Homebuyer costs to rise

HOMEBUYERS can expect higher costs and longer approval times as industry and local governments struggle to gear up for the introduction of new energy efficiency laws in the new financial year, according to the Master Builders Association Bentleys Survey of Business Conditions  March quarter survey.

Of the 98 major building contractors involved in the survey conducted by the MBA and accounting firm Bentleys MRI, 74 per cent expect extra costs of up to $2,000 for the average home and 51 per cent expect longer building approval times.

The industry forecasts bottlenecks in the approval process will occur as smaller builders and local authorities come to grips with the new laws.

The housing construction market remains strong and about two thirds of builders reported improved or steady profit margins as prices have been increased to stabilise demand levels. 

For one third of building contractors commercial construction trading conditions improved in the March quarter as more work became available in design and construction and the tender market during this period. 

Similar trading conditions are expected for the June quarter with about 70 per cent of building contractors either expecting stable or improved trading conditions.

Employment in the sector remains strong with strong demand for starting trades signalling many more months of heavy workload for on-site labour.

In the three months to May calls for subcontractors were 31 per cent higher than the previous three-month period.

The annual Macquarie Bank Property Market Outlook report released last week predicts that the momentum in the Perth residential market will continue.

Report findings point towards positive price growth for Perth houses over the next 12 to 24 months. 

Opportunities are anticipated to arise in locations undergoing rejuvenation such as Belmont, Ascot and Ascot Water, areas adjacent to Burswood and areas to benefit from transport networks.

Major influences on the market will arise from moves by the baby boomer generation.  The next major trend will be for baby boomers to move towards community living.

The report also foreshadows a recovery in office leasing demand and rental growth from the second half of 2004, however, until then tenants will continue to have the upper hand. It is expected office tenants would take up more space as as office employment continued to recover.

Macquarie property researchers say residential property prices are more exposed to weakness in the economy or rising interest rates than in the past two years, however, an across the board ‘bust’ period is not yet expected.

p See energy efficiency story, page 22