Australia's Forthcoming Construction-Led Property Boom
- Thread starter Shadow
- Start date
Hi BD,
Yes, it was only a matter of time really. A construction boom was always going to the the inevitable outcome, and Sydney was the most likely place for that to begin.
The great thing about a construction boom is the multiplier effect this has on the wider economy, once the money starts to flow not just to developers but also hardware and furniture stores, electrical, real estate, banks, conveyancers, tradespersons etc. This, of course, is the result that the government and RBA always intended.
Aside from Sydney, where else do you think the largest surge in construction activity will be felt? I'm thinking Melbourne more so than Brisbane and Perth, but Sydney will definitely lead the charge. What do you think?
I've talked before about the danger of overbuilding during this next cycle. Once things really kick off, the developers and investors may get greedy at the top of the cycle, leaving us in a potentially similar over-supply situation to the USA.
What are your thoughts on that?
Cheers,
Shadow.
Go Gen Y !!!
(I'm not Gen Y by the way).
The only way Gen Y won't be robbed by the ignorant generations above them is to not participate. I appluad those that stay out of the market and spend their money on worthwhile things like food, drink and travel.As far as I noticed there are 3 major groups of losers there, the ones who got our of property too early and missed the tide, the ones who were to scared to get into property and finally the Y gen kids who want it now but can't afford it and are not prepared to put the hard work in. The only thing they have in common is that they are all green, green with envy, and think that if they wish it hard enough it may come true. Now can you honestly deny this ?
(I'm not Gen Y by the way).
Lots of construction in Melbourne.
KY
KY
Median to hit 2003 high?
That's interesting. The median high for established homes is $524 000 (ABS figures) which would be approximately a 12% increase on today's median. Do you really think the median will hit the high again anytime soon? When exactly, do you think?
That's interesting. The median high for established homes is $524 000 (ABS figures) which would be approximately a 12% increase on today's median. Do you really think the median will hit the high again anytime soon? When exactly, do you think?
hi rockstar
I have a very simple answer to that
a developer has three sites
one he/she is working on say 60% complete
1 thats just about to start usually has da and cc done
and 1 in council to get da
now the first is stopped or slowed down
the second is moth balled and cap the interest or may well be paid (for usually is)
and the last is in council awaiting approval(already paid for)
and its these you are seeing
just because its got a da does not mean it will be built
a good example it arncliffe/tempe
you want a development site with a da
pick a building
will you get funding.
yes if you push the tooth fairy out of the way and catch that flying pig
I don't look at approvals
the mean nothing to me.
I look at where you can make a margin
sorry to say we live in a capatalist world.
and buliding with out a margin is not a great way to go
so why are they still building
to keep the teams together and build out of the current position
high risk
yes
but what choice do they have
some are on 10% some zero if not negative.
as for there lots of building in an area
building by who
if its a site thats stopped are restarted thats a bank
the bank need to finish to get paid
I know of one bank thats taken two years to finish a site paid for it all so that they lost 4 mil instead of 8 mil the developer got zip.
it that developer going to get his second site funded by that bank
guest here.
don't need a pole for that one
thry a funder funded out one site sold the lot had funding for another four site moth balled the lot and the banks holding the lot they will take a 50% hair cut on all sites
guess here if any of them will get funding today
same answer as above if you want a clue.
and last but no least current up swing on vals
on what
on development site
show me the up swing.
I just seen a site sell for 50% of the val 12 months ago.
up swing
just if you are using a pitcher or sand weg.
lots of upswing if you take out have the grass or in this case half the suburb. but just like the weg you have to cut in very deep to get that upswing.
and to do that someone has to tak a very big hair cut.
and the banks taking that hair cut.
yes.
so why not build
margins and funding.
if you have the cash.
you would buy depressed sites
and if you buy depressed sites what does that do to the val.
yes
sand weg
I have a very simple answer to that
a developer has three sites
one he/she is working on say 60% complete
1 thats just about to start usually has da and cc done
and 1 in council to get da
now the first is stopped or slowed down
the second is moth balled and cap the interest or may well be paid (for usually is)
and the last is in council awaiting approval(already paid for)
and its these you are seeing
just because its got a da does not mean it will be built
a good example it arncliffe/tempe
you want a development site with a da
pick a building
will you get funding.
yes if you push the tooth fairy out of the way and catch that flying pig
I don't look at approvals
the mean nothing to me.
