Insurance protection for Tasmanian home builders inches closer

The latest step forward for the Home Warranty Insurance (HWI) Provider Scheme came this week after the government opened the tender process for providers. 

The scheme is set to cover homeowners for loss of deposit, non-completion and defects in the event that their builder was no longer willing or able to complete the work. 

A similar policy was scrapped in 2008 – making Tasmania the only state without a compulsory home warranty insurance scheme.

Minister for small business and consumer affairs Michael Ferguson said the new provider would be responsible for delivering the underwritten element of the new scheme.

Under its terms, building contractors in Tasmania would be required to purchase a HWI policy with the homeowner named as the beneficiary.

The requirement would be on each residential building contract exceeding $20,000 and applied to both new builds and substantial home renovations.

“The scheme will provide important protections to ensure that homeowners are covered for loss caused by incomplete or defective building work should unforeseen circumstances occur,” Mr Ferguson said.

This included a builder becoming insolvent, disappearing, or dying.

Calls for the scheme have intensified in recent years despite the cost of running the scheme's predecessor, with Master Builders Tasmania pointing to the failure of two Tasmanian construction businesses in 2023 and the knock on impacts of a nation-wide builder shortage on Australia's least-populated state. 

With the Tasmanian Government having already had to cough up a specific financial assistance package for those affected by construction company failures, the time is ripe for tighter policy.

Prop Track data from showed dwelling price-growth of 0.6% for Hobart in August – the strongest monthly growth of any capital besides Perth – bringing the city's median to $683,000. Despite this slight uptick, prices in the rest of the state saw a slump of 0.1% to a median of $516,000.

The request for tender will close on 16 October.