Simonds Homes’ $10 million acquisition of Dennis Family Homes will turn the builder into one the nation’s biggest players. Its CEO believes the deal is good news not only for those involved, but the wider industry.
The similarities between Simonds Homes and Dennis Family Homes – two residential builders with decades of experience between them – have made the recently-announced merger of the two entities seem like a no-brainer.
Both trace their roots back to Victoria, Simonds having been founded in 1949 by Gary Simonds in Melbourne’s south-west before expanding to other states, Dennis Family Homes in 1982 – an offshoot of the Dennis Family Group of property developers that has stayed focused on building in Victoria.
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A four-bedroom Simonds home that is part of the builder’s current product range. Image: realestate.com.au
Proud of their history, both grew organically to become major in the building sector while staying true to their family-business roots.
And in fact, even their ways of working have always been aligned – a fact the Simonds team knew well, having been contracted as one of the first builders to craft homes for the Dennis family back in the 1980s.
So when the Dennis Family Group decided to narrow their focus to land, retail, and commercial developments and divest the contract housing business, the Simonds leadership saw it as a “seamless fit,” according to Simonds CEO David McKeown.
“We often have people come to us and ask if we’re interested in acquiring their business,” Mr McKeown said, explaining that it usually doesn’t make sense from a strategic or business culture perspective.
But in this case, “it was a yes across all categories”.
A sign of positive sentiment
The deal, which is set to be completed with Simonds taking over the Dennis Family Homes business officially on March 1, is more than just a good business move in the eyes of the executives at Simonds.
Mr McKeown explained that he believes that those who are invested in the viability of home building in Australia should also see this as a positive sign of turning tides.
David McKeown, CEO of Simonds Homes. Image: Simonds
“There’s a reason why we’re making this acquisition now, and that’s because of our strong confidence in the sector.”
“We are seeing the green shoots – whether you look at net migration numbers, pent up demand, or expected population growth by zone – we are seeing the market starting to turn,” Mr McKeown said.
Of course, he noted that the company recognises that there’s still “a long way to go” to return the industry to full health, but Mr McKeown feels that in Victoria as well as the country more broadly, this deal should be taken as “a genuine sign of confidence”.
A continuity pledge
Despite the complexities of such a large takeover, Mr McKeown said that Dennis Family Homes clients should also feel confident in their contracts, with Simonds steadfastly committed to delivering “the same product they fell in love with” when signing on.
“We’ve been very focused on making sure that we retain the best of the Dennis family homes business – that’s why we bought it,” Mr McKeown said.
For the most part, he explained, Dennis Family Homes customers shouldn’t notice much change at all come March 1. Simonds is endeavouring to bring over all the existing staff who choose to make the transition, so that it will likely be the same people answering the phones, the same people working on sites.
Existing Dennis Family Homes customers currently in construction should expect minimal disruption from the Simmonds acquisition, Mr McKeown said. Image: Unsplash
It’s not only for the customers’ benefit, but also because Dennis Family Homes’ product offering was a huge motivator behind the acquisition, so their dedication to keeping the output the same is paramount.
Mr McKeown explained that the company was already looking to plug certain gaps that had appeared in its offering when the opportunity with the Dennis Family business came along.
“We had been going through a process of refreshing our designs over the last couple of years, particularly driven by the changes in the National Construction Code, putting a lot of our product development effort and resources into meeting our NCC requirements,” he said.
After refining the designs that remained relevant, the company recognised that it could have more to offer in the larger product segments that were most applicable to master-planned communities, as well as their designs in some knock-down rebuild markets.
A Simonds home interior. Image: realestate.com.au
“When we looked at the Dennis family product set and overlaid against our own, we felt they were very complimentary; there was a fair bit of overlap in some areas, as you’d expect, given we were competing in similar markets, but certainly we felt that the addition of their products enabled us to accelerate our product development by 12 or 24 months,” McKeown said.
Becoming a bigger force
The CEO doesn’t shy away from the fact that ultimately, this is a purchase of a competitor and brings benefits beyond the product acquisition component.
The deal reportedly makes Simonds’ the country’s sixth largest builder, and with that size comes an amplified voice in the developer world.
It’s a responsibility McKeown doesn’t take lightly, and he shared what the company will be focused on over the course of 2025.
“We have a big passion for the industry, and we certainly want to advocate on behalf of our own customers. We recognise a lot of those customers are finding affordability and supply constraints exceptionally challenging at the moment, and stressful.”
“We recognise it’s not just on the governments. As industry participants, we need to find solutions that help drive down the costs and provide optionality for customers.”
Advocating for the industry
But of course, the government component is also significant, and Mr McKeown explained that this election year, Simonds will be focused on asking governments to pull whatever levers they can to ensure that consumers can access those choices.
Simonds is looking for ways to provide optionality for customers while driving down the cost, according to its CEO. Image: Getty
“Our wish and our hope and our ask for governments is to provide policy settings which allow choice and allow people to find the home that works for them.”
“If you look at, say, the Victorian market in particular, there’s a lot of push around increased density and a push to apartment living, and that will absolutely be appropriate for some people, but there are many other people who do not want that,” he said.
After all, in the minds of many Australian buyers, backyards are still inextricably linked to the idea of the great Australian dream, and there are families and buyer cohorts across the country for whom that is the most appropriate choice.
“We recognise that the unrestrained urban sprawl creates a lot of challenges around infrastructure; we understand also that there are challenges around pricing and supply of land,” Mr McKeown acknowledged.
“But there are also several policy constraints that are pushing up prices, in our view. When you look at the total cost of a new home, and how much that cost is coming from government charges of different sources, we feel that that contributes significantly to the affordability challenge that we’re facing,” he stated.
In the year ahead – as a new, larger entity once the Dennis Family Homes acquisition is complete – Mr McKeown says the messaging from Simonds will be clear.
“Our ask is to set policy settings that are friendly to homeowners, recognising that we do need to fund infrastructure at the same time, but with that cost borne appropriately across the marketplace.”
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