{"id":3122,"date":"2022-07-26T08:08:08","date_gmt":"2022-07-26T08:08:08","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/more-building-sector-woes-as-developers-projects-collapse\/"},"modified":"2022-07-26T08:08:08","modified_gmt":"2022-07-26T08:08:08","slug":"more-building-sector-woes-as-developers-projects-collapse","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/more-building-sector-woes-as-developers-projects-collapse\/","title":{"rendered":"More building sector woes as developers, projects collapse"},"content":{"rendered":"

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In another horror week for the national building industry, a major property developer in Melbourne has collapsed, while in Perth a separate developer has terminated a $165 million luxury tower project and a 56-floor apartment complex on the Gold Coast has been killed off.<\/p>\n

Caydon has been building apartments for more than 20 years but has become the latest in a string of high-profile building company crashes in the past year or so.<\/p>\n

Joe Russo, managing director of the prominent Asian-backed developer,\u00a0told media the company had endured covid lockdowns but current supply, labour and inflation issues<\/a> were the final straw.<\/p>\n

\u201cPressure on construction costs resulting in builder insolvencies and supply chain interruptions, and now the interest rate pressures and negative house price sentiment, has placed additional pressure on our operations,\u201d Mr Russo said.<\/p>\n

\u201cIt has been extremely difficult to make this decision, but to ensure the best possible outcome for all of our partners and customers, we have had to commence the liquidation of part of our Australian business.\u201d<\/p>\n

Tuesday\u2019s news (26 July) follows the collapse in Victoria earlier this month of Snowdon Developments<\/a> and family-owned Langford Jones Homes. Around 20 builders have gone into receivership since November last year and there are fears many more may soon follow.<\/p>\n

Insolvency specialists McGrathNicol said Matthew Hutton and Matthew Caddy had been appointed receivers and managers of Caydon by Asian-based non-bank lender OCP Asia, which holds security over Caydon\u2019s assets and properties.\u00a0<\/p>\n

The Australian Financial Review<\/em> described it as the biggest private developer failure since the fall of the Sydney-based Ralan Group and Melbourne’s Stellar Group in mid-2019.<\/p>\n

Among Caydon\u2019s assets is the iconic Nylex site development in Cremorne<\/a>. It has apartment projects under construction in Moonee Ponds<\/a>, Preston<\/a> and Alphington<\/a>.<\/p>\n

Mr Russo said two of Caydon\u2019s projects, HOME in Alphington and Due North in Preston, will not be affected by the collapse.<\/p>\n

\u201cThese remain fully funded projects that will continue through to completion,\u201d he said.<\/p>\n

Apartment peril<\/strong><\/p>\n

Just last week, two major tower projects were annulled by developers in response to the economic climate.<\/p>\n

A 38-floor project in South Perth<\/a> that was set to be the highest building in the area looking over the Swan River to the city skyline was killed off.<\/p>\n

More than half the apartments had been sold off-the-plan. Those who had bought will have their deposits returned.<\/p>\n

Sirona Urban had been scheduled to start building the tower block from April next year but cited building materials cost increases of up to 30 per cent as one reason for the termination of the project.<\/p>\n

In Surfers Paradise<\/a>, on the Gold Coast, Melbourne developer Central Equity abandoned plans to build the $500 million, 56-floor apartment tower, Pacific One, blaming the crisis in the building industry<\/a> and surging construction costs for making the project unprofitable.<\/p>\n

Highlighting the difficulty facing the building industry, Pacific One\u2019s demise marked the first time in 35 years of operation, covering 85 major developments, that Central Equity had not completed a planned development.<\/p>\n

Watchdog loses bark<\/strong><\/p>\n

At a time of turmoil in the building and construction industry, the Commonwealth regulator established to enforce special laws that govern the building and construction industry in Australia, particularly industrial conduct, is being disbanded.<\/p>\n

The Albanese government has taken the first steps in fulfilling its promise to abolish the Australian Building and Construction Commission (ABCC), which was created by the Coalition government in 2016 to tackle alleged lawlessness in the construction sector.<\/p>\n

Labor had argued that the ABCC was too politicised and pursued an anti-union agenda.<\/p>\n

Employment Minister Tony Burke said he wants to see the ABCC abolished soon, with legislation to scrap the body to be introduced later this year.<\/p>\n

The commission\u2019s powers will be reduced to the bare minimum before reverting to the Fair Work Ombudsman and to health and safety regulators.<\/p>\n

Denita Wawn, CEO of Master Builders Australia, said the building and construction industry still requires industry-specific regulation and oversight.<\/p>\n

\u201cThis is particularly important at this precarious time for our economy and people\u2019s standard of living when all Federal Government action should be about fighting inflation, protecting growth, and boosting productivity,\u201d Ms Wawn said.<\/p>\n

\u201cLeaving the construction sector without a specialist regulator will fail this test,\u201d she said.<\/p>\n

\u201cAbolishing the ABCC cannot be separated from the economy and economic management.<\/p>\n

\u201cMaking changes to the industrial relations system is one of the strongest economic levers that any government has at its disposal and abolishing the construction industry watchdog will have substantial negative flow on effects,\u201d Ms Wawn argued.<\/p>\n

Deputy Prime Minister Richard Marles said the changes are about ensuring workers are bound by equal laws.<\/p>\n

\u201cWhat there should be is the same laws across the entire industrial relations system applying to every single worker,\u201d he told ABC News.<\/p>\n

\u201cThe way in which this particular sector has been singled out under the ABCC was not fair.\u201d<\/p>\n<\/p><\/div>\n

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