Various market indicators have shown that enquiries for building a new home, and purchasing land and real estate have increased since December 2016. This comes off the downturn WA has experienced for approximately the past two years.
Confidence in building a new home in WA will continue to grow throughout 2017 based on key market indicators. Population growth combined with employment growth will eventually take up the residual of established real estate properties. This will increase property values for established properties and increase costs involved with building a new home. Supplier costs and trade rates have been moderate in recent years, but will rise with future demand.
Property values have been overheated throughout the mining boom period in WA. However, over the past year, as the boom has slowed, property values have been to the advantage of the purchaser. This scenario may be short lived though, with values returning to a more realistic level. While they may not return to the values seen during the boom period, they are likely to experience a steady growth, equivalent to the periods preceding the boom.
There has never been a better time to build a new home than right now, certainly not during the 35-year period that I have been part of the building sector in WA.
There are several key advantages to new homebuyers now:
- Supplier costs to builders are stable in the short term keeping building costs stable
- Trade rates have reduced to realistic levels and availability has increased with all trades
- Building/site construction times have reduced due to more than ample trade availability, saving rent
- The industry is much more competitive than ever in recent history adding value to home buyers
- Low interest rates from the Reserve Bank which are forecast to remain for some time into the future
- Competitive and innovative finance available from many sources in the finance sector
- Confidence that property values will steadily increase in 2017, which will be pertinent to newly built properties
- Employment growth within WA in recent months is assisting the economy and confidence in WA
- New major projects in WA, both public and private, which will create more employment and growth
- Faster Building Approvals with the advent of Private Certification of Building Surveyors, saving time and rent
- Fewer delays with supply of materials and labour, which may change with market demand
- Increased quality control for construction generally, with more highly skilled trades seeking work
- Increased value to prospective home buyers, due to the competitive market between builders
- Those that commit to build now will avoid the projected cost increases from suppliers and trades that have been deferred through recent times that will be imposed once the housing market is in full recovery.
The factor that makes all the difference however, is that you select a builder that will give you an accurate and fully comprehensive cost for your new home up-front detailing quoted costs and specifications. It’s important to ensure everything is included in the quote prior to signing documents and paying your deposit to avoid exorbitant price variations later.
You also need to ensure that you don’t undercapitalise when building a new home, as potential growth may be restricted. Alternatively, if you moderately overcapitalise, which can be less risky, the market value of your property will eventually catch up to the realised value and surpass your investment outlay. Over the 5-10-year period that you reside in the home you will realise greater capital growth on your investment.
To discuss new home building further, please contact Malcolm Goode, Director / Builder / Designer, at Artique Homes WA, or visit www.artiquehomes.com.au.