La Nina looms over housing sector as wet weather bites builders

Wet weather forecasts for spring and summer will likely cause more construction delays as the 2022 trifecta of Covid, rain and price escalation continues to take its toll.

Wet weather forecasts for spring and summer are likely to bring more delays in the construction business. Picture: AFP

Wet weather forecasts for spring and summer will likely cause more construction delays as the 2022 trifecta of Covid, rain and price escalation continues to take its toll.

The east coast of Australia looks set to experience another La Nina season over the coming six months, which will bring heavy rain and the possibility of more flooding to communities still in disrepair.

Roberts Co chief executive Alison Mirams said it would be a “depressing” outcome after what had already proved to have been a tough year in the construction sector.

As of last week, the commercial builder had lost about 75 workdays this year to wet weather, meaning the business only achieved 46 per cent productivity from January to July.

“I think every time it rains, builders everywhere have PTSD,” Ms Mirams said. It adds to the “2022 trifecta” of pressures on the industry, with Covid isolation periods meaning only three in four workers are usually present onsite and supply chains still being affected by China.

Rain effects also can extend past the forecasts, with tips closed and concrete needing to dry out.

“It’s not just rain and Covid; it’s the trifecta of rain, Covid and massive price escalation that is crippling the industry,” Ms Mirams said.

“We’re certainly saying to clients at the moment, if this weather pattern continues, we can’t take the risk. The industry is too tightly strung.”

The Bureau of Meteorology predicts a 70 per cent likelihood of a La Nina developing this year, which will be the third year in succession this has occurred. The triple wet-weather conditions have only happened three times since 1900 – from 1954 to ’57, 1973 to ’76, and 1998 to 2001.

Stockland chief executive Tarun Gupta. Picture: Jane Dempster

Stockland boss Tarun Gupta also lamented the impact of the weather while delivering the developer’s full-year results, revealing 40 per cent of work days had been washed away at its South East Queensland projects.

The situation is slated to have a flow-on effect into this financial year, with the outlook affected by wet weather and supply chain disruptions over the past 12 months.

Home builder AV Jennings also attributed some of its weaker results to the trifecta, with “persistent and abnormal wet weather particularly affecting our projects in Sydney, Brisbane and Auckland”.

Delays also have had flow-on effects on developers, Consolidated Properties head of residential James MacGinley said.

The weather has caused some delays within the Queensland developer’s Yeerongpilly Green development on Brisbane’s southside.

“Because the builders have the pressure of these high costs on them, which means they’re having to work a lot closer with developers to rework designs and to try and find savings in structure,” Mr MacGinley said.

“Anecdotally, I know that builders are certainly looking to try and include some more allowance for weather days into contracts based on what they've experienced over the last 12 months, and with the way the industry is at the moment I suspect it’s going to be hard to argue with that.”

Ms Mirams said she believed the impact of more wet needed to be taken seriously by industry and governments. She said financial aid and extreme weather declarations would help the industry.

“When we were in Covid, there was the lost productivity payment made to workers,” she said. “I’d love the government to bring something back to help people when there’s a rain event; you’ve got no productivity, but you’ve got all your wages still.”

Originally published as La Nina looms over housing sector as wet weather bites builders