Sunday, 22 February 2009

[Others.035] What's next after 3 more builders collapsed?

You might have already heard about this sad news: after last year's collapse of Beechwood Homes and late this January Wincrest Homes, it's really sad to see 3 more NSW builders go bust.

The formal media release from Office of Fair Trading/Department of Commerce can be found here for Kingstone Homes on 9th Feb, Tsurami on 6th Feb and Pacific Blue Homes also on 6th Feb.

Compared to the 450 unfinished houses in previous 2 incidents (350 for Beechwood and 100 for Wincrest), according to news here and here, the number of unfinished house is a smaller number of about 40-45.

But each of them will still be heart breaking for each house owner & family, and of course, the builders' staff members.

People always say that in most cases, buying a property is the biggest lifetime investment. Then building a house would be even more risky one as until you got the key, you won't know what could happen.

And if you are like us, who have to pay "triple mortgages" during the construction period the situation is even tougher. I call it "triple" because one is for the land/house that's under construction, one is the money for the construction of the new house, and another one for the rent as we need to have a place to live in.

The economy isn't that well in the past few months. Having this kind of problem with the builder will certainly extend the house completion date for at least months or even years. Hope all those families can go through this without too much impact...

Talking about the bad economy, the other day I suddenly notice opposite the Epping Station, on the Northern side of Beecroft Road which I rarely visit, more than half of the shops are either vacant or have a big "For Lease" sign. I took a photo from my mobile as below and mark those shops with red arrows.

And not only this, even the "Epping Club" walk on the other side of the road, which I walk pass almost every day has 2 out of about 10 shops been vacant for a few months.

Good to see the government trying different things to help everyone going through the hard time. But personally I still don't think giving out cash is a good strategy.

According to this article by the opposition leader Malcolm Turnbull:
the Rudd Government's latest $42 billion spending package includes provision to borrow up to $200 billion - that is, a total of $9500 for every man, woman and child in Australia.

Everyone should also have a look at this article by John Rolfe
"Kevin Rudd's national debt show a poor savings record".

The most interesting thing I learned from the article is this table about "Australian Government general government sector net debt and net interest payments" since 1970, which is "table D4" from Appendix D: Historical Australian Government data of Australian Budget 2008-2009.

It took the government more than 30 years to get out of debt. With the bad spending habit of Labour Party, wonder how long would that last.

About the $42 billion spending package, other than a very short term cheer from those who received the money, is this going to create more jobs in the long run? I really doubt it. It's just like Credit Cards, you can have a really good time while spending. But if you can't pay it on time, the interest is going to kill you!

Any way, for those of you who still have a half finished house, may be it's safer to save those extra bonus/spending money for the unexpected. Nowadays cash is king! Just hold on a bit longer, I am pretty sure most of the builder should be alright and will finish your house on time (as it's not very busy right now...). Wait until you receive the key then you would be safe to celebrate your new house in whichever way you like, good luck!

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