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Home owners wanting to build a new home in the current economic climate may be a bit frightened by words like “inflation” and “interest rate hikes” as they are the big buzz at the moment, but let’s reflect and put everything into perspective for you.
So why is there inflation right now?
The war in the Ukraine and climate change are the main drivers here because historically inflation has most often only trended upwards due to consumerism occurring in a thriving economy but this is not the case right now.
Inflation is trending upwards because of material and labour supply shortages in almost all sectors.
Interestingly enough when something is short in supply similar to Gold or Diamonds then it always seems to maintain a steady value.
Remember homes are the bedrock of all Australian families and regardless of whether home build costs go up or down, it’s really about buying/building and selling a home in the same market.
I guess the take away here is to firstly take control by acquiring your own home & putting a roof over your head regardless of economic conditions.
But can you afford it? Interest rates can determine this if you require a home or construction loan and it’s always essential to shop around to find a home that suits your budget.
Importantly when constructing a new home the improved value after completion is the best gauge as to whether you are under or over capitalizing on your investment within your chosen street or suburb.