Prime Minister Anthony Albanese took to social media last Monday to celebrate new housing data he declared Australians \u201creally do need to see\u201d.<\/p>\n
He told the nation a report had shown his government\u2019s changes to \u201cmake housing fairer are working\u201d, citing less competition in the market for first home buyers.<\/p>\n
\u201cAnd importantly, more investors are taking out loans to build new homes than ever before,\u201d Mr Albanese said.<\/p>\n
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MORE: Every Aus suburb named in home price shock <\/a><\/p>\n \u201cWith a 27 per cent increase in loans for new builds,\u201d he said, \u201cwe\u2019re fixing a broken housing system.\u201d<\/p>\n The catch was, as pointed out in a community note added to his video on X, recent figures also show dwelling commencements were down 11.2 per cent in the month to March.<\/p>\n Australian construction firms are failing at alarming rates while the nation lags almost 87,000 approvals behind an ambitious target for new homes meant to ease the housing crisis, another set of fresh data reveals.<\/p>\n MORE:\u2018Hard\u2019: Horror spike gives RBA no choice<\/a><\/p>\n Analysis of home construction data for homeloanrates.com.au by Primara Research<\/a>, released to news.com.au, shows the county was well behind the 480,000 dwellings needed to be approved to stay on track for the 1.2 million home target over the first two years of the National Housing Accord. <\/p>\n Only 393,193 dwellings have been approved, a shortfall of 86,807, while NSW alone accounts for more than half of that gap.<\/p>\n NSW has completed just under 60 per cent of dwellings it was assigned under the scheme, meaning it was more than 50,000 homes behind schedule. <\/p>\n Primara found the state has approved 6.13 dwellings per 1000 residents, against a national average of 7.52, the lowest rate of any major state.<\/p>\n \u201cNSW is behind at every stage of this pipeline, and it gets worse the further you go,\u201d Peter Drennan, head of research and data at Primara Research, said. <\/p>\n \u201cThe state is meeting a little over two thirds of its approvals target and barely three fifths of its completions target.\u201d<\/p>\n \u2018This is massive\u2019<\/p>\n The mammoth task was magnified this week when major Sydney home builder Bathla Group collapsed into voluntary administration with debts of more than $3 billion.<\/p>\n Bathla stated on its website it had 22,000 apartments and 5000 homes in the construction pipeline across various sites in Sydney and beyond.<\/p>\n Bathla executives partially blamed controversial new tax settings for more uncertainty in the market, and cited \u201csignificant increases in construction costs\u201d for its financial woes.<\/p>\n Mr Drennan said Bathla\u2019s pipeline alone accounted for 29 per cent of a full year of NSW\u2019s approvals in annualised form. <\/p>\n \u201cThat\u2019s a meaningful share of the state\u2019s housing pipeline now sitting in administrators\u2019 hands,\u201d he said.<\/p>\n Separate business data shows construction companies made up 27 per cent of total firms placed into external administration in the nine months to March 2024.<\/p>\n In the 2025-2026 financial year, NSW alone lost 1522 construction companies including prominent players like Beechwood Homes, Novati Constructions and Built Lifestyles.<\/p>\n Arjun Paliwal, founder and chief executive of InvestorKit Group, said the collapse of a firm like Bathla was hugely significant.<\/p>\n \u201cFirstly, we\u2019re already behind,\u201d he said. <\/p>\n \u201cAnd then on top of that, this isn\u2019t a major luxury builder. This is an affordable volume builder. <\/p>\n \u201cSo if an affordable volume builder goes under like that \u2026 this isn\u2019t an eastern suburbs luxury (firm) that had three projects a year. This is massive.\u201d<\/p>\n Taxes \u2018inextricably linked\u2019 to supply<\/p>\n Tom Devitt, the senior economist at the Housing Industry Association (HIA), said the housing target shortfall was gaping even before the tumultuous economic conditions seen in 2026.<\/p>\n \u201cWe weren\u2019t forecasting virtually any state or territory to be meeting its housing targets,\u201d he said.<\/p>\n \u201cOur forecasts were basically around a million (of the 1.2 million target), so almost a 20 per cent shortfall that we were forecasting this year.<\/p>\n \u201cGiven the fact that we\u2019ve had three interest rate hikes and fuel prices go through the roof and some negative announcements out of the federal budget around \u2026 investors, that has softened our forecasts for this year and next year a little bit.\u201d<\/p>\n Mr Devitt noted the federal government conceded in its May budget the recent changes to property investments tax settings would lead to 35,000 less homes built.<\/p>\n He said the reforms to ban self-managed superannuation funds from borrowing to buy residential housing could also hit the supply of new properties.<\/p>\n \u201cIf you make it harder and more expensive to invest in housing, you get less housing,\u201d he said.