Bathla's $3.4 Billion Collapse Exposes the Disorder in Australia's Housing Industry

Maybe housing developers should have to live in the buildings they construct. That is the sharp question hanging over the $3.4 billion collapse of Bathla Group.

In the two weeks before the collapse, the NSW Building Commission carried out more than 40 inspections at Bathla sites because of concerns about construction quality. Days later, the Financial Review described the Bathla family's mansion, with French cobblestones, a wrought-iron gate, several pools, a basketball court and a tennis court.

The collapse has hit Australia's housing supply and affordability effort. Bathla's stalled pipeline includes 14,000 apartments, about 18.5 per cent of the new housing stock due to be built in New South Wales this year. The state is already well behind its target.

The article identifies three broader problems. Construction costs are rising as regulators impose tighter quality controls, even though the country needs more affordable housing. Building regulation remains fragmented, with each state operating its own system. Banks also prefer lending against existing homes and have largely withdrawn from financing new construction, leaving developers dependent on more expensive private credit.

New South Wales tightened apartment oversight after structural failures at Opal Tower in 2018 and Mascot Towers in 2019. It created Building Commission NSW in 2023 and introduced the Building (Approvals and Practitioners) Act 2026. The article asks why the more than 2,000-page National Construction Code did not prevent the problems now being attributed to Bathla.

One likely answer is the system of private inspections and approvals, which allows developers to choose more lenient certifiers. The Environmental Protection Authority has alleged that a private certifier falsified approval documents at four Bathla sites. Under the state's hybrid system, private certifiers conduct mandatory day-to-day checks, while the Building Commission audits, investigates and disciplines builders and certifiers. The code also does not cover every complaint from Bathla buyers, including missing doors and poor finishes.