After almost 30 building companies collapsed last year, leaving thousands of homeowners in limbo, conditions are set to improve over the course of 2023.
After a wave of collapses, residential builders face another tough six months as the sector absorbs a huge workload of uncompleted projects amid ongoing labour shortages.
The crisis peaked in mid-2022 when 13 building companies collapsed between May and July. The fallout also hit the development sector, withConditions appeared to ease over the remainder of last year as just four building companies entered administration between August and December. According to the Australian Institute of Quantity Surveyors, construction costs rose 20 per cent in the 2022 financial year with the cost of some materials such as timber rising more than 40 per cent in a year.The AIQS Building Cost Index is forecasting a further 4.3 per cent increase in building costs to October this year.
She also highlighted the “ever-changing burden of regulation” as presenting real difficulties, given that the majority of building and construction companies are small businesses. “Last year was a disaster [for the home building industry]. The harsh reality was that 90 per cent of builders were trading at a loss every week.
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