A series of home builder failures on Australia’s east coast has left over 4,500 prospective homeowners stranded, with Porter Davis Homes being the most recent to enter liquidation. This has impacted more than 1,700 ongoing projects in Victoria and Queensland, as well as 779 customers who had signed contracts but had not yet begun construction.
Since November 2021, several other home builders have also faced similar fates, including Privium, Oracle, Condev, Pivotal Homes, BA Murphy, and LDC in Queensland; Tasmanian Constructions/Hotondo Homes and Inside Out Constructions in Tasmania; and Hallbury Homes and LP Warren Homes in Victoria.
Industry experts anticipate further construction insolvencies in the coming year due to extended cash conversion cycles and declining interest in new development projects, creating challenges for home building businesses.
Porter Davis Homes, a Melbourne-based home builder, has entered liquidation, leaving more than 1,500 Victorian and 200 Queensland homeowners facing uncertainty. The Victorian government has not yet indicated whether it will offer assistance to those affected. Despite acquiring boutique luxury builder Englehart in 2021 in an attempt to diversify, Porter Davis could not overcome challenges such as rising costs, supply chain delays, labor shortages, and a decline in new home sales. The company’s struggles underscore the difficulties faced by the home building sector in recent times.
Porter Davis Homes’ liquidators estimate the company has between 1,500 and 2,000 creditors. Englehart, acquired by Porter Davis in 2021, remains unaffected and will continue to operate independently. The mass market builder industry has been challenging, as previously described by Anthony Roberts, director and founder of Porter Davis, who referred to it as a “red ocean” and a “bloodbath.” Porter Davis’ CEO, Adrian Hondros, resigned last year after extending his contract. In a separate development, Deloitte has been appointed as voluntary administrators of the Lloyd Group, which includes six companies focused on publicly funded building and infrastructure projects, but no specific details about the debts or number of creditors involved have been provided.
Porter Davis’ liquidators on Tuesday have confirmed that they successfully negotiated the sale of a part of the business to Nostra Property Group (NPG), a Victoria-based construction firm specializing in townhouse and freestanding developments, established in 2006. This deal will enable the completion of up to 375 homes, including 126 townhouses already underway, and commence construction on up to 169 additional pre-sold townhouses, offering relief to families impacted by Porter Davis’ collapse. As part of the agreement, 16 Porter Davis jobs will be saved, and support will be provided to 80 Porter Davis customers whose homes have not yet started construction. The liquidators cited NPG’s adaptability to market changes and its strong industry standing as factors contributing to the agreement. Victoria’s Deputy Premier, Jacinta Allan, expressed hope that this positive development would help ease the stress faced by home buyers affected by the Porter Davis situation.
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