The 100 largest home builders saw volumes fall this year amid material and labour shortages
Volumes for Australia’s 100 largest home builders tumbled 15% over the year to June amid materials and labour shortages, even as the industry tried to keep pace with unprecedented demand.
The 100 largest builders posted a total of 74,973 housing starts last year, down from 88,215 the year prior, according to a report by The Australian Financial Review. Their share of the overall market fell from 44% to 36%, the latest HIA-COLORBOND steel Housing 100 Report showed.
“The market in 2021/22 was dominated by the adverse impact of rising material prices caused by record levels of demand, supply chain constraints and labour shortages,” Tim Reardon, Housing Industry Association chief economist, told AFR. “Two-thirds of the builders in this year’s Housing 100 commenced fewer homes than in 2020/21.”
Material shortages are choking the industry’s ability to produce new homes to meet the demand spurred by recent record-low borrowing costs and government COVID stimulus programs, AFR reported.
Simonds Group, which fell from sixth to seventh place in this year’s Housing 100 ranking, said last month that it was cutting 9% of its staff, including from its construction workforce, in order to lower costs to match the volume of dwellings it could produce, AFR reported.
Metricon remained the nation’s largest home builder, even as its total housing starts fell to 5,969 from 6,052 a year prior. The builder also slashed 9% of its staff in a year during which it also suffered the sudden death of founder and CEO Mario Biasin and in which owners were forced to give the company a $30 million cash infusion to keep it trading.
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“Escalating construction costs, weaker consumer confidence, consecutive bank interest rate increases, rising inflation plus speculation around the industry’s stability, all conspired against us and our competitors alike,” Metricon CEO Peter Langfelder told AFR. “Despite this, we managed to deliver 5,969 new Metricon homes to Australian customers during the past year. This is a very tangible proof point of our continued business strength.”
Langfelder said that Metricon was aiming for 6,000 housing starts this year.
