Talking Sense on Housing | CEO Intrapac Property / Past President UDIA (National) / Director Lightning Broadband / Podcaster @TheHomeGroundAU / YPO
Melbourne, Australia
Joined March 2009
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Maxwell Shifman retweeted
Jacinta Allan is already under fire over her new-look cabinet, as prominent property industry figures accuse her of neglecting key sectors by overloading senior ministers with critical portfolios. > bit.ly/4dPuGR9
Bit of fun being in one of @theage photos of the week! theage.com.au/national/victo…
🤯 Victoria’s COVID Fast Track Planning program promised speed when it mattered most.
6 years later:
• 0 of 19 projects approved in the announced timeframe
• Only 2 of 19 have commenced construction
Read more in @theage
Intrapac’s Kinley project (former Lilydale Quarry) was one of them.
Rezoning approved Jan 2022.
Yet construction still hasn’t begun due to prolonged process delays across multiple authorities.
I was asked by @theheraldsun to opine on the policy announcements from @VictorianLabor and @LiberalVictoria.
My thoughts were slightly truncated in print, so here is what I actually said in full.
Labor Party
✅Positives
• Reduced appeal rights and deemed to comply standards will reduce unnecessary and vexatious delays on compliant projects
• Improved townhouse code will help gentle densification in inner and middle rings
⛔Negatives
• Activity Centres program delivers theoretical gains only. It ignores high construction costs and subdued demand relative to other types of homes.
• "Horizon" greenfield PSP release program is substantially slower than in the past and remains behind schedule.
• Infrastructure overspend in SRL precincts takes away from spend needed in other emerging areas
Liberal Party
✅Positives
• Fast tracked PSP program has potential to make a big housing supply difference - as long as infrastructure is delivered to match
• Expanding regional growth focus will help offset growth challenges in Metro Melbourne
⛔Negatives
• Expanding CBD zone does not improve apartment feasibility
• More detail needed on infrastructure funding to match greenfield rollout
• Need to ensure middle ring remains open to gentle densification
🤔I'm sure many more announcements to come into the lead up to 28 November.
#housingsupply #elections #policyreform #victoria #planningreform #feasibility
How do Israel-Palestine protests relate to antisemitism, Jew hate and Islamism? linkedin.com/pulse/how-do-is…
Maxwell Shifman retweeted
We see @VictorianLabor announcing higher taxes and higher property price today, to build their white elephant @suburbanloop.
In 20 years from now you will have a choice - get into an autonomous car, that will pick you up from your door and drop you directly where you want for half the price of getting on a train, that you will have to walk km’s to the station at both ends of your trip.
This isn’t just economic vandalism, it’s blatant corruption, jobs for unions to stay in power. They shouldn’t just be kicked out of parliament, those responsible should be considered for criminally prosecution for intentionally and fraudulently misappropriating taxpayers money.
#Auspol2025
➕Let's do some quick @suburbanloop "value capture" math ✖️:
- Land Tax ($5.7B) - Not value capture. It's a cynical redirection of existing state taxes, robbing funding from other things.
- 70,000 dwellings + contributions ($2.9B) - quick math shows this is an average of $41,428/dwelling? #mathaintmathin. At the new Activity Centre $11,500 rate = $805 million, growing to ~$34,000 per dwelling -from 2035. Developers can't make projects #feasible now, let alone with additional cost imposts. Don't forget the actual the uplift is only 25,000 dwellings over status quo.
- Windfall Gains Tax ($450M) - astounding if it delivers this much across the precincts based on current valuations and exemptions
- Carpark Levy ($800M) - talk about disincentivising commercial investment in these areas! The current Melbourne CBD levy raises around $110m p.a., so what fraction of that would SRL precincts do? 10%?
- "State Initiated" Development ($1.6B) - Made up number, basically assuming government land has zero value as-is. I'd be amazed if $1.6B was even the completed value of developments, which is not remotely the same as creating $1.6B of (increased) value.
There is no conceivable way these value capture mechanisms will get close to delivering $11.5 billion of new value, especially once the double counting on land tax is removed (robbing Peter to pay Paul...).
#SRL #boondoggle
Max Shifman, said the government needed to stop treating property development like its “personal cheque book” and start clearing planning backlogs and boosting funding in growth areas.
“Quit focusing on announcements and new processes, and just get stuff done,” he said.
“And roll out better infrastructure spending spread across Victoria.”
This @GrattanInst and @yimbymelbourne nonsense has to cease.
The chart compares the price of all homes against all "new" units - "new" being sales of units within the last 5 years.
1. Established houses have more space/utility (bedrooms etc.) than what they have compared as "new" unit. Not a like:like comparison.
2. So-called "new" dwellings, especially in the 10km inner ring, are mostly small 1-2 bedrooms units in high rise which have for the most part lost value over their new price.
