Andrew Dickens: Why now is the time to build

It’s no secret that the construction industry is in trouble. 

There’s a number of factors. Firstly the boom in construction right after the pandemic years as money became cheaper and cheaper, so more and more projects were undertaken.

We had a residential construction boom in 2022, with approximately 51,000 consents issued, driven by surging house prices and historically low interest rates. 

But the good times weren’t to last.  

A new government cut many projects, including the construction of 2500 state houses - cutting builders' lunches.

Meanwhile the supply of cheap money dried up as the Reserve Bank attacked the recession by raising interest rates. 

We ended out with too many builders for fewer projects.  As major infrastructure projects went on hiatus, waiting for a government wanting to spend on them, highly trained construction workers went looking for work - most often in Australia. 

Construction went into a tailspin and there are claims we’ve lost 17,000 workers. 

But in every cloud there is a silver lining. 

Construction firms are now offering large discounts to avoid collapse - some offering discounts of up to 50% to keep their workers busy. 

These are in the firms that are left. 687 firms have been liquidated this past year - it’s a threefold increase in just 3 years. 

The firms that are left should be hailed as heroes.  Prepared to work through the bad times rather than cutting and running. 

And if you’re thinking about a commercial or residential build, can I suggest that there is no better time than now. You’ll never get a better deal going forward. 

And maybe. Just maybe we might be able to work our way out of a construction bust that was all our own making. 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
It is no secret that the construction industry is in
trouble and there's a number of factors. Firstly, the booming
construction right after the pandemic years, as money became cheaper
and cheaper, so more and more projects were undertaken, more
and more builders were hired. We had a residential construction
boom in twenty twenty two, about fifty one thousand consents issued,
driven by surging house prices and historically low interest rates.

(00:22):
But the good times went to last. A new government
came in cut many projects, like the construction of two
and a half thousand state houses, cutting builders launches. Meanwhile,
the supply of cheap money dried up as the Reserve
Bank attacked the recession by raising interest rates. We ended
out with too many builders for fewer projects. As major

(00:42):
infrastructure projects went on hiatus waiting for the government wanting
to spend on them, trained, highly trained construction workers went
looking for work. Most often in Australia, they left. Construction
went into a tailspin. There are claims that we've lost
seventeen thousand workers, but in every cloud you could almost
say there's a silver laning. A new report says that
construction firms are now offering large discounts to avoid collapse.

(01:05):
Some are offering discounts of up to fifty percent to
keep their workers busy. These are in the firms that
are left. Six hundred and eighty seven firms have been
liquidated this past year. It's a threefold increase in just
three years. It hasn't been pleasant. The firms that are
left and are still doing the business should be hailed
as heroes prepared to work through the bad times rather

(01:26):
than cutting and running. And can I just say to you,
if you're thinking about a commercial residential bill, can I
suggest there is no better time that now. You'll never
get a better deal going forward. And maybe, just maybe
we might be able to work our way out of
a construction bust, which was all our making in the
first place. For more from Early Edition with Ryan Bridge,

(01:48):
listen live to News Talk Set B from five am weekdays,
or follow the podcast on iHeartRadio.