Opposition calls for fix on policy blind spot as more residential builders collapse

Opposition Shadow Housing Minister Steve Martin is calling on the Cook Labor Government to fix a policy blind spot after more building companies have reportedly gone bust.

News of the liquidation of two more residential builders – Western Luxury Homes and Royal Construction and Design – this week highlights the desperate situation many Western Australians are facing.

It follows new data out today showing record low housing stock as the housing crisis worsens in WA.

“We currently have one builder a week on average going bust at a time when the number of houses for rent or sale has reduced to critically low levels,” Mr Martin said

“WA’s residential building capacity is also shrinking at a time when we need it most, and the government is picking and choosing who will get extra help.

“Western Australians have been waiting, in some cases waiting years, to get these homes completed only to be left abandoned.

“The Housing Minister says he is pulling all the levers to fix the crisis in the housing market yet more Western Australians than ever are becoming increasingly desperate to either find homes or finish them.”

Mr Martin said one area that needed to be fixed was the eligibility for the Housing Indemnity Insurance Scheme, which provides support for homeowners for incomplete or defective works in the event their builder becomes insolvent.

The maximum payout for the scheme was doubled to $200,000 in October last year in recognition of the increasing costs many homeowners face but it’s been revealed many may not be able to claim the full amount due to a technicality.

“I’ve been contacted by affected homeowners who have been told they are ineligible for the $200,000 payout because of a technicality – the date the insurance certificate was issued,” Mr Martin said.

“We’re being told that if a home build was contracted and had insurance issued before 1 June 2020, even if your home is still sitting there in 2023, you won’t be eligible for the increased help to finish it.

“The extra help only applies to insurance certificates issued after 1 June 2020, even though homeowners that signed before then face the exact same pressures and impacts as everyone else in the situation.

“It shouldn’t matter when the certificate was issued, if your builder has gone bust and you need to claim insurance to finish it, you should be eligible for the full amount.”

The policy anomaly has left Mount Hawthorn couple Tina Hoyland and Steven Radley unable to finish their home after their contract and insurance certificate was issued just prior to June 2020.

Despite being quoted over $260,000 to finish their home by new builders, the insurance will only cover $100,000 because of the technicality.

Mr Martin questioned who had approved the retrospective date and urged the State Government to reconsider it.

“We have a housing crisis in this state, and unfinished, partly built homes just sitting there because there isn’t enough money to complete them,” Mr Martin said.

“This is having a huge impact on household budgets and livelihoods as many are forced to pay mortgages on unfinished homes and still have to pay rent elsewhere.

“It’s no fault of ordinary people that their builders are going into liquidation. I’m calling on Commerce Minister Sue Ellery to immediately fix this and change the eligibility date.”