Another collapse of an Australian homebuilding firm has left customers thousands of dollars out of pocket and despairing over whether their dream homes will ever be built.
Melbourne-based Varaich Homes, also known as Harcon Property Group Pty Ltd, filed for bankruptcy on September 18, leaving several clients with unfinished homes.
A customer, Harpreet Singh, who signed a contract with the “premium custom home builder” in 2021 for $457,000, said news.com.au He still needed more than $40,000 to complete his unfinished house.
The 39-year-old father of three said work was due to start in June 2022 but he had struggled to get an explanation from the builder as to why construction was subsequently delayed.
Mr Singh and his wife were working several jobs to try to pay two mortgages and suffered another blow when they discovered vandals had broken into the Lyndhurst property and left it in a disgusting state.
“The fence around it was taken down and people were coming in and drinking beers, using the bathroom, I found a used condom on the floor of the master bedroom and there’s some other damage,” he told the outlet.
Mr Singh said he was facing the “very stressful” prospect of having to take out a personal loan of more than $40,000 to finish the house.
Vijay Bhusal signed with the company in August 2021 to build his house for $836,000.
Mallikharjuna Allanki said his two-storey home (pictured) in the Melbourne suburb of Keilor Downs remained incomplete despite signing a $731,000 contract with Varaich Homes in 2022.
He said his family, including his wife and five-year-old daughter, has since lost more than $100,000 on the project after construction began in June 2022 but was not delivered when it was due to be completed a year later.
“The company repeatedly missed deadlines, started construction six months later than agreed and did not complete our houses even after the promised deadline,” Bhusal told the outlet.
“Our homes remain unfinished, a constant reminder of our shattered dreams.”
Mr Bhusal estimates he will need another $200,000 to $300,000 to complete his dream home, having already paid 90 per cent of the contract price.
He lamented the fact that other houses near his plot, built by “smaller builders”, were already completed and families had moved in.
Ms Bhusal also feared that her unprotected property was under threat from vandals.
Another customer, Mallikharjuna Allanki, said his two-storey home in the Melbourne suburb of Keilor Downs remained incomplete despite signing a $731,000 contract with Varaich Homes in 2022.
Mr Allanki said the lack of work on its construction has caused part of the house’s structure to rot, possibly doubling his costs to complete the project.
Melbourne client Vijay Bhusal estimated he will need another $200,000 to $300,000 to complete his dream home, having already paid 90 per cent of the contract price.
He added that the company had failed to adequately communicate about construction delays.
“It’s a huge disaster,” he said.
Malcolm Howell of Jirsch Sutherland has been appointed as liquidator by ASIC.
A spokesperson told Daily Mail Australia that there appear to be 21 unfinished homes as a result of the company’s collapse.
“The team will write to creditors shortly and advise owners on the options available,” they said in a statement.
‘As the VMIA (Victorian Managed Insurance Authority) has cancelled the insurance, the company is unable to continue building the houses.
‘One of the options available is to sell the contracts in their entirety to an alternative developer.’
Daily Mail Australia has also contacted Varaich Homes for comment.
The demise of Varaich Homes follows a long list of Australian homebuilders that have gone bust since the Covid-19 pandemic.
Everything from rising raw material costs, fixed-price contracts signed during the Morrison government’s HomeBuilder grant program and the ongoing war between Russia and Ukraine have been blamed for the spate of insolvencies.
Earlier this month, Victoria-based construction company Grandeur Homes Pty Ltd fell into administration, leaving more than 100 families with unfinished homes (pictured)
Earlier this month, Victoria-based construction company Grandeur Homes Pty Ltd entered administration, leaving more than 100 families with unfinished homes.
In August, NSW Builders Adroit Constructions Pty Ltd, Maximus Builders Pty Ltd, Maxim Builders Pty Ltd and Maxus Builders Pty Ltd were liquidated, while Adelaide Designer Homes failed in South Australia and PPS Qld and PPS Commercial collapsed in Queensland.
Nearly 600 Australian construction companies have gone bust since July, and nearly 3,000 in the last financial year, leaving thousands of clients and contractors out of pocket.
The crisis comes as the Albanian government seeks to address Australia’s housing shortage with a target of 1.2 million homes over the next five years.
However, some property industry experts believe the sector’s multiple problems will mean Australia will miss the target by up to 260,000 homes.