Emerald builders under pressure

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Herron Todd White has found strong demand for housing in the Central Highlands driven by increased activity in coal mining in the region has placed builders under significant pressure.

Senior valuer Kerry Harrold stated in the May report that it was becoming more common to see projects not necessarily complete a stage before commencing the next stage, based on what materials and trades were available to the builder.

“As demand for new houses increases, COVID-19 complications combined with increasing construction material costs and scarcity is resulting in a shortage of builders and trades and increasing construction build times,” he said.

“Builders are under increasing pressure as they try to source trades and building materials and this is evident during progress inspections.”

The majority of new home activity in the Central Highlands is occurring in Emerald with new

contracts ranging from around $1700 per square metre for a standard on slab dwelling up to around $2200 per square metre for a dwelling of high quality with high end fixtures, according to the report. “These rates are a significant increase on 2021 rates,” Mr Harrold said.

“A major challenge for anybody looking to borrow to build a new home in this market is that available sales evidence doesn’t support these increasing construction rates, and building costs are increasingly not recoverable in the current market.

“As consumers are priced out of the new home market, they are turning their attention to already built product and there is a corresponding increase in prices of that product.”