Andrew Dickens: Why now is the time to build

It’s no secret that the construction industry is in trouble.  There’s a number of factors. Firstly the boom in construction right after the pandemic years as money became cheaper and cheaper, so more and more projects were undertaken. We had a residential construction boom in 2022, with approximately 51,000 consents issued, driven by surging house prices and historically low interest rates.  But the good times weren’t to last.   A new government cut many projects, including the construction of 2500 state houses - cutting builders' lunches. Meanwhile the supply of cheap money dried up as the Reserve Bank attacked the recession by raising interest rates.  We ended out with too many builders for fewer projects.  As major infrastructure projects went on hiatus, waiting for a government wanting to spend on them, highly trained construction workers went looking for work - most often in Australia.  Construction went into a tailspin and there are claims we’ve lost 17,000 workers.  But in every cloud there is a silver lining.  Construction firms are now offering large discounts to avoid collapse - some offering discounts of up to 50% to keep their workers busy.  These are in the firms that are left. 687 firms have been liquidated this past year - it’s a threefold increase in just 3 years.  The firms that are left should be hailed as heroes.  Prepared to work through the bad times rather than cutting and running.  And if you’re thinking about a commercial or residential build, can I suggest that there is no better time than now. You’ll never get a better deal going forward.  And maybe. Just maybe we might be able to work our way out of a construction bust that was all our own making. See omnystudio.com/listener for privacy information.