Building Company Insolvencies in Australia (May 2023 to May 2025)

Over the past two years, Australia’s construction industry has experienced a surge in builder bankruptcies and liquidations. This includes both residential home builders and commercial construction firms, with thousands of companies entering insolvency amid rising costs, interest rate hikes, and project delays. Construction now consistently accounts for the largest share of business failures nationwide. Below is a detailed breakdown of the insolvency statistics and notable cases, with a focus on Victoria (VIC).

Nationwide Collapse of Construction Firms

Insolvency data shows an alarming rise in construction company failures since 2022:

• 2022: 1,793 construction firms entered external administration
• 2023: 2,546 construction firms became insolvent, a 42 percent increase from 2022. This was the year major builder Porter Davis Homes went under, with over 1,700 homes in progress
• 2024: 3,217 construction firms collapsed or entered administration, another 26 percent rise from 2023. Many families were left with unfinished homes as the industry struggled to meet fixed-price contracts amid cost escalations

In financial-year terms, the trend is similar. Nearly 3,000 building companies went bust in FY 2023 to 24 alone, up 28 percent from 2,213 in the previous year. ASIC’s annual report confirms 2,975 construction insolvencies in 2023 to 24, about 27 percent of all company failures nationally, an unprecedented share for a single industry. Between July 2022 and April 2023, 1,709 construction companies entered administration, underscoring how concentrated the collapse has been in this sector.

The upward trajectory continued into 2025. In the 12 months to March 2025, 2,636 construction companies became insolvent, a further 23 percent year-on-year increase. This indicates the building sector’s woes have not yet abated, although there are signs the rate of new failures may be stabilising in some regions.

Insolvencies by State – Victoria Hit Hard

ASIC’s annual insolvency statistics for 2023 to 24 highlight the construction sector’s dominance and provide a state-by-state breakdown. New South Wales and Victoria recorded the highest total company insolvencies across all industries that year.

Victoria has been among the hardest hit states. In the 12 months to June 2023, 619 Victorian construction companies collapsed, a 73.9 percent jump from the prior year’s tally. This wave contributed to a broader national spike. By comparison, NSW saw 981 construction insolvencies in the same period, a 91 percent increase. Construction was the leading sector driving Victoria’s total business failures. For the full 2023 to 24 year, VIC had 2,862 company insolvencies across all industries, second only to NSW’s 4,634.

Monthly figures illustrate the intensity in Victoria. For example, 86 Victorian building and construction businesses went insolvent in August 2023 alone, approaching the record monthly high of 112 set in July 2019. Although monthly failures eased slightly toward the end of 2023, down to 45 in November 2023, the overall level remains historically high. Master Builders Victoria noted that while the numbers remain high, they represent under 1 percent of all building businesses in the state, meaning the vast majority are still operating, albeit under financial pressure.

Residential vs Commercial Builders – Notable Collapses

Both residential home builders and commercial construction firms have been swept up in this insolvency wave. Some of the notable builder collapses during this period include:

• Porter Davis Homes (Residential, VIC QLD): One of Australia’s largest home builders, Porter Davis went into liquidation in March 2023, leaving about 1,700 homes in progress and hundreds more contracts signed for houses yet to start. The Victorian government set up support schemes for affected customers and later extended them as other builders failed
• Lloyd Group (Commercial, VIC NSW): Entered voluntary administration in 2023. Lloyd Group was a Melbourne-founded construction firm specialising in government infrastructure and community projects in Victoria and NSW. Around 59 ongoing Lloyd projects, worth over 350 million dollars, were affected
• Qattro (Residential, SA): A South Australian home builder that entered administration in 2023. Its collapse left home buyers in SA facing delays and uncertainty
• LDC Homes (Residential, QLD): Queensland-based luxury home builder LDC Pty Ltd folded in January 2023, stranding nearly 50 home projects and owing creditors over 7 million dollars. Its failure signalled the early stages of the collapse trend
• Mahercorp (Urbanedge Homes, VIC): Entered voluntary administration in early 2023. Creditors later approved a rescue plan to keep the business running, demonstrating that not all insolvencies end in liquidation

Other high-profile collapses just outside the two-year window, such as Probuild and Clough in 2022, foreshadowed the domino effect that erupted in 2023 to 2024. Analysts attribute this wave to profitless booms, where builders entered fixed-price contracts during housing surges, only to see input costs soar post-COVID.

Conclusion

In summary, the past 24 months have seen well over five thousand construction companies collapse across Australia. Victoria has been a focal point, with hundreds of insolvencies and headline-grabbing failures like Porter Davis. New South Wales and Queensland have also endured numerous collapses, and no state has been entirely spared. While both residential and commercial builders have been affected, the common threads are clear: fixed-price contracts, supply chain disruptions, material cost spikes, and rising interest rates have pushed builders to the brink.

Looking ahead, industry observers hope that conditions will stabilise as older loss-making contracts are completed and input costs settle. However, insolvency levels remain elevated into early 2025. Homeowners, contractors, and employees are being encouraged to conduct due diligence and use protections like domestic building insurance. The situation has already prompted government inquiries and reforms aimed at preventing a repeat of the current crisis.

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Sources

• ASIC – Insolvency statistics and media releases (2023 to 2025)
• Australian Financial Review – “Nearly 3000 building companies go broke in a year” (Jul 2024)
• Realestate.com.au / Herald Sun – ASIC records 3000 plus construction insolvencies in 2024
• ABC News – “Hundreds of construction firms have collapsed” (Sep 2023)
• Accounting Times – Construction insolvencies continue to climb (Apr 2025)
• MPA (Mortgage Professional Australia) – VIC construction sector in crisis (Jul 2023)
• LexisNexis Insights – Insolvencies in construction law (Sept 2023)
• Guardian Australia – Porter Davis and Lloyd Group collapse (Mar 2023)
• API Magazine – Builder collapses in 2023 and 2024
• Master Builders Victoria – Media release on insolvencies (Jan 2024)