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Another major Australian building company has collapsed, leaving an uncertain future for 280 homes.
Surfers Paradise builder Pivotal Homes, one of Queensland‘s biggest home builders, went into liquidation on Thursday night.
The company, which was a category three builder, licensed for low-rise jobs up to $30m, has 16 full-time employees.
Pivotal Homes completed 211 jobs totalling $56.7m in 2020-21, and had completed 105 jobs worth $30.5m so far this financial year, records held by the Queensland Building and Construction Commission show.
Many clients face an anxious wait over what will happen to their homes after the collapse of a building company. Pictured is a female tradie
Thousands of Australian tradies have gone broke in recent times as building firms collapse – with the entire industry on the brink of a huge crisis amid skyrocketing commodities prices.
In a statement, Pivotal Homes said it had 103 houses under construction, in various stages from slab pours to turnkey, and 177 homes waiting on building approval from councils.
The company, which is a former sponsor of the Gold Coast Titans, said increased labour and construction costs meant the business was no longer viable.
‘In my 30 years’ experience I have never seen a set of circumstances like this and obviously we are not alone in these unfortunate conditions facing the industry,’ said managing director Michael Irwin.
‘We are absolutely devastated for our 16 Pivotal Homes employees and assure all creditors, contractors and subcontractors have been paid in full.’
Mr Irwin said those buying homes from Pivotal ‘are in a net gain position’.
‘The work they have paid for has been completed. In fact, they have had more work completed on their homes than they have paid for,’ he said.
Supply chain issues and lack of stock from national and international sources has led to a spike in demand and prices for materials.
Thousands of Australian tradies have gone broke in recent times as building firms collapse. Pictured is a house being constructed
Costs of metal ores, plastics and timber have been consistently rising for years, but particularly through the pandemic as factories were forced to shut down for extended periods.
Last month, two Perth construction firms went under just days apart.
The formal appointment of liquidators for Home Innovation Builders was lodged with the Australian Securities and Investments Commission, just after New Sensation Homes was placed in the hands of WA Insolvency Solutions.
Gold Coast firm Condev, Brisbane-based Probuild and Hobart’s Hotondo Homes are among the other companies to collapse in 2022.
Brisbane-based Probuild is one of the building companies to collapse in Australia in 2022. Pictured is a Probuild site at Darling Harbour in Sydney
The country’s largest home builder, Metricon Homes, has also repeatedly denied it was facing collapse after the sudden death of the company’s founder and CEO Mario Biasin.
Derek Cronin of Cronin Miller Litigation, acting on behalf of Pivotal Homes, said liquidation was the only option.
‘The decision for Pivotal Homes to go into liquidation has been based on forward projections dictated by the increasingly challenging market conditions, including the exponential rise in material costs,’ he said.
‘It is an unfortunate set of circumstances that is impacting on the industry across Australia.’
A young female maintenance engineer is pictured testing voltage with a digital multimeter
Chris Cook and James Robba of Worrells have been appointed as liquidators for Pivotal Homes.
The trickle-down effect of surging costs mean Australian tradies are forced to cover the difference, with the country on the verge of a major crisis.
‘I don’t think a lot of companies are taking the cost increases seriously. It’s a perfect storm,’ Matthew Mackey, executive director of engineering company Arcadis, told Daily Mail Australia.
‘Smaller businesses don’t have the cash flow, they don’t have the same safety net. They’re going to feel the pain a lot sooner and a lot more harshly.’
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