Melbourne-based Metricon has kept its status as Australia's largest residential builder for the eighth consecutive year, although its number of new starts was down by more than a fifth in FY23 - a period that also saw the passing of founder Mario Biasin as well as significant capital injections from owners to quash rumours of financial hardship.
Two other Victorian builders, Creation Homes Group and Carlisle Homes rose up the ranks to crack into the Top 10 of the HIA-COLORBOND steel Housing 100 Report released this week, while WA-based ABN Group and Harry Triguboff's Meriton Apartments each rose to spots to 2nd and 4th place respectively.
HIA chief economist Tim Reardon said Metricon Homes reported a total of 4,693 new home starts across four states in FY23.
"While Metricon Homes remained on top of this year’s list, the number of homes built was down compared with the last couple of years," Reardon said.
"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 over the last year.
"ABN Group were the second largest home builder, which is a jump of two places compared to last year’s list. With 3,506 homes built across the Victorian and West Australian markets, ABN Group was the highest ranked of the 26 builders who reported an annual increase in building activity."
Newcastle-based NXT Building Group rounded out the top three with 2,865 starts shared across New South Wales, Queensland, South Australia, Tasmania and the ACT.
Reardon said Meriton Apartments was the top ranked apartment builder in the country with 2,267 new homes, followed by Hutchies (1,332) and Mirvac (1,258).
"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.
"Leading indicators suggest that the volume of home building activity may fall further before a meaningful recovery takes hold. Industry conditions will remain challenging in the year ahead."
Reardon believes there will be better opportunities on the horizon with the Australian Government having the objective of building 1.2 million homes over the next five years.
"This implies the industry will need to undertake a level of home building that has never been achieved in the past," he says.
"This ambitious goal was set with full knowledge that it won’t be achievable under existing policy settings. A well thought out reform agenda will be required.
“Governments around the country must work together to eliminate inefficiencies in planning systems, reform the inefficient taxes on housing, develop mechanisms to fund enabling infrastructure and increase the capacity of the construction workforce.
“Only by enabling businesses in the housing industry to get on with what they do best can this target be achieved,” concluded Mr Reardon.
Australia's 10 largest home builders
- Metricon Homes
- ABN Group
- NXT Building Group
- Meriton Apartments
- AHB Group
- Henley Properties
- Simonds Group
- Creation Homes Group
- Carlisle Homes
- GJ Gardner Homes (all dwellings built under franchise)
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