A reflection on the year that was from GPS Investment Fund Limited (GPS) Managing Director, Richard Woodhead
As we close off on 2024, it’s about time for my usual reflections on the year gone, and a look ahead at what 2025 might hold.
While most people might pen a “fluff” piece in the spirit of the season, I’ve always believed in the benefit of giving our GPS investors a straightforward perspective. And this year, that perspective doesn’t involve anything we haven’t already spoken about; adapting to changing markets, responding to increasing house and build prices, and most of all, the reminder that there are always reasons to be optimistic.
Where my attention is focused for the new year is on productivity. There have been productivity changes across the board, in all industries, ever since COVID, and this goes beyond wages and working conditions—it’s about taking pride in work, being reliable, and delivering quality.
The biggest gripe for borrowers and builders has always been in getting people to take pride in their work. They’re looking for those who will turn up when they say they will and get the job done well. Because when productivity lacks, construction time frames push out, and so do loan terms, which prompts developers to ask why?
I look forward to seeing a positive shift in this market as our borrowers and builders start to prioritise productivity as a key to maintaining forecasted timeframes, lower their build costs, and get projects across the line sooner.
This year, I’ve also had the privilege of working closely with many of our builders, and I’m impressed by how they’ve adapted to the changing market. Many have shifted their focus more towards continuity of work than quantity of work. This strategy helps them better manage projects with dependable (productive) tradespeople.
They’re also very aware that while some (media and economists) are saying that development approvals are up, the reality for them is that there is a big difference between getting a project approved and getting a project underway.
With many focused on build quality, my largest base of optimism for 2025 comes from our promising loan pipeline, which is filled with typical GPS-style projects and a significant proportion of repeat borrowers and builders. With the COVID loan pushout still fading behind us, it will be great to get back to a regular supply of new offerings.
This should allow GPS to open the books for new investment monies from our existing, new, and referred investor base. We can expect the average amount of each loan will rise due to increased building costs and sale prices, and we welcome any new investor referrals whose funds will contribute to the growing funds under management we’ll need to support this.
And on the topic of loans, the Board of GPS doesn’t see inflation or interest rates dropping until late 2025 – at the earliest. I think that stagflation will take hold in Australia. As a result, we do not expect that distribution rates at GPS will decrease in 2025.
Lastly, despite the rumours, I’m not retiring anytime soon. However, I have been listening to my own counsel that if I want to slow down, then I must increase my GPS productivity. So, my focus will be on finding good quality projects and assisting loan management, as this is the best way I can continue to look after our investors.
I remain deeply committed, as always, to GPS. I’ve always believed in the old saying that when your work feels like a hobby, you never truly have to work. Mentoring the team at GPS, which includes many people who have been with GPS for over 10 years (including my daughter – Marnie) also helps to keep me fresh and engaged.
I’ll always be available for a chat, though it might take me a little longer to respond as I enjoy more of the holidays Debbie has planned for us in 2025 (I suspect though after some extended time together, she’ll be encouraging me to keep working!)
Most importantly, I want to express my gratitude to our long serving and loyal GPS investors. Your ongoing support is the foundation of our success, and it remains sincerely appreciated.
Here’s to a productive 2025.
