Bathla Group collapse leaves Sydney home buyers facing unfinished developments

Rinnah Roque, 60, bought a three-storey townhouse off the plan in Box Hill, in Sydney's north-west, hoping to live in a community. Instead, construction on the development across the road stopped two months ago after the developer Bathla entered administration. 'All of a sudden everything stopped, and what's so frustrating is everything was just left behind,' she said. Roque said it would be a 'horror story' if the area became a wasteland.

Bathla Group went into administration in August, in a $3.4 billion collapse. According to documents filed by administrator Teneo in the NSW Supreme Court, construction stopped at 45 sites. About a dozen of these are in Sydney's west, in suburbs including Marsden Park, Box Hill, Rouse Hill and Pemulwuy.

Lyndall Bryant, a property economics professor at Queensland University of Technology, said builders considering finishing the projects would find it difficult to assess the quality of work already done. 'If you're a builder coming into a job that's half-finished, you don't want to be warranting the work that someone else has done,' she said. She said delayed or failed projects could leave communities 'fractured' and 'those areas really could become almost wastelands for a number of years', bringing down property values.

Urban Taskforce Australia chief executive Tom Forrest said he believed most projects would be completed. 'Where I would be concerned is if we were to find developments with substantial defects, where basically the cost to rectify those defects is greater than the value of the land with an approval on it,' he said. Urban Taskforce Australia said any drop in property values would be a 'short-term blip'.

Two Sydney councils are among the most exposed. Construction stopped on eight Bathla projects in Blacktown Council and four in The Hills Shire Council. Both councils are registered as creditors. Bryant said councils might have to spend money on infrastructure such as roads and sewage that Bathla had yet to contribute to, and would miss out on anticipated rate revenue unless the developments are finished. Blacktown Council declined a request for comment. The Hills Shire Council mayor, Michelle Byrnes, said the collapse was 'another hit to public confidence in the construction industry'. 'I'm devastated for the buyers across Sydney who have been left stranded by Bathla's collapse,' she said.

Some private equity investors have seized control of the sites they funded and are racing to finish them. Asian private equity company PAG appointed builder ParkView to its 300-unit development in Pemulwuy. Ray White Capital, which owns the Box Hill site, expects it to be finished before April 2027. Leda Group has taken control of a 240-unit development in Marsden Park and said it was in advanced discussions with a builder. But not all sites have been taken over. Among them is a 49-home estate in Lochinvar in the Hunter Region, where restructuring firm Mackay Goodwin has been appointed to assess options.