Uptick in renovation interest yet tradies' win rate still low

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on November 16, 2020
Uptick in renovation interest yet tradies' win rate still low

Photo by Charles Deluvio on Unsplash

Trade quotes platform Buildxact reported its volume of quotes was up in Q3 2020, but the win rate was down to 13.65% in September.

Buildxact's reporting shows there were 32,463 quotes on its platform in the third quarter, an increase of 31.7% from the second quarter.

The platform's subscriber growth in that time also grew 21%. 

September's win rate is down from July's - which was 17.71% - with just 1,338 jobs won out of more than 10,000 quotes.

Throughout the second and third quarters, renovations accounted for 50% of all projects, and since July, average quote value has been above $150,000 - above the HomeBuilder renovation threshold.

The average time taken for a quote to convert to a win is about 50 days.

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September also represented a year-to-date peak of average quote value at $175,711. 

Per builder, the average number of quotes won was 2.8 in September, down from a high of 3.0 in May.

Buildxact CEO David Murray said tradies could also get a boost in the lead up to Christmas.

"As people have been restricted with domestic and overseas travel and are needing to spend more time at home, many are choosing to put their holiday budget towards renovations and home improvements instead," he said.

“Growth in profit margin suggests that builders have sufficient work and are not under pressure to reduce prices. Profit margin is also helped by the fact that there is more demand for renovations than new builds. Renovations attract a higher margin."

The third quarter average profit margin rose to 14.2%, up from 13.8% in the second quarter. 

Profit margin peaked in August at 15.09% and lowered to 14.06% in September.

The state of Victoria's trades industry

Despite strict lockdowns, Victoria also outpaced average quote values, with an average of $275,072 in the third quarter.

The next-closest was Tasmania at $230,449. 

However, the lockdown also caused a reduction in the number of quotes after July, and average quotes per builder was just 14.7 in Victoria, much lower than states not so affected by COVID-19.

Western Australia's tradies saw an average of 19.7 quotes, South Australia 17.9, and Queensland 16.6.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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