Alongside a house price boom, Australia is in the midst of a homebuilding boom with the Housing Industry of Australia expecting that a near-record number of new homes will be built over the next 12 months.
But for many in the residential construction sector, it’s a profitless boom – and several major players have recently gone bust, with the assumption that more will follow.
Why are construction companies folding?
A perfect storm of factors has been brewing for the better part of 2021, and now the rainy season has arrived.
Supply chain issues, with a shortage of building materials worldwide resulting from COVID-19 disruptions, coupled with natural disasters from freak storms and flooding to bushfires, have provided significant pressure on builders.
Those shortages have led to prices rising exponentially, particularly for timber and steel.
On top of that, a labour shortage is making it difficult to find tradespeople, giving workers the power to command huge wages.
So, the overall cost of construction has been pushed up significantly.
Adding to this is the lengthy delays in actually getting the materials, which has led to some homes taking more than 12 months to be built, further adding to building companies’ costs.
With the majority of builders signing fixed-price contracts with buyers, and the margin for escalating costs being inadequate, many are losing money on every single project.
It’s a big problem in exceptional circumstances like we’re seeing at the moment, said Russ Stephens, co-founder of the Association of Professional Builders.
“The average cost of a contract for a builder has gone up between 15% to 20% over the past six or seven months alone – and up to as much as 50% in some areas,” Mr Stephens said.
What we are doing to combat the state of the construction industry landscape
32 Degrees Building has been operating for over 11+ years and we know and understand how to manage our business in turbulent times.
We have been working with our team and talking directly to our suppliers to manage and understand any upcoming supply challenges and supply chain issues. We have been working with our timber suppliers closely to understand their difficulties in obtaining overseas supply and then managing, monitoring and forecasting for our current and future builds. Skills shortage for us isn’t an issue, we have worked very hard to set our business apart from the rest. Our team are employed with us and this enables us to closely manage and develop their practical skills with us over the course of their apprenticeship and retain them into tradespeople and leadership roles – we now employ over 40 team members and continue to grow. By employing our team members, we manage our labour costs.This strategic approach we have applied to our business has allowed us to manage our costs and your build providing you with the security and confidence that we are here to stay.
Our business is always looking forward and planning for the future, we forecast 6 months, 12 months and 18 months ahead to ensure we can stay one step ahead of any market issues and trends.
With the above in mind we have a strong business model and capable management team in place to ensure that the best outcomes for our clients and the business are always achieved.
Australia has recently experienced some severe weather conditions including high winds and heavy rainfall. These weather events and other similar events that have occurred in recent years, can at times be so severe that they exceed the Building Code of Australia (BCA) design benchmarks for homes constructed within Australia.
In such extreme weather conditions rainwater can be forced through closed windows and sprayed up rooves in a manner which homes aren’t designed for and therefore water may enter some homes. The resulting water ingress may cause damage to your home, often this damage may only be of a minor nature, but can still cause considerable stress to you as the homeowner.
What can you do to prepare your home for a severe weather event?
As part of your ongoing home maintenance we recommend the following check measures are undertaken to avoid any water ingress to your home;
- Check all gutters and downpipes are clear of debris, leaves etc…
- Regularly check your roof for signs of slipped roof tiles, cracks and possible water ingress entry points – especially if you have recently had a contractor attend your property eg. Foxtel or solar panel installer
- Check your stormwater drains for blockages
- Check your window and door seals aren’t displaying signs of cracks and ageing
- Check for other possible entry points and seal if required
If during a severe weather event you do get water ingress – who do you call?
- If it is an emergency please call the SES for immediate assistance
- In most other cases, do what you can to stop/reduce the incoming water and then contact your home insurer as the first step to understanding what you can do
When these severe weather events happen most owners contact the builder of the home to request an inspection or even rectification of the damaged parts however if this issue hasn’t occurred until now then it is likely it is due to the severe weather event and these items will be claimable under your owner’s home insurance or alternatively are maintenance issues as the homeowner for you to attend to.
It is always great to see a trainee excel and be rewarded with a full-time role once they complete their qualification.
That’s been the case for Kelsey Ray, who has just completed her Certificate III in Business Administration with us here at 32 Degrees Building.
