Two homebuilders have collapsed in a four-day period, becoming the latest companies to collapse in Australia’s construction industry.
New South Wales-based company Millbrook Homes went into liquidation on June 26 due over $4 million, while Victoria-based builder Bentley Homes appointed a liquidator on June 30 to resolve its debts of $1.8 million.
Dozens of clients have been left with unfinished homes, while laid-off workers at 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 dire financial straits.
Ronnie Brown, who has a wife and two daughters ages 8 and 13, took out a mortgage to finance the construction of his home with the currently unfinished project.
Victoria’s Bentley Homes went into liquidation leaving some families without a place to live
Ronnie Brown (pictured) says the collapse of Bentley Homes leaves his family in a desperate position as they can no longer pay their rent and the loan on their unfinished property.
The family was also paying rent to stay in another home while they waited for their dream home to be built.
Brown said her family could not afford to keep paying the mortgage and rent for another six months.
He has contacted the Victorian Managed Insurance Authority (VMIA), a state government agency set up to help people in his post, but says their processes are taking too long.
“It takes them 90 days 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 the amount I’m going to get,” Brown said. news.com.au.
“My family and I are not in a financial position to pay the rent and mortgage for six months while the VMIA goes through its process.”
Following Bentley’s collapse, around 33 other owners, who have paid bidding fees of up to $9,000, have also been left with unfinished properties.
Liquidator Timothy Holden of insolvency firm Crouch Amirbeaggi blamed supply chain, staffing problems and cost overruns for the collapse of the firm, which had been in business since 2006.
Eleven laid off employees are also owed $77,000 in unpaid wages and other rights.
BRI Ferrier liquidator John Keenan said Millbrook Homes had six unfinished products on its books, which were all properties valued at more than $1 million.
He said the collapsed company had less than $100,000 in assets, but owed about $4 million to between 75 and 80 creditors..
Failed NSW builder Millbrook Homes specialized in making custom luxury homes worth millions
A liquidator says the bankruptcy of Millbrook Homes is part of the consequences of the collapse of an affiliated company
Keenan said the Millbrook collapse was “a result” of the failure of an affiliated company, Elderton Homes, in December.
“As a result of the crash, they had some licensing and insurance restrictions,” said Keenan, who also blamed deteriorating market conditions.
Construction companies are still reeling from the impacts of the Covid pandemic with additional global shortages of timber and building materials due to blocked supply chains affected by the Russia-Ukraine conflict.
This has led to the cost of materials increasing by more than 20 percent since the beginning of 2022, with some items rising even higher.
Pine lumber more than doubled in price, while reinforcing steel, glass, gypsum board, fiber cement and other materials also increased.
Such price increases meant that many fixed-contract construction projects were no longer viable.
Across Australia, failed businesses owe hundreds of millions of dollars to subcontractors, merchants, clients and the tax office.