<\/p>\n \u201cEven if you \u2026 specifically targeted just the established market rather than the new market. It\u2019s the same market. They\u2019re inextricably linked. So what you do to one affects the other.\u201d<\/p>\n Mr Paliwal said government and business taxes were a major issue in the industry, saying they often made up a third of the cost of building a home.<\/p>\n He said many of the pressures on construction firms were \u201cinternally caused\u201d in Australia and could not be blamed on external forces like wars overseas.<\/p>\n \u201cWe can control the investment into our future workforce. We can control the regulation, the red tape. We can control the release and the build on land,\u201d he said.<\/p>\n The federal government maintains building approvals were moving in the right direction, with 205,249 approved in 2025-26, up 9.2 per cent on last year and the highest since 2020-21.<\/p>\n Australian Bureau of Statistics (ABS) home loan data for the June quarter showed $7.6 billion in new investor loans for the construction and purchase of new dwellings \u2013 up 26.3 per cent over the year, the figure celebrated by Mr Albanese.<\/p>\n Red tape, labour shortages<\/p>\n One of the biggest issues facing the home building sector was chronic labour shortages that have dragged on for several years across key trades, both men agreed.<\/p>\n \u201cAnd ever since the pandemic began, they (worker numbers) have essentially been worse for every trade \u2026 especially bricklaying and tiling and roofing and carpentry,\u201d Mr Devitt said.<\/p>\n \u201cThe shortages of those trades have been worse than any time pre-2020.\u201d<\/p>\n Skilled migration programs and a boost to apprenticeships were needed to address the workforce problem in a country that \u201cfavoured white collar workers and university students more than the actual hands-on trades that we\u2019re very much in need of now\u201d.<\/p>\n Mr Paliwal said the raft of big public infrastructure projects were also proving more attractive to builders due to more secure work and pay, taking momentum out of homebuilding markets.<\/p>\n There was also a subdued sentiment in the building industry since the Covid-19 pandemic, which saw huge numbers of businesses go under.<\/p>\n In the 2024 financial year, 2900 construction companies became insolvent, and that figure increased to 3500 the following year. The preliminary figures show some improvement to June 2026, but Mr Paliwal said they were still well above pre-Covid years.<\/p>\n \u201cI don\u2019t see this getting any better anytime soon,\u201d he said.<\/p>\n \u201cWhen you add up the major core factors \u2026 plus this sentiment factor in one paragraph, you\u2019re basically saying \u2013 not enough skilled workers, not much confidence, very complex to build and lots of taxes and costs that aren\u2019t helping.\u201d<\/p>\n The \u2018paradox\u2019 of Aussie homes<\/p>\n Despite the failures, ABS data shows the number of construction companies operating in the country was up 3.4 per cent in the past financial year.<\/p>\n \u201cSo the total number of businesses across construction has been increasing pretty much at the same rate as the rest of the businesses and in other industries,\u201d Mr Devitt said.<\/p>\n \u201cThere\u2019s just been quite a lot of turnover in the industry.<\/p>\n \u201cThe paradox of the Australian housing industry is that at a fundamental level, things are pretty good. With population growth and low unemployment, you\u2019d think that would be the makings of a busy and prosperous homebuilding industry. <\/p>\n \u201cBut because of all these other constraints, it\u2019s actually made it really, really difficult for the industry.\u201d<\/p>\n Long-term, Mr Devitt believed the \u201cnumber one constraint on homebuilding is land\u201d.<\/p>\n \u201cAnd it\u2019s the lack of land that is both zoned for homes to be built on it and provided with all of the infrastructure that need to be in place before anything can commence. <\/p>\n \u201cSo all the all the transport and utilities and telecommunications, all of that infrastructure needs to be in place before construction can even begin. <\/p>\n \u201cAnd that just takes too many years, sometimes over a decade, to get a piece of zoned farmland into a shovel-ready state.<\/p>\n \u201cOnce construction starts, once our home builders have poured a concrete slab, they complete it and someone moves in within 100 days. <\/p>\n \u201cThey\u2019re very, very efficient. The problem is everything that happens before the commencement, all that, planning and approvals and land preparation.\u201d<\/p>\n Flow on effect<\/p>\n Mr Paliwal said one thing that should be considered about the collapse of a major construction firm is the impact it has for staff, subcontractors and the supply chain.<\/p>\n It could leave thousands of people without work, or with less work, and continues a negative public image of conditions in the industry.<\/p>\n \u201cThis will impact many other builders, their margins, their sales processes, their ability to convince (prospective clients). And so then eventually will hurt them.\u201d<\/p>\n