Highlights from this week:
- Getting short stay right and where it can fail
- The market is more than the capital cities
- The top 100 markets revealed
- Buying property with your eyes wide shut
- A new building system to cut stress and time
Buying property with your eyes wide shut – Rich Harvey
Kevin: On this show in the past, we’ve carried some comment from people who’ve said with the way the internet is now, with the amount of information that’s available, it’s relatively easy for you to buy property sight unseen. I’ve always questioned that, I’ve wondered whether that’s, I don’t think it’s something that I would do. I’m prompted to talk about this because of a release I read from Rich Harvey who is the president of the Real Estate Buyers Agents Association of Australia. He joins me. Good day Rich, how you doing?
Rich: Very good Kevin, great to be on your show again.
Kevin: Thank you. I know this could be seen as somewhat as a bit of a plug for buyers agents but I don’t really want it to be that way. I want to talk more seriously about the value of the internet, the value of the information that’s out there and how do we best assess that, if we can discuss it in that way Rich.
Rich: Absolutely. Whether people do it on their own or whether they use buyers doesn’t worry me but at the end of the day it’s all about making sure you protect yourself and get the right advice and protect yourself from making a bad decision. I think a lot of people, as you say, jump online and see some beautiful looking properties but they may not know that those photos have been photoshopped or they’ve taken a wide angle lens to that room to make it look twice the size that it really is. People may not know that there’s an electricity staunchion over the back fence or a land subject to flooding. There’s all of those things that really mean people must do a physical inspection or if they don’t do it themselves, get someone else to do it for them.
Kevin: Yes, I guess in a way too, and if you think that photo shopping doesn’t happen, well then you’re wrong because it does and there have been a couple of classic examples of where it’s happened, some more dangerous than others. A little bit of photo shopping to make a river look more blue than what it is isn’t really a biggie but certainly if you take out a power station which I’ve seen happen and also take out power lines which, it should be illegal.
Rich: Well it should be, it’s false and misleading and under the trade practises act to misrepresent anything. But I think in terms of photographs, there was a great one earlier in the year which had a water tower that had been photoshopped out of a backyard or a neighbouring property. But those sort of things, it’s about getting the property into context. It’s about looking at the streets where you end up buying and making sure they’re not too busy. If you’re going to be home buyer or an investor to some degree, it’s about making sure that you’re buying in a neighbourhood that’s got the right fundamentals for growth, that doesn’t have the wrong kind of demographic that you’re looking for to buy into. It’s about getting all of those things checked on your list.
Kevin: Yeah, every property we’ve purchased we’ve gone and inspected it at different times of the day. Not had a physical inspection on the property but the area. We’ll get out of the car, we’ll walk around, we’ll have a look at the types of housing. We’ll do it at different times of the day because areas change from lunchtime to evening time to breakfast. You’re looking at traffic flows and all that sort of stuff. That’s a lot of very important due diligence on the ground that you really have to do, I think.
Rich: Absolutely. You can’t just use Google Maps and Google Earth to do an aerial flyover. There’s a lot of things that when you turn up to a property you’ll go, “Oh my goodness, I’m so pleased I came to look at this property.” Equally you can also find a diamond in the rough. You can actually find properties that people turn away from and it’s a cosmetic reno or a decent reno will really bring it up to scratch. So you can actually miss opportunities too by looking online and looking the wrong way. Getting that property into context, talking to the local agents, talking to local neighbours, talking to local shopkeepers, all of that is incredibly good intelligence. I call it recognisance. It’s a bit like ground trooping. It’s a bit like when an army’s going out to investigate new territory, they do recon and as a property investor you’ve got to do the same. I call it ground trooping. It’s getting out there, identifying the local drivers of the market and identifying the properties that are best suited to your portfolio.
Kevin: With any type of investment, whether it be property or cash or shares, I think there’s a certain amount of personal accountability you need to accept. You can’t abdicate the responsibility. You can certainly delegate it which I think is what you do when you employ a buyers agent. You sort of say to them, I’d like you to help me find the right property but at the end of the day you need to accept the fact that you will have to make the final decision. At the end of the day, it is your money that you’re spending.
