Not at home: Subdued trends in new housing investment have reduced profit margins

IBISWorld’s House Construction market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.


Industry Threats & Opportunities

  • Population growth has supported underlying demand for new housing construction
  • The damage caused by the Queensland floods brought construction work to a halt, hurting revenue
  • Despite the short-term contraction, industry revenue is forecast to rebound from 2019-20

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    Industry Analysis & Industry Trends

    Home ownership is a cornerstone of the great Australian dream, providing financial and emotional security, and often representing the largest investment an individual will make. However, homebuyers are increasingly opting for higher-density dwellings such as apartments and townhouses. Businesses in the House Construction industry are building new low-density dwellings, or renovating and repairing existing homes.

    Industry revenue is projected to increase by an annualised 1.4% over the five years through 2016-17, to total $42.5 billion. This includes a contraction of 4.2% in the current year, which reflects an expected decline in the number of dwelling commencements. Population growth has supported underlying demand for new housing construction over the past five years...

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    Industry Report - Industry Investment Chapter

    The industry has a low capital intensity. Contractors principally provide project management and trade skills to the construction process, neither of which have a high capital component. Specialised capital equipment, such as earthmoving, scaffolding and lifting equipment, is typically supplied by a subcontractor or leased. Single-unit house construction typically has a lower requirement for lifting and pumping equipment and scaffolding, than larger multi-storey developments such as apartment and office construction projects.

    The industry is considered highly labour-intensive relative to the rest of the economy. Direct labour costs (i.e. wages) absorb about 9.2% of revenue in 2016-17 while depreciation charges (a proxy for capital costs) account for just 0.8% of revenue. Thi..

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    Additional Insights for the House Construction Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the House Construction Industry are

  • Membership of an industry organisation
  • Access to highly skilled workforce
  • Having successful completion of past contracts
  • IBISWorld analysts also discuss how external factors such as Dwelling commencements and Mortgage affordability in the House Construction industry impact industry performance..

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    New Zealand Special Report

    Industry Products

    What is the House Construction Industry?

    This industry consists of companies that mainly construct houses (excluding multi-unit apartments and townhouses) or carry out alterations, additions, renovations or general repairs to houses. The industry also includes operators that organise and manage these activities as the prime contractor.

    Industry Products
    New housing construction
    Alterations, additions, renovations and improvements
    Housing repairs and maintenance
    Industry Activities
    House building
    House alteration, renovation and general repair
    Prefabricated house on-site assembly, erection and installation
    Project management

    Table of Contents

    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    Executive Summary
    Key External Drivers
  • Dwelling commencements
  • Mortgage affordability
  • Residential housing loan rates
  • Number of households
  • Residential housing prices

  • Current Performance
  • Profit and employment
  • Subsidies boost demand
  • Post-flood reconstruction
  • Competition
  • Chart: Revenue Growth

  • Industry Outlook
  • Profitability improves
  • Factors driving demand
  • Table: House Construction Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - House Construction Industry Lifecycle vs The Economy

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Residential Property Operators
  • Central Government Administration
  • State Government Administration
  • Consumers

  • Key Selling Industries
  • Clay Brick Manufacturing
  • Farm and Construction Machinery Wholesaling
  • Hardware Wholesaling
  • Machinery and Scaffolding Rental
  • Ready-Mixed Concrete Manufacturing
  • Timber Wholesaling

  • Products & Services
  • New housing construction
  • Alterations, additions, renovations and improvements
  • Housing repairs and maintenance
  • Other
  • Chart: House Construction Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Private homebuyers
  • First homebuyers
  • Property developers and speculators
  • Public sector
  • Chart: Major Market Segmentation for the House Construction Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Competitive Landscape
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs House Construction

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the House Construction Industry

  • Industry Globalization
    Major Companies
    Metricon Group Pty LtdBGC (Australia) Pty LtdABN Corporate Services Pty LtdSimonds Group Limited
  • Table: Metricon Group Pty Ltd - financial performance
  • Table: BGC (Australia) Pty Ltd - financial performance
  • Table: ABN Corporate Services Pty Ltd - financial performance
  • Table: Simonds Group Limited - financial performance

  • Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the House Construction Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Key Statistics
    Table: Industry Data for the House Construction Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • House commencements (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Jargon & Glossary
    Dwelling Commencements
  • Dwelling commencements information records when contractors receive municipal approval to commence construction of a building.
  • First Home Owner Grant (Fhog)
  • A scheme that provides state funding for eligible first homebuyers in the form of a non-means tested grant towards the purchase of a home.
  • Mortgage
  • Legal contract through which a financial institution (bank, building society etc.) lends money at interest in exchange for holding the title on the borrower's property.
  • Why buy this report?

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on House Construction:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The House Construction market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on House Construction, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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