Australia’s biggest home builder Metricon has seen an almost 60% surge in customer deposits over the past financial year in a sign of rising home building confidence.
The company said customer deposits to build new homes increased to 5,279 in the 2023-24 financial year, up from 3,303 in the previous year.
The biggest increase was seen in the metropolitan Victoria area, up from 1,554 to 2,330, followed by the Queensland market where customer deposits jumped from 706 to 1,443.
The uptick in Metricon’s customer deposits comes as home builders and developers look for signs of a recovery in the home construction industry following years of rising cost pressures and lower consumer demand.
Metricon’s financial performance over the past financial year also reflected stabilising conditions in the industry.
The company said it recorded $42.2 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA) – which is a measure of a company’s profitability – in FY23-24, up from a $33.5 million loss recorded in the previous year.
It’s a significant turnaround for the major home builder, which was feared to be on the brink of collapse in 2022 and faced sustained questions surrounding its financial health amid high numbers of builders collapsing across the country.
“After weathering a tumultuous period, our recent results indicate a strong future is on the horizon for the housing construction industry," Metricon chief executive Brad Duggan said.
Home building approvals remain at some of the lowest levels seen in a decade. Picture: Getty
The company, which handed keys over to 5,319 customers in FY23-24, said its positive results were due to growing customer demand, improved building efficiency and other factors.
Building times were said to have improved dramatically, with many single-storey homes built in less than 100 business days.
Mr Duggan said increasing stability of labour costs paired with clever design and premium suppliers had also contributed to Metricon’s overall results.
It comes as new house sales data showed homebuyers have been feeling more confident about building a home.
New house sales increased 15.7% across the country during the three months to June, compared to the previous quarter, and were 20.4% higher compared to the same period last year, according to Housing Industry Association (HIA) figures.
HIA economist Maurice Tapang said market confidence was returning, as the impact of higher interest rates dissipated and the shortage of housing stock made new home building increasingly attractive.
Metricon chief executive Brad Duggan said the company's latest results indicated a strong future was on the horizon for the housing construction industry. Picture: Supplied
“With the sales recovery in these markets now sustained, an increase in the number of new detached houses commencing construction will be observed in the second half of this year, albeit from a low base,” Mr Tapang said.
That said, home building activity remains at decade-low levels. National home building approvals declined 8.5% year-on-year to 162,892 during FY23-24, according to the Australian Bureau of Statistics (ABS).
“This is the lowest number of dwellings approved on a financial year basis since 2011/12,” ABS head of construction statistics Daniel Rossi said.
Housing completions also remained low, with the latest ABS data showing new home completions in the first quarter of the year sitting well below the levels needed to meet the country’s housing targets.
In the March quarter of 2024, 41,329 homes were completed across Australia, a decrease from 45,643 in the December 2023 quarter.
To reach the federal government’s Housing Accord target of 1.2 million new, well-located homes by 2029, Australia will need to build 60,000 homes on average each quarter over the next five years.
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