Cash flow problem builds up for Rocky's Ted Price Homes

BUSINESS may not be booming, but those at Ted Price Homes have knocked back claims they'll be closing down.

While manager Adrian Price admitted they've a bit of a cash flow problem, he is confident they'll be past the tough times soon.

"When you have a downturn in the building industry the cash flow takes a bit of a hit... everyone suffers," he said.

"We're still going, we are doing it tough but hopefully in the next couple of weeks we'll get some more funds."

Ted Price Homes has been in the industry for 40 years, building homes in Rockhampton, Gracemere and the Capricorn Coast.

Master Builders' Central Queensland regional manager Dennis Bryant said the industry was facing a tough time.

"Builders have all tightened their belts and looked at every single way they could possibly reduce their costs," he said.

But he's positive about the future, and said it was a great time for people to build.

"From a local perspective we have seen a gradual increase since the beginning of the year in the total value of approvals, both in new buildings and in repairs, particularly after the cyclone," he said.

"The industry is coming back, but one of the biggest constraints is the level of demand. People aren't saying, 'let's go and build a house'."

Dennis said people were still holding back, even as builders lowered their prices and banks lowered interest rates.

But he said some conditions set down by the banks were a deterrent for some.

"Valuations and conditions on finance are our second largest constraint in the local market," he said.

"There are all sorts of restrictions and I'm urging clients to shop around and find somebody who is willing to work with them rather than against them.

"We'll get a client who has limited funds and wants to borrow money, they probably have the ability to borrow, but the bank is saying we won't be paying anything until the slab is down."

Dennis says this can mean the builder is carrying the cost of the project until the completion of that stage, which could be 15% to 20% of the total cost of the build.

"Let's say they're building four or five houses, they'd be out of pocket $150,000," he said.

"Cash flow is king … you can be asset rich, but if you don't have the cash to carry the work you are doing then you have problems."



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