String of east coast builders fold or face collapse

A string of east coast builders and home makers have gone into administration or are on the verge of formal collapse.

New South Wales’ Stevens Construction has gone into voluntary administration, Melbourne-based custom residential builder Holbrook Homes is teetering on the brink with still builds and mounting debts, and clients of jointly owned My Tiny Home Kit and Property Magician are victims of a disappearing act.

As the Australian construction industry contends with the worst operating conditions in 50 years, hundreds of home buyers are being left with unfinished homes, lost pre-payments and having to survive financially in a dire rental market.

In a cruel irony, Australia’s housing shortage that should be fuelling demand for new builds is being stymied by supply chain disruptions, a shortage of skilled workers, and soaring material costs that have made it unfeasible for many building companies to survive.

Stevens Construction has attributed those factors to their demise.

“The construction industry has faced significant challenges since the onset of the Covid pandemic,” the company said in a statement on its website.

“Unprecedented disruptions have led to skyrocketing building costs, reduced productivity, and critical shortages of materials and skilled labour.

“These factors have collectively placed immense pressure on Stevens Construction, making continued operations unsustainable.”

The Central Coast-based firm this week appointed Jonathon Keenan, Andrew Cummins and Peter Krejci from BRI Ferrier as administrators, who will weigh up whether to restructure or sell the business.

Builders of commercial and residential apartment projects, their troubles have put a stop to ten projects.

During the nine-month period from 1 July 2023 to 31 March 2024 a staggering 2,142 construction companies entered external administration, the most of any industry sector.

Newly published data from KPMG has shown that more than 37,000 dwellings that have been approved but construction has yet to begin.

Property Magician’s vanishing act

Two jointly owned companies building tiny homes have collapsed with 170 customers out of pocket to the tune of $6 million.

Administrators have been appointed to oversee limited companies My Tiny Home Kit and Property Magician, which were run by Melbourne-based 25-year-old Spencer Porter since 2022.

The business designed, manufactured and supplied tiny homes, which are usually defined as being less than about 45 square metres.

Some customers have paid around $100,000 for homes that have not been provided.

The companies’ troubles emerged last year when My Tiny Home Kit was fined $4,000 in South Australia for failing to adhere to building laws.

Complaints subsequently mounted through 2023 and creditors have been predominantly from NSW, Victoria and Queensland, with some in South Australia.

Consumer Affairs Victoria in January issued the kit home retailer with an enforceable undertaking, which compels a company to amend certain business practices.

In this case it meant the business had to make contact by email, post and text within three business days of a client’s commencement date; and offer customers the choice of a full refund within 21 days of their written acceptance of the refund offer or deliver their completed tiny home kit by the agreed delivery date.

The website for My Tiny Home Kit proclaims it has nothing to hide and provides links to the South Australian and Victorian orders.

The administrator said it is aware of eight former and current employees who were owed unpaid wages and annual leave. One employee was claiming $9500 in unpaid wages.

Embarrassing email fail reveals builder woes

An email mistakenly circulated in a clumsy reply-all alerted property owners to the financial worries of Holbrook Homes in Melbourne.

Media reported that a couple signed a $479,00 with the company in 2022. An email intended for the builders’ engineering contractor highlighted their predicament.

“I really need your help please, this client is wanting to ensure his frame is 100 per cent up to scratch before he makes any further payments,” the email published by News.com.au read.

“Clients have driven me to the brink of insanity because they are scared that if they pay me I will take off.

“These guys are nuts and I just want to pay my bills and move on.”

Holbrook Homes has been ordered by a court to pay a concrete company the $28,000 it defaulted on in December. It is understood around a dozen clients have building projects that have stalled with the builder, who insists it will trade its way out of trouble and fulfil its obligations.

The spate of building company collapses extended to the west coast as well, where Collier Homes and numerous other building companies have folded.