Hi all, I working through a tender of a knock down rebuild into 2 townhouse project for long term hold. The final tender has come back as 20% above the quoted price when i signed a prelime agreement with a builder 2 months previously. It seems the construction material has gone up internationally and locally and this seems to be passed onto the consumer. Currently- I am out of pocket $1000- holding onto property as it is and on building the 2 townhouses I would be approx neutrally geared. Question 1: Does everyone think the prices will come down soon and would it be wise to hold off construction until there is a price correction? (Based on a few articles, apparently there is price correction that is starting to happen) Thanks in advance
In my view, building material shortage is going to stay here for short time i.e. at least 1 year, may be more. Once price goes up for anything, it will take time for it to come down. What articles you are referring to which suggeat that building material prices will come down soon? Whether to construct now or wait - only u can answer as no one else has knowledge of your circumstances. Personally, i would find a smaller builder who is happy to work with less margin but they are rare breed nowadays. Note : i m not involved in building industry so do not have much insiht into supply chain.
House prices are booming atm, do the end values make it worth while still, or are you building to rent?
Just a few international articles saying the lumbar prices are coming down. Ya i am finding it difficult to get a reliable small builder and out for recommendations Medium spec ( which is standard for this builder)- basically timber flooring to living melamine cupboards, tiles for outdoor area, semi floor to ceiling for toilets, chrome taps, 40mm stone bench for kitchen and 20mm stone bench for laundry, undermount sink for kitchen. Timber stairs. High ceiling 2.7 m ground and 2.3 1st floor. High doors. Double glazed windows. This is for total floor space including outdoor areas Unite 1 229m2 Unit 2 213m2 total its 955k. Which comes to 2165 per m2 in Chadstone. Building to rent both hence wondering if I need to wait. But then there is no guarantee the prices will come down in 6 months to an year
"Boomer Rant" - no wonder punters can't afford houses nowadays. Medium spec has moved to what used to be luxury only 15-20 years ago.
These higher material costs will flow onto the price of established houses I imagine (rubbing palms of hands together ).
I was to mean- not floor to ceiling tiles for all aspects of toilets but for selected views and parts of the toilets
I've also been stung by the hike in building prices. I'm not holding my breath for the cost of materials to come down anytime in the next 12-18 months though. Fortunately property prices have also skyrocketed in many areas so that may or may not cover the increased build costs. One builder told me their supplier didn't increase prices in 2020 so applied an extra large increase in 2021. I guess I'm not surprised. They would've gone from uncertain demand to not being able to keep up with demand. If you're building to rent long-term, you'll probably do OK as you'll have rental income and depreciation to help with cashflow. Having said that, if you can afford to wait, why not. Your planning permit shouldn't expire for 2 years and you can always apply for an extension towards the end of that.
