Two home builders have collapsed within a four-day period, becoming the latest companies to crater in Australia’s construction industry.
NSW-based company Millbrook Homes went into liquidation on June 26 owing more than $4million, while Victoria-based builder Bentley Homes appointed a liquidator on June 30 to sort out its $1.8million debts.
Dozens of clients have been left with unfinished houses while sacked workers from Bentley Homes are among the creditors still waiting for their money.
For one family, the collapse of the Victoria-based company has left them in financial dire straits.
Ronnie Brown, who has a wife and two daughters aged eight and 13, took out a mortgage to fund the build of his house with the project currently sitting unfinished.
Victoria’s Bentley Homes has gone into liquidation leaving some families with nowhere to live
Ronnie Brown (pictured) says the collapse of Bentley Homes leaves his family in a desperate position as they cannot afford to keep paying rent and the loan on their unfinished property
The family was also paying rent to stay in another house while they waited for their dream home to be built.
Mr Brown said his family could not afford to keep paying the mortgage and rent for another six months.
He has contacted the Victoria Managed Insurance Authority (VMIA), a state government agency set up to help people in his position, but says their processes take too long.
‘It takes 90 days for them to assess if I have a claim, then 14-21 days for them to get quotes and another 14-21 days for them to come up with an amount that I will get,’ Mr Brown told news.com.au.
‘My family and I are not in a financial position to pay rent and mortgage for six months while the VMIA go through their process.’
Following Bentley’s collapse, around 33 other homeowners, who have paid tender fees up to $9,000, have also been left with unfinished properties.
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Liquidator Timothy Holden, of insolvency firm Crouch Amirbeaggi, blamed supply chain, staffing issues and cost over-runs for the collapse of the firm, which had been operating since 2006.
Eleven sacked employees are also owed $77,000 in unpaid wages and other entitlements.
BRI Ferrier liquidator John Keenan said Millbrook Homes had six unfinished products on their books, which were all properties valued well in excess of $1million.
He said the collapsed company had less than $100,000 in assets but owed around $4million to between 75 to 80 creditors.
Failed NSW builder Millbrook Homes specialised in making customised luxury houses worth millions
A liquidator says the failure of Millbrook Homes is part of the fallout of an affiliated company’s collapse
Mr Keenan said Millbrook’s collapse was ‘fallout’ from the failure of an affiliated company, Elderton Homes, in December.
‘As a result of the collapse, they had some licensing and insurance restrictions,’ Mr Keenan said as he also blamed deteriorating market conditions.
Construction firms are still reeling from the impacts of the Covid pandemic with an added global lack of timber and building materials due to choked supply chains impacted by the Russia-Ukraine conflict.
This has led to the cost of materials rising by more than 20 per cent since the start of 2022, with some items surging by even more.
Pine wood more than doubled in price, while reinforcing steel, glass, plasterboard, fibre cement and other materials also rose.
Such price rises meant many fixed contract building projects were no longer viable.
Across Australia, hundreds of millions of dollars are owed by failed companies to subcontractors, tradesmen, clients and the tax office.
