Home Renovations Were Always Tough. Now Many Are Giving Up Mid-Project.
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Home Renovations Were Always Tough. Now Many Are Giving Up Mid-Project.

Labour shortages and high demand have meant months-long slowdowns for people waiting to fix up their homes

By RACHEL WOLFE
Fri, Mar 24, 2023 9:04amGrey Clock 4 min

USA: A surge of home renovations in recent years combined with a shortage of contractors is turning more repairs and remodels into never-ending nightmares.

New homeowners and those renovating always expect projects to require more time and money than their contractor estimates. But for many, the costs have become so high and the waits so long that some are now abandoning projects midway, forcing them to live among half-finished renovations for months. Others are taking up the drywall themselves.

A renovation now takes 79 days on average, up 259% from 22 days in 2019, according to Jobber, an operations-management company whose software is used by home-service professionals. Remodelling is more expensive: Hourly wages for general construction workers are up 42% over the same period, from $35 to $49, according to insurance analytics firm Verisk. Material costs have climbed, too.

The Federal Reserve raised short-term interest rates by another quarter percentage point on Wednesday, a decision that will likely continue to suppress purchases of new homes. More people who had planned to move may now stay put and renovate their existing property, says Abbe Will, a researcher at Harvard’s Joint Center for Housing Studies.

Spending on home-improvement and repair projects in the U.S. increased by an estimated 15% in 2022 to a record $567 billion, following an 11% increase in 2021, according to a report issued Thursday by Harvard’s housing studies centre. Historical growth has averaged around 5%, says Ms. Will, the lead author.

Baxter Townsend and David Zlotnick thought buying an outdated Manhattan apartment and renovating it would be more affordable than new construction. Over a year and $250,000 into a remodel quoted to take a maximum of 15 weeks and around $100,000, they say they regret their decision.

The couple had to pay to completely redo the electrical work after Mr. Zlotnick tripped a circuit and sent sparks flying by plugging in a vacuum. The tiles in the primary bathroom are crooked and the sinks askew. Still, they dismissed the design firm they had been working with this month so they could finally move back home.

“We’re like, ‘Pack up and get out. It’s been a year. Please leave,’ ” says Mr. Zlotnick, who works in international shipping logistics. They plan to hire a different firm to finish the project, if they can find one.

New recruits needed

Those renovations and repairs can’t happen quickly without an influx of qualified workers. The construction industry will need to attract more than a half-million additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to Associated Builders and Contractors, a trade organisation.

General contractor Miguel Villamil employs four people in Indianapolis, and says he has struggled to find more workers. His lead time for projects has stretched up to seven months, and he has raised prices for his services considerably to stay staffed. He pays his workers a starting salary of $20 to $25 an hour, up from $12 to $15 in 2020.

He says he is frustrated with contractors who deliver rushed and shoddy work—hurting the industry’s reputation—and with homeowners who don’t always recognise the realities of the marketplace.

“It’s a big, big, big problem,” Mr. Villamil says. “People without experience starting their own businesses, but also big companies who end up hiring subcontractors who have no experience because they have no choice.”

Facing long waits and high prices, some impatient homeowners are taking matters into their own hands—with varying results.

Total homeowner spending on do-it-yourself improvement projects grew 44% between 2019 and 2021, to a record of $66 billion, according to the Harvard report.

Mr. Villamil has picked up jobs from homeowners who tried, and failed, to do it themselves.

“Some of them do a halfway-decent job,” he says. “Some of them don’t.” He adds that one client inadvertently wired the TV to click on every time he flipped the light switch. “They try their best,” he said.

DIY by necessity

Laura Hrusovsky wasn’t trying to save time or money when she became the general contractor on a massive home-repair project. She just didn’t feel like she had a choice.

About a year ago, Ms. Hrusovsky came home from a day out with friends to a sopping entryway carpet and water cascading out of the light fixtures. An upstairs toilet had sprung a leak from the water line, spewing hundreds of gallons of water through her 3,800-square-foot home in Valparaiso, Ind.

When their preferred general contractor said he couldn’t start for another six months, her husband, Jim Hrusovsky, had an idea. “I said to Laura, who is very well organised: ‘Are you willing to try it?’ ”

She took on the 40-hour-a-week project, but isn’t happy she had to. “I just lost a year of my life,” she says. She says she has a newfound appreciation for construction work.

Evan Moody and Autumn Furr bought a second home in New York’s Catskill Mountains in summer 2021. The couple expected the few cosmetic upgrades and repairs on their list would take a couple of months. Almost two years later, the house still isn’t finished.

