Supply chain issues, skyrocketing prices for materials, and rising interest rates have plagued the construction industry this year. So, if you've been planning to build your dream home, you might wonder, is it a good time to build a house right now?
As the saying goes, the best time to start was yesterday - the next best time is now. Our busy lifestyles mean it will never be the perfect time to build. But yes, it's better to start today than to keep putting it off until tomorrow. Here are a few reasons why it is a great time to start building a new home.
Choosing whether or not to create a new house in 2024 becomes pretty straightforward when you understand that real estate is a long-term investment.
In the past, renting a house was an affordable option. However, a tight market with vacancy rates at record lows has spurred many people to decide to begin building in 2024.
With rents rising and the cost of property declining, paying off a mortgage by becoming a homeowner is a better idea for many.
Interest rates might worry homeowners, but remember, we are coming off a record low. The official cash rate is still under 4% in Australia. Throughout the 1970s and 80s, the cash rate peaked at 19%.
We have seen rapid rises in the last few months, not since 1994, when homeowners lived through more challenging times. In the present climate, thorough and realistic research into your borrowing power should ensure you don't overstretch the budget.
Government schemes can also help the process be more affordable for a first-time homebuilder. For example, the First Home Guarantee. Some states also offer grants to first-time homebuilders to get into the property market. And it's not just first-time buyers being offered incentives. Downsizers can also get help getting into their brand-new dream home.
Sustainability is another reason that building a new home is a financially wise idea in 2024. Rather than investing in an established home, new construction using the latest technology and materials can help you build a home that suits Australia's changing climate.
You may even save money by building a new home in 2024. Buying land and building a new home is a more realistic option for some instead of purchasing an established home in the inner city. New construction also comes without the ongoing maintenance costs of an older, established property. With newly built homes, you also have control of how it looks and how it functions for your family, making it better value for money, too.
Building a home is an excellent long-term investment. Australia's property market has shown long-term resilience despite many short-term challenges. For example, property values in Melbourne, Sydney and Brisbane have risen roughly 7% per annum over the last 40 years.
The nation's population is forecast to continue growing steadily in the coming decades, and the wealth of our country along with it, therefore underpinning long-term property values. So, getting into the game sooner rather than later is wise. Additionally, in the short term, making mortgage payments will see you build equity in your new home.
Construction costs are likely to rise into the future despite an easing of delays to supply chains that we've seen in the past few years. This is mainly due to rising energy costs pushing up the production price of some construction materials and increasing the cost of cement, glass and aluminium.
A shortage of skilled tradespeople seen in recent years will also likely worsen before it gets better. This labour shortfall is expected to present a considerable challenge for the construction industry over the next decade.
Choosing your builders wisely will also help you avoid the problem of your builder falling into financial difficulty and leaving your home unfinished. You should always pick a company that belongs to a professional construction industry association, such as Master Builders, to give you extra peace of mind. They are also there to assist the builder's clients should any disputes arise during construction.
When selecting a builder for your new home, choosing a team with plenty of experience should be high on your list of priorities.
A Class Building and Construction has over 45 years of combined experience as luxury home builders in the Wollongong and Illawarra region. They know the building industry has ups and downs, like house prices. They can take the stress out of the building by answering your questions and providing you with all the information you require to make the best choices for your family.
