Two more major building firms collapse amid soaring material costs leaving would-be Aussie homeowners in the lurch as industry crisis deepens
- BREAKING NEWS: More trouble for construction firms
- One company said to have been ‘trading whilst insolvent’
Two more major building firms – WA Housing Group and Individual Developments WA (IDWA) – have collapsed amid soaring building material costs and labour shortages.
WA Housing Group, which started in 2019 and reportedly owes around $1million to creditors, with 13 unfinished projects, went into liquidation on December 7.
IDWA had been contracted by the Western Australia Government to build a $2.4million social housing development – work that was almost finished but still needed some work.
WA Housing Group, which started in 2019 and reportedly owes around $1million to creditors, with 13 unfinished projects, went into liquidation on December 7. Pictured is an unfinished building project
It attempted to renegotiate a contract with the Department of Housing and Communities (DHC), but an agreement on a new price could not be reached.
Mathieu Tribut of liquidator GTS Advisory, told The West Australian that both companies foundered as construction costs went up on what were fixed-term contracts.
‘The reason (WA Housing Group) ceased trading is because they were, in my view, trading whilst insolvent and they were incurring losses every month so they had no choice but to close down the door,’ Mr Tribut said.
‘They took a bank loan, everyone lost, even themselves.’
A state government spokesman said the DHC will work with the State-Wide Builders Panel to reassign and finish the properties IDWA was working on.
Many construction companies have collapsed during the Covid-19 pandemic. Pictured is a stock image of a female engineer on a building site
‘Prior to being advised of the appointment of liquidators, the Department has been in regular communication with IDWA regarding progressing their active projects and the documentation required to substantiate their claim under the builder support package,’ the spokesman said.
‘The state government works to support the industry and works closely with contracted residential builders in the current construction market while ensuring sensible and appropriate expenditure of taxpayer funds.’
The WA companies are the latest to have folded during the pandemic with many struggling to find staff and facing problems sourcing and paying for materials due to a worldwide shortage.