A new home requires much more than a roof, windows and brickwork.
Just ask first homebuyer David Niblitt who despairs as he stands on a patchy lawn in front of his half-built house.
He was so close to being a proud owner.
But two years after signing a $430,000 fixed price contract, the boilermaker can no longer afford to finish the home that he and his wife had hoped they'd be living in by now.
The foundations are up and the roof is on but inside, it's nothing but plywood and concrete slabs.
Like thousands of Australians, the Niblitts have been caught in a perfect storm.
Their builder, Porter Davis, collapsed in March and they've been told they'll need to find an extra $120,000 to finish their home, near Geelong, with another company because of soaring construction costs.
"We're trying to do what all Aussies do, build your first home," Mr Niblitt said.
"But it's just been an absolute nightmare."
Because construction had already begun when Porter Davis collapsed, the Niblitts are eligible to claim up to 20 per cent of the value of the contract through Victoria's building insurer, Victorian Managed Insurance Authority (VMIA).
But Mr Niblitt said that wouldn't be enough to absorb the additional costs he's facing and reckons he would be "clutching at straws" to secure a bigger loan from the bank as interest rates start to bite.
"I've had a real estate agent go out there and evaluate if we can sell the property as a half-finished house," he said.
"Hopefully, we might be able to sell it and be out of debt.
"If not, I've considered maybe just claiming bankruptcy."
Builders collapse during housing crisis
Australia's facing a shortage of 106,300 new homes over the next five years, according to the National Housing Finance and Investment Corporation, which warns the number of apartments and townhouses being built has fallen by about 40 per cent since the 2010s.
Yet, fixed-price contracts combined with soaring labour and material costs are causing massive losses and pushing Australia's construction industry to the brink.
The latest statistics from the Australian Securities Investments Commission (ASIC) reveal 1,753 companies have gone broke so far this financial year – or, an average of five a day – compared with a total of 1,284 the previous financial year.
The collapse of a string of high-profile builders including Porter Davis, ProBuild and PBS Building has brought at least 3,000 projects across Victoria, New South Wales, Queensland, and the ACT to a standstill and left even more customers without a home, or out of pocket.
One of them is nursing student Lem Lem who put a $15,000 deposit down on a house-and-land package in Melbourne's outer suburbs with Privium, just months before the builder collapsed in 2021.
Because construction had not yet begun, she has no insurance cover and has been told she won't be getting her deposit back.
"I was working almost day and night to save enough money for the deposit," she said.
Lem Lem was so determined to save up for her deposit, she took a break from studying to work as a full-time personal carer at a hospital.
Since the builder collapsed, Lem Lem – who migrated from Ethiopia — hasn't returned to her studies.
"It is very painful," she said.
"I had a plan to build my house and go back to my studies but now, I have to keep working."
Customers cancel contracts
Off-the-plan developments and house-and-land packages can be attractive to first homebuyers because they tend to be cheaper than established properties, only require a small deposit up front and can come with generous government grants.
But they carry risks for buyers — including delays and unexpected costs — and for the builders who underwrite the projects.
Dale Paddle owns a building company in the Albury-Wodonga region and said 40 customers on one housing estate had recently cancelled their contracts because the costs had risen well above the original quote.
According to Mr Paddle, an average house-and-land package in the regional Victorian town had increased by about $150,000 to $650,000 in the past 18 months, pricing younger buyers out of the market.
"We've had a lot of people withdraw due to not being able to get finance," he said.
"It certainly has a big cost impact to our business. It's putting a lot of pressure on us."
Mr Paddle said it wasn't just builders feeling the pain, with subcontractors further down the supply chain "often left holding the baby" when a company goes broke.
The Housing Industry Association's deputy managing director Jocelyn Martin pointed to pandemic-era policies including the $25,000 HomeBuilder incentive which fuelled demand for housing just as costs were beginning to surge.
"That put an enormous amount of pressure on the volume builders took on, and signed up to fixed-price contracts. Then when the price of materials went up, they were really caught," she said.
"We think we're at the tail end of that now and as the effects of the HomeBuilder fall away, that pressure is coming off the industry".
