WA’s homebuilders are rediscovering stability after several tumultuous years, although land availability and labour remain concerns.
Western Australia’s homebuilding industry is cyclical by nature.
A glance at the state’s building commencement data for the past two decades shows a series of peaks and troughs, which largely coincide with consumer demand.
The sharpest spike was recorded between 2020 and 2021, when WA went from about 15,000 home starts to close to 28,000 in a matter of months.
This dramatic shift was a direct result of the state and federal government stimulus for new builds introduced during the pandemic.
While well intentioned, the stimulus measures had a disastrous impact on industry, resulting in many builders committing to more homes than they could deliver.
Coupled with supply chain issues and rapid escalation in build costs, this meant many homes were built at a loss to builders’ bottom lines, as fixed-price contracts caught them short.
Insolvencies increased and major residential builder BGC Australia made the bold call to stop new home sales.
This has led to a shake-up in the configuration of the state’s top builders, as BGC formerly occupied top spot in WA on the Housing Industry Association’s list of homebuilders.
The list, ranked by volume of home starts, reflects the surge in demand for new homes in WA during the past 12 months.
According to the HIA, dwelling commencements in WA increased by 45 per cent in 2024-25, to 21,735.
This is short of the circa 25,000 homes required in WA each year to meet the federal government target of 1.2 million new homes across the country by 2029.
However, as HIA executive director Michael McGowan explained, WA is in the best position nationally to meet the target.
“Given the turbulent conditions the industry has faced over the past ten years, there is definitely a feeling that we are in a period of relative stability,” Mr McGowan told Business News.
“WA is currently the state best placed to deliver its share of the national housing accord of twenty-five thousand homes over the next two years, but we still need a lot to go right to make that happen.
“Greenfields housing can only deliver so much. To reach our share we need to see more infill and high-density projects commence; a challenge, given they are still navigating feasibility challenges.”
Australian Bureau of Statistics data shows that, in 2024-25, there were 18,514 detached houses approved compared with 4,260 other dwellings (including apartments and townhouses) in WA.
This marked a 31 per cent increase on the year before, when a total of 17,334 homes were approved in WA.
However, recent ABS data shows a 7.3 per cent decrease in dwelling approvals in WA, and 6 per cent nationally, in the month to August.
This trend has worried some industry experts, including Master Builders Australia chief executive Denita Wawn.
“Approvals heading backwards are a flashing red light,” Ms Wawn said.
“Unless the government acts now to fix the pipeline, Australia’s housing crisis will only get worse.”
The average build time for a project home in Perth has reduced from 68 weeks in 2023-24 to about 44 weeks currently, ABS data shows.
And the increasing use of rapidbuild technology has enabled builders to produce homes faster.
While double brick remains the dominant form of construction in WA, builders are increasingly shifting towards alternative construction methods.
“Over the past twelve months, we have continued to see a shift towards alternative methods of construction,” Mr McGowan said.
“It’s not that we are doing less double brick; just the growth that we are delivering is coming from alternative methods.
“This diversity in method has been important to increase scale, and we have certainly seen decreased build times in all methodologies as a result.”
Home Group and Blueprint Homes, owned by the Silvestro family company, reclaimed top spot on the residential builders lists of the HIA’s and Business News’ Data & Insights in WA this year, with 2,243 dwelling commencements.
This represented a slight increase on the West Perth builder’s 2023-24 figure of 2,401 starts, though that figure was up a remarkable 80 per cent on the year prior.
Dale Alcock’s ABN Group remained in second place in WA with 1,685 starts, compared with 1,837 last year.
Nationally, ABN Group recorded 3,530 home starts, with the balance in Victoria.
This placed it second in the country, behind Metricon Homes with 4,015 starts.
In WA, Summit Homes Group placed third with 1,636 starts, up from 1,143 last year.
Scott Park Group placed fourth with 1,312 commencements, followed by JWH Group’s 1,048.
The ranking of WA’s top five builders remained unchanged from 2023-24, and between them these builders recorded 80 more home starts this year than the prior corresponding period.
Confidence
Stability has emerged as a key theme among the state’s top builders, who are working tirelessly to meet the demands of a rapidly growing population.
