The collapse of one of Sydney’s biggest project home builders, Beechwood Homes, could put further pressure on an already tight rental housing market, according to the Housing Industry Association.
Beechwood was placed in voluntary administration yesterday, which is expected to affect about 300 homeowners in Sydney, the Hunter, and the south coast.
Beechwood owes a total of $20m, made up of $10m in secured debts to a bank, and $10m in unsecured debts to its builders and contractors.
“Obviously you have a certain level of overheads if you are building 25 properties a week, which was the case until recently. But when you still have those overheads but are only building 12-15 homes a week, then that isn’t enough to keep the business going” said the administrator.
Rising rates have hit the building industry hard, with building approvals (the number of new homes being built) down by 5.7 per cent in March, as high rates stem consumer demand.