Rising home construction rates
Now could be the perfect time to consider taking out a construction loan and turning your sights towards building your dream home in Australia, with the latest release from RP Data highlighting figures from the Australian Bureau of Statistics showing a recent boom in the construction market. With 48,964 commencements on record over the March quarter alone, the market has shifted into its highest level yet, with RP Data Research Analyst Cameron Kusher stating the growth should be welcomed.
"The good news is that there is a strong correlation between dwelling approvals and dwelling commencements. As more approvals come through, it's then flowing rapidly through to commencement activity. The flow on benefit is increased spending throughout the economy for materials and labour," said Mr Kusher in a July 24 statement.
He went on to say the construction of a single house was a better decision to make than investment in the multi-unit sector due to the minimum number of units that need to be sold before construction begins - as well as various financial complications arising during the construction. He said there were a number of unit projects that had the groundwork done, but construction has yet to commence, leaving buyers out of pocket.
"What is interesting, is that while house completions often reach, or at least become close to the previous peaks in house approvals, the same can't be said for units where we will often see a spike in unit approvals and at some later date there will be a lower spike in unit completions," said Mr Kusher.
"This would tend to suggest that units approved for construction will often make it to commencement but are more likely than houses to ultimately not be completed."
Now could be a great time to consider building your own home, especially with the current state of the finance market making it easy for potential buyers to secure home loans for their property goals.
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