Construction giant Metricon is the latest in a long line of companies to fall victim to the slowdown in the property market. The collapse has raised alarm bells for those in the industry, with experts warning that more firms could be at risk if the current conditions continue.
Metricon’s woes come as no surprise to many, given that Australia’s housing market has been deteriorating for some time now.
Sources say that it is not just the smaller players who feel the pinch. Still, even some bigger names are starting to feel the strain because Metricon employs approximately 2500 staff, primarily in eastern Australia, with a pipeline of roughly 4000 homes under construction.
The construction industry is in such a poor shape it would be no surprise if another big name faltered. The Australian building industry is now in full-on “crisis” mode with warnings the country’s biggest builder Metricon is on the brink of collapse.
The rise in materials costs has disrupted supply chains, while periodic lockdowns have created a profitless boom. Metricon has committed to projects that are no longer feasible due to major price increases for building materials, among many other construction companies.
As a result of the ongoing bankruptcy of Australian builders, construction costs of single-story houses have risen by $40,000 to $50,000 in the past 12 months, while those for a double story have risen by $60,000 or $100,000.
Several major construction firms like Metricon went to the wall last year.
Experts say the demise of a major construction firm could lead to increased insurance premiums for new builds, a short-term rise in material and tradespeople costs, or even established property prices surging again. Real Estate Institute of Victoria claims that a major builder’s collapse could impact rental costs.
Concern has been mounting that building giant Metricon is on the verge of ruin after claims that the company faces serious financial problems.
Metricon representatives met with the Victorian government to discuss the escalating issues plaguing the sector, including materials such as timber, steel, and surging costs.
Metricon hastily emailed customers in a desperate bid to allay fears, but another construction collapse is on the way.
For days now, concern has been mounting that Australia’s biggest builder was on the verge of ruin, as claims the company was facing serious financial problems emerged.
Australia’s biggest home builder Metricon has denied it is on the verge of collapse so far, avoiding the fate other major builders have fallen victim to and declaring the business is strong as it works on a pipeline of 4000 houses across Australia.
But experts have warned many businesses in the construction industry are facing not having enough money to continue in the coming months.
Acting CEO Peter Langfelder declared it was business as usual in a press conference on a building site but admitted the company was experiencing some project delays.
Despite the announcement by Metricon, overall, the challenges for the construction industry are compounding with rising labor costs, high demand for materials that are in short supply, fixed-price contracts, and now rising interest rates.
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