MaxCap’s Developers & Dealers Forum 2016
The robust panel discussion that featured leaders in their fields of real estate development, research, economics and finance addressed the seasoned crowd, which included many of Australia’s leading developers along with senior representatives from the big four banks, at The Developers & Dealers Forum 2016 on Thursday 28 April in Melbourne, Australia.
The expert panel comprised of Grocon Owner and Executive Chairman Daniel Grollo, business commentator and financial journalist Alan Kohler, Charter Keck Cramer’s National Executive Director – Research Robert Papaleo, and MaxCap Group Partner and CIO Brae Sokolski.
Key take-aways from the Forum were the strength of the fundamentals underpinning the Australian property market; strong net migration, foreign investment, and generational shifts towards urbanisation, as well as the existence of a “tectonic shift” that is underway in real estate capital markets, via the entrance of institutional capital into the commercial real estate debt space
The panel vehemently discussed China’s influence over the Australian economy and whether demand for property investment opportunities would continue, particularly with regard to investor grade apartment stock in eastern seaboard capital cities.
Mr Kohler was positive with respect to the market, likening the supposed looming property bubble to “a storm in a teacup”.
The sentiment was echoed by Mr Grollo and Mr Papaleo who stated that although the industry is creating housing stock supply at unprecedented levels, it does not necessarily translate directly into an oversupply; especially given increasing investment in Australian real estate from Asia, particularly China whose influence was forecast to be far-reaching.
Mr Sokolski added that national population data is another reason the oversupply argument has no basis; “migration rates mean that we need to construct 330,000 new dwellings each year for the next few decades, we are currently only constructing 230,000 – that is a 100,000 short-fall year on year”.
Mr Sokolski highlighted that in a housing market that continues to be undersupplied, it is becoming difficult for the major banks to provide funding for property developments, given APRA, and pointed to examples of institutional capital entering the market to fill the gap.
Click here to watch the short video wrap of the event.