The recent collapse of Sydney developer Ralan Group and Melbourne’s Steller Group appears to be a symptom of the nation’s troubled construction market.
In the midst of building and pre-selling over 3,000 residential units, Ralan Group was put into administration and is now estimated to owe around $500 million, according to administrators Grant Thornton. This came after the fall of Steller Group, which sold off its pipeline of projects and went into the receivership of McGrathNicol.
While the property market is seeing an upswing, the construction market has been facing a slump for a prolonged period.
Building approvals have continued on a downward trend throughout 2019, while builders have faced issues renewing their insurance due to trust issues caused by the recent wave of building defect scandals in Sydney and Melbourne.
Experts have projected that weak dwelling approvals will continue throughout 2019 and into the first half of 2020, and any stabilisation is projected to be slow due to long delays on high-rise residential projects.