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The demise of the property developers - A review of the systemic influences on the Sunshine Coast
Conference paper   Peer reviewed

The demise of the property developers - A review of the systemic influences on the Sunshine Coast

Steven Boyd
Proceedings from the 17th Pacific Rim Real Estate Society Conference, pp.1-35
Annual Pacific Rim Real Estate Society Conference, 17th (Gold Coast, Australia, 16-Jan-2011–19-Jan-2011)
Pacific Rim Real Estate Society (P R R E S)
2011
url
http://www.prres.net/papers/Boyd_The_Demise_of_the_Property_Developer.pdfView
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Abstract

Business and Management property developers construction cost market influences gross realisations profitability
The development industry, in particular on the Sunshine Coast, appears to have experienced a disproportionate share of 'misfortune' in the wake of the Global Financial Crisis (GFC) with a considerably high level of insolvency in local development groups and a substantial fall in development activity. The fall in development activity is evidenced by the lack of physical construction activity and development industry research. Recent reports pertaining to the quantity of endorsed residential allotments reflect the lowest quantum of approvals in eight (8) years which contrasts the regions high current and proposed population growth. During the GFC property markets have been impacted, which may partially explain the fall of developers and the development activity, however, the leading market indicators (Gross Realisation and Construction Costs) for the Sunshine Coast have painted a mild adverse picture, not becoming the property development industry failures. This paper examines a 'basket' of Sunshine Coast property developers and identifies the respective status of their business practices followed by quantitative research to determine a 'baseline' profitability trend for developments in the region. The trend sets the scene for a comparison of how property developer failures have occurred relative to the envisaged profit declines during a set historical time horizon. In conclusion, there are broad ranging recommendations including a discussion on regulation of the development industry as well as suggestions regarding teaching and education. The appropriateness of endorsing the property developer as an 'entrepreneur' also arose presenting an avenue for further research.

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