Latest consumer research from global data, analytics and technology company Equifax reveals the improved level of trust consumers have with the construction industry.
According to Equifax, a third of Australians with property plans for the next five years have a negative perception of the construction industry (32 per cent, approximately 2.9 million people). However, nearly three in ten (28 per cent) of this group admit that their perception has improved in the past 12 months.
While trust continues to be a challenge for the construction industry, the research shows that the majority of Australians trust the construction industry to some extent. Tools like the iCIRT star-rating system have allowed the average consumer to gain a better understanding and level of trust towards the industry.
Room for improvement
The research showed that while over two-fifths (45 per cent) of Australians intend to invest in property (i.e. to purchase, renovate, or build a home or investment property) in the next five years, under half (47 per cent) cite lack of trust in the building or construction industry (34 per cent).
Insolvency levels are adding further pressure to the sector, with construction contributing 31.5 per cent of all insolvency cases recorded in Q31.
Almost seven in ten (68 per cent) Australians say they are concerned about the rising number of construction company insolvencies and their potential impact on housing supply.
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 per cent) of Australians agree that their homes have visible damage and structural or design issues.
Over three in five (63 per cent) Australians acknowledge that living in homes with defects causes stress; the number increases to 77 per cent for those who live under these circumstances.
“Only one in three Australians have a positive perception of the industry – and there is a big gap to bridge,” Equifax head of product and rating services Brad Walters 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.”
The iCIRT system
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 per cent.
The iCIRT 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.
“The correlation between the awareness of independent rating tools and change in perception of the construction industry is tangible,” Waters said.
“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 one and five stars, with businesses that obtain three gold stars and above classified as trustworthy.
Equifax research showed Australians would be willing to spend extra to be on the safe side. Over three in five (63 per cent) say they are willing to pay more to get assurance of working with trustworthy property developers or building professionals.