The Housing Industry Association's latest report reveals the home builders dominating the industry over the last year. But in a tough market with high construction costs and red tape, the numbers tell a story that's no cause for celebration.

The HIA Housing 100 Report launched this morning, ranking Australia’s largest 100 residential builders based on the number of new homes commenced each year. Metricon came out leading the charge.

 “A decade of dominance is looking for Metricon Homes, as they are, for the ninth consecutive year, the nation’s largest residential builder,” stated HIA Chief Economist, Tim Reardon.

Metricon Homes reported a total of 3,894 new home sales across four states during 2023/24 "despite a market slowdown in demand due to the rise in interest rates."

However, this milestone comes with a stark warning from Metricon CEO Brad Duggan about the state of Australia’s construction industry.

“While we are proud of Metricon’s achievements last year, we note that to be the largest builder in Australia with under 4,000 site starts it’s clear that the country is falling behind on delivering the homes that have been identified as essential,” Mr Duggan said.

The National Housing Accord targets of building 1.2 million well-located homes by 2029 have been a point of contention for builders struggling against a multitude of issues affecting construction figures. These include slow planning approvals, difficulties in access to land, the need for more trades, tax changes and cost-of-living pressures.

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Metricon CEO Brad Duggan says that the country is failing to make inroads on their housing targets. Picture: Richard Walker

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“We need to accelerate momentum in the industry. It’s time to move beyond the sole focus on social housing and tackle the bigger picture: cutting planning red tape, increasing access to land, growing the country’s trade base, scrapping discussions on tax changes impacting investors and superannuation funds, and crucially, addressing the cost-of-living crisis," said Mr Duggan.

"These are the real levers to restore customer confidence and get people building again."

Recent figures from the Urban Development Institute of Australia (UDIA) showed housing supply continues to languish at "alarmingly low" levels of activity, while demand has hit record highs.

"The supply side of the housing market has fallen short in responding to substantial demand. Building activity is at decade low levels, exacerbating the housing supply shortage," said Eleanor Creagh, Senior Economist, PropTrack.

Lack of supply and no change to higher interest rates directly affects affordability.

"This imbalance between supply and demand has offset the higher interest rate environment and deterioration in affordability and is expected to continue to do so fuelling further price rises," Ms Creagh added.

However, with the RBA hold on interest rates and expected cuts in the new year, along with low levels of unemployment, Mr Reardon believes the tide is turning.

“Market confidence is returning to the new home market as interest rates remained on hold for the tenth consecutive month. Low levels of unemployment and strong population growth have driven ongoing demand for new homes, despite the increase in the cost of borrowing and a decline in household consumption," he said.

MORE: RBA keeps interest rates steady as banks signal cuts will have to wait

Metricon is Australia's largest home builder for the 9th consecutive year, but with numbers under 4,000, it's signals industry change is needed. Picture: supplied

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"The recovery in market confidence isn’t evenly distributed across each jurisdiction, and this has had an impact on the results of this year’s Housing 100. Leading indicators suggest that the volume of home building activity is set to increase in the second half of 2024 and into 2025."

The home building outlook is increasingly impacted by local factors like land prices and state government taxes, with some states faring better than others.

“For this reason, a recovery in building activity in New South Wales appears set to lag all other jurisdictions. At the other end of the spectrum, Queensland, Western Australia and South Australia appear set to see an increase in building activity," said Mr Reardon.

"Population growth through the pandemic and then a return of overseas migration have seen a stabilisation of building levels in 2023/24 similar to that seen immediately prior to the pandemic. This bodes well for a more stable return to building activity in future years," he concluded.

Second in HIA's largest home builders list is ABN Group, who missed out on the top spot by a mere 13 home sales.

“Stronger market conditions in Western Australia and growth in Victoria have seen ABN consolidate their hold as second largest home builder, with 3,881 homes.

“This is the tightest result in the 35 year history of this Report," said Mr Reardon.

Major developer Meriton came in third with 3,291 starts shared across New South Wales and Queensland, a jump from fourth place last year. However, they topped apartment builds.

“Meriton Apartments was also the top ranked apartment builder in the country with 3,277 unit sales," said Mr Reardon.

"Multiplex ranked as the second largest apartment builder with 2,244 homes built, ahead of the Hutchies with 1,745."

Experts speculate that cuts to the cash rate next year will accelerate the rate of new home building.

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