Unrealistic numbers from the Minns Government
It all comes down to one thing in the end, supply and demand. At present we have a huge demand for homes all around and the supply in certain areas is very low. In May, the PK Property team purchased around $40 Million dollars worth of property for our clients and all of them wanted to get in before the interest rates go down, and the market goes up.
The Chris Minns Government came out this week with huge numbers in regard to supplying more properties throughout Sydney, and to tell the truth they are very unrealistic.
Let's break down the delusion of these huge expectations. A robot doesn't build a house, you need experienced people, and inexperienced people, in many different fields to build all these homes, and that's where it starts. Unfortunately, we just don't have these people available.
My son is a 4th year apprentice builder and this is what he says to me “Dad we only just had teachers come back to Tafe in May this year, we were supposed to start in February but there is a shortage of teachers”. He also informed me that more of his mates are quitting the building course than starting, as they can't hack the low wages and physical work. I said that is great for you as your trade is in very high demand, sticking to it will pay off big time.
Ok, let's talk developers, who are going to supposedly build all these new homes. Please note these developers run businesses to make a profit, not break even or even go bankrupt. Developers don't want to be caught two years down the track in fixed contracts like in covid times.
Now let's talk finance. If you haven't heard lately, interest rates are high, real high. When developers borrow money it is usually over 10 percent. To make the numbers stack up moving forward to develop all these homes Mr. Minns, all of the above, and a lot more need to happen to even reach 20 percent of these goals.
Yes, this new rezoning should have been done years ago, and I will give the Minns Government credit for stepping out in what is one of the boldest movements on the housing front in 50 years.
PK'S Sydney Property Market Predictions
I think Winter is going to be a little subdued if more stock comes on the market. Auction clearance rates are presently sitting on 65% to 68% and I urge everyone to keep their eye on these, because if they start to drop below 65% you will notice some sort of desperation setting in from the vendors, and sale prices will drop on certain properties.
PK'S Hot Property Tips
Attention all buyer's don't wait till spring! If you see something now, I suggest you buy it. When the interest rates do come down, that's when we will enter into our next property boom.
Please feel free to Call me today for a confidential chat in regards to helping you purchase your next home or investment property. Peter Kelaher 0419-200018