E30 Building Construction

Build times go through the roof

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Original article by Jessica Wang
The Australian – Page: 7 : 2-Jul-25

Analysis by the Institute of Public Affairs shows that it took an average of 12.7 months to build a new home in 2024, from initial approval to completion. This compares with an average of 8.5 months in 2014. The IPA’s analysis of building activity data from the Australian Bureau of Statistics also shows that the cost of building materials has increased by 53 per cent over this period. The IPA’s research director Morgan Begg says all levels of government must take action to address the housing crisis; amongst other things, he has called for a reduction in the migrant intake, less red tape and the release of more land for housing development.

CORPORATES
INSTITUTE OF PUBLIC AFFAIRS LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Home building falls as election stokes demand

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Original article by Michael Bleby
The Australian Financial Review – Page: 37 : 17-Apr-25

Data from the Australian Bureau of Statistics shows that new housing starts nationwide totalled 168,049 in calendar 2024, which is 1.8 per cent higher than previously. However, new home starts fell by 4.4 per cent to 41,911 in the final three months of the year, which was the largest quarterly decline since September 2023. Both major political parties recently announced election policies that are expected to boost demand for housing, but Paul Bloxham from HSBC says the focus should be on measures to boost housing supply.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, HSBC AUSTRALIA HOLDINGS PTY LTD

Fair Work Act changes are a world of pain that hurts housing

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Original article by Prue Goward
The Australian Financial Review – Page: 31 : 18-Feb-25

Changes to the Fair Work Act as a result of the federal government’s changes to industrial relations laws are having a negative impact on many business sectors, of which the housing industry is just one. The main change to the Act that affects the housing sector is in section 15, which redefines subcontractors earning less than $175,000 a year as employees. Once a subcontractor is defined as an employee by one company, it must be defined as an employee for all the companies it does work for, which could be half a dozen. These changes will result in more expensive housing, and possibly no construction industry at all, given the growth of innovations such as refabricated housing that could be brought in from other countries.

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Construction insolvencies on track to set record yearly high

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Original article by Chris Herde
The Australian – Page: 17 : 23-Jul-24

About 400 licensed building companies were declared insolvent in each of the 2018 and 2019 calendar years. Data from Alares shows that there were a similar number of insolvencies during the first half of 2024, and the firm’s suggestions suggest that the full-year total will be around 700. Alares director Patrick Schweizer emphasises that its data excludes unlicensed building companies, which comprise the bulk of the construction sector.

CORPORATES
ALARES SYSTEMS PTY LTD

Almost 3000 builders collapse in a year

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 29 : 3-Jul-24

Data from the Australian Securities & Investments Commission shows that a total of 10,497 companies were declared insolvent in the 2023-24 financial year up to l6 June. This includes 2,832 insolvencies in the construction industry, which is 28 per cent higher than the previous financial year. The data also shows that rate of corporate collapses in the building industry is accelerating, with 120 insolvency appointments during the first two weeks of June; this compares with 314 in May and 255 in April. Master Builders Australia CEO Denita Wawn says factors such as labour shortages, material cost inflation, inefficient regulation and "draconian" industrial relations reforms have made construction projects unsustainable.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MASTER BUILDERS AUSTRALIA INCORPORATED

Approved housing for 100,000 stalls on rising costs

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 27 & 28 : 29-May-24

KPMG’s analysis of data from the Australian Bureau of Statistics shows that at the end of 2023, construction had yet to begin on more than 37,000 dwelling had been approved. This represents a nine per cent increase on the five-year average. These dwellings would provide housing for nearly 100,000 people, based on the nation’s average household size of 2.5 people. Townhouses and apartments comprise nearly two-thirds of dwellings that are awaiting construction. KPMG’s urban economist Terry Rawnsley says factors such as rising construction costs and labour shortages have contributed to the stalled housing commencements.

CORPORATES
KPMG AUSTRALIA PTY LTD, AUSTRALIAN BUREAU OF STATISTICS

New home supply to hit decade low

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Original article by Larry Schlesinger, Michael Read
The Australian Financial Review – Page: 1 & 32 : 19-Mar-24

The Urban Development Institute of Australia has forecast that just 79,000 new home builds will be completed nationwide in 2026. This is 26 per cent lower than in 2023, and the slump in new housing supply is set to further reduce the affordability of homes and rental properties. The dire forecast also casts further doubt on the federal government’s target of building an additional 1.2 million homes over five years. Barrenjoey’s chief economist Jo Masters says this target is ‘aspirational’, and will require high rates of apartment construction; she adds that apartments have a longer construction and lead time than houses.

CORPORATES
URBAN DEVELOPMENT INSTITUTE OF AUSTRALIA, BARRENJOEY CAPITAL PARTNERS PTY LTD

New wage deals to drive up costs, RLB says

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Original article by Michael Bleby
The Australian Financial Review – Page: 30 : 7-Feb-24

Consulting firm RLB expects a rising wages bill to be a major contributor to construction industry costs in 2024. The CFMEU is still negotiating new enterprise agreements for construction workers in NSW and Victoria, but Domenic Schiafone of RLB notes that building firms are already factoring in wage rises of at least five per cent into their prices. RLB says other risk factors for the construction industry in 2024 include the impact of supply-chain disruptions on access to imported building materials and rising project financing costs.

CORPORATES
RIDER LEVETT BUCKNALL PTY LTD

Fall in detached housing approvals puts Labor’s 1.2 million target at risk: economists

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Original article by Olivia Ireland
The Age – Page: Online : 10-Jan-24

Data from the Australian Bureau of Statistics shows that dwelling approvals rose by 1.6 per cent to 14,529 in November. However, building approvals for detached houses fell 1.7 per cent month-on-month, to 8,506. The Housing Industry Association’s chief economist Tim Reardon expects approvals for detached homes to keep falling during the first half of 2024; he adds that this will make it hard to achieve the federal government’s revised target of building 1.2 million new homes over five years. This equates to 240,000 per year, but Master Builders Australia expects about 170,000 new home to be built in 2023-24.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, HOUSING INDUSTRY ASSOCIATION LIMITED, MASTER BUILDERS AUSTRALIA INCORPORATED

Housing industry at loggerheads over stone ban

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Original article by Angus Thompson
Brisbane Times – Page: Online : 12-Dec-23

Lendlease has advised that it will cease using engineered stone in its new development projects in Australia; the construction group is also reviewing its use of the product in other countries. Mirvac has also backed ban on engineered stone, which has been linked to a lung disease called silicosis. However, the Housing Industry Association recently advised its members that they can continue to use engineered stone, although it has recommended that they consider alternative products. Meanwhile, lawyers have warned that employers are likely to be in breach of health and safety laws by continuing to expose their workers to engineered stone.

CORPORATES
LENDLEASE GROUP – ASX LLC, MIRVAC GROUP – ASX MGR, HOUSING INDUSTRY ASSOCIATION LIMITED