Builders Are Failing at Twice Last Year's Rate. Our Clients' Homes Still Get Built.
Equifax has just measured what Australian construction has become: company exits up 114% in a year, and only 23% of new builds finishing on time. The Clarity Report documents how it got there. The Jury Room opened to the public yesterday, and the whole case file is free. Of the Australians surveyed who had followed…
Equifax has just measured what Australian construction has become: company exits up 114% in a year, and only 23% of new builds finishing on time. The Clarity Report documents how it got there. The Jury Room opened to the public yesterday, and the whole case file is free.
Of the Australians surveyed who had followed an active new-home build over the past year, just 23% reported that their project finished on time
Which means 77% did not.
That figure is not ours. It comes from Equifax, whose inaugural iCIRT Construction Index landed on 17 September. The research combined a YouGov survey of 1,063 Australians with Equifax’s own commercial credit bureau data.
The Clarity Report: The Housing Case File is a two-year forensic investigation into how Australia’s housing system failed, written by Mal Cayley and published under the Optiwise Market Intelligence banner. It was finalised on 30 June and went public yesterday.
Equifax published four weeks before it. Different team, different method, entirely different data. A household survey and commercial credit information on their side. Government statistics, legislation and two years of reconstruction on ours.
Two different methods. The same conclusion.
The biggest delay happens before anyone picks up a hammer
Equifax asked people where their projects actually got stuck.
Planning approvals and site preparation came in first, at 22%. Structural framing, the part where a house physically gets built, was 11%. Internal fit-outs were 12%.
The largest reported bottleneck was at the front end of construction, before the main building work was underway.
Brad Walters, Equifax’s General Manager Commercial, said the sector “is stalling right at the front gate with council planning and site preparation.”
That finding echoes Exhibit E of The Clarity Report. Its argument is that Australia does not simply have an approvals problem. It has a conversion problem. Approvals get announced, counted in press releases, and then a significant share never become homes anyone can live in.
Our pipeline analysis indicates that nationally, around 95% of approved detached houses reach delivery. For apartments and townhouses, the figure is closer to 60%.
The report measured the gap between approvals and delivery. Equifax measured the delays experienced by people moving through the construction process.
Two different measures, pointing at the same failure. An approval is not a home.
The builders are going backwards
Equifax’s latest figures show construction company exits up 114% year on year. Small trade business exits are up 58%. New small trade entrants are down 19%. New ATO tax default disclosures in construction are up 43%.
Exhibit D of The Clarity Report covers builder collapse, using ASIC insolvency data that runs from 1,282 in 2021–22 to 3,596 in 2024–25.
Equifax’s figures use a different measure and a more recent period, but they point to the same underlying pressure: a construction industry struggling to retain businesses and maintain capacity.
A 114% increase in company exits alongside a 19% decline in new small trade entrants is a warning about the depth of that pressure.
And it matters because construction capacity cannot simply be switched back on when demand returns.
Experienced tradespeople, subcontractor relationships, working capital and established businesses take years to build. Once lost, they are not easily replaced.
As Walters put it, “subcontractor capacity has effectively stalled, during a period where the industry needs more.”
Credit is flowing, but not evenly
Credit demand from large construction firms rose 3% year on year. From SME construction firms, it fell 3.8%. SME asset finance fell 9% in Victoria and 6.7% in New South Wales.
Finance is still moving. But the demand for credit is shifting towards larger operators while smaller firms appear increasingly constrained.
That distinction matters. Australia’s housing supply depends on a broad network of builders, trades and subcontractors, not simply the balance sheets of its largest construction companies.
This is consistent with the financing pressures examined in Exhibit B of The Clarity Report.
The problem is not necessarily an absence of money across the entire sector. It is whether finance, capacity and commercial viability are reaching the businesses required to deliver the homes.
One detail worth holding onto
Equifax’s consumer fieldwork ran from 30 July to 4 August.
On 29 September, the Reserve Bank raised the cash rate to 4.60%, its fourth increase this year and its highest level since 2011.
So when 35% of respondents indicated they could absorb a cost increase of no more than 1% to 5% before delaying, scaling back or suspending a build, they were answering before that latest increase in borrowing costs.
The survey provides a snapshot of financial tolerance before conditions tightened further.
It does not tell us precisely how households have responded since. But it does underline how little room many have for unexpected costs.
The real risk in a new build is not just the market. It is who you sign with.
Put four of Equifax’s numbers next to each other.
35% of Australians identified a lack of reliable qualified contractors as a primary barrier. Construction company exits rose 114%. New small trade entrants fell 19%. Only 5% to 7% of households indicated they could absorb a cost blowout above 15%.
