An Intimate Real Estate Conversation: Episode 4, Green Shoots/Opportunity
Two of Australia’s top Real Estate people discuss issues relating to the WA Property Market. Watch Episode 3: Interest Rates.
Intimate Real Estate Conversations between Adrian Abel, CEO of Abel Property and Ross Hunter, CEO of One Degree Consulting.
AA: Hello there, Adrian Abel here from Abel Property and I’m with Ross Hunter from One Degree consulting. Ross great to catch up again, wanted to ask you a question in the market place I’m hearing a lot of talk about green shoots of optimism if you like and that perhaps we met the bottom of the market, are you finding the same thing and what are the indicators to validate that?
RH: Yeah look there’s a lot of things and probably I guess one of the first shoots we look for is attitude. You know because so much in life be it real estate or in any aspect stems for attitude doesn’t it? People have got to have the right attitude to say, we are going to take some risks, we are going to invest, we’re going to do this, we’re going to do that. And I’m finding the general sentiment around the place is the people are positive, there saying they’re looking forward to 2018, there’s lots of good stuff happening, so mate I’ve got to say I’m pretty excited about 2018 and what it’s going to bring. What’s your take on it mate? You’re out pounding the streets every day, what’s going on for you?
AA: No that’s right.
RH: What’s your story?
AA: I have been reading up some stats recently and one of the things is that building approvals are actually at cyclical lows at the moment, but what it does mean is that there’s not enough property being built to accommodate the future growth. Which will generally start to see prices solidify, we need to mop up some of the excess stock that we’ve had post GFC, particularly in the apartment market and some of the new land development stuff, but once that happens I start to see some real growth. And I can see that probably happening in late 2018, so that’s an issue. One of the interesting stats I did read which is a bit off the wall is an increased level of traffic in Perth airports.
RH: Yeah well, as you know Adrian I travel a lot and I spend too much time at the airports. And I think I mentioned to you earlier on today that for all the negativity, people might sort of espouse out there, aeroplanes are full, airports are jam packed, so there are things going on there. Obviously not, speaking of airports from a Perth point of view, you know March we begin the direct flights from the UK which is only going to be a positive, you know you’ve got new hotels, you’ve got the Ritz Carlton being built down at Elizabeth Quay, Hilton being built down at Elizabeth Quay, Sofitel about to be finished in town, the accommodation is there to accommodate these people, JAL are probably going to fly direct from Japan into Perth…
AA: Yeah I heard.
RH: So mate…
AA: Another thing being a mining state as we are you got to keep a close watch on what’s happening in the mining industry. The people I talk to in that industry are talking a lot about exploration growth. There are no rigs available in Kalgoorlie, they’re all up on the mines…
RH: Yep, they are.
AA: you were telling me about one of your associates actually having to fly to London to look for qualified staff because there’s big demand now for full tradies.
RH: Yeah, to bring in skilled trades people into meet the demand for riggers and welders, electricians and so forth.
AA: And we haven’t seen that for seven years.
RH: No, no, no, no, no
AA: That’s always an indicator of further production and exploration so there’s a lot of buoyancy and a lot of money going into exploration. General unemployment is lower than it has been, we’ve always been – Perth has always been one of the worst in Australia in terms of states, but at the moment, it’s come from 6.5% to below 6%, so I feel a bullishness in the market as well and I do think that particularly on house, buyers and sellers we’re getting a lot of people through home opens. We’re getting 30-40 people through a new home open, and they’re not complaining about prices, they’re complaining about lack of stock and opportunity and I see that as a great harbinger of some good sentiment and some good sales activity between now and Christmas.
RH: Absolutely and as we’ve said Adrian it begins and finishes with attitude. If we’ve got the right attitude and we sort of have a great window into the future, why wouldn’t we do things?
AA: It’s positivity.
RH: Positivity is what it’s all about.
AA: Cool, great to catch up again, see you next time.