After Oracle Homes declared bankruptcy last week, Queenslanders throughout the state wondered whether their dream homes would be put on hold as well.
Key concepts
- Regional experts argue that increased prices and delays are causing them to bargain with clients.
- The biggest builder in rural Queensland, Metricon Homes, claims to be moderating demand.
- The collapse of construction behemoth Oracle Homes has stunned Queensland’s construction sector.
Although Oracle has almost entirely operated in Greater Brisbane, experts argue that the hazards and pressures faced by builders in regional Queensland are the same. What rural builders face after a series of company liquidations at major urban construction businesses?
Andrew Middleton recognises his good fortune in owning a brand-new home on the Sunshine Coast.
Prior to COVID, he and his wife Leanne acquired their Pelican Waters property, and they planned their future building throughout the pandemic.
By the middle of 2021, they had effectively picked a builder who had supplied an early cost estimate, but it would be months before the final details were sorted out and they signed on the dotted line.
By that moment, the numbers had changed.
“Where we ended up was considerably higher than where we’d began,” he commented as we advanced and made some changes.
“The builder was honest and straightforward with us about it,” adds the author. “We had to accept that price rises were occuring.
We didn’t believe they were exploiting us.
Mr. Middleton extended his condolences to anyone impacted by the delays and considerable price hikes.
“We have others nearby who are building, and their journey will be more than twice [the length of] ours,” he said.
“We built it in six months, while [theirs] took 18 months.”
The building has been under construction for 500 days, and based on interactions with others, it seems unlikely that they will be completed by Christmas.
Customers and builders are becoming more “vigilant.”
According to Nicola Scott, regional manager for Master Builders on the Sunshine Coast, builders are under a lot of pressure.
She said, “For anybody beginning a new contract right now, I believe we’re certainly more aware of what’s going on around us.
We’re also probably a bit more vigilant.
A builder may submit a quote for a $300,000 house, but if there are delays, the price may rise dramatically before the first brick is laid, according to Ms. Scott.
“Whether it’s by $15,000 or $40,000, that house’s price has risen rather drastically in the previous six months,” she remarked.
“The builders are absorbing it if the consumer is unable to assist in meeting those unplanned expenses,” the author added.
However, if I construct 150 houses every year, it will certainly have an effect on me.
During the preceding fiscal year, Metricon commenced construction on more than 900 new residences in rural Queensland, more than any other builder.
Following the death of its founder in May, it was forced to reject rumours that company was having financial troubles.
The company negotiated a new arrangement with the Commonwealth Bank after shareholders invested an extra $30 million in the company.
According to director Jason Biasin, Metricon’s problems are “affecting the whole company.”
We can attempt to mitigate the impact on the hundreds of families in rural Queensland who are now building Metricon houses, he continued.
Significant setbacks are “unlikely.”
In North Queensland, Peter Fry, who represents the housing industry, believes that Oracle-style failures are improbable so far from Brisbane.
According to the CEO of Housing Industry Australia, some towns may start constructing fewer new homes in a year than large construction firms do in a month, but they still feel the consequences.
“It raises incredibly severe implications throughout the industry,” he said.
“Is my builder going to be there?” the consumer inquires.
The builders then realise there is a problem since they are aware that something comparable would effect everyone equally.
“The sector has issues, but on the other hand, the industry is functioning very effectively in order to maintain the required burden.”
