Why the Building Sector will be hit HARD in 2024
- Written by Anna Porter
Since February, 2023, there has been an upswing in housing values even with rate rising measures by the Reserve Bank of Australia. The same growth is not expected for 2024.
The building and housing industry can expect a hit in 2024 despite wide acknowledgement of undersupply by government and industry bodies.
According to Suburbanite Principal, Property Commentator and Valuer, Anna Porter, the 2024 housing policy agenda will largely focus on energy and hit the residential building sector hard.
“Residential dwellings account for around 23% of energy use in Australia and 11% of carbon emissions,” shares Porter.
“With climate change high on the agenda, we are already seeing policies introduced to improve the energy efficiency of homes across the country,”
“This is expected to heighten in 2024 with most major banks calling for a National, standardised star-based rating system to measure the energy efficiency of homes in hope of reducing credit risk for borrowers susceptible to bill shock by living in inefficient properties.”
The housing policy agenda will filter through to newly constructed homes where dwelling approvals are already well below average levels despite a national objective to deliver 1.2 million well located homes by 2029.
At present, the Nationwide House Energy Rating Scheme (NatHERs) measures the thermal performance of new homes including the design, levels of insulation, glazing, orientation of the block and building materials used.
“This energy rating framework has recently been increased from 6 to 7-stars (out of 10) which adds a load to the budget for those building a new home, the actual builder and associated stakeholders,” shares Porter.
“The building industry is already under increased pressure and profit margins will remain compressed in 2024 as builders adjust to the new standards.”
The scheme has been expanded to include existing homes and trials for this will be continued into 2024.
“The housing sector will be hit hard in 2024 and beyond especially older homes and units as the new 7-star energy rating framework comes into effect,” says Porter.
“Older homes are going to have to be retrofitted to bring them up to standard with this expected push from banks and insurance companies to incentivise homeowners, or even penalise the ones that aren’t upgrading,”
“Many homes built prior to the 1980’s fall well outside the new compliance framework.”
This has been seen in the commercial sector and it will now flow through the residential sector.
Anna Porter
Anna Porter (Grad Dip UEM, CPV AAPI) is one of Australia’s most popular Property Commentators, the Principal of Suburbanite and a qualified Property Valuer. Currently, Anna is dedicated to helping everyday Australians make money through property and avoid the pitfalls of the property market.
Anna’s media debut began in 2016 where she shared the stage with Mark Bouris and Andrew Morello as the property expert on the 2016 and 2017 Prosperity Through Property Australian Tour. In 2019, Anna proudly took up a weekly segment on YourMoney for its duration on air. Anna also regularly joins the team on Sunrise, Nova Radio, AusBiz and 2GB to offer the latest advice and expert commentary in buying, selling and investing in the Australia Property Market. She also routinely shares her thoughts with Fairfax Newspapers, MoneyMag and the Australian Property Investor Magazine just to name a few.
Away from the camera, Anna is sought after as a keynote for many leading events in the property industry including Thought Starter and MFAA Conferences. Porter is a published author and saw great success from her book ‘Whistleblower’. She also runs education programs for companies like Caltex, Optus, Flight Centre and Cricket NSW.
As an accomplished valuer for almost 20 years, Anna has worked on many institutional portfolios with thousands of assets across various property sectors. She still enjoys working one on one with ‘Mum and Dad’ investors and first time investors to help them start their investment journey the right way. Anna is passionate about growing her company and has rolled out the very first National Franchise Company in the property investment and buyer’s agent sector. As well as being an avid advocate for the property sector, Anna is a mum of two children, Billie and Zac. Outside her working hours you’ll find her riding with her beloved horse, out and about in nature or dining with her family.
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