Land Banking

This is 82 Sussex Street. It last traded in 2003 for about $3 million. Today it is valued at between $11 million and $13 million. But it sits there. Empty. Abandoned. Prey to the elements. Prey to graffitists. Prey to squatters. Who would do this? Why would they do this?

Who would do this is not the point. Not really. They are an elderly couple who own about $100 million of property like this, all over the city. But WHY they do it is instructive. Properties - usually land, but often commercial properties - are left vacant, while the value increases year upon year. Take 82 Sussex Street: from $3m to $13m in 12 years. That's about $830,000 pa. And the downside is the council rates. Speculation.