More large Australian construction companies will fail this year, a building insolvency expert has warned, with thousands of sub-contractors, tradies and would-be new homeowners the vulnerable victims.

Andrew Spring, partner at building insolvency specialist Jirsch Sutherland, said it "wasn't surprising at all" to see two tier-one construction firms go bust in quick succession after Christmas, given the serious headwinds the sector is now facing.

He said it was "a definite possibility" other construction giants would follow Probuild and Condev into liquidation, creating a potential "domino-like effect" for sub-contractors and tradies who will be left out of pocket and saddled with debt.

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"The industry is in a really difficult position at the moment," Mr Spring told 9news.com.au, predicting that the tough times would likely stretch into 2023 because "it does take time for the full weight of these sort of (major) insolvencies to come home all the way down the chain".

Hopeful homeowners who had the misfortune to pick the wrong construction company won't escape the financial bomb.

Queensland couple Nicole and Daniel Jacobson have been forced to shell out an extra $130,000 to finish their home, after the building company they signed with, Privium Group, suddenly collapsed.

Affected by a construction company collapsing? Email data, down 27.9 per cent from December.

"The decline was much larger than economists had expected," Diana Mousina from AMP Investments said.

January approvals were 24.1 per cent lower compared to a year ago.

Ms Mousina predicted approvals would "track sideways" over the next few months, adding the reopening of Australia's international border should result in positive approval activity on a 12-month horizon.