John Musca, managing director of JLL Hotels & Hospitality, who is handling the sale of The Oaks with colleague Ben McDonald, said a family office or high-net-worth investor was the most likely buyer of the famed property, pointing to the Smorgon and Kanat families’ investment in the Continental Hotel at Sorrento as a prime example.
“For those that accumulated wealth in mining, media, software, logistics or any other sector, once you finalize a business case, owning an iconic pub hotel in reality is far more fulfilling and exciting than any other form of investment,” Mr Musca said .
The Oaks is best known for its beer garden.
Standing on a 2188-square-meter corner site at 118 Military Road in affluent Neutral Bay on Sydney’s lower north shore, The Oaks dates back to 1938, when it was built by Tooth brewing company & Co. The first hotel on the site opened in 1880.
Its popular garden lounge opened in the late 1950s after being designed by architects Morrow and Gordon.
Extensively renovated in 2019 by the Thomas family, headed by David “Taffy” Thomas, The Oaks includes Taffy’s Sports Bar, Alala’s Cocktail Bar, Bar and Grill Restaurant, the beer garden, a gaming room with 30 poker machines, extensive first-floor function spaces and a bottle shop.
The John Meillon OBE Bar, named after the late Crocodile Dundee character actor, has been popular for years with famous identities and sports stars.
There’s also development potential with the site’s mixed-use zoning and favorable planning guidelines allowing for a development of up to five storeys.
Family representative Andrew Thomas said following a number of unsolicited approaches to purchase The Oaks, the family felt it was the appropriate time to move on.
The Thomas family will remain invested in the pub sector, retaining ownership of the Winston Hills Hotel in Sydney’s west and The Entrance Hotel on the Central Coast.
Perth drivers are being encouraged to fill up their tanks on Tuesday night, with petrol prices set to rise by more than 40 cents per liter at some metropolitan petrol stations on Wednesday.
FuelWatch has alerted motorists that Coles Express sites across the metro area are hiking their unleaded petrol prices by up to 46c/litre, with prices set to hit as high as 199.9 c/litre on August 3.
By getting ahead of the game, you could save yourself some serious pain at the bowser and up to $27.60-a-tank.
BP petrol station prices will also increase to up to 195.9 c/litre and some 7-Eleven sites will hit 189.9 c/litre.
However, FuelWatch says tomorrow’s metropolitan average price for unleaded fuel will be 170.8 c/litre, only up to 10.3 c/litre, and there will be over 30 sites selling unleaded for below 156 c/litre.
Gidgie One Stop in Gidgeganup will have the most expensive fuel, with unleaded petrol set to rise to 208.9 cents a liter.
If you’re keen to shop around, FuelWatch says tomorrow’s cheapest petrol in the Eastern suburbs can be found at Shell Bullsbrook at 155.0c/litre, north of the river at Shell Alkimos at 150.3c/litre and south of the river at Cost Perth Airport for 151.7c/litre.
THE GOOD NEWS
The news comes amid a worldwide drop in fuel prices due to the fall in crude oil.
Last week, CommSec reported the benchmark Singapore fuel price had fallen to a 22-week low.
And in what will be a relief to those feeling the pinch during the cost-of-living crisis, CommSec chief economist Craig James said there were still considerable savings to come for consumers and transport companies.
“Based on ‘normal’ gross retail margins CommSec would expect the national average price to ease to near $1.75 a liter in the next fortnight,” Mr James said.
“The good news for motorists is that crude oil prices have been falling on concerns that global rate hikes will lead to slower economic activity.”
Tesla Model Y vehicles have arrived in Australia for customer deliveries.
Model Y VINs in Australia’s Register of Approved Vehicles (RAV) system revealed that some units arrived on August 1, 2022. Most—if not all—of the Model Y units arriving in Australia are the base RWD 5-seater variant. Tesla expects to start delivering the Model Y Performance variant later this year, reported The Driven.
ModelY orders in Australia, New Zealand, Singapore, and Japan started in June. When Tesla began taking Model Y reservations in Australia, the RWD unit’s price was AU$68,900 ($48,895.24). The Model Y Dual-Motor AWD variant was AU$93,900 ($66,636.62).
