Brisbane builder Pantha Homes collapses amid worst industry slump in decade

Liquidators have moved to take control of a north Brisbane construction firm as industry leaders warn the home building sector is in its worst slump in a decade.

Liquidators have moved to take control of a north Brisbane construction firm as industry leaders warn the home building sector is in its worst slump in a decade.

Robson Cotter Insolvency Group has been appointed liquidators of North Lakes-based Pantha Homes, a category three builder that was licensed for work valued at up to $30m each year.

According to the Queensland Building and Construction Commission, Pantha Homes completed 48 home projects in 2020/21 valued at $13.6m but only 11 projects valued at $4.1m in the past two years. Founded in 2005, the family-owned builder offered “innovative and contemporary home designs” as well as house and land packages.

Comment has been sought from Pantha Homes. Robson Cotter liquidator Roland Robson said building costs were a factor in the failure of the company but it was too early to say how much creditors were owed or how many homes were uncompleted. The QBCC has started the regulatory process of cancelling the company’s licence.

The Housing Industry Association’s latest economic and industry outlook report said nine consecutive interest rate increases have seen housing construction starts plunging.

HIA chief economist Tim Reardon said further RBA cash rate increases in 2023 will accelerate the downturn.

Tim Reardon, Chief Economist from HIA.

“There was a large volume of work in the pipeline when rates started to rise in May 2022, and there remains a record number of homes under construction, but this will shrink quickly as market confidence continues to fade,” he said.

“Lending for the purchase or construction of a new home had already fallen to its lowest level since 2012 by the end of 2022, and the full impact of last year’s rate increases is still to flow through to households.

“The number of detached houses commencing construction is set to decline this year and next to its lowest level since 2012.”

In the industry recorded 120,000 detached housing starts in 2022 and has forecast 109,000 in 2023. In 2024 the number of detached housing starts will fall below 100,000 starts per year for the first time in a decade to just 96,300, compared to a 149,000 starts in 2021.

Mr Reardon said multi-unit starts were impaired last year by the acute shortage of labour and materials which has seen many projects postponed until 2023.

“Unlike detached home construction, the number of multi-units commencing construction should increase as the acute shortage of housing, returning migrants and students, and affordability constraints continue to drive demand for housing,” Mr Reardon said.

He said it was unfortunate that the RBA appears set to repeat the cycle the building industry experienced after the GFC.

“Following an initial cut to rates, the RBA then increased rates quickly, bringing the building industry to a stall, before being forced to cut rates again to avoid adverse impacts on the wider economy,” Mr Reardon said.

“It is also unfortunate that higher rates will further impair the ability of the market to respond to the acute shortage of housing stock.”

The building industry has been hit by a perfect storm of labour shortages and material price hikes in the past 12 months that has seen the demise of major builders including Probuild, Condev, Privium Homes, and Pivotal Homes.

Perfect storm in the building sector