Heise Says
#construction #recession #heisesays
With the cost of building work up by 22% builders are hiking their prices to protect themselves.
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Time too start using Robots 😬
Demand drops quicker than supply in a depression
Company's shouldn't dance around, rising prices, just do it, let the market work it out.
As the borrowing capacity falls and builder costs rise, a substantial reduction in land prices is the only way new homes can be built.
I was planning to do a major renovation next year but in this environment, I've postponed indefinitely until I'm certain the economy has stabilised; meanwhile, I'll be just patching up minor issues DIY.
This buck will pass through home buyers and house prices!
Why allow banks to control of ulding let the market do it
People do not realise how much government red tape per block is in qld Brisbane alone titles 40kish+ civil headworks road works traffic (variable) adjustments water (depends if water pump needed to pump waste) electricity metre box nbn 6-8k sewerage connection 5 -8k don't forget that the dev has to release/ lose yield on land for mandatory parks facilities etc which is included in that land release… all of it is half baked into the land you purchase off the rip its like anywhere between 15-25% of the land price just on council fees and charges… wtf it doesn't cost that much… its ridiculous the land price is utterly insane!
Dont think lve come across 1 humble builder here in Australia, they seem to all be about ego and making money. They like to manipulate the tradies that work underneath them and hold them out on their money as long as they can, they get on their power trips and look down on the men underneath them propping them up so they can enjoy the glory and riches without breaking a sweat. Its all starting to backfire now though and it was only a matter of time. Its just a shame theres so many good people that just want to put a roof over their head that will suffer.
I would be hiking prices to to live.
Start growing your own bamboo for building materials!
Gotta be able to afford those Dare Iced Coffees
Here comes three d printed homes from concrete. 🙁
The funny thing is since I moved back to Singapore all the add's I am getting on this channels videos is all about buying housing in the UK.
Gotta be able to afford those Dare Iced Coffees
Borrowing capacity has to be a factor aswell
Melbourne CBD has become dericlit.Labour government is bankrupting our state from over spending and cost blow outs .
If housing becomes too expensive the gov will have to do something about holiday homes and air BnB
The Socialist system is failing and this is just the start , the system will crash and no one can stop it now !!.
Trading while insolvent, gaol time!
Theoretically tradies will find themselves unemployed, but could be directed to those houses half built?
Putting prices up won’t work!
Traditionally, building a new home is often cheaper than buying an existing one. This is for two reasons, 1) convenience of buying existing means people will pay for certainty, 2) reduction in taxes like stamp duty etc. The challenge is, that once new builds are more expensive than existing ones, why would people buy new ones?
Unfortunately if material costs rise due to inflation and sometimes profiteering by some manufacturers trying to protect their companies then builders will have to raise prices because no company can survive for long working at a loss without government assistance which is probably part of the problem like you say juicing the market and keeping zombie businesses going too long…. Inflation is a major factor EVERYTHING is more expensive then banks raising rates and some manufacturers and energy companies profiteering then staffing problems and extreme weather conditions…. Excuse the pun… its just a perfect storm of everything hitting at the same time… And we all know government reacts too slowly to just one problem let alone a few
Seems like the RBA needs to raise rates.
0.5% for August Philip Lowe!
I decided to buy a near new home on 3.5 acres. The first problem I had was I could not find land anywhere. The second, was the builder I was going to use for the design I liked,upped the price from $600,000 to $800,000.
Lol oops, they need to go the other way.
That is just a normal thing to do as a subbie for a long time I cannot price a job without putting extra on as my materials go up every month or so and my pricing has a monthly date on it when the quote expires. I never had to do this before everything seems to be a big joke now I don't even want to think what the builders are dealing with that's are building 100s of houses a year
I’ve raised my rates
Now I’m waiting to see how the market responds 🧐
Will higher prices create more building materials ? no.
Not sure why this is a surprise to anyone?
Did anyone actually think it would go the other way?
This is a lot like the 80s in a way. People can correct me as I was born in 85 but looking back –
Major construction boom in residential, magie jump in house prices, wage growth, material cost jumping up , very high interest rates (21% under mr Howard as treasurer) then late 80s ended in recession and unemployment at 11%
Then look at early 90s in contrast.
What I’m saying is that ups and downs will always happen. We have become so addicted to 24hr news cycles and updates and we are quick to forgot history.
Let’s all just crack a beer, pour a glass of wine, relax and enjoy the ride. Things will be different again shortly.
Australia is a blessed country to live in and has a lot more booming to be done.
Any government incentive program causes a price rise in that sector. Medicare, child care, building, pharmaceutical and the list goes on.
6:10 thats scary !!!!
Its amazing, Fedreal govenment is going to build 30 000 social housing homes and builders hike prices.
There is one policy which will fix all these problems with housing people, renting, buying and building.
The policy is : Pursuant to all tax deductions, tax benifits and or tax entitlements for all and any investment property and or investment dwelling, must rent out at the current market value for at least 6 months of each finnacial year in order to qualify. Any investment property or dwelling that falls short of 6 months rented will be excluded from tax deductions, exceptions gearing, depresiation and loss.
This policy excludes owner occupiers and 1 holiday property or dwelling per owner occupiers.
If the Govenment implamented this it would fix the problem and change how a dwelling is viewed and invested in and dwellings can be seen as a place for people to live and not a commodity to sit empty as a tax ride off.
Also opens up dwellings for imigration and much needed workers as well as making it affordable without the need for pay rises from buissness.
Won't this fasten the crash?
Yet 7/11 coffee's are still cheap
God dammit Florian, when are house prices going to crash I want to buy more houses. We don't even make lvl timber in Australia it's coming from overseas
Unless we don't produce our own goods. These things will happen. But even after things builders going to collapse and still plenty of companies going to go under and broke.
Wait for civil unrest to start in our Australia. There are plenty of other industries In Australia other than property.
WHEN IS AUSTRALIA GOING TO LEARN THAT WE NEED TO MANUFACTURE AND PRODUCE OUR OWN GOODS. 95 PERCENT PLUS ALL FROM OVERSEAS
It's not all bad. Builders will have to employ better techniques for construction to be competitive. They are not the most efficient at what they do. My gut feeling is we will see more of a progression of better planning on the builders behalf to have construction. More focus on waste elimination. No more just buying bundles of architraves and skirts and just sending to site. No more pallets of bricks left over. No more chippies doing single architraves at a time, more of a production method.
Tradies need to take a pay cut.
Cost Plus (say 15%) – Encourages builders to inflate the cost of building a property, since 15% of a larger number is more money
MBA contract many Project Home builders use, allows for a 5% increase in Build Contract
Not going to name this Builder but a Project Builder in Perth (South of River) is losing Money on 90% of it's Builds at Site that were signed in 2021
Builders say they are losing money when they make a million $$$ a year but think they should be making 3 million $$$. I know some great builders that stopped taking work a year ago so they could manage costs and staff.
So the rule of thimb $2000 per m2 of prime build construction coust is now history 😕