Geelong-based construction company Waterford Homes is collapsing


The construction industry’s woes continue with a Victorian builder revealing he has gone into liquidation with at least $600,000 in debt.

A Victorian builder based in the regional town of Geelong has gone into liquidation, with a number of owners, traders and contractors affected.

The builder, Waterford Homes, had a number of homes under construction, according to liquidator named Ben te Wierik of BTW Advisory.

It comes as the Australian construction industry is in crisis, with around a dozen companies going into liquidation since the start of the year due to rising building material costs, the ongoing supply chain crisis supply and fixed contracts, which put many out of business.

Mr te Wierik said he was still finding out how many homeowners would be affected after his appointment on Tuesday, but said so far he had found 60 creditors who may have unpaid debts owed by the builder.

“There are about 60 creditors in total, including the ATO, it could be higher than that, but there are obviously big and small creditors. Some of them were obviously owners, who will make claims under builders warranty insurance,” he said.

“At this time, over $600,000 in claims have been found in connection with ATO transactions and debts, but this is expected to increase as more claims are made.”

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He said it was “no secret” that builders big and small were facing “challenges” at the moment and he suspected Waterford Homes faced similar conditions.

“Commercial and residential developers have a lot of work, but fixed price contracts, rising input costs and supply chain pressure and even material shortages and the fact that it is difficult to getting an exchange, all of that leads to delays which then have a cash-flow effect on cash flow,” he said.

“This makes it very difficult for all businesses, but especially those in the construction sector, whose profit margins are squeezed.

“It’s a pretty stressful time for owners and contractors who are owed money.”

Mr. te Wierik said he would investigate the reasons for the bankruptcy of the company and its assets, as well as the possibility of recovering transactions as part of the liquidation.

The construction sector has been plagued by a series of meltdowns this year.

Two major Australian construction firms, including Gold Coast-based Condev and industry giant Probuild, have already gone into liquidation this year.

Smaller operators like Hotondo Homes Hobart and Perth, Home Innovation Builders and New Sensation Homes, and Sydney-based Next have also collapsed, leaving homeowners out of pocket and with homes unfinished.

Late last month, two Queensland businesses collapsed within days of each other, Pivotal Homes and Solido Builders.

An industry insider told earlier this year that half of Australian construction companies are on the brink of collapse as they are insolvent, and it could see thousands of homes affected within months. coming.

One includes a Victorian building company which may be on the verge of collapse after racking up millions in debt and building work has stalled for months.

Snowdon Developments Pty Ltd has 15 creditors suing it for debts totaling $2.5 million who are asking the Supreme Court of Victoria to impose a winding-up order to force the company into liquidation “due to insolvency. “.

There are between 10,000 and 12,000 home building companies in Australia undertaking new homes or major renovation projects, a figure estimated by APB.

A building insider, who works for one of NSW’s biggest construction companies, has previously warned that the situation in the industry will only get worse after a series of slumps in the sector, as the price of home building booms between $40,000 and $100,000.

Scott Mason, general manager of commercial and real estate services at Equifax, said there was a hidden crisis following the woes in the construction industry.

“Rising costs, disrupted supply chains and periodic lockdowns have created a profitless boom, with many construction companies embarking on projects that are no longer financially viable thanks to steep increases in the price of building materials” , did he declare.

“While collapses of big names like Probuild and Condev have grabbed the headlines recently, which doesn’t often make the headlines, it’s the impacts of these events on small businesses that make up the bulk of businesses in building in Australia.

“According to data from Equifax, building construction and building services managers are 30% more likely to be in mortgage arrears than the average consumer, while building construction owners are 80% more likely and those in construction services are 100% more likely. likely to have mortgage arrears.

He said the shocking statistics show the far-reaching impacts of insolvency.

“The ripple effects across the whole ecosystem of vendors and the people behind those companies often go unnoticed,” he added.

A healthy construction industry is key to a strong economy and continued growth, with the sector accounting for employment of nearly 9% of Australian workers and 7.5% of Australian GDP, according to the CreditorWatch news bureau. .


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