Buyers benefit from downturn

Buyers benefit from downturn

EXPERTS say while recent analysis of the state’s residential building market forecast a challenging period ahead for the new homes industry, they agree it will create greater opportunities for homebuyers across all markets.

The Housing Industry Association released its State Outlook Report for WA in mid-March, revealing new home building activity in the state was in decline.

According to the report, following a 6.7 per cent increase in new dwelling starts in 2014/15 to a record level of 31,160, a decline of 21.3 per cent was forecast for this year.

The report also stated further falls were expected for 2016/17 and 2017/18, with total new home commencements to bottom out at approximately 20,840.

“It is important to note that the market is coming down off record levels in 2014 of 32,100,” HIA WA executive director John Gelavis said.

“We have never been at this level ever in the history of residential building in WA.”

Summit Homes Group agreed with the HIA predictions but had not felt the effects of the downturn as much.

“We have had a buoyant start to the year already although if we compare today’s figures with the same time last year, we are approximately down by 10 per cent,” Summit New Homes general manager Tony Harvie said.

“The housing market is very cyclical and there is no doubt the industry is in a downturn now.

“It’s certainly not the worst it’s ever been in our almost 40 years of business but there has been times when it was performing stronger.”

Erick Erhard of Trowel Techniques, who has worked as a bricklayer for 37 years, said he had seen building activity go through ups and downs many times before.

“In WA, the building industry is always boom and bust, always like a bit of a rollercoaster,” he said.

“There will be plenty of work around but when it starts dropping off, it drops off quickly, which is what has happened since about October or November last year.”

Mr Erhard said because work volumes were not as high as in previous years, tradespeople were feeling the strain.

“Everyone’s a bit nervous,” he said.

“The builders can also dictate lower rates when the work volume is low there and you have to take the work or not have work at all, but unfortunately the cost of living keeps going up.

“But the population is growing and there’s always going to be a need for housing, so I hope it doesn’t stay in the downturn for too long.

“I’ve been doing this long enough to know it’s not going to be good all the time and I know it’s going to get a lot worse for the next year and a half before it gets better again.”

Mr Gelavis said the biggest positive from the forecast was that it was now a buyer’s market for those looking to build a new property.

“The obvious outcomes will be an increase in competition, providing greater opportunities for consumers to enter the housing market either for the first time, upgrading or for investment,” he said.

Master Builders WA also said it was a great time to build a family home or investment property because of the current historically low interest rates and the wide choice available to consumers.

“Residential builders are continually striving for building excellence, with many new innovative options being made available to cater for homebuyers at every level,” MBAWA executive director Michael McLean said.

Mr Harvie said consumers should shop around and put builders to the test.

“Look beyond the shiny promotions, do your research and ask what are their clients saying,” he said.

“Builders want your business, so make them work for it.

“Any builder can offer a promotion to get you interested but look beyond that and measure the value of your home on the quality of the build, the specifications, how long the company has been in business for and what people are saying about them before you sign up.”

Mr Harvie added the trade industry had an influx of trades, with the North-West market easing off so there was also a lot of competition.

“While it does mean trades are willing to work for lower rates, it also means that there will be no delays in the construction as the workforce is there to deliver and produce results fast,” he said.

“It also means that builders have the pick of the crop so that the quality on site is excellent.

“That’s more reasons right there why it is a great time for homebuyers to get into a new home right now.”