Browse Forums Building A New House 1 Mar 17, 2022 8:35 am Hi all. Would like to know if many here are putting off, postponing or cancelling their intended new builds due to potential inflation, material supplies and shortage issues. We are in two minds. On the one hand it is getting expensive. On the other it is not going to get cheaper even if we wait a couple of years (in my opinion). Appreciate and thank you for any views or opinions or suggestions. We are in Victoria. Re: Putting off new build due to inflation 2Mar 17, 2022 9:53 am Those of us that have been around long enough have witnessed Boom Bust cycles As soon as inflation increases kick in....watch what happens... you can bank on prices coming down Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Putting off new build due to inflation 4Mar 17, 2022 10:25 am Building and investing is all about timing, Buy on the cheap sell on the high. You need building, economic data and proofs.. Most commit to a fake coloured elevation renderings and estimates without looking at the building economic data OT, If you are a FHB on the gig economy, high chance you are out of the market...Blame the banks Or you can ask uber, FB, Insta for a loan (humour) Cheers Chris Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Putting off new build due to inflation 5Mar 17, 2022 11:09 am We're going ahead, because we bought the land at the right time, and it's the right time financially for us to proceed, even if there's a chance the costs will reduce later. There's always a chance your costs could reduce, equal chance they continue to increase, so it really depends how much you trust your crystal ball and what your goals are on the micro v macro. I'd certainly be wary of anyone telling you with any certainty that you can bank on prices going up or going down. People have been saying that about property prices for at least ten years, look at where we are now. Re: Putting off new build due to inflation 6Mar 17, 2022 11:13 am We're proceeding with ours. I doubt that costs will reduce substantially in the next year or two. Plus don't forget that there are also costs with not proceeding. Holding an empty block of land means you continue to pay rent/mortgage for the place you're currently living in + the interest on that land that you cannot tax deduct. Re: Putting off new build due to inflation 7Mar 17, 2022 11:39 am Why don't you do everyone a favour and put up your build plans and data? I am sure you will be helping others make up their minds. If you don't know the basics of what goes into your house ...you are in for price gouging BTW, Spare me the crystal ball stuff , put up your projects, Engineers deal with data and proofs rather than Social media witchcraft (humour) Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Putting off new build due to inflation 8Mar 17, 2022 12:46 pm "potential inflation" Costs have already increased by 30%. A $400,000 house in 2020 could now cost $520,000. I've heard opinions that the largest increases have already happened but who really knows with all the crap going on at the moment. Re: Putting off new build due to inflation 9Mar 17, 2022 2:18 pm stonesthrow "potential inflation" Costs have already increased by 30%. A $400,000 house in 2020 could now cost $520,000. I've heard opinions that the largest increases have already happened but who really knows with all the crap going on at the moment. The hidden danger to this is people thinking they're adequatly insured. My build hasn't even finished and I'm planning to either insure it for 50% more than I paid or just get complete replacement insurance. Re: Putting off new build due to inflation 10Mar 18, 2022 9:42 am The other risk right now is builders starting to go bust and industry experts are warning situation will worsen. Recent casualties such as Probuild and Condev makes us very nervous. How are we consumers protected against class 1 builder default? Does the NSW home builder warranty provide adequate protection? Re: Putting off new build due to inflation 11Mar 18, 2022 10:01 am You haven't factored in SPC hiking bake beans up 20% Baked beans, spaghetti up 10-20pc as inflation bites That's the stable diet of suffering Bim artists that use lumion house renderings (Humour) Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Putting off new build due to inflation 12Mar 18, 2022 10:20 am Samz_Turra The other risk right now is builders starting to go bust and industry experts are warning situation will worsen. Recent casualties such as Probuild and Condev makes us very nervous. How are we consumers protected against class 1 builder default? Does the NSW home builder warranty provide adequate protection? Hi Samz, Good post and good question. I am in covid isolation at the moment which is ridiculous when you aren't sick but just a close contact, but anyway I have time today to be a keyboard warrior The simple answer is in NSW HBCF insurance only covers you for 20% of the contract value and is capped at $340,000 so you can't rely on this to finish your build. The issue with the builders who are going broke are those