The COVID-19 pandemic has not had a significant impact on small builders in the residential housing sector over the June quarter according to construction software company Buildxact.

According to the Buildxact Residential Construction Activity Report April-June 2020, there is a strong demand for custom-built home projects and renovations. It also finds that while competition has intensified, many small builders are winning new work and that margins are healthy.

Buildxact chief executive David Murray says he expected a significant impact on work being quoted and won by Buildxact’s builder customers when the pandemic hit. He says one reason for this is that customers are spending more time at home and thinking about potential renovations and rebuilds.

“Buildxact’s data indicates there has been a major increase in quoting activity by the small residential builder since the COVID-19 restrictions began in March. The volume of quotes by small builders has increased and margins are steady, which makes for a relatively upbeat outlook for the residential builder,” David says.

“Our data shows that demand has not dropped off over the reporting period. Builders are still quoting work. The volume of quotes in June 2020 was up more than 25% (actual: 28%) compared to the volume of quotes in March 2020, and total quote values rose by 29% (June versus March). While our subscriber numbers have grown also during that period, it would not account for that much of an increase, which tells us there is still a lot of demand out there.”

Following the COVID-19 restrictions in mid-March, the total number of quotes fell in April. Volumes picked up again in May and June and when comparing the April-June 2020 quarter to the same period in 2019, the average volume of quotes is up 10.7%.

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“Demand is high, particularly for renovation projects. Builders are very busy quoting to secure a pipeline of projects to deliver, and with the average project over $150k, this work will run for many months,” David says.

Smith and Sons Renovations managing director Leigh Wallis, a franchise of 86 small builders across Australia and New Zealand agrees: “In mid-April, renovations inquiries took off exponentially. Obviously, some people are just tyre-kicking.

“But people are stuck at home and are looking at their four walls, wondering ‘What can we do to improve the home?’ The other a part of it is that some people may have had a go at renovations themselves and now need a tradie to fix up their mistakes. The other thing is that since COVID-19, people have got money that they may have intended to use on travel, but that’s now off the cards. They’re quite happy to spend that money on renovations.

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“I think we have fared quite well during COVID-19 compared to other sectors. For the next three months, if inquiries keep going the way they are and we don’t get another resurgence of COVID-19, I think we should get through it.”

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The full report can be viewed here.