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.
labour shortage are evident already - plasterers and chippies the big ones.
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...
this was solved with the remaining two taking on the other two's liabilities.
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.
labour prices are rising now 6 months in - that took longer than i thought but it's there now. prices have a strict 3 or 6 month guarantee to them.
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.
still a bottleneck - although DHW are selling off a LOT of land through Satterley now, so the Northern Suburbs isn't as bottlenecked - but still prices are rising. It seems the only place to build something affordable in the South is Byford or Baldivis.
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.
this happened in early to late Feb - a lot of investors mainly jumping thre gun and securing dev propoerties at a premium and now can't move them OR develop them. just had one across my desk last week - to develop or sell would have been a zero-profit exercise. port hedland making another run on prices now.
6) secession?
i certainly bl**dy hope so - 1880 accord still stands.
