Australia's top homebuilders have endured significant declines in revenues and new home starts across the nation's housing market — as recessionary conditions in construction deepen, with the industry experiencing the sharpest decline in activity in six years.
According to the annual HIA-Colorbond Steel Housing 100 Report published on Wednesday, the top developers captured a greater share of a market hit by credit curbs and weaker confidence.
The combined market share of the country's 20 largest home builders rose to 35 per cent from 33 per cent a year earlier and the largest share since 2014.
For the fourth consecutive year, Metricon has topped the annual HIA-Colorbond Steel Housing 100 Report published on Wednesday.
Metricon, led by Peter Langfelder, recorded 4,473 new home starts through the 2018-19 financial year across NSW, Victoria, South Australia and Queensland.
Meriton Apartments, owned by Australia's second richest person, Harry Triguboff, powered up the list to second place, from ninth the year prior, with 3,288 new starts.
Meriton's jump, driven by a 55 per cent annual increase in housing starts to 3288 in the year ended June 30.
Western Australia-based ABN Group moved up one place to third with 2,987 new starts, down on last year’s numbers. Dyldam Developments, Simonds Group and MJH Group also made the list.
|Rank 2017-18||Rank 2018-19||Starts||Starts|
|8||8||GJ Gardner Homes||1,949|
The sustained performance of the top echelon of unit builders masks a wider slowdown in starts of multi-unit housing.
The HIA estimates that starts contracted a “greater-than-expected” 23 per cent last year to 84,052, and will fall a further 12 per cent in the current year.
Overall the market contracted by 15 per cent with a decrease in revenue earned from home construction by 16.1 per cent to $21.29 billion over the last year. Similarly, the number of new homes constructed by the Housing 100 builders was smaller, falling 6 per cent.
New housing starts of the top 20 home builders in NSW fell 4.2 per cent to 15,688 from 16,384. In Victoria, the total slightly changed at 21,837 in the year to June compared with 21,847 in 2018.
While demand in multi-unit homes favoured by investors has continued to drop off, there are still plenty of demand for first homebuyers and those looking for smaller and more affordable homes like townhouses and attached homes on smaller lots.
“This year’s results also highlight that the hotspots for building activity have shifted,” HIA said.
“Home building businesses in Sydney have experienced a sharper contraction in the number of new home starts than other jurisdictions.
“On the other hand, the home building market in Melbourne remains exceptionally strong despite a modest cooling over the year.”
The slowdown in construction activity eased in August even as demand for new apartments dropped for a seventeenth successive month while house building remained in negative territory for a thirteenth month in a row.
According to the latest performance of construction index, activity rose 5.5 points in July to a seasonally adjusted 44.6.
Readings below 50 indicate a contraction in activity, with the distance from 50 indicating the strength of the decline.
On a trend basis, the house building sub-index was at 39.8, which improved 1.9 points on July for its slowest rate of decline in seven months, while apartment activity fell by 0.4 to 35.8.
The slowdown is also hitting job prospects across the sector with a lack of confidence causing a reluctance by businesses to increase their workforce capacity amid ongoing soft demand at an aggregate level.
The pressure the sector has been evident with the high-profile collapse of Sydney-based apartment builder Ralan Group last month, falling into voluntary administration and leaving billions of dollars worth of apartment projects in doubt.