Rivergum Homes is expanding in Victoria and Queensland
THE state’s second biggest home builder is looking interstate to supercharge its growth, targeting Queensland and Victoria as part of an ambitious national expansion plan.
THE state’s second biggest home builder is looking interstate to supercharge its growth, targeting Queensland and Victoria as part of an ambitious national expansion plan.
Rivergum Homes hopes new and expanding markets will help it nearly double its current volume and become a 1000-homes-a-year builder within three years.
The company has recently partnered with Lendlease to launch a $28 million, 72-home project 25km north of Melbourne, after earlier this year kicking off work on its first project in the state within the Jubilee development 35km south-west of the capital.
In Queensland, the company has released a new range of homes for first home buyers, as it shifts its focus from the investment to retail markets.
Rivergum chief executive Marc Taintey said the push into Queensland and Victoria represented the next stage of growth for the 25 year old company, and would help to deliver affordable housing in high growth areas.
“To establish a sustainable presence in an interstate market we’d need to go beyond 200 homes a year,” he said.
“In the next three years that’s the sort of volumes that we should be producing. That would bring us to 50 per cent in our own backyard and then two equal size businesses in those growing markets.”
Rivergum started work on more than 580 homes last financial year, with 507 of those in South Australia, down from 623 in the previous year.
Mr Taintey, who was promoted to chief executive in 2016, put the fall down to “lumpy” project work but acknowledged that the local housing market was becoming increasingly competitive.
“The market here is challenging, housing is competitive,” he said.
“While conditions in the local housing market are steady, our ability to identify new growth areas has meant we have been able to capitalise on opportunities interstate.
“This growth has enabled us to further raise our profile nationally as an important, highly-reputable industry player.
“It’s a cliché to say Adelaide bubbles along, but to be honest it does - the markets interstate are five to six times the size of South Australia.”
However, Mr Taintey said Rivergum was committed to retaining a strong presence in South Australia, with several projects in the pipeline.
“Lot sizes are getting smaller, that’s the reality, and it’s the innovative product and built form that will ensure the next wave of builders will survive,” he said.
“We’ve acquired some sites down at St Clair and we’ll be bringing those to market in the coming months - they’ll be in that townhouse, medium density style.”
Mr Taintey also sees an opportunity to grow Rivergum’s Truevest financing arm, as changes in the banking landscape make it harder and more time consuming for home buyers to secure finance.
“With fintech, platforms and the disruption that is taking place in the industry, and the rise of the non-bank lender, that is a real opportunity for us,” he said.