I bought a “death trap” apartment | SBS Insight

On this episode of Insight, broken dreams and livelihoods.Can our building industry be fixed?

such staggering consequences.

It's just another kick in the guts to have these construction company directors rack up millions of dollars of debt and they just walk away.

In 20 years nothing has ever come close to what builders are experiencing right now.

I wouldn't say crisis because there's huge opportunities coming forward.

What needs to happen is making sure that builders are licensed correctly.

Sid, six years ago you set out to build a home for your wife, you and your two children.What were you hoping for?

I was hoping for a home.It was a dream that's kind of subsequently turned into a nightmare.But yeah, I mean, we started with very positive energy to build a house, which was something that we would enjoy living in.We spent a lot of time in the design phase, selecting each component, each of the tiles, the flooring, you know, and we enjoyed the process because we thought we'd get a wonderful outcome.

Why did you choose to build rather than buy your own home?

I thought that it would be fairly straightforward.A house is merely a slab, a few walls and a roof.We're not sending a mission to Mars.I didn't think we were signing up for anything very difficult.What happened to your home?The builder who we had engaged spent an inordinate amount of time building and, unknown to me, had a lot of defects in the build.

He was an award -winning builder, had won HIA and Master Builders Awards, but he declared liquidation after spending all this time overseas and dashed off.

Lisa, you bought a block of land just over a year ago with dreams of buildingown home.

What happened?Our block of land settled on a Thursday at the end of March last year.The Monday morning of the following week, we were booked to have our final appointment with our builder.And on the Friday immediately prior to that weekend, they announced their insolvency.Which company was this?Porter Davis.

When you heard that Porter Davis, your builder, had collapsed, how did you react?

I reacted a little differently to some of those people around me.So I got a lot of panicked phone calls and people telling me that they were so sorry to hear and what a disaster it was.And I was thrilled.Why were you thrilled?Because if it had been announced on the Monday afternoon or the Tuesday morning, we would have committed at least another $15 ,000 to the process.So I think I posted a Matrix meme of Neo dodging a bullet on my profile.

So at this point, you're left with a vacant block of land.What did you do with it?

We briefly entertained the idea of engaging another builder but at the time the whole industry was very nervous and we actually decided to not build a house.So we put the block of land up for sale to try and get somebody else to buy it.It was in a quite a new estate area with lots of building going on at the time.It took over 16 months to sell and we lost over $100 ,000 in the process.

How did all this affect you and your family?

My My relationship with my husband after 15 years ended over that sort of same period.Obviously not.solely because of what occurred with regards to the house and the land, but yeah, it was definitely a stressful contributing factor.

So you're now renting as a single mum?Correct.Were you left with anything?

I'm back at square one, rebuilding again.

Construction has the highest rate of business collapses than any other industry in Australia.

In 2023, the Australian Government announced the country's goal to build 1 .2 million new homes over the next five years.But it comes at a time where the construction sector has faced more business collapses than any other industry.ASIC figures show almost 3 ,000 building companies went under in the last financial year.That's about seven businesses a day going broke.So why are so many struggling?First, the cost of construction and materials post -COVID has led to major budget blowouts.

There's also the skilled worker shortage, with 90 ,000 new skilled tradespeople needed.And businesses are also struggling to keep up with increasing industry regulations, as well as planning delays, with developers and investors holding off on new builds due to the lack of profitability.Those involved in any type of building, residential, commercial and public projects are all affected and those still standing are feeling the pressure.

Rob, you head up one of the largest home building companies in the country.In your view, what has led to these collapses?

When you look at the pandemic that we all live through and the incentive that the government actually put forward to build a new home, what that did is that that brought forward the pipeline of home buyers and the building industry just simply wasn't ready.In combination, we saw, you know, major, major tradeexit from the country.But when we see that trade exit, majority of that trade that exited were all skilled labour.And so what the industry really lost was a vast amount of skill from an industry that was not only taking the sales on, but not actually filling up the skill to actually deliver on that.

Has your company been impacted?

The company that I head up is the largest in New South Wales.We find it really, really challenging, particularly in the north coast region of New South Wales.We find it really challenging even in the ACT to actually attract skilled labour and skilled trades to actually do the work.And when you do get that skilled labour and that skilled trades, the cost of that is absolutely astronomical.

Tony, you also bought land to build your dream home.How did you go about choosing a builder?

Well, we had our land for quite a period of time.We bought it in 2011.But we found a builder who was a HIA award winner.Sorry, a Master Builders Award winner.He said all the right things and everything just seemed right.So we'd talked about building for such a long time and the kids were getting older.

