Politicians and Reserve Bank governors have two masters, the country they are meant to to serve and their own self interests. Self sacrifice is not part of the vocabulary.
The fast-build homes that could solve the housing crisis Houses built within days instead of a year could supply the housing market fast and stem the worsening housing crisis according to experts. Nila Sweeney Reporter Jun 2, 2023 https://www.afr.com/property/reside...ould-solve-the-housing-crisis-20230518-p5d9el Inside the 1600 square metre modular home factory in Smithfield, in Sydney’s west, the construction of 18 bespoke homes all at once more resembles car manufacturing than a building site, in what Tahi Merrilees, co-founder of Wild Modular which owns the factory, describes as an “organised chaos”. “It’s like an orchestra,” he says. “Everyone and everything works concurrently. The flooring goes down, the walls go up, the roof follows, before the plumbing goes in. Then the kitchen joinery gets fully fitted out and completed, before the windows and doors go in. Factory-built homes could help supply the housing market fast according to proponents of the sector. “It’s a rapid build site that runs like a car factory.” Once the homes are built, they are shrink-wrapped and packed at the back of the truck – complete with the entire bathroom and joinery in it. Sometimes including the couch. Wild Modular, co-founded by fellow Kiwi Alex Tattle, produces around 400 modular homes each year, but is aiming to quadruple that in the next two years to meet demand. “We’ve seen a substantial increase in demand in the past year, so we’re now looking for another site, likely in Queensland, to build another factory,” Merrilees says. Last year Wild Modular was enlisted by the NSW government to supply a portion of the emergency accommodation needed for residents who lost their homes in the flood-hit Lismore region. Within 10 days of clinching the contract, the company designed, built and trucked 55 modular homes to the Northern Rivers region, more than 700 kilometres from their Sydney factory. As of January, Wild Modular had shipped 110 modules to the region, which it manufactured in just four months. Solving the worsening housing shortage Merrilees believes factory-built housing will play a part in solving the country’s worsening housing crisis. “A prefab modular home can be built in just 10 days, so we can get supply out more than twice as fast as the traditional build. We can also build multiple houses at the same time, so we can mass produce housing,” he says. Wild Modular’s Sydney factory can build 18 homes concurrently at any given time. Australia needs massive amounts of housing fast – in the order of 200,000 each year – just to keep up with demand from the population that is surging at historically high levels. But with soaring construction costs, material shortages and a lack of skilled workers crippling the building industry, the housing supply pipeline has dwindled to alarming levels. The National Housing Finance and Investment Corporation predicts that the housing shortfall will blow out by 106,300 between 2023 and 2027. More critically, the rental market is in dire need of fresh supply right now to stem a rapid increases in rents, as vacancies fall to all-time lows fuelled by record migration. “The housing need is urgent. But the ballooning housing shortfall is unlikely to be met using traditional construction methods,” says Professor Tuan Ngo, research director of the Australian Research Council Training Centre for Advanced Manufacturing in Prefabricated Housing at the University of Melbourne. “I think prefab modular housing is a very obvious choice and probably one of the most viable options. If you’re looking to build homes fast, then you can’t rely on the traditional building method because they take much longer to build, the costs tend to blow out and delays are a common experience.” Fast-build homes Prefab modular homes are built in a factory rather than on site, so they require less labour than traditional homes. They are also built indoors, so they are not exposed to poor weather conditions and can be constructed more precisely and can be of higher quality. A traditional build typically takes between nine and 12 months, while a prefab home can be built and ready within five to six months according to Prof Tuan. “With better quality control and airtightness, prefab homes are also more energy efficient compared to the traditional home,” he says. “Maintenance costs can be up to 30 per cent lower, and construction waste can be reduced by up to 90 per cent.” Wild Modular founders Alex Tattle and Tahi Merrilees at the Smithfield, Sydney, factory. Louie Douvis There is also more certainty over cost as all the materials and components are worked in and guaranteed at the start of the process, says Damien Crough, executive chairman of prefabAUS, the peak body of Australia’s prefabrication industry. “When you sign a contract with a modular manufacturer, they know exactly what they’re building because it’s manufactured, so they’re not making it up as they go, so there’s no cost blow outs,” he says. On the flip side, the cost to build modular homes is more expensive by up to 15 per cent compared to the traditional build for residential homes according to Prof Tuan. In addition, the prefab home may have to travel long distances to the site, which can be more expensive or lead to damage. They are typically lifted off the truck and onto the foundation with a crane, sometimes with a helicopter, as Wild Modular does at times, which can also be costly. Market size and forecast Prefabricated modular construction, which has been around in Australia for more than 20 years, has been slower to get off the ground compared to Japan, Sweden and Germany, where it accounts for up 70 per cent of their respective construction industries. The emergency accommodation Wild Modular built for the flood-hit Lismore residents. The sector currently accounts for about 5 per cent of the $150 billion Australian construction industry, Crough says. That share is expected to expand between 7 per cent and 15 per cent by 2025, creating 20,000 jobs and adding $30 billion to the