WA - are you ready...?

So here it is. it's come to a bottleneck and here's some BOLD claims for you all.

1) Q1 2010 is going to see skilled labour shortages as the FHB homes get off the ground. the TOP FOUR WA builders (alone) are putting 9000 (that's nine thousand, not a typo) starts to ground Q1 2010. that the pace required for 27,000 homes pa. in the FIRST QUARTER. :eek:

2) 2 of the 4 current indemity insurers are shutting up shop Q1 2010. those without the capacity with the current remaining insurers will find themselves in a big, black, insurance hole. no insurance, no start. no start, no grant. i can see the TT specials already...

3) lack of insurance + labour shortage = "$2 a brick" territory. as the cost to build a home skyrockets, so will the values of recently constructed homes to match their replacement value. anyone currently building, or have just built, will experience a growth in the intrinsic value to replace their home, with older homes following closely. values from valuers will have to be re-adjusted.

4) land releases are caught. new WAPC changes mean a lot of releases are headed back to the drawing board at great expense. by the time they're ready to release, the market will have moved and they can re-coup their costs.

5) panic buying will begin. where it stops - i can't say. WA-ites have known this was building for a LONG time and there will have to be some level where banks won't lend past, otherwise, there'll be a run to figures like port hedland $2.5mil+, coastal metro $1.5mil+, anything with a view or water $1.5mil+....and on and on and on. Gorgon is the lit firecracker inside the warehouse full of fireworks of the public perception of the whole system here. forget fundamentals - just the "yes, we can" attitude here is enough to send reverberations to the universe.

6) secession?
 
lol - a lot of errors but it still fails to mention the first party formed in 1901.

The British House of Commons set up a high-powered committee to consider the issue but after 18 months of negotiations and lobbying, finally refused to consider the matter, further declaring that it could not legally grant secession. The delegation returned home empty-handed.

As a consequence of the failure of negotiations and of the economic revival, the League gradually lost support and by 1938 had ceased to exist.

seems the brits knocked it on the head, which in turn would have meant the 33 referendum was a moot point.

has been brought up, formally, as recently as 2008.

i'd love to see how canberra (and the NSW govt form lack of revenue) would fare without WA as part of "Australia".

It could be like Papua and West Papua....sans the AK47s and militia violence.

so who else in WA can see what the proposed starts will entail for the market?
 
some guy on switzer was saying things that made sense, then he went on and commented on various markets and said WA will suffer from an ongoing collapse in resources. what the heck? talk about an ill informed sydneysider... the boom is unfolding now! i am contracting to a company that earlier this year was struggling when many large miners ceased all work. over the past month all that work has been handed back again, plus new and larger orders pulled forward to now. in the interim however, the owner went and sought more work overseas - the result is an overflowing order book.
 
i'm saying ask your builder what their indemnity insurance is looking like...

Indemnity isn't an issue. We've (Builders) all had a lot of warning about the changes and most have probably already secured new agreements with the other insurers (I know we have, it took about 6 weeks and is a pain in the a$$).
 
Indemnity isn't an issue. We've (Builders) all had a lot of warning about the changes and most have probably already secured new agreements with the other insurers (I know we have, it took about 6 weeks and is a pain in the a$$).

Hi Snort, do you concur with BC's initial post as well in the thread?

How are things looking from your view?
 
hi Redwing,

I posted my thoughts recently on this thread http://www.somersoft.com/forums/showthread.php?t=55783
however it was derailed by BC funnily enough. As an update to what i posted, 2 major land developments have been given the green light last week, so that is encouraging.

In response to BC's comments;

1. Agree. How long it will last will depend on the 2nd & third home buyers market coming into play.

2. A non issue i think. We all learnt a lot from HIH 8 years ago.

3. $2 p/brick is what Owner builders and Small low volume builders will pay, i can't see us going up higher than what we were in the boom though.

I think valuations are currently out of line. They have been for a few years. The best value in Perth at the moment is in the established market as the existing home price is really undervalued and QA's are scratching their heads on current market volatility and builders playing silly buggers with trade rates etc..

4. I think the government bodies have a lot to answer for regarding delays with new developments. If the public were aware how much land values are increased due to these delays they would be outraged. It's something i've been discussing with my business partner and I may release a white paper to the West or 6PR soon. It actually sickens me the way things are handled.

5. I'm not sure about panic buying. I know land releases have been slowed but i also think a slowdown in sales will come now the FHOG has been decreased. There is definately a build up of demand for affordable land and if FIFO workers return to Perth it will create another rental shortage. I still think public perception of the economy hangs by a thread so media voices in the next 6 months will shape how WA responds.
 

see bold blue


hi Redwing,

I posted my thoughts recently on this thread http://www.somersoft.com/forums/showthread.php?t=55783
however it was derailed by BC funnily enough. As an update to what i posted, 2 major land developments have been given the green light last week, so that is encouraging.

In response to BC's comments;

1. Agree. How long it will last will depend on the 2nd & third home buyers market coming into play.

let's not forget WA's "keeping up with the jones's" attitude as well.


2. A non issue i think. We all learnt a lot from HIH 8 years ago.

but a lot of builders didn't - and still haven't !!! the big players are lined up and have it alright anyway - the top 4 or 5 have about 80% of the market here. there's prob 10% of homes out there that will be "floating" - collier homes style - if their insurance isn't sorted. how you can say it's a "non-issue" when you can't get a building license without it made my jaw drop.


3. $2 p/brick is what Owner builders and Small low volume builders will pay, i can't see us going up higher than what we were in the boom though.

my point is that brickies will charge $2 to your larger volume builders - should change things i would have thought...?

I think valuations are currently out of line. They have been for a few years. The best value in Perth at the moment is in the established market as the existing home price is really undervalued and QA's are scratching their heads on current market volatility and builders playing silly buggers with trade rates etc..

4. I think the government bodies have a lot to answer for regarding delays with new developments. If the public were aware how much land values are increased due to these delays they would be outraged. It's something i've been discussing with my business partner and I may release a white paper to the West or 6PR soon. It actually sickens me the way things are handled.

i totally agree. land prices in WA are unrealistically high because of the "slow leak" effect at WAPC and Landgate.

5. I'm not sure about panic buying. I know land releases have been slowed but i also think a slowdown in sales will come now the FHOG has been decreased. There is definately a build up of demand for affordable land and if FIFO workers return to Perth it will create another rental shortage. I still think public perception of the economy hangs by a thread so media voices in the next 6 months will shape how WA responds.

my point behind panic buying was fear of missing out. it won't happen immediately butit will build to stupid levels again no doubt - esp here in the west.
 
......and don't forget the huge impact of the eastern states IP 'lemmings' trying to jump on the over-full CG & Yield bandwagon just before the next 'peak' just to drag the boom out a bit longer for those of us already well positioned to take advantage of their ignorance.........

.......sh#t, I live in the east now, I must be a lemming too.:rolleyes:

That's ok, i'll happily retire as a lemming if it's what I must do :p

***No offence to Terry Ryder, but why start Hot Spotting WA now??? Smart buyers would have been leaving Victorian property to begin circling like vultures and moving in on WA a minimum 12 mths ago. The only target audience he could possibly be gunning for would have to be..........the lemmings!!!

Each to their own I guess.
 
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