We just decided, right, this is it.We're going to go.We're ready.And that was in 2021.We signed the contract in September of 21.

How did the build go?

Laid the slab, put the frame up.and then put the roof on and basically everything started to really slow down.After that we noticed that he was taking on a lot more builds over in the area.Those builds started moving forward really rapidly and ours sort of just halted at that point, it just didn't move any further.

Did the builder tell you why he could not finish your job?

Initially it was because he ran out of money.What he told us further on is people were starting to pay him ahead of time.So they were paying advanced payments to get their houses built.

What did you decide to do next?terms of your home?

He suggested that we get the contract drawers broken down into smaller increments because we were on what he called the old contracts where the drawers were quite large so that he had to carry the build for that period of time.So we got a cost estimator in to break the remainder of the build down to try and get him smaller increments for the remainder of the build so that he could get his cash flow a lot quicker.So in the process of that, this cost estimator came on site and said, mate, I've got 30 minutes, but I could be here all day picking out defects in this home.At that point, we started to ring alarm bells.Did you try and find another builder to do the work?Unfortunately, we're locked into a contract.

We can't really get another builder to do the work.So we went back to him and said, these are all the defects this guy's found in his inspection.He told us that the guy didn't know what he was talking about.The build's fine.No problems at all.

Sid, your first builder also left your unfinished home with defects.What defects are we talking about?

There was a range of defects in the frame, the way it was put together.The slab also had some defects in it, the way it was poured.Yes, there were some structural defects that needed to be overcome.

So now you're looking for a third builder.How long has it been since you started building your home?

I signed the initial contract with the first builder in December 2018.So well before COVID, the war in Ukraine, all of these things.

So six years.Correct.You and your family are still without a home.Where have you been living?

Luckily, my parents are helping me, and so I'm living with them.

How has this strain weighed on you?

I feel a bit bullied by the situation, by the stakeholders involved.I don't think I've done anything wrong, but it is a stress.It's a strain.

Tony, what about you?What sort of toll has this taken on you and your family?

Apart from the financial strain, my wife is really struggling now because she's she carried a lot of the load of battling with the insurance company and with the QBCC.to try and put forward our case.We ended up having to defend ourselves against the builder because no one was listening to what we were saying.The process was very difficult.She's carried this load for so long now that she's just dropped.She's just...

And in the last six months, she's developed diabetes from the stress, never had any blood sugar problems before.I had a fairly stressful beginning to last year that we just didn't believe that this was happening.

Danny, you're the CEO of a large residential building company.We read almost daily headlines that it's all doom and gloom.Are things as tough as they're made out to be?

Very simply, yes, they are.Now, when a builder goes bust, it's not just the customers that are affected, but it's also the trades.They're often the last people that are paid.And a lot of the trades in the residential building industry, they're mum and dad businesses.They can't afford not to be paid.So the trade base that we had that was already dwindling was dwindling at an even faster rate, which made it very, very difficult.

And if you think about what happened at the time, sales went through the roof.So all builders at the time, we were thinking, wow, this is fantastic.But what you sell in 2022, you don't build till 2023.And us, like most other builders, had entered into fixed price contracts with our customers, and they were priced at 2022 prices.So if you look at the start of 2022 and 2023, I think 2022, we had our wettest year.on record and when you've got all these jobs going to site and all builders fighting over the early trades being there.

and the concreters and the bricklayers, you can't build houses in the wet.So that caused an even bigger strain on the industry.And it's just flowed through to the trades for the past two years.

Have you ever seen anything like this in your time in the industry?

In 20 years being involved in the building industry, nothing has ever come close to what builders are experiencing right now.

Danita, you're the CEO of Master Builders Australia.You represent 32 ,000 building and construction companies.Is the industry in crisis?

I wouldn't say crisis, to be honest, because there's huge opportunities coming forward.But we're in a situation where the industry has gone through huge pain over the last three or four years.The thing that really hits me is in July 2019, The industry got together and supported a report called the Building Confidence Report.And it was the back of the Grenfell disaster.And the industry said, we are not being regulated enough to ensure that everyone in the industry is doing their job correctly.You've got to, as regulators, stamp down and clamp down on those not building appropriately, not treating their clients properly, not treating their subcontractors properly.

And it's been disappointing that other than some exceptions, including New South Wales with the new New South Wales Building Commissioner, we have not seen enough action by regulators around the country.

