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23 April 2020

Out of Adversity Comes Opportunity: How the Construction Industry is Responding to Covid-19

The Covid-19 crisis has dramatically changed the way we socialise and work. As we all find our way through this extraordinary time, the creativity and adaptability shown within the Victorian construction industry has been commendable.

Businesses been quick to respond to the significant change in working conditions - particularly for those in office-based roles. Workforces have been rapidly mobilised and technology embraced in order to effectively work from home.

“While nothing replaces face-to-face business interactions, the move to online day to day management of the projects has, after a few initial teething problems, been relatively straightforward and been instrumental in keeping the project moving. I can see that in a post Covid world there will certainly be a greater acceptance of and preparedness to engage in online/virtual teams meetings”  

Theo Della Bosca, Development Director – Built Form, Frasers Property Australia

 

With the wellbeing of our colleagues and clients at the forefront of our minds, it’s been important to stay genuinely connected and be flexible in the way we communicate. Teams are adapting to new ways of working together – and with clients – to get the job done. Whilst these changes have not been without some inevitable teething issues, there have been many positives gained.

“For a design practice the toughest obstacle has been to generate the immediacy of feedback that, deliberately or accidentally, proximity and adjacency provides. Our antidote to the potential lag is the concept of “conscious communication”. This notion demands a heightened awareness within the business of the need to communicate with others in a disciplined and consistent way.

Accordingly, we have quickly established new protocols, and whilst each job is different, what has been heartening to see is the shared desire amongst clients and consultants to help each other. As a collective we are being more flexible in the types of communication used, we are responding quickly to requests and we are providing each other with improved clarity in our communications. Indeed, some of these shifts may become the new normal in the future.

 As we adjust to the new normal, we have been greatly encouraged by the ability of our industry to see beyond the daily headlines and position itself to play a leading role in the national economic recovery. Opportunities are already being activated and, as for example Covid-19 loosens some bureaucratic shackles, it is becoming evident that the disruption will leave lasting benefits for our industry.”

- Chris Hayton, Principal, Rothelowman

 

While there’s no one-size-fits-all approach, we’ve seen a shared commitment to maintaining continuity of project delivery despite the restrictions. We have closely engaged with many municipal Councils, and have found the planning process is continuing to progress well. A number of Victorian Councils already have established on-line lodgement, processing and communications systems in place. Many of us have been using those process for some time and these Councils are well placed to maintain their existing services.

Planning Panels and the Victorian Commission for Gaming and Liquor Regulation are continuing to hear some matters online or on the papers and our feedback to date that these systems are effective, in part due to the goodwill of all parties in keeping the decision making process moving forward. The challenge is greater for VCAT, in part due to the sheer volume of matters and a history of underfunding, which has made the transition to an online environment more challenging.

“The Cedar Woods team is fully operational and working from home, and I’ve been really proud of the team’s ability to adapt to the working arrangements.

Having completed a large digital transformation program over the last two years we have enabled our staff across all functions to carry on with business as usual in this challenging environment.  In the last couple of months we have also digitised our sales process across our project portfolio – which has included implementing e-contracts, creating digital content and offering opportunities to connect with the team via video conferencing. Our external design team consultants have all also embraced social distancing measures to protect their staff and business continuity. We regularly video conference detailed design and legal meetings with our external teams and we are grateful for their continuing unwavering support, prompt activation to achieve results for our customers. 

We are continuing to sell our properties across our range of apartments, townhouses, land sales and strata offices but are looking forward to a return to normal face to face contact with our customers and team in due course.”

- Lloyd Collins, State Manager, Cedar Woods

 

With a reduction in foreign buyers, at least for the time being, and a general softening of the market, now is a fantastic time for developers to get back into the market. Feedback from a variety of sources is that now is good time to be securing your next development acquisition, recognising that even in the most buoyant of markets, there is a 2-3 year time lag from purchase to completion.

In tough times people band together and the current environment is typical of this approach. Our experience is that Council officers, mindful of the economic implications for a slowing property market, are working constructively with all agencies for effective and transparent decision-making.  No, this does not mean you will get a permit you would not normally obtain, but it does mean that the Council’s are being proactive in their approach. Negotiation and mediation are key words at the moment and our feedback from a number of Council’s that typically have high VCAT case loads is that they are willing to mediate in house. This of course means the potential to avoid VCAT altogether and negotiate directly with Councils and objectors.

Advice from Rothelowman is that construction prices will experience downward pressure in the coming months. This means that there is no better time to get your planning approvals in place and take advantage of a more competitive tender environment.

"We've continued to see strong sales activity, while maintaining strict distancing laws. At The Stewart Collective we have had a number of sales transact over the last month.  Private inspections for prospective purchasers at the display suite have still allowed for tangible engagement with the project's design and the use of e-contracts has simplified contract execution and exchange for all parties while in isolation.  We've also found organic content creation has worked well in maintaining engagement with buyers and establishing reassurance that the project is live and progressing".

- Sophie Whittakers, Development Manager, Lucent Group

 

Ultimately, flexibility and creativity in the planning system will be the driver for economic prosperity through development post pandemic. As an example, prioritising and fast-tracking major developments will be a critical step in economic stimulation through employment and investment and there is strong messaging from the State and Federal Governments about prioritising a development led economic recovery

“What has been most pleasing is the speed and pragmatism with which industry and Government have come together, particularly in the State’s new Development Facilitation Taskforce . Firstly to maintain existing activity, and then to consider new initiatives and projects. Working together to generate more economic activity, jobs, infrastructure and housing, is the light on the hill we can all work toward (even if it’s from home for the moment). “

- Christian Grahame, Victorian President, Property Council of Australia

 

As always, we’re pleased to assist any of our network through this difficult time and have strong relationships across many of our local government partners. It’s business as usual here at ratio and all our team are available on landlines, mobiles and email. If you’d like to have a chat about your project get in touch with your usual ratio contact or email us at mail@ratio.com.au.

 

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