What Can the Australian Property Industry Learn from Morrison’s ‘Miracle’?

Prime Minister Scott Morrison's election victory, described by the evangelist-PM as a “miracle”, offers many lessons in business and people for Australia’s property industry.

Politics aside, it was a result that continues a global trend of political upsets.

From Brexit to Trump, politics in the modern age is a wild, unpredictable beast.

For Australia's property industry, which is the biggest employer in the country and the largest contributor to our economy, volatility is our kryptonite.

The prospect of Labor's ambitious housing reform agenda, built on the winding back of negative gearing benefits, is now over.

It then comes as no surprise that the “business as usual” result has been warmly welcomed by the industry.

Regardless of your own views on the matter, the result was a clear rejection of social redistribution from middle Australia.

So what does this tell us about the nature of people and what can Australia's property industry learn from these historic events?

Related: Treasury: Negative Gearing Reforms Will Have ‘Little to No Effect’ on House Prices

Opinion polls and bookies just cannot be trusted

There is now simply no disputing that opinion polls cannot be trusted. More surprisingly, the bookies — who usually have superior form compared with the polls — are just as fallible.

How did they get it so wrong?

At The Urban Developer, we conduct an annual audience survey which generates us close to 1,000 responses. For a publication with more than 40,000 daily subscribers, this is about 2.5 per cent of our audience.

A quick google reveals that Newspoll surveys (for example, this one conducted in mid-2018), surveyed only 1,728 people!

I'm no statistician, but that doesn't fill me with confidence!

More importantly, I just don't know how reliable people are with polls. Maybe it's just me, but I'm either too busy or distracted to answer the calls, attend a focus group or respond to an online poll.

Either way, they've been more wrong than they are right.

In a quote, Donald Rumsfeld famously referred to things you can't see or are simply unaware of as 'unknown unknowns'.

My sense about polls is that we just cannot count what we cannot see. Having a gut feel for what's happening on the ground — or “the zeitgeist” — is so often overlooked.

I believe this applies to property in a big way. Data and research is everywhere now, however one's ability to observe and feel the human mood is something we will forever struggle to accurately measure.

There will never be a substitute for being authentically connected with your community.

My home is my castle... and don't bloody touch it

Whether it is someone's principal place of residence, investment property, retirement income or superannuation, the prospect of redistributing wealth from middle Australia is fraught with immense danger.

This poses a big challenge for meaningful reform into the future.

Perhaps ambitious policy agendas are best enacted from government, rather than opposition. History has told us several times (John Hewson's 'fightback' in 1993 and now Bill Shorten's campaign) that Aussie Joe prefers evolution over revolution.

From a property perspective, this helps frame the importance of the family home as a centrepiece of the wealth effect.

The average Australian is probably smarter than most give them credit for and inherently more conservative about their propensity to move and make new investment decisions.

Climate change is important but not everything.

On one hand, the planet is confronted with an existential climate crisis, while on the other, Aussie Jane is trying to pay her mortgage.

The activist left and the denialist right certainly make a lot of noise, to the extent that there is very little oxygen left for the rest of us.

Our planet is at a crossroads — there is no denying that. However when push comes to shove, Australians are not willing to sacrifice their own jobs or welfare in pursuit of radical reform on the climate.

My takeaway from this is that our response to climate change needs to be holistic.

Policy leaders need to embrace solutions that deliver superior environmental, economic and social outcomes all at the same time.

Australia is an incredibly diverse land.

Wow — understatement of the year, Adam.

I believe that the rapid development of our cities since the GFC has created a two-tiered country of mega-cities and regions.

Our cities are seriously big when compared to other comparable nations, particularly when you look through the lens of their size in proportion to the total population.

Sydney and Melbourne are some of the biggest capitals in the world when measured up like this.

This contrast presents radically different needs and perspectives, and this was definitely evidenced in the election result.

Our regions are hurting and the cities are thriving.

How we respond from a public policy perspective is one of the biggest social challenges confronting the Morrison government.

And the final word...

All in all, "ScoMo's Miracle" is a welcome result for the property industry by virtue of the certainty it provides for us. At the end of the day, that's all our industry asks for.

However, our government is responsible for only part of the solution. With certainty now delivered, it is our responsibility as an industry to step up and build upon this.

We need to double down on the investment and innovation that has characterised the industry since the GFC - in spite of the churn and upheaval in Canberra.

We have endured a forgettable period and look forward to something more promising.