Declining Victorian home approvals hurt small contractors

Master Electricians Australia has urged the state government to reinstate first home owner bonus grants as falling new home approval rates hurt smaller contractors within the construction and electrical industry in Victoria.

According to the Australian Bureau of Statistics (ABS), home building approvals had fallen 9.9% in the past year, and the decline was now flowing through to building industry subcontractors, said MEA Victoria state manager Carl Rankin.

“The ABS recorded the number of registered home builders with Victoria’s Building Commission declined for the fifth straight month in September last year to 14,414, the lowest number since the year before,” Rankin said.

“Since May last year, more than 400 builders have not renewed their registrations and this number is quickly increasing. This means the number of jobs is down for many smaller contractors as well as the amount of work.”

Rankin said despite the number of all new building permits being in overall decline and the number of home permits being registered or renewed having fallen drastically, apartment permits have experienced a jump of 17.6%. However, this did not necessarily translate to a work boom for local businesses.

“Apartments are generally smaller than houses and therefore require less material and labour. On large sites, they are also often wired by larger contractors,” he said. “This means these are jobs small contractors do not normally get and the work they are able to undertake is significantly reducing in volume. The type of work is also changing quickly leading to reduced hours of work and materials, so it’s doubly bad for small businesses at the moment.”

Rankin said the decline would impact heavily on the electrical contracting industry due to its substantial investment in the building and construction sector. “While this affects all participants in the construction sector, a large part of the electrical contracting industry sits within it,” he said. “The building industry has already been hit with a spate of high-profile company collapses, with figures released by the Building Commission revealing the value of permit activity dropping 4.5% last financial year.

“It is important the state government reinstate first home owner bonus grants as it will give the industry the boost it desperately needs and ease the financial toll on small contractors in Victoria.”