Big house builders lose market share

The top 100 residential building firms lost ground to their smaller competitors in 2006/2007, according to a new Housing Industry Australia report.

According to the “Housing 100” report, new house building starts by Australia’s top 100 construction business declined by 6.2% in 2006/2007, compared to 1% drop across the whole industry.

The top 100 builders started construction on 56,332 houses last financial year out of a total of 149,000, the HIA says. The biggest house builder was the Alcock/Brown Neaves Group, followed by BGC and Metricon Homes.

The market share enjoyed by the top 100 builders dropped from 40% to 38% in the last financial year, which represents a 3% decline in revenue to $11.4 billion.

Big builders experienced their biggest drop in NSW, where new starts dropped by 7%, while Queensland bucked the trend with a 4% increase in new house commencements.

HIA director of housing and economics Simon Tennent told The Australian Financial Review that the increasingly limited stock of large land blocks available was making it harder for them to achieve economies of scale.

“Those engaged in land development found it very difficult to find affordable raw land sites or sell their existing blocks at break-even point,” Tennent says.