Should you look into building a house?
CoreLogic’s latest Construction Cost Index suggests that outside of Covid, the price to build is the lowest it’s been since 2012.
Costs are rising at one of the slowest rates on record, with only 0.9% over the last year.
Generation Homes CEO Craig Hopkins told Mike Hosking the sectors’ greatest competition is the pre-existing market, with around 33,000 houses currently up for sale.
However, he says, as far as building a house, now is the perfect time to do so.
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Speaker 1 (00:00):
We've got some very encouraging numbers around the cost of
(00:02):
building a home. So call Logic's latest construction cost in
Dick shows us the price to build is the lowest
it's been since twenty twelve. So it's this good generation
homes bist. Craig Harrison's with us, Craig morning.
Speaker 2 (00:13):
Good morning mate.
Speaker 1 (00:14):
So it's not going back down, it's moderation at an
elevated levels. People sort of settled with the number and
feel good about building, or we've still got some way
to go.
Speaker 2 (00:23):
We've still got a bit of a way to go.
I mean, our biggest competition is obviously the existing market
and that you know, you've got a very high level there.
It was about thirty three thousand houses up for sale
in that space, and there's quite a few of the
public that sort of have that I want it and
I want it now mentality, So that doesn't quite fit
into what we do. But as far as building a
house right now, it is at the perfect time.
Speaker 1 (00:45):
How much do you deal with the individual like, you know,
the mum and dad investor or the first time buyer
versus a developer, and you build up fifty seven of them,
then you flick them off.
Speaker 2 (00:55):
Generation homes is more about where we deal with the
mar and PA run people who are looking to go
into a home, who are wanting to build something for themselves.
We're not a developer of big scale where we tend
to work individually with each individual person and give them
their dream.
Speaker 1 (01:12):
Really, what's your square meter? What's the square meter cost?
Roughly at the moment.
Speaker 2 (01:17):
Well, that's very hard to say because it depends on
what you're building. You can get anywhere around that sort
of you know, three to four thousand dollar mark is
going to get you a pretty reasonable home, and then
you can also spend seven to eight thousand dollars a
SCOO meter to give you a home. So it really
comes down to what you're building, and yeah, sort of
the requirements that you were acquiring as a family to
(01:38):
live in.
Speaker 1 (01:39):
Okay, do the message about it never being a better time?
Is this a long term thing? Do you think the
things that have been driving the inflation over the COVID
period and post that are settled for good?
Speaker 2 (01:51):
Yeah? I mean I sort of hollo to a couple
of things recently around why it's good to build. I mean,
obviously the interest rates have come down and you you
sort of spoke earlier around you know, another drop in
the oci rate. So if you look at some of
your rates there, I mean a two year rate average
has been six point five one over the last of
the twenty years, and now it's down to four point
nine nine, So good time to do that. The supply
chain has indicated some potential increases coming in quarter to
(02:15):
and quarter three. You've got banks has now started to
sort of say hey, we're back into the lending space
and have dropped some of their ratios to make it work.
And then you've also got obviously you're at the bottom
of the market, so you have that opportunity to get
those capital games.
Speaker 1 (02:29):
So we had the business confidence survey yesterday. Where's your
business confidence at right now? And going forward your positive
or negatable neutral.
Speaker 2 (02:38):
Probably neutral for the next six months, and then looking
to be positive thereafter.
Speaker 1 (02:43):
Good stuff, Craig, Appreciate your inside Craig Harrison, who's the
Generation Home CEO.
Speaker 2 (02:48):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
We've got some very encouraging numbers around the cost of
(00:02):
building a home. So call Logic's latest construction cost in
Dick shows us the price to build is the lowest
it's been since twenty twelve. So it's this good generation
homes bist. Craig Harrison's with us, Craig morning.
Speaker 2 (00:13):
Good morning mate.
Speaker 1 (00:14):
So it's not going back down, it's moderation at an
elevated levels. People sort of settled with the number and
feel good about building, or we've still got some way
to go.
Speaker 2 (00:23):
We've still got a bit of a way to go.
I mean, our biggest competition is obviously the existing market
and that you know, you've got a very high level there.
It was about thirty three thousand houses up for sale
in that space, and there's quite a few of the
public that sort of have that I want it and
I want it now mentality, So that doesn't quite fit
into what we do. But as far as building a
house right now, it is at the perfect time.
Speaker 1 (00:45):
How much do you deal with the individual like, you know,
the mum and dad investor or the first time buyer
versus a developer, and you build up fifty seven of them,
then you flick them off.
Speaker 2 (00:55):
Generation homes is more about where we deal with the
mar and PA run people who are looking to go
into a home, who are wanting to build something for themselves.
We're not a developer of big scale where we tend
to work individually with each individual person and give them
their dream.
Speaker 1 (01:12):
Really, what's your square meter? What's the square meter cost?
Roughly at the moment.
Speaker 2 (01:17):
Well, that's very hard to say because it depends on
what you're building. You can get anywhere around that sort
of you know, three to four thousand dollar mark is
going to get you a pretty reasonable home, and then
you can also spend seven to eight thousand dollars a
SCOO meter to give you a home. So it really
comes down to what you're building, and yeah, sort of
the requirements that you were acquiring as a family to
(01:38):
live in.
Speaker 1 (01:39):
Okay, do the message about it never being a better time?
Is this a long term thing? Do you think the
things that have been driving the inflation over the COVID
period and post that are settled for good?
Speaker 2 (01:51):
Yeah? I mean I sort of hollo to a couple
of things recently around why it's good to build. I mean,
obviously the interest rates have come down and you you
sort of spoke earlier around you know, another drop in
the oci rate. So if you look at some of
your rates there, I mean a two year rate average
has been six point five one over the last of
the twenty years, and now it's down to four point
nine nine, So good time to do that. The supply
chain has indicated some potential increases coming in quarter to
(02:15):
and quarter three. You've got banks has now started to
sort of say hey, we're back into the lending space
and have dropped some of their ratios to make it work.
And then you've also got obviously you're at the bottom
of the market, so you have that opportunity to get
those capital games.
Speaker 1 (02:29):
So we had the business confidence survey yesterday. Where's your
business confidence at right now? And going forward your positive
or negatable neutral.
Speaker 2 (02:38):
Probably neutral for the next six months, and then looking
to be positive thereafter.
Speaker 1 (02:43):
Good stuff, Craig, Appreciate your inside Craig Harrison, who's the
Generation Home CEO.
Speaker 2 (02:48):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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