and your assumptions that rising house prices will lead to a construction boom are questionable
It has already happened - construction activity is now at a record high, and is highest in the cities that have seen the strongest price growth.
This was the inevitable outcome. Rising prices means higher profit for developers which means they develop more stock. Simple.
Drgonzo
17 Jul 2014, 04:03 PM
architects are typically engaged on larger projects, either residential or non-residential
Oh so now they do design houses after all.
Ex BP Golly
17 Jul 2014, 04:07 PM
Just what is the point you are making here Shadow?
I'm making the point that the bulls have won, and that the silly bears have failed once again, and that I am a genius who should be worshiped as a God.
What's your dogma on homosexuals, gay marriage and abortion?
I decree they must all buy property. Gay marriage permitted as long as clones are created in the absence of children to ensure continued demand for housing. Abortion not permitted since it reduces the potential future pool of buyers. Failure to comply invokes the wrath of Bear Trap at 103% intensity.
Homewares retailer Harvey Norman has reported its first profit growth in three years as the robust housing market fuelled sales of furniture and appliances, boosting margins in Australia and lifting net profit by 48.9 per cent to $211.7 million.
The net profit result compared with consensus forecasts around $203 million and would have been even higher if not for an $11.6 million drop in the value of the group's property portfolio.
Sales from Harvey Norman's company-owned stores jumped 14.4 per cent to $1.51 billion - swelled by five new outlets - while sales from franchised stores rose a more modest 1.14 per cent to $4.77 billion as eight stores in Australia were closed.
Profits from franchising operations rose 26.7 per cent to $143.72 million, helped by a 19.7 per cent or $25.27 million reduction in tactical support provided to franchisees to $103.19 million.
Earnings from company-operated stores more than doubled to $28.72 million, primarily underpinned by better results from Ireland and New Zealand.
The property segment reported a segment result of $123.67 million, up from $58.52 million in the prior year. The net property revaluation decrement of $11.65 million was a significant improvement on the $59.12 million net revaluation decrement in the prior year, while rents increased.
and more would be used if affordable land was more readily available. Majority of new sites are filled with project homes budgeted to maximise floor area, offsetting cost of purchasing land with cheap consultancy and finishes.
( However on the flip side, with land sizes getting tighter and tighter, architects are invaluable in unlocking the most potential in a house to suit your desired lifestyle in minimum amount of space )
So where do you think the land should come from, farmland, national parks, nature reserves?
IMO, they need to look at satellite town development and infrastructure to provide transport links and also try to move employers and businesses to these centres. Sydney has Woolongong and Newcastle which could be grown via increasing density to provide jobs and homes for the growing population.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
There's enough unused land for the moment to sustain this paradigm.
But is this seriously now going to be the main driver of the Australian economy? Rapid population growth and then building houses and infrastructure? This is Ponzi economics.
There's enough unused land for the moment to sustain this paradigm.
But is this seriously now going to be the main driver of the Australian economy? Rapid population growth and then building houses and infrastructure? This is Ponzi economics.
No it is not ponzi economics. Australia has a growing population because it is a young country with vast resources. The population needs housing, hospitals, education etc etc.
Building schools for a growing population a Ponzi scheme in your interpretation and that would be silly hey?
The use of a ponzi metaphor in housing is only relevant when a market reaches the peak of a boom cycle and buy to flip (ie never to utilise) becomes a significant part of the new build market. Doomsters have completely misused this word. There is many ways in which property can grow in real value. 1. Renovation 2. Gentrification. 3. Economic wealth growth, eg A property bought in Darwin 20 years ago has morphed from a property in a backwater to a property in a significant economic wealth generating hub.
The vast majority of property price growth comes from one of these catalysts. Growth from over exuberance is always corrected down the track.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
It is. If you employ someone to build a house and they use their wages to obtain a loan to a buy a house and that creates demand for more workers to build more houses for more workers, it's a bloody Ponzi scheme.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
The Queensland government estimated in 2007 that the employment multiplier — the number of jobs created elsewhere in the economy for every job created in the mining sector — was about four
edit: just put this here relative to the OP comment regarding transition into construction to give context.
It is. If you employ someone to build a house and they use their wages to obtain a loan to a buy a house and that creates demand for more workers to build more houses for more workers, it's a bloody Ponzi scheme.
If 100% of the population, or even the majority of the population, were employed to build houses, you might have a point.
But less than 10% of the population is employed in construction, and less again on residential construction specifically.
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