The federal government has set a goal of 1 .2 million homes to be built in the next five years.Do you think this target is achievable?

I would love to think that the target is achievable because if we're going to house all Australians appropriately, we need to build 1 .2 million homes.The problem is that there is too many constraints in the system at the moment to enable that.to do that.And that is in relation to high costs, 40%.increases in the last five years.Our productivity has declined by nearly 19 % in the last 10 years.

We've got increasing lack of trades.We have increasing amount of inflation and also interest rates, which means the private sector don't want to actually invest in our industry, which meaning we're now getting a situation in which builders in some instances are looking for work because private investment is simply not there because the economics are just all too hard and we're not getting returns.So we're in a difficult situation.Danny, is that target achievable?

I'd like to hope it is, but I don't think it's possible.I don't think we've built more than 250 ,000 homes in any one year and at a time where we do have a significant shortage in trades and land availability.So it's getting harder and harder for people to enter the marketplace.So when you couple that with a lack of trades, I think we're going to have to break all types of records in order to achieve that goal.

We've got the target, but we've got limited resources to meet it.Do you think this is affecting the quality of the builds that we're seeing?

Yes, to some extent.Builders have to take shortcuts.Builders have always been associated as being cowboys.I originally wasn't from the building industry so I'm relatively new to the building industry even though I've been working in it for some 20 years.Most builders do care and most builders do want to do the right thing.The problem is there's about 150 things that can go wrong with every single construction project but it's what the company does when those things go wrong that really make the difference.

Now if I had a magic wand and I could fix every single problem I'd love to do that as the builder but I'm at the liberty of trades, I'm at the liberty ofsuppliers.And when you can't get supplies and you can't get trades and you can't get trades coming back, it creates a major problem.There's a rule in the building industry.It's the golden rule and he with the gold rules.So if you've paid for a trade and they have the opportunity to make money from another builder, there doesn't seem to be the level of loyalty that there was some 15, 20 years ago.

And that's a bit of a problem.

Defects and cowboy builders aren't just affecting the dreams of those who are wanting to build their own home.

Owning my own home was something that I think I've wanted for a very long time.This is where I live.This is the infamous vicinity towers.When I was here by myself, thinking about these building problems, I definitely did not enjoy coming home.Just up there, there's some pretty serious water damage.The waterproofing has had to be redone twice now.

There's a crack that runs horizontally through it.So there's some there, there's some here, there's some there.I did my due diligence before I purchased.I did my Strata search, got some documents.They all looked pretty OK.It's unbelievable.

So the builder was Toplace and the developer was JKN, which is just Gene Nassif's initials.

Controversial property developer Jean Nassif first wanted for questioning by a parliamentary inquiry and now by police.

I first heard about all the issues with the building in August of 2021.We also had to install a support pylon in the middle of this walkway.One of the problems is that in terms of earthquakes, this building wouldn't survive an earthquake at all.Every day coming to a building that people have described as a death trap.There's some core structural issues in terms of pylon integrity.So all the pylons that you see around, they have integrity issues.

We've done some core sampling on them and they're way too weak for what they're supposed to be.holding up.And then just basic violations of Australian building code.You go to the institutions and the people that are supposed to look out for you, but you just get stonewalled, right?Sorry.

Patrick, where has this left you?

With a lot of stress, I would say.There's no way out.There's no response from the government.There's no responsibility taken from any governing body from council to state government to federal government.The only thing that's left to the owners at my complex is a giant debt looming over their heads.

Corey, like Patrick, you bought an apartment in that same complex.When did you begin to notice that something just wasn't right?

We bought in early 2018 and we were aware when we bought into the place that there was some waterproofing issues that we were told to expect as standard across apartments within Sydney and New South Wales which in and of itself is appalling.There is absolutely no way that as a lay person that you should be left facing the such staggering consequences.There's absolutely no way buying into that complex that you would have known that the strength of concrete that they used in the pylons was not up to code.They didn't use enough reinforcing in any of the walls and a major structural element known as a capping beam, which is supposed to provide like horizontal stability of the building, that just wasn't installed.

Bradley, you research the collapse of building and construction companies.Is there enough oversight and protection for consumers?

Quite frankly, no.If there's an industry that we need confidence in right now, it's the Australian residential construction industry.And listening to the stories in this room, there's stories of people who've lost deposits and had defective homes.And The protection mechanisms for those consumers just doesn't exist.If I compare these investments to other large investments that Australians might make in their lifetime, like investing in superannuation or even bank savings, there are protection mechanisms for those types of investments.superannuation company goes bust, then my investments are still protected.