These are not simply statistics about an industry under pressure.
They are warnings about the risks sitting on the other side of a building contract.
Location matters. Timing matters. Market conditions matter. But in an environment like this, the financial strength, operational capacity and reliability of the builder can be just as important to the outcome.
If you select a builder yourself, based on a website, a display village or a recommendation from someone you know, how much do you really know about the business behind the contract?
Do you know its financial position? Whether its subcontractors have capacity? Whether previous projects were completed, and whether they were completed on time?
These are not questions most individual investors are equipped to investigate independently.
Equifax’s research reinforces why verification matters, and why builder assessment has become increasingly important.
At Investor Property, that process has been part of how we operate for more than twenty years.
What that has produced
Over twenty years and thousands of client builds and projects, we have had builders fail on us.
In a sector experiencing this level of financial pressure, pretending that builder failure cannot happen would be neither credible nor responsible.
What matters is what happens next.
Across that history, our clients have not been left with permanently unfinished homes. Every project has ultimately reached completion, including those where a builder failed and an alternative delivery solution had to be arranged.
That is a completion record, and it is important to be precise about what it measures.
Equifax’s 23% figure concerns projects finishing on schedule. Our record concerns projects reaching completion, not necessarily finishing by their original deadline.
Those are two different measures.
But for an investor whose builder has failed, the distinction between a delayed project that is ultimately completed and one that remains unfinished can be enormous.
It is also why we work with an assessed panel of builders and developers rather than treating every available builder as an equally suitable option.
Financial checks before contracts are signed. Assessing delivery capability. Reviewing the people and businesses behind a project. Being prepared to say no when the risks do not stack up.
None of that eliminates risk.
Nor does a builder panel guarantee that a replacement can always step in without additional cost, delay or complication. Builder failure can create difficult contractual, insurance and financial consequences.
What experience and established relationships provide is a stronger starting position when those challenges arise.
A promise that nothing will go wrong is worth very little. A plan for when it does is worth everything.
And that is the real distinction.
The objective is not simply to find an attractive investment property. It is to understand what needs to happen between signing a contract and having a completed, income-producing asset, and to manage the risks along the way.
And if you already hold stock
The supply failure also matters for investors who already own property.
Rental vacancy is running at 1.6%. Median advertised rents are $705 a week. Rents have risen 40.6% over five years.
Those figures reflect a rental market under sustained pressure. Nothing in the Equifax research provides a clear reason to assume new housing supply will rapidly resolve that pressure. Intention to build a new home in the next five years has halved, from 10% to 5%. Intention to buy, build or renovate has fallen from 51% to 38%.
Intentions are not the same as future construction activity, and they can change as economic conditions change. But they are another indication of the challenges facing the supply pipeline.
The shortage is structural. It is documented. And on current settings, there is little evidence of a quick resolution. For existing investors, that creates an important distinction.
A constrained supply environment may support rental demand and influence long-term market conditions. But it does not remove the need to assess each property’s location, cash flow, financing costs and individual risks.
Understanding the broader market is valuable. Understanding how your own investment fits within it is what makes that knowledge useful.
The research, and what you do with it
Mal Cayley forecast the pressures building in Australia’s housing system in 2011 and published that forecast in 2013. He has spent more than two decades working in Australian property markets, and two years assembling the case file that explains how the system arrived here. The Clarity Report is the research.
Investor Property is where that understanding becomes practical.
We cannot resolve Australia’s planning, construction and housing supply problems on behalf of individual investors.
But we can help them make more informed decisions within the market that exists.
Your Next Step
The question isn’t whether a builder might fail. It’s whether you have the right people, processes and protections in place if they do.
At Investor Property, our role extends well beyond identifying the right property. From assessing builders and developers to managing the process and navigating unexpected challenges, we help clients approach property investment with a clearer understanding of both the opportunities and the risks.
If you’re considering building or purchasing a new investment property, let’s talk before you commit.
Understanding the risks, and how they can be managed, is an important step on your Journey to Freedom.
The Jury Room Is Open
After two years of investigation, The Clarity Report: The Housing Case File opened to the public yesterday.
Sixteen exhibits. Twelve players. Every figure sourced. No paywall, no catch.
The report examines how Australia’s housing crisis developed, the decisions that shaped it, and the evidence behind a system that continues to struggle to deliver the homes Australians need.
If the findings challenge what you’ve been told, share them. With family, friends, colleagues, or anyone trying to make sense of the housing crisis.
The report argues that the crisis was built by choices, which means better choices can help change its course.
But that starts with understanding what actually broke. That’s why the full report is free.
