The Construction Industry in 2022 – Impact on Property

South East Queensland hasn’t had the best start to the year when it comes to construction. The lack of materials, which started in 2021 as a result of COVID restrictions, has been hit even more by the flooding in February. Lack of materials has led to a price hike, which in turn has left many builders on edge.

Prices they quoted in 2021 (or prior) to complete jobs are no longer accurate – and builders are now finding themselves paying more for materials than originally quoted. This is one of the reasons some major building companies have ended up falling behind and insolvencies are prominent in the news.

Oracle and Condev Construction are just two that you may have read about in the past few weeks. And according to industry sources, it’s not likely to ease just yet.

In the news last week, reported in the Courier Mail, Hutchinson Builders managing director Greg Quinn warned the construction sector to batten down the hatches saying the fallout from company collapses was “likely to be big”.

He said while it was not unusual for builders to go under, this time it was different with the significant number of head contractors and subcontractors “feeling the pinch”.

“The financial fallout is likely to be big. It’s already too late for some as the environment is here and now and needs to be confronted quickly,” he said. “There is no easy solution, and, in fact, I don’t think there is a policy or regulatory solution, because there isn’t adequate time for structural reform to take effect.”

It hasn’t stopped projects from planning or being approved, though. But it’s more something builders need to be mindful of when they’re quoting on jobs. And its prevalent in both the commercial and residential construction industry.

Construction aside though, and property in general seems to be doing okay. In this edition of Pulse, we’re going to take a look at the residential property market to see where it stands. Next edition, we’ll discuss the commercial property market so keep an eye out for that in early June.

*Disclaimer: This article is for general information only and should not be relied on as advice. You should consider your personal situation and seek advice that is specific to your circumstances before making any decisions based on this information.  If there are any issues you would like us to discuss with us arising from this article, please contact us*

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