Mini cities mean mega profits for developers
I believe there needs to be an answer to various articles about the contribution the mega greenfield developments make to this region.
The most constant theme is the number of jobs they contribute, with a strange sort of maths the spruikers change the probable actual figure of maybe 1,800 to 20,000, how is this achieved, well apparently there is a new statistic a job year, so if 1,800 people are employed each year for 10 years that in the "new speak" equates to 18,000 jobs, rounded up to 20k.
It's obvious there will be only around 2000 jobs created. That's about 1% of the jobs the coast needs now & will be ½% of required employment in 13 years.
Moreover, the majority of these jobs wouldn't be provided by the developer, they will be tradies contracted by builders to build dwellings, financed by home buyers.
For a short period, there will be some, maybe 200-300 employed by civil engineering companies contracted by developer to build roads & segment the blocks.
Let's estimate the developer will indirectly contribute thru civil engineering contractor an average of .18% of regional jobs each year, that is less than 2 in every 1000 Coastal jobs, builders & tradies about 1%, even the latter won't happen until a home buyer pays a deposit.
So, whatever jobs are being created they are a result of home buyers' investment.
Bottom line, the number of job created is small & the majority are being paid for by consumers not by the developers.
Then there is the claimed retail employment from the Mall, well with 100k sqms there may be say 45k lettable, returning to outside region owner say $30 million per year in rent which will rising annually to be 45 to 50 mil in 10 years.
There may be 150 shops, they will be mainly franchises or chain stores bringing all their supplies & products from outside the region, these will extract $200 million per annum from the estate.
What does the region get for this, maybe 300 jobs for $20 million in wages, so this is really a net drain on the community of perhaps $180 million, each job costing the Coast $600,000 in exported wealth.
Given all this, the value of any "contribution" to our regions must be questionable.
So, what are the developers giving us, almost nothing, they were the lucky ones who got to buy the forest for who knows what, the money disappeared into the State Government coffers, to finance who knows what.
Their real total outlay may be as small as a few million initial funding plus another $100 million in borrowings from maybe your super to develop the first series of blocks.
After that it becomes self-funding with no more money required from them.
What will they get for this small investment, perhaps as much as $800 million to $1 billion in almost risk free profit, a mind blowing 800 to 1000% profit, not bad eh.
But if you take away borrowings ROI could be 20,000%, try to get that from your bank on term deposit.
Our council gets fees, which seems to be feeding vanity projects like the solar farm, cycleways, the new CBD, an "Elite" sports club for Kawana, plus a number of other sports facilities & a bid for the Olympics, in fact if it moves faster than walking pace we want it. It's sport, sport & more sport, bet we'd invest in a "Bionic Jock" if the Innov Centre had a project.
Once this money is gone our future rates will have to support whatever infrastructure has been installed by the developers in these new mega urbs.
Let's not be naïve, this is an extraordinary good deal for the promoters of this scheme, it won't provide anywhere near the jobs needed by its residents, a tiny fraction of our population will be employed by it, it adds nothing to the region except people, it will offer low cost dwellings for maybe $300,000 creating an area vulnerable to the smallest economic set back, almost all its residents will work outside it, many in Brisbane & it will be drained of vitality by lack of local retail businesses. It is a tragic result of our governments' lack of negotiating ability & lack of vision.
These same developers will line up for the next government assisted mega profit, from another greenfield gift, another mini-city, another $1 billion profit, will they get it, well that's up to you & me.
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