When two building companies in NSW fail, they owe hundreds of thousands of dollars.
Two builders in NSW went out of business within a few days of each other. They owed big companies like Bunnings Warehouse hundreds of thousands of dollars.
Two building companies, both based in NSW, are the latest to go out of business because of how bad the construction industry is.
News.com.au can say that one company is in the process of going out of business, while the other has put itself into voluntary administration.
Affordable Modular Homes Pty Ltd, a business on the Central Coast that built small houses, has closed for good. It owed tens of thousands of dollars to many creditors, including Bunnings Warehouse.
Last Monday, June 22, after a vote, the builder put itself into creditors’ voluntary liquidation “due to lack of funds,” the liquidator said.
Statement Builders Pty Ltd, whose head office was in the Sydney CBD, is another builder in NSW that has gone out of business.
It comes at a time when Australia’s building industry is in trouble. So far this year, many companies have gone out of business because of rising costs for building materials, problems with the supply chain, and locked-in price contracts that make it hard to change prices.
Philip Hosking of Helm Advisory was named as the liquidator for Affordable Modular Homes on Wednesday. He said that so far, the company owed $121,000 to three creditors.
“However, this could change once [more] creditors file proof of debts,” he told news.com.au.
The building company specialized in granny flats, tiny homes, and homes made from pre-made parts.
Last month, two of its creditors, including Bunnings Warehouse, which was owed $20,000, and the Workers Compensation Insurer, which was owed $45,703, took it to court.
The Australian Taxation Office seemed to be owed $75,000, but this number has not yet been confirmed.
“The company failed because of problems with getting supplies and not making enough money,” Mr. Hosking said.
“We’ve been told that no staff members are owed wages or benefits, except for the director, who is owed wages. At this point, it seems unlikely that the director will get paid.”
Even though there are only three people working there, a former worker told news.com.au that he was owed tens of thousands of dollars.
“That company was a hellish mess,” the person who used to work there said.
“I wish I hadn’t gotten the job, because I found out right away that it was a bit of a mess.”
Statement Builders Pty Ltd, the other NSW builder, owes $200,000 to only one creditor, the Australian Taxation Office.
On July 6, Statement Builders will have its second meeting about its voluntary administration.
Atle Crowe-Maxwell of DBA Advisory has been named the administrator. He said that the collapse of the company was a sign of a bigger problem in the sector.
“It’s going to be a bloodbath,” he told news.com.au. “Between the margins and the ATO wanting their money, it’s going to really push a lot of people over the edge.”
In recent months, Australia’s construction industry has been having a hard time.
In December 2021, both Privium and BA Murphy went out of business.
Then, two big Australian construction companies, Condev, based on the Gold Coast, and Probuild, a giant in the industry, went out of business earlier this year.
This sad list has grown as more well-known companies have gone bankrupt, including Hotondo Homes Hobart, Inside Out Construction, Dyldam Developments, Home Innovation Builders, ABG Group, New Sensation Homes, Next, Pindan, and ABD Group.
Pivotal Homes and Solido Builders, both from Queensland, went out of business at the end of last month, just a few days apart.
Last week, news.com.au wrote about a Melbourne builder called Snowdon Developments Pty Ltd, which is also thought to be about to go bankrupt. Sources said that employees haven’t gotten their superannuation since October, which has caused more than half of the staff to quit. Creditors are also owed millions of dollars, and building work has been stopped for more than a year.
And on Friday, Waterford Homes, a Victorian building company, called in liquidators.
Fire Services Australia (FSA), a company that did work for the construction industry, went out of business on Wednesday, according to news.com.au. The company owed $10.6 million and 123 jobs were lost.
Earlier this year, a person who works in the industry told news.com.au that half of Australia’s building companies are about to go out of business because they are trading while insolvent.
The Association of Professional Builders estimates that there are between 10,000 and 12,000 residential building companies in Australia. These companies build new homes or do major renovations.
