The red and green flags of choosing a home builder

Building a new home is a bigger financial decision than ever for Aussies. In fact, the cost of building a house in Australia has risen about 42% between March 2021 and March 2026, according to the ABS Producer Price Index

So, how do so many Aussies end up on A Current Affair with a half-built home?

According to iBuildNew general manager Jake Taylor, Australians are walking into one of the largest financial decisions of their lives with too little context about who they are signing with, falling into the common traps that leave families locked into dodgy deals.

Mr Taylor said the signals of a quality builder were easier to read than most buyers realised.

“A good builder isn’t hard to identify if you know what to look for, and most of the signals show up before you’ve signed anything,” Mr Taylor said, noting that the most important work is done early in the process.

“The buyers who navigate this well aren’t necessarily more experienced – they’ve just done the work upfront,” he said.

“They’ve compared builders before walking into a display suite, understood what’s included and what isn’t, and asked the right questions before signing anything.”

Red flags to look out for

For Mr Taylor, the most common red flag is pressure – the kind that compresses a buyer's decision window before they have had a proper look at the contract.

“A legitimate builder doesn’t need you to commit before you’ve had time to read the contract properly,” he said. “If there’s urgency to lock in a deposit before documentation is complete, that’s worth paying attention to.”

Pricing is the next thing Mr Taylor flagged, saying it was the most common factor luring Aussies into misaligned expectations.

With cost pressures hitting the construction industry hard in recent years, Mr Taylor said a quote sitting well below the rest of the market was rarely the win it looked like.

“A price that sits well below everyone else’s doesn’t mean you’ve found a bargain – in the current cost environment, that gap has to come from somewhere,” he said.

“A quote that’s $30,000 to $50,000 below the rest of the market is hard to ignore when you’re managing a tight budget,” he said. “The problem is that in a fixed-price contract environment, a builder who has underquoted has to recover that margin somewhere.”

“It usually shows up later, through variations, substituted inclusions, or a build that drags on well past its contracted completion date.”

Mr Taylor also said Aussies should be realistic about the display home experience.

“A polished showroom doesn’t tell you anything about the builder’s financial position or what a standard build actually looks like,” he said. “Most of what you see in a display is an upgrade.”

Green flags of a quality builder

On the flip side, Mr Taylor said there were several telltale signs of a builder worth your time.

These show up in how the builder communicates before any contract is signed.

“A quality builder will offer a fixed-price contract with a detailed inclusions schedule, be straightforward about their build timeline, and put key milestones in writing,” Mr Taylor said.

“If they’re vague on specifics before you’ve signed, that won’t change after.”

Mr Taylor added that every builder in Australia needs to be registered with their state authority, such as the Victorian Building Authority or NSW Fair Trading.

“Check it yourself rather than taking their word for it,” he said.

Membership of an industry body such as the Housing Industry Association (HIA) or Master Builders Australia adds accountability.

New housing in Rockbank, VIC. Image: Shutterstock

What buyers should do first

Mr Taylor said research should begin well before any sales conversation.

“The good news is that most of what you need to make a confident decision is publicly available – it just requires knowing where to look,” he said.

This includes state building authority records, ASIC's insolvency register and editorial coverage of how individual builders are operating in current market conditions.

Platforms such as iBuildNew provide a useful starting point for getting across the market before entering any sales conversation, with builder profiles as well as articles and video interviews with builders across the country.

“This gives you a genuine sense of how different builders operate and how they’re navigating current market conditions,” Mr Taylor said.

“The builders delivering great outcomes for buyers exist in every state and at every price point.

“The challenge has always been finding them.”