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Damn The Dam Part 1
The Mary Valley and nearby Gympie are two very separate property markets and the dam project had different impacts on them. Gympie didn’t feel any effect from either the announcement of the dam or the rejection of the project. It’s considered to be a strong market and a good place for investors to park their money. If anything, it would have benefited from the Traveston Dam by getting an economic boost. In contrast, however, the rural property market in the Mary Valley suffered as a result of the dam proposal and according to many reports, there’s very little activity in the area now.
WHAT HAPPENS TO THE PROPERTIES BOUGHT BY THE GOVERNMENT?
It seems to be a bit of a waiting game to see what will happen in the rural property market of the Mary Valley.
Situated south of Gympie, the Mary Valley includes the townships of Amamoor, Dagun, Imbil and Kandanga. The Traveston Dam was proposed to stretch from the Traveston Crossing Bridge, near Amamoor, to the south and would have affected the areas surrounding the Bergins Pocket and Kandanga.
In the middle of 2006 the Queensland Government initiated a voluntary land purchase program for the Traveston Crossing Dam in response to concerns that residents would be left in limbo during the environmental assessment process.
It bought a total of 494 properties for the project. More than 150 of the original landowners elected to stay in their homes under various tenancy agreements after they were sold to the State Government, but there are also many who moved on.
Now that the project isn’t going ahead, the landowners who sold their properties to the government to make way for the failed Traveston Crossing Dam will be able to buy them back for the same price under buy back scheme. The State Government announced the six month buy=back scheme swiftly after the project was given the no-go in November in an attempt to recoup about $600 million it spent on the Traveston Dam in the lead-up to its rejection by the Federal Government.
Stamp duty charges will be waived and taxpayers will foot the bill for legal fees.
People have until May 31 to signal their intention to buy back their properties, but the actual buy=back contracts can be negotiated after that.
In June 2010 the government will decide how the land that wasn’t repurchased under the b uy-back scheme will be used.
It’s believed there could be as little as 10 per cent of original landowners who would buy back heir properties in the Mary Valley.
Many have moved on and while there are some who will want to buy their properties back, they want to pay much less than what the government paid for them.
The rural properties are believed to be worth significantly less now, due in part to the government paying inflated prices but also because values in the rural market have declined. In addition, if the government looks to offload all the properties it now owns at the same time, that will cause values to decline significantly.
Raine and Horne Mary Valley principal Nick Smith notes that the government paid premiums for the properties it bought in the Mary Valley, paying 30 per cent or more above the actual value for most properties and in some cases paid 100 per cent too more.
“If you asked local valuers to value those there’s no way in hell that even one of those properties will value up to the current valuation,” he says.
Valuer Blair Fuller of John Logan and Associates Gympie says he’d be very surprised if the banks were prepared to lend at those figures for people to buy their properties back.
“The government paid above market value just to secure the properties early,” he says.
“It varied, but for very good agricultural land they were paying around $6000 an acre before the dam and they came in and started paying $`10,000 an acres.”
Those who sold their homes to the government for the failed Traveston Dam project should be compensated, according to Smith.
He says many now can’t afford to buy their properties back because the proceeds of property sales have been reduced by sale costs, marriage break=ups or the global financial crisis which saw a lot of people lose a good chunk, if not all, of their superannuation .
Smith also points out that some of the houses on the properties bought by the government were actually demolished, which presents a difficulty for the buy-back scheme.
Source: Australian Property Investor February 2010
