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More building company collapses likely, industry body seeks to reassure would-be homeowners

Some building sites have stalled as supply chain issues delay construction. (ABC Gold Coast: Dominic Cansdale)

Master Builders has warned that those looking to buy and build new homes need to factor in "volatile" market conditions, with the collapse of more construction firms very likely.

Pivotal Homes was the latest in a series of builders forced into liquidation last week, following major firms Condev and Probuild earlier this year.

That has left some would-be homeowners in limbo with 103 houses still under construction by Pivotal and 177 more awaiting council approval.

But while home buyers can expect delays and increased costs, Master Builders Gold Coast regional manager Adam Profke says "we can assure you that your home will be finished".

What happens if the builder collapses?

When a construction firm goes into administration, Queensland's Home Warranty Insurance Scheme (QHWS) kicks in.

The premium paid is usually included in the build contract and is compulsory for all projects worth more than $3,300.

A spokesperson for the Queensland Building and Construction Commission (QBCC) said the type of assistance covered by the scheme would depend on the stage of the build.

Many housing projects have been delayed due to ongoing supply issues. (ABC Gold Coast: Dominic Cansdale)

"If the work has not yet started, the deposit will be refunded usually within two weeks once all required information is provided," the spokesperson said.

"If the work has started the QHWS will compensate the owner for additional costs to complete their home up to the compensation limit of $200,000 for standard cover, and $300,000 where optional additional cover was taken out.

Adam Profke said while most buyers should not be left out of pocket, there could be possible delays as builders face cost pressures.

"You do have that $200,000 buffer," he said.

"If something has significantly changed, they may be a small amount out of pocket."

How to pick the right builder?

Mr Profke said despite the "volatile" market, there were still options for people wanting to build a home.

"It's about going to a reputable builder and basically having conversations with them about how many projects you've got on, what is my realistic lead time?" he said.

But he said the availability of land was still a "large driver".

Building approvals on the Gold Coast have remained stable, Master Builders says. (ABC News: Elise Pianegonda)

"If it takes six months to a year for land to be registered, it's probably no point signing a contract today," he said.

"A lot of customers are being told by builders, 'Look I can't build for a year, come back and see us in a year's time."

Mr Profke said there was no "silver bullet" and that builders and their customers should be realistic about what broader industry uncertainty meant for individual projects.

Will more builders fall?

According to the Bureau of Statistics (ABS), there were 1,816 building approvals for houses on the Gold Coast in 2020-2021, and 1,781 in 2019-20.

Mr Profke says while there is "a lot of work to be done", more building companies are likely to fail.

"Demand in the sector hasn't reduced in the last two years," he said.

"The industry has been educated and seen what's going on in the marketplace."

Demand for new housing has remained high amid a growing population. (ABC Gold Coast: Dominic Cansdale)

Despite the high demand, Mr Profke said supply chain issues and continued uncertainty made it hard to predict when the market would stabilise.

"Most of the products that go into a home in Australia, very little of that is actually manufactured here," he said.

"We were surprised that the volume of timber recently [that] comes from the Balkans and the Ukraine.

"China has extended lockdowns into some of its key manufacturing districts which will again place additional pressure on the industry."

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