Challenging and interesting times are ahead for Queensland’s residential builders in the face of strong demand, continued trade and materials shortages and the impact of the current Covid-19 wave.
Master Builders 2022 Outlook is predicting 38,000 new homes will be built during 2022, an almost 20 per cent increase on the 32,000 commenced in 2019 (pre-pandemic). The prediction is supported by a booming property market and strong lending data for the three months to December 2021, which is sitting above pre-pandemic levels.
While owner occupier loans for new construction are falling, borrowing by owner-occupiers for renovations is surging ahead, along with borrowing by investors for new homes and residential land.
Master Builders deputy chief executive officer Paul Bidwell said dwelling approvals also dropped but are almost one-third above where they were in December last year, at almost 44,000 dwelling approvals for Queensland for the year.
“While these figures bode well for 2022, this year’s prediction is still 10 per cent less than the 43,000 dwellings commenced in 2021. It’s really important to recognise that these numbers occurred during the peak time following the introduction of the HomeBuilder grant and other initiatives – which provided incredible stimulus to a struggling industry,” Mr Bidwell said.
“Despite the positive outlook, we must acknowledge that builders face enormous and unprecedented challenges in delivering these new homes to our communities. The ongoing price hikes and trade and material delays are a serious thorn in the industry’s side, and we expect the issue to run right through 2022,” he added.
“The increase to construction costs is the worst we’ve seen in many years. ABS figures suggest prices have risen in Brisbane only by 12.9 per cent in the last 12 months, while anecdotal reports from the industry suggest these figures are conservative, with increases more to the tune of 20-25 per cent.
“There’s also the problem facing all Queensland businesses from the current wave of Covid-19, with quarantine requirements for close contacts hitting building businesses hard – which is certain to further exacerbate cost increases and delays.”
Along with the HIA, Master Electricians, Property Council and the AMCA, Master Builders recently called on the Queensland Government to provide critical industry status in certain situations by expanding isolation exemptions for critical construction workers who are close contacts.
“If granted, this will go some way to helping building businesses navigate these tricky waters.
“All in all, we are gravely concerned about what will happen in the first half of 2022. Unfortunately, as 2021 came to a close, the impact of price hikes and delays were highlighted, as several building businesses failed financially as a result.
“The reality is, our industry hangs in the balance and any further delays will create more disruption and impact an industry already struggling. There are few solutions in sight, but we are embracing any opportunity to provide the industry with relief and support that comes our way.”
