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Housing : June 2009
Like many other builders who deal primarily with the top-end market, the current economic climate is proving somewhat troubling for Bill. ‘We noticed a definite downturn in October last year, and things have been pretty quiet so far this year,’ he says. ‘While there’s been a huge upswing in demand, we are bringing in fewer sales. More people are enquiring about our homes, and visiting our display centres, but due to the lack of confidence they aren’t signing the cheques.’ Bill’s situation is exacerbated by the fact that quality homes don’t come cheap. Some ofAtrium’s most lavish homes hit the $2.5 million dollar mark. Clients don’t dispute the fact that the homes are worth it.Atrium’sVerdi display home, the newest and most luxurious addition to its range, was the winner of the 2008 HIAANZ Golden KeyAward Display Home of theYear. It boasts the latest European styling and finest fittings and finishes, and is the kind of home most people would dream of owning. Further assistance is needed to bring second and third home buyers back into the market But in 2009 consumers are questioning whether they really need the finer things in life.And the media, with its constant barrage of negative stories, isn’t helping them change their mind. Bill says the media and some commentators are painting a more negative picture than what actually exists. He says that’s spooking consumers who are actually facing ideal conditions in which to buy. ‘I know there’s pent-up demand out there,’Bill says. ‘I have been through two recessions, and there just wasn’t demand like this. But we can’t get customers over the line because people are petrified.’ Bill saysAtrium Homes has been involved in a recent industry campaign called ‘Build Now’, which aims to encourage consumers to build while interest rates are at 40-year lows and affordability is at a five-year high. ‘It’s basically designed to give the public some reassurance,’Bill says. ‘Money is cheap and building has quietened down in Perth. In the boom HOUSING JUNE 2009 No stigma in skills there was a shortage of six-to-eight weeks for building materials such as bricks, and we’d have to import them from NSW. Now building times are improving and land values are at a steady rate. It really is a great time to build.’ Bill says recent federal government initiatives, such as the boosted federal First Home Owners’Grant and $5.5 billion earmarked for 20,000 new public housing developments nationally, will help the industry, but further assistance is needed to bring second and third home buyers back into the market. ‘The government needs to bring in some sort of measure that removes the uncertainty about building,’Bill says. ‘They need to give our clients confidence that new building isn’t a bad thing. ‘It’s pointless to compareAustralia to America.We have totally different markets. The US have an oversupply of housing, we have an undersupply.Also, Australia didn’t totally deregulate its banks like the United States, and as a result our banks are in a much stronger position.’ The other issue that Bill sees as affecting the residential construction industry in Perth is land prices. He says currently developers release small portions of the total land they own for sale, which inevitably means consumers Bill Marcolina believes that skills shortages will continue to pose a problem for the industry, even if the land price/supply issue is addressed. The time will come when building picks up again, and industry will be in a state of panic without qualified people to do the work. ‘We only think about skills shortages when we haven’t got the workers,’ Bill says. ‘Now is the time to be looking at what we can do to attract more apprentices.’ Bill says in his day there was no stigma attached to being a bricklayer or trade contractor, but these days, it seems every parent wants their child to be university educated. ‘We should be going to the schools and telling the kids that bricklayers and trade contractors can in some cases earn more than doctors. It is hard work, but if you are willing to put the work in you will be rewarded. That’s the message we need to be selling.’ compete for fewer blocks of land at higher prices. ‘Land is in short supply through choice,’Bill says. ‘If developers are forced to put at least 50 per cent of their total land package for sale, for example at least 500 of the 1000 blocks they owned, land prices would start coming down. The problem is that current practice is to hold on to them.’ H 37