Housing construction worst in a decade

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South Australia's builders had previously built between 10,500 and 12,000 homes per year. For the next couple of years it is expected that building will not be much more than 9,000 homes per annum

South Australian housing starts for 2011 represented a fall of 19.5% on the figure for 2010.

Of more concern is that in the 3 months leading up to January 2012 seasonally adjusted approvals were down 35% compared to the same period the previous year.

If building approvals are anything to go by we can expect tough conditions for the years ahead for the South Australian new home building industry.

However the future isnt inevitable particularly if interest rates continue to drop as predicted and the state government makes the predicted reforms to the cost of new homes.

Housing shortage of 230,000 homes

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In a report released by the HIA Economics group entitled Housing to 2020 it stated that we have a aggregate shortage of housing totalling 230,000. But what does that really mean? Surely we cant have a shortage of housing if prices are going down?


It you take the year 2010-2011 as an example the number of dwellings completed were 154,400. The HIA estimates that the underlying demographic demand for new dwellings in this year was 167,000. Thus they say that there is a 12,600 dwelling shortfall.?

If we aggregate all these shortfalls over 10 years then we get the shortage of nearly 230,000.

So what is the underlying demographic demand?

Essentially it is the measure of the number of dwellings required to satisfy a growing population. This attempts to determine the total number of potential households in a given region based on a number of demographic, social and economic factors such as the natural population growth, net overseas migration and the number of people living under one roof.

It is important to understand that prices are made up of both the demand and supply of properties as well as people perceptions of the relative value of properties.

In the long run demand and supply will determine the final price in the market however in the short run it is peoples perceptions which determine the market price.?

As such we can see falls in property prices when people perceive that property prices are overvalued, however as these perceptions aren't?realized?the underlying shortage of supply will have a greater impact and prices will start to rise.

Finding the right builder

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There are many ways that you can find a builder however the most common way is by asking family and friends for names of builders they have used and could recommend.


Other methods include looking through the yellow pages and newspapers, surfing the internet or attending display homes.

For piece of mind it may be diligent to employ the services of an independent authority to assist with choosing a builder. Builder Brokers are independent advisors similar to Mortgage Brokers who have had many years experience and are qualified to offer advice on which builder is best suited to your needs.

Home indemnity insurance

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Unless your house is part of a multistorey development exceeding three storeys your builder is required by law to take out home indemnity insurance on your behalf.


This insurance policy ensures that your house can be finished in the event that your builder dies, disappears or has gone out of business because he/she can't pay his/her debts (i.e. insolvent).

The insurance policy is required to be in place during construction and until six years from the date of 'practical completion,' that is, when the house can be reasonably used for its intended purpose.

Typically the cost of taking out home indemnity insurance should be included in the building contract. The builder chooses an insurer from a list of approved insurers and takes out the policy on behalf of the homeowner.

The minimum level of insurance cover required by law provides for a maximum payout for loss of building deposit of $13 000 and the maximum payout that can be made to rectify or complete a house under the insurance cover is currently $100 000 or the value of the contract work (whichever is less).

Your builder should provide you with a certificate of home indemnity insurance before starting any building work or taking any money from you under the building contract.

It is a good idea to keep the certificate of home indemnity insurance so that you can give this to the new owner, should you sell the house before the six-year expiry date.

If you need to make a claim under the home indemnity insurance policy you may be required to pay an excess, this amount may vary with each insurer.

You should consider taking out home and contents insurance when you take possession of your house in case of damage (unrelated to construction), fire, or theft.

Driveway safety for toddlers

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There have been 85 deaths in children aged 0-5 years old between 2000 and 2010. Recent statistics in Queensland has shown that nearly 3 children per week - 150 per year - are run over, and in the past 5 years on average four die as a result of their injuries. Something is being done about this.


There is a proposal in place to amend the Building Code of Australia to help prevent future deaths by placing requirements on the internal access door between the garage and living space to include

????????? a solid inward swinging door

????????? the door handle at a minimum of 1500mm above floor level

????????? the door to have a self closer

????????? an electronic isolation cut off switch to be installed between the automatic garage door and the internal access door

Proposed urban planning guidelines include

????????? fencing of driveways and making a safe play area for kids

????????? clear space at front fence lines to see kids on footpaths when reversing