23/09/2015 - 15:58

BGC back on top

23/09/2015 - 15:58

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BGC has returned to its traditional position as Australia’s largest home builder, with the latest data from the Housing Industry Association showing six Perth-based builders among Australia’s top 20.

BGC back on top
BGC Residential chief executive Kelvin Ryan.

BGC has returned to its traditional position as Australia’s largest home builder, with the latest data from the Housing Industry Association showing seven Perth-based builders among Australia’s top 20.

BGC had 4,834 dwelling starts in 2014-15, down a little from 5,004 in the prior year.

“It’s a pretty awesome number, given that all of our starts are in Western Australia,” BGC Residential chief executive Kelvin Ryan told Business News.

Coming second on the national list was Perth-based ABN Group, which had 4,608 starts in 2014-15, up from 4,142 in the previous year.

While most of ABN’s dwelling starts were in WA, its latest figure included 899 starts in Victoria, up from 802 previously.

Other builders to rank high on the national list included Meriton Apartments (4,431 dwelling starts) and Brookfield Multiplex (3,552 dwelling starts).

Both companies focus mainly on apartment construction, compared with the two big WA builders, which focus on detached and semi-detached dwellings.

Number six on the national list was Melbourne-based Simonds Group, which is pursuing national growth after listing on the ASX last year.

Multiple industry sources have told Business News that Simonds has been evaluating acquisition opportunities in WA, with one rumoured target being Gemmill Homes, which is owned by directors John Wilson, with a 65 per cent stake, and Craig Gemmill, with a 35 per cent stake.

Mr Gemmill, who is the company’s managing director, declined to comment when approached by Business News.

“We are always on the look-out for business opportunities to grow the business and add value for our shareholders, however it is company policy not to comment on market speculation,” a spokesperson for Simonds said.

The HIA report said the top 20 builders in WA experienced a big fall in market share to 57 per cent in 2014-15, down from 65 per cent the previous year.

Large WA builders that bucked the trend included JWH Group (1,516 starts), Pindan (1,459 starts) and Summit Homes Group (1,126 starts), which all experienced growth last year.

They were followed by SSB, which trades as Content Living, and Redink Homes, which both experienced a small dip in dwelling starts.

Looking ahead, dwelling starts in WA are expected to contract from 31,569 last year to about 24,000.

“There is no doubt the market is contracting,” BGC’s Mr Ryan said.

He said the slowdown had made the market “super competitive”.

“It’s going to be a great time for people to build houses,” he said.

Mr Ryan praised state government initiatives to bolder the market, including the Keystart scheme that targets first home buyers and a $560 million social housing investment package.

He said BGC’s residential building arm planned to maintain its focus just on the WA market.

Last year, it announced plans to establish a joint venture with Melbourne-based Metricon Homes to expand into the Victorian market, but has withdrawn from that venture.

ABN Group director Dale Alcock said the Victorian housing market was underpinned by a solid state economy.

“We’re seeing strong sales activity there, though not at breakneck speed,” Mr Alcock said.

He anticipates an increase to about 1,000 dwelling starts for ABN in Victoria this year, in contrast to the slowdown in WA.

Mr Alcock said his main concern was the lack of investment in training by major builders.

“The bigger thing for me is how many of these builders are training tomorrow’s workforce,” he said.

“We’re clearly number one in Australia with more than 300 apprentices.

“It’s very disappointing that others aren’t contributing.” 

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