The Australian Building Industry Crisis 2022

2022 will go down in history as the year that saw the Australian building industry changed forever. The side effects of the Covid 19 pandemic started to show commercial effects in the last quarter of 2021 but the full brunt wasn't to be felt until 2022 and when it hit, it hit hard.

The building industry was one of the hardest industries hit with a massive drop in activity as people put their lives on hold and decided to hunker down and ride out the storm. The commercial building sector was the first to be hit, with office construction coming to a grinding halt as businesses downsized or closed their doors permanently. This had a flow-on effect on the residential sector as people delayed plans to buy or build new homes. The result was a sharp decline in building activity across the country which saw thousands of builders, tradies and other construction workers lose their jobs.

The Federal Government acted quickly to try and stem the tide by announcing a series of stimulus packages designed to kick start the economy and get people back into work. These included a home builders grant which provided a $25,000 subsidy for people who wanted to build or buy a new home. This helped to arrest the decline in activity in the residential sector, but it was not enough to stop the industry from taking a big hit.

The Australian Bureau of Statistics has revealed that dwelling approvals rose significantly during the 2020 Home Builder Scheme, with almost 23 thousand homes being submitted in March 2021. This figure steadily decreased however after its peak and is currently sitting at just over 15 thousand now - a more than 30% drop off!

The building industry is now faced with some big challenges as it looks to rebuild itself in the wake of the pandemic. The first challenge is going to be finding enough skilled workers to meet the demand for new homes and other construction projects. The second challenge is going to be dealing with the increased costs and shortages in materials. These shortages in materials due to supply chain issues and fixed-price building contracts have seen many builders feeling the pinch and some big players closing their doors. Many other builders have been struggling to keep up with the cost of materials, which are increasing at an alarming rate. Builders have seen their profits squeezed or even lost money as delivery delays pile high on top of what was already a tight market before these shortages began to happen.

The prices for timber, steel and concrete have sky-rocketed over last year alone. Not only does this hurt those who work in the building industry but also homeowners and buyers trying to renovate themselves or build their dream homes.

• Communication with the QBCC
• Suspending all obligations
• Termination of the contract
• Making a demand
• Claiming against the builder’s insurance
• Engaging a new builder to finish the work

There is no reason that you should be left in the dark without any answers. An experienced property lawyer will ensure that you are given the correct advice and that every box is ticked to get you the result you require.

History repeats

This isn't the first time that a whole industry has fallen on hard times, and it won't be the last, the good news is that the building industry is a resilient one and has bounced back before. If it can meet these challenges head-on then there is no reason, why it can't return to its previous levels of activity and employment.

Until then it's important to have a lawyer you can trust to give you the right information and advice in these unsettling times. The team at QC Law have decades of experience in these matters and with our fixed fee structure you will know where you stand from the outset. Contact the team at QC Law for all your legal needs at [email protected]