Construction firm Mahercorp has entered voluntary administration, adding to a growing tally of homebuilders facing financial difficulties amid rising cost pressures.
The construction of about 730 homes will be put on hold as Mahercorp, which is the parent company for builders Eight Homes and Urbanedge Homes, works with administrators.
The news comes in the wake of the collapse of construction firm Porter Davis, which left uninsured customers stranded and in need of government intervention.
However, in a statement to customers, Mahercorp chief executive Steve Maher made clear that the firm was not in the same position as Porter Davis.
"I want to emphasise that Mahercorp has not collapsed and is not in liquidation," Mr Maher said.
"My intention is to work with the administrator on a plan that I hope allows us to restructure the business, creating a more sustainable footing and to complete your home."
Mr Maher laid the blame on "skyrocketing" building and labour costs along with rising inflation and said that all builders were facing "unprecedented challenges".
"To ease the strain of these cost increases, for some months now we have been renegotiating our trading terms with our suppliers and insurers. Their support to date has helped us manage spiralling costs," Mr Maher said.
"Entering voluntary administration was the only option after being advised earlier this week that the insurer for our supplier of essential safety equipment, would no longer support our business."
Mahercorp has informed customers that construction on new homes will be put on hold for the five-week duration of the voluntary administration.
The company has operated in Victoria since 2002.
