Amid a significant upturn in housing starts, Western Australia has emerged as the most common home for Australia’s leading companies in residential construction, the latest report shows.

Unveiled in Melbourne on Wednesday, the HIA-COLORBOND® steel Housing 100 Report for 2012/13 shows that Western Australia was home to the nation’s largest and second largest home builders by volume of dwelling commencements during the past financial year and that seven of the top 20 residential builders are domiciled in that state.

Leading the way was Perth-based BCG Australia, which broke ground on a whopping 3,444 dwellings throughout the year including 348 multi-units and no fewer than 3,095 detached houses.

Fellow Perth-based company Alcock/Brown-Neaves Group took second place with 3,199 homes, followed by Victoria’s Metricon (2,837), Sydney’s Meriton Apartments (2,573) and Melbourne’s Symonds Group (2,432).

Housing Industry Association chief economist Harley Dale says the fact WA held both the number one and number two spots for the first time in three years is a telling reflection of not only the strength of improvement in the market for new housing in that state (where the HIA expects final ABS numbers next month to show a 32 per cent jump in starts) but also the relative concentration of large volume builders in the west. Whereas the top 20 builders might account for between 25 and 35 per cent of output on the eastern seaboard, Dale says, in WA that figure is closer to 60 per cent.

More broadly, in a further reflection of the recent improvement in the home building market, the combined number of starts of all firms which made the Housing 100 list across Australia rose 7.7 per cent to come in at 51,102 – giving Housing 100 builders a 33 per cent share of the overall market and representing the first increase for three years.

top 10 home builders

Asked about key factors which set leading home builders on the list apart, Dale says a number of them have broad base coverage of the new home market, a position which provides for diversification and flexibility to take advantage of the strongest performing segments within the geographical markets in which they operate.

BGC, for instance, has 13 separate brands catering to the first home buyer market and even modular homes through to luxury homes and commercial building – along with its own building materials division.

Alcock/Brown-Neaves Group, meanwhile, has 12 brands ranging from home improvement and renovations through to commercial property development and building.

“These companies have broad based coverage of the new home building market so they have distinct home building brands that fall under the overall home building group umbrella,”  Dale said.

“In the case of Western Australia, the recovery is being driven by new home buyers, so the fact that the number one and number two builders have specific companies aimed at that part of the market means they are able to get maximum leverage off that first-home-buyer led recovery.”

In terms of opportunities and challenges going forward, Dales says there is a considerable volume of potential demand for new home building.

He warned, however, that concerns remain about whether or not supply side factors such as a shortage of ‘shovel ready’ land in Western Australia and to a lesser extent New South Wales, high levels of taxation on new homes and delays and costs associated with planning regulations will restrict the ability of the sector to meet that demand.

“One of the concerns for the Housing 100 builders and the industry as a whole at the moment is whether we see further recovery [in housing starts] next year or whether we get stuck at a higher level of building,” he said. “We don’t want to get stuck at a higher level, we want to be growing the market further. And there is some concern these supply side constraints might prevent that from happening.”

housing starts australia

Key points:

  • The HIA-COLORBOND® steel Housing 100 Report found that Western Australia-based BGC (Australia) was the nation’s largest builder by volume of housing starts in 2012/13.
  • In total, there were 11 new entrants on the list.
  • All told, the nation’s top 100 builders broke ground on 51,102 homes last financial year – up 7.7 per cent from the previous year – and accounted for 33 per cent of the overall new housing market.
  • Consistent with recent observations of a recovery in low-density housing, the number of detached houses built by builders on the list (40,214) rose 12 per cent while that for units and townhouses (11,551) dropped 5.7 per cent.
  • Meriton Homes (2,837 starts) ranked as the biggest apartment builder and also the biggest mover up the list, lifting its number of starts by 120 per cent to jump from number 10 to number four.
  • In terms of states, Western Australia had seven of the top 20 builders followed by Victoria (6) New South Wales (4), Queensland (2) and South Australia (1).