Two NSW building companies collapse owing hundreds of thousands

Two NSW builders have collapsed within days of each other, owing hundreds of thousands of dollars to big names including Bunnings Warehouse.

Two building firms both based in NSW have become the latest casualties of the crumbling construction sector.

News.com.au can reveal that one firm is in liquidation while the other has placed itself into voluntary administration.

Affordable Modular Homes Pty Ltd, a Central Coast local business that specialised in small houses, has shut its doors for good, owing tens of thousands to several creditors including Bunnings Warehouse.

Last Monday, on June 22, the builder placed itself into creditors’ voluntary liquidation after a vote “due to lack of funds” according to the liquidator.

Another NSW builder, Statement Builders Pty Ltd, with a head office in the Sydney CBD, has also folded.

It comes as Australia’s building industry is in crisis, with many companies collapsing so far this year amid rising costs for construction materials and ongoing supply chain issues complicated by locked-in price contracts, putting them out of business.

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Affordable Modular Homes has collapsed.

Philip Hosking of Helm Advisory was appointed as the liquidator for Affordable Modular Homes on Wednesday and said so far the company owed $121,000 to three creditors.

“However, this may change once [more] creditors lodge their proof of debts,” he told news.com.au.

The construction firm specialised in granny flats, modular homes and tiny homes.

Last month, it had two court actions taken against it from creditors, including from Bunnings Warehouse who was owed $20,000 and the Workers Compensation Insurer, owed $45,703.

The largest debt appeared to be $75,000 owed to the Australian Taxation Office although this figure is yet to be confirmed.

“The director has advised us that the company failed due to supply issues and poor profitability,” Mr Hosking added.

“We have been advised that there are no wages or entitlements are owed to staff except for the director who is owed outstanding wages. At this stage it is unlikely that the director will be paid anything.”

Only three people work there however a former employee spoke to news.com.au and said he was owed tens of thousands of dollars.

“It was a diabolical mess that company,” the ex staff member said.

“I wish I never got the job, I quickly found out it was a bit of a mess.”

Bunnings took Affordable Modular Homes to court last month over unpaid debts. NCA NewsWire / David Mariuz

The other NSW builder, Statement Builders Pty Ltd, owes $200,000 but to just one creditor – the Australian Taxation Office.

Statement Builders has its second meeting over its voluntary administration next month, on July 6.

Atle Crowe-Maxwell of DBA Advisory has been appointed as the administrator and said the company’s collapse spoke to a wider issue in the sector.

“It’s going to be a bloodbath, between margins and the ATO wanting their money, it’s really going to push a lot of people to the edge,” he told news.com.au.

The two building firms join a long list of collapsed companies.

Australia’s construction sector has been struggling in recent months.

Privium and BA Murphy both folded in December 2021.

Then two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, already went into liquidation earlier this year.

And that grim list has continued to grow as a number of other high profile companies also collapsed, including Hotondo Homes Hobart, Inside Out Construction, Dyldam Developments, Home Innovation Builders, ABG Group, New Sensation Homes, Next, Pindan and ABD Group.

At the end of last month, two firms from Queensland collapsed just days apart, Pivotal Homes and Solido Builders.

Last week, news.com.au reported on Melbourne builder Snowdon Developments Pty Ltd, who is also believed to be on the brink of collapse, with sources revealing employees haven’t received their superannuation since October, leading to more than half of the staff quitting, as well as creditors owed millions and building works stalling for more than a year.

And on Friday, Victorian building firm Waterford Homes appointed liquidators.

Earlier on Wednesday this week, news.com.au reported on a company that contracted for the construction sector, Fire Services Australia (FSA), which collapsed owing $10.6 million and impacting 123 jobs.

An industry insider told news.com.au earlier this year that half of Australia’s building companies are on the brink of collapse as they trade insolvent.

There are between 10,000 to 12,000 residential building companies in Australia undertaking new homes or large renovation projects, a figure estimated by the Association of Professional Builders.