Happy 2023! Three top reasons to get started on your project now.
As 2023 dawns, you may be considering pushing forward with the building or renovating plans that you’ve been mulling over. I thought I’d give a quick update on why it might be a good time to get moving with your project. So here are three quick points for you to consider.
Housing has softened considerably
The COVID-driven construction boom appears to be over. According to the November 2022 (latest available) Australian PCI report by HIA and AI Group, house building activity remains largely in-line with its 12-month average and has risen from the previous month. However, the data also shows that
House Building Activity has contracted around 15% per annum
Trend for House Building New Orders has fallen from 72 (Expanding) in early 2021 to around 33 (Contracting) in late 2022, with 50 being the baseline
Building Approvals in the same period have also fallen from around 14,000/month to under 10,000/month
With reduced new work orders, this seems to indicate that there is a good chance of build prices softening or at least settling as existing projects are completed. Time will tell, but we’ve heard anecdotally that the issues with material supply and shipping costs have largely returned to normal.
NCC 2022 adoption date has been pushed back
The following is excerpted from the National Construction Code news site.
In accordance with the request of Building Ministers, NCC 2022 was released by the ABCB on 1 October 2022.
Ministers decided that NCC 2022 will come into effect on 1 May 2023 subject to transition periods for energy efficiency, condensation mitigation, and livable housing provisions, which come into effect on 1 October 2023.
Although NCC 2022 is available, until its adoption on 1 May 2023 it is still necessary to meet the requirements of NCC 2019 Amendment 1.
For you, this means is that if we can begin your project and get the Certification process ideally started by May 1, we can get the project assessed under NCC 2019. This will be to your advantage, as the provisions under the latest code will mean a bit of extra cost for your project. October 1 is also an important secondary deadline, as that is when the new Construction Code will be adopted in full.
Our understanding is that the beginning of the Certification starts when the Building Certifier is engaged and their first invoice paid. This is generally at a stage where the Design is completed and we’re just starting to step into the technical Documentation part of the project.
Projects take time, and the 2032 Olympics will begin to put pressure on labour availability
We have previously blogged about this - but we see the upcoming Olympics and its associated construction projects (think of the sporting facilities, accommodation, transport infrastructure and public civic works) as potentially a catalyst for increased build prices, even in the housing world. This is mainly because apprenticeship completion rates remain low at around 55% - ie. not enough new trades are coming through.
That means we’re going to see Mining and Infrastructure both competing for trades from the same existing labour pool, and logically as demand increases trades are going to push up the prices that they charge.
It’s hard to exactly know when this will start happening, but we feel it’s prudent to get prepared now to try and get ahead of the curve. Projects do take time (and having a team means we can fast-track a project if needed) - but if we begin work your project early this year, most likely we’ll be pushing early or mid 2024 for project completion.
The curve ball - China’s lockdown
As we write China is in the midst of a significant COVID outbreak. China plays such a central role in world manufacturing and shipping that there will be inevitable ripple effects on both material supply and shipping costs.
It’s early days yet, but let’s hope that it is sharp and short, rather than one that is prolonged.
It starts with a free consultation!
If you’d love to catch up and have a chat about what you have in mind,
give us a call on 07 3726 5430
email me directly at billy@everstudio.com.au
or just fill the form below!