Comment on building and development at the end of a boom. Like now.

[likewow]

Hi all,

Likewow, perhaps the experts don't know what they are talking about either??

"With apprentice numbers at a near all time low, and a resulting apprentice shortage, there is now "a black cloud hanging over our trades", according to ETU Assistant National Secretary, John Ingram."

""We are close to an all-time high in terms of the size of the building and construction industry but an all time low in apprentices numbers."

from
http://cepu-electrical.asn.au/etu-news/september_2003/apprentices.html

Or perhaps you could take some evidence from Philip Toner??

http://www.abc.net.au/rn/talks/natint/stories/s1012890.htm

or maybe you base your thoughts on recent political TV adds, that the ACTU claims were wrong??

http://www.actu.asn.au/election2004/news/1094019753_29252.html

good luck in waiting for cheaper trades, you'll need it.

bye

Bill,

You are good at doing Google searches and i spent years in the building industry...hmmm..you doing the theory me doing practice.

The guys in the articles are saying whatever is in their self interest, just like they and polies, unions and every peak body does. In 5 years they will be saying we need to cut apprentice numbers as trade rates are to low, just like they did when the last building slump was on.

But i thought we were talking about the cost rising of future houses, not wether brickies will be getting $400/100 in future. To add to my point, the cost of house building is approx. 40% material component and 60% labor component. Therefore the minor changes you mentioned will have a minimal effect compared to trade shortages/surplus.

 

[Bill.L]

OK, Likewow,

So your betting(via your investments) that new building costs will be cheaper in 5 years time than today. Could you give us one shred of evidence??
Or is this not what you think at all??
In your vast experience, perhaps you could give us an indication of the age of most of the tradesmen. Is there an overabundance of young ones, or perhaps many are approaching retirement??

bye

 

[silas]

Hi Bill

Don't know what price brickies will get but straw pole of son (15) and mates most are looking at apprentieships. Some parents (including me) have professional training. He goes to a school where all students use computers for all classes and gets one of the highest marks for It work both at school and previously in state/ national assessment. He doesn't see a future in it and doesn't want to spend his life at it. Similar to other mates. So my guess is with the demand out there if there is a way to make appreticeships available there won't be a shortage of takers.

Silas

 

[likewow]

OK, Likewow,

So your betting(via your investments) that new building costs will be cheaper in 5 years time than today. Could you give us one shred of evidence??
Or is this not what you think at all??
In your vast experience, perhaps you could give us an indication of the age of most of the tradesmen. Is there an overabundance of young ones, or perhaps many are approaching retirement??

bye

There has never been a lot of tradesmen approaching retirement in the building industry, the wear and tear takes it out of them physically and most are off the tools by mid 40s (or should be) and move into management or self employment or out of the trade altogether. There is always demand for ex tradies as sales reps in their particular industry as they know the game so well and lot go this way.

Building sites are populated by mostly younger tradesman and labourers for the above reason, its a young mans game.

Yes, i think building costs will be lower in the near future (dont know if exactly 5 years). What evidence can i give you? I have no evidence beside my experience of previous cycles. But you keep moving the goal posts from brickies to apprentices to house costs. But YES, i'd say in 2-3 years you can get building work done for cheaper than now, whatever you like on that.

Bill, i like reading your posts about investing and you are obviously very knowledgeble in that area, but i know when people start relying on Google for support they are clutching at straws.

 

[Bill.L]

Hi all,

Likewow, Don't get me wrong about this, as I know that I could be totally incorrect. It is just that I see this as a possibility and the link between brickies/apprentices(plus all the newer regulations re energy efficientcies/water conservation), = higher building costs.
Other things like reduction of logging will more than likely raise the price of hardwood for framing etc.

The current trend is still towards higher prices for new buildings, my experience tells me that trends often go on much longer than most expect.

bye

 

[kph]

Hell, I remember paying a brickie $250 per 1000...in the 90s'

A lot of framing can be done in steel, including roof trusses etc.

Timber substitutes like MDF mean you no longer need to rely on timber anymore.

We are curerntly doing transportables with concrete floors to organise housing, for a saving of at least $50k, because the local product is so expensive.

When the price gets too high, and is not sustainable, ppl find another way to do it cheaper.

I have heard that you can import a kit home from the states cheaper than you can build locally. Their material costs are apparently much cheaper.

 

[Ausprop]

I'm with Bill - the situation is at breaking point in Perth and most existing property is sitting below replacement cost. Building costs are pointing upwards and most trades have work lined up for years. It is interesting that the buildings do seem to be appreciating in value as costs spiral upwards. Something has to give but I still can't quite figure out what - I believe it will be in the price of existing stock... think there is still a lot of upside.

hey KPH - wasn't being argumentitive - you snuck your post in before me! There was an article in Money a couple of issues ago extolling the virtues of prefab housing and I love the product - I think it has a big future. Interestingly 10% of all new homes in the US are prefab. Prefab offers factory quality control and cost efficiencies. Just got to convince those pesky consumers!

 

[likewow]

Hi all,

Likewow, Don't get me wrong about this, as I know that I could be totally incorrect. It is just that I see this as a possibility and the link between brickies/apprentices(plus all the newer regulations re energy efficientcies/water conservation), = higher building costs.
Other things like reduction of logging will more than likely raise the price of hardwood for framing etc.

