Poor sentiment, or a boom on the way?
2 August 2012 –The run of poor sentiment and expectations continued in recent weeks with media reports that building companies were failing at an increasing rate – 200 in NSW and 95 in Victoria since the start of the year.
No wonder some phones are ringing out in some property companies and government departments right along the east coast, with rumours of more job losses to come.
The Federal Government got into the act last week with the sad and meaningless statement of dropping its support for the Banksia Awards. Sad because the message is so loud and clear and meaningless because it was worth no more than $65,000. Makes you think everyone’s trying to outdo Queensland premier Cambell Newman with his axing of his tiny Premier’s literary award.
But although there are also positive signs in the economy that people are getting bored with the negativity and want to get on with their lives, (such as an uptick in housing prices and falling vacancy rates), the worrying backlash against sustainability continues.
The Total Environment Centre’s Green Capital arm will try to work out how to reinvigorate the green business agenda in the face of a “new agenda” from conservative governments at a breakfast forum on 13 September in Sydney.
Titled Where to now for a Green Economy in Australia? the forums will look at the impact of conservative governments on policy.
In a great move it’s got the politicians to speak for themselves.
In Sydney speakers will include NSW Treasurer Mike Baird, NSW Minister for Environment and Heritage Robyn Parker and Parliamentary Secretary for Renewable Energy Rob Stokes.
Panel members will include GE’s Director of Ecomagination Ben Waters.
Say my name, say my name
One of the worrying trends taking hold as part of this backlash is the search for a new word to replace “sustainability”.
A headline this week from Green Biz captured the mood,
Why sustainability execs should shun the S-word.
Sustainability managers should concentrate on people skills and bringing the crowd with them, the article explained in its discussion of what works and what doesn’t in the sustainability business right now.
But the headline writer got their point across. And they were right on the money.
The issue has emerged in discussions with marketing gurus, sustainability managers and lobbyists such as Conservation Foundation’s Monica Richter who brought it up during a recent interview with The Fifth Estate (coming soon.)
OK, let’s say the name changes. If we get the same outcome, who cares?
Let’s call it resource efficiency. Or even better, accurate accounting.
Now that might work.
Let’s encourage the bean counters to come out of their closets and start to put the right price on everything: the carbon emissions we ship to other countries in brown coal or those emitted on our behalf, and on the cost of pollution so that polluters pay for their own mess instead of cleaning up from the profits of not cleaning up.
Let’s never say accountants are boring again. They have the power to deliver to us a business plan – and life plan, if you think about it, that will give us the framework within which to live and work. Long time.
So that we don’t get another deferred bill like the GFC (and worse.)
As the economy turns we may lose this fear of the “S” word and embrace it. Call it by its name. Proudly.
More good news for property…maybe
PCA-ANZ Property Industry Confidence Survey showed sentiment moved from 113 to 106 for the September quarter.
“Industry sentiment had reversed and was down across the board, even in the nation’s resource-driven states”, the report said. But tempering the picture was the longer term picture that proved nothing has changed in the natural order of the world: what goes up tends to come down; and what comes down tends to go back up again.
ANZ chief economist Warren Hogan said market fundamentals “suggest the broader commercial property sector may be at the early stages of a multi-year cyclical upswing”.
He said: “Low vacancy and elevated incentives present considerable upside to effective rents/room rates, particularly in the office, industrial and hotel sectors.
“Moreover, current yields belie the positive fundamentals and will firm as investor sentiment rebounds.
“A robust economic backdrop will underpin tenant demand, while supply will be constrained by rising development costs and tight credit conditions.”
And more: “Capital expenditure expectations and our assessment of proposed major resource and infrastructure projects suggest we are at the early stages of a multi-year investment boom that will underpin solid growth in economic activity and employment.”
This backs what BIS Shrapnel told the Property Funds Association conference on the Gold Coast earlier this year – extensively reported in these pages – especially for Queensland.
This week we had news that vacancy in the office market is down. But then again Melbourne has 10 major office towers coming along.