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    9th Oct 2019

    An Update On The Australian Property Market

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    It’s safe to say 2018 was a tumultuous time in the Australian property market. We witnessed our property superstars, Sydney & Melbourne experience a devastating blow with Sydney dropping a staggering 5.9 per cent and Melbourne dropping 1.5 per cent. Darwin and Perth both experienced a decline of 3.6 per cent. 

     

    Some states bucked the trend and lifted. Brisbane had a minor growth of 0.01% with Adelaide and Canberra increasing by 1.1 per cent and 1.4 per cent respectively. Hobart bucked the trend with a 8.4 per cent property increase. 

     

    Everyone was nervous. New builds declined, the Big 4 banks imposed tighter lending conditions and the property market flatlined. As a result, sellers held firm, buyers with decent financial backing went awol and new builds declined dramatically. 

     

    The whole nation was waiting for unemployment to rise and the property market to tumble. The doomsday reporting had an element of truth that was hard to ignore. 

     

    2019 Market Conditions 

    Enter The Royal Commission and the Federal Election. A petri dish of uncertainty and a nail in the coffin that was positive buyer sentiment. 

     

    The main change came post-royal commission when a new ruling stated the banks could no longer pay mortgage brokers a home-loan finders fee. Additionally, lending conditions remained competitive. Interest-only loans, smaller deposits and equity-driven loans were harder if not impossible to obtain. 

     

    Quarters 1 & 2 were shaky, to say the least. 

     

    Australian Property Forecast 

    Fast forward to quarter 4 and it seems the reported property apocalypse is all smoke and mirrors. In fact, we’re now seeing increases across the board. Some slight but none the less, the market is rising. 

     

    Just today, the Reserve Bank announced a rate cut (the third for the year) to 0.75 per cent. Lower interest rates coupled with looser lending conditions will result in a more positive market.

     

    So far, house prices have increased by 1.7 per cent nationally. Sydney recorded a slight rise of 0.2 per cent with Melbourne increasing by 0.1 per cent. 

     

    Overall, the market is still a hesitant one but certainly, it’s heading in the right direction. Predictions are for a strong 2020 with rates set to remain low. 

     

     

    Custom Home Builder Forecast 

    Of course, this is all relevant but what does it actually mean for custom home builders? In short, your clients will have more access to finance with more relaxed lending conditions meaning you’ll see more of them in the market. 


    Additionally, the hesitation experienced in 2018 and the first half of 2019 will lessen. With the change in sentiment in the market, you should expect to see larger projects coming your way. 

     

    Our advice is to prepare for a busy 2020 with all of your ducks lined up neatly. 

     

    How have the current conditions affected your custom home building business?

     

    Further Reading: 

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  •  
    28th Mar 2019

    Property Update: How To Remain Profitable When New Builds Decline

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    It seems everywhere you turn these days there’s yet another article predicting the impending property apocalypse. This isn’t one of those articles. No, we’ve penned this piece today to chat through how the current market conditions affect custom home builders. You’ll notice many of these property updates only really focus on sale prices, auction clearance rates and discounting. Custom builds are a whole new kettle of fish.

    Here we want to outline the facts along with a few key strategies you can employ to remain profitable while the real estate market does it’s thing. Here at AREI, we don’t see the point in reporting anything unless there’s a solution ready and waiting.

     

    What is the current market telling us?

    The ABS Building Report released in November 2018 showed a dramatic decline in construction approvals across all states. When averaged across all building types (houses, apartments, commercial) the decline totalled 32.8% in the last 12 months. When narrowing down the data to show private dwellings, houses dropped 6.4% and all other private dwellings (apartments & co) dropped a staggering 53.9%.

    This can be the result of many things. For us, there are 2 key elements that are really steering the boat on these figures. The first one being the tighter lending conditions all Australians (and overseas investors!) are experiencing. Interest only loans, smaller deposits and equity driven loans are harder if not impossible to get right now. For that reason, there just isn’t as much cash floating around.

    Secondly, people are nervous. As we mentioned, every media outlet in Australia is hypothesising about the future of our property growth and even the economic wealth in this country. When there’s fear in the market, it’s harder to sell. The results of the Royal Banking Commission is still playing out in Australia so it’s a case of waiting to analyse the full impact the adjustments have made.

    We believe your potential clients are still waiting in the wings. In the meantime, we’ve got a few ideas to keep your custom home building business flush.

     

    Stay Current

    The construction industry is always changing as you’d know. To attract and retain clients, you need to match or stay ahead of your competition. The key trends coming forth in 2019 and beyond in home building are:

    • Technology: many builders are investing in online project management tools which of course, benefit the project at hand but also, the client. Many of these tools allow for frequent build updates which the client can access online. It may seem like a small thing but key client value adds such as this can be the difference between winning and losing a job.
    • Sustainability: with the focus on eco-friendly sustainable homes gaining more traction, ensuring you have viable options for this type of request will drastically improve your chances of acquiring new clients. Everything from building materials, solar options and house plans will need your consideration here. We now offer eco-friendly, sustainable custom house plans which are drawn and ready to be downloaded.

