It seems almost weekly that news breaks of another building company collapsing in Australia leaving a trail of shocked and devastated clients and creditors.

As of June, ASIC data shows that 2023 construction companies have gone into liquidation since mid-2021. Collectively these companies had billions of dollars of home construction projects on their books.

The latest firm to suffer this fate is Keysborough-based Red Bluff Homes which went into liquidation on Thursday 22 June.

This time the news was personal for KR Peters Director Peter Nicolls who has engaged Red Bluff Homes for development projects for more than 10 years.

The company was constructing four townhouses for Mr Nicolls in Boronia when it went under.

The project has now stalled at the frame stage as Mr Nicolls contemplates the complicated journey ahead to get the townhouses finished.

Mr Nicolls said the collapse had left him with feelings of "emptiness and sadness".

He is keen to share his experience as the victim of a building company collapse as a warning to others embarking on a new home or development building journey.

Mr Nicolls signed a fixed price contact to build four townhouses with Red Bluff Homes in 2021.

He said it took Red Bluff 12 months to progress the project from slab stage to frame stage, where it is currently stalled.

In the meantime, framing costs skyrocketed, along with most other trades associated with the domestic building industry, with wages for framers rising from $450/$500 a day to $700 a day according to Mr Nicolls.

"They were saying to me they couldn't get trades like framers and brick layers because they are so in demand.," he explained.

Acknowledging the rising cost of construction, Mr Nicolls agreed to make an extra $44,000 payment when the frames were completed, to support the builder from collapsing.

On June 2 two frames passed inspection and two frames failed inspection.

Mr Nicolls said he knew Red Bluff Homes was in trouble "two days before the official announcement when I noticed scaffolding had been removed from all four townhouses."

This is the first time in his 48 year property career that Mr Nicolls has had a project caught up in a building company collapse.

Liquidators from PKF Melbourne have been appointed to manage Red Bluff's remaining projects and debts.

Mr Nicolls hopes warranty insurance will cover some of the costs he faces in getting the townhouses back on track.

"Now I need to find an independent building inspector to assess the frames, find a new builder and renegotiate the contact, negotiate with a building surveyor to reinspect the property and change the name of the licensed builder and I also have to go back to the bank and ask for more money and their support.

"Time is of the essence to get all this done because the frames are exposed to the weather at the moment. I need to get them covered and locked up so they aren't damaged."

He calculates the extra steps he now has to take will add 25 to 30 per cent to the cost of the four townhouse project.

"I feel sad that it has come to this. Red Bluff could have said to me 'we're in big trouble' and we could have worked together to see what other action could have been taken."

Mr Nicolls cautioned that signs that a builder may be in trouble include:

* Demand for payments before their due dates

* Abnormal delays between stages

* Tradies not returning to a site

* Requests for money above the fixed price contact

* Restricted communication making it difficult to contact your builder

Mr Nicolls said Red Bluff Homes won't be the last building company in Victoria to go into liquidation and there will be "more suffering to come".

"Everyone knows someone caught in this situation. It is becoming like a disease. There are good home builders out there but obviously there are also a lot who are suffering," he said.

"I won't cry over what has happened. I will move on get these homes finished. I've got to complete the task I've started."