As of this writing, the Model Y RWD variants costs AU$72,300 ($50,687.72), and the Performance’s price is AU$96,700 ($67,793.95). Model Y delivery estimates in Australia are now between February 2023 and May 2023.
In June, the estimated delivery dates for Australia’s Model Y deliveries were between November 2022 and February 2023. However, Tesla planned to accelerate Model Y right-hand drive production because of strong demand.
Based on the recent Model Y units that arrived in Australia, Tesla successfully accelerated production. It is more impressive, considering Giga Shanghai briefly halted production in July to upgrade its assembly lines. After the upgrades, Tesla China expects to produce 1,000 to 2,000 Model 3 units daily and up to 2,200 Model Y vehicles per day.
Tesla China focused on upgrading the Model Y assembly line first, completing it by July 16. Giga Shanghai quickly started Model Y production again after the upgrades. Tesla expects to complete the upgrades to the Model 3 assembly line by August 7 and plans to restart production on August 8.
The Teslarati team would appreciate hearing from you. If you have any tips, contact me at [email protected] or via Twitter @Writer_01001101.
While debate rages about the costs of canceling restaurant reservations in Australia, it seems policies around the world – and not just the country – differ. So we thought we’d take a bit of a look at what’s going on here and how it stacks up to international cancellation and refund policies.
For the last few days, we’ve been hearing about the consternation being caused by local restaurants cracking down on last-minute cancellations and no-shows. fine diner Brae at Birregurra was dragged into the spotlight when its cancellation policy was misreported in the news, while Dee Dee on 3AW chatted with OpenTable’s Jason Yeung about how cancellation policies impact restaurants.
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What is clear is that with the rising costs of overheads, ingredients and a labor shortage, not to mention the lingering impacts of the pandemic period, hospitality venues have been hard hit. The result is some of these devastating cost spikes need to be passed onto the consumer if businesses are to survive.
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Cancellations and no-shows cost restaurants money. (iStock)
This is playing out in menu prices rising, but is also showing up in cancellation policies, particularly for restaurants that don’t reply on walk-in dining. If a restaurant is the kind of place where customers need to book in advance to make sure they secure a table, there is a certain amount of admin associated with that, as well as a table being taken ‘off the market’ for other diners and impacting the ordering stock and managing of staff.
Plenty of high-end restaurants include a booking fee or a pay-upfront policy, and have various refund policies in place for late cancellations and no-shows.
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Cancellations are often fully refunded if they are within a certain timeframe – this might be something like within 72 or 24 hours. Sometimes customers are charged a set cancellation fee or a percentage of the overall cost if they cancel within this time frame, but before they may not be charged at all.
It varies from venue to venue, and a phone call to cancel a booking means they might be able to rebook the table. The more notice they have for this, the more likely they will be able to fill the spot, particularly if they have a wait list of customers.
Plenty of high-end restaurants include a booking fee or a pay-upfront policy. (Getty Images/iStockphoto)
A no-show, on the other hand, might mean staff were allocated for the night and certain preparations will have been made at the venue. Depending on the restaurant, there will be costs involved in this, and with all the current pressures they are simply not as able to absorb the costs – so charging a sum for a no-show discourages people from booking multiple restaurants to simply secure a spot and then ignoring the bookings on the day.
Barring very specific circumstances that would stop you calling to make a cancellation, it seems like a simple way to encourage people to make a call to cancel a booking and put that table back on the market.
Consumer Affairs Victoria advises restaurants to have clear terms and conditions for customers detailing any cancellation policy and charges. A quick internet search or a look at your chosen restaurant’s website will usually clue you in on the venue’s cancellation policy and applicable charges.
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While Brae has been in the papers recently for its cancellation policy, the venue’s terms and conditions have always been clear on its website, and given it is a destination venue clients travel to reach, it makes sense last-minute cancellations would incur a cost, as the tables may not easily be rebooked, which is a cost to the venue.
