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Customer support

What to do if your builder requests a price increase

Craig Johnston, Manager, Credit Decisioning

04 Apr 2022 • 4 mins
aerial view of neighbourhood

We’re aware that some customers are receiving requests from their builders to increase the price for their home builds. This is becoming more common in WA, with high demand for building materials and labour shortages increasing costs and causing delays.

Receiving a notice from your builder that prices are increasing can be a difficult and stressful situation.  So, we’ve put together some general information to help you understand possible options.

Home building contracts in WA

Most home building contracts in WA are fixed price. The builder can usually only increase the price if the customer agrees to it. 

The main reasons a builder can increase the price without needing the customer’s agreement is if there are:

  • delays to construction start. Delays of more than 45 days to the start of construction that aren’t the builder’s fault.
  • unexpected circumstances.  Unexpected circumstances that the builder couldn’t have known about, but this can’t include increases to costs of materials or labour.

The Department of Mines, Industry Regulation and Safety is the WA regulator for home building contracts.  They have produced a useful guide on price increases. If you don't think your builder’s price increase fits within the above reasons, you may be able to complain to the regulator who can vary or disallow price increases.

Read the Department's guide (pdf)

You can reach out to the Department of Mines, Industry Regulation and Safety for more guidance on 1300 489 099.

Talk to your builder

Keep the conversation with your builder open.  They may be able to give you options for reducing any price increase.

Make sure you understand exactly why the builder is increasing the price.  It may help to ask for a breakdown of the price increase if the builder hasn’t given you one.  The regulator suggests asking your builder to confirm the clause of your contract or the section of the Building Contracts Act that allows the price increase and, if relevant, who has caused any delay.

Paying for price increases

If a price increase is allowed, or you’re considering accepting it to move on with your build, you should check that it is within your budget.

We’ll have already assessed you when approving your loan and can let you know whether we can lend you more to cover a price increase.  Any more lending is based on our lending criteria.   If you would like us to consider this, please reach out to your Keystart Home Loan Specialist or broker to speak about your individual situation.

If we can’t lend you more, you’ll need to cover the price increase with your own non-borrowed funds. As a responsible lender, Keystart will also need to verify the source of these funds.

Remember to let us know if you are considering a price increase. 

Cancelling your contract

Depending on your building contract terms, the reason for the price increase and what stage of the build you are in, you may be able to cancel your contract. 

Consequences of cancelling can vary depending on the specific terms of your building contract and the time and reason of cancellation.  It may affect grants, insurance, your loan repayments and involve termination fees. 

You should consider what your next step will be after cancellation – trying to find another builder, selling the vacant land or simply waiting for a period?  Each may have implications for your loan with us, grants and stamp duty.  The Department of Finance can give you more information on grants and stamp duty.  Contact them on 08 9262 1400 or visit The Department of Finance. 

If you’re considering cancelling, you should discuss this with your builder.  Price increases and delays are affecting both builders and customers, so your builder may be able to give you options to avoid cancelling or reduce the impacts of cancelling.

Talk to us as well, so we can let you know what cancelling may mean for your loan.

Get advice

The above information is general.  We recommend you obtain independent advice to ensure you are aware of the options available to you in your particular circumstance.  Contacting the Department of Mines, Industry Regulation and Safety can be a good first step.

Financial difficulty

We understand this can be a difficult time. If you feel this situation is putting a strain on your finances, get in touch with us to discuss our hardship options.  There are services which may be able to help you. 

Financial hardship assistance.

Get in touch

It’s important that you contact us, should your builder advise of any delays to your construction timeframe, or if your building contract may be cancelled.  

Please also contact us if you or your builder are proposing any of the following changes:

  • structural changes to the agreed building plans,
  • removal or replacement of existing contract inclusions, or 
  • a price increase to your overall contract cost.
If you have any other questions, please reach out to your broker or Keystart Home Loan Specialist. Alternatively, you can call us on 1300 070 756 or email

Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs. Any examples given in this post are provided for illustrative purposes only.

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