- Regional networks opened up many off-market opportunities
- The regional migration due to Covid has put pressure on existing affordability issues
- Affordability concerns have also pushed essential workers out of some regional areas
According to Jennifer Macquarie (the first part of our interview series can be read here), small communities lend themselves to authenticity. There’s no hiding behind a public relations team.
“In a small community, a business isn’t separated from you personally. Your personal values and culture have to be consistent across both, it’s all very visible. You don’t go to work in one place and return to your personal life in a completely different community as you would in the city. It’s all connected,” Jennifer Macquarie told The Property Tribune.
The connections formed are long-lasting, and bonds are strong.
“I grew up with a culture of giving back to your community, sharing time and skills where they are needed. It’s the scaffolding that holds regional communities together.”
The regional difference
“The projects we have been involved in have been quite diverse from residential subdivisions to industrial units, nursing homes and multi-story buildings in Wollongong, we’ve really done everything,” said Ms Macquarie.
She added that as a regional developer, the scale of projects is often smaller so you have to consider every aspect of real estate. If you want to grow you can’t stay in just one lane. If you know your territory intimately and are open to anything, the opportunities are broad.
“For a long time, we were the big developer in our region. This probably happens in a lot of regional areas, you have local companies grow to become the bigger player in that region.”
Competing on larger scales, with larger players
“We had a couple of forays into Sydney at one point, that didn’t go so well. It is a very different business culture, tougher territory with more players in the development space. Our competitive advantage, being our network and reputation, didn’t exist in Sydney and we would have had to change who we were to seriously take on that territory. We happily chose not to pursue it.”
“We’ve expanded our territory in the other direction, focusing on country towns and regional centres. It’s where we came from, the roots that we started with. We really understand those places.”
Ms Macquarie also noted that being in tune with the regions and capitalising on the long-held family networks has opened up many off-market opportunities otherwise not available to developers from outside the area.
Intuition
“In the big corporate development firms, the guys making the decisions at the top can be disconnected from the salespeople in their various projects spread over many locations,” Ms Macquarie said.
Being a regional developer and a smaller company affords Ms Macquarie luxuries that the big corporates don’t have: intuition.
“Even though I’m one of the owners and directors of the company, I’m in the sales office often. I deal directly with our buyers and potential buyers, so I’m really in touch with the market and how its shifting.”
“When I see changes in the market and in demographics, I just pick up the phone to my business partners, my father and brother and we discuss it. I can see this change and there’s a niche in the market that we should tap into… and the decision is made around a lunch table, it’s fast and very responsive.
“I feel we can get into those spaces often before anyone else.”
Arising issues
The regional allure has drawn people gradually over the years, but in more recent times, there has been a real push out of the city.
Ms Macquarie observed that “When Covid came along, it turbo charged this trend even further. Everyone wanted to get out of Sydney. When working from home was normalised people realised they didn’t have to sacrifice their career to have a regional lifestyle.”
Sharply increased demand caused issues, Ms Macquarie said: “It’s really added to the demand for regional properties and made a pre-existing affordability issue even worse.”
Regional areas traditionally have houses situated on larger blocks, and with prices surging, Ms Macquarie noted there wasn’t enough diversity of housing to serve the demand.
The catch: the local community often says ‘we don’t want our area to change’.
Regional issues
A common regional concern, Jennifer Macquarie said, was small block sizes and small houses.
The underlying issue may be one we don’t often think about.
“What I think people really don’t want is Sydney style urban sprawl. It really changes the character of a town and I can understand that, having grown up in the same kind of towns,” said Ms Macquarie.
“It has evolved into an anti-development sentiment. When you actually talk to people, and drill down, it’s not so much anti-development but anti-the-wrong-development and anti-development that’s going to change the town into something that’s more like Sydney. Urban sprawl with McMansions.”
Ms Macquarie added that one of the complicating issues is that local councils may not necessarily have the skills or financial resources to manage ‘getting the character right’ or putting appropriate design controls in place.
“At Fountaindale we incorporate traditional architecture in our development projects, not because the local Council requires it but because we feel it fits in better with the character of regional towns. It’s respectful of its context and the community.”
Local politics is another factor in preventing the development of small, affordable houses, which as it turns out – may have its place.
Small affordable houses
In a small but related digression, other discussions with real estate bodies and practitioners around Australia have found one common issue: certain regional areas have become so unaffordable, people in hospitality, cleaning, health, and other essential services often leave those areas, resulting in empty restaurants and bars because those who work there, can’t afford to live close by.
Ms Macquarie recounted:
“You have farmers who can’t harvest their crops, you have tourism businesses who can’t find a barista to make the coffees or serve the wine at the cellar door, simply because those workers can’t afford to live in the area.”
“My husband is in radiography, and they’re considered key workers. He recently lost a radiographer to Canberra because she couldn’t afford to live in Bowral… aged care, health care, child care workers, so many can’t afford to live in the more popular regional towns anymore and we can’t afford to lose them.”
There are some solutions on the table, to be explored in part 3.
