Ongoing demand for new houses has shored up the construction pipeline for home builders into 2022, according to new home sales data for last month.
The HIA New Home Sales report showed the number of sales had jumped 15.3 per cent despite the end of the Home Builder program earlier this year.
HIA economist Angela Lillicrap said market confidence and low interest rates were underpinning owner-occupier demand for detached dwellings.
“The strength of new home sales nationally suggests that there will be a significant number of new homes entering the pipeline post-HomeBuilder, which will ensure activity remains elevated into 2022,” Lillicrap said.
“Sales in the June 2021 quarter are below the levels experienced during the nine months of the HomeBuilder program but are stronger than the same quarter in 2019.
“Sales are also on par with the June 2018 quarter, which was a strong year for detached home building.”
Private new house sales: Australia
Lillicrap said strong house price growth was also a contributing factor to the ongoing market confidence.
“This strong volume of sales will continue to pull the national economy forward,” she said.
“New home sales in New South Wales and Western Australia were over a third higher in the June 2021 quarter compared to the same time in 2019.
“Sales in Queensland were 4.4 per cent higher compared to the June 2019 quarter, while Victoria is flat (down by 0.1 per cent).
“South Australia had the strongest response to HomeBuilder, but sales since the end of the program remain lower by 14.4 per cent compared to the June 2019 quarter.”
But a KPMG report on The Impact of Covid on Australia’s Residential Property Market has warned of a “tempering” of property prices over the next two to three years.
The research assessed the impact of Covid-19 on Australia’s property prices and found that house prices were between 4 and 12 per cent higher, and units were up to 13 per cent higher than without the global pandemic.
KPMG chief economist Dr Brendan Rynne wrote the report and said stimulus measures introduced in response to the Covid-19 economic downturn had impacted Australia’s property market bth directly and indirectly.
“While our analysis shows that the decline in mortgage interest rates has contributed to the strong property price increases observed over the past year, there is an expectation that house price growth will moderate in the next few years as mortgage interest rates start to rise and the impact of lower than anticipated population growth starts to bite,” Dr Rynne said.
“Our analysis suggests that the recent spike has moved house prices further away from the estimated equilibrium price levels.
“Our expectation is that this disequilibrium will start to contract … over the next two to three years this will place downward pressure on prices and eventually outweigh the positive impacts on prices of the shorter term factors, which are expected to weaken over time.”
Article Source: www.theurbandeveloper.com
Hutchinson Builders takes over Cbus Brisbane tower that broke Probuild
Hutchinson Builders will take over the completion of Cbus Property’s troubled residential development in Brisbane, one of most problematic projects for failed construction contractor Probuild.
The awarding of the contract was widely expected, as family-owned Hutchies, the largest Queensland-based builder, was seen as the only contractor capable of taking on the 47-level project.
“Since commencing preliminary works on site three weeks ago, Cbus Property, together with Hutchinson Builders, continues to finalise subcontractor negotiations and prepare a revised construction programme,” Cbus Property chief executive Adrian Pozzo said on Monday.
“Once finalised, we will provide an update to purchasers with a more definitive completion timeline.”
Chairman Scott Hutchinson told The Australian Financial Review in early March he was “quietly hoping” to pick up the job and the announcement makes it second time lucky for the company that came second to Probuild in the 2017 race for the project.
But the project turned into such a drag for the business that Probuild parent WBHO said last year – long before putting the company into administration in February this year – that the project had racked up a $48 million loss.
Sydney-based Roberts Co has acquired Probuild’s Victorian projects and Built has taken over Dexus’ 25 Martin Place project in Sydney. The future of Greaton’s Ribbon project at Sydney’s Darling Harbour is still not clear.
Article source: www.afr.com
Gold Coast’s New Isoletto Pool Club Brings A Slice Of Europe To Queensland
Over the past few years, The Star Gold Coast has been going hard on expansions as the property tries to firm up its status as the area’s most emblematic luxury address. Unlike in other Australian cities up and down the east coast, The Star Gold Coast has virtually no competition in sight, leaving it as somewhat of an incubator for the coastal city’s more premium offerings across dining and accommodation. The latest opening to help fortify that kind of reputation is Isoletto Pool Club, a ritzy sixth-floor bar and events space that’s part of the new Leisure Deck within its recently built 53-storey hotel and apartment tower.
Given the Ibizia-style Cali Beach has been such a hit for Gold Coast locals and visitors, it’d be no surprise to see Isoletto Pool Club take off as the destination pushes into its post-pandemic groove. And while Australia’s east coast is most likely heading towards its wetter months (yes – even Sydney), the opening still comes nicely timed to capitalise on all the return domestic travellers looking for something a bit more premium than the typical Broadbeach haunt.
