Builders in danger of running out of puff as industry endures marathon woes

8 July 2021

FIRST home buyers have cooled their heels since government stimulus wrapped up – but investor confidence in new homes remains strong, despite there being no end in sight to trade and materials shortages and cost hikes running the industry ragged.

The May loans data from the Australian Bureau of Statistics (ABS) show new home loans for investors have grown 9 per cent over the past three months – a 36 per cent jump on the figures from May 2020.

On the other hand, lending to owner-occupiers slowed significantly, diving sharply by 19 per cent since the HomeBuilder and Regional Home Building boost grants came to an end back in March.

The ABS Building Approvals data for May tells the same story, with a 10 per cent increase in the number of new dwellings given the nod in the last quarter, cracking the 40,000 mark (40,034) for the first time since 2018.

Against the backdrop of the ongoing shortages in building materials and trades and increasing costs, which show no signs of backing off, Master Builders Deputy CEO Paul Bidwell said the stats put paid to any suggestion the appetite for new construction is easing.

“The pressure on builders and their clients continues to mount – and while the new Accelerated Builder/Consumer Dispute framework (ABCD) will help, it won’t solve the crisis,” Mr Bidwell said.

“Opening the lines of communication and equipping builders and consumers with the right information to discuss reasonable and realistic solutions to time delays (and hopefully price increases) will do much to achieve better outcomes for both parties,” Mr Bidwell said.

“We’ve floated the idea of a rapid dispute resolution process with Minister Mick de Brenni, providing residential builders with access to independent adjudication (instead of mediation), which already exists in the commercial sector.

“It would need to be fair to both parties, readily accessed, reach decisions quickly and have the statutory power to enforce decisions. Ideally, it would be used to solve payment disputes over defective work, as well as delays and proposed time extensions on contracts.

“Amid the chaos, there’s an opportunity to explore a permanent, comprehensive dispute resolution process to deal with these issues for the long term.”

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