Metricon in profit for past 13 months but calls on structural changes to attract workers

Australia’s largest house builder Metricon is back in profit and looking to the future but wants structural changes to attract more workers and ensure the sector’s viability.

Apprentice Kaylee Kimber at a Metricon construction site in Brisbane’s suburbs. Picture: Richard Walker

Australia’s largest house builder is in “clear waters” and also in profit after a rocky period but Metricon chief executive Brad Duggan has called for structural changes in the construction sector to ensure its further viability.

He said Metricon was supportive of the federal government’s ambitious new national target to build 1.2 million new well‑located homes over the next five years.

However, Mr Duggan said there was a critical need to build up the workforce and immigration was only a short-term solution to the skills shortage.

“I think there’s a lot of structural change needed to be made to achieve goals and trying to get more breadth and capacity in the workforce is a critical component of that,” he said.

“These skills are not developed overnight. These people are professionals and it takes a long time for them to get to a level to deliver a quality home.

“I think we all have responsibility to redefine what success is for our children because university is not the only pathway to have a successful life and that’s the structural change we’re talking about.”

Mr Duggan was in Brisbane on Monday as part of a Metricon and Housing Industry Association initiative to empower 10 Queensland women through a pre-apprenticeship program designed to provide hands-on experience and enhance job readiness through the paid 12-week initiative.

It is anticipated that 80 per cent of enrolled participants will successfully complete the program, securing apprenticeships or pursuing further education in the building and construction sector.

Apprentices Jamisyn Nott, Charlise Ransom, Kaylee Kimber and Tali Roberetson at a Metricon construction site at Stretton in Brisbane’s southern suburbs.

Metricon currently has 1600 employees and can employ up to 30,000 contractors on any given day.

“Capacity and capability needs to be broadened and that includes diversity by bringing in women into the industry which is critical,” Mr Duggan said.

Mr Duggan became CEO of Australia’s largest detached home builder just over 18 months after the sudden death of founder and chief executive Mario Biasin in May 2022.

In August 2022, Metricon slashed its workforce by 9 per cent as home construction slowed following hikes in interest rates, which led to a wave of construction giants collapsing, including Porter Davis Group, Hallbury Homes and Privium.

In July 2023 the company said it had raised prices by up to 10 per cent for clients whose original contracts had expired before construction could begin. Metricon was also armed with a $30m as yet unused overdraft from the Commonwealth Bank, and an $80m injection of funds from its owners to get it through the rough patch,

According to data released by the Australian Securities & Investments Commission data last week, of the 7700 companies that entered external administration between July 1, 2023 and March 31 this year, the construction sector represented the greatest number of failures – 2142 or 27.7 per cent of all insolvencies.

Mr Duggan said he was “sick of talking about the past” and was looking towards the future.

“We’re definitely through the worst of it and we are in clear water now,” he said.

“We’ve done a lot of hard work on ourselves for the past few years and have been profitable for 13 months in a row.

“We’re a private company, so we keep that information to ourselves but we’re doing quite well, significant multiples on some of the numbers you hear what the other people are talking about in the market.

“So we’re very happy with how the market has turned around and really optimistic for 2025.”

Metricon CEO Brad Duggan. Picture: Richard Walker

The company’s build times peaked in early 2023 with the average build for a double-storey home taking about 50 weeks, and 35 weeks for a single-storey home. That has now been reduced to 25 weeks for a double story and 25 weeks for a single storey.

Metricon’s construction starts in 2022-23 were around 4693, compared to almost 6000 in previous year.

According to the Housing Industry Association, new home sales in the first three months of this year remain 41.3 per cent below the same quarter in 2021, 18.2 per cent below the same quarter in 2020, and 18.9 per cent below the same quarter in 2019.

Mr Duggan conceded that interest rates remained a crucial issue.

“There is a real lot of demand out there but what I worry about is making sure the Reserve Bank gives a clear signal about where they think interest rates are going,” he said,

“A really clear non-nuanced statement that interest rates cycle increases have reached the top which would have a big impact on demand. And then in time when they foresee that interest rates will go down they can signal that.

“We just need to maintain that nice smooth equilibrium in our industry – we don’t need peaks and troughs.”

Mr Duggan welcomed any state and federal government initiatives to boost the industry.

He gave credit to the Queensland government for doubling the First Home Owners Grant to $30,000 and a move to cut red tape tangling up development applications with a specialist housing team aiming to reduce approval times to just 75 days.

Mr Duggan said he also supported and understood the introduction of the National Construction Code.

“I have questioned for sometime whether now is the right time to do it but it’s happening at the end of the month so there is no use complaining about it,” he said

“It will result in an increase in costs but the customer will see in the long term that the development of these sustainable homes will be worth it.”