Wednesday, Jul 08, 2009
A nice cosy little understanding
The Times: Housebuilders ‘drip-feed’ new homes to prevent further price falls
Housebuilders are “drip-feeding” homes on to the market to prevent further falls in prices, industry experts claimed yesterday. They said that the practice — to avoid flooding the market — was widespread among large-scale builders such as Barratt and blamed a lack of competition among the developers of large sites for the problem.
Posted by quiet guy @ 12:07 AM (742 views) Add Comment
9 Comments
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1. drewster said...
The new-homes market is dwarfed by the existing-homes market. Nobody's going to pay over the odds for a new-build shack when there's a second-hand building at a knock-down price (pun intended) down the road.
2. dbc reed said...
As has been pointed out thousands of times before: this is a job for LVT MAN. Kapow!
3. jonb said...
This is just another example of pent-up supply
4. inbreda said...
drip feeding the supply is a dangerous game - particularly when cashflow and liquidity are important. They may be trying to prop up prices to encourage a bounce in the market, but they won't be able to play these games for too long. One more shock to the financial system (there are plenty that could be on the way - reports of adjustable mortgages in america hitting another phase, bad defaults data in the uk, increased restrictions on lenders capital requirements etc) and one of these speculator building firms will go under and then we will see a SERIOUS supply to the market.
5. britishblue said...
I am not sure they are drip feeding the market. Builders work on phases. Each site will be split down into phase 1,2,3 etc. The idea is that only when you sell so many of phase 1 you move onto phase 2. This is not drip feeding. It is about managing cost and inventory and has been solid building practice for the last 20 years. The woolworths example is crap.
6. Neil B said...
This article obviously is written by someone who has never worked in the construction industry. Properties are always 'drip fed' onto the market as it takes many months to complete them and they do not build all of the properties at the same time.
7. mander said...
Engineered housing shortage. Competition watchdog is sleeping. How did they spot fixing prices by BA and they can not see the elephant in the room?
8. Harre said...
I don't think the builders are in the business to lose money... Of course they won't push everything onto the market at once. That would increase the supply too much, devalue the property and potentially piss off existing owners. It's not the builders task to lower house prices. Starting to think this place is filled to the brim with paranoid communists.
9. sosoon said...
New house buyers buy of plan; thus allowing them to choose their Kitchen, Bathroom, lights etc etc etc. Put simply no buyer equals no building. The last thing a builder / developer wants is finished stock on it’s books.