Shore Homes: Sad reason why Sunshine Coast home building company has gone into liquidation

A residential home builder has gone into liquidation and is banned from completing unfinished houses after its licence was suspended for failing to disclose financial problems.

Shore Homes based on Queensland's Sunshine Coast went into liquidation on Tuesday, less than four years after being registered during an era of $25,000 Covid home building grants.

The Queensland Building and Construction Commission confirmed its licence was cancelled on June 27.

'The company, which had its builder – low rise and carpentry licence classes cancelled, is prohibited from carrying out any building work, including completing any work already in progress,' a spokeswoman told Daily Mail Australia.

Queensland law requires building companies to disclose if they have trouble servicing debt or having sufficient cash flow, under rules known as 'minimum financial requirements'. 

'QBCC licensees must always meet their MFR, including having sufficient assets and capital to perform the amount of work permissible in their licence category,' the spokeswoman said.

Any residential building work, including small renovations worth more than $3,300, must be insured through the Queensland Home Warranty Scheme.

Shore Homes Pty Ltd was registered in October 2020, just four months after former prime minister Scott Morrison's government unveiled a HomeBuilder program which handed out $25,000 grants to owner-occupier home owners to either build a new house or renovate an existing property.

This led to a surge in new home builders, with construction companies now making up a quarter of all insolvencies in the Australian Securities and Investments Commission data.

Daily Mail Australia contacted liquidator Kaily Chua, the Brisbane director of insolvency firm Rodgers Reidy but she declined to comment.

Shore Homes has taken down its website, removed its Instagram and Facebook pages and disconnected its mobile number. 

'Home owners in Queensland who are affected by the liquidation of residential building and construction companies such as Shore Homes can seek assistance through Australia’s most accessible home warranty scheme,' a QBCC spokesperson said.

Matthew Caddy, a Melbourne-based partner with insolvency firm McGrathNicol, said the former government's HomeBuilder program had created artificial demand for house building.

'You saw all the pressure in the home building market post Covid where the builders had gone out and signed up record numbers of forward contracts off the back of government grants and incentives for home buyers,' he told Daily Mail Australia. 

'Then those prices were fixed and then suddenly, the home builders were struggling to build those homes - they weren't getting built at a profit.'

This meant builders signing up lots of new customers were only able to survive if they had more money in the bank.

Struggling builders had encountered surging building material costs, causing them to make losses on fixed-price contracts.

'The stronger builders, the tier one builders, that have got deeper pockets and better liquidity can still perform well,' Mr Caddy said.

'The ones that you see become insolvent are the ones that aren't well capitalised and one project can catch them out materially.' 

Shore Homes has also been known as Zaia Property Group since July 2022.