CR&S Report 2009 - Stockland

OUR CUSTOMERSAND SUPPLIERSRESPONDING TO OUR CUSTOMERS– RESIDENTIALCustomer insightsTo obtain customer feedback we conductcustomer research specific to each businessunit: Residential Communities, Apartmentsand Retirement Living.Residential CommunitiesIn Residential Communities we conductweekly tracking research. ‘StocklandCustomer Pulse’ covers more than 30 ofour residential communities across fourstates. We began interviewing customers inJune 2008 and during FY09 conducted over4,000 interviews with our Lead Customersand Purchasers. The results show that96 per cent of our buyers rate the overallsales experience as good to excellent.One of the most important aspects wemeasure is the proportion of Lead Customersand Deposit Customers who are First HomeBuyers, Second/Subsequent Home Buyersand Investors. This helps the businessidentify trends and anticipate the likelycustomer mix six months ahead.The July 2009 ‘Choose New’ marketingcampaign in Residential Communitiesis aimed at both First Home Buyers andSecond/Subsequent Home Buyers, aswe anticipate the former to decline as aproportion of all sales. Consequently,we will have over 500 house and landpackages available at under $450k.In the coming months, we will be refiningour strategy to better meet the needs of‘Mum and Dad’ property investors.ApartmentsCustomer satisfaction research inApartments was conducted in June andJuly 2008. The research identified the needfor customer relations managers to continueto work closely with our customers. We willbe reviewing appropriate consumer researchdedicated to Apartments’ customers in thecoming year.Customer Relationship ManagementTo improve marketing and communicationswith customers and potential customersin our Residential business, we launcheda Customer Relationship Managementsystem in FY09. The system has improvedour ability to capture customer details andhas enabled the increased use of electroniccommunication channels, including email andtext messages. These channels are morecost-effective and enable us to communicatemore frequently and effectively with ourpotential customers. In the coming financialyear we will improve our understanding ofpotential customers and customers throughthe launch of the Siebel Analytics reportingtool in our Residential business.Housing affordabilityThough land price increases have been anentrenched feature of the residential marketover the long-term, the early to mid 2000sreflected a sustained period of above averageprice growth.Between 2000 and 2009, housing demandincreased, driven largely by populationgrowth. Land supply did not increase at thesame rate, causing prices to increase. Thiswas exacerbated by increasing developmentcosts and demand for larger homes. In someplaces like southeast Queensland, landvalues increased by as much as 16 per centper annum between 2002 and 2008. In allcapital cities, average house and land pricesincreased faster than average incomes,resulting in declining affordability.In FY08, the typical price of a new housewas $240,000. Our modelling suggests that78 per cent of the market would face financialdifficulty in purchasing this typical product.Identifying how we can improveaffordabilityIn the past year we identified two areas wherewe have scope to improve affordability. Thefirst was introducing villa allotments – creatingdetached lots under 300 square metres.The second was to change our productmix, focusing on more affordable lot sizes,essentially lots under $200,000. Over the pastyear, lots between 375-650 square metresincreased from 49 per cent to 56 per centof sales.Lots priced under $200,000 increased from26 per cent to 44 per cent of sales, with thevolume of sales at this price increasing byover 100 per cent over this time.We also undertook a review of developmentpolicies to identify areas for costs savings sowe can reduce prices for our customers.Key outcomes from this included:types and to improve the transportabilityof builders’ standard house plans acrossdifferent projects and markets, rather thanhaving to amend designs or house andland packages for every development,remove particular elements acknowledgedas adding cost, without significant benefitto new housing construction.The Residential Communities business’ability to understand the impact of reducedhousing affordability on housing demand,and to quickly respond with product andoperational changes, has enabled homebuyers who were not able to enter the marketto do so and at the same time stronglycontributed to our market performanceover the past year.We have increased our market share inQueensland from an average of 11 per centin FY08 to approximately 16 per cent in FY09.In particular, we have extended our reach intothe First Home Buyer market.36Stockland Corporate Responsibility & Sustainability Report 30 June 2009