The current trend is still towards higher prices for new buildings, my experience tells me that trends often go on much longer than most expect.

bye

Well mate, the future wil answer our questions. We both dont have crystal balls. (At least i dont)

But i know when factory/warehouse building costs were high, they developed the tilt-up pre fab style walls (imported technology from the States) which slashed costs dramatically. same thing happens with home building with brick & a half,(blocks) steel frames, blue board, particle board bearers (I beams) , waffle pod slabs....etc... and every individual trade has new products or techniques coming out all the time to reduce costs/speed up install. All these have reduced costs dramatically, not only material but installation times.


OT: Do you hold any CPU? This stock has been so good to me in the past few months, its getting obsene. Some body up there likes me.

Big price spike yesterday (up 25%) and some profit taking today.

 

[kph]

Understood Aus,
You're on the ground and dealing with it everyday...hence no argument from me.

Those pesky consumers will adapt if the product is good enough...

All this dbl brick construction in WA is too much. Time for a change...

Lets Import Prefabs !!!!!!

 

[Sunfish]

Hey Speedhog, This bit makes me curious.

"We are curerntly doing transportables with concrete floors to organise housing, for a saving of at least $50k, because the local product is so expensive."

One of my "in my mind" projects involves well built transportables shipped West onto cheap land. The local council is on-side. This is an old mining town where 90% of housing stock is a centuary old.

Are there any pitfalls to be wary of?

T

 

[Ausprop]

"But i know when factory/warehouse building costs were high, they developed the tilt-up pre fab style walls (imported technology from the States) which slashed costs dramatically. same thing happens with home building with brick & a half,(blocks) steel frames, blue board, particle board bearers (I beams) , waffle pod slabs....etc... and every individual trade has new products or techniques coming out all the time to reduce costs/speed up install. All these have reduced costs dramatically, not only material but installation times."

Yes but despite these advances costs are going thru the roof (excuse the pun). Tilt has been tried with limited success on residential, just as steel trusses but I hear that is pretty much being dumped. The problem comes down to the labour cost.

Yes KP - double brick belongs in the 1950's, just as the 1/4 acre block, but I see we are going to fill all the way from Perth to Mandurah with the stuff. The government talks of going green, so why do we keep building these huge homes in the sticks for 1 or 2 occupants? I see in todays paper (The West) they are talking of making the developers fund the local amenities - about time! Why should I subsidise someone else that lives in the fringes? But hey, whilst those properties are being subsidised I am more than happy to throw them in the portfolio!

 

[Sunfish]

As a canetoad I'm well used to the "Turn your watches back twenty years and one hour" jibes as you fly into Bris.

But this surprises me....... "I see in todays paper (The West) they are talking of making the developers fund the local amenities - about time! Why should I subsidise someone else that lives in the fringes?" Bloodyell! It's decades since phone, water, sewerage and electricity have been supplied to consumers in the 5 acre belt at a "general" charge to revenue in this area. Do you need to wind up the clock?

The attitude here is "if you want to live a fancy lifestyle, meet your own costs".

Sounds Fair.

T

 

[kph]

Thommo: shhpeedhog...what the @#%*??
You mean me??
Same with us, council is favourable, I have been told that the builder puts "dougnut" concrete footings down first, so no real siteworks required, no sandfill or sand pads, just make sure the levels are right.
In WA, we want the house floor level to be pretty level with the ground. In Qld you may require it higher..( low set or high set ??)
Forget the jibes, Qland is great...so much so that I am investing there in preference to WA.
You got to put yr watch back 2 hrs when you get here.....but it may FEEL like a lot longer..

Signed...Disgruntled Sandgroper...

OK..get it..gotta change the nick, try kp

 

[Sunfish]

Thommo: shhpeedhog...what the @#%*??
You mean me??

Try "Sheepdog" then. Just don't go to NZ

 

[likewow]

Yes but despite these advances costs are going thru the roof (excuse the pun). Tilt has been tried with limited success on residential, just as steel trusses but I hear that is pretty much being dumped. The problem comes down to the labour cost.

This is what i was trying to explain to Bill. Imagine the cost without the constant innovations and with current labor costs?

The problem with tilt up residential is the lack of cavity for plumbing/elec services..etc..where as commercial/industrial they can be exposed.

 

[Sunfish]

This is what i was trying to explain to Bill. Imagine the cost without the constant innovations and with current labor costs?

The problem with tilt up residential is the lack of cavity for plumbing/elec services..etc..where as commercial/industrial they can be exposed.

Another problem with tilt-up would be the poor R rating for heat. I wouldn't consider it in the tropics.

T

 

[kph]

NZ......where men are men and sheep are scared ??

Likewow: why not incorporate ducting within the poured slab for the services??

Thommo: You had a cyclone bearing down on you last Feb. Did any houses get destroyed ?? They seen to stand up pretty well up that way..even the old Queenslanders..
We are in a cyclone prone area and all that is reqd is extra steel in the frameing...( raises the rating to 300kmh winds as opposed to 120kmh for standard construction)apart from that, the houses stand up fine to the strong winds.
Its not like our building standards ar akin th Solomon Island or Bangladesh standards...

The cyclones are not fun, but the houses stand up allright ( so far....)

WOOF........BBBAAAAAAA !!!