A third of Aussies looking to purchase, renovate or build in the next five years say they don’t trust the construction industry to get the job done.
Recent consumer research from global data, analytics and technology company Equifax revealed that over two-fifths (45 per cent) of Australians intend to invest in property in the next five years.
But of this cohort, nearly half (47 per cent) said they weren’t likely to see these goals through thanks to a lack of trust and a lack of qualified contractors in the building industry.
Researchers have largely put this lack of faith down to the sheer number of insolvencies sweeping the sector, with the construction industry making up 31.5 per cent of all businesses going bust in Q3 of 2024.
But this shouldn’t come as a huge surprise to any tradies keeping tabs on the news. Only last month, the collapse of Melbourne company Varaich Homes saw 18 customers left in limbo with unfinished homes and thousands of dollars out of pocket as the self-labelled “high-end builder” seemingly disappeared overnight.
But what is more surprising is the general lack of faith in the construction industry’s ability to produce decent homes and apartments. According to the survey, two-fifths (41 per cent) of Australians agree that their homes have visible damage and structural or design issues.
Over three in five (63 per cent) Australians also said that living in homes with defects causes stress, with that number rising to 77 per cent for those who live under these circumstances.
And things aren’t looking much better going forward as nearly two-thirds (64 per cent) of Australians closely watching the housing market think that the low supply level, coupled with high demand will only negatively impact building quality even more going forward.
Brad Walters, head of product and rating services at Equifax, said the industry was facing an uphill battle in wrestling back some positive perceptions from the public.
“Only one in three Australians have a positive perception of the industry – and there is a big gap to bridge,” he said.
“However, we know there are many capable, reliable and resilient industry players that are dedicated to doing the right thing. The opportunity is there to rebuild consumer trust, and for trustworthy building professionals to benefit from improved market confidence.”
Trust doesn’t come cheap
But the news isn’t all bad for tradies. Over three in five (63 per cent) of Aussies surveyed said they were actually willing to pay more for their builds on one condition – if construction businesses offered them assurances they were working with trustworthy developers.
To do this, a lot of companies and clients are supposedly placing greater value on industry rating tools like the Independent Construction Industry Rating Tool (iCIRT). Developed by Equifax, this star-rating system gives developers, builders, building and design practitioners, certifiers, trade contractors and consultants a rating of between 1 and 5 stars, with businesses that obtain 3 gold stars and above classified as ‘trustworthy’.
Although many still look to online reviews and licensing certifications to assess the quality of builders, the rating system is undeniably already making a splash. According to Equifax, some customers are even requesting their contracts include a termination and refund clause, in the event the developer does not obtain and maintain a trustworthy iCIRT rating before completion.
With so much about the sector’s future still up in the air, Walters said that these rating tools would likely become an industry mainstay, and net early adopting tradies a decent pay bump to boot.
“How can we support consumers and create an opportunity for the building and construction industry after a period of turbulence? That is the big question here,” he said.
“We’ve seen Australians familiarising themselves with independent rating tools and learning to use them when looking for credible construction firms and building professionals.
“One in three of those with property plans are aware of the tools, which is a testament to Australians’ increasing education and due diligence.”