Rich: That’s right, it is, it’s the buyer’s money. As buyers agents, we have a very strong thing called fiduciary duty which means we have to put our clients interests ahead of ourselves. So we can’t just, and we never do, we don’t push a client into any deal or force them to buy a property just so we get paid. We diligently identify the right areas to buy in and then we diligently assess whether those properties are going to fit their criteria that they’re looking for. But as you say Kevin, it is, at the end of the day, property investment is a risk and no buyer’s agent can control the market. They can’t control all the factors, they can’t control who moves in next door or whether the council’s going to rip up the road and do something different. You have to take all of those factors into account but getting someone who is independent of you as a professional and does it every day of the week is another way to mitigate that risk.
Rich: A good buyer’s agent will go there, they’ll have deep relationships with agents in that local area to get both on and off market properties and they should have a very clear process by which they do an assessment of the property that they end up buying for you to make sure that you pay the right price.
Kevin: Yeah, I think we need to accept also the fact that the best investment property might not necessarily be right where you live. You may have to go shopping elsewhere in which case you can employ a buyer’s agent to do some scouting for you, but as I say again, at the end of the day the responsibility is up to you as the investor to make that final decision. You can’t then turn around and blame someone for a bad investment if you’ve accepted that responsibility yourself. That’s my view anyway.
Rich: I agree, that’s absolutely right. Just because the market doesn’t perform as you’d expect it or as some expert as said, at the end of the day you have to invest your own money. But getting a professional to help you do that process helps to minimise that risk. I think you mentioned something that was useful too is just buying inter state. Like you say, a lot of properties that we’d like to buy are not on our own backdoor and I think it’s important for investors to dig beyond their own backyard and to look at where the market’s moving. But also look not just in the short term but the longer term and look where those jobs are going to be and where that big population is going to be located and the infrastructure that’s going in to support that population growth.
Kevin: Yeah, Rich Harvey, my guest. Rich is the president of the Real Estate Buyer’s Agents Association. Thank you very much for your time Rich.
Rich: My pleasure Kevin, always good to chat with you.
Getting short stay right and where it can fail – Mike Johnson
Kevin: Well, for many investors always looking for an edge, a way to get a better return, no doubt more and more investors are turning towards the short-term rental market. It’s been with us for quite some time. It used to be called holiday rentals, and it carried with it the perception that it is a very costly option. That could be changing with the popularity of AirBnB and MadeComfy, which is a specialist company helping investors make the most of their short-term rentals. And joining me to discuss that, Chief Sales Officer for MadeComfy, Mike Johnson. Mike, thank you very much for your time.
Mike: Thanks for inviting me on, Kevin.
Kevin: It’s been a wonderful growth curve, hasn’t it. I mean, you would have noticed that in your business. Where are most of these people coming from? Is it overseas, or is there a lot of domestic travel?
Mike: Yeah, we’re seeing huge growth in this area. The main driver of the demand is visitors. Now we’ve seen a lot more visitors in Australia in the last six years. We’re seeing international visitors go from six to nine million, and we’re seeing that continue year-on-year with about the same growth rate. So that’s the first part. But we’re also seeing the habits of travel change. So, as people are working more across multiple cities, we’re seeing interstate visitors between Melbourne, Brisbane, and Sydney as an example, go up as well.
Mike: So the combination of those two means we’ve got a lot more visitors in our cities. Now the traditional accommodation availability hasn’t gone up to meet that, so hotel rooms and traditional where to stay has not met that. So what we see then is an opportunity in the marketplace. Which means you can host your property and get guests to stay, and they need a good place to stay.
Kevin: Okay, well I want to talk to you about the types of property, and also what facilities should be included. What are the hotspots? And let’s focus firstly on the cap cities of Brisbane, Sydney, and Melbourne. I’ve heard you say that properties with water and city views are very popular. That rules out a lot of regional Australia, but certainly lines up well for the cap cities.
