Metricon says it’s business as usual, as 300 SA homes are under construction

Under-pressure home builder Metricon has declared it’s “business as usual”, as the state treasurer says there is no cause for concern.

Embattled home building giant Metricon is currently constructing more than 300 homes in South Australia amid severe financial pressure.

It comes as the peak body of South Australia’s building and construction industry remains “optimistic” the largest home builder in Australia can overcome “a challenging period for the industry”.

The South Australian Housing Authority has 22 contracts with Metricon, which include 16 building contracts and six contracts in partnership with the non-government sector, to build affordable homes.

But Treasurer Stephen Mullighan said work continues to progress and there is no cause for concern.

“We all know that the building industry is under pressure from high prices and the last thing that anyone needs, anywhere around the country, in the building industry is any sort of fear mongering or alarmist language,” he said.

“The last thing we need is the rumour mill undermining the viability of this important industry.”

Premier Peter Malinauskas said advice from Metricon indicated the company was currently building more than 300 homes in South Australia, and are paying their bills on time.

“So there is no evidence that we’ve received or no advice that we’ve received to suggest that any contractors or any home builders themselves or any families are going to be affected,” he said.

Metricon display homes at West Lakes. Picture: Dean Martin

Master Builders Association SA chief executive Will Frogley said he had remained in regular contact with Metricon, who have been holding crisis talks on Thursday.

“I’m in regular contact with Metricon and believe they can navigate through the current challenging environment,” Master Builders SA chief executive Will Frogley said.

“Now more than ever it is crucial the industry is not burdened with additional red or green tape,” he said.

Mr Frogley encouraged South Australians to talk to their builder and work closely with them.

“I sympathise with South Australians waiting to move into their homes, but rest assured builders are doing everything they can to complete builds as soon as possible. After all, the longer it takes for them to build, the more price increases they have to deal with.” he said.

“Good communication is extremely important.”

Mr Frogley said record high demand and severe supply challenges were continuing to impact the industry.

“Due to factors such as Covid, China, Ukraine and floods, material prices are going up at the highest rate in 40 years. There is also a big trade shortage. As fixed price contracts are widespread, these shocks have eroded margins,” he said.

A Renewal SA spokeswoman said they don’t have any direct contracts with Metricon.

However, she said the builder has 12 properties under various stages of construction within the Playford Alive development.

Playford Alive is a partnership between Renewal SA, the South Australian Housing Authority, the City of Playford and the local community.

It comes as Metricon told the Victorian Treasurer Tim Pallas it has paid all its trade creditors “in full and on time” and expects this to continue, Mr Pallas says.

The comments come after the Treasurer met with Metricon on Thursday amid fears over its future, and the unexpected death last week of founder and chief executive Marion Biasin.

Metricon has nine display home locations across the Adelaide metropolitan area and the Hills, offering 97 home designs in SA.

Metricon in South Australia

According to Metricon’s website, it builds from Victor Harbor and Normanville in the south to Eudunda, Balaklava and Port Wakefield to the north of Adelaide, and at Murray Bridge and Mannum to the east.

Winchester and Michael Furtak have been waiting months for work to start on their first home at the Lovegrove Estate in Angle Vale but will now walk away from the deal. Picture: Keryn Stevens

Among the many South Australians building with Metricon are Adelaide pair Erin Winchester and Michael Furtak. The young couple said they signed on with Metricon to build their first home in 2020, but say they are now are now beset by financial disputes and ready to walk away.

“There is nothing that we wish more than to default on our finances and pull out,” Mr Furtak said.

After a series of delays, the couple said they were now under serious financial stress themselves and in a three-way standoff with the builder and their bank over a $4000 charge Mr Furtak said was the result of an error in the company’s paperwork.

“We are a happy couple of six years, but this is starting to affect our relationship,” Mr Furtak said.

“We wanted to build a nursery for our son.”

Metricon’s display homes at West Lakes. Picture: Dean Martin

Speaking to the media at Metricon’s headquarters in Mt Waverley, Victoria on Thursday, Metricon’s acting chief executive Peter Langfelder declared it was “business as usual” for the home building titan, firmly denying any risk of financial collapse.

“This is an extremely difficult time for our business, we’ve just lost the co-founder of our business, and we’re dealing with the grief,” he said.

“Our business has been very strong for 45 years and will continue for a long time to come,” he said.

“Metricon has long term viability, we’ve got a string history of performance.

“Everything is completely up to date, we have an incredibly strong management team and fantastic staff, and trades and suppliers who have been loyal with us for many years.

“We have the support of our banks ... all our trades paid for today, on time and in full ... and all our suppliers were in the same boat.”

“All I can say is we remain strong, and to please bear with us as we go through this grieving period.”