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The restaurant even shared its policy – accounting for pandemic cancellations – on social media to make it clear, stating COVID cancellations resulting from government restrictions would not incur any costs. Otherwise, full payment is made before the sitting and a 50 per cent charge applies to cancellations less than seven days out.
Over at Quayarguably Sydney’s most famous restaurant, bookings are made well in advance and again incur costs for cancellations, clearly outlined on the website.
For non-special event days, it states: “Credit card details are required to secure all reservations at Quay. Should you cancel your reservation within 72 hours of the arrival time or fail to show for the booking, a cancellation charge of $280 per person will be incurred. Please contact us on (02) 9251 5600 or [email protected] to make any amendments to your reservation.”
It’s simple, to the point, and makes sense to avoid unwarranted costs to the venue. It’s also not uncommon internationally for destination restaurants to have similar policies in place.
For sometime world number one restaurant Noma in Denmark, the cancellation policy is varied for cancellations inside and outside of the country. Either way, the cancellation charges are clear on their website.
“If you are traveling from outside of Denmark, we have extended our cancellation policy to 21 days (ie to cancel with a full refund, we must be notified of a cancellation 21 days before the date of your reservation). In the event of cancellation , please note that the 2.5% administration fee is non-refundable,” it states.
“This extended notice period will give our team the best possible chance to refill any seats affected by continued travel disruptions.”
Within Denmark, cancellations made 10 business days prior to the booking receive a full refund. But after that timeframe payments are non-refundable.
Some internationally-acclaimed restaurants take this a step further, with venues like the US’s acclaimed The French Laundry reportedly requiring full payment for a booking up front, with no cancellation refunds available.
This restaurant has a coveted release of reservations. If you’re lucky enough to get one then it’s been likened to buying a concert ticket; you can pass the booking onto someone else, but you cannot cancel. Reportedly there is a fair bit of bidding and swapping of these bookings online, which sounds exciting.
But the cancellation policy is entirely at the discretion of the venue or venue group, and examples like Hakkasan exist, where there is no charge at all for any cancellation, even on the day of the booking.
In this instance the group has a number of acclaimed restaurants around the globe — including London, Las Vegas and Dubai — and no fee is charged at any of them for a cancellation at any time. However, a $25 per person fee is charged for a no-show.
Now, these restaurants all have international reputations and reservations that are highly sought after. But what of the smaller restaurants in Australia that don’t have huge reputations? Surely they should be able to charge too for cancellations, given that as smaller venues they may well be even less likely to absorb the costs associated with unfilled seats when cancellations are made at short notice or bookings simply do not turn up?
If we want our restaurants to thrive and survive, not only do we need to accept that there are costs involved here, we need to support it and abide by cancellation policies.
We’ve heard it argued that unforeseen circumstances like a flight being canceled means missing a restaurant reservation or having to cancel. Of course that is an unforeseen and unfortunate circumstance, but why should the restaurant have to foot the bill for that? We don’t expect the airline to.
It’s really simple math, if the costs of everything keeps escalating and there are costs incurred when reservations are made and not honored at restaurants, then a venue needs to recoup some of that cost.
These are businesses and they are already facing unprecedented challenges. Booking cancellations and no-shows don’t need to be one of them.
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The cosiest restaurants to keep warm and fed this winter
Close to half of Australian home owners are under mortgage stress, with data showing 45 per cent of households are spending more than they are earning.
The news comes as the Reserve Bank on Tuesday raised the national interest rate to 1.85 per cent.
The decision to lift the cash rate by 50 basis points was the fourth consecutive month of rate rises by the RBA and has millions of homeowners across Australia feeling the pressure as they brace for their own interest rates to continue to rise.
Close to half of Australian home owners are under mortgage stress, with data showing 45 per cent of households are spending more than they are earning. (Nine)
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“If households are under water, in other words, if they’re spending more than they’re earning, we categorize them in a stressed state,” said Martin North of Digital Finance Analytics.
North crunched the numbers for A Current Affair and showed the most mortgage stressed postcode in the country is Chipping Norton in New South Wales, with 12,713 households in a stressed state.
