Australia’s biggest building groups bullish on outlook

TWO of Australia’s biggest building groups are bullish about the outlook for home construction market.

Both Metricon and NEX have reported profits and declared a need for a bigger pipeline of development plots.

Metricon CEO Brad Duggan says the country’s largest detached home builder is looking for partners to fund its expansion into land development.

He was speaking after the company – Australia’s biggest home builder, with just under 4,700 starts last year – revealed a return to profit for the year to June.

Mr Duggan said: “After weathering a tumultuous period, our recent results indicate a strong future is on the horizon for the housing construction industry.

“The Australian construction industry is robust, and it is time to look at it more positively.”

Metricon’s EBITDA jumped from $33.5 million to $42.2 million in its latest results – a 25 per cent increase.

To meet the growing needs of consumers, he says Metricon wants to focus on improving efficiency to bring projects to completion faster– with some single-storey homes built in under 100 days.

But he also said having the sites to develop was key.

“It’s all about access to land,” he added.

It is a concern shared by NSW rival NEX Building Group.

The Japanese-owned business has said it wants to secure the supply of new greenfields land to ensure it can continue expanding.

NEX director Koji Naganawa said the company wanted to expand into land development by itself, but would enter joint ventures if necessary.

“Land supply is very important for the growth of the housing business,” he said.

The Housing Industry Association (HIA), which represents builders such as NEX, says new home sales volumes rose 15.7 per cent in the June quarter.

But the home-building market has been shrinking with the HIA ranking charts showing that NEX’s total starts sank to 2865 in the year to June 2023 from 4143 a year earlier.

NEX now stands as the third-largest, after Metricon Homes – which had 4693 start – and ABN Group – which had 3506.

The news comes against the backdrop of a worsening housing crisis and the government’s stated intention to build 1.2 million homes over the next five years.