How to choose a builder in Australia

Do these first. They filter out the obvious problems.

Check the builder is licensed and registered in your state. In Victoria that is the Victorian Building Authority. In NSW it is NSW Fair Trading. In Queensland it is the QBCC. Each has a public register where you can confirm a builder holds a current registration for the class of work you are having done. A builder who is vague about their registration number is a builder to be careful with.

Confirm the company behind the builder. Get the company name and ACN, not just the trading name, and look it up on the ASIC register. Check how long the company has existed. A brand new company run by people who have folded a previous company is a pattern worth understanding, and it has a name (see phoenix activity in our glossary).

Look at finished work, not photos. Ask to see homes the builder completed two or three years ago, not just the ones still under construction. Two years is long enough for defects to show. Talk to those owners if you can.

Confirm domestic building insurance. For most residential work over a threshold value, your builder must hold domestic building insurance, also called home warranty insurance, before they take your deposit. It is a backstop if the builder dies, disappears, or becomes insolvent, though it is capped and slow, as we cover in our guide on what happens if your builder goes broke.

A builder can be skilled, licensed, insured, and still go under mid-build because they ran out of cash. That is the failure mode that strands the most homes in Australia, and you can pick up signals before you sign.

Ask how many jobs they are running at once. A builder juggling more projects than their team can fund is a builder relying on each job's money to keep the others moving. That pattern works until one progress payment runs late. We explain how this pyramid forms, and how it brought down large builders, in our piece on what BuildFair contributes to the housing crisis.

Ask who their suppliers are and how they pay them. A builder paying suppliers on normal account terms is in better shape than one being asked for cash on delivery. Suppliers withdraw credit when they are worried about getting paid, so a builder who has lost trade credit is showing you something.

Notice whether they ask for money ahead of the schedule. A builder who wants a larger deposit than the law allows, or who hints they will need the next stage early, is telling you about their cash position.

None of these on their own means a builder is in trouble. Together they tell you whether the business behind the hands is steady.

Here is the question that matters more than the quote: while my build is happening, where does my money sit, and who can spend it?

In the standard system, the answer is that your progress payments land in the builder's general operating account and mix with everything else the business owes. Your money can pay last quarter's supplier debt, the wages on another job, or a tax bill, all before it pays for your build. That is legal and ordinary, and it is also why owners become unsecured creditors when a builder fails, standing behind the tax office and the banks for money they already paid.

Compare that to how a solicitor handles your money. It sits in a trust account and can only be used for your matter. Residential building has had no equivalent, which a 2024 UNSW analysis put plainly: once your money reaches a builder, it can be spent on almost anything.

So ask the builder directly. Are my funds held separately from your other jobs? What happens to the money I have paid if your business fails partway through? A builder who has a clear answer is worth more than one with a slightly cheaper quote.

This is the gap BuildFair was built for. On a BuildFair project, your funds sit in regulated custody with our banking partner Kobble, which operates under AFSL 545391 (Yondr Money Pty Ltd). BuildFair holds the verification, the audit trail, and the release authority. Kobble holds the cash. Each project has its own ringfenced account, so the money for your build can only be released for your build, never to plug a hole on someone else's job. Funds release on verified progress. If the builder runs into trouble, the money that has not been released is still tied to your project rather than lost in the builder's general account. The full mechanics are on our Trust & Security page.

The payment schedule is buried in the contract and it is one of the most consequential parts of the document. Two things to get right.

Make sure each stage is defined by something verifiable, not vague. "Frame and roof structural inspection passed" is a stage you can check. "Structure complete" is an argument waiting to happen.

Make sure you are never paying ahead of the work. You pay for stages that are finished, not promised. If you are funding through a construction loan, the bank releases money in stages through a drawdown and inspects the work first, which adds time but also adds an independent check. Our progress payments guide walks through how the standard five and six stage schedules actually work.

Any one of these is a reason to slow down. Several together is a reason to walk.

A good builder will not be offended by any of these questions. The ones who get defensive are answering you.

Choosing a builder is not only about who builds the nicest home for the best price. It is about who you can trust with a very large amount of your money over many months, in an industry where that money has historically had little protection. Run the standard checks, read the financial signals, and ask the money question out loud. Then make the decision with the answers in front of you.

This article is general information, not legal or financial advice. Check the rules that apply in your state and seek advice for your own situation.