Another Victorian building company has gone bust, weeks after the collapse of one of Australia’s largest home builders, Porter Davis, and construction firm Lloyd Group.
Award-winning builder Mahercorp announced it went into voluntary administration on April 21, affecting more than 700 homes, as the industry continues to struggle amid the cost of living crisis.
In a letter to clients on April 21, chief executive Steve Maher blamed “unprecedented challenges” but said the company, which oversees builders Urbanedge and Eight Homes, had not collapsed.
“My intention is to work with the administrator on a plan that I hope allows us to restructure the business, creating a more sustainable footing and to complete your home,” Maher wrote.
“It’s no secret that all builders are facing unprecedented challenges right now. Building costs are skyrocketing—materials and labour costs are at record levels and rising inflation is putting huge pressure on builders.
“To ease the strain of these cost increases, for some months now we have been renegotiating our trading terms with our suppliers and insurers. Their support to date has helped us manage spiralling costs.”
Maher added that entering voluntary administration was “the only option” after encountering a problem with the insurer of a major supplier.
Construction on existing projects will be placed on hold for about five weeks.
The Victorian company was first founded in 2002.
It follows the collapse of Porter Davis last month, after the building giant went into liquidation.
Civil design and building firm Lloyd Group was also recently placed into voluntary administration.
Luxury apartment developer EQ Constructions, which is based in NSW, also collapsed owing at least $40 to $50 million (US$26.8 to $33.5 million).
Western Australian companies WA Housing Group and Individual Developments went bust in January.
