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‘Fast Five’ with Gordon Yoon, Senior Economist

Gordon joined MacroPlan as an Economics Consultant in 2015. Gordon has seven years’ experience in Economic and Financial Analysis, Land and Property Advisory Services and worked on a range of Land Development projects working previously with the Northern Territory Department of Lands, Planning and Environment, the Land Development Corporation, as well as the Power and Water Corporation.

What do you think is the biggest challenge facing Australian cities is?

Housing affordability is one of the biggest challenges that Australia is facing. The middle-class plays a big role in growing the economy, and promotes good governance. However, Australia’s middle class has shrunk, but there has been a dramatic increase in households that are either very rich or very poor. The most recent analysis by the Australian Bureau of Statistics has found that there is a greater inequality in the distribution of wealth – the graph below shows that the wealthiest 20% of Australian households owned 63% of total household wealth in 2015–16. By comparison, the lowest 20% of households owned less than 1% of all household wealth.

SHARE OF EDHI AND NET WORTH PER QUINTILE, 2015-16

Source: ABS 6523.0 – Household Income and Wealth, Australia, 2015-16

Creating a clear path to the middle-class and ensuring economic prosperity means that we have to invest more in affordable housing. However, when it comes to planning, policy and regulations for the property sector, we still have a counter-intuitive way of thinking. For example, some Councils only strive to protect traditional employment sectors (e.g. manufacturing, bulky goods and warehousing) rather than focusing on unlocking future opportunities (e.g. more efficient and intensified employment and housing uses).

The overall impact of less middle-class households is expected to have direct consequences on the viability of existing businesses which trade at localised market levels. Through consumption of services and goods (i.e. food catering, fresh food, food eateries and local service providers), local jobs could be supported. Retaining expenditure and expanding on it through population growth must be facilitated.

 

What upcoming approved project/development can you see having the biggest impact on the city?

Western Sydney Airport is one of the most significant projects in Australia by far. The proposed airport at Badgerys Creek will connect Western Sydney to the world, meet Sydney’s growing aviation needs and help build a sound economic future for Western Sydney.

Western Sydney Airport will have capacity for 10 million passengers per annum, a 3.7 km runway and provide 20,000 direct and indirect jobs. Western Sydney Airport is on track to open in 2026 and preparations are already underway so that construction can start by late 2018.

Furthermore, the NSW Government is currently investigating opportunities to create a new vibrant community, centred around the new airport (i.e. ‘Western Sydney Airport Growth Area’). The NSW Department of Planning and Environment is working closely with relevant councils and agencies, and planning for the delivery of new jobs, homes, infrastructure and services in time to support Sydney’s new parkland city.

Exciting times are ahead for Sydney and MacroPlan.

 

Why did you choose your profession?

My father taught me to aspire to have a good career. He was not afraid to try something different and new. He has a science degree in Geology from Seoul National University, previously established a small to medium IT related enterprise with his colleagues (he did admit that he was way ahead of the game…too soon), and currently is a successful real estate developer in South Korea.

I remember that our favourite dinner topics were properties, economics, politics, technology and video and computer games. I guess that’s why I started to develop my interest in this profession without realising it until my early 20s.

A career in property economics and planning is fascinating. It offers me the opportunity to meet a wide range of people while carrying out a variety of different tasks and responsibilities. It can be very satisfying to assist my clients with important decisions such as site/property acquisition, property development, land rezoning, amending and revoking development controls for the most competitive, cost-effective or least-cost outcomes.

 

In your view, what will Australian cities look like in 50 years? And how will we get there?

Thanks to our Executive Chairman (and future strategist and economist) of MacroPlan, we can clearly see how driverless technology is developing rapidly.

The first stage of the ‘driverless’ shuttle bus in an off-road environment at Newington Armoury (near the former Olympic Village) was launched in August 2017. The vehicle ran autonomously on a pre-programmed route.

Later this year, the trial will be extended to roads at Sydney Olympic Park where office workers and other members of the public will get a chance to ride the driverless vehicle. We will see the shuttle operating live at Sydney Olympic Park no later than 2018.

Personally, I believe Australian roads will be filled with autonomous cars by 2050, and after that there will be personal drones flying over Sydney city. Of course, this really depends on the development of Artificial Intelligence (and its progress).

Driverless cars will change society, not just the fundamentals of mobility and transport. The technological advancement with driverless vehicles will create many headaches for government, planners, urbanists, economists, and developers as they will bring big shifts to development and the urban landscape. MacroPlan will be ready for driverless cars (and drones) and anticipate the impact of automated vehicles on infrastructure, land uses and real estate.

 

What hot property opportunities should we look out for in 2018?

My view is that the recent attitudes to medium-density living (i.e. duplexes, triplexes, two- and three-storey unit complex) are rapidly changing in Sydney. While large traditional detached homes or high-rise apartments remain in demand, they do not meet everyone’s needs, preferences and budgets. Retirees and downsizers, young families with children, lone person and professional young couples all need more housing choices.

In September 2016, the Centre for Urban Transitions surveyed 2,000 Sydney and Melbourne households in established middle-ring suburbs. Almost 60% of residents in both cities favoured a detached house. This is down from 90% in the early 1990s. Over the three decades, attitudes have shifted significantly toward embracing higher-density living.

Responses also revealed that when location was combined with housing type, this significantly increased preference for medium-density housing when located in established suburbs with good public transport and access to jobs and services. Half of the residents favoured this. That was the same proportion as those who preferred a separate dwelling and garden in a car-dependent suburb. Less than 10% opted for apartments.

As the major CBDs have grown on the back of the apartment boom, sites for new apartment supply have become scarce and incredibly expensive.  Inevitably, this is leading to developers to expand their acquisition focus from inner-city locations to areas which are up to 10km further out, and from high-density to lower rise products.

From a developers perspective, construction costs for these dwellings are a lot cheaper than for high-rise apartments and can achieve higher yields than detached housing.  From the consumer perspective, this product satisfies ‘the missing middle’ – people who do not want to live in a high-rise building but are locked out of buying a freestanding house.  Many councils and communities are usually more amenable to medium-density buildings than tower blocks.

You can get in touch with Gordon to discuss your property research requirements via email or call 02 9221 5211.

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