All dislocating events bring opportunity, ANZ’s David Plank, Mirvac’s Susan Lloyd-Hurwitz and Stockland’s Mark Steinert agreed during the Property Council’s latest live-stream event. Which direction should you steer your ship?
ANZ’s head of Australian economics, David Plank, set the scene with the low-down of the latest Property Council ANZ Survey. National industry confidence levels have plunged by 61 index points from the previous quarter to 62 index points – the lowest level in the survey’s decade-long history.
Some economic data hadn’t yet caught up to the speed of the Covid-19 crisis, but the numbers were currently “consistent with a recession,” Plank explained. Australia could expect to lose a million jobs over the next three months, with unemployment rising to its highest level since the early 1990s, he warned.
Stockland’s CEO and managing director Mark Steinert said this was already influencing demand in the residential sector. Stockland had seen enquiry levels fall by 40 per cent since the crisis began.
Steinert was worried about the demand and supply imbalance as 300,000 temporary residents left the country. The $320 billion stimulus package, representing 16.4 per cent of GDP, was maintaining “job momentum” and there was “still some certainty”.
And besides, more time at home meant more time spent dreaming about upsizing, Steinert added.
Australia had plenty of well-capitalised property companies in a good position to seize opportunities, the panel agreed.
Mirvac’s CEO and managing director Susan Lloyd-Hurwitz was confident that build-to-rent would remain a long-term proposition and could be a shorter-term stimulus measure. The “fundamentals remain positive and the customer proposition remains utterly compelling,” she said.
Mirvac was still progressing its first project at Sydney Olympic Park, Lloyd-Hurwitz explained, adding that build-to-rent did not require presales. “People may struggle to get mortgages, but they can still rent.”
The panel agreed we were witnessing a radical reshaping of retail, but this was an acceleration of an already established trend. Lloyd-Hurwitz said the crisis would change how people shopped and the way supply chains operated. Stockland was already in talks with one national retailer about transforming its shopfronts into dark stores permanently, Steinert said.
Offices would weather the storm, but Steinert said they would need to be “pandemic proof,” with masks, temperature checks and social-distancing measures expected for some time. Lloyd-Hurwitz added that the dawning realisation to offices aren’t just to carry out business operations but to “provide human connections” will drive their evolution.
The biggest opportunity ahead was in “applying the new mindset of agility” to make cities better places to live, Lloyd-Hurwitz thought. Plank said the industry needed to grapple with “a post-Covid world where interest rates are effectively zero everywhere”.
Isaac Newton did his best thinking during plague times in London, Steinert concluded. He urged the live-stream audience to “use this time wisely to improve the productivity of the nation and create a better future – that really is our opportunity”.
Disappointed that you missed out on the latest instalment in the Property Council webinar series? Don’t miss the next live stream on Friday 1 May, when Dexus’ Darren Steinberg, Lendlease’s Kylie Rampa and Investa’s Jonathan Callaghan explore their secrets to survival.