Prodap began as a project management company in 1986. The name stands for Procedure for Analysis of Development Potential, which is a system for identifying the factors which contribute to the development potential of a development site.
In assessing a particular site for development potential, by far the most difficult to predict are market factors, because they are so dynamic. Other site factors such as hydraulics, geotechnical and services availability are relatively fixed and (generally) known constraints.
In order to analyse market factors, Prodap began to focus on market research, particularly in regard to the supply of land for residential housing. It seemed to us at the time in 1986, and this still applies now, that the property development industry has very little information on likely new production of serviced land for development. The stock of available land is one half of the supply/demand equation and yet no-one had any information on the supply side.
Hence, Prodap began to measure supply and demand in the Gold Coast region by contacting every developer each quarter, and asking them what their plans were for new production, as well as their sales in the previous quarter and their current stock levels.
By aggregating this information for certain market catchments and for the Gold Coast overall, it is possible to determine where we are situated on the long term supply/demand curve, and have to forecast the likely situation in the future.
In property development, timing is even more important than the traditional 3P’s (position, product and price). Product that is well located, well designed and well priced may be difficult to sell in a market which is oversupplied, and with the inevitably distressed vendors reducing prices to get out at cost. It is imperative for developers and investors to know where the market sits in the property cycle, and what will be the likely pattern of capital growth or shrinkage in the future.