Land Acquisition Dispute Near Sydney Airport Escalates as Goldmate Awaits Higher Compensation – Sydney Auction Clearance Rate at 51%

Week’s Key Focus

A prime parcel of land near Sydney’s upcoming second airport has triggered an intense legal battle over compulsory acquisition, leaving the NSW government facing millions of dollars in compensation costs. Developer Goldmate purchased a 32-hectare site in Luddenham for $33 million in 2020. Just months later, Transport for NSW compulsorily acquired 46% of the property for the construction of the M12 Motorway leading to the airport. Initially, the Valuer General offered Goldmate a mere $130,112 in compensation, assessing the land’s market value at zero. Dissatisfied, the developer pursued legal action.

Approximately half of the land owned by property development group Goldmate in Luddenham, near Badgerys Creek, has been compulsorily acquired by Transport for NSW.

In April this year, the Land and Environment Court awarded Goldmate $9.8 million in compensation. However, the developer deemed the amount insufficient and appealed. Last week, the NSW Court of Appeal ruled in favor of Goldmate, determining that the previous compensation calculation failed to account for the land’s rezoning value. This ruling could result in a significantly higher payout for Goldmate and has set a precedent for other landowners in the Western Sydney Aerotropolis to seek increased compensation.

The crux of the dispute revolves around how the market value of compulsorily acquired land is calculated. By law, any increase or decrease in land value due to its “public purpose” must be disregarded. However, the court clarified that the scope of the acquiring authority’s powers influences how value is defined. It ruled that Transport for NSW’s acquisition was limited to building a road and did not extend to broader economic development purposes. Therefore, the land’s rezoning to an “enterprise zone” should not have been disregarded, potentially raising its market valuation.

This decision carries significant implications for landowners and the NSW government alike. Legal experts say it provides clearer guidance on defining “market value” for compulsory acquisitions while offering landowners a chance to pursue fairer compensation. While developers and landowners have welcomed the outcome, it could translate into higher land acquisition costs for the NSW government. Amid critical infrastructure developments around Sydney’s new airport, this ruling highlights the complexities of land acquisition and its broader implications for the region’s growth.

Auction Results Last Week

Sydney: 979 properties went to auction, with 696 results reported and 353 sold, resulting in a clearance rate of 51%. The total auction value was AUD $342,383,436, with a median house price of AUD $1,320,000.
Melbourne: 1190 properties went to auction, with 862 results reported and 516 sold, resulting in a clearance rate of 60%. The total auction value was AUD $354,116,477, with a median house price of AUD $885,000.