The suite of poolside spaces that make up Isoletto aren’t breaking the mould when it comes to some of the more popular pool clubs from around the world, but the clean organic neutral palette looks incredibly inviting with its bright accents of lemon and melon. Consider it one of the few slices of European inspired spaces nudging its way into the famously outdated spread of average cafes and generic restaurants (Social Eating House being an exception) that have held Broadbeach back for years.
The catch here is that Isoletto Pool Club will remain exclusive to all hotel guests within The Star’s numerous hotels, which span The Star Grand, The Darling, and newer developments Dorsett Gold Coast and The Star Residences. This includes anyone staying in the long-term rentals and permanent residences that make up The Star’s new apartment tower, which is opening in June this year.
There’s no subversion here. A press release for Isoletto Pool Club touts “island-inspired cocktails” and an extensive wine list, plus the kind of food menu that’s perfectly aligned with the coastal inspiration. Think casual Gold Coast staples like freshly rolled sushi and locally sourced oysters to fried snapper burgers and various acai bowls. Groups can also grab various poolside packages that include bottles of Champagne, cocktail selections, seasonal fruit platters, and some complimentary sunscreen.
The opening will be complemented by a separate Isoletto Privé, which is a dedicated event space signalled by a sprawling lawn and its own deck and terrace. And it seems The Star is really pushing this part of Isoletto, bolstering the property’s business and events portfolio with enough capacity to fit a comfortable 168 guests at long tables, 150 guests at seated banquet tables or a max of 1,200 standing guests if considering the entire Leisure Deck as well.
Homebuyers Warned as Builders Renegotiate Contracts
The Queensland Building and Construction Commission has warned homebuyers to seek legal advice before agreeing to make payments that fall outside of the terms of fixed price contracts.
QBCC’s warning comes as builders and construction firms face escalating construction and labour costs and delays.
Earlier this week, it was revealed Oracle Homes was asking homebuyers for up to $122,000 for price variations due to cost blowouts.
Master Builders Australia acting chief executive Paul Bidwell said the ongoing war in the Ukraine was also affecting supplies.
“We’ve just seen, as a result of the Ukrainian conflict, the federal government impose tariffs on goods coming out of that region and the immediate impact has been a 25 per cent increase on engineered wood products,” Bidwell said.
“So that will add $6000 to $11,000 depending on how big the house is.
“Who would have figured that that would have happened, two months ago?”
After high-profile builders Probuild and Condev declared insolvency, a number of smaller subcontractors, builders and construction firms are barely managing to stay afloat.
“What Oracle is going through is no different to what any other builder in Australia is going through,” Bidwell said.
“They have signed a fixed price contract and in the period of that contract, the cost of materials and labour has gone up astronomically.”
Cost variations can be accounted for via rise and fall or cost escalation clauses in contracts but when and how these can be introduced into contracts varies from state to state.
With a fixed price contract the homebuyer is not required to pay any more than what was initially agreed to in the contract but it does not prevent the buyer from contacting the homebuyer to negotiate.
Bidwell said it was key to keep the homebuyer informed and to try to negotiate.
“There is nothing to stop the builder going to their clients and saying ‘here is the problem I have got. I can’t finish it by this time, it’s going to cost more, here are my invoices so you can see the costs’,” Bidwell said.
“It’s all about managing relationships.
“The builder has to manage the relationship with the client so there are no surprises.”
Metricon’s chief executive Mariao Biasin recently announced that it was renegotiating contracts with some clients.
“Metricon is committed to fulfilling every valid contract in which a fixed price has been agreed,” Biasin said.
Last financial year, Oracle Homes built 112 houses worth $36.6 million, a drop of nearly two thirds compared to the previous financial year when it built 318 houses worth more than $90 million.
It has a category 6 licence allowing it to build up to $240-million worth of housing per year.
Bidwell said there seemed to be no short-term solutions.
“We do need to do more planting with forestry and more domestic production and manufacturing,” Bidwell said.
“But it won’t fix the problem in the short term.
“It’s very difficult—there’s not much that can be done.”
Monash University Professor Gerber told media this week that if a builder went bankrupt it would affect every one.
“When things start to go wrong for the builder, it really has a domino effect because all the people they are responsible for paying — their workers, their suppliers, their tradies — they all suffer and can’t be paid,” Gerber said.
Article Source: www.theurbandeveloper.com
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