The COVID-19 pandemic has had a serious impact on the construction industry, especially in the residential housing sector ever since restrictions were imposed in March this year. However, data collected by Buildxact’s residential construction software reveals a surprisingly strong demand for custom-built home projects and renovations across Australia.
At the beginning of the pandemic, Buildxact expected a significant impact to the work being quoted and won by its builder customers. However, as revealed in the Buildxact Residential Construction Activity Report for April – June 2020, the data indicated a major increase in quoting activity by small residential builders during this period, despite the pandemic-related restrictions.
Buildxact’s subscriber numbers have risen in the three months since the end of March 2020 by about 17% but have still been outstripped by the volume of quotes, indicating overall growth in the sector. The volume of quotes in June 2020 rose by 28% compared to the volume of quotes in March 2020, and total quote values rose by 29% (June versus March).
The volume of quotes over April-June 2020 totalled 25,900 compared to 12,779 in April-June 2019 – up 102%. The average volume of quotes per builder has increased by 10.7% in the April-June 2020 quarter compared to the same period last year.
During the April-June period, subscribers quoted on $4.01 billion worth of projects, compared to a total of $2.19 billion over the same 3-month period in 2019, representing an increase of 83%.
This increase in the volume of quotes is attributed to the pandemic-related restrictions that forced more people to stay at home, which enabled them to consider renovations and home improvement projects.
April, May and June of 2020 recorded significant increases in quote value over 2019 numbers: April 2020 totalled $1.18bn versus $632m in April 2019 (up 87%); May 2020 totalled $1.34bn versus $796m in May 2019 (up 68%); and June 2020 totalled $1.48bn versus $760m in June 2019 (up 95%).
Comparing Q2 2020 to Q1 2020, renovations showed the strongest growth, up 37.3% with new builds rising 36%, and other work up 15.4%. Renovations also showed the strongest growth when compared to the previous corresponding period, up 107.6%, while new builds rose 93.1%, and other work increased by 100.5%.
Victoria leads the way in regional performance
Most quotes by number, in both Q1 and Q2 2020, came from Victoria followed by NSW and Queensland. That pattern has remained consistent since 2019.
However, in Q2 2020 versus Q1 2020, NSW had a higher growth rate of 34.7%, compared to Victoria’s 28.4 % and Queensland’s 25.4%. Tasmania recorded growth of 33.6%, South Australia 19.7%, Western Australia 12.2%, ACT 18.9% and Northern Territory 186%.
Victoria also leads the way in total quotes by value, again followed by NSW and Queensland. However, in terms of growth, NSW (35.4%) outstripped Victoria (24.8%), comparing Q2 2020 to Q1 2020.
These numbers reveal that there is strong demand for custom-built homes and renovations. Despite the tough competition in the sector, many small builders are winning new work in these areas, though the average value per project is slightly reduced.
Chris Rennie, co-founder of Houselab, says, “Many of our major home builder clients had record months during June and July with August also tracking strongly. This growth is attributed to a combination of government incentives and the resilience of the housing sector, but it’s made all the more remarkable as it’s set against a backdrop of severe restrictions across Melbourne.
“We’ve also seen major home builders rapidly adopting digital innovation in order to provide customers with a compelling virtual experience during the sales process, helping to guard against any future market softness. They are also implementing software solutions to support their activities pre- and post-construction to help manage costs. Standouts across the major builders are the likes of Porter Davis who continue to drive innovation, and in the mid-range, businesses like Beachwood Homes are also adopting digital technologies to improve their customers’ experience.”
About the report
Buildxact is Australia’s fastest growing provider of cloud-based residential construction software for home builders and home renovators. Data in this report is drawn from thousands of builders across Australia who use Buildxact’s job management and job estimating software.