When Oracle Homes went into liquidation last week, Queenslanders building homes across the state looked on and wondered if their dream homes might be left in limbo, too.
- The liquidation of construction giant Oracle Homes has sent shockwaves through the Queensland construction industry.
- Regional experts say that price increases and delays are a problem and that they have to negotiate with customers.
- Metricon Homes is the largest builder in the Queensland region and says it is managing demand
But while Oracle has operated almost entirely in Greater Brisbane, experts say the pressure facing builders in the Queensland region is the same, as are the risks.
Andrew Middleton knows how lucky he has been with his new home built on the Sunshine Coast.
He and his wife Leanne bought their Pelican Waters land before COVID and then spent the pandemic thinking about their new build.
By mid-2021 they had largely settled on a builder who had given an early indication on the price, but it would be months before the details were ironed out and the dotted line signed.
By then the numbers had changed.
“As we went through the process and made some changes, where we ended up was significantly higher than where we started,” he said.
“We had to accept the reality that price increases were happening and the construction company [was] honest and open with us about it.
“We didn’t feel like we were being ripped off.”
Middleton said he felt sorry for those caught up in delays and larger price changes.
“We have people near us building and their trip is going to be more than double [the length of] ours,” he said.
“We were built in six months and [theirs] looks like 18 [months].
“As I have spoken with others [and] I hear stories of [it being] 500 days from [the] start of construction and probably won’t be ready for Christmas.
Builders and consumers more ‘vigilant’
Master Builders Sunshine Coast Regional Manager Nicola Scott said builders were under tremendous pressure.
“For anyone entering a new contract right now, we’re probably a little bit more aware of what’s going on around us,” he said.
“And we’re probably going to be a little bit more vigilant.”
Ms. Scott said a builder can list a house for $300,000 but, if there are delays, the cost can be much higher before the first brick can be laid.
“Over a six-month period, the price of that house has gone up quite significantly, whether it’s $15,000 or $40,000,” he said.
“If the consumer can’t help cover those unexpected costs, the builders are absorbing that, and that’s certainly hurting the industry.
“But if I’m someone who builds 150 houses a year, it’s bound to affect me.”
Metricon started building more than 900 new homes in the Queensland region last fiscal year, more than any other builder.
In May, it was forced to deny reports that it was facing financial problems following the death of its founder.
The company struck a new deal with Commonwealth Bank when shareholders pumped an additional $30 million into the company.
Director Jason Biasin says the challenges facing Metricon are “affecting the entire industry.”
“We can work to minimize impacts to the hundreds of regional Queensland families currently building a Metricon home,” he said.
Major failures ‘unlikely’
Peter Fry represents the housing industry in North Queensland and says Oracle-style failures are unlikely to happen this far from Brisbane.
Australia’s housing industry director says some regions can build fewer new houses in a year than construction giants start in a month, but they’re still feeling the ripples.
“It puts very big concerns across the industry,” he said.
“The consumer starts asking questions: ‘Will my builder be there?’
“And then the builders see the problem: They know that as soon as something like that happens, everyone gets hit with the same blanket.
“There are challenges in the industry, but the other side is that the industry is doing very well to maintain the workload that is required.”