If my bank goes bust, my deposits are still protected.Even other financial services companies, like if I have to pay a lawyer for something, my funds are put into a client account, and that's ring -fenced, and that has to be used for the purpose with which it was intended.In the residential construction industry, those regulations, those checks and balances don't exist.So I might pay a deposit for a home builder.And I mean, they can spend that however they like.I mean, they could buy a new Toyota Hilux or go on a holiday to Thailand.

There's no regulation which says that that money needs to be ring fenced.and put in an account to be spent on the project by which I'm investing in.So in an industry that we need confidence in, where we need more Australians to step up and decide to build a new home or extend their existing home or build a granny flat out the back, I don't think we're doing a good job of protecting those consumers.

Corrie, buying your first property, did you ever think you'd find yourself in this position?

No.so we paid...Sydney prices for an apartment.It was a really lovely apartment.Everyone says, oh, you just need to get a foot on the ladder.And that's what me and my partner were trying to do.

We had not much of an idea that buying into a large complex, there's no home warranty insurance for complexes over a certain size.So that has meant that there is no backdoor for us at all, and now that Jean Massif has liquidated all of his companies and has now fled the country and is on the run in Lebanon, it means that any responsibility for trying to repair the defects that he and his companies have created falls to us as the owners.Financially, where has this left you?Oh, in a complete mess.Yeah, we have no idea really how much this is going to cost.Initial estimates are $20 million, and that may not even touch the sides of the problem that we're facing.

It has felt for a number of years that my life is on hold.It's very unclear whether or not I would be able to get another loan to buy another property and it's just this albatross around my neck.

Bradley, are home buyers the only collateral when a builder goes under?

No, this is a network of subcontractors and suppliers and they are greatly affected when a builder goes under.So those subcontractors, they might be typically very small businesses.They're left with nothing and they're the ones who've already paid for their materials.They've got to cover their labour and they're left in the lurch when building companies go under.

Anthony, you and your wife Amy run your own small business in Canberra.What does that look like?

We run a subcontract company which specialises in commercial carpentry fit -outs.We've been doing that for 13 years now and basically with me being on the tools to having someone work with me to slowly build it up over the years to get it to the stage it is now.

So you're a husband and wife team and you have a handful of employees?

Yep, that's correct.

You're contracted by a larger builder to then work on residential and commercial projects that they've secured?

Yep, so we do various jobs and I tender for the projects and some of them are federal government jobs, some of them are ACT government jobs, some of them are private businesses and basically, yeah, we price the jobs.If we have the right price, we do the carpentry fit -outs.That's secured by the head contractor.What's your view of the current environment?It's the worst I've ever seen it.People say we're not in a crisis.

We're in a crisis.This stems not just from the top, but it goes down, right down to the bottom.And the people that are getting hurt are the people that are down the bottom.

What happens to subcontractors like yourself when a building company collapses in the middle of a job?

Basically, we're out the shit.And pretty much, Everyone thinks it's got this, you know, oh we'll be right.We've outlaid all of our money, and this is our cash from other jobs that we've worked up, all of our materials, all of our expenses up front to the works, and the builder goes, you know, that's everything.Basically the hopes and dreams are that you're going to get them back from going into administration, which we're talking like multi -million dollars worth of money that builders are going into, you know, upwards of $45 million.You're not going to see a cent.I get nothing.

Have you been affected by any major builder collapses?

Yes I have.We've been caught up by three.We've been caught up by Project Coordination.We've been caught up by Rourke Projects and we've been caught up by National Projects and Maintenance.How much have you lost in those?Roughly upwards of $450 ,000.

Nearly half a million dollars.

Yep.To get out of this I've had to incur my personal financial stress and me and Amy have had to work harder than we've ever had to work before just to try and get out of this.There's no one coming to help us.No one.

When you're working with a builder, are there any indications that they're about to go under?

No, there's not.We've signed up to Creditor Watch, which is something that we've paid physically out of our own pocket, which gives you notifications.But the only indication is when the cash stops coming in.which we're doing jobs from start to finish due to the payment terms.And we've finished the whole job, everything's outlaid, like a 200 grand fit out, done, before we've even got a cent, and they go under.And I've got to pay my suppliers, like my suppliers are 30 days in a month.

I have to pay them.I have to, otherwise they're going to my accounts on hold and I can't trade.I have to pay my employees.If I don't pay my employees, I don't have people to do the work.You know, it's a joke.You mentioned Rourke Projects as one of the companies.

