HOME owners and builders will launch a new association aimed at gaining greater industry and government representation and increased bargaining powers at Labor Opposition leader Kevin Rudd’s Housing Affordability Summit in Canberra today.
More than 27,000 people, made up of home and apartment owners, developers, builders and subcontractors, will are expected to join forces to fight the crisis attacking
One of the key players behind the new Cooperative, that will see consumers and builders unite, is Builders Collective of Australia National President Mr. Phil Dwyer.
“When it comes to Housing Affordability, existing homes make up 98% of the housing stock with only 2% taken up from new home construction. Any suggestion that building more of these McMansions will solve the overall Housing Affordability crisis is therefore a complete nonsense and this type of rhetoric only serves the vested interests of a few project home companies and their buddies!! To build more lower cost housing requires greater productivity and reduced costs of construction for the vast majority of the 35,000 builders across the country”. Dwyer told Australian Property Journal.
Dwyer said ABS approval statistics show the cost of detached housing increased from between 30% (project homes) and 50% (other building) over the last few years.
Dwyer confirmed that this figure has also been corroborated by statistics derived from the Victorian Building Commission showing a 51% cost of building increase since 2000. This figure includes all domestic building work, and is therefore a realistic meter for the whole industry. There are some 7000 registered builders in
“The affordability debate has so far been dominated by Associations that represent this very small percentage of registered builders. So far, the only ‘solutions’ brought forward have in essence amounted to nothing more than a veiled subsidy for the volume/project builder.
“They have shunned the small builder, who simply cannot compete with this subsidised end of the market, and as always have also totally ignored the consumer.
“The poor consumer is not on the radar of big Associations or Government.”
Dwyer pointed to a number of areas that continually add to the growing cost of a house:
a. The direct and indirect costs of Builders Warranty Insurance continues to have a major detrimental effect on the majority of builders.
b. 5 star compliance add thousands of dollars to the cost of an individually designed home, the specific domain of the majority of registered builders.
c. OH & S compliance costs can easily add $3000 – $10,000 to a home and far more for a double storey.
d. The national skills shortage, compounded by the uncertainty of tenure bought about by the warranty insurance regime and other over regulation cutting into industry profit margins.
“Owner building has become in many cases an ineffective tool in the home owner’s desperate attempt to cut costs. Depending what State you are in, the volume of all permits obtained in this manner ranges between 30 % and 50% with many of these projects being non compliant on 5-Star, OH & S and insurance issues which creates a further anti-competitive environment for the majority of compliant builders who now find themselves competing with home owners for market share. Home owners should be builder’s clients, not competitors.” Dwyer added.
“Affordability is an index directly related to costs and income, and if Government and industry cannot decrease the costs of building and home ownership as a consequence of this debate, then incomes to Australian families must increase or the community’s basic need for shelter will simply not be able to be met into the long term.
“Providing businesses subsidies to developers and volume builders that will affect only 2% of the existing housing stock is clearly not a long term solution.”
The new National Home Owners and Builders Cooperative will be formally launched in the next few weeks.
The group aims to increase industry transparency and foster greater project collaboration between government, property owners, builders, sub contractors and suppliers.
Australian Property Journal
