Fears for more housing industry collapses in 2022 as big builders go bust

ABC Sunshine Coast / By Jacqui Street Posted 7h ago

More construction companies will fold this year as lock-in contracts leave builders unable to pass on the rising cost of labour and supplies, the Master Builders Association warns.

Key points:

• Two Queensland firms, BA Murphy and Privium went into liquidation in December 2021, while Tasmanian Constructions (Hotondo) went into administration in January 2022
• Subcontractors are pushing for bank accounts for smaller projects to protect them when firms go bust
• The Master Builders Association fears more builders will collapse as supply costs continue to rise

Two Queensland firms, Privium and BA Murphy, went into liquidation just before Christmas, with customers and subcontractors waiting to find out how much, if anything, they will get from the wash up.

Liquidators FTI Consulting told the ABC that Sunshine Coast-based BA Murphy owed almost $11 million to about 550 creditors.

The company's 30 employees were owed more than $400,000.

BA Murphy also had 50 unfinished building projects across Australia, including 21 in Queensland, 18 in Victoria and about 11 in New South Wales.

Meanwhile, the final amount owed by Privium is likely to be more.

The company has 831 unfinished contracts around Australia and records show a $28m dollar loss in the 2020 financial year.

Sunshine Coast regional manager for Master Builders Queensland, Nicola Scott described the collapse of BA Murphy as "absolutely devastating".

She said the prices of supplies, from timber and steel to plumbing and tapware, had risen substantially over the past 12 months amid increased home building demand globally.

"I think it would be a miracle if somebody wasn't affected by that, because they're continually having to absorb the cost," Ms Scott said.

Last year, the Master Builders warned the new year could be a tipping point.

Ms Scott said the association was counselling stressed builders who were trying to pay their subcontractors.

She fears other building firms will follow Privium and BA Murphy this year.

"I don't think the new year is going to bring some wonderful miraculous change where it's a brand new year and it's all going to be rainbows and whistles," Ms Scott said.

"I think it's going to be quite tough until maybe mid-year."

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