With buyers wanting to have a piece of the “Australian dream” the housing market is seeing a bull run.
Demand for new homes in Sydney’s suburbs, with buyers seeking the “Australian dream” of owning a house with a yard, is fueling the country’s construction industry to new heights.
Since home prices have more than doubled since 2008, in established suburbs, home seekers are flocking to the fringes where the cost of acquisition of land is much cheaper.
“It’s where we could afford,” said Sandeep Hehar, 28, who queued overnight with her husband to secure a plot of land in Oran Park, a new outer-Sydney suburb rising on the site of an old motor racing circuit where she hopes to build a 4-bedroom home and start a family.
The construction boom has essentially reversed a downward trend in building approvals with house approvals touching its 18 month high of 9,929 in September unexpectedly prolonging a boom which many thought was wind down.
The development has created a labor shortage in the industry.
“There aren’t enough bricklayers to keep up, so what builders have started doing is actually looking for other products to use rather than brick,” said James Logue, a housing manager at Fairmont Homes, a family-owned home builder based on Sydney’s southwestern fringe.
Large aerated concrete panels under the brand of Hebel, have become a common substitute for bricks since they can be fitted into timber frames and adds to the speed of completion of the building, said Logue.
“Pretty much every builder here is just flat out, crazy busy.”
As a result of this boom, land values have touched a record high of A$470,000 in October and has come as a relief to policymakers who were worried the housing bubble would burst.
As a result of this roaring business, the construction industry is adding more growth to the Australian economy.
“I think most people, including us, underestimated it,” said Jack Hoffman, General Manager at Satterley, Australia’s largest privately-owned land developer, in Victoria state, where approvals to build new private homes hit a seven-year high in September.
He goes on to add, “The population growth took people by surprise and that’s a real driver…we’ve got strong levels of demand every time we’re releasing blocks of land.”
Borrowings to purchase finished homes touched their 38-year peak in September.
For carpenter Ryan Crocker the increased work has enabled him to build his four-bedroom house in Oran Park.
“It’s booming out here, and I think our house might go up in value,” said Crocker, of the new house he bought that boasts a yard and a pool, into which he recently moved in with his wife and daughter.