Jacinta Allan - Leading a zombie government

[MarcMaverick]

Achievable cheaper than SRL?

Definitely.

 

[The Punter]

Achievable cheaper than SRL?

The package was costed at $19b. Achievable is up to others to judge, and judge they did.

 

[Sphynx]

It's a sad couple of days for the state.

I say that as someone who is likely to benefit greatly financially from her announcement, also.

I also say that as someone who has worked on the pointy end of some of these major infrastructure projects in this state, as well as on private equity projects like the ones she is hoping to attract and is well aware of the existing master plans to areas surrounding the suburban rail loop.

There's multiple issues with these "activity centers"

For starters - residential development is in the toilet. It's not from a demand perspective (well it is, but I will get to that), it's from a cost perspective. Feasibilities don't work at the moment. Building costs have never been higher, labour costs have never been higher. Material costs have never been higher. Companies, developers and investors as end users have never been taxed higher (they need to pay back the state debt afterall...).

Major residential towers in the volume they require haven't been getting greenlit and built for 3-4 years now. Most of the major towers in Melbourne are build to rent at the moment (which is very much TBA) or mixed use like hotels and commercial. The largest residential project in the CBD is currently on hold, because presales are nowhere near the number required for commencement despite massive media campaigns on it's announcement as the likely landmark Melbourne building of the future.

Now, if one of your sole target markets are simply first home buyers or downsizers etc (because investors are taxed out of it currently), then you need to offering a product at entry point prices for these buyers, otherwise whats the point? Something not easy to do with the costs of acquisition and construction these days.

Now we get to the product itself. First home owners don't want a 30sqm apartment value managed to the absolute bare minimum in construction quality in a 20 story tower on a major road or next to a train station. Sure, there are people that do want that product, but there's already enough supply of that product in the market to meet current demand.

First owners want houses. They want their own block, they want potential family homes, they want something that resembles something they grew up in.

How exactly does oversaturating residential suburbs with 10's of thousands of tiny/dog box apartments (and you have no idea how some of these developers can fit some of these in, as Victoria is one the one state that basically lets them do whatever they want regarding living space requirements) solving this issue? And then we can get to their true intention here. It's not to solve the housing crisis, it's a desperate attempt to raise the states revenue to pay for their financial crisis with development levies, stamp duty increases, rates, land tax etc and all the knock an tax revenue to this volume of additional dwellings.

Where's the public study which considerers the impact this will have on local infrastructure, like schools, hospitals, medical clinics, parks, open space, parking, sporting fields and amenities etc? Has this been costed into it?

What's further ridiculous is that it seems that the activity centers have all been concentrated in one area of Melbourne, the South East and Bayside, which is traditionally a family centric, residential pocket. Why not spread it throughout the city? Well the answer to that is fairly easy. It's because that section of the SRL will never get built after Stage 1.

The impact on some of these suburbs are going to be absolutely devastating imo. I say that not as someone afraid of not getting a park at my local cafe, but someone who has seen a suburb like Box Hill manifest into what the vision for some of these activities centers are. Which is truly gross, in all honesty.

 

[Sphynx]

The package was costed at $19b. Achievable is up to others to judge, and judge they did.

Not achievable at all.

Not costed at all.

Simply lip service of a semi-justifiable number, with no ongoing accountability or tracking until 4 years after the project is completed and the fiscal review spits out ~$40b.

I say that as someone that knows exactly where some of the cost blow outs of the Metro Tunnel are currently heading.

The SRL makes the Metro Tunnel look like a sand castle at the beach.

 

[The Punter]

Not achievable at all.

Not costed at all.

Simply lip service of a semi-justifiable number, with no ongoing accountability or tracking until 4 years after the project is completed and the fiscal review spits out ~$40b.

I say that as someone that knows exactly where some of the cost blow outs of the Metro Tunnel are currently heading.

The SRL makes the Metro Tunnel look like a sand castle at the beach.

Not sure if we are talking about the same thing: the LNP regional public transport package taken to the 2018 election was costed at $19b. I can't remember if the Parliamentary Budget Office was up and running by then, so not sure who was responsible for the costing. Just to be clear.

 

[Sphynx]

Improved regional public transport was certainly part of the 2018 manifesto.

