CEO and founder of 21st Century Group of Companies Jamie McIntyre welcomes Senate questioning over his land banking methodology as he says it’s the best solution to solving Australia’s housing affordability crisis.
Fairfax Media reported in the Sydney Morning Herald on June 7 that the Senates Committee is expected to call participants in the land banking in for questioning.
Jamie McIntyre who founded the 21st Century Australia party and authored the book “101 Ways to Improve Australia“, says the government, if it was educated about his land banking methodology would be in fact supporting it as it is one way to potentially solve the current housing affordability crisis, which is clearly out of control especially in Sydney.
“The Federal Treasurer’s Joe Hockey’s comments only highlight that the government has no solutions to solving the housing affordability crisis, so maybe the Senate could do well by hearing my solution,” said McIntyre.
“Senators need to look past the defamatory and deceptive articles by Fairfax Media who clearly have an agenda to discredit myself and the land banking concept by deceptively linking my projects to a former property spruiker, even though it’s been proven otherwise.
“They also need to be questioning ASIC who are often used by competitors to use taxpayers’ money for witch hunts to ensure that ASIC is going after the right people”, he said.
He went on to explain:
“I welcomed the ASIC investigation into a land banking project in Shepparton as I was the victim and incurred $4.7 million in liabilities to protect my clients from the developer and his partners who took the money. Yet, despite this Fairfax deliberately try and continue to state otherwise.
“If politicians were going to solve the housing affordability problem, they would have done so by now. I agree with Sir Richard Branson who says it’s never the government that changes the world; it is nearly always small to medium businesses and entrepreneurs”.
McIntyre- a controversial figure who has tussled with the ASIC back in 2001 says, taxpayers’ money should not be used for witch hunts but for matters that will improve our country.
He said his land banking methodology is legitimate and should be used on a wider scale as it can help release more land and enable many locked out home owners to get a foot in the door. He says that the investigation is welcome, as anyone with financial intelligence will soon discover the facts of why it has the potential to solve the housing affordability crisis.
As an example he uses a case study of one of his planned projects ‘Melbourne Grove’ in Tarneit, Melbourne, which is inside the Urban Growth Boundary (UGB) but not yet rezoned for residential purposes.
“For new home buyers to buy land in that area, often they have to camp out overnight before a land release to try and jump the queue. In fact now developers often hold ballots to select who is fortunate enough to buy the land”, he said.
Therefore, he had the idea to help homebuyers pre order their lot of land at today’s prices but not have to pay for it for 3-5 years, and in some cases 7 years.
This means they can cap their land at today’s prices by paying an option fee to control their future lot of land but still have years to save up before they have to actually pay for the land and then build their house.
The land is not expected to be rezoned residential before 2017-18 in this case.
McIntyre says, not only does this cap prices for homebuyers, but also helps make more land available for release as it enables the developer to potentially lock in part of the development as pre sold effectively.
Even though the option holders aren’t obligated to buy, most would go through with the purchase or flip to interested new home buyers in the future.
However, a spokesperson for Melbourne Grove did claim that many savvy investors have caught onto the idea and are snapping up the options for the potential capital growth they can get before they ever have to consider paying for the land as it’s effectively a way to enter the property market debt free and without a loan, interest or holding costs.
Some argue about the consequences in case the land doesn’t get rezoning. However, McIntyre says the option holders are protected in this case by a money back guarantee secured against the rising land prices in the development and generally only a minority of land lots get optioned as it eats into the developers’ margins .
“We are taking a calculated bet that land prices over time will rise. It is a safer bet than the stock market.
In a worse case scenario if it doesn’t, option holders aren’t obligated to buy, unlike off the plan apartments where buyers have lost fortunes when apartment prices don’t rise. For instance, in Docklands, prices fell before settlement time thus forcing buyers to stump up more money or lose their deposit and be sued for the difference”, he said.
According to McIntyre, option holders stand to make more in developments outside the UGB but take on slightly more risk, as it may not get rezoned.
“As long as everything is fully disclosed to investors, the ASIC and government should in fact be supportive of innovative financial engineering that can help solve some very serious challenges Australia faces”, he said.
Therefore, McIntyre says he would more than welcome to be called before the Senate Committee about his land banking methodology and the sooner this country adopted more entrepreneurial ideas in government and less bureaucratic incompetence and playing politics, the better off taxpayers will be.
“After all Senators of all people should know not to believe everything written in the newspapers, especially Fairfax publications, which are hardly the bastions of truth and independent reporting. They should be able to see clearly through the deceptive agenda being run by Fairfax to slander me by continually trying to link me to a former property Spruiker despite it being public knowledge that my projects have nothing to do with anyone else and I have no external investment partners, especially a certain former spruiker.
In fact even the ASIC know this now and one only has to check ASIC public records to confirm who owns my land projects as it’s 100% transparent and fully disclosed.