I look at where you can make a margin
sorry to say we live in a capatalist world.
and buliding with out a margin is not a great way to go
so why are they still building
to keep the teams together and build out of the current position
high risk
yes
but what choice do they have
some are on 10% some zero if not negative.
as for there lots of building in an area
building by who
if its a site thats stopped are restarted thats a bank
the bank need to finish to get paid
I know of one bank thats taken two years to finish a site paid for it all so that they lost 4 mil instead of 8 mil the developer got zip.
it that developer going to get his second site funded by that bank
guest here.
don't need a pole for that one
thry a funder funded out one site sold the lot had funding for another four site moth balled the lot and the banks holding the lot they will take a 50% hair cut on all sites
guess here if any of them will get funding today
same answer as above if you want a clue.
and last but no least current up swing on vals
on what
on development site
show me the up swing.
I just seen a site sell for 50% of the val 12 months ago.
up swing
just if you are using a pitcher or sand weg.
lots of upswing if you take out have the grass or in this case half the suburb. but just like the weg you have to cut in very deep to get that upswing.
and to do that someone has to tak a very big hair cut.
and the banks taking that hair cut.
yes.
so why not build
margins and funding.
if you have the cash.
you would buy depressed sites
and if you buy depressed sites what does that do to the val.
yes
sand weg
David,
seen it. lived it.
the FHB is bumping up construction - agreed.
the FHB is having an effect on house prices currently - agreed.
there was a lull in the construction industry not 3 months ago. builders i hadn't talked to in YEARS were calling me up, had heard i was doing a ton of units, wanting to quote on them. now - they're still calling, but they're not calling because they're desperate and staring down the barrell of voluntary admin. they're chasing forward work - like they ALWAYS HAVE.
so do i thinkt here will be a construction slump? no, maybe a nice steadying off, but no slump. i imagine there'll be some conflicting medai report though, talking about figures 3 months and 6 months ago.....
seen it. lived it.
the FHB is bumping up construction - agreed.
the FHB is having an effect on house prices currently - agreed.
there was a lull in the construction industry not 3 months ago. builders i hadn't talked to in YEARS were calling me up, had heard i was doing a ton of units, wanting to quote on them. now - they're still calling, but they're not calling because they're desperate and staring down the barrell of voluntary admin. they're chasing forward work - like they ALWAYS HAVE.
so do i thinkt here will be a construction slump? no, maybe a nice steadying off, but no slump. i imagine there'll be some conflicting medai report though, talking about figures 3 months and 6 months ago.....
Hell yeah. We are already the fastest growing developed nation. Lets ramp it up eh?
At 1.9% compound, we are on the way to 100 million in 2090. Won't that be bloody loverly.
Lets pull our fingers out and get it up to 2.5%. That way we will hit 100 million in 2070.
Thank flip I won't be around then to see that happen. Greed is a terrible thing.
See ya's.
I think they'll have the cash. Here's a nice post by Blue Card on that question:
http://www.somersoft.com/forums/showpost.php?p=583785&postcount=146
Cheers,
Michael
TC
How does increased immigration equal greed? Haven't read all the posts so may have missed something.
Australia could easily create another 10 cities spaced around Australia's coast line with populations of 250,000. The creation of new cities would be good for Australia's development as long as they were set up the right way. One thing Australia definitely lacks is population.
Before anyone goes on about water there is enough excess fresh water per year in the North of Australia to supply the rest of Australia for over 10 years. The problem is we haven't harness this water or built the necessary storage facilities. A series of national water pipelines is needed.
How does increased immigration equal greed? Haven't read all the posts so may have missed something.
Australia could easily create another 10 cities spaced around Australia's coast line with populations of 250,000. The creation of new cities would be good for Australia's development as long as they were set up the right way. One thing Australia definitely lacks is population.
Before anyone goes on about water there is enough excess fresh water per year in the North of Australia to supply the rest of Australia for over 10 years. The problem is we haven't harness this water or built the necessary storage facilities. A series of national water pipelines is needed.
Our population is growing at a million every 3 years now. Why would anyone want to increase that? We are headed to 50 million by 2050 and 100 million by 2090 at current growth rates. It's total madness.
At 60 million we become a net food importer. And there goes a significant amount of export income.
All the immigrants are piling into the capital cities, mainly Sydney and Melbourne. Why anyone in these cities wants increased traffic, pollution, high density housing etc, I have no idea. From the people I see moving out to the country to escape it all, there are plenty who don't want this population increase.
The education system is supposedly now our third biggest income earner behind coal and iron ore, but it's just a rort to pile even more people in. I'll bet most of these students are just here to become permanent residents. Anyway, how does educating a few hundred thousand students become a 12 billion dollar industry? Get the calculator out, there is a bit of creative accountancy going on here.
