Current events have had an effect on many industries, including real estate. Here is a breakdown of price rises and what it means for our Swanbuild Homes’ customers.
Historical trends
There is always a small annual price rise across industries, which occurs in line with slowly increasing costs and inflation levels. The building industry is not excluded from this.
Short supplies
Recent bushfires and the COVID-19 pandemic have meant that timber and steel are in short supply locally and globally. The government’s HomeBuilder grant also increased demand. We are doing our best to secure materials. On a positive note, our factory process always involves detailed planning and forecasting, which translates to less wastage and offcuts to be used down the production line.
High demand
The law of supply and demand means that inevitably when something is in high demand, the prices increase. This has been true for both materials and labour costs at the moment, with some up as much as 40 percent. Whilst we have absorbed as much cost increase as we can, at some point we need to share this cost with our clients. This is so that our business can remain viable and we can continue building homes you love.
Silver lining
The positive is that in most of the areas we build, we have also seen a demand for properties. This is particularly true of lifestyle focused, regional and rural properties, as many people are choosing to work from home. Real estate prices and property values have increased as a result. Consequently, your home should be worth much more, once built, in the current market. The advantage of the modular home is our speedy build time, so you have less rental costs whilst waiting for your home to be built.
In summary, despite the various price rises across the industry and even though your home may cost more to build now, the return on investment is more likely, given the trend in lifestyle changes in 2021.