who signed contracts 1, 2 or even 3 years ago. So with Probuild and Condev, these are major projects that take 2-3 years to build and prices have moved so far in that time that they simply can not afford to build under the current contracts. I have also been saying this on here for a while, I think there will be a number of project home builders who won't last as well. I have connections in one medium sized group and the word is that they wont last this year because they are carrying too many 2020 contracts. The project home sector is a bit like a ponzi scheme in that as long as deposits for new builds keep coming in they can use that money to fund work under construction. As soon as the new deposits stop and the builder runs out of cash reserves then it is all over. In my opinion this is why several groups are advertising big discounts at the moment. I believe it is to keep the deposits coming in and advance payments under the new contracts to try and fund the old contracts ( hope that makes sense). I saw one major builder go through a complete restructure recently and shut down most of it's offices. I assume that is to try and get overheads low to see them through this year. But that is speculation. It's not all doom and gloom though, there are solutions if you do need to build. If you can afford to use a smaller builder who doesn't carry massive overheads and who has a short lead time between signing the contract and starting work, then you will be building on realistic pricing and if something does happen, you can usually get another builder to take over. I genuinely would be wary of any builder who is carrying a bunch of contracts that were priced before 2021 or even early 2021. The price rises we have seen, even since October 2021 to now are astronomical, but I think they will level out this year. I hope that wasn't too hard to read Cheers Simeon Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: Putting off new build due to inflation 13Mar 18, 2022 3:20 pm Ashington Homes Samz_Turra The other risk right now is builders starting to go bust and industry experts are warning situation will worsen. Recent casualties such as Probuild and Condev makes us very nervous. How are we consumers protected against class 1 builder default? Does the NSW home builder warranty provide adequate protection? Hi Samz, Good post and good question. I am in covid isolation at the moment which is ridiculous when you aren't sick but just a close contact, but anyway I have time today to be a keyboard warrior The simple answer is in NSW HBCF insurance only covers you for 20% of the contract value and is capped at $340,000 so you can't rely on this to finish your build. The issue with the builders who are going broke are those who signed contracts 1, 2 or even 3 years ago. So with Probuild and Condev, these are major projects that take 2-3 years to build and prices have moved so far in that time that they simply can not afford to build under the current contracts. I have also been saying this on here for a while, I think there will be a number of project home builders who won't last as well. I have connections in one medium sized group and the word is that they wont last this year because they are carrying too many 2020 contracts. The project home sector is a bit like a ponzi scheme in that as long as deposits for new builds keep coming in they can use that money to fund work under construction. As soon as the new deposits stop and the builder runs out of cash reserves then it is all over. In my opinion this is why several groups are advertising big discounts at the moment. I believe it is to keep the deposits coming in and advance payments under the new contracts to try and fund the old contracts ( hope that makes sense). I saw one major builder go through a complete restructure recently and shut down most of it's offices. I assume that is to try and get overheads low to see them through this year. But that is speculation. It's not all doom and gloom though, there are solutions if you do need to build. If you can afford to use a smaller builder who doesn't carry massive overheads and who has a short lead time between signing the contract and starting work, then you will be building on realistic pricing and if something does happen, you can usually get another builder to take over. I genuinely would be wary of any builder who is carrying a bunch of contracts that were priced before 2021 or even early 2021. The price rises we have seen, even since October 2021 to now are astronomical, but I think they will level out this year. I hope that wasn't too hard to read Cheers Simeon Thanks Simeon. I wasn't aware HBCF claims are capped up to $340k or 20%. I assume its the lower of both. As you rightly pointed out this isn't enough to cover even the cost of an average build. You have raised a great point about builders not being able to honour fixed price contracts. There was a recent article about Metricon renegotiating fixed contracts with consumers. I wonder how this year will pan out for the large volume builders in the country. I would think the ability