In my recent conversation with Mark Percy, executive manager of residential of Cbus Property, we explored some of the main issues confronting our sector. I was also very pleased to hear Mark express some refreshing thoughts across a range of ongoing topics impacting the housing market, as well as some timely points directly related to project marketing.
As we come to the end of this topic, I asked Mark what he thought were among the key marketing challenges for the next few years, not only limited to supply and costs but also the big shifts in demographics.
“I see the biggest marketing hurdle as being an almost complete lack of confidence among buyers at all levels of the market, and while this might move up and down at the margins it remains a problem. Affordability, the demand for smaller homes and the number of kids living at home later and later with mum and dad are just some of the more obvious pointers we see today.”
According to Mark, statistics such as low residential rental vacancy, low interest rates and limited new supply should be contributing to a bubbling along New South Wales market. He believes that many of the indicators are positive and that now is a good time to buy.
“But confidence to commit to a new purchase is lacking. I think it’s almost a perfect storm working against market sentiment. Overshadowing everything is the post-GFC flow-on, the global economy looks a concern, it’s not going to improve quickly and we are now seeing its shadow reaching Australia. Consumers are being told so every day, it’s an endless negative background conversation.
“We also now have unemployment concerns and announcements in the media of large job cuts in certain sectors contributing to a nervous housing market. I think that it’s a subject watched more closely than usual.
"We are talking to a cautious market where many young adults are just staying put with mum and dad and not entering the real estate market. Mum and dad are also deferring downsizing while the children are still at home.
“It’s a complex picture and as locals see housing affordability slip away, it’s one reason I think that foreign investment gains so much attention but without it, the local market would be significantly worse off.
“We also have state governments who are scared of taking on debt as they are hell-bent on keeping their credit rating. This is adding to pressure on local governments, who are struggling to meet their local infrastructure needs."
Mark Percy’s 35 years of experience has helped to frame what has been a wide-ranging discussion with Project Agenda. Many points are common industry concerns and the debate will go on, but possibly there needs to be more action and less debate. For anyone working in project marketing, there are many ongoing challenges to address.
Funding, affordability, development design and quality, higher and more complex marketing, lack of infrastructure, professional roles and shifting consumer needs are all big issues to work with and address.Peter Chittenden is managing director for residential of Colliers International.