Mike: Yeah, absolutely. Now look, people are looking for interesting, comfortable, well-equipped, and a wow-factor in the properties they stay in. So there’s no hard and fast rules, completely. A lot of properties can have a little bit of interesting difference, and we’re always looking out for those. But yeah, as you mentioned, we do see, for example Brisbane. If you’ve got a view over the river, you’ve got some water views there, that can be an advantage. Sydney, definitely, you’ve got the hot spots in terms of location, transport links, and harbour views. And when you combine all those together, that’s the really hot area.
Mike: Melbourne, because of the reasons I mentioned, we see a lot of interstate business to Melbourne. A lot of business travellers. The high-end properties, well-furnished, well presented properties are doing really well. And we see a lot of demand for places like that across Melbourne.
Kevin: Is there any distinction, or much of a distinction between houses and units, or are they both as popular as each one?
Mike: So the sweet spot is really in terms of numbers of visitors. The highest volume of bookings comes from groups between two and four adults. And you’d probably use common terms to say the most common group is a couple, of two people. You have one person, like a business traveller, but up to four people or small family. That’s the highest volume. So really, we see high demand for one and two-bed apartments wherever we are. One and two-bedroom houses do similar. One of the key drivers we’re seeing in the market in the change is we’re also seeing people wanting to book further out of the cities.
Mike: The Australian Bureau statistics actually came out this year. So they actually ask visitors, international and interstate, what’s the reason for their visit. And they’re finding that as well as tourism and holidays, business is on the rise. And also staying with family and friends. So when they’re looking to stay with family and friends, obviously they want to be near them. And often they’re living further out, and not in the CBD. So therefore, they’re looking for accommodation that suits that. So they’re looking to stay near where their family lives.
Kevin: Does climate have much to do with popularity? In other words, Queensland as an example, you think if climate was any indicator, then the place would be booked out all the time.
Mike: Sure. Yeah, look, Queensland has a history, actually, a good history of holiday properties. You mentioned in your intro, I think that actually that’s been going on for 100 years or more. I think the new platforms of AirBnB, booking.com, etc. have made this much more accessible to people. And really we’re not reinventing that part of it. So yes, where you’ve got holiday locations, warm climate, obviously there’s properties there that do on a holiday, on a short-term rental basis, very well. But actually, the key thing is the data across the year.
Mike: So one of the things MadeComfy does is we collect data across all the platforms we use, keep it internally in our database, and we’re able to put together a proposal for a potential owner of a property of what are the supply and demand. i.e. the nightly rate, the potential occupancy, and therefore the returns of that property across the year.
Mike: So you mentioned it exactly right. So somewhere like Bondi or Manly, obviously does very well, and has a lot of demand, but also a lot of supply through the summer months. But also, other areas. So we’re seeing little places, like outside Bondi for example, Randwick is a place that people had not really thought of in terms of staying, but is equidistant to the University, the Hospital, and the race course, as well as being close to the coast.
Mike: So there, when you look at the data, you see actually, there’s quite a lot of demand all year round. So that’s the key. So when you’re looking for it, you can ask a real estate, kind of short-term rental management company like MadeComfy to say, “What does your data say about who’s coming, where they’re staying, and what they’re paying?”
Kevin: Okay, if you’d like to get a bit more information, website is MadeComfy.com.au. My guest has been Mike Johnson. Mike is the Chief Sales Officer for MadeComfy. Thanks for your time, Mike.
Mike: Thanks a lot, Kevin.
The market is more than the capital cities – Geoff White
Kevin: Well, of course we realise don’t we, that the real estate market, the property market is more than just the capital cities and that’s why with particular interest, I saw the latest report from Core Logic that looked at the regions, state by state. An interesting report and we’ll dig into it a little bit in this discussion I’m having with Geoff White who’s the head of real estate at Core Logic. Geoff, thanks again for your time.
Geoff: Hi, Kevin.
Kevin: Well, let’s have a look at this report. We might have a look at state by state I think, because there are a couple of surprises in there. We’ll get to a few of those in a moment. New South Wales. What do we see there in terms of sales activity?
