Fears fixed price contracts could place an ‘unrealistic stranglehold on builders’

Master Builders Victoria says the collapse of building giant Porter Davis should trigger a review of the state’s domestic building contracts act.

Labour and material shortages and costs are still causing havoc in the construction sector, sparking a fresh call to review home building laws.

Master Builders Victoria interim chief executive Michaela Lihou said the collapse of building giant Porter Davis, which has left 1500 unfinished projects around the state and 410 job losses, should trigger a detailed review of the state’s domestic building contracts act.

Calls to consider cost escalation clauses in fixed price contracts emerged last year when Metricon was on the brink of financial disaster, but were not acted upon.

Ms Lihou said fixed price contracts could place an “unrealistic stranglehold on builders” that ultimately impacts consumers.

Mark Anthony says he is in limbo, with his Mitcham home half built. Picture: Ian Currie

“The rigid lack of flexibility in these contracts, on top of supply, skills and labour shortages, as well as inflation and interest rate rises are continuing to impact the building and construction industry,” she said.

Ms Lihou said the current client payment structure within the building and construction industry also needed to be reviewed. Data supplied by the MBV shows that in the past year there were 454 insolvencies, up from 328 in the year prior to that.

While some costs of materials have stabilised, the annual State of the Nation’s Housing report released by the Commonwealth on Monday shows that “building material cost inflation remains strong”.

The cost of plyboard, terracotta tiles, structural timber and timber windows were the worst affected last year, rising 30 per cent.

Angry tradies target Porter Davis home

A new mum has been left devastated after disgruntled tradies vandalised her Porter Davis home in Melbourne’s southeast.

The woman, who wished not to be named, told the Herald Sun about $50,000 worth of damage was done to her Berwick build.

It’s believed the subcontractors working on the home, intentionally left the sink and bath tapes running, causing 7cm of water to flood the property.

All doors and walls were also scratched with a knife.

It comes as the major home builder was forced into liquidation on Friday with work immediately halted on more than 1500 properties across the state.

All doors were scratched with a knife.

Tapes were turned on, forcing rooms to flood.

The woman and her partner were expected to move into the property with their 13-day-old baby on Thursday.

“I’m completely devastated and shocked,” she said.

“We worked so hard and put a lot of money into this house to only hope we could bring our new baby home this week.”

The woman believed their home was targeted by angry tradies.

“What they have done has not affected Porter Davis at all but unfortunately only us as now the damages are more than what we had remaining on the house,” she said.

“It’s devastating to understand that someone would actually break in and do this to our home.”

The woman said she informed police after another Porter Davis house in the area had the same damages caused on the same night.

Another Porter Davis home damaged in Melbourne.

It’s believed heartless looters were also targeting properties across Melbourne that featured the home builder’s signage on fences.

Other clients have reported ripped fixtures, shattered windows, smashed cabinetry and stolen furniture, forcing them to change their locks and install security cameras.

It comes as a father of two said he was expected to be at a $1m loss over his unfinished Mitcham property.

Mark Anthony said the collapse had become his worst nightmare.

“We are a young family and this was going to be our dream home, our forever home,” he said.

“It’s become our worst nightmare.

“We are beyond devastated. This has finally broken us.

A Victorian Managed Insurance Authority spokesman said more than 600 claims had been received as of Sunday.

“We understand this is a difficult time for all those impacted by the collapse of Porter Davis Homes,” he said.

“Our immediate focus is to support affected homeowners with VMIA domestic building insurance.

“We can confirm that we have received over 600 claims and expect more to come in over the coming days.”

Homeowners are covered for up to $200,000 in policies issued before July 1, 2014 and for up to $300,000 in policies issued on or after July 1, 2014.