10 Sep 2010
Peter McMahon on the Australian Real Estate Market
Peter McMahon from our Real Estate Markets group discusses the key trends and opportunities in the Australian real estate market.
Peter McMahon on the Australian real estate market
Peter McMahon, Partner, Real Estate
What are the key trends in the Australian real estate industry?
We're still emerging from the GFC, but when credit and confidence return to the market then there should be some exciting trends emerging. Having said that, there is still a basic confidence in the properly industry. One thing that the industry should be definitely keeping an eye on is the growing importance of green buildings and green developments. We're seeing a greater call for innovation in delivering green developments and greater regulation as well, such as the disclosure requirements for building energy efficiency
How has inbound investment changed the Australian real estate marketplace?
Inbound investment has created greater competition and also created greater cash flow into the Australian property market, and with that greater cash flow come more opportunities - opportunities for existing projects and also opportunities for projects that have been on the drawing board for some time and now may be able to get kick-started.
Where are the opportunities within Australian real estate?
There is still a lot of investment in major projects and infrastructure. The tourism sector is an innovative one and there are certainly some interesting projects in that sector. Foreign investors are still looking at the market here and we don't think their appetite has waned yet.
What are the greatest challenges for business in real estate?
Well the issues that we keep hearing from our clients at the moment are the difficulty in getting credit for property investments and also the lack of confidence in some segments of the market. The less glamorous issue, but a very important issue, is the harmonisation of laws. Having different laws in each state of Australia is really a major problem for our clients as they have to play by so many different sets of rules. We've been involved in attempts for many years now to achieve greater harmonisation, particularly through my role as Chairman of the Property Law Reform Alliance. We're confident we'll get there in the end.
What are the greatest challenges for your government clients in real estate?
One of the perennial problems for government is getting its tendering process right. It's crucial because a properly run tender process can really deliver value for money for the government, but getting it wrong can derail the whole project. It's also frankly a problem for our private sector clients. They're the ones, after all, who have to respond to tenders which can be a very expensive process. They want to be sure that the process is being done fairly and correctly.