WATCH ABOVE: Expert warns that the construction industry is on brink of collapse<\/p>\n
Know the news with the 7NEWS app: Download today Arrow<\/a><\/p>\n \u201cWe\u2019re living through the biggest industry shake-up we\u2019ve seen in decades,\u201d Hegetschweiler told Sunrise.<\/p>\n \u201cFor the average Australian, it\u2019s not so much can they afford to build as will the builder be able to finish his job.\u201d<\/p>\n There were 3,500 industry-related business collapses last year \u2014 more than double the normal annual rate of 1,000 to 1,400.<\/p>\n The unprecedented collapse rate comes despite soaring demand, with vacancy rates at just 1.1 per cent and a genuine housing crisis gripping the nation.<\/p>\n Hegetschweiler said the paradox of high demand and mass bankruptcies came down to pricing accuracy and price shock.<\/p>\n He said builders were dropping their margins to win work in a race to the bottom, only discovering they\u2019re losing money when it\u2019s too late.<\/p>\n \u201cIt\u2019s a sad story from a business perspective, but it\u2019s the Australian family with half a home built and nowhere to go where the real impact often is,\u201d he said.<\/p>\n Subcontractors locked into fixed-price contracts are being particularly hard hit, with plastic prices surging about 40 per cent.<\/p>\n Many tradies were also being left unpaid when builders go under, Hegetschweiler added.<\/p>\n For Australians planning renovations or new builds, Hegetschweiler advised proceeding with caution but not necessarily waiting.<\/p>\n \u201cThe housing crisis is not going to go away. The pool of quality builders and trades is going to shrink,\u201d he said.<\/p>\n He recommended having buffers of 10 to 20 per cent beyond the quoted budget and asking builders two key questions: what they\u2019ll do if prices rise during the job, and what their process is for price changes or variations.<\/p>\n \u201cIf the builder\u2019s vague, walk,\u201d he said.<\/p>\n \u201cIf they\u2019re very clear, they can demonstrate a process and speak to some of their clients as well, then absolutely go ahead because it\u2019s only going to be more expensive 12 months from now.\u201d<\/p>\n![\"Kurt](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/ed296c45ed2c6006a0b2ddf156bb7462c802b933-16x9-x0y0w1280h720.jpg\")
Kurt Hegetschweiler warns that trades prices could jump 50 per cent as construction industry faces crisis Credit: 7NEWS<\/p>\n