BLACKBURNE Property Group managing director Paul Blackburne has completely restructured his business since he won a WA Business News 40under40 award in 2005.
The property services business, which specialises in property development, investment and finance, went through a significant expansion during the ‘boom years’ from 2004 to 2008.
Mr Blackburne said the company made more than $353 million worth of sales in 2007, which was more than it had done in the previous three years.
Riding the wave of the boom, Mr Blackburne doubled staff numbers from around 50 to 100 in a 12-month period.
“We put on around one person a day for 50 days, which would have been fantastic if the economy kept going as it was, but the reality was the world changed in 2008 and 90 per cent of our competitors went out of business,” Mr Blackburne said.
“Although I understood that all good things come to an end, and that all booms are followed by some kind of bust, there was so much new business we just kept on expanding rather than saying ‘no’, which is what we should have done, in hindsight.”
When the GFC hit in September of 2008, consumer sentiment took a dive and the number of properties the company was selling halved.
“During the GFC sales were still strong but they were half of what they were, so we went from doing about 80 sales a month down to 40 sales a month, so costs had to go down by half too,” Mr Blackburne said.
“It was a time where you had to re-think the types of products you were providing people and you totally had to rethink how you presented yourself to people and your business model.”
As the economy stabilised, Mr Blackburne cut staff by 50 per cent back to what they were before the expansion. He also changed the company’s approach from a ‘selling approach’ to a ‘consulting approach’.
“People became very apprehensive of salespeople post-GFC, so you had to sell yourself and the company, more than the property,” he said.
“We would spend four to eight hours with each client before we would even talk to them about a specific property.
“At the moment we’re doing between eight and 12 sales a week in Perth, which is about 10 to 20 per cent higher every year for the past five years, but it has gotten a lot harder to make those sales.”
During the past three years the company has also had to change the type of product it lists for sale.
“In the boom we listed anything, because anything would sell, particularly product over $1 million; now we don’t do much over $600,000 because there is no market for it,” Mr Blackburne said.
“We read the market and move with what the market is doing, and for the past two years the market has been investors and first homebuyers who have a borrowing capacity of around $600,000.”
Mr Blackburne said while there was a lot of talk about the market being slow, it actually wasn’t, provided real estate agents had the right product and knew how to develop and sell it.
“Most developers and real estate agents were struggling because they had product over $500,000 and we have done better in the last three years than we have done in the boom because we’ve had the right types of product,” he said.
“Also they are not listening to the clients enough; they’re talking to people, not talking with people. Most real estate agents would be lucky to spend 15 minutes with a client.”
Mr Blackburne has decided to focus his energy into the commercial property market.
“Commercial property has come back really strong during the past six months,” he said.
“It hasn’t been that big a part of the business until the past six months, but we definitely want to grow that part of the business.”
Along with managing shopping centres and commercial offices around Perth, Mr Blackburne said the company was currently working on a $60 million office development in Subiaco, which already had secured about $30 million in pre-sales.
To nominate for the 2012 awards, go to www.40under40.com.au.