Badgerys Creek airport a boon for local land owners

Land valuers from valuation firm Herron Todd White say the second airport for Sydney at Badgerys Creek has been like winning the lottery for those who bought a small block of land.

"It used to just be called poor man's acreage – greyhound trainers and and truck drivers – but really it's been their lottery win," Herron Todd White's Kim Quick was cited as saying by The Australian Financial Review.

According to an estimate by her colleague, Haden Nolan, land prices have easily doubled since the then Abbott government confirmed the location three years ago.

"As soon as that came out the phones started ringing," Nolan said.

"A five acre (two-hectare) holding with a house and shed would have sold for about $1 million in 2014 and I just did a valuation this morning on a place like that and there is nothing under $2 million for that now. Most of those places are now worth $2.5 million.

One smaller land owner about 5 kilometres from where the airport will be, Jason Kennett, is another supporter of the airport but he thinks values are already priced in.

"I don't think you will see any more value unless all the infrastructure comes in," Kennett said. "We do want to realise the value so we would look to develop the land or sell it."

The federal government  recently said it will build Sydney’s second airport after the Sydney Airport Group, which owns the Kingsford Smith airport, pulled out of the project, citing "risks" on monetary return for its investors.

But not everyone is happy with the news of the second airport. Valuers say the expectation of planes flying overhead have made some move further west.

Jackie Kelly, the former Liberal MP, who held the seat of Lindsay for a decade, which covers parts of Badgerys Creek, is irate that the government is paying.

"The government is going to fund this whole thing. I think taxpayers should be screaming their heads off," Kelly was quoted by the AFR as saying.

Another charged question is who will pay for the infrastructure charges and who might get taxed on the increase in value of the land because of the new infrastructure – a concept known as value capture?

The government will unveil the details of the plan in the federal budget.

UDIA national president and member of the federal government's Cities Reference Group Michael Corcoran said the federal government's decision was excellent news because it offered certainty for people to invest. However, he said if the government started taxing property owners and developers it would have negative consequences.

"If the federal and NSW governments think that value capture taxes on new housing can fund a large portion of the cost of the new airport and related infrastructure they are dreaming," Corcoran said.

"Sydney housing is suffering an affordability crisis driven by a lack of supply and taxes that equate to 30 to 40 per cent of the cost of a new home. New home buyers are at breaking point.

"The new airport and related infrastructure will bring benefits to all of Sydney, NSW and Australia and cannot be used as a pot of tax gold, levied only on new home buyers and employers in western Sydney. More levies and charges on this new city will undermine its viability from day one."

Former Labor heavyweight and former secretary of the NSW Labor Council Michael Easson, who is executive chairman of property investor EG Funds Management, was also overwhelmingly supportive of the airport but questioned the opportunity for private investment and said further work needed to be done to make sure growth in real estate and the local economy was achieved.

"I have seen estimates of property values doubling and tripling in the decades ahead," he said, "although it might seem obvious that property values will go up with new infrastructure, nothing is entirely guaranteed".

"The full realisation will take 30 years or more," Easson said. 

"There are many stages ahead, each with the potential to add value to the built environment, the aesthetics of the urban habitat and property values.

He said public-private partnerships were needed, including good opportunities for super funds to invest – and quality architecture, resourceful thinking to make this transformation.

"Obviously this needs to be bi-partisan and it looks like everyone supports the critical infrastructure. But we need the best minds in the country – and beyond – to make Badgerys Creek one of the best places to live in Australia," Easson said.

Mark Perich has lived his entire life over the road from where the federal government has declared it will go it alone and build the new multi-billion dollar Western Sydney Airport at Badgerys Creek.

Perich, who operates dairy company Leppington Pastoral, is one of the big winners from the plan, with about 2000 hectares of farmland in the area that could one day have thousands of houses on it.

"There have been others who have invested in the area over the last five years on the expectation the airport would go ahead and they have benefited from an increase in land values," he said.

"I don't know how much more it's going to go up."