Builders struggle as investors leave Gladstone
BUILDERS have been hit hard in the past 18 months, with a sharp drop in building approvals as investors headed elsewhere.
Chris Allen from Gladstone Designer Homes said the past 18 months have been the hardest he's experienced in 15 to 20 years.
But the Gladstone builder was hopeful about the future.
"Gladstone always has its ups and downs; I think we've gone past the rock bottom," he said.
"It's going to be a slow recovery, but we're definitely recovering slowly," he said.
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He said high land prices combined with a large number of new investment houses built during the 2011 housing boom led a housing glut and a drop in approvals.
But now investors have deserted Gladstone and most new housing approvals are made by first home buyers, mums and dads on their second home and retirees building their dream homes.
"I've found that a lot more families are feeling comfortable about building in Gladstone, Confidence is everything," the builder said.
He said land has dropped $60,000 from an average of $260,000.
"When land was expensive some people only had a budget of $400-500,000 which left only $140,000 for the house.
"The average buyer of a house spends $260-300,000 on a nice, good quality home.
"Now that the land has come down, it's made it more affordable and people can do a nice house for under $500,000."
Gladstone president of the Urban Development Institute of Australia, Andrew Allen said property prices had corrected from an all-time high to a more sustainable level.
"We saw a very sharp rise in property prices during 2011 due to the huge influx of construction workforce as more supply was added to the market, particularly new housing and apartment products," he said.
"We saw that demand level off and supply caught up to demand, and in many cases particularly in the apartment and townhouse market, supply overtook demand.
"In terms of housing approvals, the reason that they dropped so much was that they were coming off a very high base. 2012 and 2013 saw an enormous number of investment housing approvals.
"That investment housing has slowed dramatically."