Small rise in costs good for new house buyers

An almost negligible increase in housing costs for the first quarter of 2009/10 is positive news for new home buyers, says the Master Builders. The organisation’s director of housing policy Paul Bidwell says their latest housing cost index for new home construction in south-east Queensland shows an increase in housing costs, mainly labour and material of just 0.84 per cent for the September 2009 quarter. “This is positive news for both investors and aspiring owner occupiers who wish to purchase a new home,” he said.
“The cost of materials and labour are two major components that strongly dictate the cost of building a new home. The results show that margins and costs are down, which means more affordable housing. “This extremely low increase reflects the difficult environment in which the building and construction industry is operating at present.
“Recent Australian Bureau of Statistics figures also showed an increase in the number of investors in the market, but fewer owner occupiers.
“This indicates that potential new home buyers are still concerned about their capacity to meet repayments, making it more difficult to achieve the ‘Great Australian Dream’ of owning your own home.
“This has been exacerbated by the recent decision of the Reserve Bank of Australia (RBA) to increase interest rates, with more rises predicted to come in the coming six months.
“Consumer confidence is still fragile and yet, there remains a significant undersupply of housing to the Queensland market.
“We are urging the RBA to hold off on any further interest rate rises until we see an improvement in the economy.”

• For a full copy of the report, log onto Master Builders’ website.