Shockwaves ripple after dozens of Victorian builders collapse in May

The industry’s crisis is deepening, leaving hundreds of devastated families in limbo as dozens of Victorian companies collapse each month.

Dozens of Victorian building companies are collapsing every month, leaving hundreds of families creating dream homes in limbo.

The monthly number of building and construction sector insolvencies hit a year-high 51 in May, as rising costs and labour shortages started to bite.

Since then, several other prominent construction companies have gone under, amid warnings more will struggle to see the year out.

Wulfrun Construction and Westernpoint Construction were the latest to have liquidators installed this week, after Longford Jones and Snowdon Developments were also forced to fold.

Administrators for Wulfrun are yet to disclose how many people are impacted or how much money is owed, while Westernpoint is only expected to impact a small portion of the market.

But hundreds of families linked to Snowdon have been left reeling, with 550 homes currently being built and $17.8 million owed to creditors.

Hundreds of families are in limbo as more Victorian builders collapsed.

Water pools in the frame of an unfinished Langford Jones home.

Donna Taylor with her unfinished Phillip Island home that Langford Jones Homes was building.

Sam Langford-Jones of Langford Jones Homes, which collapsed last month. Picture: Aaron Francis

Langford Jones had 65 developments ongoing, and creditors owed $10 million.

Dad-of-two Mark, who declined to provide his last name, told news.com.au he was in a “desperate” situation after providing extra cash to get his Wulfrun-built property on an old family block in Newport.

“The underlying feeling is that fear of losing your home, that piece of land that has been in my family since the 1980s, where you grew up and spent your childhood,” he said.

Mark said there were exorbitant costs to complete the home, despite having insurance reduce some of the bill.

Other homeowners have also revealed their grief at the situation.

Donna Taylor, a postwoman in Phillip Island, signed with Langford Jones in 2020 and only has a frame after 18 months on her $365,000 build.

“My dream (is) gone,” she said.

Snowdon Developments also collapsed, owing $17.8m.

More than 500 homes were affected by Snowdon’s collapse.

“I am totally devastated like so many other people. Tears are rolling down my face.”

Master Builders Victoria chief executive Rebecca Casson said the state was experiencing a “profitless boom” where rising costs in residential home building were killing profits of many companies while others were struggling to remain solvent.

“The vast majority, if not all, of the state’s builders are experiencing a challenge to their profitability due to supply chain challenges and rising cost of materials,” she said.

A shortage of key materials exacerbated by overseas conflict has seen prices soar on building sites, hitting companies that signed fixed term contracts hard.

“Unlike in other sectors, and with other products like fuel and food, these unforeseen costs increases cannot be passed on to consumers,” Ms Casson said.

Hundreds of households are in limbo after the industry’s collapse.

Snowdon failed to deliver on its ‘build your dream’ tagline.

“Master Builders Victoria continues to advocate to the Victorian government to include rise and fall clauses in domestic and commercial building contracts.”

The crisis, which saw 180 companies collapse between January and May 31, sparked national attention when construction giant Metricon held crisis meetings with government in NSW and Victoria earlier this year.

Metricon’s owners pumped an extra $30 million into the business to prove it was viable, but have been negotiating for changes to government contracts ever since.

While the number of building company collapses is not yet at the level seen in 2019, when 541 closed their doors, industry insiders say numbers will get worse before they get better.

Ms Casson said she was confident the industry would “come through this and continue to be the cornerstone of Victoria’s economy” but it needed assistance.

“The best way to protect consumers is to protect builders,” she said.