This article is from the Australian Property Journal archive
AUSTRALIA’S largest homebuilder, Metricon, says it wants to play a “pivotal” role in rebuilding trust in the rebounding construction sector, as it unveiled a stellar set of numbers for FY24 on the back of a surge in demand for homes.
Metricon posted a turnaround of nearly $80 million over the year, with EBITDA coming in at $42.2 million, compared to the prior year’s loss of $33.5 million.
It comes just two years after the company appeared on the brink of collapse, requiring a $30 million boost from its owners. A year ago it terminated fixed-price contracts that had made operations difficult.
The significant FY24 increase in demand from customers looking to build their dream home saw deposits jump from 3,303 in FY23 to 5,279 in FY24. Metropolitan Victoria saw the biggest increase, from 1,554 to 2,330, closely followed by Queensland, from 706 to 1,443.
“With that demand that’s there, people just want to have that comfort that now’s the right time to make the step,” Metricon CEO Brad Duggan told Australian Property Journal.
“We definitely feel like we have a role to play. We’re Australia’s largest builder and we want to take that leading role in rebuilding that trust.
“I think there’s been too much negative talk about our industry. It really is a robust sector. It’s a large employer and a large contributor to the economy.”
The construction industry has been battered since the pandemic, seeing chronic labour shortages and skyrocketing materials prices, and a number of builders hit the wall.
Metricon was among the companies deemed financially capable of delivering the nearly 1,800 unfinished homes left in limbo by collapse of major builder Porter Davis.
Metricon’s FY24 results land at a time in which national cabinet’s National Housing Accord has just kicked off with analysts forecasting that difficult construction industry conditions will see the target 1.2 million homes delivered across the country missed by hundreds of thousands. The latest Australian Bureau of Statistics data showed starts have fallen to their lowest annual level since 2012.
But Duggan said demand in the market is “quite strong”.
“We had two-and-a-half-thousand people in our displays last week,” he told Australian Property Journal.
“There’s still a lack of financial confidence out there and committing due to the interest rates and cost of living, but undoubtedly the metrics are great in terms of the demand in the sector. And we’re really happy with the amount of activity we’re capturing.”
He said the surge in demand has been due to population growth and a period of interest rate stability.
“There was a pause there – there was a period of time last year where there was a lack of builder confidence on the back of some news stories that occurred. And I think some of that demand also got pent up from when there was 13 interest rate rises in a row that slowed a lot of people down.
“I think people have started to find their ground in relation to what they can afford. A lot of people have done a lot of work, qualifying what they can and can’t afford and what they do and what they don’t want. And now they’re starting to make some decisions and make some moves.”
Duggan is confident in the knockdown-rebuild space, particularly in Victoria.
“I think a lot of customers are really looking at how to best utilise their investment, whether that is knockdown and build a new dream home, as opposed to going to the established real estate market or turn their property into a dual occupancy property for multi-generational planning.
“There’s some really quite strong demand in that space, because I think people want to stay in the communities that they’re familiar with.”
Metricon handed the keys over to 5,319 customers in FY24. It said many single-storey Metricon homes were built in less than 100 business days, and building times have seen a “dramatic improvement” in efficiency, particularly in the last quarter.
