THE PROPERTY DEVELOPMENT REVIEW
counterfactual of what it might have looked like if the rates hadn’t risen, but you would assume prices would have run harder and faster than what occurred. So the RBA likely achieved one of its aims. Ultimately however, our market’s story is more about what is happening on the demand side. Because of the underlying demand for rental premises, both residential and commercial, the costs associated with owners’ occupiers’ interest rates rises over the period still didn’t match the rise in rental occupancy costs to a Lessee over the same period. You were still better served either as a resident or business to own your premises despite the rate rises. I’m not suggesting that as they now stabilise/fall, it won’t help, like in any market, but it’s the investment cycle of industry in the region, not interest rates, will likely be the key determinant of what happens next. - There is optimism that some larger, multi-story Residential and Mixed-use developments that achieved DA in late 2023 will now be built in 2024. Once commenced, these will represent the first large-scale residential developments in the area in over a decade. We desperately need this supply response because the demand is absolutely there. The Pilbara Development Commission is tracking $177b worth of investment proposed or committed to in the Pilbara over the next 10-15 years. About $46b of this is under construction or committed, with $131b still to make it to a final investment decision. Importantly, this is not all just the existing industries with Iron Ore and Oil and Gas projects only representing about $63b of this pipeline. I don’t think this is generally appreciated on the Eastern seaboard. The opportunities in front of the Pilbara right now, if realised, won’t just alter the commercial landscape of the Pilbara and Western Australia, it’s a game-changing wealth generator for the entire country. The challenge to the entire nation is to ensure that these opportunities are facilitated. - The key challenges, as discussed, remain building costs and finding the workforce to undertake the required work. We have seen some residential building commence on a smaller scale from some local developers and now have some larger scope projects such as Azzura Square apartments and the Serenity townhouse development past planning stages and awaiting commencement of construction. There has been good demand for industrial land since COVID, but the larger industrial builds we have seen recently have tended to be business building for their own use. I’m not sure this will change in the short term. - Be bold. Developing in the Pilbara is logistically challenging, but if you can crack it, the rewards will be there. You shouldn’t face NIMBY’ism in Hedland either. The community actually wants your investment because the alternative is a FIFO workforce living in accommodation camps in the middle of the community. Town of Port Hedland planners will work with you, not against you, because that’s the only mindset that will see what we need built. If we don’t find a way to get it done, the investment pipeline I’ve mentioned may become at risk due to a general lack of capacity to support and capture the massive upcoming opportunities.
April / May 2024 – 99
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