The Senior Project Manager of Goldfield Group, Peter Burke was invited to speak in the Euro-Asia Economic Forum.
Established in 2005, the Euro-Asia Economic Forum is a high-level international conference with the mission of promoting economic cooperation, boosting trade exchange and enhancing mutual understanding within the Asian and European areas with an emphasis on China’s One Belt One Road initiative.
The 2017 Forum was held over 21 -23 September in Xi’an – an ancient capital city of China. As part of the forum over 350 people participated in the Green Building and Infrastructure Summit, including government leaders, industry pioneers, main-stream media, and leading enterprises from the UK, South Korea and Australia.
The Senior Project Manager of Goldfield Group, Peter Burke, who has over 30 years of experience in the local development industry, was also invited to the conference to speak on how China and Australia compared in relation to sustainability, planning and real estate development, as well as the advantages for Chinese wishing to invest in Australian property.
What do you expect to get from the forum?
I’m looking forward to gaining greater understanding of how green infrastructure can be integrated in China’s One Belt One Road initiative and what part other countries like Australia can play in cooperating in its implementation.
What is the advanced experience China can learn from Australia in real estate development and city planning?
It is crucial that we always remember to plan and develop cities in a way that ensures that livability is the highest priority and people’s lives and livelihoods are bettered through that planning and because of development. In that respect I think that China can learn from Australia the importance of ensuring that land is a limited resource and must be utilised efficiently optimising as a balance community uses, market demand, environmental conservation and equity of opportunity.
Differences between China and Australia in real estate and city planning?
When it comes to residential property both Australia and China are very much demand driven at the moment. In commercial markets China cities seem to be quite robust whereas well weighted portfolios has been a feature of Australian commercial markets for more than a decade. Of course scale is a principle distinction with the Australian population being less than 2% of that of China. That said Australia has become one of the most urbanised countries in the world with 90% of the population living in 7 cities and 65% in the two major markets of Sydney and Melbourne.
China has many more cities which should mean that as it continues to mature the Chinese property market can become more resilient. Conversely when we talk of the Australian market we have to recognise that there is less depth of diversification and therefore we need to bolster against the potential of being more subject to the dynamics of economic conditions.
In respect to planning systems I would say the differences are mainly in administration and environmental policies. In Australia in most cases local government determines planning outcomes within overarching principles set by State Governments. The federal government has a major role in environmental conservation although little direct say in city planning.
So in Australia the participation of local communities in decisions made by authorities in respect to development in their neighbourhood is accepted. This can lead to better development outcomes with the local community usually best placed to understand the context of their area. It’s undeniable that China’s planning regime is structured according to the challenge of housing such a vast population and the mechanisms for enabling development would therefore seem highly managed.
Another key difference between the two planning systems as I see it is in land utilisation provisions with Australian governments being prescriptive in which uses are permitted where and which are prohibited in certain areas. Australia could learn a lot from China in respect to adoption of more flexible mixed use zones to encourage densification particularly around transport hubs.
Goldfield Group is one of the most active property development companies in the Melbourne property market. Success is demonstrated through a development portfolio and pipeline of multiple projects with off the plan sales consistently bettering sales targets through offering a compelling value proposition and quality in great locations.
A strategy focused on infill house and land / townhouse and low rise apartment mixed use projects in middle ring Melbourne suburbs has now expanded into greenfield land subdivision developments. The company builds as well as develops through third party contract builders and works with some of the most high profile architecture firms and consultancies.
In house resource capabilities include professional development and project management, design management, sales and marketing management and cost estimating and construction management.
The company recently completed its largest project to date in the very popular suburb of Box Hill. Three other developments are in the field currently, another three being marketed and three more in the planning pipeline.
Advantages for Chinese wishing to invest in Australian property?
Financially the fundamentals of the Australian property market remain sound with demand exceeding supply in the main centres such that steady growth in valuations has been achieved in excess of 8% per year on average over the last half a century combined with low vacancy rates and yields on residential dwellings averaging between 3% and 4% in a low interest rate environment. Australia’s population growth rate of more than 2% per annum is the primary driver of this while there has historically been times of lag in home building rates to meet demand. Also with a relative abundance of land supply generally well managed by governments there is real scope for the Australian property market to continue to grow in a commercially and environmentally sustainable way.
In terms of individuals’ sentiment the reasons buyers like Australian property could be summarised as “overhead and under foot” – Australia with abundant blue sky and pristine sandy beaches is seen as a safe, clean and pleasant environment with mostly temperate climate and little risk of the effects of the forces of nature in the places where most people like to live.
In addition when you buy an Australian property you are standing on what belongs to you personally. Australia is a very secure mature property market operating under a system of title where property is registered to owners as individuals or in common and whereby under law the entitlement to property is able to be passed between generations or even granted by the owner to anyone else unencumbered.
Business and skilled migration opportunities for Australian residency and education options for children are other benefits with Australia having exemplary credentials when it comes to its public and private school systems and consistently top ranked universities.
Invest in Xi’an
Certainly what I’ve been able to learn during the past few days of being in Xi’is that it has many great attributes for the potential to become China’s leading out performing property market and I’ll be taking back to my directors in Melbourne a recommendation that we look to cooperate further with capable Xi’an local property organizations and enterprises to pursue suitable opportunities that we could consider where these may be mutually beneficial.