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The Langers Forum
Must.... Own....property....
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<blockquote data-quote="Orchard thief" data-source="post: 7029546" data-attributes="member: 41458"><p>I’m stuck in the middle of it at the moment. Never been busier, there’s an absolutely massive push on at the moment across all the sites we’ve on. The developers are looking for a huge number of completions. </p><p></p><p>However….. it’s fake as fuck. The material increases are absolutely catastrophic at the moment. </p><p></p><p>If, for example, my average unit cost per unit delivered was €10k per in 2019 it’s about €14k now. Developers are making less per house now than they were 18 months ago even though the house prices have rocketed up. It’s not sustainable. </p><p></p><p>The sale price of a new house is set at the launch of a new phase. The house will then be delivered within 9-12 months typically. The developers genuinely have no idea what price increases the suppliers are going to implement during the delivery period. They’re all saying they will pull the plug if profit margins drop below 15%. </p><p></p><p>All the jobs I’m working on at the minute are for houses that are already sold with the prices locked in. 3 proposed new sites are on hold indefinitely until the cost of materials stabilise. </p><p></p><p>We haven’t even scratched the surface of the supply chain shock yet either from what I’ve been told. </p><p></p><p>The strict reins put in the developers (thank fuck) mean that the days of having 40/50 unfinished houses on sites are gone. This means when developers do decide to pull the plug on it that there will be zero unsold stock left, and no pressure on the developers to sell at a loss. </p><p></p><p>The impact of Covid affected house deliveries negatively but that’ll be nothing compared to the supply chain mess that’s only begun. </p><p></p><p>With private housing the developer can launch phases in whatever way they see fit. </p><p>A 200 unit site might have 5 launches with accurate price increases throughout to reflect building cost increases. </p><p></p><p>The social housing sites are a right bollocks for the developer because in a 200 unit social site all prices are fixed so builders are going to be way less inclined to take these on. </p><p></p><p>In short, I won’t be a bit surprised to see construction drop off steeply at some stage in the next 6 months. This won’t mean a collapse in house prices though, as the supply simply won’t be anywhere near demand is.</p></blockquote><p></p>
[QUOTE="Orchard thief, post: 7029546, member: 41458"] I’m stuck in the middle of it at the moment. Never been busier, there’s an absolutely massive push on at the moment across all the sites we’ve on. The developers are looking for a huge number of completions. However….. it’s fake as fuck. The material increases are absolutely catastrophic at the moment. If, for example, my average unit cost per unit delivered was €10k per in 2019 it’s about €14k now. Developers are making less per house now than they were 18 months ago even though the house prices have rocketed up. It’s not sustainable. The sale price of a new house is set at the launch of a new phase. The house will then be delivered within 9-12 months typically. The developers genuinely have no idea what price increases the suppliers are going to implement during the delivery period. They’re all saying they will pull the plug if profit margins drop below 15%. All the jobs I’m working on at the minute are for houses that are already sold with the prices locked in. 3 proposed new sites are on hold indefinitely until the cost of materials stabilise. We haven’t even scratched the surface of the supply chain shock yet either from what I’ve been told. The strict reins put in the developers (thank fuck) mean that the days of having 40/50 unfinished houses on sites are gone. This means when developers do decide to pull the plug on it that there will be zero unsold stock left, and no pressure on the developers to sell at a loss. The impact of Covid affected house deliveries negatively but that’ll be nothing compared to the supply chain mess that’s only begun. With private housing the developer can launch phases in whatever way they see fit. A 200 unit site might have 5 launches with accurate price increases throughout to reflect building cost increases. The social housing sites are a right bollocks for the developer because in a 200 unit social site all prices are fixed so builders are going to be way less inclined to take these on. In short, I won’t be a bit surprised to see construction drop off steeply at some stage in the next 6 months. This won’t mean a collapse in house prices though, as the supply simply won’t be anywhere near demand is. [/QUOTE]
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