Bombo couple Mark and Yvonne and Yvonne's elderly mum Bub who is 88 next month, were two-thirds of the way through their house build, when their builder went bust. That was four years ago. He didn’t complete the work and disappeared. All three are on the aged pension, and had a finite budget and their house is still not completed.

“Mark has long-term health issues and is limited in his ability to work around the house. Our children stepped in to help out as much as possible, paying for and installing flooring, decking and recently fencing and doing landscaping. They can only do so much as they have their own businesses and families to take care of and all live a few hours away.” Yvonne revealed.

Carolyn Lee, owner of local solar business The Energy Experts, knows Yvonne from her cookbook club ‘Kiama Feast’, and is leading the charge to enlist the help of local tradies to help the couple finish their house. She has already called on all relevant businesses in the Ray White Kiama Preferred Trades List to ask whether those tradies would consider donating their time and expertise to help the three. The Energy Experts are donating the supply and installation of some solar panels, to help get their electricity costs down. 

The Bugle would like to help by widening the audience to appeal to any kind and suitably qualified and insured tradespeople, who can help with things like replacing some skirting boards and an architrave, finishing timber trim, some painting jobs, some rendering on the garage, installing a ceiling in the back garage, staining the front deck and fence, fixing the leak in the ceiling downstairs in the dining room. It would also be great to get some raised garden beds built if possible. All materials will be provided. Bub, Mark and Yvonne said “We are very appreciative of Carolyn's kindness and anyone else who can help out.” 

Carolyn says to all prospective helpers: “Know that your help would be much appreciated, and Yvonne is a superb cook so any tradesperson who helps out will be treated to delicious and plentiful food in thanks for their efforts.”

Please give Yvonne a call on 0431 870 831 or Caro on 0414 675 673 if you would like to help.

This unfortunate experience is not uncommon. The University of NSW has produced a study since construction companies have been collapsing at a rate that has not been seen for almost a decade.  ASIC data shows that 2,023 construction companies have gone into liquidation since mid-2021 - in fact this sector leads the trend. 

The reasons for the collapse in the construction industry has been put down to “COVID shutdowns, extended periods of inclement weather and chronic supply chain issues to cashed-up infrastructure companies competing for construction labour, first home builder stimulus packages being wound back and the end of a prolonged cheap credit-fuelled surge”. In fact, “the industry has been at the centre of a perfect storm.” 

Prof. Swan, observes that bankruptcy, particularly of home builders, is very hard to predict, and says that “there is ‘very little’ that individuals can do in response other than expensive legal action”. He recommends avoiding buying off the plan. “There are large, reputable builders who have been around for many decades. This offers some protection but far from complete,” he said. 

Currently, the house buyer is just an unsecured creditor to the builder. Associate Professor Nicholls says “This means that they have two problems. Some of their funds will be lost and finding another builder to complete the work is difficult because of increased material costs.” 

He also noted that home warranty insurance (under the Home Building Compensation Fund) could only be claimed five weeks after an insolvency event, which is the case under the Master Builders’ Association standard contract. “The cover is also based on the original cost of works, which is likely to rise because of the same events that led to the insolvency”.

A/Prof. Nicholls is conducting investigative research into consumer protection in the construction industry as part of a UNSW Business Insights Institute project with Tip Group, an ASX-listed financial institution. The fact is that if a superannuation fund goes into liquidation, members’ investments are protected, and if a bank goes bankrupt, customers’ deposits are protected, but if a homebuilder collapses, he said new homebuyers’ deposits are not protected. 

“Our research focus will be to understand how to reduce systemic and systematic risk in residential construction by learning from financial and professional service regulation,” said A/Prof. Nicholls. He explained the outcome of the research would be to propose a regulatory framework that will minimise risks for those looking to buy and build new homes.  

For more information about the research at the UNSW Business Insights Institute, you can contact Dr Brad Hastings, Research & Insights Associate.