Our customers and suppliers

Responding to our customers - Residential

Customer insights

To obtain customer feedback we conduct customer research specific to each business unit - Residential Communities and Apartments as detailed below, as well as Retirement Living.

Residential Communities

In residential communities we conduct weekly tracking research. 'Stockland Customer Pulse' covers more than 30 of our residential communities across four states. We began interviewing customers in June 2008 and during FY09 conducted over 4,000 interviews with our Lead Customers and Purchasers. The results show that 96 per cent of our buyers rate the overall sales experience as good to excellent.

One of the most important aspects we measure is the proportion of Lead Customers and Deposit Customers who are First Home Buyers, Second/Subsequent Home Buyers and Investors. This helps the business identify trends and anticipate the likely customer mix six months ahead. 

The July 2009 'Choose New' marketing campaign in residential communities is aimed at both First Home Buyers and Second/Subsequent Home Buyers, as we anticipate the former to decline as a proportion of all sales. Consequently, we will have over 500 house and land packages available at under $450k.

In the coming months, we will be refining our strategy to better meet the needs of 'Mum and Dad' property investors.

Apartments

Customer satisfaction research in Apartments was conducted in June and July 2008. The research identified the need for customer relations managers to continue to work closely with our customers. We will be reviewing appropriate consumer research dedicated to apartments' customers in the coming year.

Customer Relationship Management

To improve marketing and communications with customers and potential customers in our Residential business, we launched a Customer Relationship Management system in FY09. The system has improved our ability to capture customer details and has enabled the increased use of electronic communication channels, including email and text messages. These channels are more cost-effective and enable us to communicate more frequently and effectively with our potential customers. In the coming financial year we will improve our understanding of potential customers and customers through the launch of the Siebel Analytics reporting tool in our Residential business.

Housing affordability

Though land price increases have been an entrenched feature of the residential market over the long term, the early to mid 2000s reflected a sustained period of above average price growth.

Between 2000 and 2009, housing demand increased, driven largely by population growth. Land supply did not increase at the same rate, causing prices to increase. This was exacerbated by increasing development costs and demand for larger homes. In some places like southeast Queensland, land values increased by as much as 16 per cent per annum between 2002 and 2008. In all capital cities, average house and land prices increased faster than average incomes, resulting in declining affordability.

In FY08, the typical price of a new home site was $240,000. Our modelling suggests that 78 per cent of the market would face financial difficulty in purchasing this typical product.

Identifying how we can improve affordability

In the past year we identified two areas where we have scope to improve affordability. The first was introducing villa allotments - creating detached lots under 300 square metres. The second was to change our product mix, focusing on more affordable lot sizes, essentially lots under $200,000. Over the past year, lots between 375-650 square metres increased from 49 per cent to 56 per cent of sales. Lots priced under $200,000 increased from 26 per cent to 44 per cent of sales, with the volume of sales at this price increasing by over 100 per cent over this time.

We also undertook a review of development policies to identify areas for costs savings so we can reduce prices for our customers.

Key outcomes from this included:

• An initiative to standardise allotment types and to improve the transportability of builders' standard house plans across different projects and markets, rather than having to amend designs or house and land packages for every development,
• A relaxation of covenant inclusions to remove particular elements acknowledged as adding cost, without significant benefit to new housing construction.

The Residential Communities business' ability to understand the impact of reduced housing affordability on housing demand, and to quickly respond with product and operational changes, has enabled home buyers who were not able to enter the market to do so and at the same time strongly contributed to our market performance over the past year.

We have increased our market share in Queensland from an average of 11 per cent in FY08 to approximately 16 per cent in FY09. In particular, we have extended our reach into the First Home Buyer market.