If you’re thinking about building or renovating, you’re probably well aware that Australia’s building industry is under a lot of pressure. What does this mean for borrowers who want to build or renovate? Is it harder to get a construction loan?
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Building industry under pressure
Australia's building and construction industry is feeling the pinch. Supply chain issues have pushed prices up and delays have created a backlog.
Uncertainty in the building industry is also causing issues in the lending sector.
For a start, the average cost of building a house has shot up nearly $70,000 in just the last 12 months. With the ground shifting, it’s also harder to get builders to commit to a quote.
My Finance Agent client, Claudia, whose new home is in Mosman.
What does this mean for borrowers?
Unfortunately, it means that getting a loan to build or renovate has become harder. Harder, but not impossible. It comes down to your individual situation and many other factors at play.
I’m also hearing the question whether it’s worth holding off building or renovating until, say, 2023 or ‘24. I wish I could answer that definitively, but I’m not sure anyone knows how the building industry is going to shape up.
On the one hand, labour and supply shortages might improve, but any savings might be eaten up by more rises in interest rates and building supply prices. There are a lot of moving parts right now and it’s hard to predict how they’ll all intersect.
Discover what's possible
The only thing I am certain about is that it’s always a good time to get your ducks in a row.
If you’re thinking about borrowing money to build or renovate, I encourage you to give my team a call or send us an email.
We’ll run the numbers, look at your options and, armed with that information, you can start to make some informed decisions.