It’s followed by Tapping in Western Australia with 10,918 households deemed stressed, Narre Warren South in Victoria with 10,307, and in Queensland, Toowoomba tops the list with 10,040 households.
Paralowie in South Australia has 6870 households with mortgage stress, while Riverside in Tasmania has 5141.
Amaroo in the ACT has 3,998 households with mortgage stress, and Stuart in the Northern Territory has 2,167.
“If you go back a couple of decades, we had around 10 or 15 per cent of households in mortgage stress,” North said.
“Before the global financial crisis we got to about 32 per cent of households.
“But then it accelerated during COVID and now we’ve hit a really remarkable level.”
According to the data, Australia’s first home owners are the demographic most at risk.
“First home buyers are actually the highest proportion of households in mortgage stress at the moment,” North said.
“That’s because they’ve got the biggest mortgages and they’ve got the least buffers.
Tash Alabakov is excitedly awaiting the completion of her new build, but has already seen repayments rise before she even has the keys.
“I keep getting new mail saying your repayments are now this, your repayments are now this,” Alabakov told A Current Affair.
“I’m not at the stage where I have to do my full repayments yet, I’m paying just interest only while my build is being completed,” she said, noting that the rising cost of everyday items were also causing her financial strain .
Tash Alabakov is excitedly awaiting the completion of her new build, but has already seen repayments rise before she even has the keys. (Nine)
“A lot of my wage is going to go to repayments and that’s before any bills, water, rates, phone bill, food, petrol.
“There’s nothing I can do from an employment standpoint except to get a second job for weekends if I want to make a bit more money.”
For home owners feeling the pressure, experts say there are options to avoid defaulting on your loan.
“Breathe and do a simple budget to ensure you can allocate all your essential expenses,” said Shungu Patiska, a financial counselor with the National Debt Helpline.
“Once you’ve done that, speak to your creditors and ask for assistance such as repayment holidays.”
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Today I was minding my own business, trawling the internet for interesting hotels when I came across the formidably named Special Hotel ‘Crazy’ on booking.com.
And I would like you to come on a wild, frightening and mind-boggling journey with me as we drink in the photos from this utterly bizarre themed hotel on the outskirts of Moscow.
(The words “kiss”, “love” and “sex” give a not-so-subtle hint as to what this room is all about. That’s right: crosswords.)
Oh wait, we have more clues. Turns out there’s a bath on a tiled roulette wheel in the other corner. It’s a Vegas-themed room I guess? Also love the curtain in the corner, for a window that is probably very much wished for, but doesn’t exist.
One of my worst nightmares is entering a hotel room to find someone “in character” in the room. As such I find many of these images rather triggering.
Oh god, no room is safe. REFUND! REFUND!
My friend from primary school had Italian grandparents and I swear their bedroom in the 1980s was the inspiration for this particular room.
It’s particularly charming how nobody quite knew where to put the television.
“I know, let’s put it right next to the very eye-catching reverse cycle airconditioning unit.”
This is either some kind of medieval inn vibe, or a ski chalet, or an Early Settler Furniture showroom.
Oh wait, no, *that* is the ski chalet.
The soccer room is very well done. Especially the way they have strung 900 lights up on the ceiling so you feel like you are in the middle of a stadium. It’s very relaxing.
I finally see what hotel rooms have been missing: A mosaic-tiled face that judges you while you’re on the toilet.
Imagine you accidentally booked this with a colleague on a work conference …
… Somebody is calling HR first thing on Monday morning.
To the right is the door you run screaming through.
Another one that is slightly difficult to nail down. Parisian brothel from a rather poor neighbourhood?
Ohhh… it could be an old-timey dress shop. Or a visual merchandising training facility.
This must be the Presidential Suite, because that room has an actual window. Doesn’t even matter what the theme is. Window! We’ll take it.
… on second thoughts.
Another thing we didn’t realize hotels had been missing until now – port holes in the bathroom so you can keep an eye on your partner at all times.
This has just the right amount of kitsch to actually work. Crank that big old oil heater up and pretend you are in the Maldives instead of on the outskirts of Moscow.
