Evidence Shows Now Is A Great Time To Develop

Evidence Shows Now Is A Great Time To Develop

WA is primmed for growth with the Australian Government announcing they will be opening visas for up to 200,000 migrants when borders are fully opened which will assist in economic recovery post-pandemic. The government is focusing on bringing in skilled individuals, as well as students and refugees. Evidence is showing when the borders begin to open, the housing market will be in high demand and with plenty of jobs available, Western Australia (WA) is looking to be an attractive state for immigrants to settle. These immigrants will need somewhere to live and with our current low supply, housing demand is only going to increase proving now is a great time to develop.

 

It is common knowledge that tradespeople are in high demand. Skilled labourers from a number of different industries are in dire need; as mentioned in our previous blog explaining some of the reasoning behind the low supply of tradies in particular in the construction industry. If you were to do a job search on SEEK, you will notice over 1,000 jobs available for Diesel Fitters with multiple sign-on bonuses. On top of that, some employers are offering their staff bonuses just to bring in skilled labourers. This particular job search is a good indicator of the Western Australian job market and shows there is plenty of work out there for tradespeople in both the construction and mining industries. Great news for the 200,000 migrants Australia should soon be expecting. WA will be an attractive prospect for those skilled migrants with our high demand for labourers which will, in turn, add further stress on housing and rental demand. This could work in favour of the sale of your future development.

 

Most immigrants rent in the first few years.

This is just what property investors want to hear. The current high rental prices and low availability is already working in their favour and the prospect of that demand increasing is a great incentive to purchase their next rental property such as a unit from your future development. In addition, they almost have a guarantee they will find tenants and receive a decent rental income. If you are sitting on a block big enough for multi-units especially if you are close to a university or public transport you should expect a lot of interest, come sale time. Incoming foreign students will be on the lookout for rentals close to their place of study which makes multi-unit dwellings an attractive investment purchase.

 

Immigrants are likely to buy within a few years of moving.

If you have developed before you are likely aware of the time it takes to submit building applications, plans and gain council approval for your development and with the current building delays, your next project could take longer than expected. Therefore, leave yourself with plenty of time to get your development completed. Start looking for land and securing a block for your next project now so you can be prepared and have homes built and ready to go when these immigrants are looking to buy.

 

“With borders opening in 2022, a significant pick-up in immigration will fuel further demand, right at the time when supply is struggling to keep up due to the labour shortages in the building industry.”

– Damien Collins – Head of Real Estate Institute of WA (REIWA)

 

Don’t wait for building prices to go down. Strong evidence suggests demand should start to pick up mid-end of next year if borders in WA open which could cause increases in housing prices. This is why now is a good time to get a move along on your development before the influx of immigrants hits our state. Help fill the current supply gap in the housing market by getting your development ready to go.

 

Starting a development is easier said than done. It takes time to get things moving, to find land, submit applications, get council approval, which is why getting the ball rolling sooner rather than later will put you in a better position for the near future. Contact us to help you get started on your project.

We can help you with your search for land, building plans, council submissions, EVERYTHING from start to finish. If you are still not sold on the clear evidence provided, in addition, we will do a feasibility study for your prospective project to give you a good indication of the returns you should expect.

 

Send Jubilee Homes Director Joe Snare a message today:

[email protected]

(08) 9571 3512

Perth Building Delays and Supply Shortages

Perth Building Delays and Supply Shortages

It is a common misconception that builders are the ones benefitting during a construction boom while consumers get caught with increasing prices and longer wait times. This can cause some frustration however, these booms are no walk in the park for small builders let alone the larger ones.

The global economy took a hard hit when COVID-19 emerged. The pandemic caused many strains on a number of industries including residential construction. To help stimulate the economy the federal and state government announced the building bonuses. The building industry is one of the largest employers in Western Australia which meant these bonuses would help keep a large portion of the population employed. As a result, the industry had a sudden increase in activity however there have been some side effects to this sudden boom and COVID-19 has increased the strains on builders which in turn, unfortunately, gets passed on to the clients. This is a time of understanding and patience. If you are building in the current climate it is important to understand why there are delays and what is causing them.

 

“Builders are now experiencing a range of pressures associated with the huge levels of activity, including significant cost escalation as a result of labour shortages and material delays caused by the ongoing disruption from COVID-19 to global supply chains.”

– HIA WA Executive Director, Cath Hart

 

Labour Shortages

You may have already heard of the current trade shortages with an emphasis on brickies. As a result, there are many Perth builds at a standstill, ready to progress to the next stage of construction however not enough tradies around to finish the job. The shortage of brickies in particular stems from the last boom where a good number of older professionals moved over east and of those who stayed, many have retired. On top of that, there was a low intake of new apprentices in WA. As a result, the current industry boom is seeing tradies like brickies left in high demand and a lack of professionals out there to meet building needs. This is an issue both small and large building companies are struggling with. Jobs are getting delayed and on top of that, tradesmen such as brickies are hiking up their prices.

 

Supply Shortages

The building industry is currently battling with material shortages such as steel. Iron ore is being sold to China at high prices however is coming back in steel form at equally high prices and we are not getting enough of it to keep up with demand. Timber is another material that is in high demand with shortages being experienced globally as a result of fires in both America and Australia as well as the shutdown of timber plants thanks to COVID-19. There are efforts in place to try and tackle the wood shortage. The Australian Government has allocated $15.1 million to help tackle timber shortages with aims to salvage bushfire affected softwood from Kangaroo Island.

All these shortages are normal during a boom period however with the added pressure of the pandemic these constraints are even more difficult to workaround.

 

While you may be thinking builders are the ones to benefit from the booms this is not always the case. Yes, there are more projects available however with tradies and suppliers hiking up their costs and delays in supply, builders are having to struggle to keep costs down for their clients, coordinate labour delays with material shortages and receive progress claims to ensure cash flow. 

 

“From the builder’s point of view, especially where you have a lump sum contract, it’s fixed at the top end so you can’t necessarily increase that.”

– HIA WA President, Dean Humphrey (Building WA Podcast)

 

So how is Jubilee Home Builders managing these obstacles? We believe transparency and communication are key. We are communicating openly with our clients on cost expectations and are trying our hardest to keep our clients within their budget. We are also creating realistic timeframes and are working with our tradesmen closely so we can communicate labour delays.

The prospect of building with the current trade and supply shortages may sound offputting however these obstacles are no reason to delay building your dream home/development plans and capitalising on low-interest rates during construction. With the right builder to guide you through the process, you can build with minimal stress and surprises. If you are thinking of building your next home or developing land in the near future get in contact with our team today.

 

Contact us on:

08 9571 3512
[email protected]
www.jubilee.com.au