Firms rally for Metricon

AT least one home builder went bust every day in March, with fears more could go under amid soaring material costs and labour shortages.

A total of 40 building and construction companies were wound up over the month, according to insolvency data – 40 per cent higher than the past year’s monthly average.

And Master Builders Victoria chief executive Rebecca Casson has warned more builders are likely to fall.

Major suppliers have rallied around under-pressure Metricon with an advertising blitz to reassure customers.

The national campaign by Metricon’s suppliers, including Carpet Call, Cosentino, Dulux and Reece Group, comes after the building giant held crisis talks with state Treasurer Tim Pallas, and concerns were raised about the sector by Prime Minister Scott Morrison.

Cosentino national sales director Iain Whyley said a supplier-led campaign of support for Metricon would help show they were “positive and optimistic” about its future.

The state opposition has called for the state government to scrap Victorian Building Authority fee increases that came into effect this month.

Shadow treasurer David Davis said the Victorian Building Authority’s $63m impost was effectively a “tradie tax”.

“The state government should help, not hinder, the building and construction sector as it grapples with supply and price issues,” Mr Davis said.

“Labor’s nasty new tax increases on builders, tradies and their building companies introduced on May 2 should be reversed immediately.”

Fears of major builders collapsing this year have emerged due to big increases in material costs that are blowing out fixed price contracts.

Construction and property industry insiders say a “doomsday” scenario of a major builder collapsing could hammer government coffers.

The fallout could include higher insurance premiums for new builds, a short-term rise in the cost of materials and tradies, and even a boom in prices of established properties.

An industry source said the cost of building a home in Victoria had risen $40,000 in the past year, so anyone forced to renew a contract locked in a year or more ago would expect to pay at least that much more.

Real Estate Institute of Victoria chief executive Quentin Kilian said a major builder’s collapse would cause a hit to confidence in new builds.

But HIA chief economist Tim Reardon said those building a home should remain confident, with insolvencies in the industry 31 per cent below where they were in 2019.