Major home builder avoids liquidation, but another collapses
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Key points
- Work on more than 700 Mahercorp homes stalled five weeks ago when the company went into voluntary administration.
- A vote on Monday decided to keep the firm trading, but most customers will need to pay extra to get their homes completed.
- The news is not as positive for smaller residential builder Rawdon Hill, which fell into liquidation last week.
A major Victorian home builder has avoided falling into liquidation and plans to resume construction on hundreds of homes, five weeks after entering voluntary administration, as a separate residential builder has collapsed in Melbourne.
Creditors and customers for Mahercorp — which includes brands Urbanedge Homes, Eight Homes, as well as House and Land World — on Monday voted to keep the Melbourne business trading, administrators Cor Cordis confirmed.
Mahercorp, which owns builders Eight Homes and Urbanedge Homes, has gone into voluntary administration.Credit: Nine
Most customers will cop a 6.5 per cent cost increase to continue, however a date to resume has not yet been provided after work on more than 700 homes halted in April.
Labour and supply shortages have hammered the residential construction industry. Porter Davis, Australia’s 12th largest home builder, left 1700 homes in Victoria and Queensland unfinished when it went straight into liquidation in March.
Rawdon Hill posted on social media that it could assist Porter Davis customers, a day before falling into liquidation.
Smaller residential builder, Rawdon Hill, fell into liquidation last week, a day after advertising to victims of the Porter Davis collapse.
“We can help Porter Davis customers in south-east Melbourne who require assistance to complete their build,” Rawdon Hill posted on Facebook and Instagram last Wednesday. “As a low-volume builder with over 46 years of creating family homes we may be able to provide support for eligible customers.”
The company appointed liquidators Dye & Co on Thursday.
The Facebook page for Rawdon Hill, which also advertised discounted builds in April, was removed entirely on Friday.
Calls to liquidators Dye & Co and to Rawdon Hill were not returned.
Premier Daniel Andrews was forced to launch a $15 million rescue package for 560 families after the Porter Davis collapse, while the Victorian Building Authority is investigating whether the builder broke the law by failing to obtain the necessary domestic building insurance for its customers.
Opposition home ownership spokeswoman Jess Wilson said the Andrews government had failed to protect consumers after being warned about the sector.
“Now it is Victorian homebuyers who have put their life savings into their dream home that are paying the price,” Wilson said.
Planning Minister Sonya Kilkenny has been reviewing the sector and will propose reforms in coming months.
Rawdon Hill had just 15 open building permits. The Victorian Managed Insurance Authority (VMIA) confirmed it had so far received eight insurance claims from its customers.
The VMIA did not engage the builder to assist in finishing Porter Davis homes.
In promotional material in the Star Journal and Star News papers in April, Rawdon Hill said it was going strong and had not been impacted by supply chain issues affecting other builders.
General manager Peter Grant told the papers: “We can say with absolute certainty that we will proudly finish every single home in our strong pipeline, guaranteed.”
Last week’s state budget allowed the commissioner for state revenue to use discretion to extend land tax exemptions for residences under construction if the builder had gone under.
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