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Downside of housing boom as Tamawood holds back payouts

Business

Home builder Tamawood has warned of the double-edged sword of the housing boom and a possible overheating of the sector because of the Government stimulus measures.

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The Brisbane company reported a six month result of $3.1 million, a 78 per cent increase on the same period last year, but said it could have been better. It claimed the stimulus from the Federal Government’s Home Builder grant had been introduced with a lack of clarity which had caused delays in contract signings.

Tamawood, which owns Dixon Homes, will pay a dividend of 11 cents a share fully franked and warned of major bottlenecks in the housing sector.

“Tamawood has recorded significant increases due to the HomeBuilder grant and ordinarily, as a result, the board would expect that (the company) would easily restore the fully franked dividends of 27 cents for the 2021 financial year,” chairman Robert Lynch said.

“Unfortunately … the industry may experience a number of issues due to the conditions and timing of the Homebuilder grant introduction.”

He warned there may be major delays in build times because of a labour and materials shortage because local manufacturing was at full capacity.

There could also be import delays on some materials and many builders were facing cash flow problems because of the delays.

Lynch said the company had done everything it could to mitigate the issues and he believed Tamawood was in a better position than most in the sector because it was debt-free and had long-standing supply and trade relationships.

He said there was no doubt there would be an impact but he could not predict how and when it would occur.

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