Australian economy. By 2033 prefab is expected to gain 30 per cent of the building construction industry. The sector has significantly evolved in the past decade, and has been used to build schools, aged care homes and accommodation for mining workers, Crough says. However, residential demand is a small slice of the prefab sector, because of a perception problem. “People still think that it is temporary, poor quality and cheap stuff, and in fairness, you can still buy that if you want, but the technology has evolved dramatically in the past 10 years and there are a lot of innovative designs emerging from manufacturers,” he says. Mirvac Residential head Stuart Penklis says adopting prefab in building homes at scale is challenging, but also offers big opportunities for property developers. Mirvac has been using prefabricated components in its projects in the past 10 years including bathrooms, but it still only accounts for about 15 per cent of their business at the moment. Mirvac head of residential Stuart Penklis in front of newly built townhouses, some of which were prefab. Eamon Gallagher “It’s still a small component, and it does fluctuate up and down depending on the projects, but we are very committed to ensuring it becomes a bigger component of not just our business, but also of the industry moving forward,” Penklis says. “Adoption is certainly not smooth sailing as the cycle progresses. We’ve seen a number of headwinds from the perspective of labour and material shortages, which has meant that the viability of prefab has fluctuated through that period. “At the same time, with the ongoing challenges with labour and supply chain, I think what we will see is a greater pivot towards more off-site construction and on-site assembly.“ So far, Mirvac has delivered about 200 homes through prefabrication over the past 10 years. More recently, it has built 45 homes using prefab in its Georges Cove development in Moorebank, 27 kilometres south-west of the Sydney CBD. Using what Mirvac calls “modern methods of construction”, the company was able to reduce construction time by 54 per cent and the overall construction duration by 30 per cent. It also cut down waste produced onsite by half, or the equivalent of 10 dump trucks. At its development in Tullamore in Melbourne’s Doncaster East, Mirvac slashed its build time by 23 per cent using prefabrication. It was also able to reduce labour cost by 11 per cent for townhouses in its pilot program. Challenges remain But the slow uptake by homebuyers remains a big challenge, Crough says. “What we need is volume, scale and repetition, and what we call mass customisation, like what they’re doing in Japan, where Toyota builds 40,000 homes a year, and they build them on a production line very similar to how they would build cars,” he says. “If we can give a manufacturer a committed pipeline of 20 or 30 homes a month with minimal variation, but all the homes being customised to the purchasers’ choice, then we are going to see a massive decrease in cost escalation, and we see a huge increase in productivity, and productivity is what brings cost savings over time. Prefab modular homes are built in a factory rather than on site, so they require less labour than traditional homes. “I think this predominantly needs to be underpinned or driven by the government in the affordable social housing space.” There are signs that the potential of prefab is already being recognised by some state governments. Jan Gyrn, chief executive of Melbourne-based modular home manufacturer Modscape, has been working with the Queensland government to help ramp up prefab manufacturing in the state to build affordable housing quickly. “The Queensland government, at a high level, has an aspiration to deliver 20,000 social and affordable housing products over the next five years, and they’re looking to deliver half of that using prefab technology, so they established a panel of providers and architects to design and create a catalogue of products that can be utilised for that program, and we’re part of that,” Gyrn says. “We’ve recently started production on a number of the houses for that project, and it’s exciting because it is a great response to solving the housing crisis in the country.” Last month the Queensland government opened the QBuild Rapid Accommodation and Apprenticeship Centre in Eagle Farm in Brisbane, where prefabricated homes will be built and then transported across the state. This is part of the state government’s $519.2 million Government Employee Housing construction package that will build 439 homes over the next five years to house 550 frontline workers. Federal Assistant Trade Minister and Assistant Manufacturing Minister Tim Ayres says: “There’s no silver bullet to Australia’s housing challenges but bolstering industrial capability could be part of the answer. “I’m interested in hearing more from the modular construction industry about ideas to deliver more industrial capability and in turn, more affordable homes for Australians.” But the sector is also still saddled with regulations that hinder it from taking off, according to the Housing Industry Association, which has published a report examining the regulatory barriers to prefab construction last year. The report found that given the likelihood of a steady increase in demand for fast-tracked building construction, a vast number of construction projects including housing will move to off-site and modular or systems-based construction methods over the next five, 10 and 20 years. However, regulations relating to offsite construction methods, including prefab and modular remain vague, and are impeding the cost-effective and timely delivery of buildings, it says. In addition, getting finance for small scale residential construction and for home buyers is also difficult as prefab is still not widely recognised by the banks. “Australia’s regulatory systems need to be updated and revised to remove the unnecessary barriers and enable greater uptake and recognition of the suitability and effectiveness of prefabricated and modular construction and facilitate an appropriate and streamlined process for the necessary approvals,” HIA says.
