The Australian Financial Review have spoken to Australian Property Valuations property executives to comment on the current property market trend.
Sydney home builder and property valuer of Australian Property Valuations Adam Cingiloglu said there was a lack of new homes in the pipeline because “builders are going bust” due to the high cost of materials, labour and interest rates.
“It’s not worth building because I don’t know if the price is going to go up or down,” he said.
“We can’t get tradesmen, and they don’t get up out of bed for less than $600 a day, whereas before it was $250, $300.”
Treasury’s housing investment forecasts show the value of annual construction activity will fall for three straight years, implying a decline to a 10-year low of $102.9 billion by 2024-25, according to analysis by The Australian Financial Review.
Construction costs at all-time highs
The new figures, revealed in the federal budget, forecast a widening gap between home construction and population growth over five years. The failure by state and local governments to approve enough new homes has exacerbated the housing supply problem.
A plunge in new home building to a 10-year low will collide with the arrival of a record 1.5 million migrants, worsening housing shortages, driving up rents and inflating real estate prices.
We’ve got a housing crisis
Property Council chief executive Mike Zorbas said the federal government must match its targeted approach to migration with the same focus on housing investment and better planning.
“The population growth outlined in this budget highlights the need for faster and better housing delivery and planning across our cities,” he said.
