There’s a lot of frustration and chaos in the property development industry now. So many moving parts that are affecting how builders, buyers, stakeholders, developers are acting and reacting. I’m choosing not to hit the panic button. Here’s why—and the practical steps to take to develop a project successfully in this market.
First, here’s your new mantra to repeat every morning.
How the property market works hasn’t changed.
The process of property development hasn’t changed.
It’s just that prices have gone up and time frames are extended. It’s a highly volatile market.
So, trust your process. Trust your team. Trust in your ability. Get ready for the rewards after putting in the hard work in this market.
Okay. Having that perspective is what’s keeping me optimistic, centred, and full steam ahead in 2022, gearing up for a big 2023. It helps my positive mindset and propels me forward, as it will do you. This is how we are helping propel our clients in this market.
Step one: Get clarity on your strategy and process on your project. Get an intimate understanding of where your numbers sit, what the process is to get the project started, what the time frames are, a technical understanding of how things come together and how things are going to unfold.
Step two: You need to have a trusted team you can rely on. By trusted I mean you know the team isn’t just in it for the financial reward. It’s critical they’re in it for the betterment of the project and are behind the vision of the project and they want to work with you long term.
Step three: As the developer, you need to continue to delegate so you can hold the standard for everyone. No acting flustered or stressed, no moping, no complaining. Because if you don’t back the project 100% it hard to expect other consultants to back and prioritise your project.
Step four: Remove yourself from your own troubles and get in the world of other stakeholders. If you’re finding it hard, they are too. You need to ask, ‘What part of the process is challenging for stakeholders?’ Then your relationship isn’t adversarial and the pressure eases. If a builder is worried about escalation, as a developer you want to go, ‘right, what trades are you worried about, how do we come up with a way forward that is solution-based and allows us to open up the flow in that area of the project?’ It’s a very evolved way of doing things—and it will open up momentum and flow on your project.
Step five: Look after the end buyers. The end buyers should come first and right now some can feel forgotten about as they are being hit with price rises and delays in getting into their new unit or house. Buyers are more sophisticated and educated than ever and they have to feel they’ve had a win and are being looked after at every step. That’s not to say asking them for a price increase is unreasonable—it’s the process and way in which this is done at the moment that counts. If someone has been invested for months and costs have gone up, so the sales price of their unit has gone up, they deserve communication and transparency. This will help generate positive feedback about your brand in the market and help build relationships that make the later part of the process and settlements a lot easier.
Step Six: Don’t wait for all the stars to align in this market—it won’t happen, and you’ll lose out on an opportunity. If your project is financially viable and you can get it funded, then back your project. Keep front of mind that from a developer perspective, whoever navigates this channel at the moment will have a finished product in a low supply market. And the intrinsic value will be higher than ever because it comes down to basic supply and demand. Whoever has new stock will get a premium price.