Homebuilder MJ Gleason reports that his customer cancellation rate has more than doubled since the beginning of the year.
T.He also said the company saw demand drop after the mini-budget.
According to Gleason Homes, the number of homes booked by customers at each site has dropped from 0.42 a year ago to 0.26 over the past six weeks.
Over the same period, the cancellation rate increased from 20% in the first 10 weeks of the year to 41%.
The volatility in the post-mini-budget market and the rapid rise in interest rates have affected consumer sentiment and caused a significant decline in demand.Dermot Gleeson
“In September, we announced record earnings and earnings for the year ending June 30, 2022, and we expect further growth in the current fiscal year despite the broader economic outlook,” said Dermot Gleason, president. It is well positioned for profitable growth, he said.
Shareholders will notice that a lot has changed since then.
“Market volatility and a sharp rise in interest rates after the mini-budget affected buyer confidence, leading to a significant drop in demand.”
Gleeson said the average price for one of his homes was £186,500, up 9% last year.
He said the company’s homes are “attractive to first-time buyers,” despite the significant price increases.
“We are also seeing interest from customers who previously valued more expensive properties built by different contractors, but are now interested in Gleason’s more affordable price range,” Gleason said. increase.
The company believes it can deliver between 1,600 and 2,000 homes this fiscal year.
There are now 88 sites under construction and 68 sites for sale, an increase of 6 units compared to this time last year and 8 units more than a year ago.
“It’s too early to call for improvements, but yesterday’s fall announcement was encouraging,” Gleason said.
“We had expected a return in buyer confidence as broader macro volatility eased.
“There is also good reason to hope that the improved long-term interest rate outlook will increase the availability and affordability of mortgages.”
Author: August Graham, Pennsylvania Business Correspondent
Source: Belfast Telegraph