Geelong-based construction company Waterford Homes is collapsing

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

A Victorian developer based in the regional city of Geelong has gone into liquidation, with a number of homeowners, homes and subcontractors affected.

The developer, Waterford Homes, had a number of homes under construction, according to the liquidator appointed Ben te Wierik from BTW Advisory.

It comes as Australia’s construction industry is in crisis, with around a dozen companies going into liquidation so far this year due to rising costs for building materials, the ongoing crisis in the supply chain and firm contracts, which have put many into bankruptcy.

Sir. te Wierik said so far that he had found 60 creditors who could have outstanding debts with the developer.

This included 10 homeowners with current construction at various stages of completion, he said.

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

“Currently, over $ 600,000 in claims from trades and ATO debt has been found, but it is likely to increase as additional claims are made.”

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

“Both commercial and residential developers have a lot of work to do, but fixed-price contracts, increased input costs and pressure in the supply chain and even material shortages and submit the fact that it is difficult to get a trade, all this leads to delays, which then have a flow-on effect on cash flow, ”he said.

“This makes it very difficult for any business, but especially those in the construction industry where profits are under pressure.

“It’s a pretty stressful time for homeowners and subbies who owe money.”

Sir. te Wierik said he would investigate why the company failed and its assets, as well as whether any transactions could be recovered as part of the liquidation.

The construction industry has been plagued by a wave of collapse this year.

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

Smaller operators such as Hotondo Homes Hobart and Perth companies Home Innovation Builders and New Sensation Homes as well as Sydney-based company Next have also collapsed, leaving homeowners out of pocket and with unfinished houses.

Late last month, two companies from Queensland collapsed every few days, Pivotal Homes and Solido Builders.

An industry insider told earlier this year that half of Australia’s construction companies are on the verge of collapse as they act insolvent and it could see thousands of people’s homes affected in the coming months.

One includes a Victorian construction company that may be collapsing after accumulating millions in debt and construction work stalled for several months.

Snowdon Developments Pty Ltd has 15 creditors chasing it for debts totaling $ 2.5 million, which require the Supreme Court of Victoria to order a liquidation order to force the company into liquidation “due to insolvency”.

There are between 10,000 and 12,000 residential buildings in Australia carrying out new homes or major refurbishment projects, a number estimated by APB.

A building insider working for one of the largest construction companies in NSW has previously warned that the situation in the industry will only “get worse” after a streak of collapse in the sector as the price of building homes blows out between 1 p.m. $ 40,000 and $ 100,000.

Scott Mason, general manager of commercial and real estate services at Equifax, said there is a hidden crisis due to the problems in the construction industry.

“Rising costs, disrupted supply chains and periodic shutdowns have created a unprofitable boom in which many construction companies have committed to projects that are no longer economically viable thanks to large price increases on building materials,” he said.

“While big name collapses like Probuild and Condev have been in the news recently, what does not often make headlines is the impact of these events on the small businesses that make up the majority of construction companies in Australia.

“According to data from Equifax, directors of construction are 30 percent more likely to have mortgage arrears than the average consumer, while construction owners are 80 percent more likely and those in construction are 100 percent more likely to have arrears. on mortgages. ”

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

“The flow-on effects for the entire ecosystem of suppliers and the people behind these companies are often unseen,” he added.

A healthy construction industry is crucial for a strong economy and sustained growth, with the sector accounting for the employment of almost 9 per cent of Australian workers and 7.5 per cent of Australia’s GDP, according to the reporting agency CreditorWatch.

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