A Breathing Room for Builders and Buyers
The construction landscape in Victoria is experiencing notable developments in 2024, reflecting a dynamic and resilient industry. Victoria’s largest home builder, Metricon, anticipates a surge in new home builds, driven by the recent decision to delay the implementation of sustainable home requirements from October 2023 to May 2024. This strategic pause offers a critical window of opportunity for homebuyers and the construction industry to prepare for the impending eco-friendly regulations.
The Sustainable Shift: A Gradual Transition
The Victorian Building Authority’s decision to postpone the new energy efficiency standards has been met with a collective sigh of relief from industry stakeholders. The revised code, aimed at making homes more energy-efficient, was deferred due to challenges faced by the construction sector, including global supply chain disruptions and local material shortages. This delay allows the industry to manage the transition more smoothly.
Tom Trevaskis, president of the Urban Development Institute of Australia (Victoria), acknowledged the benefits of the delay, stating, “This breathing room enables the industry to adapt to the new requirements without being overwhelmed, ensuring a more seamless integration of sustainable practices.”
A Golden Opportunity for Homebuyers
For prospective homebuyers, this delay represents a golden opportunity to secure their dream homes before construction costs potentially rise due to the new regulations. Peter Langfelder, Metricon’s executive director for Victoria and New South Wales, noted that the postponement provides a “great window” for buyers to enter the market before the additional costs associated with eco-friendly construction kick in.
By May 2024, Langfelder expects that 50% of Metricon’s display homes will be compliant with the new National Construction Code (NCC), easing the transition for future homebuyers. This period allows buyers to secure homes without the immediate financial burden of the new energy efficiency standards, while still having the option to incorporate eco-friendly features at their own pace.
Rebuilding Momentum: A Resilient Industry
The delay in sustainable home requirements coincides with signs of recovery in the construction industry from the disruptions caused by the COVID-19 pandemic. Keith Ryan, executive director of the Housing Industry Association (Victoria), pointed out that the skilled labor shortage is easing, and material shortages are resolving, positioning the industry well for a robust recovery.
With international shipping issues abating and local material supplies stabilising, construction timelines are returning to pre-pandemic norms, with new home builds expected to be completed within seven to ten months.
A Boom on the Construction Horizon
Looking ahead, Metricon forecasts a return to boom times for Victoria’s new home market. The combination of delayed regulations, recovering industry conditions, and increasing migration is expected to drive demand. Langfelder emphasized the importance of learning from recent challenges to better prepare for future disruptions, including discussions around fixed contracts, more regular progress payments, and potentially rise-and-fall clauses to mitigate risks for builders and ensure customer-friendly contracts.
The Victorian government has committed to working closely with the building industry to support a smooth transition to the new standards by May 2024. This collaboration aims to address any lingering issues and ensure that the industry is well-prepared for the upcoming changes.
Seize the Moment
As Victoria’s construction industry prepares for a significant upturn in 2024, the delayed implementation of sustainable home requirements presents a crucial opportunity for both builders and homebuyers. This period offers a chance to adapt and prepare for the new regulations while taking advantage of favorable conditions. For those considering building a new home, now is the time to seize the moment and secure their dream abode before the eco-friendly standards come into effect, ushering in a new era of sustainable living in Victoria.
Industry Updates
In addition to the current developments, several trends are shaping the construction industry in 2024. Nationally, the construction of transportation, utilities, renewables, and industrial projects will drive significant activity, providing longevity for engineering and construction businesses. Renewable energy infrastructure is expected to surge, notably in the Eastern states, with investment in large-scale renewable generation, distribution, and storage increasing significantly.
The construction industry continues to face challenges such as rising construction costs, planning approvals, and labor market constraints. However, the overall position of Australia’s construction markets remains strong, with significant opportunities for growth and innovation in the coming years (Coates).
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