By Eleanor Wilson
South East families in the middle of their dream home-builds are reeling after the collapse of one of Australia’s largest home builders, Porter Davis.
Grant Thornton Partners confirmed it had been appointed liquidators of the Porter Davis Homes Group, covering 14 companies.
Englehart Homes is the only company in the group not subject to liquidation.
Works on current Porter Davis builds would stop immediately although liquidators are working to find a solution to support customers and some employees, liquidators Grant Thornton said last week.
Porter Davis has more than 1500 homes in progress across Victoria and 200 properties in Queensland, while a further 779 customers have signed contracts where building is yet to commence.
Rising input costs, supply chain delays, labour shortages and falling demand contributed to Porter Davis’ collapse, the liquidators said.
“Notwithstanding the financial support from shareholders and lenders, the group has exhausted options to secure the further funding required to allow Porter Davis to continue to operate viably,” Grant Thornton said in a statement.
“The directors were left with no option but to place the companies into liquidation.”
The Porter Davis board of directors said it regretted the current circumstances but was hopeful a solution could be found to support Porter Davis customers in completing their homes.
It also acknowledged the group’s 370 employees for their hard work and commitment to Porter Davis.
But the break-down of the construction giant has triggered further heartbreak for several homeowners in the South East.
A near-finished property in Clyde North was this week the victim of a suspicious fire, police said.
It is understood emergency services responded to a fire at a property on Andante Crescent in Clyde North on Monday 3 April about 4.30pm.
Seven CFA units from Clyde and Pakenham responded to the house fire, where crews discovered a two-storey property well involved in fire.
Crews fought the blaze for 40 minutes before it was deemed safe at 5.33pm.
The building was not occupied at the time and no one was injured.
Investigations are ongoing into the cause of the fire, which is being treated as suspicious at this stage, police said.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000.
It is understood police were set to return to the site on Tuesday morning to continue investigations.
On Monday, other media outlets reported that a Berwick home under construction by Porter Davis had been vandalised by “disgruntled tradies”.
The owner of the home claimed $50,000 worth of damage had been done, including damaged doors and walls and flooding caused by taps which were left running intentionally, it is alleged.
In a second hit to the sector, construction firm Lloyd Group has also gone into voluntary administration, Deloitte confrimed on Friday 31 March.
The company specialises in the design and construction of building and infrastructure projects for state and local government, primarily in Victoria and NSW, including the recently completed Beaconhills College Community Arts and Recreation Centre.
The process will affect 59 projects under construction – 30 in NSW and 29 in Victoria.
“We do appreciate that this news will be unsettling and potentially disruptive for employees and project stakeholders, contractors and suppliers,” Deloitte restructuring partner and voluntary administrator Sam Marsden said.
“In these early days, we will be undertaking an urgent assessment of the business’s financial position and project-by-project status, and immediately commence communication with project principals and stakeholders.”
The business has about 200 employees.
Mr Marsden said the sector had faced increasingly challenging circumstances in recent months that had eroded project margins.
Meanwhile, the opposition government met with a number of residential building companies and industry representatives to consider an “urgent action plan” in the wake of the Porter Davis collapse.
On Tuesday, 4 April opposition leader John Pesutto and senior Liberal frontbenchers met with the stakeholders from Dennis Group, Boutique Homes, Lyssna Group, SJD Homes, Sienna Homes, Burbank Homes and Villawood Properties at Parliament House.
Mr Pesutto said it was clear the industry was facing a number of significant challenges in Victoria, including rising costs, labour shortages, fixed building contracts and reduced supply.
“These challenges are having huge ramifications for thousands of Victorians who will be left without homes or simply priced out of the market,” he said.
“The housing construction industry is not only vital to Victoria’s economy but also to realising the home ownership dreams of thousands of Victorians.”
Shadow Minister for Home Ownership and Housing Affordability, Jess Wilson, said there were legitimate concerns about the impact of the government’s Big Build program on the housing industry.
“Victorian home buyers shouldn’t be left with a half built home and nowhere to turn if their builder goes under,” she said.
“Insurance is an important safety net, but we need a sustainable construction sector that isn’t buckling under ever increasing pressures and being crowded out by poor planning under the government’s Big Build.
“Housing affordability needs a comprehensive plan including appropriate protections for home buyers, supply chain improvements, material and labour cost management.”
It is understood the meeting proposed the establishment of a taskforce chaired by Ms Wilson to work with the industry and homeowners to address the urgent and ongoing issues facing the sector.
– With AAP
