Construction in Australia continues to be hammered by insolvencies leaving creditors owed millions and hundreds if not thousands of families reeling.
These collapses have arisen because builders signed thousands of fixed-price contracts to build homes and were then caught out by soaring input costs. As a result, margins have turned negative, with many firms now building at a loss.
Rising cost pressures will continue with a lack of materials, elevated fuel costs and broader inflationary pressures… likely to push building costs higher for some time yet.
As it happens in Australia, it is beginning to happen in the US. Some of the largest builders burned through building lots that are normally reserved for 2-4 years out in just the last 10 months because of the strong demand for housing.
That leaves them with much fewer communities to build in over the next year or two.
With fewer builders remaining in Australia, the remaining builders are busier than ever but they are losing money, again because of inflation, shortages of materials and labor and rising fuel costs.
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Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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