Kelsey is “delighted” to be staying on with the business, which specialised in custom built new homes, first floor additions and ground floor extensions. She will continue in an administration type role, utilising the skills she has developed in customer service, processing payroll and navigating MYOB.
“Kelsey has been a positive addition to our team,” said Victoria Size, Operations Manager at 32 Degrees Building.
“She is assertive in her ability to step in and assist in other areas where she can and is always willing to learn more. Kelsey now has a great understanding of accounts payable and payroll and is continuing her learning path with sales, client support, HR and accounts receivable, which will ensure that she is a great asset to any company she works for.”
The skills and knowledge Kelsey has learnt in her traineeship have been invaluable to her in regards to working in an office environment.
“Being able to develop the skills I need to start my career in business administration in a practical, real world application,” Kelsey said of what she’s enjoyed the most about her traineeship.
A key element to any young employee getting the most out of their traineeship is the support they have around them. Kelsey described the support she received the last year as “excellent”.
“Everyone at 32 Degrees Building have been so willing to share their knowledge and experience with me, and it was comforting to know that My Gateway was always there if I needed help with anything.”
Prior to beginning her traineeship at 32 Degrees Building, Kelsey worked in the veterinary industry and had limited administration experience. This didn’t pose an issue during her traineeship though, with Kelsey displaying an eagerness to learn and to help her colleagues when necessary.
“From the start Kelsey was all about the “why” – she had to understand why she was doing what she was doing and as soon as she understood this, she was able to effectively undertake her new role,” Victoria said.
Kelsey’s development throughout her traineeship has provided her with some great lessons and advice to help anyone looking to do a traineeship.
“Ask for help when you need it,” Kelsey said. “You’re there to learn and no one expects you to know how to do everything straight off the bat, so ask questions when you need to so you can get the support you need.”
“If you’re willing to put the effort in, you won’t regret it. The opportunity to learn on the job is truly invaluable and My Gateway will be there to help every step of the way.”
We are stoked to have Kelsey employed with us full-time as a valuable member of our team and thank My Gateway for their support throughout the process.
Start your career with us
Leading Hands, Carpenters, Carpentry Apprentices and Administrative Staff Required
Due to recent growth, we are looking for leading hands, carpenters, carpentry apprentices and administrative staff that live in the surrounding suburbs along the M4 & M5 corridors to join our team.
Must have a drivers licence and a ute, an immediate start is available for the right applicant. Attractive packages available to the right candidates and based upon skill level. Apprentices are paid as per the Award.
What do we offer in return?
A challenging, rewarding and safe working environment where you can develop your skills and gain a variety of experience across the residential construction industry. We will help you to cement your future in your chosen trade and offer exciting career opportunities for you.
First floor additions, also known as second storey extensions are increasingly popular for those homeowners who don’t want to lose valuable garden space but want to increase their family living space. Best of all, going up is easy and our team will do their best to ensure the process is smooth and the build is completed on time and with minimal disruption to your daily lives.
You can have a modern, liveable home with plenty of space for your family – without giving up the location you love.
Our team are the experts in planning and building custom/tailor-designed First Floor Additions
We are often approached by clients who would like to create an open plan living environment downstairs, whilst adding more room for the family to live comfortably upstairs. The best way to achieve this is with a Custom First Floor Addition.
As specialists in these types of builds, we have many years of experience enabling us to easily offer solutions and suggestions on products, layout and how to get the most from your investment. We are able to share with you relevant quality projects that have resulted in many of our clients becoming raving fans.
No Plans? No Worries!
If a client comes to us without plans, part of our service is to organise for a building designer to assist with the plans and design process. This is will be included in our Preliminary Agreement if required.
We can arrange for our draftspeople to consult with our clients at their home and discuss their project requirements. From there we will then provide plans based upon their specifications and work hand in hand with our clients and the draftsperson to ensure the plans continue to work within the tailored build cost estimate that we have provided.
Improve your lifestyle and bring your family together
When building their addition our clients often decide to open up downstairs living spaces, renovate their kitchen and bathrooms and create new living spaces internally and externally. Once the addition and renovation are completed they are left with a finished product that is like moving into a brand new home.
