PPP plan to revive residential
PROPERTY developers will become more involved with government through private-public partnerships in an effort to support the flagging residential sector.
PROPERTY developers will become more involved with government through private-public partnerships in an effort to support the flagging residential sector.Matthew Quinn, the managing director of Stockland, said with housing affordability at such a precarious point, developers were now approaching state and federal governments to help fund infrastructure projects as a support to their own developments."More PPP deals will be struck as developers look to manage the risk and help build the roads and infrastructure," he said after a Committee for Economic Development lunch in Sydney yesterday where he was guest speaker. "We will be talking to all forms of government to discuss these issues."Mr Quinn's comments come a week after he issued a warning that profit for the full year would be down about 3.5 per cent following a slump in sales in the residential sector.Under Mr Quinn, Stockland pursued a three-Rs strategy of retail, residential and retirement.He said the downgrade in residential was necessary as a combination of wet weather in January and a rise in interest rates by the banks meant buyers disappeared. It was also part of continuous disclosure because Stockland is undertaking a share buyback and may be seen as having insider information."I have never seen such a material shift in sentiment in my many years in this job as I have over the last six weeks," Mr Quinn said. "It's banks increasing rates out of cycle and wet weather that has pushed [investors] to make a decision to do nothing."He said there was a fifth bank emerging, known as the parent bank, which could be called upon more frequently to help first home owners enter the market."The dinner party talk has shifted from how big is my house to how small is my mortgage," he said. "Stockland is leading the charge by building smaller houses that people can afford."For retail, Mr Quinn said the landlords and tenants that thrive were those that adapted to the internet and the structural shift in consumer spending.He forecast equilibrium would be reached when internet sales account for about 20 per cent of all retail spending."Discretionary spending is down, but there is more to life than conspicuous consumption. People are social creatures and as a result malls will evolve from traditional shopping centres to community areas," he said.