Geoff: Yeah, the sales activity Kevin, pretty much right across the country, but very much in New South Wales. The activity or number of sales conducted for the 12 months up to the end of September, is down across all of those regions ranging from 13 percent to 14.7 percent. So a big reduction in the activity of sales across the board in those regions in New South Wales there, Kevin.
Kevin: Yeah, it’s also surprising to see that the advertised rental rates, well I suppose not surprising, they increased over the year. Is that an indication more people moving into rental properties?
Geoff: Yeah, I think rents have been looking quite attractive to people and I think when you’re seeing demand, the sales numbers going backwards, naturally they’re going somewhere, and rents have probably been turning over nicely. So we’re seeing in the likes of Newcastle and Lake Macquarie, a 5.3 percent increase in asking rents for units. 5.3 percent which is quite a reasonable high. In fact, that’s the highest unit increase for the whole of the country was in Newcastle, Lake Macquarie, and houses 4.7 percent in Richmond Tweed, so both houses and units top the list in New South Wales.
Kevin: Yeah. Well, in fact you talk about the Tweed region there. Interesting too to see the largest increase for units in the Richmond Tweed region. Medium unit value increased 9.3 percent.
Geoff: Yeah. 9.3 percent is a big percentage and alongside that was houses at 8.7. So Richmond Tweed when you really look at it, whilst the activity’s been down, it’s up right across the board in terms of house values, units and rents. So that’s a very strong region at the moment. And New South Wales generally has performed very well in these regional areas over the last 12 months.
Kevin: Yeah. Good news when you get out of Sydney. Let’s have a look at Queensland. Townsville. Gee, they’re really feeling it tough up there. They have been for quite a while, Geoff.
Geoff: Yeah, they have. That’s exactly right. So whilst we’ve seen sales activity come down, we’ve seen actually house values come back by 1.3 percent and units 3.9 percent, so it’s feeling the pinch. The only shining light in Townsvile out of these figures is rents for units have gone up 3.7 percent. So that’s it. And look I guess it’s one of those regions that has felt it, like some others, and just hasn’t seen the good days yet.
Kevin: Yeah. A lot of people will be breathing a sigh of relief to see the Sunshine Coast picking up again too after so many years of just lagging behind the rest of the state because of an oversupply, but Sunshine Coast and Gold Coast both performing quite well.
Geoff: Yeah, they are. They really are, and that whole South East Queensland area is doing very well and Gold Coast actually had the highest decline in terms of sales activity at 15 percent, so that was down a lot. But on the flip side, Gold Coast and Sunshine Coast, both up on house values and unit values. You know, the Sunshine Coast house values gone up 7.7 percent and units 5.3. Great result over that 12 months.
Kevin: Yeah. Probably a bit of catch up there too. I think it’s been a bit lacklustre in recent years, but it’s good to see it picking up again now. There’s been a lot of development of that area as well, Geoff.
Geoff: Yeah, that’s right. And I mean, and it’s a great place to live too.
Kevin: It’s not bad.
Geoff: It’s not a bad part of the world to be honest.
Kevin: Do you get there occasionally, Geoff, do you?
Geoff: Oh, I try to. Not enough unfortunately.
Kevin: Not enough, no. Well, let’s go to Victoria. Sales activity down a little bit in Victoria, and you and I talk about what’s happening with the auction market in Victoria. I don’t quite know where that market’s headed right now.
Geoff: Yeah, that’s right. The region, the two regions in Geelong, sorry in Victoria, Geelong and Latrobe Gippsland, have both had positive. In fact, Geelong had the biggest increase in house values right around the country in terms of regions at 16.6 percent. So that’s enormous. We’ve been talking about Geelong for quite a while and these numbers tend to reflect it. Units up 11.9 percent. Activity, sales activity down 9 percent, so it’s been a very, very strong market at Geelong. And our friends down at Latrobe Gippsland a steady performance. Basically up right across the board in terms of house values and unit values, both in between the six and seven percent. So a good result for them too.
Kevin: Yeah. It is indeed and you and I of course, do a lot of work in that area because we do a show in there as well and it’s such a good thing to see an increase in both units and houses for the area, and quite a sizeable increase as well. So, you know, good on them.
