I often get asked if now is a good time to build

Hi Everyone

After 3 incredibly difficult years, the answer is yes, now is a great time to build.

The bottom line is that building has finally become easy again. The last couple of years were so difficult.

The building industry has been going through a massive well publicised clean out, and the results of this have really been evident on the ground over the last few months.

Here in Sydney, tradies and materials are finally available again, and most importantly, pricing has pretty much stabilised.

The difference between August 2023 and August 2022 is incredible.

For those who followed my duplex blog, last year Sydney had run out of scaffolding, and I had to call over 20 companies to try and track some down, and prices had doubled. Now I have scaffolding companies calling me chasing work.One big firm was telling me last week that they are selling most of their stock as they don't have enough demand.

Another example was bricklayers. We were putting adds up online and literally driving around building sites trying to find new crews, recently I have been getting at least 2-3 calls per week from good sized crews looking for work.

I use this amazing excavation crew who were telling me last week that the previous week was the first time they had no work in 6 years and are now thinking of leaving the industry.

My last example is a well known window company who flat out refused to sell me windows, now contacted me last week begging for work. I should name and shame them actually because their previous behaviour was appalling, Wideline, no I won't be letting you quote my jobs. There I said it!

The sad part is that a lot of these tradies you talk to are owed significant sums of money by other builders. Particularly for jobs in Western Sydney.

My joiner has $500k outstanding, plumber $60k, a third of that since January. Nearly every trade I speak to is owed money. The story is the same. Builder saying that the clients haven't paid, so the tradie misses out. This tells me that the clean out hasn't finished yet.

For our business, we have made a point of paying our tradies the day invoices have come in, essentially to buy their loyalty. When our clients have been slow with payments this has meant that we just can't pay ourselves, but now that we have a good pipeline, that loyalty is paying off and our jobs are getting priority.

Building has never been smoother.

Price wise, I have several jobs out to full tender at the moment, and we are still getting some stupid numbers in, but mixed with that are some very reasonable ones as well, so it's just a matter of shopping and negotiation.

A great example last week was 3 Hebel quotes, 2 came in at $90k and one at $145k. I simply went back to the high guy and without hesitation his priced dropped significantly. We had a similar situation with a bricklayer early in the week who started at asking $2.50 and dropped to $1.35 when we told him the job was going to someone else. So there are tradies who are still trying it on.

But overall, this is the way the market should be ( minus people not being paid). Essentially, we are finding it easy to find quality trades to do high quality work in a very reasonable time frame.

So in summary:

1. If you have been sitting on the sideline waiting for the market to stabilise before building your dream home. I genuinely believe that time has come.

2. Prices have definitely stabilised and supply issues are mostly gone. I wouldn't be talked into a cost plus contract for instance.

3. Unfortunately, there still will some builders going under, but I believe these are the ones who have priced their jobs too low, thinking they need to pick up market share. So hunt around, find a builder who prices your job fairly ( not too low and not too high). My theory is that if they are pricing your job too low then they have done that to other clients to win work and there is a good chance they won't finish your job. From time to time I get people calling me saying that they have quotes to build a duplex for $750,000 and I know that materials alone will cost over $900,000 and there is no contingency built in.

So even though it is tempting, choosing the cheapest builder could cost you.

And lastly, don't forget to do your research. Go look at other builds, talk to clients and see what their experience has been, and stick to timber frames.

Cheers

Simeon