Another Australian construction company collapses

The construction woes continue with a Victorian builder revealing it has gone bankrupt with at least $600,000 in debt.

A Victorian builder based in the regional city of Geelong has gone bankrupt, hitting a number of homeowners, craftsmen and subcontractors.

The builder, Waterford Homes, had a number of homes under construction, according to curator Ben te Wierik of BTW Advisory.

It comes at a time when the Australian construction industry is in crisis, with a dozen companies liquidated so far this year due to rising construction materials costs, the ongoing supply chain crisis and permanent contracts, leaving many out of business.

Mr te Wierik said he was still figuring out how many homeowners would be affected after he was hired on Tuesday, but said he had found 60 creditors so far who could have outstanding debts from the builder.

“There are in total about 60 creditors including the ATO, it could be higher than that, but of course there are large and small creditors. Some of them were obviously homeowners, who will be making claims under the builders warranty insurance,” he said.

“Right now, more than $600,000 in claims have been found from transactions and ATO debt, but that will likely increase as more claims are filed.”

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He said it was “no secret” that builders both large and small were facing “challenges” at the moment, and he suspected Waterford Homes was facing similar circumstances.

“Both commercial and residential developers have a lot of work to do with fixed price contracts, higher input costs and supply chain pressures and even material shortages and the fact that it is difficult to get a transaction all lead to delays which then have a flow . -on the effect on cash flow,” he said.

“This makes it very difficult for any business, but especially for companies in the construction industry where profit margins are under pressure.

“It’s a pretty stressful time for homeowners and subbies who owe money.”

Mr te Wierik said he would investigate why the company failed and its assets, as well as whether any transactions could be recovered as part of the liquidation.

The construction industry has been ravaged by a wave of collapse this year.

Two major Australian construction companies including: Condev . from Gold Coast and industry giant Probuild have already been liquidated this year.

Smaller operators like Hotondo Homes Hobart and Perth firms Home Innovation Builders and New Sensation Homes, as well as Sydney-based company Next have also collapsed, leaving homeowners out of money and with unfinished homes.

At the end of last month, two Queensland companies collapsed just days apart, Central residences and Solido Builders

An industry insider told earlier this year that half of Australian construction companies on the brink of collapse while acting insolvent, and it could hit the homes of thousands of people in the coming months.

One includes a Victorian construction company that may be on the brink of collapse afterward millions in debt incurred and construction work has been halted for months.

Snowdon Developments Pty Ltd has 15 creditors pursuing the company for debts totaling $2.5 million, demanding that the Supreme Court of Victoria issue a winding-up order to force the company into liquidation “by virtue of insolvency”.

There are between 10,000 and 12,000 housing companies in Australia undertaking new homes or major renovation projects, a figure estimated by APB.

A construction insider, who works for one of the largest construction companies in NSW, has previously warned that the situation in the sector only “gets worse” after a series of industry collapses as the price of building homes rises between $40,000 and $100,000.

Scott Mason, general manager of commercial and real estate services at Equifax, said there is a hidden crisis due to the problems in the construction industry.

“Rising costs, disrupted supply chains and periodic lockdowns have led to a profitable boom, with many construction companies committing to projects that are no longer financially viable due to large price increases for construction materials,” he said.

“While the collapse of big names such as Probuild and Condev has been in the news recently, the impact of these events on the small businesses that make up the bulk of Australia’s construction companies doesn’t often make headlines.

“According to Equifax data, building and construction services directors are 30 percent more likely to be in arrears than the average consumer, while construction owners are 80 percent more likely, and those in the construction industry are 100 percent more likely to be in arrears.”

He said the shocking statistics show the far-reaching consequences of insolvency.

“The flow-through effects on the entire ecosystem of suppliers and the people behind these companies often go unseen,” he added.

A healthy construction industry is vital for a strong economy and sustained growth, with the sector accounting for the employment of nearly 9 percent of Australian workers and 7.5 percent of Australian GDP, according to reporting agency CreditorWatch.

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