Why 2024 could be your best year yet
With many of the headwinds of recent years easing, HC sees 2024 as having the potential for being one of the most opportune for quite some time and a chance to build a solid base for a number of years to come.
Just in case you had been looking at the glass as half empty, let’s review some of those recent challenges and why it is time to be thinking half full;
1 Materials
Both supply and cost have been under pressure for some time however, our research indicates that supply is for the most part no longer an issue, while the pressure on costs has for the most part substantially eased to be in line with the broader inflation levels. While there remains some pressure on wages in the industry, this is expected to be manageable, predictable at worst.
2 Clearance Rates
Tthe “days on market” measure has become extremely tight on the Eastern Seaboard at 22 days for Brisbane, 35 days for Sydney and 36 days for Melbourne. Which means if you list a new property for sale and it is priced correctly and meets market expectations, you should be receiving acceptable offers within the first few weeks of your being on market.
3 Approvals
Council approval timeframes are still slow however, lower recent activity should mean that certainly in the shorter term, they are less congested going forward they can action things quicker than previous years. While still not perfect or reliable we are hearing reports of some developers getting approvals in weeks instead of months.
3 Activity
Lower DA & BA activity resulting in lower job starts should translate into builders being more hungry for new work to fill their pipeline, and we are seeing evidence of this, particularly in building tender responsiveness
4 Funding Availability
As we cover in our funding landscape piece in this market update there has been something of a reordering of the sector with many participants withdrawing or resetting their appetite which means there is probably greater stability and clarity for developers. That said, there continues to be a constant influx of new players of unknown performance capabilities so the subtext is that you still need to do your homework to ensure delivery is solid in all aspects of the process.
So, in terms of the way forward in 2024, we believe that it’s not the operating conditions that are the challenge, the real hurdle is finding new opportunities that stack up.
We have seen many feasos which need to be worked and re-worked in order to find the key to unlocking the real potential. We often work alongside the developer to help them tap into third party info that will do this because we know that the good developers find a way by doing the hard yards while other rush the process and fall short. Time to earn your stripes.
Taking into account all of the above, we see the path ahead as calmer than previous years and with the obstacles developers have had to overcome far more manageable.
To discuss your next project and let us show you how we can get constructive with your finance, give us a call.