Correct.

How quickly did that collapse from your perspective?Overnight.How much money are we talking about from that particular company?

$130 ,000.

Chris, you're also a subcontractor who worked for Rourke Projects.How much are you out of pocket?

$820 ,000.

$820 ,000.

Plus I almost end up with half a million dollar debt, which I don't have.have to pay my suppliers for the materials I use for their jobs.

What were some of the jobs that you were doing for them?

I was doing five jobs for them.One in Goulburn for New South Wales Police Academy, three private jobs, and one for OTA, which is Organ and Tissue Authority in Canberra.That's a government institution.

Rourke Projects collapsed owing more than $25 million to creditors.The company went into voluntary administration, citing a, quote, tsunami of impossible economic conditions.Chris, what has Rourke's collapse meant for you and your business?

I didn't know how this process works at the beginning.You know, I thought there were administrators involved.I thought they're going to do the right thing.They're going to try to get the assets back and get as much as they can and then sort of pay something to subcontractors.We didn't know how that's, how much we're going to get it.Four or five weeks later, we find out that us as a subbies, which were unsecured contractors, we're going to receive zero.

How much did you have left in the bank after all this?

$8 ,000 to $12 ,000.I can't remember.Something like that.

And you're still having to pay debts.You're still having to pay staff.

Yes.

And you've got kids.

I've got two kids, yeah.House, mortgages, cars.Impossible.It's impossible.

Anthony, you're out of pocket nearly half a million dollars.Have you managed to keep your business going?

I have.I had to refinance my house.I did a renovation.I worked my ass off.And the only way to get out of this was having my accountant, which is the only thing that's keeping me here today.We had to refinance our house.

I had to borrow money off my parents -in -law.I'm just very lucky that I could borrow money to pay employees to keep going.We had to cash our credit card points to pay for groceries.I've got three children.I could have lose absolutely everything, which would destroy me.It would put me to the point of, you don't want to be here anymore.

Bradley, how are builders able to continue trading when they're in financial trouble?

It's about managing cash.So by going out and getting new contracts, they're actually getting new deposits, which is bringing fresh money into their business to keep them afloat.But of course, because there's no protection or ring fencing of where that money should be spent, they can spend it on trying to keep the old projects afloat.So when one company goes belly up, the ripple effect of that on suppliers and also homeowners or people wanting to build is massive.

So builders are allowed to do that.They can do it.

Yeah.There's no regulation.You know, it's in contrast to other industries.You know, a law firm can't do that.They can't spend my money on someone else's legal case.They have to spend my money on my case.

But that's not the same in the building industry.That's not how the building industry is regulated.

Jason, you're a professor of corporate law specialising in business insolvency.What does trading insolvent mean?

Insolvent training is defined as the company is insolvent on an accounting basis and the director either knows that it's insolvent or a reasonable person in that situation should have at least suspected that the company was insolvent.But we do have a safe harbour defence and so directors are able to say well I did do something, I tried to fix the problems in the business and that's then giving me protection against liability.Otherwise, potentially all unsecured debts from the point of insolvent trading onwards, and what we see in this industry is that often the companies are insolvent for years, so all of those debts could be the personal liability of the directors.So Australia for a long time, for decades, had some of the most strict insolvent trading liability laws for directors in the whole world.If the company's insolvent, you can't trade.If you do, it's a criminal offence and you could... lose hundreds of thousands, if not millions of dollars.

And some directors have been successfully sued for that.So back in 2017, the government said, well, this is causing a problem because we feel that too many directors are putting their companies into insolvency too early.And what we want to do is give them a little bit of breathing space.Once they recognise that there could be a problem, they go off and get some external advice, usually from an insolvency practitioner, and they'll come up with a plan to try and save the business.And if they do that in good faith, and particularly if they have been paying their employees, if they've been making their tax lodgements on time, which are both qualifications for safe harbour, then they should get protection against insolvent trading liability.

So basically builders can continue to operate even though they can't pay their debts?

Even though they know the company is insolvent.

Is there enough scrutiny of companies that are trading insolvent?

No.ASIC, which is the Australian Securities and Investments Commission, brings, in terms of insolvent trading, probably I could count on two hands each year.And we're talking just in the building and construction industry, as we heard before, up to 4 ,000 companies a year.So it's a drop in the ocean because ASIC has an impossibly broad remit.So it has to focus each year on what it's going to look at.And it just doesn't have the resources, doesn't have the manpower or the money to actually deal with this problem because it's a problem on a massive scale.

