Latest / The Good Builder Podcast / The Daily Dose #356 | Sydney Home Values Are Falling. So Why Are Approvals Speeding Up?
Transcript
- Az (00:00) Well, very similarly to that Elton John song, I am on a plane and I am flying out today, but I'm going to Sydney. So I thought today we're gonna do a bit of a look at Sydney for the solo podcast for you Monday. You know there's been a few interesting things happening down there. Sydney home values are eight point six percent below where they were in February. The state government just approved a thirty-three story tower over the objections of local council. And we're going down over the next couple of days to see what's going on on the ground. G'day, I'm Az, and we are back with the Good Builder Podcast for your Monday. We hope you have a great week and we've got a fair bit to get through. But before I do, I'm going to give a bit of a shout-out because we were at the Professional Builders AI and Marketing Summit last Thursday and Friday. They set up a little stage for us and we did some live podcasting. We didn't drop them live, but we're doing it in front of everybody. We did about twenty-six podcasts and I tell you what, it was one of the most awesome experiences that we've had. We had builders from everywhere coming up to us and knowing who we were and also sharing their experiences. They knew what we were about and they wanted to do exactly what so many of our amazing guests have done. We've got so much stuff to get out from that awesome event, so many great conversations, so many great opinions on AI and marketing, and the broader sort of what's happening in the industry and and how builders can help themselves. Again, TPB, Lucy Holder, Vinny, Marty, Owen, all the guys there, Gareth, mate, that was some of the coolest days that I've seen in the industry. And thank you very much once again for. Bringing us along to have a chat with a few of your awesome members of your community. I thought that was really, really fun. Now, we're going to talk a little bit about Sydney and what is going on there. And first of all, we're going to talk about where Sydney sits. So, according to Cotality, Sydney values fell another 1.4% in September. They're down 7% over the year, and they're now 8.6% below the February peak. Totality says that's a slightly deeper fall at the same point of the last downturn in 22 and 23. Now, why does a builder need to care about house prices? Because falling values hit you at the worst possible moment, right at the end of the job. At the final claim, when the bank's valuation comes in under what your client thought their home was worth, suddenly there's a gap, and guess who's standing in it? And it's not the client's problem. It's a cash flow problem for you. If the client can't settle, your final payments sit there, your trades still need paying, and the margin you work so hard for on that job gets eaten up while everyone argues about the valuation. if you build in Sydney, you're living that right now. You build anywhere else, this is a good week to have a look at your current jobs and ask yourself which ones would be exposed if values dropped where you are. Number two, While prices are falling, the New South Wales government is pushing approvals through faster than I've ever seen. On the 25th of September, a 33-story tower with 156 apartments was approved right opposite Campsie Station. It went through the state's housing delivery authority, fast track. The local council objected, and the developer says the whole approval took under four months. Whatever you think about councils being bypassed, and I know plenty of you have strong views out there, it tells you where the government's head is at. They want approvals out the door and they want them out fast. That's a shift. But here's the bit that matters for all of you out there. An approval isn't a job between a stamped approval and a hoarding going up. You still need finance, you still need pre-sales, and you still need a builder who can deliver at a price that stacks up. And that's exactly where that next number comes in, which we're finding really interesting. And that is the pre-sale guarantees. Banks aren't looking to release construction finance on a lot of apartment and townhouse projects until enough homes are sold off the plan. So New South Wales started guaranteeing some of those pre-sales. If the homes don't sell, the government will buy them. He's a scorecard so far. The government's commitments cover 152 homes directly. But those homes sit inside projects totaling twelve hundred and thirteen. So every home the government agreed to buy helped unlock finance for about eight. And Western Australia has just opened its own $250 million version. Is that going to fix the housing shortage on its own? No. But it's a clever way of Breaking a logjam that's holding up a lot of good projects and means real work for builders and trades. And this is what I want builders to hear. These schemes look at the builder. They ask who you are and what your track records are. Your reputation is now part of someone else's finance application. And funnily enough, that's what Mark Vasello and Paul Hogan from Dixon Homes the other day were telling me on the episode. Every sale is a promise the rest of your business has to deliver. so there's some really interesting stuff as you can sort of tell going on in Sydney. It's going to be an interesting 12 months, 24 months. We're hearing that all around. And so we're going to head down and see what's happening on the ground, talk to a few builders down there. Now, before we leave, we want to also give another big shout out. And this one goes to Robin Andrew Gray and the entire team at GRAYA They've just revealed Ivory. Gray describes it as a five-story private residence on the Brisbane River. We're just going to put up an article very shortly on this, and you might have seen the social posts. It took them 11 months. It's got DA approval. It's designed. It's developed and built by GRAYA And everyone's talking about falling prices. Well, I think this one's a $50 million build or something like that. So it's going to be pretty cool. Well, I hope that episode gave you a bit of a rundown about what's happening in Sydney It's a very interesting market, generally one of the most stable ones, as you all know. And we're gonna come back with a bit of info, of course. If you haven't subscribed to the Good Builder Podcast, hit subscribe now. Please share it around with a builder that this could help. And if you're building in Sydney or anywhere around Australia and you'd like to catch up. contact us, you can DM us on the Instagram at the goodbuilder underscore AU. Send us an email, admin at the goodbuilder.com.au or, you know, comment underneath these podcasts or whatever you do there. Thanks for listening. You guys are awesome. Have a great week.