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Published 03 December 2013 00:26, Updated 03 December 2013 11:40
Matt Hope, founder of GJ Gardner Homes, returned to the company last year to turn around its fortunes. Photo: Michel O’Sullivan
Home builder GJ Gardner Homes is poised to partner with a Chinese company to take advantage of the booming Asian interest in Australian property.
Chinese investment in Australia has more than tripled between 2007 and 2013 due to local restrictions on property purchases in China, the rise of a wealthy middle class and a growing trend of educating their children overseas.
Matt Hope, the director of GJ Garder Homes in NSW and the ACT, agrees it is an ambitious move for the company which has undergone a big restructuring over the past year to better service the strong housing market and address problems in the company’s structure.
In 2014 GJ Gardner will focus on Asian investment and is in negotiations with a Chinese group.
“Other Australian home builders have been able to get good increase on sales just by focusing on the Chinese market,” Mr Hope said.
“We will be partnering with a company over in China and doing some seminars over there with house and land packages to be able to sell more homes into that market because it has become so strong, especially in NSW.”
The view that investor interest in Australia’s residential sector will stay strong, particularly from Asian buyers, is shared at the institutional end of the market.
Professional services giant, Deloitte, acquired property business Capland Real Estate Advisors last April to better service offshore groups entering the Australian real estate sector.
Deloitte Capaland chief Damian Winterburn said he was dealing a lot more with developers who want to build residential apartments or other, bigger projects such as shopping centres.
“There’s no doubt I am spending a lot of time in Asia,” Mr Winterburn said. “It’s not absolute, but as a broader trend I don’t see many United States or UK developers entering the market. We see Asian groups.”
Mr Winterburn said there is usually something that brings Asian investors to Australia, such as attending university or having family here, rather than simply looking around the globe.
He noted a strong preference for residential and hotels but the interest is becoming “broader and increasingly varied”.
Mr Hope, who ran GJ Gardner NSW-ACT from 2005 and had semi-retired, returned last March after he noticed a 30 per cent slump in the number of houses the group was building, and several underperforming franchises.
Mr Hope’s division had a network of 19 franchises, turning over $100 million a year prior to the global financial crisis, building on average 400 homes a year.
Mr Hope moved the head office from NSW to Queensland’s Sunshine Coast, where he is based, and added new people to the team. He improved communications between franchises by holding quarterly meetings, and transformed the head office offering support into a leadership office providing direction. He also introduced monthly benchmarks for franchisees.
GJ Garder Homes has built more than 500 homes this year and turnover for this financial year will be over $120 million, according to Mr Hope.
“The market has certainly picked up, especially in the latter part of this year. Having low interest rates and more land releases I see continued growth in the housing market over the next 12 months.”
Mr Hope suggested a rise in interest rates might help the building industry.
“People might finally feel like the interest rates have bottomed out and people in the market might think its time to jump in.”