for volume builders to secure deposits is still relatively strong due to strong market demand for property but these companies don't release their financial data publicly so hard to know what their profitability or working capital is looking like. Some of these builders are generating over a billion in revenues and really should be reporting their financials. Another question I have it how easy is it for a builder to take over another builder's job? I assume the new builder taking over the project wouldn't want to be liable for works already completed by the original builder, hence risk is higher so would charge a premium over an above the contract price? Re: Putting off new build due to inflation 14Mar 18, 2022 9:10 pm Samz_Turra The other risk right now is builders starting to go bust and industry experts are warning situation will worsen. Recent casualties such as Probuild and Condev makes us very nervous. How are we consumers protected against class 1 builder default? Does the NSW home builder warranty provide adequate protection? "Experts are warning situation will worsen" what are these "experts" qualifications? (Please don't tell me they're engineers because we've already seen in this thread how overinflated their opinions are of their own conjecture). I'd be keen to see some stats on percentages of small/med builders going bust over the last 20 years to back up these claims. Re: Putting off new build due to inflation 15Mar 19, 2022 10:52 am dandaman21 I'd be keen to see some stats on percentages of small/med builders going bust over the last 20 years to back up these claims. Don't worry about seeing the MBA and HIA data , releasing that info is bad for Members businesses. You'll soon enough see a backlash from tradies tweeting " they've been locked out, haven't been paid" , Builders on the do not supply manufacturers lists, maxed out on Builders indemnity Insurance, etc.... get the gist What is it you do? Did you make the Trusted professions list lol, That's a free lunch right there? (Humour) Talking it up isn't the problem, delivering the results might be for you. LOL when I see an economist driving around in a ute with a trailer full of tools then I might believe them when they talk about the built economy. hth Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Putting off new build due to inflation 17Mar 23, 2022 1:17 am There are far fewer people entering the trades, so the rates the trades are going to charge isn't going to decrease. The fed and state governments have just thrown container loads of money into construction, we are way past bucketloads, so it would be reasonable to believe the days of first home owner grants are gone for at least the next 5 odd years. Substantial areas of QLD & NSW have been washed away. Insurers are known to pay about 1.5 times the normal rate to get the work done quickly. All governments have abandoned any concept of providing public housing, so rents are through the roof and vacancies are through the floor. and for the past 3 years everyone that has a soap box has been standing on it crying the bust is around the corner. Pretty straight road from where i'm looking. I've been in this game for 40 yrs, house prices don't come down, the level of give-a-ways just increases in quieter times. Affordability will keep outpacing most budgets and the Aussie Dream will change from "come and look at our new home" to "come and look at the home we're renting". We are Expert Consultant's, and we are here to help. Re: Putting off new build due to inflation 18Mar 23, 2022 3:45 pm I am currently going through the quote for a custom build and builder already increased the quote by 5% within 2-3 weeks of original quote. builder is saying that they are revising the quotation price every month and until a fixed price contract is signed, prices are not locked and continue to increase. in a very bad situation right now on how to decide so quickly Re: Putting off new build due to inflation 19Mar 23, 2022 3:54 pm idev that is the dilemma facing many currently. Bite the bullet and do it now or just put it off until prices stabilise and competition comes back in to push prices down. However no one knows how long the wait will be and of course there is no guarantee prices will come down. Also be wary of so called "fixed price" contracts there is always some out clause for the builder to pass on significant price increases. Re: Putting off new build due to inflation 20Mar 23, 2022 4:15 pm I don't think prices will stabilise anytime soon - atleast not this year. Have a read on this article that talks about why Condev and Probuild defaulted. https://www.smartcompany.com.au/industr ... -industry/ DIY, Home Maintenance & Repair Are you doing this with a building permit? Conversion of a non habitable room into a habitable room requires building permit. 3 17325 I couldn't attached the photo for some reason. Here is the link to the photo https://pin.it/79jwdMp 1 3123 Get some long brass machine screws and bolt right through the gate and put brass acorn nuts and washers on the other side. It will never come off 1 9084 |