Collapse of Adelaide builder leaves 200 homes at risk

Debts of more than $4.5 million, scores of lost jobs, and 200 homes in jeopardy worth more than $110 million.

That’s the diabolical scenario unfolding in Adelaide following the collapse of Qattro Built and the end of its 15 years of operations.

Liquidators Chris Powell and Nick Gyss from Duncan Powell say they will try to minimise the losses to creditors and hope the 200 homes can still be completed through other avenues.

Among the developments impacted are Cedar Woods Fletcher Slip Development, part of the Dock 1 Development and smaller developments in Underdale, Torrens Park and Lightstview. 

The 200 projects are either in pre-construction or in the process of being built.

The Adelaide company’s collapse comes as builders around the nation face similar pressures, with more construction industry pain expected.

In Perth this week, BGC Housing Group was attributing fixed price contracts to the issues that have led to it facing a huge class action lawsuit.

The Qattro Built liquidators issued a statement on Tuesday (12 September), saying there had been recent unsuccessful attempts to recapitalise the company.

“Qattro Built has faced increasingly challenging operating conditions that have affected the entire industry and we have significant experience in supporting construction businesses in similar circumstancesx.

“We will work closely with the management team and the various developers and owners to mitigate ongoing losses and exposures for all stakeholders and facilitate the orderly transition and completion of the projects,” Mr Powell said in the statement.

Labour shortages hitting industry hard

Qattro Built’s Managing Director, Bradley Jansen, also issued a public statement on the company's website saying the decision to wind up operations was devastating, with fixed-price contracts being a significant contributor to the business’ demise.

“I have made significant changes to the company in the post Covid years, such as downsizing both operations and our office, but I have now exhausted all options,” Mr Jansen said. 

“The reality is ongoing supply chain and labour shortages mean that there is too much cash stuck on near-completed projects to meet the immediate obligations of the company.

“I have tried my best to protect the staff and suppliers and have put all my personal assets into the business to try to push through, but attempts to absorb the $7.5 million in cost increases over the last few years have wiped the balance sheet.

“Business failures are always a result of a combination of complex factors, and it is heartbreaking to see the high volume of builders and supply chain collapses across South Australia and the country.

“It is a deeply troubling time for the sector when shortage of housing supply is in lock step with supply side degradation.”

The closure of the business will cost 25 employees their jobs and impact dozens more tradespeople.

With more builders likely to face a similar fate, clients are urged to take measures that may offer a degree of protection, including ensuring adequate insurance policies are in place.

Regulations differ from state to state but in the event a builder goes bust, buyers should be protected by a mandatory insurance that is compulsory for builders to take out ahead of construction beginning.