Residential Home Building Figures Set to Improve Further
Riding on the strong momentum it has gathered over 2013-14, home building is all set to pick up further over the course of next 2-3 years. In an article for the website Australian Broker Online, Julia Corderoy sheds light on the high number of dwelling starts anticipated.
Rise in the fortunes of residential buildings
From $51 billion, the amount of residential building work will go up to $68 billion in the next 3 years. This is a phenomenal 33% increase in residential building fortunes. Dwelling starts are also expected to overreach $200,000 within the same tenure.
Apartment units doing very well
While the apartment units and detached houses will both make merry, the greater impetus will come from the detached houses; the traditional blue-eyed baby of the real estate world. Noteworthy performance from the apartment units has considerably reduced the load on the housing industry and the same is set to grow at a good pace in the next two years before mellowing down in 2017.
Detached houses picking up
Detached houses which had not seen the best of times since GFC is playing a nice catch up game and by 2017, it will be well on its way to the top again. Over the last decade, supply could not keep pace with the growth in population and this brought up unrestrained demand, something that Corderoy feels, low interest rate has been able to meet.
You can read the original article here.
Problems anticipated when interest rates rise
This said, in my opinion, the interest rates cannot stay where they are till eternity and once they rise they may bring in a flurry of problems. Those who haven’t budgeted for the rise in advance may find themselves defaulting. Further, the lenders may tighten their grip in such a case, reducing the recent spate in dwelling approvals to a mere showpiece effort.
What borrowing arrangement have you used?