There is no secret when it comes to my views regarding how everything is now sensationalized by the media for clickbait. It has been the topic of many articles and conversations in the past.
There is rarely any similarity between what the media reports as the current issue, and what that issue actually looks like when it is coming across my desk.
The current articles around the “builder failures” is a recent example.
This issue hit my desk when COVID started and was all about supply issues thanks to the global pandemic. As a result of these issues, the price of building materials and the cost for subcontractors rose, which put pressure on builders as their profits were fixed by their building contracts, that they locked in before the world changed.
At that time, there was tight competition between builders to secure new projects, which resulted in tight margins. This was particularly prevalent at the big end of town with the larger builders, who forgot the adage that “cheapest isn’t necessarily the best value”.
What we are now seeing is the inevitable fallout.
This is now old news for GPS.
As our investors expect from us, we dealt with the issue at the time, adapted, and moved on. The solution involved several aspects, but came back to the strength of the relationships GPS has built, the dynamics of GPS’s preferred builders and our philosophy of always being part of the solution.
One part of the solution which you will have seen, is the change to our SPDS’s which were discussed in the March newsletter. This is just one example of how GPS is working with builders and assisting them with the increased requirements for deposits. GPS has always been a “relationship” business. Our relationships have seen us through this issue and, I expect, the residential development industry will now better understand that relationships must be part of the way forward.
The reputation GPS has built over the past 25+ years will assist us to stay ahead of the competition.
Richard Woodhead | Managing Director
