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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 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.
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.
“I think some action is necessary to prevent this event becoming a contagion that impacts upon the whole industry.
“We can least afford that right now. There’s been enough bad news in the sector,” Forrest said, pointing to surging construction and material costs, labour shortages and a drop in property sales.
Bathla’s collapse heaped pressure on the Minns government’s ambitious housing agenda, which is struggling partly due to concerns about the feasibility of apartment construction in western Sydney.
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, who has expressed his reluctance at using taxpayer funds to rescue a private developer, said government officials would be watching the administration process this week.
He acknowledged the company’s “substantial [land] holdings” but said on Saturday that government officials 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.
“Another financier could step in, some other developer … may step up, but it would be putting the cart before the horse to be speculating on that right now. It’s going to take time,” Minns said.
Forrest, who is a former Labor chief-of-staff, said 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.
“It seems like an appalling shame in the context of the housing supply crisis that we would have homes that were 90 per cent built, and not completed,” he said.
“If we find subcontractors are not being paid and tradies are not being paid, that flows onto every other project because that potentially sends that contractor or tradie broke. That then flows onto the rest of the industry and suddenly a shortage becomes an even greater shortage.
“That’s why there is a case for the government considering a proactive stance in assisting in this particular meltdown.”
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.
However, he said Conquest 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”.
“This is about rescuing housing,” Akkawi said on Saturday.
Akkawi agreed taxpayer funds should not be used to bail out private developers, but he said the state government could “absolutely” be part of the solution to the problems arising from Bathla’s woes.
“If capable developers step in, the government can fast-track approvals across all the authorities and utilities to get these projects moving again, especially for the families who are waiting to move into their homes.”
Urban Development Institute of Australia NSW chief executive Stuart Ayres, a former Liberal minister, suggested the state’s building watchdog could intervene to aid the completion of homes.
“Where the NSW Building Commissioner [James Sherrard] can play a role in giving confidence to the market to take on existing or under-construction products, that could be incredibly useful for both the administrator and for people who are hoping that their homes still get completed,” Ayres said.
Akkawi said the developer’s collapse was “a material hit to Sydney’s housing delivery numbers at the worst possible time.
“The biggest risk is that all that housing, completed, unfinished and future sits dormant for years, caught up in process, while Sydney is already facing a housing shortage, and the damage flows downstream.
“Subcontractors, suppliers – there’s a contagion effect through the whole industry, and we already have a trade shortage. We need to keep the viable projects moving rather than letting housing supply become collateral damage.”
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 said Bathla’s collapse was a reminder of the challenges the industry faced in building apartments, particularly in western Sydney, where feasibility was stalling completions.
“Bathla is an example of just how challenging that product actually is,” Ayres said.
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, but Scully said the government was “determined to get there”.
“We are seeing an increase in the number of lodgements, approvals, commencements, and homes under construction, and a decrease … in the number of projects that were approved but had not commenced,” Scully told the hearing last Monday.
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