The Australian dream, building shoe boxes called 'houses' which resemble shipping containers using smoke and mirrors. This is an ideal solution for Australian slaves.
A quarter of Australia’s property investments held by 1% of taxpayers, data reveal Only 1% of Australian taxpayers own nearly a quarter of all property investments across the country, amid concerns over escalating rates of wealth concentration. Data provided by the Australian Taxation Office has revealed the extent of that concentration, with more than 7% of property investors – or 215,321 people – accounting for 25% of all property investments. That 7% also have three or more interests in investment properties across the country, with 1% of investors – or just 19,895 people – currently holding six or more investment interests. It showed that while just fewer than half of property investors held one interest in an investment property, only 15% of the total number of taxpayers in Australia were property investors. Just more than 30% of the country’s roughly 11m private residential dwellings are considered property investments. The figures also revealed that a clear majority of that 1% were over the age of 50, contrasting with recent data from the Australian Institute of Health and Welfare, which showed that more than 60% of renters are under 35. The data shows just how concentrated home ownership currently is, and that it is much easier to increase investment portfolios than enter the housing market. It also comes amid a worsening housing crisis nationally, with vacancy rates at historic lows and rental affordability at its worst level in nearly a decade. Dr Laurence Troy, a senior lecturer in urbanism at the University of Sydney, said that while the findings were unsurprising, they revealed the extent of the barriers to home ownership for people from middle or low-income backgrounds. “The role of individual investors in the property market here really has, over time, squeezed out people who are not in home ownership,” he said. “The sheer volume of capital coming in from investor sources is what is putting price pressures on the housing markets and so outcompeting those that don’t have home ownership.” Troy said investors were the “biggest driving force” and the largest beneficiaries of rising prices, while making it harder for those who do not have access to generational wealth to enter the market. “We are increasingly seeing this kind of polarisation, particularly in the big cities where those price pressures are more intense,” he said. “In places like Sydney, you basically need to have family support to enter into homeownership. You can’t independently rent, save for a deposit and find your way into homeownership. “We increasingly have a homeownership system that is based on the family you’re born into,” he added. Greg Jericho, the policy director at the Centre for Future Work, said the figures highlighted how negative gearing and the capital gains discount “distort” the housing market. “Australia is one of only three OECD countries with this type of negative gearing regime,” he said. “Negative gearing of properties is costing Australian taxpayers nearly $4bn a year in tax revenue and makes it much harder for first-home buyers to enter the market. Overwhelmingly, the majority of the benefits of negative gearing go to the richest in Australia. Jericho added that capital gains tax should be scrapped, while negative gearing policies should be reformed. “Limiting negative gearing to new properties to ensure it promotes an increase of housing supply rather than increasing the wealth of Australia’s richest would be a good start.” Prof Hal Pawson, from the City Futures Research Centre at UNSW, said the findings were “pretty dramatic”. His own research had indicated an increase in the number of property investors since 2001. He said that the reason wasn’t down to the financial benefits of rental income, but because housing was seen as a surefire return on investment. “The most important motivation for most individual landlord investors is expectation that the value of the asset will be a lot more in 10 years than it is now. “And yes, you do pay capital gains tax on that, but only at a discounted rate. And it’s still been highly attractive to do that over the last decades.” Pawson said the “professionalisation” of the investor industry has made landlords more “business savvy” in the past two decades and made investing easier and more effective at generating wealth. “There’s a huge industry which functions to advise people investing in rental property, and how to do so to their best advantage,” he said. “And that industry is tending to lead to more and more people becoming landlords, in some cases probably without even ever seeing the property.” The Tenants’ Union of NSW chief executive, Leo Patterson Ross, said the numbers reflected just how large some investment portfolios can get. Ross added that a key issue was the fact housing was seen as a “wealth-generating investment” and not a social necessity. “Taxation, banking practices and light regulation has turned property into primarily a wealth generating investment strategy rather than recognising the use of home as the primary purpose of the renting sector. “This comes at a cost both to renters and hopeful owner occupiers who face higher and higher prices.”
