Key Development Criteria Location, Lifestyle & Loans
Over the past week a fresh debate about the need to directly encourage new land releases has started, thanks to mainly an announcement by the state government, asking developers to nominate sites that might then be fast tracked for housing.
The response, as might have been expected has been fast and at times colourful, thanks mainly to the suggestion that local councils might be side-lined in some of the decision making. At the same time the debate has also re-kindled questions over who should pay for the extensive costs associated with providing services to these new release areas.
The idea of ‘fast-tracing’ development in this way is not a new idea and governments have always looked for such influence.
Across Sydney we already have in place a policy that seeks to see more, much more high-density development tied to existing infrastructure and transport links. This policy has, like some aspects of the new scheme, concerned locals who worry about the impact on their existing communities.
While the government and industry continue this debate we should not forget the consumer’s perspective. What expectations do consumers have when they consider buying a home in a new housing estate or in an apartment development? Is there enough attention paid to what consumers who might live in these new areas think? Or are the big-picture numbers just given the lion’s share of attention?
While price, place and timing are the three big factors that influence almost all consumers in the housing market there are endless, more personal and subtle, more local and possibly less robust combinations of influences that we need to keep central to the debate and planning.
This is where I personally think that the rule of location, location, location needs to be modified so that we think: location, lifestyle and loans. Because no amount of government planning or wishful thinking will create viable communities that people want to live in if these elements aren’t assured.
These are the key elements we need in place to ‘sell’ into any new areas. Even if supply might be lagging, demand will fail to meet expectations if all three issues are not fully addressed. Guaranteed.
Price and value for money are possibly the most obvious and easy factors that influence activity; it is a buyer’s emotional connection with a property that will determine their readiness to buy or not. And I suggest that emotion soundly links to lifestyle and that in turn links to infrastructure. Let’s wait and see is not good enough when it comes to creating a community.
Or is it reasonable to suggest that the role of emotion can be over-stated and will the idea of an anxious buyer driven by a lack of supply mean that the market is willing to over look the lack of services, transport or other facilities?
Incomes, interest rates, employment and an entire range of settings need to be aligned, but if services are not in place or reasonably assured buyers will hesitate to act. They might already be doing as much, because even as the lack of new housing stock remains a constant, buyers remain concerned about the lag in the supply of quality services, and so they are staying put, at home with mum and dad, in shared housing or in inner-city apartments they may have long ago outgrown.
Price and easy access to employment centres are clearly other big concerns, but it can also be much less complex. More day-to-day issues influence buyer behaviors and how they respond to the marketing benefits of one development or another. And I suggest how they will also respond to any plans to create new communities for Sydney’s expansion.
What makes one area more appealing than another can sometime come down to very simple and very human influences? While the heavyweight issues like access to loans, employment, transport, shopping and schools will always be important, it is at times other less complex factors that can provide an incentive for particular buyers to consider or be attracted to a development.
The need for new areas of expansion and development in Sydney is obvious and the debate is productive and will hopefully go on, but the end product has to be desirable.
It is an up-hill exercise to market and to create appealing communities without the location, lifestyle and (affordable) loans all there from the start as the essential foundation.
So can we keep this conversation going from all angles?