Apartment Giants Leap Up Housing League Table

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Tuesday, September 30th, 2014
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Large multi-residential developers in Australia have taken full advantage of the recovery in apartment building activity in Sydney and elsewhere to surge up the ranks of home building outfits and increase market share, according to a league table which ranks builders in the residential construction industry according to the volume of new dwellings on which they commenced work.

Unveiling the HIA Colorbond Steel Housing 100 for 2013/14 in Melbourne, the Housing Industry Association said the number of builders on the list that ranked multi-unit construction involving more than four storeys as a major business activity increased from 15 to 19.

Meanwhile, Sydney based apartment builders Meriton Apartments more than tripled the number of dwellings it commenced to jump from fourth place on the list to first, fellow Sydney’s Brookfield Multiplex increased starts by more than sixfold to leap from 43rd to sixth and Melbourne based L. U. Simon Builders more than doubled its commencement volumes to climb from 32nd to 13th.

Around Australia, a surge in apartment building activity across eastern states over the past two years has seen approvals of new multi-residential dwellings surge by almost 50 per cent and the proportion of new dwelling starts which are not detached houses rise from just over 36 per cent to what is now believed to be around 43 per cent (final ABS numbers for 2013/14 are not yet in).

Primarily, this has benefited larger builders with the scale and capacity required to undertake this kind of work – a phenomenon demonstrated by a rise in the estimated share of the overall market believed to be held by the top 100 builders from 32 per cent in 2012/13 to 37 per cent over the last financial year.

Commenting on the results, HIA chief economist Harley Dale said a surge in the number of dwellings on which the top 100 broke ground from 51,102 in 2012/13 to 66,674 in 2013/14 was reflective of the broader housing market recovery and represented a “tick in the box for the housing industry and also the broader economy.”

While highlighting the strong performance of the multi-residential sector, Dale added that healthy gains recorded by detached housing outfits such as BGC and Alcock Brown Neaves Group in Western Australia along with solid results from Simonds, Henley Properties and Porter Davis showed life in this sector was evident despite the long-term shift toward a higher share of non-detached dwelling construction.

“We have tended to have a conversation publicly in Australia in recent years around the implication that the increased share in medium-high density means that the detached market is a weaker market than it used to be,” Dale said. “Granted, the share of detached housing is lower than it used to be and the volumes historically were below average until recently, but we are clearly seeing a recovery in detached housing in the Housing 100 and in the wider market.”

“That’s giving us above average volumes at the moment. I think it’s a reminder that that core focus of the industry which historically has been detached and to a lesser extent semi-detached housing certainly is not dead in the water.”

Housing 100 at a glance:

  • Meriton Apartments was Australia’s largest volume home builder by construction starts in 2013/14, followed by BGC and Alcock Brown-Neaves Group with Metricon Homes and Simonds Group rounding out the top five.
  • All told, the top 100 broke ground on 646,674 new dwellings, up from 51,102 in 2012/13
  • The top 100 accounted for 37 per cent of all new dwelling commencements in 2013/14, up from 32 per cent in 2012/13
  • 32 per cent of companies on the list increased their start numbers by more than 100 homes in 2013/14, up from 22 per cent in 2012/13
  • The biggest movers (in terms of total increase in commencements) were Meriton (4th to 1st) and Brookfield Multiplex (43rd to 6th)
  • Major activities of the top 100 firms include detached house construction (95 firms), multi-units of under four storeys (52 firms), land development (35 firms), commercial building (21 firms) renovations (20 firms), multi-units of four or more storeys (19 firms) and property management (12 firms).

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