So what do you think should be done in terms of ASIC?How can it operate better?

ASIC is the mega regulator, the omni regulator, regulator.It covers almost every aspect of our lives.So it's spread far too thinly.So if it gets criticised about insolvency trading, you can say, well, this year we're focused more on investment banks or this year we're focused more on protecting people's pensions.So it's too easy for it to deflect liability, which is why we need a more focused insolvency regulator.

Is there an appetite to prosecute?

Yes and no.In my research, I've looked at ASIC's enforcement track record over the last 27 years.ASIC is still bringingthe same number of cases.So the number of directors who ASIC bans every year now is about the same as it was 27 years ago.So that's a problem.

In terms of the building industry, if our goal is to quickly build homes and many homes, Wouldn't regulatory action slow that down?

Yes, and make it more expensive.And I think that's the trade -off that we're making as a society, that we're saying we want more homes, we want them faster, we want them cheaper, but that comes at a cost, it comes at risk, it comes at, as we've heard tonight, people cutting corners and we see the collateral damage, the people at the bottom of the barrel, as we've heard.As a society, that's what we're choosing to accept by maintaining this position.

We hear about construction companies going under and then the director opening a new company, potentially under a different name.Is that allowed?

It is, and a lot of the theories suggest that this is what we should be encouraging people to do.We actually want an entrepreneurial economy.Improper phoenixing is a business model in the building and construction industry and in labour hire and many other industries.The bad guys know that they're highly unlikely to get caught, which is why they keep doing it.So we've heard about people who are complying with the law paying their taxes in over 80 per cent of building and construction insolvencies.there's large scale unpaid tax.

So we've got people out there whose business model is I can make a profit by not paying creditors, not paying my taxes.

You mentioned the word phoenixing.Talk us through that.

So a phoenixing is like the myth, you're rising from the ashes.So one business fails, you put it into liquidation, you appoint an external person who investigates, winds up the affairs, hopefully pays creditors, although in more than 90 % of cases, they get nothing.And then a new business can be started, often with a very similar name, with the exact same people involved.So unless we can prove that those directors have broken the law, and then ASIC bans them or the court disqualifies them, then they're free to start up as many businessesas they like.

Amy, you run a small business with your husband Anthony.What are your thoughts on all this?

It's just another kick in the guts.Letting us take the hit after hit after hit and then not doing anything about it.It's devastating for us.We're doing all the right things.We've remortgaged our house to pump equity into our business to pay our debts and to have these construction company directors rack up millions of dollars of debt and they just walk away.And we know for a fact some of them are in their holiday houses, they've got yachts, they bought brand new BMWs before their businesses collapsed.

And the creditor report just says, cost benefit analysis in recovering assets.How does it feel to be on a spreadsheet like that?You just have a bit of a laugh, really.We're at the point now where we're like, we've done everything we can to keep ourselves afloat and we're fine.But you look at the list of creditors and in some of these reports, there's pages and pages and pages of people that are owed money.And this isn't little money.

This is millions of dollars.And you feel for them.I know that subbies are collapsing.It's just not as widely known.So the little guys like us, there's a lot of them that have had to go into administration and subsequently collapse.And they're losing homes.

So not just their businesses, they're losing their homes, they've got kids.Like, it's devastating.

Danny, as the CEO of a larger building company, have you seen morale impacted?

We've had some people who have been in the building industry since the age of 19, construction managers, who approached me and said, I'm leaving.And I said, well, which other builder are you going to?He says, no, I'm leaving the industry.And we've had a lot of that happen over the past few years.We've had a lot of customers complain that the site supervisors are changing regularly.Site supervisors have had enough.

So site supervisors are the ones that actually build the homes for the major builders.And they're dealing with the trades who aren't getting paid.They're dealing with the customers who are frustrated with how long it's taking.to build a home.And if you look at the statistics about mental health challenges, I think the building industry is probably one of the worst, most adversely affected industries when it comes to men's and women working in the industry's mental health.

Jamie, you've been a builder and carpenter for 22 years.Were there times you wanted to just walk off the job?

Yeah, the stress and pressure built up.and you've sort of had enough, but you're the one running the show.So, yeah, it gets really hard.

Has working in the building and construction industry affected your mental health?

Anxiety, depression, just from the constant pressure.Then that affects you at home, with your relationships, with your family.

How did you manage all that extra pressure?

When I was younger, drinking was a big deal.pretty big in building in the culture.That's something I saw with my father, who was a builder as well, that generation as well.That was how you deal with your emotions.You don't really talk too much.It was, that's how it was dealt with.

