As Australia’s building industry experiences unprecedented demands and delays, homeowners wanting to get more work done are being warned to lookout for scammers.

Alpine police commander Senior Sergeant Doug Incoll said several people had fallen victim to criminals posing as tradespeople.

“It’s just an unscrupulous method by these criminals to take advantage of the fact that tradies are in short supply and there’s a long waiting list. Concrete is really in high demand at the moment and there’s a huge waiting list locally to get any concrete laid. They are utilising that then asking for a reasonably large deposit before carrying out any of the work,” says Senior Sergeant Incoll.

Senior Sergeant Incoll says there have been some occasions where the work has been started but not completed, and in other cases, once the deposit was paid the so-called contractor became uncontactable. Senior Sergeant Incoll revealed that unfortunately people had been scammed out of thousands of dollars.

“It leaves those people in a civil dispute and generally criminals don’t have much money. It’s generally lost money. It’s pretty hard to get money from someone that doesn’t have it,” says Senior Sergeant Incoll.

According to Victorian Master Builders Association’s Nat Molinaro demand for materials is only expected to ramp up.

“We don’t expect the demand for timber to peak for the next few months, and the shortages won’t be resolved until the demand decreases,” says Nat Molinaro.

HomeBuilder grants on offer during the pandemic have resulted in a large increase in demand for new home builds.

Nat Molinaro says that the demand had continued to grow with 71,500 new residential buildings approved across the state in the 12 months to 22nd February 2022.

“That figure hasn’t been that high since 2018 even before the HomeBuilder stimulus,” says Mr. Molinaro

Coupled with material shortages, Mr. Molinaro says that delays were inevitable.

“Our members are highlighting that there is definitely a shortage of materials that is impacting their ability to build. We’ve seen examples of wait times for timber going from four to eight weeks to now 12 weeks,” says Nat Molinaro.

Laminated veneer lumber (LVL) beam wait times have ramped up to about 16 weeks, with doors and locks now taking 12 weeks, and plasterboards 10 weeks.

“There is a genuine supply issue out there causing delays on the building process for many of our members,” says Victorian Master Builders Association’s Nat Molinaro.

The construction industry is advocating for contract relief as builder insolvencies continue to rise, leaving more room for scammers to operate. 

Wodonga-based Cavalier Homes’ managing director Dale Paddle says that fixed-price contracts in Victoria were only adding to the building squeeze. 

“With hold-ups in the sector, whether it’s supply chain or with land, it pushes the jobs back and pricing has probably gone up about 30 percent in the last two years for materials. So if you’re signing on a contract, your price goes up 10 or 15 percent, you are losing money,” says Dale Paddle.

Those increases are even pricing builders out of the sector.

“We have got young builders coming into the game that are getting knocked around early and we will probably lose them out of the industry, and this is one of the biggest concerns I have. Builders at the moment are stretched to the limit. If we are going to lose 20 per cent of builders out of our industry, who is going to build the houses for people to move into?” says Cavalier Homes’ managing director Dale Paddle.

Nat Molinaro says it was a problem across the state.

“There have been price increases up 50 to 60 percent on many of the raw materials that go into building. Our builders can’t pass that price increase on due to fixed-price contract law in Victoria. It’s definitely a pressure point for our members … We need more relief,” says Nat Molinaro.

Senior Sergeant Incoll’s advice to consumers is to check the contractor’s credentials.

“If it is cheap and seems a bit too good to be true it generally wouldn’t withstand scrutiny,” says Senior Sergeant Incoll.

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)

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Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

Post Author: Craig Dangar

Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

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