The collapse of the Bathla Group has left thousands of homebuyers in limbo and raised questions about how governments will meet housing targets, as the crisis casts a spotlight on broader problems in Australia's construction sector.
Donna Jones, a 63-year-old disability support worker, bought a one-bedroom unit off-the-plan from Bathla, expecting it to be part of her retirement plan. After almost a year of delays, she learned through the media that the developer, one of New South Wales's largest, was not only broke but on the verge of liquidation. "I'm terrified that I'm going to lose my deposit," Jones says. "I've worked all my life. I was a single mother. This was my retirement."
Administration and Debt
On 25 August, Bathla went into voluntary administration, weighed down by almost $3.6bn in debt. The developer's size has turned its collapse into a major news story, but thousands of other building companies have gone bust in the past year, some of which had sold apartments with defects.
The national housing accord, an agreement to build 1.2m new homes across the country, is forecast to miss its original deadline of the end of 2029 by at least another year. Since the accord came into effect in 2024, more than 7,000 construction companies have gone bust, according to data filed with the corporate regulator. There were 3,472 insolvencies last financial year, down slightly from 3,596 in 2024-2025.
"For me it goes beyond one developer and raises the bigger question of how the housing pipeline we are planning for is actually going to be financed and delivered," says Prof Nicky Morrison, a planning expert at Western Sydney University. "Planning targets are one thing, but we need to think about finance, infrastructure, construction and genuinely affordable housing alongside them."
Buyers Left in Limbo
Bathla, established in Sydney in 1997, has expanded into regional NSW, South Australia and Victoria, with 20,000 apartments and 7,000 "dwellings" in the works, according to its website. The insolvency advisory Teneo, appointed as administrator, said its immediate priorities included finishing the estimated 2,000-2,500 homes on which construction had already begun, and it was not in a position to refund anyone's deposits.
Jones, who paid a $54,500 deposit for her Kembla Grange apartment in September last year, says she has heard "absolutely nothing" from Bathla or Teneo. "Had I known it was going to take 12 months, I would have invested my money instead. I haven't, and I've made no interest on it," she says.
After the NSW government knocked back a request for a bailout, Teneo warned it would be forced to liquidate Bathla if it didn't get enough cash in the short term. There was no money to pay subcontractors or Bathla staff, some of whom had gone without wages for eight weeks. On Thursday afternoon, administrator Stephen Longley said enough cash had been scraped together to make partial payments to staff. At a creditors meeting on Friday, administrators said about $40m in wages and superannuation was still owing to workers, along with debts of $3.4bn to creditors. Teneo said it was in discussion with five lenders about funding, but it would not be able to keep parts of the business open unless that funding was secured by Monday, according to the ABC.
Volatile Industry
Property lawyer Renee Roumanos says she's often contacted by homebuyers in similar predicaments. "It's very common, unfortunately … I probably hear this monthly," she says. Regarding Bathla, Roumanos says the company went too far with its "high volume, low profit" model, ending up unable to pay for its developments. "Now, when you're doing such high volumes and you're not making money and you keep borrowing money, you're on the back foot already," she says.
Roumanos says the entire building industry is "already in a really volatile state" due to increased labour and materials costs. "We've seen higher numbers of companies going into liquidation and voluntary administration because they can't keep up with the finances and the debt," she says.
Residential construction is exhibiting a higher level of stress than non-residential, according to analysis by CreditorWatch. This is partly because there are more smaller businesses and sole traders operating in the residential space, who have tighter margins and are more vulnerable to economic pressures. Additionally, the commercial construction sector has been buoyed by huge demand for datacentres, which may drive up material and labour costs for residential builders.
Cameron Kusher, an independent property economist, says there has been a "massive" increase in the cost of constructing new housing. Higher interest rates have also resulted in traditional lenders being wary of financing developers, leading them in many cases to seek riskier forms of credit on the private market.
Jones says the only updates she gets come from reading the news or talking to people at the construction site. "I want them to tell me my unit will be fixed, it will be finished, and I can move in."