Anthony, how about you?How are you coping?

I tell myself I'm coping.but I wasn't before.I've had to work out my own way to get through it.I've been doing some men's mental health workshops and only because Amy started having to do some work for herself mentally because as a mother she wasn't the same.She's a great mother.

Well, you could say it's been tough for us together.So we work together.We're together all day.We've got three little kids.We're also doing, we've been doing a three -year renovation.So all these things obviously, like, yeah.

The best way we've found is just to be honest with our kids.So we've come home a few times and been like, look, we're a bit upset today.Unfortunately, we've lost a lot of money.And they've been really good.Like, the kids understand.But it's the long -term effects on them now.

too that we're worried about.So I don't know about Anthony, but I get a little bit jittery at the end of every month because I'm kind of like, okay, are we getting paid this month?

Jamie, is mental health something that's openly talked about in the industry?

No, not at all.I didn't grow up with it in the industry.It's just that masculine culture, you know, where people just don't talk about their feelings and want to be vulnerable, I guess, or show any vulnerability.

Has the stress at work ever impacted your relationships?

Being so under so much pressure and stress all the time that when you get home you just can't even handle one more question.And so you shut down, you're not present.It's quite similar to drinking because you're not present when you're drinking.Yeah, it definitely affects your kids, you know, your partners.

Samantha, you're Jamie's wife.How have those times been for you?It's super hard.

Yeah, so when he comes home and he's migrained and vomiting and taking prescription medication and just completely not present.So that just means you're a single parent with quite a few children.And you just have to knuckle down and do it.It's hard because you want to sort of get down on, I want to sort of get down on his level and meet him there and help him out.But there's so much other stuff for me to do around the house just to make everything float.

Did you ever say to your husband, you need to get some help for this?

Yes.I have said that quite a lot.And there was one particular occasion where it wasn't a question.I made the appointment for him.And I wrote it down on a piece of paper.I said, this is what you're going to do.

Jamie, you took your wife's advice and you started seeing a therapist.Has that helped you?

Yeah, massively.I quit drinking and sort of really turned my life around.I started doing Ironman races, Ultraman races.Wow.Yeah.So a bit of a full 360.

I guess it's still, it's a way to deal with my mental health as well.It's a good outlet, it's a good meditation.You meet people that actually talk about their mental health.Like when you're out riding your bike with your mates, you know, you can, you kind of talk and unpack things, which is really, really healthy.

And how about work pressures?Have you found ways to kind of balance those out with, you know, responsibilities?

Yeah, so now I've just winded right back.I just take on small projects one at a time, just try and dial down the stress.

I've been a builder since 2011.I remember after the first interest rate rise, there was a little bit of concern, and it just kept on going up.My first client pulled out of their job, and then there was another one that pulled out.We had two or three million dollars worth of pipeline work ready to go.Contract signed and ready to start building.

To have them drop out right at the crunch, it hurts.

The industry is really struggling at the moment.Two years ago, people were ringing every day.Can you code my job?Can you have a look at my job?Can you look at these plans for me?Now, all my phone calls are, do you have any work for me?

Do you need any materials from suppliers?It's totally changed.It's tough.You have a team that looks up to you and you're responsible for putting food on their table.And I take that pretty seriously.So yeah, I did sit the guys down and I said to them, look, this is going to get tough, guys.

We need to have a plan in place so that we're not one of the victims.Modular building or prefabricated building is building in a controlled environment in a factory.We build them in here and then we transport them to the site, complete it.It's just a way more efficient way of building.Yeah, so this one, more granny flat style.So you've got a bed.

you've got a kitchen and a bathroom.So that just becomes a real viable option for people.So the speed of it is a massive factor.Had we not made this switch, we would have struggled 100%.

Danita, does the industry need to adapt to some of the challenges we've been talking about?that needs to adapt in terms of its techniques.

Modular is going to be a critical part of any capacity that we can build 1 .2 million homes.There are early signs that building ministers are willing to look at the changes that we need to our regulation, but it certainly has not been encouraged.And as such, it is very difficult for those who are wanting to get into that space at the moment.

Danny, almost 3 ,000 building companies have collapsed in the past year.Do you think we've seen the last of it?

No, I don't.I think if the period between 21 and 24 hasn't killed you, the period between 25 and 26...A year and a half ago, I came out and I said, survive till 25.And the problem we have is we've mentioned it a few times tonight, that the tradespeople, the consultants and the customers are at the bottom of the pyramid and, sadly, the builders at the top.that pyramid needs to be turned upside down and we need to find a more collaborative method, a more collaborative construction approach where every vested party is working together.

