Victoria sold 2.6 hectares of a heritage former psychiatric hospital site to Channel Nine for A$1 million, about A$38 per sq metre; MPs and neighbours are now demanding answers over The Block deal

The Victorian government’s sale of a historic former psychiatric hospital site in Sunbury to Channel Nine for A$1 million has triggered questions over the valuation, transparency and public interest behind the deal. Reporting by Star Weekly, The Guardian and realestate.com.au has highlighted concerns over the price paid for the 2.6-hectare Jacksons Hill property, which is set to feature in the 2027 season of The Block. The transaction, recorded on the Victorian government’s property sales history website, covers three heritage-listed buildings at the former Sunbury Asylum precinct. At approximately A$38 per square metre, the sale has drawn scrutiny from politicians and community members who want to know whether the state secured the best possible return for publicly owned land. Channel Nine acquired the buildings in September for its renovation reality show, with plans submitted for assessment proposing to turn the historic structures into six residential properties. The project is expected to require extensive restoration, with heritage restrictions and the condition of the existing buildings presenting significant challenges.Questions over the sale processDavid Ettershank, a Western Metropolitan MP, raised the transaction in Victoria’s Parliament on September 22, asking the government to disclose the property’s valuation and explain why it had not been offered through an open, competitive sale process. His concerns reflect broader questions about whether other prospective buyers were given an opportunity to put forward offers.Housing, Building and Precincts Minister Nick Staikos responded on October 2, saying the government had approved an exemption from the usual public sale process. The decision followed years of engagement that, according to the government, had failed to identify a financially viable use for the land.The government’s position is that Channel Nine’s proposal provides an opportunity to restore the deteriorating heritage buildings while encouraging further investment in the wider precinct. The sale was approved by the state government’s land monitor, with the government maintaining that the property changed hands at market value. A spokesperson for the Department of Transport and Planning said independent valuers determined the sale price, which was certified by Valuer General Victoria.Why the price is difficult to compareThe reported figure has attracted attention partly because the property is located in a suburb where residential real estate can command substantially higher prices. However, property specialists and government representatives have cautioned against comparing the transaction directly with ordinary residential land sales.Jacksons Hill is not an undeveloped housing block. The site contains three substantial buildings protected by the Victorian Heritage Register, and any conversion must account for the cost and complexity of conservation work. Those obligations can affect what a buyer is prepared to pay and whether a proposed development is financially viable.Reporting by realestate.com.au has also noted that earlier estimates of the sale price differed from the final figure recorded by the government. The confirmed A$1 million amount has intensified debate over how the valuation was calculated and how the costs associated with the site influenced the final price. The redevelopment plans remain subject to heritage assessment, meaning the proposed residential conversion is not simply a matter of renovating the buildings to ordinary housing standards.A historic site’s futureThe former asylum holds considerable historical significance for Sunbury and the wider state. Its future has therefore become a question not only of property value but also of how public heritage assets should be preserved and reused. Supporters of the redevelopment argue that finding a commercially workable use could help prevent further deterioration and bring investment to the precinct. Critics, however, have questioned whether a private television production was the best available route, particularly without an open sale process that could have tested the market.The government has defended the transaction on the grounds that previous efforts to find a viable use had been unsuccessful and that the proposed project could unlock further development opportunities. The central question now is whether the sale price adequately reflects both the property’s constraints and its potential value. With the government standing by its valuation process and critics continuing to seek greater transparency, the Jacksons Hill deal has become a wider debate over accountability, heritage conservation and the use of public land.You use AI every day. Now get your AI Quotient. Take the AIQ test.