Projects in limbo as another SA builder goes under
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As the nation’s housing market downturn continues, South Australia’s peak body for home building is pushing for greater security for the industry following the collapse of two local businesses this week.
Key points:
- The Master Builders Association of SA is calling for an overhaul of the housing market
- Several building companies have gone into administration in SA since 2015
- Other states have introduced schemes to help people into homes
OAS Group, based in Beverley in Adelaide’s west, went under this week, days after custom home builder Platinum Fine Homes announced it had entered voluntary administration.
Civil engineering firm York Civil and Dowling Homes also went into liquidation this year and followed several other construction companies which had closed their doors since 2015.
Master Builders CEO Ian Markos said local companies would continue to suffer unless the housing market was overhauled.
“This goes right through a community,” Mr Markos said.
“You’ve had people who’ve worked their life to build a business and they’ve put everything they have into that and they obviously lose it.
“Their employees become unemployed. You have a range of subcontractors that are potentially owed money and may not get paid.
“This has a ripple effect through the whole economy.”
Continued downturn and soft economy blamed for collapse
Clifton Hall was appointed liquidator of OAS Group last week and told the ABC the company was the victim of a “tough market”.
It said around 40 homes remained half-built, but that home owners should be covered by building indemnity insurance.
In a statement issued by the liquidator, OAS directors said its demise was caused by the continued downturn in the housing industry, increased competition, and low margins.
The State Opposition said a “soft” economy was to blame for the collapse of local building companies.
Shadow Treasurer Stephen Mullighan said the Government should bring forward its planned payroll tax cuts to alleviate pressure on the building industry.
“We need to stimulate this industry, we need to get more houses being built in South Australia,” he said.
“The Government needs to be looking at how they can better support the housing industry.”
Reviving the housing market
Mr Markos said a variety of factors were impacting the local building industry and that South Australia could learn from solutions implemented interstate.
“You don’t need companies to fail to see the economic environment and where the pressure points on the industry are coming from,” Mr Markos said.
“But you need to look at how other states have managed it and how they’ve turned the situation away.”
In Queensland, the State Government removed the requirement for the mandatory installation of rainwater tanks at new homes, and both Victoria and New South Wales introduced stamp duty exemptions for first home buyers.
He said both initiatives were included in Master Builders’ ‘Make Housing Great Again’ plan.
“It gives an injection in the arm of the building industry in those states, but importantly it’s put a lot of people into their first home,” he said.
The document also outlined a boost to the First Home Owners’ Grant and a Productivity Commission review of land and property taxes and charges.
He said the State Government has been provided the plan for consideration.
“There’s enough evidence now that indicates there’s a problem,” he said.
“That’s what the public is concerned about — they want an affordable house.”
The ABC has contacted the State Government for comment.
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