This article is from the Australian Property Journal archive
VICTORIA’S Housing Minister was briefed in the middle of last year – eight months before the collapse Porter Davis – about potential insolvencies in the residential construction sector and “options to de-risk consumers”, but did nothing,
Documents obtained by The Age under Freedom of Information laws show then-Housing Minister Danny Pearson received a briefing from state bureaucrats on 11th July, but no legislative changes to reduce the risks faced by home builders nor customers were introduced.
Colin Brooks was appointed Housing Minister in Labor’s new cabinet in December following Labor’s re-election.
The briefings obtained by The Age also revealed Pearson received departmental advice about builders warranty insurance, which is taken out by builders before taking a deposit or any money. State-backed Victorian Managed Insurance Authority (VMIA) is the primary provider of cover if a builder becomes insolvent or dies.
Figures released by the Australian Securities and Investment Commission yesterday showed building and construction firm collapses in the nine months of the financial year to date were at their highest level in seven years – there were 1,601 insolvencies recorded, including 524 in the first three months of calendar 2023.
Porter Davis collapsed at the end of March with 1,500 homes under construction in Victoria and 200 in Queensland, with 410 staff made redundant.
Liquidators Grant Thornton said that there were 779 homebuyers who paid deposits without a permit being granted and construction starting on their home who may have lost their hard-earned savings. Victorian Premier Daniel Andrews has said Porter Davis could be facing heavy penalties if it left customers uninsured before going bust.
Victorian firm Nostra Property Group was this week appointed to take over up to 126 townhouses designed by Porter Davis that had already started being built, and up to 169 Porter Davis homes on which construction hadn’t yet kicked off.
