Building and construction is a growing industry. In fact, it has just topped the list for full-time employment in Victoria, providingin the sector in the last year.
Why the boom?
There’s been a lot of government focus on developing more metropolitan dwellings to address the current housing affordability situation. Development is also in anticipation of population growth in the coming years.
Earlier this year, the NSW state government released plans to create mini-cities across Sydney, much like the mini-cities of Singapore. Effectively this will be large scale apartment development, providing up to 700,000 new homes, and thousands of jobs.
The construction boom stimulates the economy, providing jobs in construction. Jobs in manufacturing and retail are also predicted to increase, as new homeowners outfit homes. With more dwellings available in inner city and suburban areas, economists predict growth in the local economy.
What will the construction boom mean for you?
Residents living around proposed mini-cities are cautious. They wonder what will happen to their existing homes if developers move in. They also raise questions about how mini-cities will affect the culture of their neighbourhood. What will it be like, living close to a 25-storey apartment block?
The state government and council are seeking to address concerns by providing forums for public discussion, and welcome feedback and suggestions from the local communities.
For people looking to get into the housing market, the construction boom could be positive. More dwellings available means more competitive prices, and more choice. There will be more opportunity to live in metropolitan areas.
If you are thinking ofin apartment developments, talk to your about your options. There may be Lender Mortgage Insurance and lender restrictions for some postcodes, which could affect your ability to borrow over 80 per cent. You will need to make sure your pre-approvals are secure before making a commitment to a new development. Investors should look at the housing and rental market trends, to assess the viability of the investment.
Owner-occupiers should consider factors like floor size, aspect, and whether the apartment has a balcony. You should also enquire about whether the courtyard or communal space has a leasehold, and whether parking spaces are provided.
Check out the developers’ vision for park and leisure spaces, and access to infrastructure like transport and schools, as this will affect your lifestyle.
Investors and owner-occupiers need to consider the risks associated with buying off a plan. Securing a mortgage is now based on a number of factors, which might change by the time the project is completed in 12-18 months. Seek independent legal advice, to ensure you understand the developer’s contract before making any commitments. The developer must be fully insured so your deposit is secure, should the project not proceed as planned. Talk to your Smartline Adviser about your commitments.
The construction boom has positives and negatives for both individuals and cities. Speak to your broker about how you can benefit from proposed changes.