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House builder bails out of Queensland

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  • House builder bails out of Queensland

    House builder bails out of Queensland

    Shannon Molloy | January 21, 2009 - 1:00PM

    Melbourne-based residential builder Simonds Homes has announced the immediate closure of its Queensland operation, blaming the worsening economy and a slump in demand.
    Dozens of contract workers, including estimators, draftsmen and sales staff, were today told to stay at home amid growing speculation the business had "gone under".
    However managing director Gary Simonds rejected suggestions of financial trouble and assured existing customers their homes would be built.
    Mr Simonds said the shock decision was based solely on dwindling demand for new homes and the forecast for continued economic uncertainty.
    Sales of new homes in Queensland dropped by 10.1 per cent in November, despite the $21,000 first-home buyers' grant the Federal Government is offering for new properties until June 30.
    The rest of the national company will continue to operate as normal, Mr Simonds said.
    "We have decided not to take anymore orders in Queensland and we are scaling back our business there because of economic times," Mr Simonds said.
    A small skeleton staff will complete work on the last of Simonds contracts in the south-east in the next six to nine months.
    "We will (also) be there to service the maintenance of the warranties for the periods we are obligated to," he said.
    Mr Simonds admitted he had considered withdrawing from Queensland for some time, but defended the short notice given to contract staff.
    "They would've been draftspeople ... estimators, sales people especially ... because we don't need (them) anymore."
    Queensland's economic outlook is unlikely to improve in the short term, Mr Simonds said, and the company may never return.
    Housing Minister Robert Schwarten said the Building Services Authority had contacted the company and been assured it was not entering into administration.
    "The company directors advised the BSA that they plans to complete all existing building contracts and honour ongoing contractual warranty obligations," Mr Schwarten said.
    Simonds Homes told the BSA its product did not suit the Queensland market, he said.

    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx