On Thursday morning, executives from Australia’s largest homebuilder, Metricon, will meet with the Victorian treasurer, Tim Pallas, after the company denied rumors it was on the verge of collapse.
Metricon holds $195m worth of contracts with the state government, including a five-year deal to build and maintain public housing as part of Victoria’s ambitious “big build” infrastructure program.
Sources said Metricon requested the meeting late last week, Still, it was pushed back several days after the unexpected death this week of the company’s founder and chief executive, Mario Biasin.
If the company collapsed, insolvency practitioners from KordaMentha would likely be appointed administrators.
The chief executive of Master Builders Victoria (MBV), Rebecca Casson, said the industry association was “aware there are rumors about the future of Metricon”.
“We are in close contact with them, and we are very optimistic about the company’s future,” she said.
“It is incumbent on everyone not to join in with the rumor narrative, especially during this incredibly challenging time.
“We also encourage Metricon’s clients and suppliers to be kind and patient with them as they navigate these unprecedented challenges.”
On Wednesday, Metricon’s acting chief executive, Peter Langfelder, said there was “simply no basis to these rumors”.
“Metricon is a strong, viable business without any solvency problem,” he said. “The biggest challenge Australia faces is to get more homes built for more Australian families, and as the biggest home builder in the country, we are the ones to deliver.”
He asked for “patience and consideration from our customers while our executives and staff deal with their loss” following Biasin’s death.
The Victorian government was contacted for comment.
Building industry sources said Metricon and other large-scale homebuilders reaped large amounts of work due to the federal government’s homebuilder program, which was designed to prop up the industry during the Covid pandemic.
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However, the large volume of work has exposed builders to dramatic inflation in the price of materials and continuing delays in obtaining products due to blockages in global and local supply chains.
The price of timber rose by more than 25% in the year to March, while steel products were up almost 50% over the same period, MBV said.
Builders have been pushing for changing Victorian law to allow them to pass on increased materials costs to customers, but the Andrews government has rejected this.
Metricon’s projects include a contract for its Everyone division to build 115 homes as part of Victoria’s Social Housing Pipeline Project, which was due to be completed last year.
As part of a $2.6bn package designed to respond to the housing crisis, the Social Housing Pipeline Project was expanded in March to 913 homes. It is not clear whether Metricon was part of this expansion.
Through Everyone, Metricon is also involved in building public housing for the Queensland and New South Wales state governments.
It is the largest homebuilder in Australia, with 6,052 homes under construction in 2020-21.
So far this financial year, it has undertaken 1,006 home construction jobs in Queensland alone, worth more than $400m, according to Queensland Building and Construction Commission records.
It completed 1,563 jobs in Queensland in 2020-21, more than double the 668 it built in the previous year.
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