Karen Scarlett had been eagerly waiting to move into her dream home that’s been under construction with Adelaide-based builder, Qattro, for three years.
Now she faces the idea of giving it up all together to buy another home, which could cost her $150,000 more than the first house, or continue renting.
“When you’re on a fixed income (like) I’ve retired now, it’s not easy to find that money,” her husband Colin Scarlett said.
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The couple paid a $70,000 deposit before the COVID-19 pandemic for a home in Underdale that was meant to be completed within 12 months.
Three years on, the home is three-quarters finished, and they’ve paid thousands extra on rent which they had not budgeted for when Colin retired.
Qattro announced it was entering voluntary administration earlier this week, leaving 200 customers with unfinished homes and owing $4.5 million to unsecured creditors.
Managing director Bradley Jansen said the company could not absorb material cost increases when many customers were on fixed price contracts signed before the pandemic.
Qattro was the builder for 16 developments, including Fletcher’s Slip at New Port and Dock One at Port Adelaide.
It is at least the third South Australian building company that’s collapsed this year, and one of 1709 entering administration over the last 12 months nationally.
Now that Qattro’s gone into voluntary administration, customers can access building indemnity insurance, which is compulsory for all new home builds in South Australia.
But the insurance may not cover the entire remaining cost of construction — and there are still trade supply issues.
“It’s so vague at the moment where we could end up,” Colin said.
Developer Mark Johnson said his company selected Qattro for the housing development in Underdale because of the company’s good history of similar builds.
The Underdale development was meant to be his last project to financially prepare him for retirement.
Johnson said his company was now “just hanging on” by a small thread because he will continue paying high-interest rates until the homes are complete.
“It’s quite dire. I feel a bit like (I’m) in quicksand. I’m just not sure, I’m just trying to hang on,” he said.
“I’m not angry at Qattro, I feel sorry for them as well. A lot of government (housing) stimulation just made things worse. We need more trades and people to build.“
Subcontractor Karim Hrynkiw has been working on Qattro’s Dock One development in Port Adelaide.
His concerns about the builder’s finances grew over the past few months because they would at times be late for payments.
“When we contact them about the bills we’ve let go, no messages, no replies, nothing whatsoever, so we’ve been put out of pocket $60,000-80,000,” Hrynkiw said.
South Australian Premier Peter Malinauskas said he wasn’t concerned about more builders entering liquidation because the worst of the building industry’s issues had passed.
“South Australia has been performing far better than other jurisdictions when it comes to the number of builders impacted or going into administration,” Malinauskas said.
He said the state government was hoping to establish a hotline for Qattro customers to call for assistance.
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