Auctions Gutted and unlivable Camperdown house sells for $1.13m to first home buyer By Tawar Razaghi June 3, 2023 https://www.smh.com.au/property/new...-13m-to-first-home-buyer-20230530-p5dcf0.html 88 Church Street attracted eight registered buyers, mostly builders, at auction. It was guided at $975,000. The sell-off was slow to start, beginning at $700,000. The price only rose in increments no larger than $50,000 before five active bidders whittled down to $25,000 and $10,000 bids. It eventually sold for $1.13 million — $80,000 more than the $1.05 million reserve — to a builder, who also bought it as his first home. Ray White Rozelle selling agent Belinda Cassano said the sellers were off-loading the investment property because they had planned to renovate it for their daughter to live in it while she attended university. They purchased the house in 2017. “Then COVID hit [and the renovation stalled]. The daughter has graduated and decided to give it to someone else to finish,” Cassano said. The owner of 88 Church St, Camperdown had demolished the inside of the property, then the pandemic hit, interrupting renovations plans.Credit: Dean Sewell “It’s an unusual project. The demolition has been done. It’s ready to start. A lot of the heavy lifting has been done.” The home has an approved development application for a two-bedroom, single storey house with one bath and an open-plan kitchen. The property last traded off-market for $905,000, records show.
Property market Sydney terrace sells $400,000 above reserve as auction clearances rise Nila Sweeney Reporter Jun 4, 2023 https://www.afr.com/property/reside...ve-as-auction-clearances-rise-20230601-p5dd0i Nearly eight out of 10 Sydney homes put up for auction at the weekend sold, the strongest result in 19 months, as buyers shrugged off the prospect of another interest rate increase on Tuesday, preliminary auction numbers from CoreLogic show. Early auction results also show 77.2 per cent were cleared across the combined capital cities, the third consecutive week of robust increases, reflecting the solid house price increases during May. Clearance rates jumped to 79.6 per cent across Sydney, as buyers ignored the threat of another rate increase on Tuesday. Peter Rae Of the reported auctions so far, 75.9 per cent were successful across Melbourne, while more than 70 per cent of all homes under hammer sold in Brisbane, Adelaide and Canberra. “Clearance rates are clearly building some positive momentum on lower auction volumes, and it looks like demand is holding,” said Tim Lawless, CoreLogic research director. “Selling conditions are getting better, but the number of auctions is well below a year ago. At a time when selling conditions are so strong, we’re simply not seeing home owners who are thinking about selling taking advantage of it. It’s a real conundrum.” Auction volumes fell by 2.9 per cent across the combined capitals over the week to 1832 as winter set in. Melbourne led the biggest decline of 11.1 per cent to 750, while Sydney was the busiest with 714 homes taken to auction. During the same time last year, 2644 homes were taken to auction across the capital cities, 912 in Sydney and 1245 in Melbourne. Broad recovery Sydney-based real estate agent and chief executive of BresicWhitney, Thomas McGlynn, said strong demand had spread across different types of properties, not just at the upper end. “We saw auction registrations rise across all types of properties on the weekend, including apartments,” he said. “I think it is another positive sign of a broader recovery that there have been a lot more buyers wanting to buy apartments, which hasn’t been the case for quite some time now. “We’re also seeing the number of people attending open for inspections jump to 50 groups through the first weekend of winter. That’s unusual.” Independent Sydney-based auctioneer Clarence White also noticed growing competition for units, even those that were shunned during the pandemic. “It’s been fascinating to see the unit market roaring back to life,” he said. A fully renovated Sydney terrace in Erskineville was sold for $4.2 million, which is $400,000 above the reserve, and broke the suburb’s highest sale price record. “Even one-bedders are selling quite well nowadays, such as the one I sold on the northern beaches last week, where we had five registered bidders. I wouldn’t have seen that six months ago. “During the pandemic, it was nearly impossible to sell smaller apartments. So I think the market is strengthening. It’s not as hot as when the market was booming, but it’s heading in that direction.” Early results show 76.4 per cent of Sydney units taken to auction were sold, 70 per cent were successful in Melbourne, 85 per cent in Brisbane and 74.1 per cent across the combined capitals.
Real estate agents, government, everybody celebrating a market 'roaring back to life.' Everyone in business is happy to see slaves for life to put a roof over heads.