The home building industry is questioning whether it should continue to offer fixed-price contracts for new homes, particularly after so many companies went bust during the pandemic.
A number of builders, bound by fixed-price contracts, struggled to continue operating when high inflation resulted in the cost of building a home soaring by more than 30%.
Master Builders Australia, has begun developing what it hopes will be adopted as “industry-standard contracts” which put fewer builders at risk in the future.
It hopes they will be implemented by 2030.
Chief executive Denita Wawn, says a better approach is needed to reduce the risk involved in construction.
Wawn says it needs to be more fairly shared by everyone in the chain and not just loaded up on to the builder.
But Tamawood, executive chairman Robert Lynch says the onus should be on builders to price correctly.
He says banks will not lend money if they don’t know what the end price is going to be