Why almost 2,000 builders have gone bust in Australia in the past year trends now
Builders are going bust in Australia in record numbers leaving behind a trail of devastated customers who forked over tens of thousands of dollars for home deposits.
Sio and Maria Tupou paid $30,000 as a deposit with Melbourne firm Porter Davis, which collapsed in March leaving 1,700 homes unbuilt, and assumed any trouble would be covered by an insurance policy.
'When we attempted to make the claim, we were told there was no policy. Porter Davis never took out the insurance on our contract or build,' Ms Tupou told ABC Radio's Life Matters.
Sio and Maria Tupou were one of 1,700 Porter Davis customers left in the lurch when the builder collapsed and they weren't covered by insurance
'I just remember sitting there crying in the middle of a busy restaurant. I'm still emotional about it.'
The Tupous have since had some good news with the Victorian government announcing a $15million assistance package and the partial buyer of Porter Davis promising to complete unfinished homes.
Others are not so fortunate.
According to corporate watchdog ASIC, 1,709 builders went into administration between July 2022 and April 2023.
The problem facing the country's building industry can be traced to the HomeBuilder grant introduced by the previous Coalition government in June 2020, according to industry experts.
Phil Dwyer, president of the Builders Collective of Australia said the stimulus worked so well it put too much pressure on an already 'heated industry' by overloading builders with work they couldn't complete.
CoreLogic's Research Director Tim Lawless likened it to builders being 'over-subscribed' as homeowners rushed to qualify for the grants.
An owner-occupier could collect a $25,000 grant under Homebuilder if they signed building contracts by December 31, 2020 or a $15,000 grant if they signed by March 31, 2021.
More than 130,000 customers signed on for the program.
