Another Australian home building company has gone bust, leaving customers out thousands of dollars and wondering desperately whether their dream home will ever be built.
Melbourne-based Varaich Homes, also known as Harcon Property Group Pty Ltd, went into administration on September 18, leaving several customers with unfinished homes.
One client, Harpreet Singh, who signed a contract with the “premium custom home builder” in 2021 for $457,000, said news.com.au He still needed more than $40,000 to finish his unfinished house.
The 39-year-old father of three said work began in June 2022 but he struggled to get an explanation from the contractor as to why construction was subsequently delayed.
Mr Singh and his wife were working multiple jobs to pay off two mortgages and were dealt a further blow when they discovered vandals had broken into the Lyndhurst property and left it in a horrific state.
“The fence around it was taken down and people went in, had a beer and used the toilet. I found a used condom on the floor of the master bedroom and there’s some other damage,” he told the newspaper.
Mr Singh said he was faced with the “very stressful” prospect of having to take out a personal loan of more than $40,000 to complete the house.
Vijay Bhusal signed with the company in August 2021 to build his home for $836,000.
Mallikharjuna Allanki said his two-storey home (pictured) in the Melbourne suburb of Keilor Downs remained unfinished despite signing a $731,000 contract with Varaich Homes in 2022
He said his family, including his wife and 5-year-old daughter, has since lost more than $100,000 on the project after construction began in June 2022 but the project was still unfinished when it was scheduled to be completed a year later.
“The company repeatedly missed the deadline. They started construction six months later than the agreed deadline and could not deliver our houses even after the promised deadline,” Mr Bhusal told the newspaper.
“Our homes remain unfinished, a constant reminder of our shattered dreams.”
Mr. Bhusal estimates he will need another $200,000 to $300,000 to complete his dream home. He has already paid 90 percent of the contract price.
He lamented that other houses near his plot, built by “smaller builders,” were already finished and families had already moved in.
Mrs Bhusal also feared that his unsecured properties were under threat from vandals.
Another client, Mallikharjuna Allanki, said his two-storey home in the Melbourne suburb of Keilor Downs was still unfinished despite signing a $731,000 contract with Varaich Homes in 2022.
Mr Allanki said the lack of work on his building has caused part of the house to rot, potentially doubling the cost of completing the project.
Melbourne client Vijay Bhusal estimates he will need another $200,000-$300,000 to complete his dream home, having already paid 90 percent of the contract price
He added that the company had not communicated well about the construction delays.
“It’s a complete mess,” he said.
Malcolm Howell of Jirsch Sutherland has been appointed as liquidator by ASIC.
A spokesperson told Daily Mail Australia there are 21 unfinished homes as a result of the company’s collapse.
“The team will shortly be writing a letter to creditors and advising homeowners on the options available,” the statement said.
‘Because the insurance has now been cancelled by the VMIA (Victorian Managed Insurance Authority), the company cannot continue to build the houses.
‘One of the options is to sell the contracts as a whole to an alternative builder.’
Daily Mail Australia has also reached out to Varaich Homes for comment.
The demise of Varaich Homes follows a long line of Australian homebuilders that have gone bust since the Covid-19 pandemic.
The rising cost of raw materials, the fixed price contracts signed during the Morrison government’s HomeBuilder subsidy program and the ongoing war between Russia and Ukraine are all blamed for the string of bankruptcies.
Earlier this month, Victoria-based construction company Grandeur Homes Pty Ltd entered bankruptcy, leaving more than 100 families with unfinished homes (pictured)
Earlier this month, Victoria-based construction company Grandeur Homes Pty Ltd went bust, leaving more than 100 families with unfinished homes.
In August, NSW Builders Adroit Constructions Pty Ltd, Maximus Builders Pty Ltd, Maxim Builders Pty Ltd and Maxus Builders Pty Ltd were liquidated, while Adelaide Designer Homes in South Australia went into administration and PPS Qld and PPS Commercial in Queensland went into administration.
Since July, around 600 companies in the Australian construction industry have gone bust, and almost 3,000 in the last financial year, leaving thousands of clients and contractors in dire straits.
The crisis comes as the Albanian government seeks to address Australia’s housing shortage, aiming to build 1.2 million homes over the next five years.
However, some housing industry experts believe the sector’s many problems will mean Australia misses its target of as many as 260,000 homes.