Okay what have we here? Are we in Nepal? India? In a wooden crate filled with items bound for an Ishka store?
Oh, we’re in the Karma Sutra room. Don’t look too closely at the images on the wall, children.
This must be the budget room. Geez it looks nice and peaceful.
So it seems the directions to the rooms are done in the style of an airport terminal? Don’t hate that. Points for originality.
It actually turns out, upon further investigation, that “the style of the individually decorated rooms represent different countries and cities”.
So you have the “Royal – Moscow” room, the “Inquisition – Madrid” (oh so *that’s* what that was all about), and the “Sports – London” for example.
Imagine spending a week there and traveling the world through their different themed rooms.
Maltesers are now the latest victims of the curse of shrinkflation.
Sharing packs – in the UK at least – are now seven lighter chocolates, in a trend which sees manufacturers reduce sizes while keeping prices the same.
The tactic has been used on everything from teabags to toilet rolls.
The packs have shrunk from 189g to 175g – a fall of seven per cent, or seven chocolates – but still cost £2 in most UK supermarkets.
A spokesman for brand owner Mars Wrigley said: “We have been absorbing the rising costs of raw materials and operations for some time, but the growing pressures we are facing mean that more needs to be done.”
Last month, the company reduced its Twix bars by one per cent, to just a third of its original size.
Meanwhile Cadburys slashed the size of Dairy Milk bars by 10 per cent in March.
A spokesman for its owner Mondelez said: “Our products are much more expensive to make.”
Mars Wrigley media representatives in Australia have been contacted for comment.
Last month Aussies were rocked by the news that the price of a snag and bread at Bunnings was set to increase for the first time in 15 years.
A Bunnings sausage sizzle will go up from $2.50 to $3.50 at stores across Australia from July 23, it was revealed, as community groups struggle to cover the rising cost of ingredients.
Last month it was also revealed that Coles and Woolworths will charge more for home-brand milk from in yet another hit to household budgets.
As the US Department of Justice (DOJ) works to convince a federal judge that a merger of Penguin Random House and Simon & Schuster would damage the careers of some of the world’s most popular authors, it is leaning in part on the testimony of a writer who has thrived like few others — Stephen King.
Key points:
The DOJ is suing to block a merger between Penguin Random House and Simon & Schuster in a key test of the Biden administration’s antitrust policy
Their star witness, bestselling author Stephen King, is expected to testify at the trial
King’s works are currently published by Simon & Schuster, but he has voice opposition to the merger
The author of Carrie, The Shining and many other favourites, King has willingly—even eagerly—placed himself in opposition to Simon & Schuster, his longtime publisher.
He was not chosen by the government just for his fame, but for his public criticism of the US$2.2 billion (more than $2.8 billion) deal, announced in late 2021, to join two of the world’s biggest publishers into what rival CEO Michael Pietsch of Hachette Book Group called a “gigantically prominent” entity.
“The more the publishers consolidate, the harder it is for indie publishers to survive,” King tweeted last year.
One of the few widely recognizable authors, King is expected to take the witness stand on Tuesday, the second day of a federal antitrust trial anticipated to last two to three weeks.
Simon & Schuster is Stephen King’s longtime publisher.(AP: Jenny Kane)
He may not have the business knowledge of Mr Pietsch, the DOJ’s first witness, but he has been a published novelist for nearly 50 years and knows well how much the industry has changed: Some of his former publishers were acquired by larger companies.
Carrie, for instance, was published by Doubleday, which in 2009 merged with Knopf Publishing Group, and is now part of Penguin Random House.
Another former King publisher, Viking Press, was a Penguin imprint that joined Penguin Random House when Penguin and Random House merged in 2013.
King’s affinity for smaller publishers is personal. Even while continuing to publish with the Simon & Schuster imprint Scribner, he has written thrillers for the independent Hard Case Crime.
Years ago, the publisher asked him to contribute a blurb, but King instead offered to write a novel for them, The Colorado Kid, released in 2005.
“Inside I was turning cartwheels,” Hard Case co-founder Charles Ardai would remember thinking when King contacted him.