Was also the bulk of the Comm Games budgeted costs.

A big % of the total budget was infrastructure, road and public transport upgrades to Bendigo, Ballarat etc.

 

[Sphynx]

Not sure if we are talking about the same thing: the LNP regional public transport package taken to the 2018 election was costed at $19b. I can't remember if the Parliamentary Budget Office was up and running by then, so not sure who was responsible for the costing. Just to be clear.

Apologies.

It's a similar number to the first stage of approvals for SRL.

 

[peetoo]

It's a sad couple of days for the state.

I say that as someone who is likely to benefit greatly financially from her announcement, also.

I also say that as someone who has worked on the pointy end of some of these major infrastructure projects in this state, as well as on private equity projects like the ones she is hoping to attract and is well aware of the existing master plans to areas surrounding the suburban rail loop.

There's multiple issues with these "activity centers"

For starters - residential development is in the toilet. It's not from a demand perspective (well it is, but I will get to that), it's from a cost perspective. Feasibilities don't work at the moment. Building costs have never been higher, labour costs have never been higher. Material costs have never been higher. Companies, developers and investors as end users have never been taxed higher (they need to pay back the state debt afterall...).

Major residential towers in the volume they require haven't been getting greenlit and built for 3-4 years now. Most of the major towers in Melbourne are build to rent at the moment (which is very much TBA) or mixed use like hotels and commercial. The largest residential project in the CBD is currently on hold, because presales are nowhere near the number required for commencement despite massive media campaigns on it's announcement as the likely landmark Melbourne building of the future.

Now, if one of your sole target markets are simply first home buyers or downsizers etc (because investors are taxed out of it currently), then you need to offering a product at entry point prices for these buyers, otherwise whats the point? Something not easy to do with the costs of acquisition and construction these days.

Now we get to the product itself. First home owners don't want a 15sqm apartment value managed to the absolute bare minimum in construction quality in a 20 story tower on a major road or next to a train station. Sure, there are people that do want that product, but there's already enough supply of that product in the market to meet current demand.

First owners want houses. They want their own block, they want potential family homes, they want something that resembles something they grew up in.

How exactly does oversaturating residential suburbs with 10's of thousands of tiny/dog box apartments (and you have no idea how some of these developers can fit some of these in, as Victoria is one the one state that basically lets them do whatever they want regarding living space requirements) solving this issue? And then we can get to their true intention here. It's not to solve the housing crisis, it's a desperate attempt to raise the states revenue to pay for their financial crisis with development levies, stamp duty increases, rates, land tax etc and all the knock an tax revenue to this volume of additional dwellings.

Where's the public study which considerers the impact this will have on local infrastructure, like schools, hospitals, medical clinics, parks, open space, parking, sporting fields and amenities etc? Has this been costed into it?

What's further ridiculous is that it seems that the activity centers have all been concentrated in one area of Melbourne, the South East and Bayside, which is traditionally a family centric, residential pocket. Why not spread it throughout the city? Well the answer to that is fairly easy. It's because that section of the SRL will never get built after Stage 1.

The impact on some of these suburbs are going to be absolutely devastating imo. I say that not as someone afraid of not getting a park at my local cafe, but someone who has seen a suburb like Box Hill manifest into what the vision for some of these activities centers are. Which is truly gross in all honesty.

Agreed the devil is in the detail. But for example glen waverley and Broadmeadows business districts could be rebuilt much much better. The individual shops etc are low standard and physical shops are becoming less relevant with online etc

 

[Sphynx]

Agreed the devil is in the detail. But for example glen waverley and Broadmeadows business districts could be rebuilt much much better. The individual shops etc are low standard and physical shops are becoming less relevant with online etc

No problem with gentrification which is scaled to the communities requirements and doesn't impact on it's neighborhood characteristics.

This is exactly what we should be trying to achieve.

Carrum Skyrail Train Station is a great example. It didn't go overboard, completely reshaped the beach area, as well as the local shopping strip there. Has won multiple international design and planning awards, despite actually having quite a lot of opposition in regards to the building mass vs the underground stations nearby in the initial planning stage.

Great example of infrastructure investment reshaping a local area, but letting it also maintain it's existing identity. It's enhanced the residents area, not destroyed it.