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Recent reports of the Andrews government’s plans to update legislation relating to building contracts and planning legislation have been warmly received by the Housing Industry Association (HIA).
According to reports by Fairfax Media earlier this month, Victorian Treasurer Tim Pallas held “crisis talks with four Victorian building sector lobby organisations to discuss an overhaul of planning and building contract laws as part of a push to cut delays and lower the risk of growing cost blowouts for builders.”
Under the host of proposed changes to building legislation in Victoria, builders could potentially receive payment for works completed quicker than under current schemes, defined by HIA Victorian executive director Keith Ryan as “out-of-date,” which were brandished by the group as responsible for “significant cash flow challenges” faced by Victorian builders in recent years.
According to the reports, HIA was joined by the Urban Development Institute of Australia, the Master Builders Association, and the Property Council, in the talks with the Victorian government.
According to Mr Ryan, “Reform of this legislation will take time to implement [and will] not address the current challenges or contracts already signed,” according Mr Ryan.
But, he added that “possible reform is positive news from the government at a time when industry needs confidence and certainty.
Construction contributes approximately $165 million to the state’s GDP, while real estate and related services account for just over $90 million.
In Mr Ryan’s estimation, “unnecessary red tape and delays in the planning process, along with out-of-date domestic building contract laws, have exacerbated the labour shortages and material cost increases.”
“Reforms will reduce delays in supplying new homes and allow builders to enter into better contracts that balance price certainty and flexibility for consumers,” he said.
Mr Ryan concluded, “We look forward to continuing to work with the government through this process.”
The news follows the collapse of Victorian-based builder Porter Davis last month, which stopped 1,700 home builds and impacted over 800 contracts for builds that had yet to commence, with rising input costs, supply chain delays, labour shortages, and a drop in new home demand cited as primary factors in the company’s’ demise.
Additionally, the Lloyd Group also reported at the end of March that all of its current projects were halted as the organisation revealed it was on the brink.
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