This article is from the Australian Property Journal archive
HOME builder Metricon has received a $30 million capital injection from its owners as well secure support from the Commonwealth Bank, as the construction industry’s challenges mount following the collapse of Queensland’s Pivotal Homes.
Acting CEO Peter Langfelder said industry and media speculation following the sudden and unexpected death of company founder Mario Biasin is now impacting the company, and Metricon’s owners wanted to demonstrate their commitment to the future of the company.
“We have previously said that our company has a proven history of success and remains profitable and viable and that we have the full support of our key stakeholders.
“We have also appreciated incredible support from many of our customers, suppliers and trades – but sadly, this hasn’t been enough to reinstall the complete confidence of the broader industry,” Langfelder said.
“This significant injection of capital by the owners demonstrates to our customers, employees, sub-contractors and suppliers our confidence in the viability, profitability and future of the Metricon business. We hope it may help cultivate a groundswell of support for Metricon, which is a great Australian success story,” he added.
The company also announced that its main lender the CBA has approved a 100% increase of its existing working capital facility.
“We are so appreciative of the bank’s support – which demonstrates its confidence in our future,” he continued.
Meanwhile Metricon has reportedly met with the New South Wales government about possible financial support.
NSW Premier Dominic Perrottet told the Sydney Morning Herald that the NSW Building Commissioner and Metricon are having discussions to better understand the challenges in the industry and how the government could provide assistance.
Langfelder said Metricon executives will continue talks with all key stakeholders in relation to support packages aimed at assisting the entire construction industry.
He said whilst industry conditions are challenging the entire sector, Metricon has always been confident of weathering this storm and powering ahead with plans for growth.
Photo: Note Viriyarat (Copyright Australian Property Journal)
Last Friday Australian Property Journal reported that Queensland home builder Pivotal Homes has gone into liquidation, the second QLD company collapse after Condev in March.
Pivotal Homes managing director Michael Irwin blamed rising labour and construction costs for the company’s collapse.
“In my 30 years’ experience I have never seen a set of circumstances like this and obviously we are not alone in these unfortunate conditions facing the industry.” Irwin said.
Building materials supplier Southern Star Windows’ boss Paul Armstrong told Australian Property Journal that the cost of materials has increased, with timber rising by at least 35%, along aluminium and glass.
The latest data from the Australian Bureau of Statistics revealed skyrocketing home building costs was the lead contributor in pushing inflation to its highest level in 20 years.
The price indices of residential housing construction show items that have increased the most are timber, board and joinery (such as structural timber, timber doors and windows, plywood and board) as well as steel products (such as steel beams and sections and reinforcing steel).
Charter Keck Cramer associate director Richard Temlett said industry sentiment is that house building costs will increase by around another 10-15% over the next 12 months due the continued impact of China’s COVID-zero policy and Russia’s invasion of Ukraine.
“This is not a good sign for housing affordability, the stability of the construction industry and the overall supply of new dwellings (houses, townhouses and apartments) over the next few years. It is anticipated that there will be further builder insolvencies as well as an increase in purchaser disputes over the costs and / or timing in a number of building contracts.” Temlett said.
