Condev Construction collapse: Building and development industry’s future
A top-level construction boss has revealed what the future holds for the Gold Coast’s building and development industry following the devastating collapse of Condev.
Business
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A top-level construction boss says the Gold Coast will remain a hot market for tradies this year.
But for companies there will be major challenges.
“The supply issues will not go away in the next six months but the reality is, there is a lot of buildings under construction on the Gold Coast right now, which means the demand for labour will remain high,” Hutchinson Builders associate director Jack Hutchinson said.
“There is so much demand and stock that I expect it will remain a hot market.
“However, construction costs have now outpaced sales revenue and growth which means some (proposed) projects will not be feasible in the current environment.
“Once a few jobs are paused, this will lead to a decrease in material costs and see the market recalibrate.”
The city was rocked this week with the collapse of one of its biggest builders, Condev Construction.
A “perfect storm” of spiking material costs, flood damage and the effects of Covid proved too great a financial burden and it could not muster $25m to keep it afloat.
More than 40 cranes are in the Gold Coast’s skyline presently.
However, virtually all those projects have been hit by severe disruption in recent months, losing staff during the height of the Omicron wave in January and 30 days in a 45-day period to rain delays.
Many building sites were damaged by flooding, forcing some materials to be written off.
Developers who partnered with Condev on its six Gold Coast tower projects said they would take over construction and employ the subcontractors who had worked on the sites.
Builder Descon Group Australia has taken on both the Allure development at Chevron Island and the Brook Residences at Robina’s Cambridge project.
Workers are expected to return to the sites from Monday.
Mr Hutchinson said many builders were struggling against rising costs and having signed fixed-price contracts.
He said his company, one of Australia’s largest, had taken some hits but remained in a strong position.
“We have been fortunate in that we have been diligent about negotiating contracts earlier, though that’s not to say we haven’t felt pain because of Omicron,” he said.
“We have tried to mitigate this though through early procurement of materials and adjusting our prices every 30 days because of how fast the market is changing.
“We are in decent shape and have a strong balance sheet so we can take a few shocks, but it really has been a perfect storm.”
Townhouse of horrors: Inside Condev’s destroyed homes chaos
A Robina mum who lived in construction chaos in a Condev-built townhouse for almost a year says many homeowners in the same predicament have been left in the dark.
Monique Cribb’s family moved into a rental built by Condev Construction in June 2020, but they started to notice leaks and cracks in the walls of their basement in Easter 2021.
Formerly one of the Gold Coast’s largest construction companies, liquidators were called in on March 15 after it was revealed the business had been struggling since last year.
Ms Cribb said building inspectors determined the walls were “100 per cent moisture” and would require up to a month to fix.
They were later told pipes in the second floor of the townhouse were leaking and would also require up to a month to fix.
Almost a year later, the work still hasn’t been done and most of their rental is unlikeable, Ms Cribb said.
“We were just living in a mouldy, dusty, messy construction site.”
The family moved out earlier this month, just days before the company collapsed.
She said several other townhouses in Robina had experienced the same leaks, cracks and damage – with the owners of them now left in limbo with unfinished repairs.
The Bulletin contacted a Condev spokesman for a response, but did not receive one by deadline.
“It didn’t surprise me to hear (Condev) were having issues. The work that was done was very substandard,” Ms Cribb said.
“You could see the writing on the wall.
“I feel for the homeowners waiting for repairs to happen, the people caught up, the tradies that won’t get paid – it’s really sad.”
And it’s not just homeowners who have been left in the lurch.
A subcontractor owed at least $1m from the Condev fallout told the Bulletin he feared the construction giant’s demise could be “the tip of the iceberg”.
The subbie, who asked to remain anonymous, said he was sympathetic to Condev’s position.
“They’ve never done anything wrong by us and have been pretty good with payments historically,” he said.
“Obviously, now they owe us money and it’s not ideal, but they didn’t do this on purpose.”
But he warned it could be “the tip of the iceberg” for the industry, with price undercutting and soaring material costs becoming all too regular in one of the Coast’s biggest development booms in decades.
One veteran Gold Coast subcontractor, who has worked with Condev for more than a decade, said he had “the utmost respect” for the company.
“They’ve always been very good to all the subcontractors and always paid exactly on time,” he said.
“There’s never been an inkling of them not doing the right thing. I can only speak highly of them.”
He said he was owed retention money by Condev and expected to lose it, but said “I accept that”.
“Many years ago I took another builder to court and got absolutely nothing out of it.
“When a builder’s going good, they’re everyone’s best friend but if they miss one payment, they’re a********,” he said.
“Nobody goes broke because they want to.”
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