Alarm over land sharks
OVERSEAS land speculators locking up land in Geelong’s growth areas could see homebuyers carrying the cost through higher land prices and reduced community infrastructure, developer Rory Costelloe warned.
The Villawood Properties executive director said the speculators threatened to undermine the property market as they tried to exploit the region’s low prices when onselling the land to developers.
The speculators, largely backed with Indian and Chinese capital, are buying up long-term options on land surrounding Geelong to on-sell at a profit once the land is rezoned.
Local agents and landowners have said they are targeting Geelong’s growth corridors, including Armstrong Creek, Batesford, Fyansford, Lovely Banks, Lara West and even Stonehaven and Anakie.
Landmark Harcourts, Bannockburn agent Owen Sharkey said landowners were being hounded by agents trying to convince them to sell, but said he had warned individual sellers they risked their contracts being handed back should a further deal fail to eventuate.
“They are being doorknocked three or four times a week, having agents walking up with contracts and asking to ‘sign here’,” he said.
“It’s a lot of Indian buyers and there’s some absolute sharks out there and people are selling their houses and the contracts will never come to fruition and people will walk away from their deposits,” he said.
But Mr Sharkey said there were some genuine buyers in the market.
Geelong consultant David Sprague said one buying group was trying to lock up more than 800ha in the Armstrong Creek area. He said the contracts that laid out terms for 10-year options to on-sell the rezoned land gave the buyers opportunities to walk away.
“There’s a lot of clauses, which means they’re not giving you much upfront, they’re just giving people that sense of hope,” he said.
Mr Costelloe negotiated a deal with landowners for Villawood’s 1179-lot Lara West development worth about $40 million.
But he said developers would face problems meeting infrastructure requirements when building new estates because of the higher prices that speculators were demanding.
He urged landowners to be wary of who they dealt with if considering selling.
“Speculators come in to try and make margins and they’re taking away much needed money for infrastructure, or roads, schools and community centres.
“But taking it out of Geelong, there’s nothing left to build these things,” he said.
Developers often acquire land through a combination of cash and profit sharing with landowners.