A call for optimism.
We've popped out the back door of a pandemic, we are currently functioning within a cycle of uncommonly high petroleum prices and the inherently negative press that comes and goes with a federal election has passed us by, like a tide. It's time not to focus on the uncertainty that has hung above us like a heavy cloud seemingly since the start of the decade... But to focus on and consolidate what is doing well.
In a more proactive rather than reactive way, the state government is investing more than ever in infrastructure and public transport services, which when completed, will hopefully enable people in the newer suburbs to have more options for getting to work and school.
With the rise of more infill options for land in Perth it has become easier to end up in your dream suburb, without having to settle on established. That same customised feel without being made to settle on a less desired location. Whereas City of Melville and City of Fremantle were all over this in the late 90's, so many more areas have jumped aboard to previously unseen levels.
Whilst there have been issues with logistics and tradesman, the worst of those issues seem to be in the rear view mirror. With the worst part of pandemic behind us, logistics are much closer to 2019 levels and the concerted efforts made by industry to recruit more prospective tradesmen, will pay off in the medium/long term as the new blood behind to bear fruit.
As we awaken from our little "hermit kingdom", it is now a better time than ever to build. The rental market likely will stay tighter than ever and prices are only going to continue to creep on their steady upward trajectory.
It's time to embrace the optimism.
Todays Good Reads
Cold Hard Tax
Calculating capital gains tax? Here is a little guide from NAB to help you avoid any issues.
Who’s been naughty
Here is a handy little resource for those in the process of choosing a builder. The names may surprise you.
Time to prune?
Australia is more fixated than ever on flora in the home, how do we care for our green housemates?
Recovery: The gentile art of bouncing back.
There can be no doubt the Perth housing market was experiencing a bizarre set of market conditions.
House prices are going up - but some builders went bust. Whilst the market steadies itself for yet another correction, the show must go on.
When we discuss builders going under, normally its when house prices are falling as happened in, say, 1991 when high interest rates killed the market. It’s a different cause today, but an eerily similar result - costs are going up and even if you can pass them onto the customer getting staff on site to on site to start the build has proven to be somewhat challenging, even though there has been some recovery in that regard.
Everyone got a concrete slab down very quickly to qualify for the State and Federal building grants - now they’re just sitting empty because there were insufficient tradesman at the time
There are three major progress payments when you build a house. Slab down, Plate, that’s when the bricklayers are done, and roof cover, which is self explanatory. A lot of builders have only got one of those three payments so their cash flow is so small that moving onto the next stage went from a small challenge to giant mountain... all in the process of a few short months.
Now, as is the norm with supply/demand, because nobody can build a house it means more people are looking at buying an existing one - and that’s sent prices soaring. With some areas experiencing a bubble of growth that otherwise may not have had this much growth in price, this early.
That said with another election cycle behind us and the new federal government eager to lead the nation out of recovery, look for more targeted Keynesian-like programs aimed at incentivising an industry wide period of growth, as WA aren't the only state facing challenges. Queensland have gone to the unusual step of just outright asking for more tradesmen to "come work in paradise" and Sydney and Melbourne have also struggled somewhat in both tradesman recruitment and retention. Whether this extends to the government looking abroad for more candidates and incentivising their settlement here, who's to say.
Content with more content
Now if you prefer to consume your information through audio instead of through text (which is understandable) come and check out or podcast which lives here. It is a show we are doing weekly which has a nice blend of education and entertainment aimed at the prospective homebuyer.