The Master Builders Association is warning of increasing numbers of builders going bust, prompted by a major drop in the number of new housing starts.
Australian Bureau of Statistics figures show dwelling unit commencements in the March quarter fell 50.9 per cent in the ACT.
It is the largest decrease of any state or territory, and the fourth consecutive quarterly fall.
Master Builders Association ACT executive director John Miller says the recent building boom has slowed dramatically.
"We've had a very high level of activity in the industry in the last 10 years or so, and a lot of entrants to the industry at a time when business is reducing and obviously that's probably going to create some difficulties for some that have come into the industry," he said.
Mr Miller says many businesses are being wound up.
"We were building 4,000 - 4,500 dwellings 15 months ago and we've fallen down to 3,000 - 3,500 so there would be people looking for work, there's no question about that," he said.
"Having said that there are still many many good builders in the industry, there's still a good work load in front, it's just not what we've been used to in recent years." Mr Miller says prospective home builders need to be diligent when selecting a contractor.
"There's many good businesses out there, do your homework, see who's been working in your area and arm yourself with the information you need and communicate through the process," he said.
"The town certainly isn't short of good builders, there are plenty of good ones around."