One failed company owner called the current building industry conditions "the perfect storm". Photo / Getty Images
Many house builders have failed lately, unable to survive when New Zealand has a housing shortage.
Who called for their liquidation or receivership and who is owed money?
This is a 12-point list of the many businesses involved in the residential building sector which have gone under.
The failures show the huge stress the sector is under, with creditors going unpaid and owed many millions of dollars.
Many house builders have failed as consent applications dropped sharply, prices for land, labour and goods rose and people could not afford the high interest rates and were deterred by lack of access to finance.
Stats NZ said that in the year to January 2024, 36,453 residential dwellings were consented, down 26 per cent on the previous year.
This 12-point list is only a sample and contains more than 12 companies.
Companies are not listed in any particular order but all failed in the last two to three years.
Not all failures are contained within this 12-point list: it is a sample to show the scope of financial trouble besetting the sector.
This business boasted of high-end homes designed by architects with luxury finishes.
Director Mark Edwin Berryman of Grey Lynn called in Waterstone Insolvency this month, citing poor health, cashflow problems and spiralling cost rises.
In September 2020 in a promotional piece, Berryman featured as “not your typical builder with a ute, a dog and a radio tuned to a lad-rock station. After only 10 years in business, his construction company, Selah, which specialises in design for new builds and renovations, has more than 50 staff and he’s finishing his MBA thesis at Otago University on the housing crisis”.
He was selected in the Deloitte Fast 50 and was a finalist for Young New Zealander of the Year for his volunteer work for Habitat for Humanity since he was 15, building homes around Asia and Samoa, an advertisement for 10 Tauwaka Cres, Riverhead said.
Secured creditors are BNZ, Carters Building Supplies, Mico New Zealand, Kitchen Things, The Warehouse, two branches of Fletcher Building’s PlaceMakers, Hillside Building Supplies, Northern Forklifts, Applico, Metal Line Roofing, Matakana Building Centre, Town and Around Fence and Gate, Hi Qual Doors & Stairs, All About Developments, Fujifilm Business Innovation, Base Up Auckalnd and Chesters Plumbing and Bathroom Centre.
Two creditors called the Herald about Selah, expressing deep dissatisfaction about the liquidation, their prospects of getting paid and saying there were a number of unfinished homes in Auckland.
South Auckland house builder Compass Homes (Franklin) put up more than 200 new residences in Pōkeno but went into liquidation in early February. Unsecured creditors are owed $335,000 and Inland Revenue $181,000.
Grant Reynolds of Newmarket was appointed as liquidator. He is already the liquidator of a number of other Compass businesses.
Creditors expressed disappointment about the South Auckland builder, saying they were owed money and wanted to be paid. The company is owned by interests associated with Garry Shuttleworth, who said the builder was no longer trading.
“It’s the perfect storm,” Shuttleworth said of the current problems facing the industry.
Shuttleworth is also a director of this business, which he put into liquidation this month owing unsecured creditors $196,000.
Its failure has not been reported in the Herald until now.
Shuttleworth blamed the insolvency of a related company, the construction industry in general and “other economic conditions, including escalating building material costs, inflation and access to finance [that] had an impact on sales”.
Westpac, Fletcher Concrete and Infrastructure trading as Humes Pipeline Systems, Carpet Court, Inland Revenue, Spark and many others are named as creditors in the first report.
This insolvency caught RNZ National Morning Report presenter Ingrid Hipkiss and partner Jack Tarrant, who are creditors along with eight other parties for having homes under construction in Milford, Beach Haven, Hobsonville, Castor Bay, Mt Roskill, Massey, Rothesay Bay, Sunnyvale and Papakura.
Steve Khov and colleague Kieran Jones issued a long list of creditors, naming Inland Revenue, possibly employees, Fletcher Distribution and Tile Warehouse.
The company was only incorporated in 2017 and had its registered offices in Silverdale.
This business called in liquidators last March, blaming crippling costs for making fixed-price house-building contracts untenable and leaving others to build the homes. But whether creditors claiming $1.5 million from the insolvent business will see a cent is unknown.
M W Residential, trading as Stroud Homes Pukekohe, called in Whangārei’s Garry Whimp of Blacklock Rose to wind up the business.
James Stroud of Stroud Homes said contracts were struck to build nine homes: work was to start on three, some were finished except for final compliance and driveways, and three were under construction and needed finishing.
This business failed last January owing an estimated $417,000 after it made an unconditional offer - not even specifying it needed to get finance - on properties a lender then refused to fund.
The company, established five years ago, was forced to abandon the purchase but incurred fees on the ditched deal.
Pritesh Patel of Patel & Co wrote about the string of problems that resulted in the failure in his first report.
“[What] triggered the insolvency is the refusal of a lending institution to provide funding for an agreement to purchase a property, signed unconditional,” Patel noted.
To avoid such situations, most buyers who need loans make offers they make conditional on being able to get finance.
But JHIM failed to put that condition in its offer agreement.
This Auckland-based modular housing business was declared insolvent last May, hitting 11 clients who signed up for affordable new places.
