The boss of Australia’s largest homebuilding company has called for more action to unlock delivery of new housing across the nation.

And he says that there are increasing signs that momentum in the nation’s home building market is picking up.

Speaking after last week’s decision from the Reserve Bank of Australia to reduce official interest rates by 0.25 basis points from 3.85 percent to 3.6 percent, Brad Duggan said that buyer confidence in the market for new home building is on the rise.

Duggan is CEO of Metricon, which is ranked by the Housing Industry Association (HIA) as Australia’s largest home building company.

According to Duggan, the latest decision is likely to provide further impetus to those who are thinking about constructing a new home.

Pointing to his own firm’s experience, Duggan says that more than 2,500 people are visiting Metricon display homes across the country each week.

This is an indication that buyers are actively monitoring the market, he said.

He adds that banks and mortgage brokers are reporting heightened enquiry levels and refinancing activity, with many customers exploring fixed-price home packages to secure certainty in a shifting market.

“This decision gives more Australians the confidence to take the next step, whether that’s building their first home or upgrading to better suit their lifestyle,” Duggan said, referring to last week’s interest rate cut.

“We know there’s a large group who have been watching the market closely, waiting for the right moment. This cut sends a strong signal that the time might be right to act.”

Momentum builds

Duggan’s comments come amid growing signs of momentum in the market for new home building.

Recent data on new home sales and building approvals has shown that the pace at which new work is coming in is near its highest level for three years.

Whilst much of the activity has been focused on detached housing, approvals in the multi-unit sector (units/apartments/townhouses) have risen over the past twelve months.

Reform needed

The comments also come as the Australian Government prepares to host the three-day National Economic Roundtable on Tuesday.

Property industry lobby groups have been encouraging the government to use the forum to enact measures that will address barriers to new home delivery.

This is happening as industry lobby groups say that blockages in several areas are adding to the time and cost of newly built homes.

A recent member survey conducted by HIA, for example, found that on average, obtaining a planning approval for a new home takes 5.4 months and costs more than $14,000.

Meanwhile, there are signs that shortages of vacant ‘shovel ready’ land have reemerged.

In the March quarter, data from HIA and CoreLogic shows that sales of vacant residential land sit at 25-year lows even as land prices have reached record highs.

Unless these challenges are addressed, industry bodies warn that the nation will fail to meet national housing targets of delivering 1.2 million new homes over the five years from 1 July 2024.

According to Duggan, the most significant challenges involve slow and complex planning approvals, a limited supply of serviced land and ongoing skilled trade shortages.

These create delays, add costs and make it harder for buyers to move from interest to construction, he said.

Asked about the land issue, Duggan said that serviced land that’s ready for immediate construction is increasingly hard to secure in many high-demand markets.

Beyond this, he says says that deeper problems lie in the pipeline, whereby rezoning, infrastructure delivery and approvals are all moving too slowly to meet demand.

Unless these bottlenecks are addressed, Duggan says that the market risks falling behind just as buyer confidence is returning.

He says that faster approvals, stronger infrastructure investment and more training programs to expand the building workforce are needed.

Act now

Asked about advice for prospective homebuilders, Duggan encourages people to act as soon as finance is in place.

Doing so will help to lock in more favourable prices, timelines and design options before demand ramps up further and builder order books fill up.

He adds that it is important to establish a clear plan from the outset.

This involves thinking about location in terms of schools, transport, and community amenities; establishing a budget within which buyers are comfortable over the long term and selecting builders who offer certainty in terms of price and delivery.

But he stresses the need for governments to act.

“To sustain this momentum, we need urgent action on planning and approval delays, land

supply, infrastructure investment, and building workforce capacity,” Duggan said.

“Momentum is clearly building, We’re ready to meet that demand and we know many Australians are ready too.

“But to keep things moving in the right direction, we also need long-term, coordinated solutions that address the barriers to supply and delivery.”

Enjoying Sourceable articles? Subscribe for Free and receive daily updates of all articles which are published on our site

Want to grow your sales, reach more new clients and expand your client base across Australia’s design and construction sector?

Advertise on Sourceable and have your business seen by the thousands of architects, engineers, builders/construction contractors, subcontractors/trade contractors, property developers and building industry suppliers who read our stories across the civil, commercial and residential construction sector