Times are tough right now. Interest rates are up and forecasted to increase, and the cost of living is through the roof. The following year or so looks rather bleak for our economy.
These factors are also wreaking havoc on our residential building industry. In a recent article by MacroBusiness, stats reveal dwelling approvals have dropped significantly, and construction loans have crashed to levels not seen since the Global Financial Crisis in 2008.
It might seem like a ridiculous notion to consider planning your new custom build or renovation project now, but it might not be as silly as it sounds. In a recent article from Canstar, the big four banks made predictions about when interest rates would go down. The general consensus was that the RBA rate will peak at 4.1% in May, then drop back to 2.85-3.1% by mid to late 2024. That means interest rates should drop to a more palatable level in the next 15-21 months.
In the Home Build Mentoring program, one exercise we undertake is to forecast the potential timeframe for your project- Before you start. If your project triggers council approval, the likely timeframe between engaging your preferred designer and being able to engage with builders is approximately 16-21 months. You see where I’m going with this now.
Most homeowners are adopting a ‘wait and see‘ approach, waiting for the economy to settle before committing to their new custom build or renovation project. Of course, this is a sound plan, but in 16-21 months, they will also kick off their project with the masses who have chosen this same approach.
If renovating or building a new custom home is a genuine aspiration for your near future, then instigating the design, documentation and permits during this period of relative uncertainty could position you in front of the pack. If you have the finance to invest in this design phase, it could prove invaluable down the track, where builders will likely tender competitively for projects in a predicted lull.
Will you buck the trend and get in front of the pack?
Regardless of when you start, the success of your project lies in careful planning, research and informed decision-making. The good news is that you don’t need to navigate the minefield that is the residential design and building industry alone; with the support of your Home Build Mentoring, I will be with you every step of the way.