What really annoys me is the excuses used for the population growth. We need young people as our population is getting older. Thats ridiculous, as the people coming are mainly young, and they will all be old in 40 years time, so then we will need even more immigration of young people. It's making the eventual problem worse. It's a self fullfilling problem. The more young people coming in, the more we will need in 40 years time.
Australia is a commodity exporting country. We don't need masses of people to work in factories, because we don't need factories. You would know why Japan needs to manufacture stuff? Japan has to manufacture stuff because it imports most of it's food and nearly all it's other commodities. Australia doesn't have to manufacture stuff, so it doesn't. So we don't need masses of people. Mining and agriculture employ hardly anyone. It's why these industries are competitive here with our high wages.
We all need to remember why this is such a great place. We have a lot of land and wealth, distributed between relatively few people. It's not my or anyone else's problem that most of the rest of the world is overcrowded. Why not leave this great land as an oasis? Why turn it into another overcrowded polluted part of the world?
Africa is going to increase it's population by another billion in the next 40 years. All we can do is try to encourage birth control. We can't help them otherwise, they have to take the initiative themselves. There is nothing we can do now to stop what is going to happen there.
We could set up another 10 cities at a quarter of a million each. But why?
You could turn Taree into a quarter million city, but you would have to dam the Manning
You could turn Port Macquarie into a quarter million city. But you would have to dam the Hastings.
You could turn Kempsey into a quarter million city, but you'd have to dam the Macleay. etc. etc. Let these magnificent rivers run for goodness sake.
Does anyone think someone living in Port Macquarie wants another 200,000 moving in? They don't, or else they'd live in a city in the first place. If all you city people want more people in the cities, then cram them in and leave the rest of the place as is.
And what about power? We are too bloody silly to use nuclear, of which we own half the uranium in the world, so we would need even more coal powered power stations. The upper Hunter is half dug up now. It's all crazy.
I suppose I shouldn't have used the word 'greed'. But I went off a bit when someone suggested we should increase immigration ever more. I see no reason why we need to fill this country up. We don't. We don't need to be another overcrowded polluted place like the rest of the world. It is greed though that's causing it. Greed for profit in any number of industries and areas. And no long term thought. Just profit for tomorrow.
See ya's.
ps. One final note. I would like to point out that as a farmer I would stand to benefit more than most from filling Australia up. Once food prices turn from export parity to import parity, farmers are on a gravy train. Plus, the masses don't seem to want to live in these parts, so I don't ever see any problems here. I live 100 ks from a set of traffic lights. That will be the same in 100 years time hopefully.
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Hi all,
TC,
If the world was really a safe, warless place I would fully agree with everything you just wrote. However I'm a bit of a believer in the "Populate or Perish" camp over the longer term.
With a world that is going to run into resource shortages (food,energy) at some point 10,20, 50 years hence, how could we protect what we have with a low population??
I'm not prepared to assume the US will always be the world's policeman.
bye
TC,
If the world was really a safe, warless place I would fully agree with everything you just wrote. However I'm a bit of a believer in the "Populate or Perish" camp over the longer term.
With a world that is going to run into resource shortages (food,energy) at some point 10,20, 50 years hence, how could we protect what we have with a low population??
I'm not prepared to assume the US will always be the world's policeman.
bye
Love the creative response GR.
So what about these wealthy cashed up developers who are taking advantage of those current drop in vals? Surely they are out there investing. Wouldn't they merely borrow what they can get - even if they can't borrow as much as they formerly could?
I agree that the environment would be healthier, and quality of life would be higher, if Australia was less crowded and less polluted. But the global population is growing, and will continue to grow until we reach some hard limit on sustainability. We haven't reached that limit yet, and since Australia is one of the least populated countries in the world, we can expect the Australian population to continue to grow.
It doesn't really matter whether you or I want it to happen. It will happen because as you say, industry, commerce and political parties all want growth, and they are the ones with the power to decide what happens.
I don't think it's greedy. Maybe it would be greedier if we said we wanted to keep Australia to ourselves, and allow the over-population to happen only to other countries?
Well, we will see.
It's the masses who provide the most votes, not industry and commerce. Industry and commerse are just lining the politicians pockets to encourage this unsustainable growth.
I'm feeling the masses are getting fed up with the congestion. I see locals on the Gold Coast who can't get a park at the beach on a Saturday. They then pack up and move to some other little place, like the Gold Coast was 30 years ago. I hear on here all the time people investing 'cause I've got to get out of the rat race'. Just wait till a major city runs out of water.
It's our country. The voters will decide if we fill this place up.
We will see. I think people will realise what's going on.
See ya's.
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