More builders fail, thousands of workers left unpaid

The chaos enveloping the construction industry continues to unfold, with more major builders collapsing in recent days and hundreds of reports flooding in about unpaid wages within the sector.

Among the latest business casualties are St Hilliers, which has folded and halted work on 21 multimillion-dollar development projects around Australia, and Brisbane’s construction company CMG Homes that lapsed with $300,000 in unpaid debts.

ASIC data revealed 1,541 reports of unpaid wages by construction companies entering administration, almost 1,000 more breaches than any other industry on the list.

New South Wales has been particularly hard-hit with around 1,600 businesses in the state engaging an external controller. The most impacted sector was construction, which accounted for 80 per cent more companies under administration than the next most affected industry category — food and accommodation services.

The past week has been a terrible one for housing in Australia, with dwelling approvals and loans for purchasing or constructing a new home diving.

The Federal Government’s ambition to build 1.2 million over five years, or 240,000 homes a year, appears sunk before it has left its berth. Annual dwelling approvals collapsed to only 162,200, which was the lowest result since March 2013.

Almost 1,400 businesses collapsed in the second half of 2023 and St Hilliers’ demise has only added to the sense of gloom within the building industry.

WLP Restructuring was appointed as voluntary administrator of seven entities within the Sydney-based St Hilliers group of companies.

The private construction company is a 34-year-old apartment, commercial and infrastructure builder that had a range of major projects in progress and had contracts all over the country, particularly in the defence industry.

The company, which racked up losses of around $12 million over two years, released a statement this week.

“St Hilliers has told sub-contractors not to come into work at 21 work sites, with seven entities within the group now in administration”.

“WLP Restructuring partners Glenn Livingstone and Alan Walker were appointed as voluntary administrators of St Hilliers Contracting, the company’s construction division”.

“So far, 22 staff have been retrenched with 80 still employed in uncertain circumstances at the company established in 1989”.

“Its key projects are in Sydney, Brisbane, Townsville and Perth”.

The first meeting of creditors will be held on or before February 14.

CMG Homes was a family-owned business that operated out of Moreton Bay and the Sunshine Coast for 28 years.

Even 2025 looks tough for housing

With record migration levels and population growth coinciding with the downturn in building activity, the prospect of meeting the country’s housing needs is retreating, not advancing.

Dwellings approved in 2023 were down 15.4 per cent on the 2022 result.

“This is a level of approvals not seen since 2012,” noted Maree Kilroy, Senior Economist for Oxford Economics Australia.

“There remains a significant pipeline of residential construction work not yet done, which we expect will finally materialise, seeing an increased volume of homes being completed over the next six months.

“While this will provide a boost to near-term supply, the trajectory of dwelling approvals points firmly to a softer 2025 for completions.

“Compounded by record levels of migration, Australia’s housing undersupply is expected to persist for several years.”