The Collapse of Another Victorian Building Company: What Does It Mean for the Industry?
Key Highlights :
The collapse of another Victorian building company, Mahercorp, has sent shockwaves through the construction industry. Just weeks after the collapse of one of Australia’s largest home builders, Porter Davis, and construction firm Lloyd Group, Mahercorp announced it went into voluntary administration on Friday, affecting more than 700 homes.
The announcement of Mahercorp’s voluntary administration has put the spotlight on the industry’s ongoing cost of living crisis. In a letter to clients, Mahercorp’s chief executive Steve Maher highlighted the “unprecedented challenges” the industry is facing. He pointed to the skyrocketing costs of materials and labour, as well as rising inflation, that have put huge pressure on builders.
In an effort to ease the strain of the cost increases, Mahercorp had been renegotiating its trading terms with suppliers and insurers. However, the company encountered a problem with the insurer of a major supplier, leaving voluntary administration as its only option. As a result, construction on existing projects will be placed on hold for about five weeks.
The collapse of Mahercorp is the latest in a string of collapses in the construction industry. In January, luxury apartment developer EQ Constructions, based in NSW, collapsed owing at least $40 to $50 million. Western Australian companies WA Housing Group and Individual Developments also went bust in the same month.
The recent spate of collapses has raised serious concerns about the health of the industry, with many questioning the sustainability of the current model. With the cost of living crisis continuing to take its toll, it’s clear that the industry needs to take steps to ensure it remains viable.
It’s also important to remember the impact of these collapses on the individuals involved. For the hundreds of homeowners affected by the collapse of Mahercorp, the cost of living crisis has become a very personal issue. It’s essential that support is provided to those affected, both financially and emotionally.
The collapse of another Victorian building company serves as a stark reminder of the need for the industry to take action to ensure its sustainability. It’s clear that the current model is not working, and the industry needs to take steps to ensure it remains viable in the long-term.
