Slowdown fears as home building sector emerges from inflation frenzy

– and industry group Master Builders Australia this week set out a road map to develop industry-standard contracts that spread the risk beyond builders by 2030.“We need a better approach to the level of risk involved in construction, so that it is shared more fairly by everyone in the chain and not just loaded up on to the builder,” said MBA chief executive Denita Wawn.

“If you were to do [like NZ banks] here, does it mean that people can’t borrow as much as they could now? That would be putting another hurdle in the way. Even so, would it have coped with the amount of increases we’ve had over the last 2 years? Probably not.”But as the housing cycle turns further, attention is quickly turning from the white-hot market to a slowdown.

Some costs are still rising, including builders warranty insurance premiums, which home builders – and their clients – are required to pay to guarantee completion of a project if a builder fails during construction.Victoria’s government insurer this month said it would hike domestic building insurance premiums by 43 per cent from September 1, in response to the large number of industry insolvencies and ongoing inflation.

Even so, builders are working their way through the outstanding numbers of houses they had agreed to build but been able to get started on.

Source: Entertainment Trends (entertainmenttrends.net)

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