Image Upload

File size must be less than 2Mb

You must have online publishing permission or full ownership of this image

File types (jpg, png, gif)

  • Hero image
    Member for Lowan Emma Kealy.

‘Profitless boom’ as Wimmera builders feel the pinch

By Jessica Grimble

Member for Lowan Emma Kealy has called for State Government assistance for the building sector. 

Her calls come after the collapse of Hotondo Homes in Horsham last week. The company attributed external pressures facing the construction sector as cause for the action. 

It is the second Hotondo Homes franchise to be placed in administration this year.

Article continues below

Ms Kealy first raised concerns about an impending industry crisis a year ago, when she spoke in State Parliament about timber and other product shortages and related cost increases. 

She noted how the government’s winding down of Victoria’s sustainable timber industry had caused an over-reliance on imported products, which were impacted by supply shortages.

She said the situation had gotten worse. 

“All you have to do is drive around any regional town to see how much the building sector really is struggling,” she said.

“It is upsetting to see Hotondo Homes Horsham go into administration. 

“It is something no-one ever wants to see happen to any business, and is devastating for the local family operators, the local employees who have lost their jobs, the local businesses left out of pocket, and the local families who are now uncertain about the future of their homes.

“Whether it was the endless lockdowns after the outbreak of COVID-19, staff and labour shortages, or shortages of materials and supplies – it’s fair to say that the building sector is one industry that definitely has not recovered.” 

Ms Kealy said it was ‘crushing’ for residents and builders. 

“The government must step in to support these businesses and give them and regional families some hope when it comes to not only their livelihoods but building their forever homes,” she said. 

Long wait times

John Mays of Mays Builders said shortages of materials such as structural pine, insulation and plaster had eased, but wait times for other materials such as laminated beams were up to six months. 

“There are huge rises in costs. Cost rises across the board could have been 15 to 20 percent – so something you price today, then wait for six months for materials, means the price is nowhere near what you’ve quoted,” he said. 

“I’m lucky my clients are very understanding and they realise it’s out of their control, out of my control and if they want the job done, they need to accept it, or it’s not going to happen.” 

Mr Mays said there were also long wait times for some trades and services. 

He said demand for building projects remained high, though rising interest rates had appeared to impact new house builds. 

Ararat-based EW Bulte offers hardware, timber and paint services. Owner Peter Walker said wait times for materials had eased, but sizes of certain materials could be challenging to access. 

“Prices have been going through the roof. Every time you get something, the price has gone up,” he said. 

“But we are still busy. There are not as many customers, but we are still doing the sales we were at the same time last year.”

Master Builders Victoria, MBV, chief executive Rebecca Casson said most builders were experiencing challenges. 

“We are calling it a profitless boom,” she said. 

She said MBV was advocating to the government to include ‘rise and fall clauses’ in domestic building contracts to protect builders amid unforeseen price increases. 

“Many builders in the residential sector have signed fixed-price contracts,” she said. 

“Unlike other products like fuel and food, these unforeseen price increases cannot be passed on to consumers. 

“If builders cannot pass increases onto clients, there is a risk of insolvency, and clients might end up with half-finished homes.” 

The entire July 27, 2022 edition of The Weekly Advertiser is available online. READ IT HERE!

The entire July 27, 2022 edition of AgLife is available online. READ IT HERE!