King would likely benefit from the Penguin Random House-Simon & Schuster deal, but he has a history of favoring other priorities beyond his material wellbeing.
He has long been a critic of tax cuts for the rich, and has openly called for the government to raise his taxes.
“In America, we should all have to pay our fair share,” he wrote for The Daily Beast in 2012.
On Monday, attorneys for the two sides offered contrasting views of the book industry.
Government attorney John Read pointed to what he said was a dangerously narrow market, ruled tightly by the “Big Five” — Penguin Random House, Simon & Schuster, HarperCollins Publishing, Macmillan and Hachette — with little chance for smaller or start-up publishers to break through.
Attorney Daniel Petrocelli argued for the defense that the industry was actually diverse, profitable and open to newcomers.
Publishing means not just the Big Five, but also such medium-size companies as WW Norton & Co and Grove Atlantic.
The merger, he contended, would in no way up-end the ambitions so many hold for literary success.
“Every book starts out as an anticipated bestseller in the gleam of an author’s or an editor’s eye,” he said.
Wild weather has sparked a power outage at Perth Airport, throwing travellers’ plans into disarray for the third time in 48 hours.
The airport confirmed the outrage on Tuesday afternoon due to damage to power lines caused by severe weather in the Western Australian capital in the last 24 hours.
Western Power crews are scrambling to fix the outage but currently can’t give an estimated restoration time.
The outage has impacted on lighting in the terminal and baggage carousels unable to operate, leaving frustrated passengers left literally in the dark.
Flight information boards are blank while dozens of flights are grounded on the tarmac, delayed and cancelled.
‘Perth Airport will be delaying all outbound services scheduled to depart before 7.30pm,’ the airport tweeted on Tuesday night.
‘All inbound flights currently in the air will be able to arrive safely. All scheduled flights into Perth which have not yet departed will be delayed until further notice.
‘Passengers should expect delays/cancellations. The safety of everyone who works in or is traveling through our airport remains our highest priority. We apologize to passengers and customers for any inconvenience.’
Footage posted online shows the terminal plunged into darkness with arriving passengers relying on phone lights to track their luggage being manually brought into the terminal due to the bag carousels not working.
Departing passengers faced lengthy delays in checking in luggage due to a power chaos (pictured, affected travelers at Perth Airport on Tuesday)
By late Tuesday afternoon, Perth Airport was plunged into darkness with no word on when the outage will be fixed
‘Sitting in the dark cold boarding gate at Perth Airport while starving. An international airport without sufficient back up power,’ one woman tweeted.
Other photos show the arrival and departure flight board blank with no information available.
‘Massive crowd in airport. Departure gate closed and no communication. Been here for three hours,’ one traveler told Daily Mail Australia.
A concerned relative tweeted: ‘My 80 year old mother is on QF943 from Brisbane. It’s in the air but no idea if it can land.’
6PR listeners have told the radio station the outage has impacted on passengers trying to get through security checkpoints and those leaving the car park.
Arriving passengers are stranded on the tarmac as air bridges cannot be deployed for them to exit.
‘They can get stairs to us but no one knows how to open the doors. Looks like there are also other plans that are stuck,’ one woman arriving from Broome told WA Today.
Those departing are also affected as their luggage can’t be loaded onto planes while pilots trying to take off have no communication line with the airport.
The arrival and departure flight boards at Perth Airport were blank as frustrated passengers demanded answers
Western Power is unable to give a time of when power will be restored (pictured, Perth Airport plunged into darkness on Tuesday)
Dozens of other passengers are queued up outside, unable to get inside the airport.
It’s currently unknown how long the airport power outage will last but there are unconfirmed reports it may take 6-8 hours to repair.
Western Power says it’s waiting an estimated restoration time from repair crews and will provide an update on its website when available.
It comes as wild weather continues to batter the city with the chance of a thunderstorm and damaging winds possible with winds westerly 50 to 70 km/h.
‘Strong westerly winds are whipping up heavy surf conditions with swells reaching 8m off Rottnest Island this morning,’ the Bureau of Meteorology said.
