BGC Housing Group Halts New Homes to Remove Backlog Amid Potential Class Action Lawsuit
One of Australia’s largest homebuilding companies has cut sales to “absolute lows” after dozens of customers complained about construction delays.
Perth-based BGC Housing Group announced this week that it will “direct all of its resources and attention to completing builds for our existing clients.”
The decision follows fed-up homeowners who banded together and consulted attorneys in a potential class action lawsuit after some were forced to pay mortgages on construction sites that were half-finished for more than two years.
One client, Erika Steel, told Daily Mail Australia that she signed her contract almost three years ago and her house is not even close to being finished yet.
“If I had gone with another builder, I would have been in my house a year ago, all my neighbors started construction after me and moved out a year ago,” he said.
Erika Steel was so frustrated that she handed out flyers in her area last weekend describing how she had waited almost three years for her house to be built (pictured at her construction site).
Angry customers have joined in a potential class action lawsuit against BGC Housing Group
BGC Housing Group has several major brands under its umbrella, including Aussie Living Homes, Homestart, Smart Homes for Living, Now Living, Terrace, and Ventura South West.
Ms Steel signed her contract with Smart Homes in November 2020 for her property in the outer southern suburbs of Perth.
“Site cleanup started in April 2021, the slab collapsed in August 2021 almost a year later, in July 2022 the roof structure went up…and nothing has been done since.”
“Now it’s getting to 2.5 years.”
“There’s wood on my site that’s been there all winter and summer and now it’s mouldy.”
He explained that he is “on the verge of financial ruin” because he has been paying his mortgage and rent for so long and his home loan payments have skyrocketed thanks to increases in interest rates.
Her children have now moved in with their father, she has had to relocate her beloved dog, and she lives in a small studio while her house is unfinished.
She’s also furious that BGC has built show houses to attract new customers while they haven’t completed their backlog.
“They have built four show houses 2 km from my house that have been built in four months and mine is still not finished in 28 months.”
She was so angry that she handed out fliers around the area describing her experience, and now she had been given a date for her roof to be finished after six months with no progress.
Another client, Josef Wilkins, has been waiting for his Perth house to be completed for over two years.
‘The biggest problems aren’t even the construction times, it’s the quality of the labor of the low paid trades, the lack of communication and knowledge of the consultants.’ he wrote on Facebook.
“They are taking advantage of customers who have been struggling financially. Enough is enough.’
Another client, Josef Wilkins (pictured), said he also waited more than two years for one of BGC’s companies to build his house.
Social media is abuzz with homebuyer complaints targeting BGC after long delays
Many resented that show houses were built to attract new clients while paying rent and mortgaging unfinished properties.
BGC said in a statement that a shortage of workers was behind the delays.
“Due to the severe ongoing labor shortage in WA, BGC Housing Group has significantly restricted its inflow of new home sales to absolute minimum levels,” a company spokesperson said.
“Our focus is entirely on the delivery of the houses we have on the ground,” the spokesperson said.
But instead of offering attractive wages to attract workers, BGC on February 1 lowered hourly rates for masons.
Now they are paid as little as $1.50 per brick, well below the industry standard of $2.60 per internal brick.
Reduced mason fees are $1.50 for internal bricks and $2 for external bricks for single-story homes and $1.70 to $2.20 for two-story homes.
Ms Steel said that BGC had taken on more work than it had the capacity to complete in a reasonable period of time in an effort to cash in on construction stimulus efforts.
WA Premier Mark McGowan was forced on Wednesday to reject claims that the state government had caused the construction bottleneck by offering $20,000 grants on top of HomeBuilder’s $25,000 federal grant.
The stimulus sparked a rush of new construction: BGC has just under 4,000 homes under construction, out of 30,000 statewide.
“When we went to Commonwealth government in 2020, home sales and new home registrations came to a complete halt,” McGowan said.
“The market was dead…we had to do something to get it going.”
BGC has just under 4,000 home buildings under construction in WA (one site is pictured)
One client complained that she and her partner had been waiting for two and a half years and she was preparing to give birth, but did not yet have her own home.
That’s little consolation for Ben Ledbury, who enrolled in BGC’s HomeStart venture in January 2021.
“We were told that if we signed up, it would be completed within 12 months by December of that year.” he said on Wednesday.
“More than two years later, I’m just putting a roof on, hopefully, today.”
There is also a lot to do: windows, doors, electrical installation and interior. I’d be surprised if it ended this year.
“We have had price increases as well as extensions of more than 300 days on top of what it was supposed to take.
‘And the communication is shocking = they will lie to you and tell you that something is happening when it isn’t.’
He said early Wednesday that a payment had been withdrawn from his bank account for the roof to be completed when it had not, for which BGC apologized to him.
Her situation is echoed by Ms. Steel and dozens of other people who have joined the potential class action lawsuit.
“I’ve been paying rent on top of my mortgage for over two years, it’s hard.”
‘What is even more difficult to accept is where I am building, there are other houses that have been done. They were vacant lots when mine started and now there are people living on them and I’m still waiting.
“When I first met them, I was with my mother, who is building with another company, and they even told her they were cowboys: their house is finished.”
Daily Mail Australia has contacted BGC for comment.