Builders are navigating cost pressures. Picture: GettyImages
A contract deadlock is threatening to derail Queensland’s housing target, with nervous builders and homeowners delaying projects as the industry grapples with runaway costs.
Master Builders Queensland has warned of a sharp drop in contract signings after sudden supply chain shocks added an average of $10,000 to $15,000, or as much as 10 percent, to the cost of a home build in just three months.
Desperate to avoid the post-covid wave of liquidations that hit the construction industry, builders are pushing back against absorbing the risks of traditional fixed-price contracts.
Master Builders Gold Coast regional manager Adam Profke at the 2026 Roadshow
But the alternative of including cost-escalation clauses, or even an open-ended or “cost-plus” contract, has hit a wall with banks who refuse to approve construction loans without a guaranteed final price.
Master Builders Queensland deputy chief executive Michael Hopkins said spiralling costs amid global unrest had effectively frozen the market, leaving builders “nervous about the future”.
“One thing we have noticed recently is both builders and clients holding off on signing contracts at the moment,” Mr Hopkins said.
“That’s unfortunate, because at the moment in Queensland we’re trying to build 50,000 homes every year for the next 20 years to hit our housing targets.
“So that’s a worrying sign…we’re still falling short of that target.”
New QBCC Commissioner and CEO Angelo Lambrinos attended the Gold Coast event. Picture: Liam Kidston
Master Builders principal lawyer Julian Lane said the stalemate between builders trying to survive and banks minimising lending risk was incredibly difficult to navigate.
“Everybody likes a fixed-price contract because we know how much we’re going to get paid, and we know how much we’ve got to pay,” Mr Lane said.
“But we do need to change where it’s seen as the builder has to wear all of the risk in times of extreme uncertainty.”
Mr Lane said cost-plus contracts were a hard sell, as banks aimed to protect consumers from open-ended debt while interest rates remained high.
Around 140 Gold Coast builders attended the local installment of Master Builders’ Roadshow series, where members also raised their concerns with newly appointed QBCC commissioner Angelo Lambrinos.
The QBCC had previously taken a hardline stance, warning consumers that paying extra costs outside a fixed-price contract could trigger a breach of contract and void their home warranty.
Queensland is falling short of its housing target
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Gold Coast regional manager Adam Profke said the pressure was acutely felt across the local market, which relied on the knock-down-rebuild pipeline to house its booming population.
“We are very constrained from a land supply point of view. There is no more land,” Mr Profke said.
He said tradies faced the challenge of meeting clients’ expectations against the backdrop of a heavy backlog of major infrastructure projects across the region.
“We know we’ve got the work to do, we want to do it, but no one wants to lose money and depart the industry,” Mr Profke said.
For buyers trying to secure finance, Mr Lane advised negotiating a cost-escalation clause that includes a strict financial limit to appease cautious lenders.
“The builder should still put in perhaps a cap so that the bank knows the maximum amount they might have to lend to finish the job,” he said.
“If the homeowner can’t afford it, it is difficult for everyone. To be fair to homeowners as well, it’s not their fault these prices are going up, nor is it the builder’s.”
Both builders and homeowners are nervous
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