Construction heavyweights warn of wave of building company collapses on the way

As one of Queensland’s biggest builders hits financial trouble with hundreds of unfinished projects, leading industry players have a warning for anyone looking to build their dream home.

Subbies are believed to be owed $20m.

The head of Australia’s largest private construction company has warned people dreaming of building their own home to do their homework first.

One of Queensland’s largest residential builders Privium Group is facing a $28m collapse and

Hutchinson Builders chairman Scott Hutchinson said he does not expect conditions to improve in the sector until 2023.

“I’ve been saying for a while now that collapses are going to happen,” said Mr Hutchinson, who heads up the largest construction company in the state. “That’s just the way it is when there is a boom. The prices of materials go up and builders get caught and lose money. It happens every time.

“We are in a profitless boom and the industry needs to be settled down. There will be a lot who will go broke next year.

“It’s important that people before engaging a builders look at their balance sheet. If they’re not audited or they’re not up to scratch don’t use the builder. If you do, you’re looking for problems.”

Privium is believed to owe subbies more than $20m and has shut down the bulk of its building operations. It will transfer 160 uncompleted homes in Queensland to Eight Mile Plains-based builder Torsion Pty Ltd.

Privium CEO Rob Harder, a former carpenter who founded the Underwood-based company 20 years ago could not be reached for comment.

Privium, formerly known as Impact Homes, had in recent years expanded into NSW and Victoria.

Privium CEO Rob Harder started his career as a labourer and carpenter. Picture: Nigel Hallett

It is unknown what the plans are for its interstate operations.

A Victorian contractor who has worked with Privium for a number of years in Geelong, expects a lot of tradies are going to be out of pocket.

“This is going to hurt a lot of trades, for me it has cost $20,000 coming into Christmas,” said the man who does not want to be named.

“I don’t expect to see that money again.”

Masters Builder Queensland deputy chief executive Paul Bidwell said Privium Group was a member of his organisation and they were aware they were under stress.

“One of the contributing factors is the delays in getting material and the cost increases of building materials which is impacting on all builders big and small across Queensland and the country,” he said.

“A lot of companies are not making a profit and worse they are operating at a loss. There are very few with black ink on every projects and it can’t go on.”

Hutchinson Builders chairman Scott Hutchinson. Picture: Glenn Hunt/The Australian

Documents filed with the corporate regulator ASIC, reveal that Privium reported a loss of more than $28m in the 2019/20 financial year as the construction industry felt the impact of shutdowns, labour shortages and price hikes caused by Covid-19. Over the same period it paid dividends in excess of $18m.

Customers such as Hervey Bay couple Nikki and Dan Jacobson have engaged lawyers who are pursuing the company over claims of a breach of contract.

The couple say they are $80,000 out of pocket after Privium downed tools on their block leaving a pile of timber on their acreage property.

The Jacobsons signed a contract in January with Privium after being introduced to the builder by their mortgage broker.

Privium was named 11th biggest builder in Qld by HIA this year and completed more than 600 projects worth $183m last financial year.

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