Gold Coast home builder collapses amid dire industry warning

Gold Coast building firm Chelbrooke Homes has called in liquidators in the latest sign insolvencies in the construction sector are increasing.

Gold Coast building firm Chelbrooke Homes has called in liquidators with industry experts warning “building firms are falling everywhere.”

The Burleigh-based business founded in 1998 operated in Brisbane, Gold Coast and northern NSW with a number of display homes in the region.

The company has appointed Jason Bettles, of Worrells, as liquidator. Comment has been sought from Mr Bettles and company director Peter Riewoldt.

According to Queensland Building and Construction (QBCC) data, the company held a category three licence allowing it to complete residential work worth up to $30m each year. The amount of work undertaken by the firm in Queensland has tapered off in recent years with only one job undertaken this financial year. That was from a high of 68 projects undertaken in 2013/2014 worth in excess of $24m.

Master Builders Gold Coast regional manager Adam Profke said more pain was to come for the building sector in the coming months. “Lot of firms have been hanging on for a long time,” said Mr Profke. “But now they are falling everywhere.”

Chelbrooke was an established firm that had hoped to trade out of its problems. “I know the owner and he has invested his life in the company,” Mr Profke said.

Chelbrooke display home on the Gold Coast

He said part of the problem faced by Chelbrooke was a hangover from pandemic lockdowns which impacted on the company’s projects across the border in NSW.

It also had faced lengthy building approval delays in Tweed Shire Council of up to a year which meant many of the company’s fixed price contracts became unprofitable. That contrasted with about a month on the Gold Coast.

The collapse of Chelbrooke comes a week after Brisbane construction company Murarrie-based DCB Developments, with a client list that included KFC, Guzman y Gomez and Hungry Jacks, also called in liquidators with some subbies owed almost $400,000.

Jason Stone and Paul Allen, of PKF Melbourne, were last week appointed receivers and managers of after weeks of speculation about the future of the 15-year-old company.

DCB, specialised in design and construction in the retail and commercial sectors, and at the time of the appointment was working on Leda Development’s $60m Currumbin Service Centre that will include a drive-through Zarraffa’s Coffee shop, KFC, Shell service station, Coles Express, 24/7 Gymnasium and a Storage King.

The failures come Insolvency Australia revealed that national external appointments soared by 57 per cent in the June quarter to 3008 with the Australian Taxation Office ramping up its debt collection activities with cash-strapped small and medium businesses in the middle of a “perfect storm”.

Insolvency Australia director Gareth Gammon said it has been a “tough year” with a significant increase in winding-up applications and ATO-initiated court recovery, particularly over the past quarter.

“Over the past year there’s been plenty of discussion in the sector about the incoming insolvency wave. It started with a trickle and it’s now become more of a surge as economic pressures and the ATO’s debt collection activities combine to create the perfect storm.” he said.

According to the Corporate Insolvency Index in the fourth quarter of the 2022-23 financial year Queensland recorded a 59 per cent increase in external appointments.