Metricon still Australia’s largest residential builder but new home starts have plunged

Metricon remains Australia’s largest home builder but 75 per cent of the top residential builders reported 17,000 less starts than in 2021-22. | SEE THE LIST

There has been a plunge in the number of homes being built in Australia.

Interest rate rises and a construction sector still emerging from one of its toughest ever periods has sparked a plunge in the number of homes being built in Australia, according to the latest HIA research.

In the midst of a nationwide housing crisis, the HIA-Colorbond Steel Housing 100 Report found there were 17,043 fewer residential starts in the 2022-23 financial year.

The report, which ranks the top 100 residential builders in the country, recorded 57,830 residential property starts in 2022-23, down almost 23 per cent from 74,973 in the previous 12 months.

HIA chief economist Tim Reardon said the industry has been under pressure over the past year.

“A drop-off in activity was reported by three quarters of the businesses on the list, with the lower numbers reflecting the challenging conditions facing the industry,” he said.

For the eighth consecutive year, Metricon Homes was revealed as the nation’s largest residential builder with a total of 4693 new home starts, down on the 5969 starts in 2022.

Metricon chief executive Brad Duggan said the company’s strategic focus was very much about being the best, rather than the biggest.

“More than 90 families every week chose to commence building with Metricon in the past year, trusting us with the most important purchase of their lives,” he said.

He said there has been a decrease of 1276 Metricon site starts compared to 2021-22 figures, which aligns with pre-pandemic levels and closely mirrors Metricon’s forecast and planning for the next three years.

“We believe that volume home builders like Metricon play a critical role in keeping house pricing in Australia at affordable levels and in helping solve the current housing shortage across the country,” he said.

“Homes are not going to get any cheaper, so we are constantly working on smart designs and specifications to address affordability.”

ABN Group, which owns brands including Dale Alcock Homes and Boutique Homes, was the second largest home builder, jumping two places from last year’s list with 3506 homes across the Victorian and West Australian markets. ABN was the highest ranked of the 26 builders who reported an annual increase in building activity.

NXT Building Group dropped back a place to be third with 2865 starts shared across NSW, Queensland, South Australia, Tasmania and the ACT.

NXT managing director Andrew Helmers – which retained its top position in NSW and Tasmania – expects the number of building starts to continue to slow across 2024.

“Our brands are maintaining or growing their market share while the total number starts is in decline,” he said.

“The industry is still facing labour challenges across a number of trades including scaffolding, plasterboard and tiling. While some suppliers are still struggling to deliver materials.

“Builders in NSW will face further challenges of complying with the new National Construction Code which comes into effect on October 1.

Meriton was the top apartment builder in Australia.

“Industry requests to delay the rollout date have been ignored and as a result we will see significant negative impacts on an industry already under immense pressure.”

Meriton Apartments rose two places to fourth with 2267 new starts and was also the top-ranked apartment builder in the country.

Hutchinson Builders was the second largest apartment builder with 1332 homes built compared to 3829 last year and fell 10 places to 13th, and was narrowly ahead of the Mirvac Group with 1258 starts.

Mr Reardon said in 2021 and 2022 the industry grappled with a rapid escalation in the cost of construction, with materials in short supply and acute shortages of skilled workers. “Throughout 2022-23 the industry faced the added challenge of rapidly rising interest rates,” he said.

“While there has been a heavy focus on the impact of higher borrowing rates on households with mortgages and the effect on demand for new homes, the higher borrowing costs also put further pressure on business margins during the year.”

Creation Homes was a big mover jumping six places to eighth with 1787 build starts compared to 1175 last year while Carlisle Homes was up four places to ninth with 1768 homes compared to 1607 in 2021-22.