While skills shortages remain, major players say labour availability has improved markedly in recent years.
Scott Park Group managing director Scott Park said his building companies, Redink Homes, 101 Residential and B1 Homes, were in a far better position than three years ago.
“We’re not experiencing any delays with the labour component,” Mr Park told Business News.
“There is some pressure around bricklayers, which is normal, but the rest of the labour component is pretty good.”
Industry heavyweight Nigel Satterley and Summit Homes WA general manager Cameron Lade recently called out the excessive cost of bricklayers, indicating that it was common for the tradespeople to earn up to $250,000 a year.
“When bricklayers are earning two-hundred-and-fifty thousand dollars, you’re going to have a bit of a challenge,” Mr Lade said at a recent Summit Homes event.
“[To get into] that rhythm of a capacity of building twenty thousand homes a year, those labour rates will [need to] stabilise.”
Mr Park said the availability of materials had improved since the pandemic, which made it a lot easier to build a home.
“We are four years into this cycle of being busy, which I think provides a lot of stability around the trades,” he said.
“The subcontractors in particular, they know that they’ve got work next week, the week after, and so on.”
Mr Park has been in the industry for 40 years, having started as a carpenter aged 16.
He said about 20,000 home starts a year in WA was manageable.
“If that number is twenty thousand plus, then it’s good,” Mr Park said.
“But if that was to go to, say, twenty eight thousand, which we had in 2021, [that was] absolutely crazy.
“It didn’t do anyone a lot of good. Builders got caught short with their pricing … and they were financially distressed.
“The rest has played out over the past two or three years, with the less financially stable players falling by the wayside, which is a bit of a pity, but a lot of good people got caught up in it.
“A lot of people got hurt financially, which is not very good for the industry and the public.”
Australian Securities and Investments Commission data shows company collapses in WA increased by 24 per cent last year, with construction companies among the hardest hit.
The data showed close to a third of the 1,200 companies that went under were in the building or hospitality space.
Nationally, 2,832 builder insolvencies were reported in 2024-25, a 28 per cent increase on the previous year.
Japanese building giant Sumitomo Forestry acquired a majority stake in Scott Park Group in late 2019, just before the pandemic.
Sumitomo also owns Metricon, Henley Homes in Victoria, and NSW builder Wisdom.
That means Scott Park Homes is part of the largest building company in the country.
Mr Park said having the backing of an international brand helped, particularly during the pandemic.
“I think we’d still be in the game [without Sumitomo], we’d still be pushing through in the top five; it made us stronger and wiser as a building group,” he said.
“[During] the turbulent period of Covid, sharing a load with a big brother was much more peaceful.”
Demand boom
ABN Group managing director Dale Alcock is taking a cautious approach during this period of significant demand.
“What we’re seeing [is] we had all that activity a couple of years ago [then] it went a little flat,” Mr Alcock told Business News.
Dale Alcock says it is up to the entire industry to train the next generation of builders. Photo: Michael O’Brien
“It has certainly picked right up again now, and we’re seeing a lot of interest [out] there … whether it’s [in] the established market in WA or the [new] housing market.
“For us [that] is a bit of a warning sign that we can’t overcommit in terms of the volume.”
Mr Alcock said while some of his competitors were intent on producing a large volume of homes, he was careful not to overcommit on sales.
“When we look at our volumes, we’ll only commit to selling what we’re capable of processing and delivering at a standard,” he said.
“Otherwise, what’s the point? Because reputationally, you will suffer.”
Mr Alcock added that constraints around the availability of developable land made it more imperative for builders to only take on jobs they could complete.
For ABN Group, bringing new people into the industry is paramount.
The Leederville-based builder has facilitated the training of more than 1,700 apprentices in the past two decades and currently trains about 130 people each year.
“If we look at WA, the biggest challenges … are labour and land,” Mr Alcock said.
“If we look at the labour, that hasn’t improved. And that’s despite us running … Australia’s largest apprenticeship program, and we will continue to do that.”
He recommended builders put greater emphasis on training tradespeople.
“It frustrates me that no other major builders in WA are committed to an apprenticeship program,” Mr Alcock said.
