Drawn-out construction times and escalating costs are forcing some property owners to abandon plans to build in regional SA.
Industry experts say many are blindsided by the fact that builders couldn’t determine true costs until their home was finished years down the track
Instead, they opted to sell the land they bought just six to 12 months prior.
Exp Real Estate agent James Stacy, who sells primarily in Port Lincoln, said people were buying cheap land but putting it straight back on the market as soon as they got their building prices.
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Building a home in Port Lincoln has become too expensive for many.
“The cost of building regionally is a complete shock,” he said.
“I think it’s a combination of high labour prices and high product costs as well.”
Mr Stacy said it was much cheaper to build the same product in Adelaide.
Existing homeowners were benefiting though because Mr Stacy said replacement costs for many houses, which were in short supply, were much higher than the asking price.
“That’s what’s driving the existing home prices here,” he said.
Latest PropTrack data shows Port Lincoln’s median house price has climbed 10 per cent over the past year and 43.5 per cent over the past three to $495,000.
It was a similar story on the Copper Coast, according to Exp Real Estate’s Tim Hosking.
He said while there was a lot of development happening in areas like Moonta, Kadina and Wallaroo, the unknown cost at the end of the 18 months to 2.5 years it would take to build was stopping a lot of people.
“They get an indicative number but they don’t know what it will really be,” he said.
Mr Hosking said he had taken many properties back to market after failed build attempts.
“In most cases they’ve held onto it for six months to a year,” he said.
While not an instant fix, Mr Hosking said modular homes could help alleviate the issue.
“Modulars over time could become more of an answer – over time they’ll probably become more acceptable,” he said.
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Several offers have been made for the Kadina modular home at 2 Addison St.
It has two bedrooms and two bathrooms.
Mr Hosking was selling a two bedroom, two bathroom modular home at Kadina – a show home for BoxMod.
The company specialises in modular homes built in Chinese factories and shipped to SA for assembly – they can arrive in months, be installed within weeks and are priced under $300,000, excluding the cost of land.
It is led by SA’s Neville Roberts, who is a widely recognised former VFL and SANFL footballer and has extensive experience in the modular industry.
With luxury finishes and pre-installed electrical, plumbing and airconditioning systems, they are much more appealing than earlier designs.
Mr Hosking said there were already offers on the table for the Kadina modular home, which had a price guide of $425,000 to $450,000.
Mr Stacy said many added costs associated with modular homes, including moving it to its destination with a police escort because of the size, could pose issues, but there was a place for it in the market.
“There’s definitely a demand for it, I think we’ll see more kit homes coming through,” he said.
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