The NSW government is facing urgent calls to intervene and ensure the completion of unbuilt homes following the collapse of a major Sydney developer, amid growing concerns of a “contagion” effect across the state’s housing sector.
Bathla Group Collapse Leaves Hundreds of Buyers in Limbo
Bathla Group entered voluntary administration last Monday, owing debts of more than $3.3 billion. The company’s collapse plunged hundreds of home buyers into limbo over dozens of residential developments, mostly in Sydney’s fast-growing outer suburbs and in the Illawarra region.
Lawyers for administrators Teneo told a Supreme Court hearing on Thursday that Bathla was juggling about 220 projects when they were called in, and roughly 45 of those were still under construction on sites such as Box Hill in Sydney’s outer north-west.
Industry Warnings Over Housing Supply Pipeline Contagion
Urban Taskforce developer lobby chief executive Tom Forrest said unfinished homes where buyers had already paid their deposit – although representing a minority of Bathla’s projects – risked “punching a giant hole in the housing supply pipeline” while worsening costs and delays. According to Forrest, some action is necessary to prevent this event becoming a contagion that impacts upon the whole industry amid surging construction and material costs, labour shortages and a drop in property sales.
Forrest suggested the government could step in as a facilitator, alongside the administrator, to secure a development or construction partner to deliver those unfinished homes where deposits had been paid and construction had substantially progressed, noting it seemed like an appalling shame in the context of the housing supply crisis to have homes that were 90 per cent built and not completed.
Minns Government Position on Financial Support and Intervention
The NSW government knocked back a request from Teneo for financial support last week, and staff at the developer were stood down without pay on Friday. Premier Chris Minns expressed his reluctance at using taxpayer funds to rescue a private developer, stating that government officials would be watching the administration process this week while noting they did not yet have a clear view of Bathla’s very complicated set of financial arrangements.
“I’m not going to close the door on ensuring that contractors, and mums and dads who are waiting to move into their homes, aren’t helped by their government, but there are many ways to do that,” Premier Minns said, adding that another financier or another developer might step up over time.
Alternative Industry Solutions and Developer Readiness
Michael Akkawi, who is chief executive of Sydney developer Conquest, said the company had been approached by “half a dozen or so lenders” to take on Bathla projects a year ago, but had declined, yet would be “ready, willing and able” to work with the government to finish homes provided the projects make economic sense and have a viable pathway to completion. Akkawi agreed taxpayer funds should not be used to bail out private developers, but argued the state government could fast-track approvals across all the authorities and utilities to get these projects moving again.
Urban Development Institute of Australia NSW chief executive Stuart Ayres suggested the state’s building watchdog could intervene to aid the completion of homes, noting the NSW Building Commissioner, James Sherrard, could play a role in giving confidence to the market to take on existing or under-construction products.
Broader Housing Targets and Western Sydney Feasibility
As of July, NSW was tracking about 40 per cent behind the rate required to meet the Minns government’s commitment to build 377,000 homes by mid-2029 under the National Housing Accord. Ayres noted that Bathla’s collapse was a reminder of the challenges the industry faced in building apartments, particularly in western Sydney, where feasibility was stalling completions.
Planning Minister Paul Scully told a budget estimates hearing last week about 35,000 homes were built in NSW in 2025-26, and 50,000 new dwellings were expected to be finished this financial year. Those figures were well short of the 75,000 new homes needed each year for NSW to meet its five-year target, though Scully said the government was determined to get there and was seeing an increase in lodgements, approvals, commencements, and homes under construction.
Frequently Asked Questions
What caused the collapse of Bathla Group?
Bathla Group entered voluntary administration owing debts of more than $3.3 billion, amid a sector facing surging construction and material costs, labour shortages and a drop in property sales.
How many projects were affected by the administration?
Lawyers for administrators Teneo told a Supreme Court hearing that Bathla was juggling about 220 projects when they were called in, and roughly 45 of those were still under construction.
Is the NSW government providing a bailout?
The NSW government knocked back a request from Teneo for financial support, and Premier Chris Minns expressed his reluctance at using taxpayer funds to rescue a private developer, while stating officials would watch the administration process.
What happens to buyers with unbuilt homes?
Options remain open while administrators and industry figures discuss potential solutions, such as capable developers stepping in and the government fast-tracking approvals across authorities and utilities.
Did you know? As of July, NSW was tracking about 40 per cent behind the rate required to meet the Minns government’s commitment to build 377,000 homes by mid-2029 under the National Housing Accord.
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