Tradies could soon be in short supply. Image – Canva.
  • Residential building companies are seeing demand at ‘never seen before’ levels
  • The main reasons are: more time, more money and government grants
  • Reports of looming shortages of materials and labour are appearing all over the country

Analysis of 252 residential building companies by the Association of Professional Builders (APB) has found preliminary sales for quarter three (2020/21) are at ‘never seen before’ levels.

For the latest quarter, builders are anticipating an increase of more than 355 per cent compared to the previous three quarters.

With 180,000 new builds for the 2020 year, 9% up on 2019, and accelerating demand courtesy of generous federal and state government grants, comes a looming labour and materials shortage.

“Contract signings are at record levels mirroring what is happening earlier in the sales funnel with preliminary agreement sign-ups. This has boosted both revenue and net profit, and in some cases, we are seeing a five-fold increase in net profit being forecast for quarter four,” said Construction Marketing Specialist and APB Co-founder Russ Stephens.

“We’ve analysed the data and it comes down to three things; more time, more money and government grants.

“In the first few weeks of lockdown, builders were reporting a significant increase in concept design and preliminary agreement sign-ups. Consumers were making decisions a lot faster, because once those busy households found themselves working from home, they were able to discuss ideas and aspirations that normally take a backseat while life gets in the way,” he said.

Things have only accelerated. Early reports from the industry were concerned that home starts would plummet below 130,000. Not so, as it panned out.

“While a number of people have sadly lost their jobs, the vast majority of people remain employed with less options to spend their money now that overseas travel is no longer an option,” Mr Stephens said.

“This additional disposable income is being invested in property rather than being left in the bank where it generates next to no interest,” he continued.

Mr Stephens said government grants such as the HomeBuilder stimulus scheme was ‘literally pouring fuel onto the fire’.

“Coupled with having more time and more money, the temptation to get started with a new build or a large-scale renovation is just too big for most consumers. A lot of building companies are now more concerned with securing enough subcontractors to deliver their projects rather than trying to secure more work,” Mr Stephens said.

Mr Stephens predicted the current high market demand would begin to cool at some point during 2021.

Before then though, waiting times are beginning to rise. Just as in the earlier mining boom (2002-2006), many skilled craftspeople are being sucked into the resources industry. Finding someone to help you build or join a project or become an apprentice is becoming harder.

Reports of looming shortages of materials and labour are appearing all around the country. Tasmania has recently seen 1,900 new homes approved for build over a six-month period, where the previous record for the same period was 462.

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