This article is from the Australian Property Journal archive
CONSUMER trust in the construction sector continues to fall, with two in five Australians saying their perception of the industry has gotten worse over the past 12 months.
Consumer research from data, analytics and technology company Equifax shows that just over half of Australians plan to purchase, renovate, or build a home or investment property in the next five years – up from 45% a year ago – but these ambitions are constrained by concerns around building quality, builder solvency, defects and delays.
“After housing affordability, the biggest barriers to buying, building or renovating a property in Australia all relate to people’s perception of the construction industry,” said Brad Walters, head of product and rating services at Equifax.
“Four in ten (41%) Australians identified a shortage of reliable and qualified builders as a key barrier to buying, building or renovating a property, and the same number raised concerns around construction delays and build times (41%),” he said.
The challenges facing the construction industry are having a notable impact on consumer confidence. A massive 85% of Australians surveyed are concerned about building quality and potential defects, with two-thirds concerned that the low level of supply, coupled with high demand, will negatively impact building quality.
Australia has just recorded its worst 12 months for new home builds in a decade and experts are calling for more action on labour shortages that have drained construction capacity, as the nation embarks on its ambitious National Housing Accord amid an ongoing housing crisis.
Some 80% are concerned about insolvencies in the construction industry.
These worries are even more pronounced among those with property intentions, with 73% of people looking to buy, build or renovate in the next five years voicing these concerns, Walters said.
Negative perceptions of the sector are becoming hard to shift. Almost half (47%) of Australians doubt anything will change over the coming 12 months when it comes to the construction industry, and 20% predict the sector will be worse off.
“The good news is, we know there are many capable, reliable and resilient industry players that are dedicated to doing the right thing. The opportunity is there to rebuild consumer trust, and for trustworthy building professionals to benefit from improved market confidence,” Walters said.
Three in four say they’re likely to require independent due diligence and ratings of a property developer, contractor, or building professional when buying (69%) and/or building/renovating (70%) a home or investment property. This rises to 92% for those with plans to buy, build or renovate a property in the next five years.
Further, 72% of Australians who intend to buy, build or renovate a property in the next five years would be willing to pay to ensure they’re working with trustworthy property developers or building professionals to get the job done.
“The lack of consumer confidence in the construction industry, combined with increasing interest in building, buying or renovating, creates a catch-22 for the industry. Consumers have big property plans but don’t know who they can trust to bring these ambitions to life,” Walters said.
Data shows that consumers who are aware of and/or used Equifax’s Independent Construction Industry Rating Tool (iCIRT) star-rating system – which gives developers, builders, building and design practitioners, certifiers, trade contractors and consultants a rating – have an improved perception of Australia’s construction industry, at 69% compared to 18% overall.
