The construction industry is feeling the effects of a weaker economy, with construction company liquidations and credit defaults on the rise. According to credit reporting agency Centrix, credit defaults in the construction sector have increased 34% over the past year, while construction company liquidations are up 73%.
The housing market downturn, coinciding with large increases in building costs, has left many building companies in a precarious financial position. As a consumer, this is a frightening prospect: you’ve paid a lot of money for a company to build you a home, but they go bust, leaving you in a potentially devastating situation.
However, it’s important to remember that not all building companies are at immediate risk of failure. So, how do you know if your builder is safe?
There are a few things you can do to make sure you’re choosing a safe, reliable builder.
How to choose a builder carefully
Before you sign on the dotted line with a building company, do a little research to find out how the company operates. Ask them what they do with your deposit: if they put it in a trust account, that money is safe until your home is completed.
If the deposit doesn’t go into a trust, there’s potential for it to be used for other things, and there’s a higher chance you could lose it if the company goes bust. Find out how much of your money goes towards the actual building of your home, because some companies use progress payments to pay other bills, potentially leaving themselves unable to complete your home.
A key indicator of a building company in trouble is if they have uncompleted projects due to a lack of finance. Try to find out if they are paying their subcontractors.
Also, check the contract to see what costs aren’t included, such as drainage, site works and floor coverings. This will help you see if there are likely to be some additional costs you didn’t anticipate.
Why choose ZB Homes
Choosing ZB Homes gives you the assurance that your home will be delivered on time, within budget, and to your specifications.
The house and land packages we offer are transparent – you can see what your money goes towards, and what it doesn’t. With no head office or franchise fees, we can keep the costs of your new home low, so you can enjoy it more.
When you choose a builder with 25 years of experience and the flexibility to add your own personal touches, you’ll know you’re getting what you pay for.
