As a researcher, when examining a particular market or trend, I look to answer one simple question – Why? (In fact, I believe this question is so central to research, I named my company Y Research.)
What are the patterns or relationships between variables that help us better understand our industry. For example what impact:
- Does new housing construction impact retail development?
- Do improved school results lead to higher local house prices? or
- Does lower commodity prices have on office vacancies?
As we approach the first weekend in October with two West Australian teams still in contention for the premiership, and my beloved Port Adelaide Power enjoying an early pre-season, I sought to explore the correlation between the economic cycle, reflected in Perth CBD office vacancies, and AFL premiership winning teams.
If history is any indicator, when Western Australia swims against economic tides, the football gods bring premiership glory to Perth.
The following table outlines the average Perth CBD vacancy rate by AFL premier, based on figures from the Property Council’s Office Market Report between 1990 and 2014.
Recent premiership winners, Hawthorn (2008, 2013 and 2014), Sydney (2005 and 2012) and Geelong (2007, 2009 and 2011), who all won premierships during the resources boom, typically win premiership in years when the Perth CBD office vacancy is below 10%.
Premierships won by Brisbane (2001, 2002 and 2003), Essendon (1993 and 2000), Port Adelaide (2004) and Adelaide (1997 and 1998) are historically tied to normal vacancies around 10% that the Perth CBD recorded before the resources boom.
With the current Perth CBD office vacancy rate at 16.6%, based on historical performance, the West Coast Eagles would appear to be the favourite for this year’s flag. The average vacancy rate when West Coast wins is 16.8% based on a premiership in the boom resources year of 2006 combined with premierships during economic malaise years of 1992 and 1994.
With the Perth CBD office vacancy rate widely forecast to peak between 22 and 24% next year, Carlton fans without a premiership since 1995 can dream, despite the wooden spoon in 2015, of a historic worst to first campaign in 2016.
Source: Y Research/Property Council of Australia/AFL.com.au
For any Dockers fans, reading to the end of the article waiting for a discussion of their 2015 premiership chances – to be included you need to win one first.
Enjoy the weekend’s games and remember that if your team is one of the 17 teams each year not to lift the premiership cup there’s always 2016.
About the Author
Damian Stone is the Chief Problem Solver of Y Research which specialises in providing independent research and analysis on West Australian commercial property.
Y Research produces a series of regular reports on Western Australia’s commercial office, retail, apartment and industrial markets, as well as providing consultancy services to a range of Government and private clients.
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