We are able to create open plan living spaces and improve their current living situation. Our mission is to bring families closer together.
Take away the stress, let us help you plan, manage and design your build
We have a streamlined process which is stress-free and fun. When you are building with 32 Degrees Building you don’t have to worry about anything other than choosing what you want to add to your home and we will work with you on the design to suit your home and your lifestyle.
Contact us to start your building journey today
Not ready to book? Check out our process and how we do things here.
You’re in the market for a renovation or addition on your home, but where can you find a builder that is reliable, will minimise the disruption to your family and deliver maximum quality on your investment that will stand the test of time?
You may have been referred to builders by people you trust, however that doesn’t necessarily mean that the builder will be trustworthy. So who do you contact and what should you look out for when contemplating taking the first steps on your building journey? We’ve put together a list of things you should consider when making your decision to select a builder;
1. Do they specialise in your type of build?
You might assume this is obvious, however, it’s vital to ensure that the builder you choose is well-established and reputable. Search for a builder who has experience in the type and style of build you are looking for and see if they are able to provide references for a number of jobs they have completed.
Always do your research – look at their website, social media pages and online presence. Are their projects active and up to date? Can you see samples of their work? How long have they been operating for?
2. Do they belong to a builder’s association?
Builders that have a professional membership in the industry eg. Housing Industry Association (HIA) and Master Builders Association (MBA) participate in continuing education and stay up to date with best practices, new technology and innovations within the field. This ultimately means that these builders will use the newest and correct practices when constructing your home.
3. Are they licenced and insured?
A good indicator of a high-quality builder is one that’s fully licenced and
insured – and that they can provide you with those details upon request.
It’s vital for you and your builder to be protected and insured in the event
that something goes wrong.
Examples of insurance that may be required by the builder are;
- Public Liability Insurance
- Workers Compensation Insurance
- Contract of Works Insurance and;
- Home Warranty Insurance (for all builds over $20K)
You can do a licence check of your builder through the Fair-Trading website, however, we also recommend that you request a copy of their insurances before engaging with them to ensure your family and your investment are protected.
4. Are they able to provide client testimonials or reviews?
The sign of a reputable and successful builder is one that is able to provide
a list of client references from the past, most recent and from those currently going
through the building process with them. This is a good indication that they have been
delivering high-quality service to their clients consistently throughout their years in business.
5. Is there clear communication from the beginning?
Good builders are responsive right from the beginning of your interaction with them. This shows that they invest in their team to ensure that customers and their experience is at the forefront of their business. A builder and their team should be available to communicate with you throughout the project, even after practical completion.
6. The cheapest quote may not result in a quality build
Be wary of going with the cheapest estimate a builder may put in front of you. When searching for a builder ensure you are making as direct a comparison as possible. It is always important to compare apples for apples; a higher quoted price may result in less unforeseen costs and expenses. By choosing a significantly cheaper quote be aware that you can run the risk of finding out halfway through your build that you have been underquoted and the builder is unable to fulfil your project, leaving you stranded and stressed, putting a strain on the family and your investment.
7. Do they offer fixed priced contracts?
Beware of quotations and contracts with a long list of ‘estimates’ and ‘TBA’s’. To avoid a blow-out in costs which could end up exceeding your budget or not being to afford to complete your build, ask for a fixed price contract.
There will be items that a builder cannot foresee such as soil removal, asbestos removal and termite damage, however, the builder should be upfront and discuss these items with you during the planning process. This allows you to properly plan things and have a contingency plan in place.
8. How does the builder operate?
Does the builder utilise sub-contractors to complete your build or do they employ their own team? A benefit of choosing a builder that employs their own tradespeople to complete your build is that they invest in the proper training and management of their team. This also means that they have greater control of the quality and the speed of the build as they will be coordinating the trades across their builds. By limiting the number of sub-contractors being used, your builder can ensure that you know who is working at your home, giving you peace of mind that your family is safe and secure and that disruption is kept to a minimal.
At 32 Degrees Building, we specialise in additions, extensions and renovations. We believe in putting the clients first and have a support team there for you during your build to address any of your concerns throughout the process. We are licenced, fully insured and are more than happy to provide you with references from our clients, past, recent and in progress if you would like to discuss their building experience.