{"id":45193,"date":"2026-10-29T00:11:39","date_gmt":"2026-10-29T00:11:39","guid":{"rendered":"https:\/\/www.argonandco.com\/?post_type=article&p=45193"},"modified":"2026-10-29T00:11:39","modified_gmt":"2026-10-29T00:11:39","slug":"use-the-window-how-volume-builders-can-recover-faster-and-perform-stronger","status":"publish","type":"article","link":"https:\/\/www.argonandco.com\/en\/news-insights\/articles\/use-the-window-how-volume-builders-can-recover-faster-and-perform-stronger\/","title":{"rendered":"Use the window: how volume builders can recover faster and perform stronger"},"content":{"rendered":"

Home builders carry the most risk in a new home for one of the thinnest returns. To weather the coming <\/span>downturn<\/span> builders<\/span> need to improve their operations in three ways. Lower the cost to build, build faster, and build with fewer paid trade days.<\/span><\/span>\u00a0<\/span><\/span><\/p>\n

The order book has already turned. New-home sales, land lending and borrowing capacity are all down, and HIA is now commenting that fewer homes will start in 2027 once signed work is built out. On our reading, most builders have less than a year of work in hand to make the changes. Six levers do most of it, and two of them return cash within a quarter.<\/span>\u00a0<\/span><\/p>\n

There is little room for error. Volume builders agree a price with the buyer, carry the cost of every trade and material until handover, and stand behind the home for years after it. For that, a builder typically keeps 3 to 7 cents in every dollar before tax (Master Builders WA), and we see similar results in the builders we work with.<\/span>\u00a0<\/span><\/p>\n

In the builders we work with, the sales commission on a home is, in round figures, often about the same as the builder’s profit on it. Winning the sale is real work, but the builder carries the risk after it. Theft takes more. HIA warns that copper theft is \u201ccrippling\u201d the sector, and the theft itself, and the locked fencing and video surveillance built to stop it, take a real share of a builder’s profit.<\/span><\/p>\n

\"\"<\/p>\n

Figure <\/span><\/span>1<\/span><\/span><\/span>. Anti-theft surveillance tower.<\/span><\/span>\u00a0<\/span><\/p>\n

It is an industry worth getting right. Construction employs about 1.4 million Australians, around one worker in eleven, and is the country’s third-largest employer, with about 7% of GDP (ABS). When a builder fails, buyers lose deposits, trades and suppliers go unpaid, and the businesses that fit out new homes lose the orders.<\/span>\u00a0<\/span><\/p>\n

That risk is rising again. Builders are busier than they have been in years, with about 95,000 houses under construction, but new-home sales fell 17.5% in the September quarter and cancellations rose to 13.6% (HIA).<\/span><\/p>\n

The turn is already in the data<\/span><\/b>\u00a0<\/span><\/h2>\n

Housing runs as a pipeline. Land comes first, then a building contract and finance, and only then a slab.<\/span>\u00a0<\/span><\/p>\n