Developers are drawing on a pool of smaller builders and subcontractors as an interim solution to Queensland’s construction woes.
On the back of the great pandemic migration to the Sunshine State, building approvals have remained well above 2019 levels outside a slight dip when interest rates first started to rise.
But construction starts are well down and projects are being shelved as the state continues to grapple with a paucity of builders.
At The Urban Developer Brisbane Long Lunch, prominent south-east Queensland developers—Pikos Group, Silverstone Developments, Graya, and Griffith Group—shared the strategies they were using to overcome the bottleneck caused by a lack of tradespeople.
Silverstone Developments managing director Troy Daffy said they were focusing on smaller projects and drawing on a pool of subcontractors to complete them.
“I guess we see the opportunity in building smaller-scale buildings,” Daffy told the event.
“Once you get to five to six storeys in the city you’ve probably got a tier one or two builder and the step up in price is quite substantial.
“So we think if we can build smaller buildings more efficiently we can use the third tier subcontractors who are the guys who don’t have a heap of work on.
“It’s not third tier in terms of quality but in terms of complexity and in operation.
“The bigger guys are getting sucked into all the infrastructure work so they’re gone.
“As soon as you put up a 10 or 20 storey building there’s no resources behind it.”
Griffith Group managing director Byron Griffith said they had two or three builders fall over recently so had to look at alternative solutions. Griffith said they had used smaller builders and were managing to get more competitive pricing.
“Luckily we’ve got our open builders license so we could finish the jobs ourselves,” Griffith said.
“The smaller jobs, the childcare jobs, that are $4 million or $5 million builds are stabilising if not coming back.
“With the third and fourth tier builders, we just have to be really hands-on with our project managers.
“It’s intense for our staff but we are getting really good prices.”
Griffith said Queensland lacked the depth in the construction market that they had seen in Melbourne.
Graya director Rob Gray said they were doing the majority of the projects themselves.
“We started off as a building company so that’s the backbone of our company, obviously development then sales and marketing,” Gray said.
Pikos Group chief executive Michelle Wooldridge said they had to react quickly as the housing market changed drastically every 12 months.
“The presale environment was changing extremely quickly with financiers as well as build-ability,” Wooldridge said.
“The hierarchy is that we need to attract a builder so we need to make this more efficient.
“Second was looking at the product mix.
“We did a development application in six to eight weeks, which was a phenomenal effort, but that’s how quickly you have to react because the market is moving.”
While construction prices skyrocketed across Queensland, the number of licenced trades jumped to 9017 new licenses.
There were 113,724 in the state by the start of 2023, according to the Queensland Building and Construction Commission, it was just a matter of attracting them.
Regardless, demand continues to outpace supply of trades and homes leading to trying times ahead for both buyers and sellers alike.
