Australia has a housing shortage. So why are Bathla and other home builders collapsing?
Until we do more to tackle the causes of high construction company insolvencies, we’ll keep seeing more headlines about builders going bust.
Australia is experiencing a housing shortage, yet several home builders, including the Sydney-based Bathla Group, are collapsing. Bathla, one of Australia's largest affordable home builders, owes A$3.4 billion to private lenders and has ceased construction on over 2,000 apartments, jeopardising an additional 14,000 homes. Construction company failures surged to 3,472 in the financial year ending June 2026, a 24.5% increase from previous years.
Despite a slight decrease, the construction sector still faces higher insolvencies compared to other industries. Australia is lagging in meeting its goal of building 1.2 million new homes by 2029, with New South Wales, the country's largest housing market, not on track to meet its targets until 2032. The collapse of Bathla has significant financial ripple effects, as the company had taken around 1,000 deposits from buyers for homes now stalled.
The construction industry is grappling with higher costs, thinner profit margins, falling house prices, and competition for skilled tradespeople, exacerbating the insolvency crisis. Structural barriers, such as restrictive land-use regulation, slow approvals, and complex regulations, have also hindered the construction of more homes.
While some builders are diversifying into infrastructure and commercial projects, housing remains the riskiest option due to current market conditions, suggesting more builders may shift away from housing construction.
Written by urgent.news from The Conversation AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