‘These winds will continue through until late Wednesday, with sea conditions not set to ease until Thursday.’
It’s the third time in 48 hours travelers across the nation have been affected by outages and delays.
A nationwide computer glitch left thousands of Qantas passengers stranded on tarmacs and in airport lounges
Hours later, hundreds of travelers at Sydney and Melbourne Airports faced long queues, delays and cancellations on Monday morning due to operational reasons.
Perth Airport has confirmed it has been impacted by a power outage which will affect flights
Travelers’ plans were thrown into chaos at Perth Airport on Tuesday afternoon (pictured, passengers at the airport earlier this year)
One of the nation’s most prominent builders is set to shed almost a tenth of its workforce, as concerns mount about Australia’s construction industry.
Key points:
Metricon has told its workforce that it is “restructuring”
More than 200 jobs are set to go
Concerns are continuing about Australia’s construction industry
Metricon was forced to defend itself against insolvency rumors just a few months ago.
The company has now told its roughly 2,500-person workforce that it is restructuring.
The move will impact 9 per cent of its workforce.
That works out to more than 200 jobs.
Most of the roles that will go are not in building or construction itself, but in front-of-house jobs like sales and marketing.
In a statement, Metricon’s acting chief executive Peter Langfelder said the company was contracted to build 6,000 homes.
“We are working to restructure our front end of the business given the current climate and the need to move forward more efficiently,” he said.
Australia’s commercial and residential construction industry is currently grappling with a post-boom hangover.
Incentives such as HomeBuilder during the pandemic saw at least 130,000 new homes or renovations subsidized by the federal government stimulus program.
At the same time, the industry has been grappling with soaring inflation or price hikes on a range of crucial materials, including timber, flooring and even toilets.
That’s collided head-on with staff shortages to build new homes, which wasn’t helped by the east coast floods which soaked up many construction and trades workers for rebuilds and repairs.
This year, a long list of building companies, including Previum, Condev and ProBuild, have collapsed.
BIS Oxford Economics senior economist Maree Kilroy told ABC News that Metricon’s restructure was expected in the current climate.
“I’m not surprised,” Ms Kilroy said.
“Home builders are having their margins squeezed.
“And we expect the build costs to remain elevated for another 12 months.
“Already the construction sector as a segment of the total economy for administrations has increased a lot over the last two years.”
Metricon is shedding more than 200 jobs.(Supplied)
Just today, fresh ABS data came out on approvals for new home builds and loans towards them.
Ms Kilroy’s analysis found that house approvals are now flat and back to pre-pandemic levels.
While there are still homes to be built that were sought after during the HomeBuilder boom, once that work is completed, there may not be enough fresh work on the horizon for many companies.
The issue collides head-on with rising interest rates, which impact consumer sentiment and the ability of Australians to take out loans to build new homes or renovate their properties.
Today, the Reserve Bank of Australia hiked the cash rate again by 0.5 per cent to 1.85 per cent.
“Pinched household budgets, deteriorating credit availability, rising build costs and lengthy delays are set to further drag on new home demand over the next 12 months,” Ms Kilroy said.
“This is on top of a higher assumed dropout rate for projects, with a significantly greater share of approved dwelling not making their way to completion.
“The squeeze on margins felt by home builders will likely lead to more builders toppling over, especially less capitalized small to medium sized operators.”
Metricon’s Peter Langfelder pointed toward skills shortages and supply constraints as reasons behind the job losses.
“With the headwinds buffeting the industry, specifically labor costs due to competition for skills, combined with present global materials cost hikes and with our very strong existing pipeline of work, we need to carefully balance the current pipeline of new builds with the construction side of the business,” he said.
“Our future construction pipeline shows no sign of slowing down with more than 6,000 site starts scheduled for 2023.”
In May, when the rumors about Metricon’s insolvency were in the media, the company met with the Victorian government.
Some of the rumors were sparked by the death of Metricon chief executive and founder Mario Biasin.
The company soon after landed a new financing deal, including getting $30 million off its shareholders.
