Property owners set to benefit from proposed King Island wind farm

Property owners set to benefit from proposed King Island wind farm

Posted on Wednesday, December 05 2012 at 4:18 PM

Property owners with a turbine lease to sign would be most likely to benefit if the $2 billion wind farm on King Island goes ahead, according to buyers’ agent Rob Zubin of My Property Hunter.

Last week the Tasmanian Government announced the
potential for the construction of a 200-turbine wind farm covering 12 to 15 per
cent of the western side of small King Island, in the path of the Roaring 40s
(strong westerly winds).

Typically known for its high-quality cheese
production, King Island would see 500 jobs during the two-year construction
phase of the wind turbine project and 10 to 20 permanent jobs.

A minimum of 240,000 homes would be powered from the
wind energy generated and $220 million is estimated to flow into the Tasmanian
economy, Tasmanian Premier Lara Giddings says.

Spinoff construction jobs would also likely be
created to upgrade roads and port infrastructure, providing a catalyst for
growth of new industries, Giddings adds.

Housing construction would be added to that list due
to strong rental demand, Rubin says, despite the construction phase likely to
be a short two-year timeframe from 2017 to 2019.

Those most likely to reap the benefits
are the existing landholders on the western side of the island who sign a
long-term lease with the energy companies. Perhaps that’s where the most
profitable deals will be if this project moves ahead, rural and commercial
valuer Chris Ryan of Opteon Property in Portland, Victoria, says.

Ryan’s regional base of
Portland is a town that, in recent years, saw wind turbine construction start
and finish in about two years.

He says property price rises
weren’t evident, only falls of up to 40 per cent on agricultural land in
particular since 2008, but that’s because the dairy industry has been going
through a major downturn simultaneously so it has been hard to gauge what the
wind farm’s impact really was on the town.

“I’m sure it has had a beneficial effect,
though it’s the large landholders who’ve leased their land to energy farms for
the wind turbines who have cashed in the most. I’ve heard it’s a good little
source of cash at around $7000 per turbine…” Ryan says.

The wind turbines don’t seem to have
devalued agricultural properties in the short term, he adds, probably because
of the long-term land lease that comes with the sale of a farm, something
that’s considered a perk.

He adds that the wind turbine leases
might actually boost the value of an agricultural property.

Residential blocks are another story, Ryan
adds. “A valuer down in the Gippsland area has reported that if located within
a short distance of a residential property, impacting the visual scenery,
residential prices have been noted to experience decreases of 10 to 15 per

Community forums are currently under way and a
decision to proceed to the full feasibility stage will be known by April next

Rubin says the main impacts the
development would have is improving economic confidence in Tasmania and on King
Island, particularly after the island community recently lost its abattoir and
has struggled with escalating shipping costs as a result of the closure and
reduced economy of scale.

“It would be a fantastic economic
injection for the island and because it’s such a small property market something
of this scale would create a mini boom in housing demand,” Rubin says.

Despite the “mini boom” a project of this
scale would have on the King Island market, Rubin puts it “on par with
investing in a high-risk mining town”.

Even the government has stated its
construction phase would only be around two years, he adds.

“In the short term houses will be built
and rents will increase – then it will fall back to normal prices once the
project is over.

“I wouldn’t consider it a balanced
market,” Rubin says. “When most of our clients are looking for balance of
growth and return supported by economic diversity, well, King Island just
doesn’t fit that mould.

“There’s really not a great deal of
economic diversity on King Island…there may be a sharp incline for a short
period but long term it doesn’t have that economic diversity most investors
would look for, though some high-risk investors might find the short-term
growth appealing.”

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