Australians have big property plans, but remain concerned about who they can trust in the construction sector

Key survey findings

• 45% of Australians intend to purchase, renovate or build in the next five years. A third of this cohort (32%, approximately 2.9 million Australians) say they have a negative perception of the construction industry in Australia. 
• Overall, only three in ten (30%) Australians have a positive perception of the construction industry, including one in ten (10%) extremely positive.
• Around seven in ten (68%) Australians say they are somewhat (28%) or very (40%) concerned about the rising number of construction company insolvencies and their potential impact on housing supply.
• Three in four (76%) Aussies who intend to buy, build or renovate a property in the next five years say they are willing to pay more to get assurance of working with trustworthy property developers or building professionals.

Sydney, Australia – November 2023 – Trust continues to be a big problem for the construction industry. Latest consumer research from global data, analytics and technology company Equifax reveals that while over two-fifths (45%) of Australians intend to invest in property (i.e. to purchase, renovate, or build a home or investment property) in the next five years, nearly half (47%) cite lack of trust in the building or construction industry (34%) and/or a lack of qualified contractors or builders in the market (32%) as the biggest barriers.

Insolvency levels are adding further pressure to the sector, with construction contributing 31.5% of all insolvency cases recorded in Q3¹. Perhaps unsurprisingly, almost seven in ten (68%) Australians say they are concerned about the rising number of construction company insolvencies and their potential impact on housing supply. This increases to three in four (76%) for those who plan to invest in property in the next 5 years.

Another factor contributing to consumers’ concerns with regards to the building and construction industry is the condition of their houses and apartments. According to the survey, two-fifths (41%) of Australians agree that their homes have visible damage and structural or design issues. Over three in five (63%) Australians acknowledge that living in homes with defects causes stress; the number increases to 77% for those who live under these circumstances. 

Brad Walters, Head of Product and Rating Services at Equifax, said the industry is facing a number of challenges. “Only one in three Australians have a positive perception of the industry – and there is a big gap to bridge. 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.”

In an uncertain market, trust is a highly prized asset

Equifax research also showed Australians would be willing to spend extra to be on the safe side. Over three in five (63%) say they are willing to pay more to get assurance of working with trustworthy property developers or building professionals. This number increases to 76% for those with property plans for the next five years.

Australians are also watching closely the supply shortage currently impacting the market. More than half of respondents (56%) say there are not enough homes to consider buying or moving into, with three in ten (29%) strongly agreeing. Nearly two-thirds (64%) of Australians are concerned that the low supply level, coupled with high demand, will negatively impact building quality in the country. 

“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. 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,” said Walters. 

A third of Australians with property plans for the next five years have a negative perception of the construction industry (32%, approximately 2.9 million people). However, nearly three in ten (28%) of this group admit that their perception has improved in the past 12 months, compared to only 9% of Australians without property plans in the next 5 years who have experienced a positive change of perception. For those consumers aware of the Independent Construction Industry Rating Tool (iCIRT), developed by Equifax, the chance of an improved perception of the construction industry in the past 12 months increases to 76%. 

“The correlation between the awareness of independent rating tools and change in perception of the construction industry is tangible,” commented Walters. “It is understandable that consumers have construction and property concerns, but rating tools like iCIRT help provide them peace of mind.”

The introduction of a star rating system into the residential construction industry aims to give certainty around one of life’s biggest purchase decisions. The iCIRT 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. 

This system gives consumers transparency and visibility, allowing them to choose building professionals confidently. Already, Equifax understands some customers have requested their purchase contracts include a termination and refund clause, in the event the developer does not obtain and maintain a trustworthy iCIRT rating before practical completion.

¹ Results from Equifax Quarterly Commercial Insights - September 2023

ABOUT EQUIFAX INC. 
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit www.equifax.com.au or follow the company’s news on LinkedIn.

ABOUT THE RESEARCH
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1008 Australian 18+ adults. Fieldwork was undertaken between 28th September - 2nd October 2023. The survey was carried out online. The figures have been weighted and are representative of all Australian adults (aged 18+).