Company collapses continue in Australia’s “construction

The crisis engulfing Australia’s construction sector has deepened over the past six weeks. A plethora of building companies have been placed into administration and liquidation, owing millions of dollars to owners of unfinished homes, subcontractors, suppliers and workers in entitlements.

This month, Victorian-based building firm Snowdon Developments was ordered by the Supreme Court to go into liquidation on the grounds of insolvency, owing just under $18 million to 250 creditors.

The Snowdon collapse follows similar failures throughout June, including prominent home builders such as Victorian-based Waterford Homes, which went into liquidation with debts so far amounting to $600,000.

House under construction in Manly, Queensland [Photo by Orderinchaos via Wikimedia Commons / CC BY-SA 4.0]

Specialist small home builder Affordable Modular Homes collapsed under a mountain of debt, owing $121,000 to creditors, while Statement Builders failed, owing $200,000 in taxes. Other home builders that went to the wall last month included Langford Jones Homes, Pivotal Homes, Solido Builders, Wulfrun Construction and Westernport Constructions.

These failures are part of what media commentary terms “a construction sector bloodbath.” More than 16 building companies had already collapsed since the closing months of 2021. They include well-known names in home building, such as Hotondo Homes, Dyldam Developments, BA Murphy, Home Innovation, ABG Group, New Sensation Homes, Pindan and ABD Group.

This year also saw the collapse of major companies, such as Probuild and Condev, that had projects underway or on the books worth billions of dollars. The fate of Australia’s largest home builder Metricon, which had around 4,000 homes under construction last month, remains uncertain despite a $30 million cash injection into the company by its shareholders and promises of government support.

It is widely acknowledged across the industry that these failures are only the tip of the iceberg. Industry market researcher IBISWorld recently projected that the number of firms operating in the home building industry would fall by 9 percent in 2022-23, contracting for the first time in a decade “by thousands.”

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