Building company collapses turn home dreams into nightmares

PHOTO: Building construction firms are falling like flies. FILE

A new home requires much more than a roof, windows and brickwork.

Just ask first homebuyer David Niblitt who despairs as he stands on a patchy lawn in front of his half-built house.

He was so close to being a proud owner.

But two years after signing a $430,000 fixed price contract, the boilermaker can no longer afford to finish the home that he and his wife had hoped they’d be living in by now.

The foundations are up and the roof is on but inside, it’s nothing but plywood and concrete slabs.

Like thousands of Australians, the Niblitts have been caught in a perfect storm.

three photos top of a ute in front of the half-built house, inside the house and the family standing in front of a window. — **David Niblitt, his wife Jess and daughter Eva have been left with a half-built house in Teesdale.(Supplied: David Niblitt)**

Their builder, Porter Davis, collapsed in March and they’ve been told they’ll need to find an extra $120,000 to finish their home, near Geelong, with another company because of soaring construction costs.

“We’re trying to do what all Aussies do, build your first home,” Mr Niblitt said.

“But it’s just been an absolute nightmare.”

Because construction had already begun when Porter Davis collapsed, the Niblitts are eligible to claim up to 20 per cent of the value of the contract through Victoria’s building insurer, Victorian Managed Insurance Authority (VMIA).

Hundreds of Porter Davis homes to be completed under new deal | WATCH

But Mr Niblitt said that wouldn’t be enough to absorb the additional costs he’s facing and reckons he would be “clutching at straws” to secure a bigger loan from the bank as interest rates start to bite.

“I’ve had a real estate agent go out there and evaluate if we can sell the property as a half-finished house,” he said.

“Hopefully, we might be able to sell it and be out of debt.

“If not, I’ve considered maybe just claiming bankruptcy.”

Builders collapse during housing crisis

Australia’s facing a shortage of 106,300 new homes over the next five years, according to the National Housing Finance and Investment Corporation, which warns the number of apartments and townhouses being built has fallen by about 40 per cent since the 2010s.

Yet, fixed-price contracts combined with soaring labour and material costs are causing massive losses and pushing Australia’s construction industry to the brink.

More than 27,000 new home projects shelved by crisis hit construction industry

The latest statistics from the Australian Securities Investments Commission (ASIC) reveal 1,753 companies have gone broke so far this financial year – or, an average of five a day – compared with a total of 1,284 the previous financial year.

The collapse of a string of high-profile builders including Porter Davis, ProBuild and PBS Building has brought at least 3,000 projects across Victoria, New South Wales, Queensland, and the ACT to a standstill and left even more customers without a home, or out of pocket.

Woman standing next to a man holding brochure for housing development — **Lem Lem (right) signed a contract with building company Privium.(Supplied: Lem Lem)**

One of them is nursing student Lem Lem who put a $15,000 deposit down on a house-and-land package in Melbourne’s outer suburbs with Privium, just months before the builder collapsed in 2021.

Because construction had not yet begun, she has no insurance cover and has been told she won’t be getting her deposit back.

“I was working almost day and night to save enough money for the deposit,” she said.