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160,000 homes at risk as builders report contracts down 65 to 80%
Builders have reported falls of 65 to 80 per cent in new contracts heading into 2027 and 2028, according to a briefing note from Meridien Group managing director David Brown, as reported by News Corp Australia. The note says that, on a national scale, those falls would represent 160,000 homes never being built and about $100 billion of activity.
Brown told the publisher this week's official home-loan data was the "tip of the iceberg". "This is catastrophic stuff," he said. In the briefing, which he also sent to a Queensland MP, he said the numbers pointed to an "industry-wide catastrophe" and a "national problem".
The note said the current build pipeline is still "pretty full right now". "It is the new contracts where the problem is, and that will flow through to a massive drop in construction activity in 2027 and 2028."
A house frame and incomplete roof behind temporary fencing in Prestons, New South Wales. Photo: Maksym Kozlenko / Wikimedia Commons (CC BY-SA 3.0), cropped
Official lending data already points the same way
That warning landed in the same week the Australian Bureau of Statistics released its September-quarter Lending Indicators. Owner-occupier loans to build a house fell 14.4 per cent, to 8,114. The value of all new home loans dropped 15.5 per cent to $81.2 billion, the largest quarterly fall since that series began in 2002. Homebuilds covered those figures when they were released on 11 November.
The briefing note also pointed to August building approvals, which in the ABS's original release had fallen 6.1 per cent, led by a 21.2 per cent drop in private dwellings excluding houses — townhouses, terraces and apartments. Private house approvals actually rose 3.7 per cent that month. Total approvals then rose 5.1 per cent in September, with private dwellings excluding houses up 16.6 per cent and private house approvals down 5.3 per cent. Monthly approvals are volatile, and they are not the same as signed building contracts.
The note said one major, unnamed builder had seen sales fall 29 per cent and enquiries drop 70 per cent, and that the cost of building a spec home had risen 37 per cent to $2,700 a square metre since Covid. Those figures have not been published by the Housing Industry Association or Master Builders Australia.
A newly finished house on a bare lot in Wungong, south-east of Perth. Photo: Sam Wilson / Wikimedia Commons (CC BY-SA 4.0), cropped
