Home Rot 2

If building or buying a new home would you like full disclosure of all costs involved and profit made. How would the builder feel in having to disclose the profit they were to make? This was one action discussed at a meeting last week of local builders and suppliers to the building industry as a way of keeping their businesses viable. Interesting, builders calling for full disclosure and not consumers, the way I assume disclosure in financial planning eventuated. Highlighting the pressures on local builders (not necessarily all) to remain viable in the current market, which most at the meeting agreed wasn’t good. Not helped by the number of investment properties being built using out of town suppliers and contractors, sold by marketeers to interstate and international buyers with 12 month rent guarantees. The problem being when the rent stops buyers finds out the true rental return and value of their house if they decide to sell it. Presently the true value for many is less than what was paid, which one builder claimed is affecting the value of every home in the greater Rockhampton region. If allowed to continue the potential results are less local builders, less local supply work, less apprentices employed and lower home prices across the board. How does full cost and profit disclosure help? If you were aware that in the purchase price was a marketeer’s fee of $10000 to $30000 (as well as possibly the amount to cover the first 12 months rent guarantee) on top of costs and profit margin would you buy sight unseen at an investment seminar? Buyers beware; many may think more fool them. However if this builder is correct, supporting his claim the Rockhampton median house prices fell for the first quarter this year while the national price increased, should Council negotiate with developers on their fees to see more of these investment properties built in the one area. The lure of a higher rate return from more non-principal place of resident homes may be to the future detriment of every home owner and the local job market. Surely this is an issue that deserves investigation now rather than possibly fester.