Should You Build a Home After the Porter Davis Collapse?

17th April 2023

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Building a new home in Australia? Learn what the Porter Davis collapse can teach buyers about choosing a builder, comparing quotes and protecting deposits.

Should you build a new home after the Porter Davis collapse?

If you’re planning to build a new home in Australia, the collapse of Porter Davis raises a practical question. How do you decide whether you’re ready to sign a building contract and pay a deposit?

In this Home Building Hub episode, Colin Bischof and Darren Brennan discuss the pressures builders and buyers faced in 2023, from material shortages and delays to rising costs. Their advice still gives buyers a place to start. Compare what each builder will deliver, work out what a delay would cost you and check what protection applies before you hand over money.

What happened to Porter Davis?

Porter Davis Homes Group went into liquidation on 31 March 2023. Grant Thornton was appointed liquidator to 14 companies in the group, and work on affected builds stopped. Some Victorian customers had signed contracts and paid deposits without domestic building insurance in place. Grant Thornton liquidation updates and Victorian Government information for affected customers.

Why did building costs and delays matter?

Colin explains how a builder might price a home months before work can start. If the block is still waiting for title and the cost of timber, concrete or trades rises in the meantime, the builder can face much higher costs than it allowed for when it quoted. Darren adds that the construction method can affect which shortages hold up a job. A builder using timber frames, for example, faced different supply issues from one using steel frames.

For buyers, delays can affect two separate timelines. There’s the wait for land settlement, approvals and a site start, then there’s the construction period itself. Ask the builder for both estimates in writing and find out what each depends on. If you’ll be renting while you build, work out what a few extra months of rent would do to your budget.

How to compare builders and quotes

Colin and Darren caution against choosing a builder on price alone. A lower quote can look appealing until you discover the items you’ll need to pay for separately. Ask each builder to quote on the same scope so you can see where the prices differ.

• Check the builder’s registration or licence.

  Use your state or territory regulator’s register and check that the business or practitioner listed matches the entity you’re contracting with.

• Compare inclusions and exclusions.

  Check whether the driveway, flooring and site works are included, excluded or listed as allowances.

• Ask how long the quote holds.

  If your land is untitled, ask what happens if the title date moves or the quote expires before work starts.

• Ask for a realistic timeline.

  Find out when the builder expects to start on site, how long construction is likely to take and who will update you if the schedule changes.

• Review the contract before signing.

  Ask an independent building lawyer to explain the price, allowances, variations and progress payments if you’re unsure how they apply.

What should you check before paying a building deposit?

Ask which building insurance or warranty scheme applies in your state or territory. Get the relevant documents for your property, check the address and contracting entity, and confirm what the cover includes before paying. If the builder asks for a preliminary fee for plans or soil tests, ask what the fee buys, whether it’s refundable and whether any cover applies to that payment.

Victorian update, November 2026. The episode discusses Domestic Building Insurance (DBI), which applied at the time. Victoria’s Home Warranty scheme applies to eligible domestic building work valued at more than $20,000 under eligible contracts signed on or after 1 July 2026. Existing DBI policies continue under their terms. Check which scheme applies to your project and read the documents for your specific build. Building and Plumbing Commission guidance.

Should you build now or wait?

Start with your own block, quote and budget. If you already own land, ask the builder to confirm that the design suits the block and get the site costs clarified. If you’re still shopping for land, compare the combined land and build cost and check how the expected title date lines up with the quote’s expiry.

If your budget is tight, separate the features you need from the upgrades you can leave until later. Ask your broker or lender how a longer build or higher repayments would affect what you can afford. A quote you understand, a workable timeline and room in your budget for unexpected costs give you a clearer basis for deciding when to proceed.

Glossary

• Liquidation

  • The process of winding up a company and dealing with its assets and debts.

• Titled land

  • Land with a registered title. For a new lot, registration generally allows settlement to proceed under the land contract.

• Site costs

  • Costs associated with preparing and building on your particular block, such as excavation or additional footing work.

• Variation

  • A change to the contracted work that can affect the price or construction time.

• Progress payment

  • A payment tied to a stage of construction under the building contract.

Frequently asked questions

What should I do if my builder goes into liquidation?

Keep copies of your contract, payment records and insurance or warranty documents. Contact the appointed liquidator and the insurer or scheme administrator to find out what steps apply to your project. Get independent advice before terminating the contract or engaging a replacement builder. If you were a Porter Davis customer, start with the Grant Thornton liquidation updates.

Does a fixed-price building contract cover every cost?

Check what the contract includes and how it treats allowances, exclusions and variations. For example, a flooring upgrade you request after signing may change the amount you pay. If your quote contains a site works allowance, ask how the final cost will be determined and when you’ll know it.

Is it better to buy titled land if I want to build sooner?

Titled land can remove the wait for title registration. Your start date still depends on settlement, approvals, site conditions and the builder’s availability. Ask the builder for a likely start date for that specific block before relying on it.

Key Takeaways

• Compare builders on the full scope, price and expected timeline for your home.
• Check the quote’s expiry against the likely land title and site start dates.
• Confirm what insurance or warranty applies to your property before paying a deposit.
• Allow for the cost of delays and decide whether the build still fits your budget.

Watch or listen to “With Porter Davis down, should you be building right now?” on YouTube

About the Home Building Hub Podcast: The Home Building Hub podcast, hosted by industry experts Colin Bischof and Darren Brennan, is Australia’s premier resource for new home buyers. With weekly episodes featuring special guests, the podcast provides objective, high-quality insights into the home building process - completely free and without sales pitches. From understanding financing options to navigating the complexities of building a new home, each episode is packed with actionable advice and tips. Explore more episodes at http://www.homebuildinghub.com.au and join our growing community of informed home buyers.

Disclaimer: This article was generated by AI based on a transcript of our podcast episode and may contain inaccuracies or omissions. Whilst we’re all about providing value to you, this article should not be considered as legal or financial advice. It contains general information only and is based on the content discussed during the podcast episode. This information is relevant to the episode’s release date and may not be applicable at the time of reading. Always seek independent professional advice tailored to your personal situation before making any legal or financial decisions.