Welcome to the autumn edition of On the Job.
As we barrel through the start of the new decade, here’s some food for thought for those working in building and construction:
Back in 1988, the ABS estimated Oz would have a population of 25 million by 2050, but we reached that number 30 years earlier. Now the ABS is estimating there will be 30 million of us by 2030 and urban planners have crunched the numbers and found that, with this growth rate, we will need to house an additional 16.8 million residents in the next 40 years. That’s the equivalent of building a new city the size of Canberra every year for the next 40 years, or a city the size of Darwin every 12 weeks.
Tools at the ready – that should mean a good pipeline of work!
In this edition:
- Top risks for homebuilders and how to beat them.
- Rise of reverse factoring – what you need to know.
- Contractor? Do you know what insurance you actually need?
- Sisters are doing it for themselves…women tradies stepping up.
- Forget down-sizing, ‘right-sizing’ is the trend builders and tradies need to know about.
We hope you enjoy this edition of On the Job.
The BuildCover and TradePlusCover Teams
Risky business: home building
Ever wondered what the biggest risks for
Reversal of fortunes?
Would you take a price cut if it meant your
invoices got paid early?
I'm the boss of me - then the buck
stops with you
When you work for someone else you are covered under their insurance, but when you work as a contractor
or subbie, you need to make sure you have your
own insurance in place.
These boots are made for workin'
The International Women's Day 2020 campaign theme is #EachforEqual.
News in Brief.
- Tradies help bushfire victims.
Tradies from across the country have banded together to support people affected by the bushfires. Tradies for Fire Affected Communities is a national online platform where tradies sign up and offer their services to help rebuild homes and communities razed by bushfires. Tradies including plumbers, chippies, sparkies, excavators, asbestos removalists and arborists are among the 4,000+ tradies who have registered to help.
- ATO warns builders about property flipping.
The ATO has cautioned people who flip properties on a regular or recurring basis that they might be treated differently by the ATO to that of an individual who is extending or renovating a property as a one-off. People considered to be in the business of flipping property include “a builder moving into a property with the family, renovating the property and then moving out, doing it to the next property and making regular gains on the property”. Where an individual is in the flipping business, “some of the exemptions that would apply to you as an individual when you normally purchase your home and sell your home no longer applies”.
- Building approvals rise.
The number of building approvals nationwide rose 2.1% in December to 14,423 (in trend terms), according to the ABS. Approvals for private sector dwellings excluding houses rose 4.9%, while approvals for private sector houses also rose 0.3%. Dwelling approvals rose in Victoria (6.1%), the NT (4.7%), the ACT (1.0%), NSW (0.5%) and SA (0.5%). Decreases were recorded in Tasmania (2.0%), WA (1.4%) and Queensland (1.3%). The estimated value of residential building rose 1.1%, while non-resi building declined 2.7 %.
- New home sales dip.
New home sales in the December 2019 quarter fell 6.8% compared to the same quarter the previous year, according to the HIA New Home Sales report. WA (+12.8%) and NSW (+15.1%) recorded higher private detached house sales, while Queensland (-5.7%), Victoria (-9.9%) and SA (-12.8%) experienced falls
- Construction costs to grow.
According to the Rider Levett Bucknall 4th Quarter 2019 Australia Report, construction cost growth is forecast for all cities in 2020. RLB is forecasting construction cost growth of 4.0% in Adelaide, 3.0% in Brisbane, 3.0% in Canberra, 1.2% in Darwin, 2.5% in the Gold Coast, 3.5% in Melbourne, 2.8% in Perth, 4.0% in Sydney and 3.0% in Townsville.
- HIA tips building bounce back.
In analysing data from the ABS, the Housing Industry Association (HIA) found building approvals across the 2019 calendar year were 18.5% lower than they had been in 2018. But despite a tough start in 2019, the final months showed the market improved and new home building stabilised at relatively strong levels. “Detached house approvals have a three-month annualised level of 101,240 approvals, which is a very robust level and similar to building volumes in 2018,” HIA noted, while multi-unit approvals led the declines, 25% lower than they were in 2018.
- Construction downturn eases.
The AIG-HIA Australian Performance of Construction Index increased by 2.4 points to 41.3 points in January (seasonally adjusted), indicating that the construction industry declined at a slightly slower pace at the start of 2020. House building expanded mildly in January (+1.0 points), with upticks in activity (+5.8 points), new orders (+4.0 points), apartments (+0.1 points) and engineering activity (+0.5 points).
- Risk-rating tool for apartments.
In a bid to address the state’s building standards crisis, the NSW State Government has announced a plan to get credit ratings agencies to develop a new risk-rating tool they will be able to sell to prospective apartment buyers. Under new powers, the Building Commissioner will be able to use the rating tool to select sites to audit and halt dodgy apartment projects. The tool draws from up to 100 different data points to determine whether a development displays indicators of compliance riskiness.
- 9% of tradies earn $200k+ p.a.
According to Service Seeking’s Tradie Rich List for 2020, 9% of Aussie tradies rake in more than $200,000 per year. Plumbers topped the rich list earning an average yearly income of $110,000, followed by concreters on $107,500 and builders on $103,750. Those working in flooring are making $103,125, carpenters $102,424 and earthworks contractors $94,167. Brickies make $92,500 per year, building designers $91,111, air-conditioning and heating technicians $90,455 and people working in lighting installation $90,000. The average income for landscapers is $88,750 followed by $87,500 for renderers, $85,972 for electricians, $84,167 for removalists, $82,500 for plasterers and $81,364 for roofers. Painters earn $80,946, exterminators $78,000, building inspectors $77,500 and handymen $73,200.
- 3m households put off jobs.
A survey by hipages found 92% of homes have at least one outstanding project and around 3 million Australian households put off a job for more than a year. Cleaning jobs (72%) had the biggest backlog, followed by general home maintenance (67%), garden maintenance (63%), painting (46%), pest control (38%), plumbing (36%) and electrical work (35%). Painting was the job put off for longest with an average wait time of 29.9 weeks. This was followed by fencing and tiling jobs at a wait time of around 26 weeks.
Insight: The rise of 'right-sizing'
Builders and tradies are set to hitch their wagons to the ‘right-sized’ housing train. Here’s why.
Lighter side - An offer you can't refuse?
It seems that when it comes to hiring, tradies like to keep it in the family. [Cue theme tune from The Godfather.]
A survey of tradie-related businesses by The Game Changes found 50% of business owners had employed one or more family members – and 2% had four or more rellies working for them.
Given how easy it is for the boss to check (i.e. ask parent, partner etc.), could this be the end of “chucking a sickie”?
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