Much as been said about the downward pressure CSG mining has on property values. Of course the CSG industry will say “bumf and nonsense” to such statements. Michael Fraser, Managing Director and CEO of AGL is due to retire next year, and he is perhaps feathering his retirement portfolio with a swag of properties the value of which have been enhanced through the installation of a few gas wells, flares, and compressors, a garden feature incorporating a waste-water evaporation pond, a pimp-my-truck styled drill-rig parked in the drive.
Meanwhile, in the real world…
Curtis Associates is, in their own words “(A)n independent and licensed buyers’ agent located in the Sydney CBD which acts exclusively for buyers of residential and commercial properties whether to occupy, develop or as an investment. We are specialist and full time buyers agents free from the distractions of other business activities such as property management and finance brokering. Buying property is simply all we do and we do it well.” Curtis Associates “act as exclusive buyers agent in Sydney and as such, never acts on behalf of sellers of real estate.”
That last piece is very important in understanding what Curtis Assoc. has to say about CSG – because they never represent sellers of real estate they have no self-serving interest in downplaying any depreciative characteristics of CSG mining on property values. Curtis Assoc. charges their clients “a fixed amount in your price bracket and does not increase with every increase in the purchase price.”
Curtis Associates has this to say about Coal Seam Gas mining and property values:
“For those looking to buy a house in Sydney or an investment property in Sydney, the issue of CSG mining is a further and increasingly high profile example of the regulatory and environmental risks which can be encountered in the Sydney’s ever changing property market.
Nature of the issue
The issue has both public and private elements.
The public element is now well documented and centres around various environmental, health and safety risks associated with CSG mining especially to aquifers supplying water into the food chain and where the “fracking” extraction method is used.
The private element is of particular interest to existing and prospective property buyers. It centres around the law and other guidelines under which a party becomes entitled to explore for and extract CSG.
Curtis Associates go on to warn that it is difficult for a buyer to know whether a prospective property is subject to a CSG Petroleum Exploration License (PEL) and further that there is currently no law forcing sellers to warn a buyer of PEL coverage. They point to the Minview website as a resource people can use to see the gross coverage of the variously issued PELs across NSW, as do we.
Curtis Associates go on to warn:
“(W)hile development consent from a local council or authority may be required before a petroleum title can be granted, property specific searches of such a council or authority will not reveal petroleum titles over other land on which CSG mining might be conducted and which might have subterranean or other environmental effects on the land being searched.
Whilst it is possible to navigate through a series of steps on the DPI website to download an updated list of petroleum titles and applications, the particular difficulty with this type of property risk is that even if pre purchase due diligence uncovers a petroleum title affecting a property of interest, because of the exploratory element inherent in CSG mining and environmental effects that may be unknown (and in contrast for example, to a development consent for a new building), it is difficult to ascertain the future nature and extent of that risk.
We’ve heard it said by property sellers and those representing them that A). CSG won’t come here and anyway if it did my land values would not be downgraded, if anything the fact that I’m getting a royalty for a gaswell on my land is only a good thing. More income means higher values; and B). All this community noise about CSG, the signs along the road about CSG meetings and the articles in the local press are putting off potential buyers.
Clearly Curtis Associates has a lot to say about the validity of point “A”. The best way to retain the value of our land investments is for the community to collectively Lock Our Gates against the gas companies and Say No To CSG.
As to the second point; blaming the presence of signs such as LTG Yellow Triangles and those erected to advise the community about CSG meetings for downward pressure on property values is a case of shooting the messenger. It is like a seller of water blaming the inventor of the microscope for the drop in the value of a glass of water when the microscope finds the water to be teeming with disease causing microbes. The facts of the matter are; we’re covered by AGL’s PELs and that fact, combined with the real possibility that mining could commence have the potential to exert a downward pressure on land values.
Should mining commence, we will almost certainly find our land values decreasing to a significant degree.
The visible presence of community resistance to CSG mining, such as signs, is if anything a fantastic boon for our community and sends a strong message to potential buyers that they are looking at property within a community that has both a backbone and sense of community co-operation toward the common good. The surveys of all the residents of the Mountain Districts are almost complete and collation of the data has begun; we’re on track to declaring Coal Seam Gas unwelcome and unwanted.
PS. Don’t miss the Coffee, Cake and CSG session on the 23rd if you want to understand what happens underground when CSG mining occurs.