    Find Your Niche

    If you’ve been in this business for a while, you’ll know that finding new clients takes time, money and resources. Instead of trying to attract everyone and everything, spend some time figuring which projects have been the most profitable in the past. Identify who it was that booked those builds. Really niche this down to include their age, profession, location, family status and more.

    This is called creating a customer avatar. One you have a clear idea of who to target and for what, develop a marketing plan to attract them. Put it this way, you can acquire many smaller clients or you can get strategic and book a smaller quantity of larger jobs.

    You may also like5 Essential Strategies to Land More Clients’.

     

    Run a Lean Business

    Even if you’re booked solid until Christmas, it’s always a good idea to plan for the future. It’s even more imperative in a market lull. You’d be surprised at how much you can save just by adjusting your operating expenses. For example:

    • Labour: Watch your sub-contractor labour costs. Are there elements you can take back yourself rather than outsourcing? Can you minimise weekend work to reduce your expenses for a period of time? This is undoubtedly your highest cost so addressing this and making adjustments where you can should be a priority.
    • Marketing: Of course if work is drying up, you’ll want to increase your marketing budget but it’s worth addressing what types of marketing you’re spending on. Traditional print mediums have a low return on investment where digital marketing can be tracked and adjusted for conversion almost instantaneously. Audit your efforts and market with intention. If the billboard is costing $5k per month and you’re not sure if it’s even working, it might be time to take it down.
    • Plans: Another very hefty investment for builders are house plans. If you’re building 5 homes or more per year, you are likely already spending upwards of $12,500 per year on house plans alone. Most architects charge $2,500 or more for a custom house plan. Here at AREI Designs, our Construction Package gives you 5 construction drawing sets PLUS access to over 200 buildable, bankable designs for less than what you’re paying for 5 house plans standalone.

     

    Spending only where required and making minor tweaks to your outgoing expenses will help you build a bit of beef in your budget to get you through the leaner times.

     

    How have the current conditions affected your custom home building business?

     

    Source: https://www.mintequity.com.au/news/severe-slowing-in-housing-construction-forecast-as-building-approvals-drop-by-328

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  •  
    5 Essential Strategies To Land More Clients
    15th Feb 2019

    5 Essential Strategies To Land More Clients

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    2019 is well and truly upon us and if you’re like most custom home builders, securing clients and booking out your services are on the top of the priority list. In years gone by, a letterbox drop, print advertising piece or even word of mouth would likely do the trick. In this day and age, your digital presence is everything. If you haven’t yet invested in your digital footprint, the time is now. We’ve outlined the very best ways for professional builders to land more clients today.

     

    1. Launch a professionally designed website

    Nothing turns off potential clients quite as much as a slow, poorly designed website. Almost 53% of website traffic is mobile these days so your website needs to be mobile responsive. A DIY website likely doesn’t have the capabilities to capture your audience’s attention on mobile if you’ve done it yourself.

    Hire a website developer who can design and code a professional piece. This will pay itself off in no time!

     

     

    2. Get Social

    79% of Australians are now using social media. That statistic has grown by 10% in a year alone. If you don’t have a social media presence, it’s likely your competitors do and you’re missing out on the gravy as a result.

    The key is to grow an active and engaged audience by humanising your brand. Take them on a journey with you as you begin projects, complete homes and everything in between. 94% of social media users have a Facebook page and 46% are on Instagram. So if you’re going to concentrate on any platforms, make it those.

    Further to this, almost 64% of consumers stated they would be more likely to trust a brand if they interact with followers in a positive way on social media.

     

     

    3. Showcase Your Plans Online

    Once you attract your ideal demographic to your website, you want to showcase what you can do for them. The very best way to do this is to upload your range of plans online. Visitors can browse and dream about their ideal home while online and hopefully, this will convert to a hot lead for you.

    Organise your plans by type for example, 3 bedroom modern homes, 5 bedroom replica homes, apartments and so on. This will make it easy for them to find exactly what they’re looking for.

    HINT: we have over 200 buildable, bankable designs readily available through our subscription service.

     

    4. Create High-Quality Content

    Producing high quality content is a must when enhancing your digital presence. Grainy images and sloppy copywriting just won’t cut it in this day and age. If you can’t create the content yourself, consider hiring a graphic designer and copywriter to help you.

    The type of content every builder should be producing is:

    • Social Media Content: a minimum of 4 posts per week
    • A monthly blog
    • Email marketing to current, prospective and past clients

     

    5. SEO Is Important

    As most prospective clients are searching for you online, you need to make it easy for them to find you. Your organic search engine optimisation covers your website. At the very least, each page should include a keyword such as ‘Builder Brisbane’ and have a meta description to compliment it.

    You can also up the ante through paid Google Advertising. This is where you can select a range of keywords and pay for your website to be shown first when prospective clients are looking for you.

    Remember, great content comes first with SEO being the icing on the cake.

     

     

    Obtaining high quality, hot leads is imperative to every business owner but more-so for builders. As you know, as soon as a job finishes, you need another to replace it. Don’t get caught out constantly chasing leads, create a winning online presence that works for you.

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