Property experts present contrasting outlook on Australian market

Panellists at a high-level property lunch in Sydney yesterday presented contrasting views of the Australian economy and the post-election outlook.

Two of the three property market experts at yesterday’s Australia-Israel Chamber of Commerce function had recently arrived here from overseas. Both were very bullish, saying that the Australian economy compared very favorably with those of the United Kingdom and the US.

In contrast, local property developer Lang Walker, the executive chairman of developer Walker Corporation, said that Australian business confidence was low due to political instability and a lack of job security.

Susan Lloyd-Hurwitz, the Managing Director of listed real estate group Mirvac, has spent many years working overseas. She contrasted Australia’s GDP growth rate of 3% with that of the UK, which was 0.3%.

There are a lot of opportunities for people to carry assets given the strong economic fundamentals, Ms Lloyd-Hurwitz said. The unique transparency of the local property market was one of the qualities that gave “developers confidence to deploy certain amounts of capital.”

The third member of the panel, American Bill Powell, recently relocated from New York to become the CEO of Brookfield Australia. Brookfield’s parent company, based in North America, is a global asset manager focused on property, renewable power and infrastructure with over $175 billion of assets under management.

Mr Powell said he was “shocked with the negativity” around the local economy, as we had a “great GDP, low unemployment, low CPI and banks that were well capitalized.”

Other advantages were a strong fiscal outlook and the presence of an educated workforce with capital to invest, he said.

By way of contrast, Mr Walker said that this country needed foreign workers because the work ethic of young Australians was lacking. On top of this, the government had recently “virtually doubled” the wages of apprentices, making them too expensive for many employers to hire, he said.

The 67-year-old executive chairman of property development company Walker Corporation, who was last year estimated to be worth be worth $2.1 billion, went on to say that “in the old days, the training process took three to five years and you were paid a little bit more each year. That’s not the case now, it’s too expensive.”

His statements are not quite right, however. Last month the Fair Work Commission increased the wages of first-year apprentices from $304 to $400 a week, to reflect the fact that most apprentices are now school leavers.

Mr Walker also said that although, as a nation, we are “burdened by regulation”, his recent dealings with the Queensland bureaucracy, which has been slashed by Premier Campbell Newman, had been extremely positive. His latest approval from the Queensland Land Titles Office had taken only one day, he said.

A total of 800 people attended the lunch, which is one of the most popular events in the AICC calendar.