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House and land package sales rise as buyers undeterred by long waits and cost blow-outs

Home buyers

Home buyers are undeterred by the prospect of new builds, snapping up more house and land packages than before COVID-19 even though building a new home is costing up to 10 per cent more and taking months longer to complete.

Surging prices for established houses have prompted first-home buyers, upgraders and investors to secure more affordable house and land packages, and record low interest rates have further buoyed demand.

House building approvals are up by 3.5 per cent nationally in August to 12,009, sitting well above the 8458 recorded at the same time in 2019, before coronavirus struck, the latest Australian Bureau of Statistics figures show.

House and land buyers have even been active through Melbourne’s record lockdown, with figures from real estate services group Oliver Hume showing a 30 per cent jump in reservations (a payment for securing a block of land) in September, compared to August.

The national general manager residential housing at Burbank Homes, Louis Sultan, said the market had been increasingly busy as coronavirus-related lockdowns in both Sydney and Melbourne began to ease.

“In Queensland it’s been a very, very busy time in terms of sales,” Mr Sultan said. “But they haven’t had the lockdown scenarios of Sydney or Melbourne.”

The extra work comes despite costs for building rising by around 10 per cent for a single-level home, and 5 per cent for a double-storey, since February. Costs have also been rising for trades and labour on builds.

Adding to the challenges, timber frames and glass have been in short supply, seeing slabs poured but further building delayed by up to five months, Mr Sultan said.

However, this hasn’t dampened the desires of those looking for their first home, or a bigger one.

Home buyers

Timber shortages have caused delays to starting home builds. Photo: iStock

Oliver Hume national head of research George Bougias said the challenges faced by the industry had not put off buyers of house and land packages.

“I think people are taking it in their stride and with record-low interest rates people are intent on capitalising on that,” Mr Bougias said. “There’s still a lot of energy wanting to be expressed in the market [after lockdown] and land prices have gone up quite a bit.”

Some buyers were rushing into the market, not only because house and land packages were much more affordable than many inner-city homes.

The Australian Prudential Regulation Authority announcement that it was tightening lending criteria at the end of the month could make it more difficult for some buyers to get a mortgage.

“Some people are rushing to get loans approved and do everything sooner,” Mr Bougias said. “I think overall APRA changes will have a modest impact on the market.”

While more buyers were coming into the market, the type of buyer had been changing. More of those looking for a bigger home, or bigger home office, had been buying house and land packages over the past few months.

As had investors, looking for a better deal than they could get in the expensive inner-city markets.

“The number of upsizers has increased. They’re actually looking for something where they’re not living on top of each other and have bigger home offices,” Mr Sultan said. “That demographic has increased by 40 per cent.”

HIA chief economist Tim Reardon said the number of sales remained strong after a bumper year last year, with the HIA expecting 146,000 new homes to be built this year.

Last year, the home building industry was inundated with house and land sales, when the federal government’s HomeBuilder grants of up to $25,000 were taken up by more than 109,000 people before the scheme ended in April.

“Why is there such strong demand for housing? Because there was such little housing before COVID,” Mr Reardon said. “The market had been constrained for so long – what’s happened in two years is a catch up on 20 years of under-building.”

Like many in the real estate sector, Mr Reardon said he expected the market to spark up again once state and international borders reopened and migrants returned by the end of the year. He also expected the challenges of finding timber and other materials to build homes to ease by the end of 2022.

 

Article Source: www.domain.com.au

Brisbane

Hutchinson Builders takes over Cbus Brisbane tower that broke Probuild

Hutchinson Builders takes over Cbus Brisbane tower

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.

Probuild had tendered a price for the project that was $40 million less than Hutchies’ price and a year faster to build, Mr Hutchinson said. Probuild has not confirmed those numbers, nor has Cbus Property.

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

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Gold Coast

Gold Coast’s New Isoletto Pool Club Brings A Slice Of Europe To Queensland

gold-coast-pool-club

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.

gold-coast pool club

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.

Article source: www.bosshunting.com.au
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Infrastructure

Homebuyers Warned as Builders Renegotiate Contracts

homebuyers feature image

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.”

homebuyers 1

▲ Metricon is renegotiating some contracts.

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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