Queensland builder collapses with $30 million in debt as lobby groups calls for government help for sector

The Queensland branch of the Housing Industry Association is calling for the State Government to look at cutting property taxes, stamp duty and infrastructure charges, after the collapse of another large building company in the state’s far north.

Cairns-based building and construction company Glenwood Homes was placed in the hands of receivers from BRI Ferrier last week after collapsing with $30 million of debt, most of which is owed to the Commonwealth Bank and subcontractors. More than 20 staff have lost their jobs as part of the collapse.

The company’s owner, Udo Jattke, has told the Cairns Post that he will work with the receivers to try and finish construction of more than 40 homes on the company’s books.

Peter Collins, who runs the Cairns branch of the Housing Industry Association, says the collapse is another blow to the town’s construction sector, which was rocked in mid-2009 by the collapse of local identity and former rich list member, Tom Headley.

“It’s another blow to the industry. The Cairns house and residential building market has been bouncing along the bottom for some time now and it’s claimed what it really an iconic company in Cairns.”

Collins says Cairns has struggled to recover from the GFC, which led to a drop in tourist numbers and population growth. This has in turn led to an increase in unemployment and a drop in demand for new homes.

Compounding all of that bad economic news has been poor weather which has lashed the far north for the past six months.

“When someone such as Glenwood is already battling tough trading conditions, then the weather can really effect cashflow,” Collins says.

“When you can’t move on to the next stage of construction, you can’t move onto the next payment.”

The HIA will take part in a Government-sponsored property sector forum in Brisbane on April 12 to push for measures to help the stricken building sector.

“What we would like to see is some tangible, immediate action that can help free up the impediments to housing construction that currently exist,” Collins says.

The HIA particularly wants the Government to “rein in” regulatory costs it says are blowing out the costs of new home construction, including stamp duty, infrastructure charges.

It would also like to see the Government encourage lenders to improve their support for the sector and examine the provision of new first home owner’s grants to spark activity.