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Profitless home building boom to end by mid-year: Henley CEO

After a wave of collapses, residential builders face another tough six months as the sector absorbs a huge workload of uncompleted projects amid ongoing labour shortages.

But conditions will start to improve from mid-year, according to the chief executive of one of the country’s biggest home builders.

Henley, the nation’s eighth-biggest detached home builder, had planned to complete more than 2000 homes last year, but only managed about 1700 as it grabbled with supply chain issues, rising costs and labour shortages that created havoc last year for the $200 billion sector.

Also adapting is Landen Property Group, which specialises in house and land packages in outer Sydney and the Central Coast.

In response to concerns about rising interest rates and builders’ ability to deliver a completed home on time and on budget – and anticipating a market only fully recovering late into 2023 and early 2024 – co-director Jim Dionysatos said Landen planned to offer between 10 and 25 per cent of its pipeline (more than 500 home sites) as finished products.

“Our model has been to sell all our packages off the plan, which during COVID was extremely successful. But we’re in an entirely different market, so we have listened to our customers and responded with a different approach.

“It will mean we carry costs and take on risk, but we have a strong balance sheet, so we’re well-positioned to manage this and we believe it will give the market a boost of confidence and help keep sales moving,” he said.

Read full artical at the Australian Financial Review – Full article link



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