Kevin: Now, Western Australia finally to round out this tour around the country. Bunbury, the region there saw house values fall by 4.6 percent.
Geoff: Yeah. Houses down 4.6. Units down 4.9. Rentals not going in the positive direction at all. Bunbury’s just been one of those, and it’s been tough there for a long time. Over the last five years, we’ve seen a decline in activity of 11 percent. In the last 12 months, three percent. So, just off the back of all of the Western Australian property market, yeah, it’s soon got to turn the corner I would have thought, because there’s some really good opportunities there for buyers particularly. So yeah.
Kevin: I wouldn’t be at all surprised next time we do talk about the regions, particularly in Western Australia, we’ll see an improvement there, because I am hearing reports about green shoots coming out of Western Australia. Now whether that’s extending to the regions, I’m not quite sure, but certainly in Perth there is good signs.
Geoff: Yeah. Likewise, hearing that as well. So yeah, I think you will find it a change in Perth, sorry Perth and Bunbury and the Western Australian market. So I agree with you there, Kevin.
Kevin: Yeah. Good report and you can always catch Geoff and I with our auction report, the auction update every Monday as we look at the auction results over the weekend. Geoff, look forward to talking again soon, mate. Thanks for your time.
Geoff: Yeah, thanks Kevin. Have a good one. Bye bye.
The top 100 markets revealed – Sarah Megginson
Kevin: Well, the good news is that issue number 138 of Your Investment Property is out right now. Joining me to talk about what’s inside, Sara Megginson, from Your Investment Property Magazine. G’day Sara how are you doing? Congratulations on another great issue.
Sarah: Thank you so much. Yes, we’re doing very well, very excited about this issue.
Kevin: Well mine’s arrived and a very colourful cover it is too, featuring or promising the Annual Top 100. Huge amount of research gone into this one.
Sarah: Yes, this is our Annual Top 100, so we do this every year at the beginning of the year to kick things off, and I guess basically give investors a bit of an idea of where the experts are predicting we’re going to have the biggest growth in the year ahead.
Kevin: Any surprises in there for you?
Sarah: There are always surprises. Always surprises. It’s an interesting mix. We’ve gone out to about four or five different really well respected and well-known researchers and analysts. They’ve all come forward with their short lists. Then we take all of that information and we do our own research on them and we look for things like the supply and demand ratio, the capital growth in the past. The population growth, what local infrastructure is like. All of those different factors that can impact a suburb’s value.
Sarah: Then we’ve trimmed out some of the really ludicrously expensive suburbs that might comprise an investor’s entire portfolio. Because if you’re spending over $2 million for one property, you don’t have a lot of wiggle room there. We try to keep them relatively affordable and come together with this list and it has a real range of suburbs. There’s actually suburbs in every state, in almost every state. I think Northern Territory doesn’t make the cut, but everywhere else had some. Even the interesting thing to me was that Perth popped in with a few different suburbs there. Even though the recent growth statistics there have not been very strong, I think that’s a market that we’re going to see some growth in, in the future.
Kevin: The thing that struck me when I read through the list and you’ve highlighted Perth there. But it sort of highlights the fact that no matter what the market’s like anywhere, there are always opportunities aren’t there?
Sarah: Exactly. I think that is a key lesson out of any of these stories that we do is that there’s no such thing as a Sydney property market or the Perth property market. Within each of those cities there are smaller micro-markets operating. Even down to within a suburb, within a street, you can have one street and on one side of the street it performs better than the other side because one side might have a better view or might back onto a beautiful park that can never be built out. The other street might have some housing commission in it that lowers the value or it might have a drain pipe running behind it that brings the value down. There are so many little things that can influence a property market. That’s why we always say with this particular list, it’s a really good starting point, but it’s something you should use as a road map of where to get started. But then you need to go and do your own research and your own due diligence to make sure that these are the suburbs that match up to what you want to achieve with your property investing.
Kevin: And as well there’s also the great investor story, a Six Figure Profit Strategy.
