The major wave of builder collapses peaked in 2022-2023, but the risk hasn’t entirely disappeared. Some volume builders are still working through contracts signed before recent cost increases, meaning caution is still warranted when entering a new build agreement.
What checks should I make before signing a build contract?
Confirm the builder has current domestic building insurance and is a current HIA member in good standing. Crucially, have a solicitor review the contract to ensure it’s genuinely fixed-price, and ask for evidence of the builder’s financial standing – don’t rely on verbal assurances.
What does a fixed-price building contract actually mean in 2026?
A fixed-price contract *should* mean the builder completes your home for a set price, regardless of cost fluctuations. However, in 2026, scrutinise for escalation clauses, provisional sum items, prime cost items, and conditions allowing the builder to pass on material cost increases. Spending $600 to $800 on a solicitor’s review in Officer, Pakenham South, or Clyde North is a worthwhile investment.
The honest reality
Melbourne’s property market is navigating a tougher environment, with two recent RBA rate rises putting pressure on buyer borrowing capacity. In the South East, Officer, Pakenham, and Wantirna are proving more resilient than other corridors, but sellers who price to 2021 optimism are finding it difficult to transact.
Questions to consider
- Is the builder’s quoted price realistic given current market conditions, or is it based on older, lower cost estimates?
- What specific allowances are included in the contract, and what happens if those allowances are exceeded?
- How will the builder demonstrate their financial stability and ability to complete the project without relying on subcontractors who may be at risk?
Talk to KR Peters for a straight-talking appraisal with no obligation.
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Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.