Australia has a housing shortage. So why are Bathla and other home builders collapsing?

Across Australia, thousands of people are waiting to find out if their homes will be built, after several separate construction company collapses.

By far the biggest of those recent collapses has been the Bathla Group , a Sydney developer that’s been one of Australia’s largest affordable home builders.

Owing about A$3.4 billion to private lenders, Bathla’s voluntary administration has thrown the construction of more than 2,000 apartments into limbo, while jeopardising a further pipeline of 14,000 homes.

More builders going bust since COVID Figures released last week show 3,472 Australian construction companies went bust in the financial year to June 30 2026: one in four (24.5%) of all company insolvencies nationally.

The only good news? The number of builder insolvencies was slightly down for the first time since a steep rise began during COVID.

However, our research has found insolvencies in the construction sector remain consistently higher than in other industries.

That makes it harder to build the housing we need.

Australia is falling further behind in meeting the federal government’s 1.2 million new homes goal by 2029.

Official forecasts released last month indicate the target won’t be met until December 2030.

New South Wales – Australia’s largest housing market – may not meet its targets until March 2032, three years late on a five-year target.

There’s no shortage of demand for new homes.

What we lack is a construction system capable of delivering them reliably, sustainably and at scale.

Bathla’s financial ripple effects On Monday, more than 200 of Bathla’s 350 staff were stood down as the administrator continues to work on a rescue deal.

While most of its building projects are in Western Sydney , Bathla’s collapse is being watched around Australia because of its wider financial impacts.