News & Blogs

10.06.20

Market Update – Residential Construction – June 2020

 

 

 

 

 

 

 

 

 

An overview: Busy now but slowing…

The residential building market has been less affected than many other industries over the last 8 weeks, principally because of the Government’s decision to label construction as an essential service. The key disruptions have been affecting operations and back-of-house teams while a few, but not a lot, of builders have made redundancies to office-based roles. Site-based construction teams have remained busy to very busy throughout, with the real concern being the medium to long-term sales pipeline. On this front, a variety of builders have reported strong numbers passing through  their display centres since the lifting of restrictions, with the hope of these visits converting to sales in the short-term.

 

HomeBuilder Scheme: Good, but not great…

The much-anticipated Federal Government stimulus, aimed at generating 1000s of new building projects and jobs, has fallen short of the industry’s hopes. With significant limitations around project value, home value and means testing, the group most-likely to take advantage of this scheme are those already looking to build/renovate, particularly in outer-urban or regional areas. Discussions with various builders across new build, knock-down-rebuild, and renovation markets all expect minimal growth in new projects as a direct result of the scheme. Time will tell as the scheme is only due to run until Dec 31.

 

The Job Outlook: Caution is king…

With the exception of larger developer builders, site activity is forecast to slow significantly in the next three to five months, meaning most builders are being very cautious in relation to hiring. As a result, builders are seeking to stretch current teams, delay project starts to maintain current resources or offer new employees contract roles with a view to permanency if sales figures increase. Some demand exists for talent across Estimation, contract Drafting and Site Supervision roles. Salaries are typically stagnant or in some cases in slight decline.

 

Access to Talent: Job security a priority…

There are a significant number of residential building staff seeking work across design, office-based roles and  to a lesser-extent, site-based roles. Some of these people have been made redundant or stood down, while others have been caught out ‘in-between jobs’ during the COVID crisis. Candidates who are on the market are typically open-minded to salary negotiations favouring security over promotion, a key factor driving affordability of new hires. On the flip-side, quality candidates in secure roles are less likely to consider moving employers in order to maintain their job security. Whilst it’s a good time to seek new talent, in order to attract the top people in the market, employers need a solid value proposition that convinces new employees of their relative job security.