Millers Point: three new homes for every property sold?

Wednesday, August 27, 2014
Last night a second government owned property in Millers Point was sold. Family and Social Services Minister Gabrielle Upton reports it sold for $2.56 million. This follows the first property sale price of $1.911million.

Minister Upton says for each property sold in Millers Point, the government's public housing portfolio could be increased by three. But not so long ago the Secretary of FACS said the current State Budget would deliver a 'line-ball' increase in social housing supply this financial year.



More recently, the Minister herself told the Budget Estimates committee (see page 5 of the transcript) that for every million dollars her department spends on its housing portfolio, only $190,000 – 19 per cent – goes towards new housing. Of the rest, $340,000 is used for 'improvements' (for example, kitchen upgrades), and $470,000 goes to repairs and maintenance.



Now, we're all for spending money on overdue repairs and maintenance of the government's housing portfolio, but it's a bit rich to sell other people's homes in order to pay for it. Especially when much-needed growth of the portfolio is implied, to justify the sales.



On the basis of Minister's Estimates statement, let's see what we might be able to do with the $4.471 million raised so far. Within the confines of the Budget, of course...

First things first, we'll have to put about $1.52million aside for 'improvements', and a further $2.1 million aside for repairs and maintenance. This leaves us with just under $850,000 to tip into the 'new housing' bucket.

$800,000 will get you a pretty swish flat in Sydney, leaving change for stamp duties, legal costs and perhaps even some champagne to celebrate.

Cunningham St Sydney - from www.realestate.com.au

Or, if you wanted to replace the two Millers Point properties with a pair of dwellings, you can get a nice little studio in the same complex...

Cunningham St Sydney - from www.realestate.com.au

... a spacious walk up in Parramatta...

Early Street Parramatta - from www.realestate.com.au

... or a respectable family home in Campbelltown, for around $400,000.

Lindesay Street Campbelltown - from www.realestate.com.au

Of course, if you wanted to replace the two Millers Point properties with six homes in Sydney, you'd be hard pressed to do it. You'd be looking at around $140,000 per home. A quick look at the real estate pages tell us you can still find homes at such low, low prices, but nowhere near Sydney. You'd have to look in places like Deniliquin, South Grafton, Dubbo, Jindabyne, Albury and Orange.

Which leaves us with two possible conclusions to ponder: either the money will be used to buy houses in regional NSW, or more of our existing metropolitan public housing will be demolished so that we can 'replace' the Millers Point homes on land already owned by the NSW Government.

Help us keep track of what's happening with public housing sales and estate redevelopment. Check out our Clearing House blog for more information.

Government left red-faced after Millers Point sale

August 27, 2014   Toby Johnstone


Buyers were expecting the rundown terrace to sell for between $1.5 million and $1.6 million. They were off by $1 million.

This house at 29 Lower Fort Street, Millers Point, had a price guide of $1.5 million -$1.6 million. It sold for $2.56 million.

The state government has been left red-faced after the first two houses to be auctioned at Millers Point sold for significantly higher than the price guides provided to buyers.


Onlookers were stunned at the Tuesday night auction of 29 Lower Fort Street when the derelict terrace sold for $2.56 million. The price guide earlier in the day was between $1.5 million and $1.6 million.


Last week the first state-owned terrace to be sold at 119 Kent Street, Millers Point, went for $1.9 million. The initial price guide of $1 million had been revised to more than $1.3 million ahead of the auction by Peter Starr from McGrath.

This house at 119 Kent Street, Millers Point, had a price guide of more than $1.3 million. It sold for $1,911,000

The selling agent on Tuesday night, Rohan Aalders from Di Jones, cited a lack of comparable sales in Millers Point. 

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"We had to work with what little comparables we had and rely on the market to tell us the figures," he said.


"We spoke to 60-plus people ... the highest number we were hearing was the price guide."


Edwin Almeida from Just Think Real Estate has been following the first two sales closely. He said when a property sold for 10-15 per cent over the price guide it was typically a case of buyers getting carried away.


"But when you are talking 90 to 100 per cent over the price guide, you have to raise questions," he said.


In the aftermath of Tuesday's staggering result, Minister for Finance and Services Dominic Perrottet distanced himself from the price guides given to buyers.


"The price guides for properties at Millers Point are determined by the real estate agent based on market feedback," he said. "This process is independent of the NSW government."


Millers Point: a community under the hammer


Although the state government does not set the price guide, as vendor they do set the reserve.
The state government refused to disclose the reserve price. The government also declined to share information about the initial independent valuation of the property.


Buyer's agent Patrick Bright said: "We don't know if it's underquoting or not because we don't know what the reserve was.


"Given that auctions are meant to be a transparent way to sell property, why all the secrecy around all of this? Why not just share the information?"


When a spokesperson for the Department of Fair Trading was asked whether a house sale that is $1 million above the price guide was something the department would look into, they replied: "A gap between the initial advertised price and the final sale price is not necessarily proof of underquoting."


But the spokesperson went on to say that an example of underquoting is "when a property is promoted at a price that is less than the seller's asking price or auction reserve price".


In any property transaction, disclosing the reserve is at the discretion of the vendor.


Mr Perrottet said he welcomed the strong result "as the proceeds of these sales will be invested back into social housing to assist the 58,000 people currently on the waiting list".


RESOURCED: http://smh.domain.com.au/real-estate-news/government-left-redfaced-after-millers-point-sale-20140827-108xu9.html

Millers Point sales shock investors

Millers Point sales shock investors

Millers Point: Prized harbourside land is being sold to investors. Buyers were expecting a rundown terrace for sale at Millers Point to sell for around $1.5 million. It sold for a staggering $2.6 million.

Stuart Bocking asks Minister for Family & Community Services Gabrielle Upton if she can guarantee that the proceeds from the sale of the Millers Point households will be put back into public housing?

Resourced: http://www.2ue.com.au/blogs/2ue-blog/millers-point-sales-shock-investors/20140828-3egn1.html  



Resourced: http://www.2ue.com.au/blogs/2ue-blog/millers-point-sales-shock-investors/20140828-3egn1.html  


This was the home for 6 people working in the city up until the last tennant died 4 years ago. all it ever needed was a coat of paint and the gutters cleaned outand repaired to be livable again. what alot of wasted rent over the past 4 years

peter Tuesday 2 September, 2014 - 9:50 PM

This minister has yet to meet with the residents on Millers Point personally even after continuous requests. Sales at Millers Point without the 2 recent sales has already earned the government over $42 million. Where are all the new properties they have acquired with these funds? Where is all the new housing stock they have acquired with monies made from other sales of housing stock across the country? Housing have sold twice as many properties as they have actually acquired in the last 12mths alone. There are many many empty properties dotted around the country that could be used to accommodate ppl on the waiting list but are left to sit empty. What is the point of properties sitting empty, in some cases for years on end? Why move the residents from Millers Point before selling all the empty properties first? If they have 300 empty properties to relocate the residents of Millers Point to, why have these properties not been allocated to ppl who have been on the waiting list for years??? So many more questions need to be asked by the public who as you say, own these properties. Also where is all the money Mr Packer paid for the prime real estate at Barangaroo? Where has that been reinvested?

Cindy Friday 29 August, 2014 - 7:53 AM