“We all talk about labour ... it’s our biggest constraint, but what are we doing to train more people?
“We have to not just talk about the labour problem as large builders, we’ve got to do something about improving it.
Anthony Silvestro says it’s concerning some builders are using generators to get jobs done. Photo: Michael O’Brien
Key issues
In addition to skills, land availability has emerged as the key issue for residential builders in WA.
And they’re calling on the state government to increase investment in infrastructure to expedite the delivery of housing.
“It’s not a ‘sexy spend’, but without this investment we will continue to see a shortage of housing supply into the market,” HIA’s Mr McGowan told Business News.
“We’re talking billions of dollars over the next five years that gets greenfield and infill sites ready for development.”
Earlier this year, the state government announced it would invest $101 million annually on new water and power infrastructure to unlock about 33,000 housing lots.
Home Group and Blueprint Homes managing director Anthony Silvestro agreed access to readily available land for new housing was a growing concern.
Many builders, including ABN Group, are forced to use generators to build a home due to a lack of power infrastructure on some greenfields sites.
Michael McGowan says alternative build methods are continuing to grow. Photo: HIA
Mr Silvestro said while his company had avoided this to date, the fact builders were using generators was very concerning.
“That has become common practice for a lot of builders, and that’s a real pain, because it creates a bottleneck somewhere along the line,” he said.
“We do our best to avoid that because it’s a concern for tradespeople [and] can be a concern for customers, if we finish the home and there’s still no power connected.
“It really is becoming a heightened problem, but we’re just trying to manage our way through that.”
Mr Silvestro said Home Group and Blueprint Homes’ focus was to remain as consistent as possible in the next 12 months and beyond.
“Our key focus is to … maintain the continuity of work, which we’ve been able to do,” Mr Silvestro told Business News.
“The market and amount of work is pretty consistent out there for most builders.
“It’s what helps build a company to be really good at what it does, by being consistent.”
He added that WA’s residential building industry would struggle to significantly lift volume, given current capacity constraints.
“We’ve had a huge rise in work across the board, in all sectors, in particular new home construction, which has been great for our industry,” Mr Silvestro said.
“To do any more than we’re doing now would be a challenge.
“There are still labour constraints across the board, but probably more prominent now is the [shortage of] readily available land for us to build on.”
He said affordability was also top of mind for builders, as cost-of-living pressures affected their customers.
The federal government’s recent low-deposit home loan scheme, which allows first homebuyers to get into the market with a 5 per cent deposit, has been welcomed by most builders.
Dale Alcock, in particular, called out critics of the policy.
“A lot of very conservative people will say you need twenty per cent deposit, [but] it’s bulls..t,” he said.
“Unless you’re going to … hand over one hundred per cent and [be] a cash client, there’s always a risk.”
Mr Alcock said the policy was very similar to Keystart, where WA first homebuyers on low incomes could get into the market with a 2 per cent deposit.
“This is what we’ve been doing in WA for the past thirty-five years with Keystart,” he said.
Osborne Park builder JWH Group operates across brands including Oswald Homes, WA Country Builders and Residential Attitudes.
JWH Group general manager Jay Walter told Business News the company planned to maintain a similar volume of builds over the next 12 months.
In the recent financial year, JWH recorded 1,048 dwelling commencements.
“We’ve been careful with the volume we take on, which has meant saying ‘no’ or walking away from some projects and builds,” he said.
“But we have a duty to protect our staff, contractor base and clients.
“We’re hoping to maintain the same sort of volume and don’t see further growth as an area of priority or major interest at this stage.”
Mr Walter said trade availability was a major constraint, and government initiatives to bring in skilled migrants only went some of the way to addressing the issue.
“Trade recruitment from over east and overseas provides a level of benefit, but it’s really about replenishing the trades we’ll see soon leave the industry over the next number of years: whether it be via apprentices [or] development of technology in construction that will assist,” he said.
“The federal government’s lower deposit assistance demonstrates their willingness and creativity, but we need to be mindful of any initiative that could potentially create another bubble.
“The challenges in WA are different to those in Victoria for example, so this needs to be considered.”
