Continuing to lead the conversation on the Property industry, Colin Biggers & Paisley's annual Property Think Tank event convened in Sydney on 11 April. Held at the Fullerton Hotel, the event attracted over 200 property development industry leaders and stakeholders to explore the current state of the property market under the theme of "Light at the end of the tunnel! Market conditions affecting sales through to the end of 2024".

Keynote speaker David Roberts, a leading economist from Macquarie Asset Management, kicked off proceedings by sharing a comprehensive analysis of the economic dynamics shaping the property market.

Following David's insightful presentation, Bob Miljevic, a partner in our property and development group, facilitated an engaging panel discussion. The audience heard perspectives from a diverse panel of industry experts. The panellists included Chris Duggan, Group Managing Director of Bright & Duggan Property Group; Luke Hartman, Founder and Managing Director of Metro Property Group; Rhys Morgan, Managing Director of Boston Projects; and Sian Jones, Special Counsel at Colin Biggers & Paisley.

Here are the key takeaways from the panel discussion:

• Housing Supply and Affordability: A noticeable pullback in housing supply has propelled rents to escalate sharply. The affordability of housing now stands as one of the most stretched since the late 1980s and 90s.

• Planning Regime Challenges: The current planning regime in New South Wales has emerged as a hindrance to supply. Approvals for both apartments and detached housing have not kept pace with the burgeoning demand.

• Construction Feasibilities: Property developers and builders grapple with daunting feasibilities. Construction prices, buoyed by labour shortages and persistently high wages, are unlikely to revert to pre-COVID levels. However, there are signs of normalisation in inflation.

• Market Challenges and Opportunities: Developers face challenges, particularly in the middle market segment, compounded by escalating construction costs. However, Greenfields locations and the top end of the property market exhibit resilience. Opportunities lie in incentivising investors, including foreign investors, to bolster the rental pool.

• Strata Living Trends: The cost of living influences the evolution of strata and community living trends. Streamlining strata living experiences through simplicity, efficiency, and targeted solutions could restore confidence in the industry.

One consistent theme of the evening was the desire for interest rates cut. David Roberts identified that:

"Interest rates are high and the cost of living pressures are becoming quite acute for lower income and middle income households in particular, as well as highly leveraged households. We're now starting to see the conditions come through where the Reserve Bank is in a better position to be able to cut rates going forward. In my view, a rate cut is possible as soon as November or in early 2025, dependent on conditions continuing. However, there is also the risk that an upside to inflation in Q2 could lead to another rate increase".

As the property market navigates through challenging terrain, stakeholders are poised to capitalise on emerging opportunities while addressing existing bottlenecks. The Sydney Property Think Tank provided a platform for industry players to hear industry experts discuss the current climate and debate what the future development landscape holds.