This is the latest in a string of modular business failures, following Kiwi Modular Homes going under, owing Inland Revenue nearly $298,000.
Adam Botterill and Damien Grant of Waterstone were appointed receivers following liquidator Ben Francis, of Gerry Rea Partners, being appointed at the shareholders’ behest.
“It’s a very, very hard thing for these people to go through. There were some active projects - around two of those. There was at least one home nearing completion,” Botterrill said at the time.
One client contacted the Herald saying he had paid FirstBuild Homes more than $500,000 but didn’t have a home. He is devastated by the insolvency and wonders what rights he has to get materials for his new home, which are still with the business.
John Maxwell Phillips established this Christchurch firm to answer the demand in that growing city.
But a liquidator’s report out last May showed he accrued an unpaid tax bill of $298,000 and suffered staff, supply and profitability problems, so called in Thomas Rodewald of Tauranga insolvency specialist Rodewald Consulting.
Rodewald wrote that the company in voluntary liquidation had accrued that big IRD debt.
Before financial troubles, Phillips’ company said it could deliver complete houses from 25sq m cabins to four-bedroom places.
But Kiwi Modular Homes owed $197,000 in PAYE taxes, $82,000 in GST and got a small business loan from IRD of $17,000, according to a statement of affairs.
Trade creditors were owed an estimated $128,000. Secured creditors are owed a further $70,000 while employees are owed $15,000 in wages and holiday pay. Deposits received for homes total $91,000.
All up, creditors are estimated to be owed $367,000 - with little to offset those debts.
The financial failure of Auckland’s off-site residential builder was estimated at $5.2m, making it one of the largest collapses in the modular housing sector.
The first report on the Wairau Valley-headquartered company from liquidators Benjamin Francis and Simon Dalton of Gerry Rea Partners estimated a $5.2m deficit.
That also identified more than $2m in deposits paid by customers whose homes weren’t started. That money was also in the general trading account - so customers’ deposits couldn’t be identified.
The Herald highlighted the plight of some Podular customers, including Wellington doctors Kathryn Percival and David Pirotta, who estimated $500,000-plus losses. Podular was to build their modular home in its factory, then deliver it complete to their Marlborough Sounds property within months.
Unpaid taxes prompted Inland Revenue to go to court to have liquidators appointed to this North Shore house-building and finance business, in which a group of big-name national businesses registered an interest.
PwC’s Craig Sanson and Malcolm Hollis were appointed last June.
Businesses with security over the First companies are Carters Building Supplies, owned by billionaire Graeme Hart’s Rank Group, Fletcher Distribution trading as PlaceMakers, Riviera Hardware, trading as Mitre 10 Mega New Lynn, Yes Finance, with security over motor vehicles, and Merchant Finance.
Inland Revenue was owed $189,000 in GST, PAYE and other employee deductions. Unsecured creditors want $1.8m.
This was one of the sector’s largest failures, going under in 2022, with creditors claiming $55.7m. DDL originally stood for Delivering Dreams Ltd - but that became some people’s worst nightmare.
A territorial authority, roading and water utilities, real estate agents, a building materials supplier, concrete, civil engineering and consulting businesses are claiming money from the failed South Auckland housing developer.
Creditors of DDL Homes Ormiston and DDL Homes Ormiston 2020, beset by liquidations and receivership, were businesses involved in a 122-property Flat Bush scheme.
A schedule of creditors from liquidators Baker Tilly Staples Rodway Auckland showed 34 businesses want money.
Creditors named included Auckland Council, Auckland Transport and Watercare Services, lines business Vector, real estate agents, lawyers, Carters, Geolab of Pāpāmoa, Harmya Engineering Consultancy of Blockhouse Bay, Helen Mellsop Landspace Architect of Mount Albert, HSCNZ of St Lukes, Kardon Consultants of Devonport, Khar Consultants of Auckland, KTK Concrete Pumping of Hillpark in Auckland and NZ Civil Structure of East Tamaki.
This was one of New Zealand’s largest construction company insolvencies of 2023 and left about 300 creditors owed an estimated $14.9m.
McGrathNicol liquidators Andrew Grenfell and Conor McElhinney’s first report on a trio of insolvent Scarbro businesses contained a seven-page list of businesses and people wanting money.
It included local and international companies, a number associated with some of this country’s largest corporates, along with smaller entities: from a business owned by New Zealand’s richest man to sole traders specialising in finishing trades.
Interests including painters, electricians, retailers, hire businesses, lawyers, bathroom equipment suppliers, concrete specialists, crane companies, portaloo suppliers, joiners, office stationery retailers, waterproofers, recruitment specialists, scaffolders, container suppliers, a bank, a car parking company, kitchen, roofing, telco, accounting, landscaping, water, insurance, grouters, pest exterminators, floor suppliers, equipment hire, welders, bin suppliers, stair makers, air conditioners, power tool sellers, coffee suppliers, media, window and door manufacturers, plumbers, cleaners, other builders, aluminium suppliers, fabricators, insulation and concrete suppliers and appliance specialists are all named as wanting money.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
Jetstar's first planes to Sydney and Gold Coast have taken off from Hamilton this week.