This article is from the Australian Property Journal archive
MORE construction groups have folded amid growing strain for the industry, as high costs, low supply and supply chain delays continue.
Amongst the companies, Snowdown Developments in the same week was ordered into liquidation by the Victorian Supreme court, impacting 52 employees, 550 residential projects and over 250 creditors who are owed nearly $18 million.
Only a few hours following this news, another Victorian building – Mimosa Homes – partially bought out the firm, acquiring multiple assets including owned masterplans, copyright materials, branding and Snowdown’s customer database.
Though Mimosa Homes will now be absorbing the construction company’s debt, leaving creditors in the same position.
Meanwhile Victorian-based Hotondo Homes Horsham, a franchisee of the national construction, went into administration last Thursday after 14 years in business, with Worrells appointed as administrators.
The collapse of the branch has left 11 homes still under construction and 11 employees with outstanding entitlements.
“The Australian building industry is currently enduring a perfect storm of factors, navigating record levels of demand while facing widespread shortages of building materials and trades, supply chain delays, major spikes in the costs of materials and labour and the ongoing effects of the Covid-19 pandemic.” Hotondo Building Pty Ltd said in a statement.
This follows the close of Hotondo Homes Hobart in January, who according to liquidator Revive Financial owed $1.3 million to creditors, with up to 80 contractors and 40 customers left in the lurch.
Dwelling Building Group in Victoria has also entered voluntary liquidation over the last week, effecting four employees and three unfinished residential projects.
Australia’s construction industry has so far had a tumultuous year, with the collapse of giants Probuild in February followed by Condev in March.
Meanwhile in Sydney, Merhis group also entered liquidation, with Stephen Wesley Hathway and Philip Raymond Hosking from Helm Advisory as liquidators.
It followed the Federal Court appointing Helm advisory to deal with related company The Stacey Group in 2019, with liquidators finding there was around $17 million owed plus interest.
This comes after building contractor Fire Services Australia (FSA) Group went into voluntary administration last month owing over $10 million.
Rising construction materials, labour costs and the prohibitive weather conditions have smashed the construction industry. In Queensland, building firm Solido Builders appointed liquidators in recent weeks, just days after the collapse of Pivotal Homes, while the country’s largest home builder Metricon received a $30 million capital injection from its owners and support from the Commonwealth Bank as it sought to ward off ongoing industry and media speculation about its viability.