Sarah: Yes, and he’s moments away from it being a Seven Figure Property Strategy.
Sarah: He’s got over 900,000 or just around 900,000 equity in his portfolio. What I love about this one is that it’s a husband and wife team. They’ve just been slowly and steadily building their portfolio, trying a few different things. It shows the decisions they’ve made over the last decade and how they’ve had growth. The risk mitigation strategies they’ve used, which is always really important. They’re not trying to do anything crazy. They’re just trying to slowly and steadily build their wealth and that’s what I really like about a story like this that shows other investors what you can achieve if you just put a really clear strategy in front of you and take action towards that.
Kevin: Yes and the story also talks about a renovation that boosted the rent by 25%.
Sarah: Yes, we all love a good renovation story. This one, you can renovate for a range of different reasons and this one in particular they renovated to hold. They knew they wanted to keep the property afterwards. This renovation was designed to boost the rent and make it as attractive as possible and it really worked. I think the previous rent was around $370 and then after the renovation it was renting for $500 a week, so it boosted the rent by thousands and thousands of dollars a year.
Kevin: Yeah, good.
Sarah: A good return, and as well as that added six figures to the value of the property, so really great result.
Kevin: Yeah, in every magazine there’s always a lot of take home value and in this one, there’s some really good advice about tenant damage and, well, how to avoid it and what can happen.
Sarah: Yeah. Exactly. I think it’s important to cover some of the risks of property investing and the downsides. In this particular story we interviewed someone who’d had a really frustrating experience with a tenant who’d caused a lot of damage to her property and then done a runner. The end result was over $14,000 worth of damage. It goes through the process of what happened next and how she dealt with it. How she was able to avoid having to pay all that herself. Stories like this are designed to show people that there’s always things that can go wrong, but if you plan for them in advance it doesn’t need to be the most stressful or the most expensive experience of your life.
Kevin: It’s out now, issue number 138, Your Investment Property Magazine. Congratulations on another great issue, this one takes us through Christmas and New Year. I look forward to talking to you next year about issue number 139.
Sarah: Yes, I know we’re marching on ahead into 2019 at break-neck speed, it’s scary.
Kevin: We are indeed. Sara Megginson, thank you for your time.
Sarah: Thank you.
A new building system to cut stress and time – Dean Willemsen
Kevin: It’s well known that the process of building a home can have its challenge. Whether it be cost overruns, average customer service or lack of transparency, poor quality building or unexpected surprises. Well those days could be over. A group of some the most respected companies in the property and housing industry have joined together, and launched a new model of housing, which is called Heuga.
Kevin: Dean Willemsen is the managing director of DNW group, who’s heading up this initiative. He says that Heuga may just shake up the housing market in Australia. He joins me, Dean thanks so much for your time.
Dean: Great, thank you so much for having me.
Kevin: Tell me. Firstly we hear some very sad stories about what some people go through when they build a property. We hear about the commissions around Australia and how they don’t protect builders, they don’t protect tradies, or the consumer. So where does the building of a new home go so wrong Dean? Why do we hear so many bad stories?
Dean: Look, there’s many contributing factors and I can’t pretend to have all the answers, but to my experience has been that there’s so many contributing factors, and so many elements that go into building a house, there’s a lot of room for error. Some of them potentially in our control, and a lot of them aren’t within our control, for example, weather. We can take a simple glance over to other industry, the automotive industry, which has definitely worked out a way to take a lot of those variables out of the process and really leave, the customer with a very seamless process and there’s no secret that really we look at our business in Heugar we have looked at that and sort of tried to take some lessons accordingly.
Kevin: One of the problems I think with home building, is that each home is almost unique, even though there may be definitive plans, everyone wants to make their changes. Weather does have a huge impact as you said. As I understand it with Heuga. Well, I’ll get you to explain what it is, but it’s a much more controlled environment, the construction, is that right?
