Master Builders Queensland has warned of a challenging year ahead.
Master Builders Queensland has warned of a challenging year ahead.

Building sector facing tough times

QUEENSLAND'S peak building body has warned of a challenging year ahead for the sector on the same day another construction company collapsed.

Master Builders Queensland said the latest Australian Bureau of Statistics figures showed a 2.1 per cent drop in building approvals in the year to November 2018.

Master Builders Queensland deputy chief executive Paul Bidwell said it was an increasingly grim story across all of the state attributable to tighter lending rules.

"We expect the residential sector to slip slightly from the 42,000 commencements in 2018 to 40,000 in 2019," said Mr Bidwell.

"Worryingly, the drop will be largely in the detached housing sector, with the impact to be felt across the state.

"Tightening in finance requirements is largely to blame. However, we hope this is a passing phase, due to solid underlying market fundamentals."

 

Master Builders Queensland Deputy CEO, Paul Bidwell.
Master Builders Queensland Deputy CEO, Paul Bidwell.

 

The warning came as Maroochydore-based Lusso Concepts went into liquidation yesterday owing more than $250,000 and leaving homes unfinished. Lusso joins more than 1400 companies in the state's construction sector that have failed in the last five years.

Director Aaron Steel told News Corp that the firm's financial difficulty had arisen from an owner of an unfinished home wanting to renegotiate terms of a contract.

"We didn't just take people's money and run," Mr Steel said.

"We've got a young family. It's horrible but unfortunately the construction industry is a tough industry."

According to Queensland Building and Construction Commission records, Lusso Concept's building licence was cancelled in August 2015 for unpaid fees but was restored later that month. The company was licensed to build low-rise buildings.

The QBCC on Tuesday said that it had commenced the legal process that could see the director of the company excluded from the industry for three years.

"When a company enters liquidation, the QBCC begins exclusion action promptly," the building watchdog said.

Mr Bidwell said that as well as tricky economic conditions, the industry was facing a wave of legislative changes, including an expansion of the project bank account scheme.