At the latest Westpac Leading Conversations at the Wharf, Lincoln Place Executive Director Nick Collishaw and Ingenia Communities CEO Simon Owen shared the difficulties of the land lease market.
“There's significant issues around building. Pre-COVID, it would take us 16 or 18 weeks to build a home. Six months ago it was taking over 30 weeks. Now it's probably normalising around 20 to 24,” said Simon.
“We've seen build costs go up by 25 to 40%, and the big building companies are not giving any of that back and still pushing through cost inflation.”
Nick said the approach of customers has changed totally.
“People would inspect once and put their deposit down and they're away. Today, our experience is that people will take any time between 80 to 120 days,” Nick said.
“They will inspect five or six times. They'll look for validation from their kids, from their friends, and they'll be back.”
He also said the crisis in the building industry has led Lincoln Place to be inventive.
“We have taken on capacity to be our own builder. We are now building ourselves in three projects in Victoria and depending on how that goes, we'll be bringing that capability into New South Wales.
“We have at least a big enough balance sheet to pre-order significant amount of materials to try and not get caught in the various supply shortfalls which were there 18 months ago. We are able to control our input costs a little better.”
The SOURCE: the bigger land lease operators are now building homes with steel frames on cement slabs, which takes considerably longer than the 8 to 12 weeks when they built homes in factories to ship in on a truck.
