Sign of times perhaps.
http://www.abc.net.au/news/2015-05-...-jobs-in-wa-as-new-homes-numbers-drop/6446902
http://www.abc.net.au/news/2015-05-...-jobs-in-wa-as-new-homes-numbers-drop/6446902
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I was speaking with another large builder today who averages 90 homes per month and they are down to 45-50... So it's a sign that there are people out there struggling for work. Does this mean they'll start cutting each others throats and lower the price for building?
Don't listen to sales people, they have a vested interest, it's all smoke and mirrors, look at the facts.
market conditions is all that matters,
Supply vs demand
My builder said he is already offloading, not the case 9 months ago.
We are now in a downturn, not boom, this effects all markets, including building.
People stop buying, building, numbers fall off. Development sites do not make sense, no profit, only fools will build to make a loss, or take a risk that end values will stack up on completion
Mtr
I don't believe the prices have dropped yet, but probably due to the projects they currently still have on their books.
I met up with my accountant this morning he said his developers are trying to offload asap and not buying as market conditions getting worse and waiting to see if there are any surprises in May budget.
I suspect developing will drop off dramatically, very soon and building costs will fall, however so will end product.
MTR
I was speaking with another large builder today who averages 90 homes per month and they are down to 45-50... So it's a sign that there are people out there struggling for work. Does this mean they'll start cutting each others throats and lower the price for building?
This is actually one of my other favourite times to build - the other being on the beginning of the upturn. I hate building during the peak.
It will be interesting if costs will come down, the main component that is likely to fall will be labour not product. It will also be nice to have things not constantly delayed by tradies being stretched over too many projects.
However I'm a hoarder/investor and hold more than I sell so I'm different to the typical developer.
I want to start building in Perth in the next 6 months. This is a long term hold, so end values won't affect me as I'm not borrowing against the new townhouse to purchase further properties. The only factor for me is for the townhouse to be positively geared. I'm going to be making money off this one.In terms of building in a downturn there would be positives for sure, ie cheaper to build, less time to build. The negative is on completion the end value may have dropped off considerably and therefore higher risk??
What I have noticed is if you are lucky enough to buy at the beginning of a rising market you can possibly make more money on the land and not build at all, that's a nice position to be in I think
MTR
I want to start building in Perth in the next 6 months. This is a long term hold, so end values won't affect me as I'm not borrowing against the new townhouse to purchase further properties. The only factor for me is for the townhouse to be positively geared. I'm going to be making money off this one.
How about building cost for apartments?
I heard that cost/sqm increases as the number of floor increases? Due to elevators and etc.
If so what would be the cost/sqm for a 2 storey development vs 3 storey and so on? Is there a rough guide out there to calculate?
200k per unit for a 75 sqm 2 bedder in double storey development, does that sound right? Equates to about $2,667/sqm
Wasn't your project in spear wood? Sounds like your builder was talking nonsense, that's hardly on the edges of the cityThat's very interesting, sign of the times.
This also means they will travel wherever they need to go for work, my builder could not get the brickies to go south of the river, once again causing delays on my project
Mir
Wasn't your project in spear wood? Sounds like your builder was talking nonsense, that's hardly on the edges of the city