How to protect your building project in the current market

With increasing construction costs and many builders finding it challenging to source the materials and trades they need, it’s no surprise if you’re wondering whether building now is the right choice. If you’re looking at house and land packages in Perth or considering building a home in Perth, there are still plenty of ways that offer you peace of mind to get your dream home built.

Why does the building market appear more volatile?

Several factors are affecting the current market’s volatility. For example, material costs have risen due to record inflation figures resulting from Covid-19. In addition, the war in Ukraine is also driving up the cost of fuel, and ongoing supply chain issues are causing delays and driving up prices. 

Australia is also currently experiencing one of its most significant labour shortages. According to the Australian Bureau of Statistics, over 423,000 job vacancies are now available nationwide. With so much demand for skilled labour, tradies can choose who they work for, making it difficult for builders to secure consistent contractors.

Another issue is fixed-price contracts. While the certainty of a fixed price contract is desirable for many people looking to build for the first time, it is affecting the volatility of the building industry. That’s because a builder can’t change the lump sum amount you agree to pay with a fixed price contract. While this is great for the end consumer, it can affect costs considerably in a market with a skilled labour shortage and rising material costs, leading to financial difficulties for some builders. 

How to protect yourself in the current market

While there’s always an element of risk involved with purchasing an existing house or building a new home, there are some steps you can take to help protect you. 

Seek professional advice

Researching different builders and understanding their reputation and financial position is an excellent first step. Our downloadable checklist is a great place to start.

Seeking expertise from an independent third party, such as legal counsel or a new home building broker, is also a great idea, particularly if you’re relatively new to the building industry. Both can offer expert advice about the industry and help guide you through the process, including checking contracts, negotiating, and advocating on your behalf when dealing directly with a builder. Be sure to get recommendations and use a completely independent broker that isn’t aligned with an existing builder, like Better Way 2 Build.

Choose the right contract

You should also consider the correct type of contract for your build. As mentioned, a fixed-price contract can be an attractive option as a first-time builder to ensure you stick to your budget. Just be sure your builder has a solid reputation. Unfortunately, in the current environment, some builders are finding it necessary to win business to keep their business running, which means they can sometimes agree to a contract that’s not profitable for them. An unprofitable contract can lead to bankruptcy if they’re already in financial difficulty, leaving your build at a stand-still and costing you a lot more money in the long run. 

Check insurance

In WA, builders are required to have home indemnity insurance to protect homeowners. This type of insurance also covers unsatisfactory or defective building work and can offer you peace of mind if your builder declares bankruptcy and leaves you mid-build. 

Be realistic

Finally, it’s essential to be realistic with both your timeframe and budget. Again, speaking to a new home building broker can be a great way to assess whether your expectations are realistic or whether you need to reconsider your build. 

What can I do if the worst-case scenario occurs?

If your builder becomes insolvent, it can be incredibly stressful. As part of your builder agreement, you should have received the home indemnity policy with all the details so you can contact the insurer directly to find out the next steps. To claim, you’ll need to contact the insurer within 180 days of your builder’s insolvency. 

Use a building broker Perth

An experienced and independent building broker can help guide you through the process, explaining the various terms and conditions you need to understand and checking everything is in order before you sign any contracts. 

When choosing a broker, it’s important to remember not all building brokers work on behalf of their clients, with many associated with specific builders. At Better Way 2 Build, we work as your advocate to ensure you get the best outcome possible for your dream home. We’d love to hear from you and help you on your journey. Simply fill out the form or give us a call on 0861186119.

Christine Cappas
Christine Cappas
Mike is a truly genuine person who cares about his client. From the start he was very transparent and let me know how everything works, he is very knowledgeable and knows his stuff! I completely trust him in buying and buying my first home
Monserrat Reuter
Monserrat Reuter
I built my first home all on my own thanks to Sev and Marlise. I don’t even know where to start as words cannot describe how grateful I am that I found these two. To build my own home was only a dream that Sev and Marlise helped make into a reality. The unconditional support and dedication towards whatever I needed throughout the whole process made me feel so safe and looked after. Even though I built my dream home on my own it never felt that way, it didn’t matter the time or day, these guys went out and beyond for me with every detail and step of the process. They are people of their word that you can genuinely trust in this dog eat dog world. They are upfront and honest, it was never about the money but how you felt leaving their office. I had many friends and family tell me about the awful experiences they had building with other companies, so naturally I was a little frighten and on guard but Sev me Marlise squashed this with one meeting. But the biggest thing I can say about Sev and Marlise is that my experience was incredibly fulfilling and wholesome and I am so grateful for them and their expertise and professionalism. If I ever decide to build again I know exactly where to go! Thank you guys so much for all the love and support which has continued even after the build. Much love to you all!! 😊
Ashley De Faria
Ashley De Faria
Sev and Marlise were so incredible throughout our time with them. We’re so happy that we got to work along side an epic team. My partner and I had a vision, Sec and Marlise happily put up with our pickiness and changes (including after hour messaging), and did everything they could do bring that to life. They are so warm and welcoming too making this whole crazy big process more enjoyable. I couldn’t recommend these two enough!
Raphaela & Amelia Jay
Raphaela & Amelia Jay
Mike was wonderful from the beginning and still helpful. We were about to give up Building but Mike assured us that he will definitely make it happen. Thank you Mike
Errin Patsy
Errin Patsy
Contacted Mike by chance for a new build and was met with honest and factual help. Excellent follow up and support, Mike is reliable and will go out of his way to get the best deal.
Rhys Crawford
Rhys Crawford
Mike has been helpful and reliable in getting my first home build started and well on its way to a timely completion. I recommend his services to anybody looking to build a new home!
Natasha Hanisch
Natasha Hanisch
When searching for a home loan you need to be able to rely on someone you can trust to be able to present you with all the options available and give you the right information to make the right decisions. Mike King from Better Way 2 Build is able to do all of this and so much more, with his extensive experience and knowledge he was able to answer confidently and made us feel at ease using Better Way 2 Build. Everything was handled quickly, efficiently and his customer service is the best you could find anywhere else. "Thanks Mike for helping change our lives.”
Mk Ultra
Mk Ultra
Mike King has helped my little family get into our own home by guiding us through everything that is to know for building a house. I did not know anything about building, I was shown and given 100% support for the process of owning my own home and I am still being supported during the build. I was given an amazing package deal much cheaper then I predicted with heaps of extras, in the location I wanted. Mike King has made it easy to understand the process and I would highly recommend him.