What was the biggest challenge faced by our industry in 2018? And what emerging trend will have the biggest influence in 2019? We checked in with some of our industry’s leaders for insights.
Planning for our future population
Mirvac’s chief and Property Council president Susan Lloyd-Hurwitz says one of the biggest issues of 2018 was the “continuous conversation around Australia’s population growth, particularly in Sydney and Melbourne”.
“We know that residents in these highly-populated areas are weary of density, transport construction and new building approvals,” Lloyd-Hurwitz says, adding that “we need all stakeholders to play a part in solving these issues”.
Lloyd-Hurwitz is looking forward to “greater focus on urban planning and more investment in key infrastructure” in 2019, as well as collaboration among all levels of government, corporations and residents to develop a “shared vision” for their communities.
“This will be the difference between poor outcomes, good outcomes and ones that lead the world,” Lloyd-Hurwitz says.
Political uncertainty poses challenges
“The biggest challenge for the industry would have to be the uncertainty in the Australian political landscape, its impact on business confidence and ultimately the confidence of our customers who lease space from us,” says Dexus CEO Darren Steinberg.
“Hopefully in 2019, there will be stability and leadership that inspires business to make further investment and grow the economy,” Steinberg adds.
JLL’s CEO Stephen Conry also points to the challenge of political uncertainty and notes the upcoming federal and NSW elections “could lead to a slowdown in business decision-making”.
Carolyn Viney, Vicinity Centres group executive for development, says political uncertainty influenced investment decisions in 2018, notably in Victoria. “With the election done and dusted, and the policy settings now understood, it’s now up to us to identify the opportunities and get on with it,” Viney says.
Virginia Briggs, partner, infrastructure, construction and property leader at MinterEllison, is optimistic that a federal election year brings new opportunities.
“As political parties look to our industry for further advice on housing supply, affordability and population growth, 2019 presents great opportunity to influence policy and be truly strategic advisers to government,” Briggs says.
Housing markets hit turbulence
Briggs also notes the “clear shifts” in Australian housing markets, particularly in the Sydney, Melbourne and Brisbane areas.
“I think 2019 will be a really interesting one for our industry as we wait to see if housing prices fall further, clearance rates lower and stock sits on the market for longer with borrowers being more closely scrutinised by lenders – it feels like the end of this boom is certainly approaching,” Briggs says.
Jason Cannock, ANZ’s head of property, points to the big challenges of “housing generally, demographics, affordability, and meeting the needs of an ever-changing population”.
Cannock sees an emerging opportunity for build-to-rent and anticipates more thought leadership in this space in 2019 “as industry participants, governments and the private sector explore possibilities further”.
Retail rises to the customer experience challenge
“In retail, we continue to rise to the challenge of meeting the needs of our customers,” says Peter Allen, Scentre Group’s CEO.
“This means staying focused on curating the right product and services mix in our living centres and creating places for our customers that they want to visit, rather than they have to.
“In 2019, I expect to see more discussion on the pivotal role that physical stores play in influencing sales in-store as well as online.”
Steve Leigh, managing director of QIC Global Real Estate, notes the “mixed-bag of economic indicators” that “continue to create headwinds for the retail sector”.
“At QIC GRE we expect the Australian economy to gradually recover closer to trend-like growth during this new financial year.
“The overall pick up in the domestic economy will help to support consumption going forward. However, our sector remains sensitive to consumer disposable income which is impacted by the housing sector, wages growth and rising costs of living,” Leigh says.
Retirement living evolves to meet expectations
RetireAustralia’s CEO Alison Quinn, who is also president of the Retirement Living Council, says her sector’s biggest challenge ahead is the Royal Commission into Aged Care. She expects “choppy waters” next year, but a “very strong light at the end of the tunnel” for operators who are ready to embrace change.
“On the other side of the Royal Commission, I see an improved sector which will be better placed to meet the needs and expectations of residents and their families,” Quinn adds.
Planning for sustainable growth
Tanya Trevisan, the Property Council’s president in WA and chief operating officer of Iris Residential reflects on a “challenging few years” in her local market but, taking a broader view, argues that the industry’s biggest challenge for 2019 is planning for the sustainable growth of our cities.
“Property Council’s 2018 research paper ‘Creating Great Australian Cities’ makes for interesting reading. In 2019 the property industry should continue to provide thought leadership on how to improve the sustainability of our cities, but we cannot do this without engagement with and the support of the communities where we operate,” Trevisan says.
Diversity continues to deliver
Finally, JLL’s Conry, a Property Male Champion of Change, argues that the industry’s diversity agenda will continue to deliver dividends in 2019, as it enhances talent and experiences, fuels innovation and boosts employee performance.
“While the industry has made improvements in gender balance, we are cognisant that diversity is more than gender and a workforce representing the broadest society mix is crucial. This challenge will remain at the forefront of 2019,” Conry concludes.