Dean: Yes, look we ultimately as a customer, and as we all are, we all want to have a choice and we got to put out, make sure what we are trading, it feels like it is ours. However, there are a lot of, there are inherently a lot of consistency or similarity between houses and unfortunately, typically there isn’t much to be able to make that consistent. So for example through the Heuga system, we aim to have a tech platform that ultimately drives the whole process, so it is not about builders trying to work out ultimately solving the same problem twice. The platform itself drives the process a lot more seamlessly and takes that variance out of the process.
Kevin: Okay, well lets talk about technology, because from what I’ve seen and I’ve watched a couple of videos and had a look into the system, there is a fair amount of technology that has gone into this. It has been developed over a number of years. Can we look a little bit closer at the technology and how is it going to impact the consumer?
Dean: Look, the technology is a part of it but I think for us this smarts is in how we collaborate with our partners and really take a different view. I mean the industry typically is very closed door where, where ever do you sit in the chain and everyone has this perspective of working behind closed doors which unfortunately impacts their own ability to be efficient and also what the customer gets at the end. So our approach is having an open API approach where all the partners that we work with were open about our processes and how we all plug into the Heuga system or the Heuga operating system as we call it. And ultimately it means that the ambiguities and the inconsistencies are quickly ironed out and we are left with the process as is it should be without the waste and interruptions along the way.
Kevin: Given the fact that a Heuga home can be constructed, as I understand it, correct me if I am wrong in around about 15 odd days. Is that correct firstly?
Dean: Yes, so the 15 days is from slab to a fully completed and locked up house. That includes all external finishes as well. So your render, paint, your windows, your roof, your gutter, facia. The whole external of the house is complete. Call it your shell.
Kevin: So would it be unfair to call it like, is it a kit format?
Dean: No, not at all. No, it is absolutely, it’s not even the houses that your project home builders will typically build. We’re designing it and delivering it in a far sort of ,more of a technology enabled way which enables the consistency and the more tightly coordination of trades and moving away from an on sight construction to a more off sight construction methodology. Where we can control a lot of the value that we add to the product is done in a controlled environment. Which is agnostic to weather conditions, agnostic to availability to trade because ultimately we have a different kind of work force that is able to build houses essentially.
Kevin: You touched there on the car industry, how they’re so successful at how they manufacture vehicles and I guess this in a way this is a similar thing although it has to be delivered on site. To do what you’ve done, have you been able to identify the pain points for the consumer and then isolate those and almost eliminate them and is that basically in the construction stage?
Dean: Look, the pain points, in a way yes, I mean we are at early stages of the business. We can’t say that we’ve got it nailed as yet but identifying the pain points. Unfortunately, you ask a room of home owners “Did you enjoy your experience“, unfortunately not many put their hand up and that’s not necessarily anyone’s fault, it is just inherently how the industry currently deals with the process. So for us the process starts far beyond, far before you start on site. It is a design process, it’s having designs that are sympathetic to an off site construction methodology of which there’s plenty of flexibility and really there is no distance to our customers, it is just the smarts upfront that enables to deliver a seamless experience at the end.
Kevin: Sounds like a fantastic idea. You mentioned the company is very young. When will this product be available and how widely will it be available?
Dean: Look, we are in trial stage. We had a very successful launch on Thursday, the 29th of November and we’re really exited to see us moving to some more projects over the next 12 months and really 2020 is we see our product coming readily available on the market. We will be focusing on the East Coast of Australia in the first instance, starting in Sydney but, ultimately we believe that our system will be well enjoyed by customers across the country and hopefully beyond.
Kevin: So, did you say 2020 it be available or is it available 2019?
Kevin: 2020? Okay so anyone interested or thinking about doing this, I imagine there is a website for them to go to?
Dean: Absolutely, yeah we are at heuga.com.au and you can register your interest. We’ve had quite a lot of interest already. It wasn’t what we expected, so we are taking places at the moment and we’ll look to communicate with our customers and continue to move forward from there.
Kevin: Dean, great talking to you mate. Thank you, all the best for the product, we look forward to watching it grow it’s called Heuga. HEUGA.COM.AU
Kevin: Dean, thanks for your time.
Dean: Great, thanks so much. Thanks for having me.