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New home construction pulls back

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Julia Corderoy | 16 Apr 2015, 05:00 AM Agree 0
The construction of new homes dropped almost 11% in the December 2014 quarter
  • New home broker | 16 Apr 2015, 09:53 AM Agree 0
    I believe there is still a high demand for new homes however there are significant barriers to overcome:
    - scarcity of land ready to build, developments are being pre-sold to meet developer / lender terms and titles don't release for sometimes 9-12 months later.
    - excessive title release times coupled with unconditional finance clauses of only 3-4 weeks after signing COS means every purchaser faces the risk of losing their deposit if their circumstances change.
    - stamp duty concessions need to be widened for vacant land to include all purchases not just FHB's
    - valuers / banks looking for secondary market sales in new areas need to look at the market price ie sale price (less rebates) as the value, not a discounted value, the bank does that anyway by only lending to 80% without LMI.
    - LMI cover is excessive (nothing new)
    - lender capital requirements (APRA) need to be relaxed for construction products to allow more entrants into the market for greater competition.
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