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Our biggest challenges
MOUNT ANNAN
There are plenty of challenges facing us in our day-to-day business
and these are well documented throughout this report. We are
also mindful of the broader challenges facing our business and the
industry as a whole, and how best to respond over the longer term.
Achieving the government’s dwelling targets
In April, the New South Wales Government asked Landcom to deliver
10,000 home sites in western Sydney over the next four years. This
represents a 25% increase on our previous targets. We have prepared
a plan to deliver on the government’s objective, but the task ahead is
considerable, with little margin for error.
Our main challenge will be securing resources, both staff and land.
We are bringing forward current projects and reviewing contingencies
for new supplies of land. We will also work closely with our
government partners, exploring options to streamline the approval
and development process.
Increased uncertainty in the development
industry
At a time when we face ambitious dwelling targets, a variety of
external factors are also increasing potential risk and uncertainty, both
for us and for the rest of the industry.
A significant overhaul of the development approval framework in
New South Wales is imminent and likely to be wide-ranging. At the
same time, the national impact of a future emissions trading scheme
on the cost of development remains largely unknown. Finally, while
the development industry is still recovering from the effects of the
recent global financial crisis, worldwide fears of a second round of
crises and defaults continue to persist.
Responding to moderate income housing needs
Our ability to meet our moderate income housing target remains
an ongoing challenge. Australia’s recent emergence from a record
low interest rate environment has highlighted the challenges we
face. We have been unable to get traction for some of our initiatives,
such as our shared equity loan scheme and our attempts to attract
institutional investors to the low cost rental housing market (see case
study page 48). Since the problem is both ingrained and structural,
we gear most of our efforts towards achieving incremental and
sustainable improvements.
We are responding by promoting housing diversity in our projects,
since this enables us to offer a range of differently priced products.
Our Housing Diversity and Density Guides were launched this year
and are successfully influencing policy makers and regulators in the
industry. We also aim to influence a shift in consumer preferences
towards smaller housing through our 21st Century Terrace
demonstration project. Next year, we will seek closer alliances
with small to medium sized home builders and developers, who
tend to produce the majority of Sydney’s affordable housing. More
information on our moderate income housing performance is on
pages 51-52.
Maintaining our industry leadership and
relevance
Sustainability innovation is gaining momentum in the development
industry, with the greatest advances being made in the building
sector. Landcom outsources building and construction to third parties,
and this limits our ability to participate directly in these advances. The
challenge ahead for Landcom lies in our ability to remain relevant and
maintain a leadership position in sustainability innovation, while not
being a builder.
What we aim to achieve in 2011-2012
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landcom annual report 2011
Sanctuary
While our core projects and initiatives will continue during
2011-2012, we have targeted several issues for specific attention,
as follows.
We will support economic development in New South Wales by:
••
delivering 10,000 home sites in western Sydney over the next
four years
••
commencing construction at our Green Square, North Penrith
and Ingleburn projects
••
advising government on ways to facilitate urban renewal and
greenfield development
••
facilitating regional development opportunities, where the local
housing market may be under stress
••
contributing to the supply of more affordable housing via a
range of initiatives.
We will also promote a national rollout of PRECINX ® through
strategic alliances with government land agencies in other states.
We also plan to establish new alliances that will enhance our ability
to promote sustainability leadership and innovation.