For most Sales People in the building industry, it's always "a great time to build!!". As charming as overstating the positives can be it can also lead to a lack of confidence in the industry. This is because the more educated understand that, while it's always a great time to build, some times are simply better than others.
Over the last five years the large builders have been advertising all the tricks and traps from discount floor plans to promotions every month. So lets cut through the spin and look at what's happening right now. There was a strong demand for quality properties before COVID 19 shut down. Building and development activity was showing signs of improvement.
COVID 19 has changed all this and left a lot of uncertainty in people's minds. Building for most is a longer-term plan so uncertainty causes customers to put things on hold. There are a couple of major influencing factors that are on people's minds right now. Firstly the talk of the government providing stimulus measures to the building industry and secondly the project building companies restructuring.
Stimulating the building industry has proven to be a fantastic way to get the WA economy going. The suppliers, trades, manufacturing, and deliveries that go into building a house all contribute to the economy and come back to the government. The GST component alone suggests it won't take government long to recoup any money spent. The fact that people think that they might be in for a lager government windfall they are holding off.
What are the concerns facing the government?
Previous stimulus packages in WA have focused on first home buyers. It turns out building for fist home buyers is not only a great cause it is also incredibly profitable. Much more profitable than the other segments of the market where customers have higher expectations. As a result, the largest building companies have more businesses selling into this market segment. These stimulus packages have resulted in many builders becoming incredibly wealthy. Many of the recipients of the grant now find themselves in a situation where their home is worth less than what they can sell it for. It's, for this reason, I feel we could see a stimulus package aimed at a wider audience this time.
This raises a few challenges going forwards. Over the past five years, the building industry has been cutting costs by reducing staff. As a result, it more likely than not that these cuts will affect service. Any government stimulus that intends to increase activity will have to consider these factors. This is a very different landscape to 2008 when many businesses were in a better position to deliver.
This week has been one of the busiest weeks for Piran Property Group. More experienced buyers are already asking about the stimulus and how will it affect them? They want to avoid the service issues that any improvement in the market will surely bring. At the same time, they want to be in a position to claim any government rebates & avoid any price rises that tend to accompany stimulus measures.
At Piran Property Group we put the customer in control.
This is why we -
1/Design your home.
2/ Get the approvals in place.
3/ Choose the builder.
Being in control means you're in a position to use any market to your advantage.
So is it a good time to build?
Fingers crossed on Friday it could be a great time for you to build.
Contact Piran Property Group to talk about your new home design.
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