After getting turned down by every electrician in the area, Mr. Moody ended up pleading with one who was two counties over. On top of a $100 surcharge for travel, he said he could only come on a rainy day when he couldn’t do the outdoor work that made up most of his income. A storm didn’t occur for weeks.

Tired of waiting, Mr. Moody recently took a week-and-a-half away from his job in advertising to build a back deck himself. He knew he was in trouble and needed a professional to finish the job when he had barely gotten the holes for the posts dug by the end of day two.

“I think that going into this, we had the perception that we were very good DIYers,” Mr. Moody says. “I learned that, in fact, I wasn’t.”



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A Perfect Storm Claims a Major Player

Western Sydney’s property development sector was rattled this week by the collapse of Bathla Group, one of the region’s most prominent builders of affordable housing.

Administrators from Teneo were appointed to the group’s main entity, Universal Property Group, along with related firm Raj & Jai Construction, after months of mounting financial pressure.

The scale of the fallout is significant. Universal Property Group reported liabilities of $3.2 billion as at June last year, the bulk of it owed to private credit funds, a detail likely to draw scrutiny as administrators work through the group’s finances.

Founder Bhart Bhushan pointed to a “perfect storm” of softening sales, the impact of May’s federal budget changes and rising construction costs. Bathla’s chief executive was more blunt, acknowledging that falling property prices and climbing build costs had squeezed the business over a sustained period.

The human cost is already visible. Off-the-plan buyers across Bathla’s Western Sydney projects, including in Schofields, Marsden Park and Tallawong, suburbs at the heart of the group’s development pipeline, are now facing uncertainty over deposits, settlement timelines and unfinished builds.

It’s a story that has become depressingly familiar in NSW, with more than 1,500 construction firms going under in the state this financial year alone.

A Market Searching for Certainty

Bathla’s failure isn’t an isolated event. It’s a symptom of the conditions squeezing developers across Western Sydney, and Marsden Park sits right at the centre of that pressure.

Rising construction costs, tighter lending and softening buyer sentiment have combined to push even large, established players to the wall.

For prospective buyers looking at Marsden Park, the collapse has sharpened a question that was already on many minds: not just whether a development looks good on paper, but whether the developer behind it has the staying power, capital discipline and planning relationships to actually deliver.

In that environment, track record has become the differentiator that matters most.

Buyers are no longer simply comparing floorplans and masterplans. They’re asking who has the balance sheet, discipline and history to see a precinct through from approval to completion.

KDMC: 25 Years, Zero Incomplete Projects

Against that backdrop, KDMC’s position in Marsden Park stands out.

The Kanebridge Group development arm has been building in Northwest Sydney for 25 years and, in that time, has never left a project unfinished.

That’s not a marketing line. It’s a completion record buyers can check against a market that has just delivered a stark reminder of what happens when developers overextend.

KDMC’s flagship Marsden Park project, a roughly 1,320-home precinct at 264A South Street, reflects the scale of ambition the suburb now needs from a developer that can actually deliver it.

It’s also a project with history.

Back in 2017, KDMC launched Stage One of the development and sold 49 units in a single day, a result that speaks for itself in terms of market confidence.

Shortly after, the project was abruptly put on hold when Transport for NSW halted the DA to reserve the site for a future train line. It would have been easy for a lesser developer to walk away.

Instead, that pause has turned into the site’s greatest asset.

With the train line now set to connect Marsden Park directly to both Sydney Airport and the CBD, the residual site has become one of the most sought-after development opportunities in Sydney, a rare case of patience and planning discipline converting a setback into a generational upside.

The current stage of the project is backed by lodged State Environmental Assessment Requirements and formal development applications, along with independent valuation and transport infrastructure analysis.

The aim is to ensure the precinct is grounded in real, defensible fundamentals, precisely the kind of financial and planning discipline that was missing in Bathla’s playbook.

KDMC has also backed its recent projects with a 10-year defect warranty, well beyond the statutory minimum most buyers have come to expect.

For anyone who has just watched a major developer collapse mid-build, that kind of guarantee isn’t a nice-to-have. It’s the difference between a confident purchase and a leap of faith.

The Bottom Line for Marsden Park Buyers

Marsden Park’s growth story doesn’t need more supply promises. It needs a developer who delivers on them.

With Bathla out of the picture and its Marsden Park buyers left assessing their options, KDMC’s quarter-century of completed projects and extended defect cover offer something increasingly rare in the current climate: certainty.

For anyone weighing up where to place their trust in Marsden Park right now, the calculation has become simple.

Choose a developer with a story of every project finished, and a site whose fortunes have only strengthened with time, not a headline about one that wasn’t.

For more information email propertyconcierge@kanebridge.com.au

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