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Global Real Estate Review - Peter Sharp Explaining Global Real Estate

Australian construction industry facing significant challenges:
  • 2349 construction firms collapsed in the past year alone.
  • Almost 28% of 8471 company collapses in 2023 were in the building and construction sector.
Introduction of Morrison government’s HomeBuilder grant in June 2020:
  • Injected $2.52 billion into the housing sector.
  • Rapid uptake: Over 130,000 customers signed on.
  • Placed immense pressure on tradespersons and construction companies.
Builders faced challenges under HomeBuilder scheme:
  • Entered into fixed-price contracts.
  • Skyrocketing prices for materials and labor.
  • Unable to sustain operations, leading to administrations and liquidations.
2020 Government Policy contributed to financial challenges:
  • Fixed price approach.
  • Unforeseen consequences during pandemic and post-pandemic supply chain costs.
Media reports on builders going into administration:
  • Highlighted severity of situation.
  • Builders often first to feel economic pinch due to narrow profit margins.
Crucial to prioritize:
  • Transparency, collaboration, and sustainable practices.
  • Ensure long-term health and stability of Australian construction sector.
  • "Watch-out" message for other markets.