Why Development WA sold a parcel of regional land for $415k less than its value
The state's finance watchdog has accused land developer Development WA of putting commercial interests and expediency before transparency and accountability.
Auditor-General Caroline Spencer released the findings of a lengthy probe into Development WA on Wednesday, revealing significant issues around land sales, including missing documents and poor management of conflicts of interest.
'Taken together, the rigour, consistency and curiosity that was absent means Development WA was not, between 2017 and 2022, conducting land sales in a way that minimised the risk of error, fraud and corruption, and is unable to demonstrate that probity and value for money was achieved,' Spencer said in the report.
Spencer looked at thousands of land sales from July 1, 2017, to June 30, 2022 and found several instances of sales made without available rationale.
Block sells for half-price
Among those was the sale of a piece of regional industrial land for less than 50 per cent of its valuation price in 2022.
Spencer found the piece of land was originally approved to be sold at $600,000, but was dropped to $450,000 in 2020 under a COVID stimulus scheme known as the Temporary Incentivising Regional Land Pricing Policy.
In July 2021, Development WA had the land valued, and it was determined to be worth $800,000, but it continued to be marketed at $450,000 and eventually sold in April 2022 for $385,000.
'When we queried why the land was advertised and sold well below the valuation, Development WA advised the valuation was incorrect,' Spencer said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
4 hours ago
- Sydney Morning Herald
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
The Age
4 hours ago
- The Age
The type of housing cost that just soared 75 per cent in five years
The cost of land for housing development has skyrocketed by 75 per cent over the past five years, pushing homeownership further out of the hands of average potential buyers. The median development site cost has risen from $4.8 million in 2020, to $8.5 million this year, Ray White analysis of Real Capital Analytics data shows. It comes as construction costs remain elevated from their pre-COVID-19 levels, putting further pressure on affordability. Ray White Group chief economist Nerida Conisbee said it would take considerable time before building costs fell enough to make new housing genuinely affordable for average buyers. 'Land costs haven't come back down and what's happening is developers want to build, but they can't do it affordably,' Conisbee said. 'We're not seeing the crashes in the market we previously saw so we're in a kind of holding pattern.' In past economic downturns, rising interest rates would put pressure on some owners of development sites, forcing them into distressed sales at reduced prices. But this time was different, and Conisbee said many had built financial buffers while interest rates were at record lows, and developers have been in a better position to hold onto land. They were also entering into joint ventures when finances were squeezed. Changes to how lenders operated were also helping developers hold on to their assets, banks were holding off on forced sales for struggling developers, and were more likely to offer relief measures. It comes as the federal government aims to deliver 1.2 million homes in five years to address the housing affordability challenge.
West Australian
5 hours ago
- West Australian
Last minute data disappointment lowers GDP growth hopes
Forecasters have revised down their predictions for Australia's economic growth, which could show the weakest start to a year in decades, outside of COVID. Partial indicators released in recent days have diminished optimism of the economy's vitality before the Australian Bureau of Statistics releases national accounts figures on Wednesday. The anticipated economic recovery driven by falling interest rates, moderating inflation and recovering disposable income has not materialised as expected. New public demand declined 0.4 per cent over the quarter and will shave 0.1 percentage points off GDP growth in March, the ABS reported on Tuesday. Alongside weaker than expected household spending, business investment and mining exploration, Westpac pared back its prediction for GDP growth to 0.1 per cent - the slowest March quarter result, outside of COVID, since the 1990/91 recession. That would put the annual growth rate at 1.2 per cent. Westpac economists said there was even a small risk for a minor decline in output over the quarter. Negative effects from Tropical Cyclone Alfred and flooding in Queensland as well as a slowdown in public demand highlighted the downside risks to growth. "While some of the weakness reflects the direct and indirect (or 'confidence'-related) impacts of the bad weather events, it is undoubtedly the case that underlying growth remains sluggish," they said. "Without a pickup in private demand, the shaky handover from the public sector could result in a period of below par economic growth." While the figures won't show the worst effects of global uncertainty on consumer demand, given Donald Trump's main tariff announcement wasn't until April 2, trade barriers will continue to weigh on economic growth into the future. The Organisation for Economic Cooperation and Development downgraded its forecast for Australia's GDP growth from 1.9 per cent to 1.8 per cent in 2025. But the outlook is rosier in 2025, with economic growth expected to accelerate to 2.2 per cent as interest rates continue to fall and disposable incomes recover. Treasurer Jim Chalmers said the national accounts would show an Australian economy resilient in the face of substantial headwinds at home and abroad. "Our economy has been hit by natural disasters and we're not immune to global volatility, but the progress Australians have made together means we are well placed and well prepared to face this uncertainty," he said. CBA economists also downgraded their Mach quarter GDP forecasts following Tuesday's data dump but still expect growth of 0.3 per cent, while ANZ and NAB revised down their predictions to a 0.2 per cent rise. JP Morgan left its growth prediction unchanged at 0.3 per cent while Japanese investment bank Nomura lowered its estimate to 0.1 per cent. It's unlikely GDP growth will meet the Reserve Bank's forecast of 0.5 per cent, published just over two weeks ago in its May Statement on Monetary Policy. Rates markets imply a 78 per cent chance for the RBA to cut interest rates by another 25 basis points at its next meeting in July, with two more cuts expected by Christmas.
