ANOTHER BRICK IN THE FALL
Bust homes builder blames ‘price gouging’ tradies
There’s no need for tradies to put up prices from $1.10 (a brick) to $2.20 in a year
Pivotal homes boss Michael Irwin
THE boss of a collapsed Gold Coast builder is savaging price “gouging” tradies who he blames for taking advantage of rising supply costs to charge more.
Pivotal Homes managing director Michael Irwin (above), fronting media within 24 hours of the house builder going into liquidation, said: “They have just been gouging the prices.
“There’s no need for them to put up prices from $1.10 (per brick) to $2.20 in a year.”
Mr Irwin said Pivotal, with a dozen-plus employees, and 103 contracts under construction, had enough cash for staff entitlements and had paid all subbie invoices received.
THE boss of collapsed builder Pivotal Homes has savaged “gouging” tradies, who he said were taking advantage of rising supply costs to bump up their prices.
Fronting media less than 24 hours after his company went into liquidation, Michael Irwin said labour costs like bricklaying and framing had doubled in a year, without any real justification.
“As far as the tradespeople go, they have just been gouging the prices,” he said.
“There’s no need for them to put up prices from $1.10 (per brick) to $2.20 in a year.
“We supply everything, they just turn up on site.
“But because there’s such a shortage of trades out there, it comes back to demand and they can demand what prices they like.”
Mr Irwin said the company had enough cash to satisfy employee entitlements, and had paid all subcontractor and supplier invoices it had received.
Despite this, there is still likely to be some debts outstanding from invoices that had not been submitted by suppliers or subbies when the company went into liquidation.
Pivotal had more than a dozen employees, and 103 contracts under construction and another 177 pending council approval.
Liquidator Chris Cook, of Worrell’s, said while it was too soon to know the full scale of the liquidation, it appeared the outstanding debts did not stretch further back than a week or two.
An emotional Mr Irwin said while Pivotal was still solvent this week, it would not have stayed that way if it continued to trade. He said it was “devastating” and “gut-wrenching” to see his company end this way, but he had to make the call to minimise damage to clients, staff and creditors.
“I’m really disappointed and devastated by what’s happening,” he said.
“It’s hard. This is not the way I wanted to go out, I wanted Pivotal to continue.”
Pivotal clients have been urged to lodge a claim under the Queensland Building and Construction Commission’s insurance scheme, which may assign another builder to complete the work.
“The QBCC recommends homeowners seek legal advice about terminating contracts, because an invalid termination will mean the homeowner is not entitled to a claim,” a spokesman said.
“If a claim is assessed as eligible for assistance the type of assistance will depend on the stage of the build.
“If the work has not yet started, the deposit will be refunded usually within two weeks once all required information is provided.
“If the work has started the QHWS will compensate the owner for additional costs to complete their home up to the compensation limit of $200,000 for standard cover, and $300,000 where optional additional cover was taken out.
“This process requires the QBCC to seek tenders from appropriate builders and takes longer to finalise depending on builder availability.”
Mr Irwin said lockdowns, floods, Covid infections and constant rain delays had exacerbated the costs increases, obliterating the viability of fixedprice contracts.
“While that’s ticking away, prices are going up,” he said.
“We used to get price increases sometimes once a year in January, where now they put it up every month.”
Mr Irwin said take-up of government grants had exceeded expectations and fuelled the demand which was exacerbating cost hikes in the industry.
“The government needs to step in to assist builders to get through this, because there are other builders out there, big builders, in the same position,” he said. “If they don’t, it’s going to end up with carnage.”