New home buyers have been left stranded by a building industry crisis that has blown out construction times by as much as four months and pushed up prices.
HIA chief economist Tim Reardon forecasts the volume of homes under construction will not see a tangible decline until after June 2023, with the jump in commencements running ahead of a slower pick-up in completions. The supply challenges are meeting strong demand, and more new homes were sold in the first four months of this year than in the same period last year when HomeBuilder was still on offer.
“It’s just a pain building a house right now,” Rose said. “I understand it’s COVIID – I think it is too much.Although he managed to avoid timber shortages, he did not escape the labour force challenges that have beset the building industry, and was at one point told that the site supervisor for his project had moved on.
He said typically a new build customer starts paying interest on the land component of their loan first, then the full loan repayments start when construction finishes. But building delays can leave clients paying both rent and mortgage repayments for longer.
“I’m going to be interested to see in the coming period if we start to see more claims when the builder has disappeared or become bankrupt, or kind of just failed to deliver altogether. I suspect we’re going see a change in what’s coming through.”