You've got the tradesperson who has his payment protected.You've got the customer who's not paying money to a builder to prevent that money from being spent on, as people have mentioned, buying BMWs and buying other assets.So having a more collaborative approach to the industry and putting the homeowner in control as opposed to the builder, I believe is a viable solution.

Rob, you head up a large home building company.What can be done to ease pressure on the industry?

What needs to happen, first of all, issure that builders are licensed correctly.They're licensed to their capacity and they're licensed to their skill.And that's the regulation change.And I know we don't want to say crisis, but, you know, it is veering on crisis.These challenges are real and we need all levels of government, not to make political statements for an election that's coming up, but to actually get to the people that are on the ground and actually get some real resolutions in place now.

Bradley, what about for consumers, with more collapses likely, do we need better consumer protection?

I think so, absolutely.I mean, we've talked about consumers being at the bottom of the pyramid, you know, along with subcontractors.It's pretty clear to me that we've got a broken industry here.What worries me is that this target of 1 .2 million homes, the government is just pouring billions and billions and billions of dollars into an industry that's broken.And that's only going to create more havoc for consumers and for suppliers as we go forward.So for me, I think we need to have a conversation about going under the hood and talking about what's wrong.

Amy and Anthony, your business is out of pocket, close to half a million dollars after a number of building companies collapsed, owing you a lot of money.What needs to change?

Since the third collapse, we've started to look into this, and the number one thing on our agenda now is campaigning and pushing the government, the federal government, to look at enacting security of payment legislation at a national level.Our second thing that we'll be pushing is for the government to fund ASIC, to start prosecuting companies that become insolvent and collapse, owing millions of dollars, because at the moment there's just no consequence.And it is devastating for us to see people just walk away from collapsing companies.We need them prosecuted.We need them potentially put in jail if they've done the wrong thing.and we need examples made of them so that this stops happening across the industry.

Sid, your first builder went bankrupt, now you're on to your third building company for your family home, six years on.

Third time lucky, yes.

When do you think your home will be finished?

Well, it's hard to say.I mean, the irony is, is that there's not actually much work left to do, maybe three or four months.But the three or four months is taking three or four years.Hopefully, with a third builder who is good and motivated, we should be able to finish shortly.But it's an unknown at the moment.

Tony, what about you?When do you see your home being finished?

I'd hope to see it finished within 12 months.But there's no real guarantees at the moment because one of our biggest concerns is that by law, our builder was supposed to give us our certificates at every stage that was completed.So this lab stage, he was supposed to hand the certificates over as soon as he received them.There's a certifier that makes sure he does that.It used to be done by the council, but it's done sometimes by private certifiers now.He wasn't keeping checks and balances on it either.

So we've found that we don't have certification right back to the slab stage.But to hear the things in the room tonight, it's just basically, I will never build a home again, 100%.And to hear the lawyer say, no one's held accountable.It's exactly that.I mean, the building industry itself and our codes are such that we build some of the best homes in the world.But there's always a place for a rat to run.

But there's no one weeding the rats out.And we need a rat catcher.

Corrie, you and your husband bought an apartment in a defect ridden building.Do you still live there?

No, we just couldn't take it anymore.As soon as all of the defects started coming to light, it didn't feel like a home, never really did.And yeah, our mental healthwas severely declining, just having to see it every day.What's next for you?We're in the hands of the Department of Fair Trading and the Office of the Building Commissioner.

Basically, we are just waiting for a massive bill that we're somehow going to have to pay.

Lisa, you lost $100 ,000 on a block of land when builder Porter Davis collapsed.You're now renting again for the first time in decades.Has this experience changed the way you see housing?

Yeah, absolutely.I think being in this room tonight has changed the way that I've seen housing.I can't help but be grateful that I have an excellent relationship with my landlady, who we rent directly from.I'm acutely aware of the statistics of homeless women over 50 terrifies the shit out of me.I've got a son who's on NDIS.I'm on Centrelink payments.

I've got chronic health problems.I work casually as much as I can.And there's one thing that I'm sure of, which is life's going to continue to throw shit at you.That's going to keep happening.I'm convinced that I will be a homeowner once again, that I will get through this albeit really rough patch, and come out the other side and see better days.

Lisa, thank you so much.And thank you so much, too, for joining us.You can catch up on this episode or any others on SBS On Demand.I'll see you next time.