Yet another collapse of an Australian home building company has left customers thousands of dollars out of pocket and despairing about whether their dream homes will ever be built.
Melbourne-based Varaich Homes, also known as Harcon Property Group Pty Ltd, collapsed into administration on September 18 leaving multiple clients with unfinished homes.
One client, Harpreet Singh, who signed a contract with the ‘premium custom home builder’ in 2021 for $457,000, told news.com.au he still needed more than $40,000 to complete his unfinished house.
The father-of-three, 39, said work started in June 2022 but he had struggled to get an explanation from the builder about why construction was subsequently delayed.
Mr Singh and his wife were working multiple jobs to try and pay off two mortgages and were dealt yet another blow when they discovered vandals had broken into the Lyndhurst property and left it in a disgusting state.
‘The fence surrounding it has been taken off and people were going in and having beers, using the toilet, I found a used condom on the master bedroom floor and there are a few other damages,’ he told the outlet.
Mr Singh said he faced the ‘very stressful’ prospect of having to take out a personal loan of more than $40,000 to finish the house.
Vijay Bhusal signed on with the company in August 2021 to build his home for $836,000.
Mallikharjuna Allanki said his double-storey home (pictured) in the Melbourne suburb of Keilor Downs remained incomplete despite signing a $731,000 contract with Varaich Homes in 2022
He said his family, including his wife and five-year-old daughter, has since lost more than $100,000 on the project after construction started in June 2022 but wasn’t delivered when it was due to be finished a year later.
‘The company repeatedly missed deadlines, starting construction six months later than agreed upon and failing to complete our homes even after the promised time frame,’ Mr Bhusal told the outlet.
‘Our houses remain unfinished, a constant reminder of our shattered dreams.’
Mr Bhusal estimates he will need another $200,000-$300,000 to complete his dream home, having already paid 90 per cent of the contract price.
He lamented the fact other homes near his plot built by ‘smaller builders’ were already finished and families had moved in.
Ms Bhusal also feared his unsecured property was under threat from vandals.
Yet another customer, Mallikharjuna Allanki, said his double-storey home in the Melbourne suburb of Keilor Downs, remained incomplete despite signing a $731,000 contract with Varaich Homes in 2022.
Mr Allanki, 42, alleged the company had repeatedly asked him to make payment for stages of the home’s construction before completion in breach of the contract’s terms and building regulations.
Melbourne client Vijay Bhusal estimated it will require another $200,000-$300,000 to complete his dream home, having already paid 90 per cent of the contract price
He said the lack of work on his build has caused part of the house frame to rot, possibly doubling his costs to complete the project.
Mr Allanki added that the company had not properly communicated about the delays in construction.
‘It’s a very big mess,’ he said.
Malcolm Howell from Jirsch Sutherland has been appointed by ASIC as the liquidator.
A spokesperson told Daily Mail Australia that it appears there are 21 incomplete homes as a result of the company’s collapse.
‘The team will be writing to creditors shortly, and will advise the homeowners on options available,’ they said in a statement.
‘As the insurance has now been cancelled by the VMIA (Victorian Managed Insurance Authority), the company is unable to continue with the construction of the homes.
‘One of the options available is to sell the contracts as a whole to an alternative builder.’
Varaich Homes has also been contacted for comment by Daily Mail Australia.
The demise of Varaich Homes follows a long line of Australian home builders that have gone bust since the Covid-19 pandemic.
Everything from the rising cost of raw materials, fixed price contracts signed during the Morrison government’s HomeBuilder grants scheme, and the ongoing war between Russia and Ukraine have been blamed for the series of insolvencies.
Earlier this month Victorian-based construction company Grandeur Homes Pty Ltd fell into external administration, leaving more than 100 families with unfinished homes (pictured)
Earlier this month Victorian-based construction company Grandeur Homes Pty Ltd entered administration, 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 went under in South Australia and PPS Qld and PPS Commercial collapsed in Queensland.
About 600 companies in Australia’s construction sector have gone bust since July, and nearly 3,000 in the last financial year, leaving thousands of clients and contractors out of pocket.
The crisis comes as the Albanese government seeks to meet Australia’s housing shortage with a target of 1.2million homes over the next five years.
However, some housing industry experts think the multiple problems in the industry will see Australia fall short of the target by as many as 260,000 homes.