3. The replacement cost for the same units in today's market would be anywhere between 30% and 100% more than the prevailing "existing" price due to cost escalation. In many cases paying more for a new, smaller unit than an existing detached house.
4. Comparing a new like:like (i.e. 3bed home vs 3bed apartment) you would find the cost of the apartment is likely greater than the median house price.
🚆@metrotunnelvic opens tomorrow, so let's get some facts straight
1️⃣ 𝗜𝘀 𝗶𝘁 𝗲𝗮𝗿𝗹𝘆? 𝗢𝗿 𝗹𝗮𝘁𝗲?
The original 2011 Business Case stated it would be open "by 2026" to avoid "CBD rail gridlock". It's squeaked into the end of 2025. 𝘐𝘵'𝘴 𝘳𝘪𝘨𝘩𝘵 𝘰𝘯 𝘵𝘪𝘮𝘦.
People arguing it's late are confusing Metro with the West Gate Tunnel, which is indeed years late.
2️⃣ 𝗜𝘀 𝗶𝘁 𝗼𝗻 𝗯𝘂𝗱𝗴𝗲𝘁?
No. The 2016 updated Business Case forecast was $10.9B. It's ended up around $13.5B, 24% higher.
Edit: this is capital cost only. The smoke and mirrors is the true cost is around $15.5B once financing and setup costs are considered - a 42% increase.
3️⃣ 𝗗𝗼𝗲𝘀 𝗶𝘁 𝗺𝗮𝗸𝗲 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝘀𝗲𝗻𝘀𝗲?
Highly unlikely. The 2016 Business Case showed a wafer-thin Benefit-Cost Ratio (BCR) of 1.1, lifted to 1.5 by considering "Wider Economic Benefits" (WEB) - 𝘵𝘩𝘦𝘰𝘳𝘦𝘵𝘪𝘤𝘢𝘭 𝘨𝘢𝘪𝘯𝘴 𝘧𝘳𝘰𝘮 𝘢𝘨𝘨𝘭𝘰𝘮𝘦𝘳𝘢𝘵𝘪𝘰𝘯 𝘢𝘯𝘥 𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘪𝘷𝘪𝘵𝘺 𝘤𝘭𝘶𝘴𝘵𝘦𝘳𝘪𝘯𝘨.
A BCR should be >1.0 to make a project worthwhile.
The cost increases alone mean the underlying BCR drops to 0.77,or 1.0 if the flaky WEB are considered.
📉𝘛𝘩𝘦 𝘣𝘪𝘨𝘨𝘦𝘳 𝘱𝘳𝘰𝘣𝘭𝘦𝘮 𝘪𝘴 𝘵𝘩𝘦 𝘢𝘴𝘴𝘶𝘮𝘱𝘵𝘪𝘰𝘯𝘴 𝘢𝘳𝘰𝘶𝘯𝘥 𝘳𝘪𝘥𝘦𝘳𝘴𝘩𝘪𝘱. Public transport usage remains 23% below pre-pandemic levels, let alone the higher level projected by 2025 in the Business Case. That kills the assumptions on the theoretical economic gains, which are being killed with current utilisation of the CBD and surrounds.
🤔 𝗧𝗵𝗲 𝗦𝘂𝗺𝗺𝗮𝗿𝘆
Metro Tunnel is definitely an engineering and architectural achievement, one that will reshape movement patterns around the city. But let's be real: the “𝘢𝘩𝘦𝘢𝘥 𝘰𝘧 𝘴𝘤𝘩𝘦𝘥𝘶𝘭𝘦” opening and “𝘵𝘳𝘢𝘯𝘴𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘣𝘦𝘯𝘦𝘧𝘪𝘵𝘴” are definitely overstated.
𝗛𝗮𝗽𝗽𝘆 🚅 𝘁𝗿𝗮𝘃𝗲𝗹𝘀
Meanwhile today: theage.com.au/national/victo…
🧮Time for some #housingtarget math. 𝘛𝘩𝘦 𝘢𝘪𝘮: 1.2 million new homes from 1 July 2024 to 30 June 2029.
Follow along...
🤔What is we wanted to catch up from here? Well, at the 95% CR, 1,263,158 approvals are needed over 5 years.
With 418,493 approvals to-date, 𝗮𝗻𝗼𝘁𝗵𝗲𝗿 𝟴𝟰𝟰,𝟲𝟲𝟱 𝗮𝗿𝗲 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗱 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝟯𝟮 𝗺𝗼𝗻𝘁𝗵𝘀. 𝟮𝟲,𝟯𝟵𝟲 𝗲𝗮𝗰𝗵 𝗮𝗻𝗱 𝗲𝘃𝗲𝗿𝘆 𝗺𝗼𝗻𝘁𝗵, 𝗼𝗻 𝗮𝘃𝗲𝗿𝗮𝗴𝗲.