Hickinbotham sheds dozens more staff amid industry slowdown

The building sector is warning infrastructure delays are behind a crippling slowdown in new homes as it emerges SA’s top home builder has cut dozens more staff.

The state’s building industry is warning delays to water, electricity and other infrastructure connections to new housing projects are behind a crippling slowdown in housing construction, as it emerges the state’s biggest home builder has shed dozens more staff.

While acknowledging the state government’s Housing Roadmap was addressing some of the infrastructure bottlenecks, Urban Development Institute SA chief executive Liam Golding said more could be done to fast-track new infrastructure connections, including by recruiting private operators to bridge the infrastructure gap.

“The major challenge still revolves around infrastructure and turning zoned land into development ready land,” he said.

“We’re seeing some hold-ups even in the rezoning stages, but those are secondary to the struggles that we have getting services in, particularly sewer and water, but also other services including power.

“We do have some examples of third party sewer providers providing infrastructure that is supporting developments in the northern metropolitan area and around Mount Barker, but these approvals have taken too long to get off the ground and we think that there is capacity to fast-track these, and to provide even more opportunity for third party access to the market.”

Hickinbotham Group managing director Michael Hickinbotham.

The warnings come as the state’s biggest home builder, Hickinbotham Group, sheds more staff following an initial round of cuts earlier in the year.

It is understood the company has cut up to 30 jobs as part of the latest round of cuts, after a decision in January to lay off 15 sales staff, which it blamed on delays to new land releases.

Hickinbotham is a dominant player in the local housing market, starting work on 1539 new homes last financial year, more than three times the volumes of its closest rivals Metricon and Rivergum Homes. It is also a top 10 builder of detached homes nationally.

The company declined to comment on the latest round of cuts, but it is understood most of the affected staff were notified about their redundancies on Monday afternoon.

In January Hickinbotham said delays in land supply were causing “significant challenges for us and the broader housing industry”.

Housing Industry Association SA executive director Stephen Knight told The Advertiser builders were adjusting to a “trough” in the market, following a pandemic-era boom caused by the HomeBuilder stimulus.

“We’re building less houses than we were a decade ago, and that’s despite the strong demand for housing,” he said.

“That’s down to a combination of things. One is the cost of living pressures – it’s much harder to buy a house these days, particularly for first time buyers, because of escalating construction costs, high interest rates and the cost of living.

“The impact of that is the number of sales and the number of builds has fallen. We’re in a little bit of a trough at the moment and some businesses are readjusting.”

Mr Knight said new home approvals in South Australia had fallen from a peak of around 1200 per month in 2021 to less than 900.

“As much as the government is doing great work on the roadmap, infrastructure delivery and announcements on land ... it just takes a while to bring those on-stream for building.”

Hickinbotham, which employs more than 200 staff, is one of the most active builders in Adelaide’s fast-growing northern suburbs, and is also overseeing new housing projects in the southern suburbs and Mount Barker.

The state government unveiled its Housing Roadmap last June, including a commitment to pump an extra $1.2bn into water and wastewater infrastructure, with the aim of unlocking an extra 40,000 new homes over four years.

The latest round of cuts at Hickinbotham follows a decision by Rivergum in March to close its book to new individual customers, and instead focus on partnering with developers on larger-scale infill and medium-density housing projects. It resulted in five redundancies in the company’s sales team.

Originally published as Hickinbotham sheds dozens more staff amid industry slowdown