Markets in a ‘sound’ state despite shift: PIPA
The winds of change are sweeping through the country’s real estate market, but for Property Investment Professionals o...
Essential information, plus expert insight on what is shaping the national property market...
AUSTRALIAN CAPITAL TERRITORY
Building industry in unstable condition
The Canberra housing market has been left in a volatile state following a collapse of building starts and a subsequent increase in builders going out of business.
Industry analysts, administrators and liquidators are warning prospective home builders that it is more important than ever to carry out due diligence when selecting a contractor.
“Building insolvency has spiked since last year,” said Frank Lo Pilato, a senior administrator at accountancy firm RSM Bird Cameron. “From July last year to now it has been very busy. I have been involved with six other builders [a total of eight facing insolvency] in the last six months.”
ACT building starts for this year’s March quarter were down by 50.9 per cent, or 41.2 per cent on a seasonally adjusted basis, according to the ABS and HIA.
Developers get waiver for building completion fees
The ‘commence and complete’ charges, which are designed to discourage land banking in the ACT, will not apply to some of Australia’s biggest property developers.
Home builders on standard residential blocks, however, are still subject to the fines, which were increased in 2008.
Builders who fail to complete new homes within two years could be fined, while major developers that sit on large portions of land could still have their fees waived.
Treasurer Andrew Barr was applauded at a Property Council lunch two weeks after the June budget when he announced that the ACT government would waive the fee for commercial, mixed-use and multi-unit residential developments.