Home builders are having it tough as home buyers shun high land prices.
The Housing Industry of Australia [HIA] wants more tax payer stimulus, instead of fixing the problem.
What is the problem you might ask?
Land prices are ahead of where they should be.
So what part of the above does the Housing Industry of Australia [HIA] not get?
When you take away the sweet deals for first home buyers, everything falls in the construction industry falls into a heap.
The HIA blame game avoids the Elephant in the room. The Cost of Land.
A brief history of the HIA blame game for anyone that might be interested
- The RBA for increasing interest rates [houses were easier to sell when interest rates were 12%, if you check your records]
- Then the Government needs to restate the first home owners grant boost.
- Westpac and CBA banks for double dipping on interest rates goodness thathappened because the HIA and the Government chose not to support the non bank lenders when they needed it]
- Then the HIA turned on its own and blamed the builders for not innovating in home design. This needed to happen 10 years ago, but where was the HIA then?
- Then they have a talk to the culprits of this mess, the land developers, and are told that its the builders fault because they don't chase up lookers using crm software programs.
The latest HIA statement.
A battling construction industry means a battling employment market. Unemployment goes up. The retail market suffers badly. It's already suffering.
This is just not the case.
Why I feel like the one eye man in the land of the blind on the home building industry.
I have worked in the home building area since 1985.
I have worked with nine different builders, the good, the bad and ugly, as well in home mortgages.
Each time I went back the home construction industry the customer and the offers had changed.The one thing that matters was the price of land compared to the home.
In that period land prices had risen three times faster per square, than house building prices per square metre.
Now you have to spend more on the land than the house! In a nation as big as Australia? Get real!
This is the core reason that people don't buy new homes anymore. it does not make sense, and that because land owners and developers have constantly gotten more and more greedy.
You can buy homes in cities for less than virgin smaller land lots in the sticks.
Land costs are too high, so holding costs are out of reach. So people don't buy new homes.
Most people building today are second home buyers who have equity in their homes, or who have sold in better markets. People trying to sell now will be as deflated as their home prices are.
Author: Mr Mortgage
