Natalie Barr, Sunrise host: The total for the first time since 2022. Fresh data shows a downturn of $34.1 billion in the June quarter, and it's come as no surprise to the industry, which has seen almost 3,500 construction companies go bust in just one year, driven by skyrocketing costs and major tradie shortages. The recent wave of insolvencies has left thousands of families stranded with half-built homes. For more, we're joined by Jocelyn Martin, director of the Housing Industry Association Good morning. 

What do you think the biggest challenges facing the housing industry are right now?

Jocelyn Martin, Housing Industry Association Managing Director:  Well, look, there are significant barriers to delivering the housing supply that the government want to deliver. And, you know, probably one of the biggest barriers that we see at the moment is available land. costs has gone up significantly over the last decade. And so that has then in turn put pressure on prices. But sort of more immediately, of course, this year we've seen a couple of interest rate rises. conflict in the Gulf which has impacted material prices and now of course following the government's changes in the federal budget, we've seen a complete change in the market. Our members are telling us that following those changes, traffic through things like display homes, we can see it the loan data, that the market has completely dried up.

Ms Barr: So, you know, there were significant barriers already and now this year we've just been up against it. Your data is showing that that's not working.

Ms Martin: Well, I guess what we're saying is that, you know, at the beginning of this year, I've got to say that some of the things that the federal government and the state governments were actually having some impact. You know, we were improving things around the environmental protection laws where governments, state governments were looking at their planning regimes and things were starting to look up. And then, of course, we had a few interest rate rises. The conflict in the Gulf put pressure on material prices. the government really scored what can only be described as an own goal by changing the tax settings, which has seen the investor market just completely dry up. And the investors are crucial to providing rental accommodation. And so in a market like Sydney or Melbourne or Brisbane, where you've got enormous pressure already on rental market, when you lose the investors from that market, you know, it immediately puts pressure on the prices. And, you know, when there's pressure on when investors leave the market, even for established homes, no one's going to actually want to buy a new home.

Ms Barr: There's no need to do that because there's no demand for that immediately at OK, we've got thousands of construction companies going bust, I think 3,500 in the last year. And most recently, this big company, Bathla Group, collapsed, leaving almost a fifth of New South Wales homes half-built. 

What options do families stuck in these situations have?

Ms Martin: Yeah. Well, I guess it's important to say, first of all, that the construction data about insolvencies includes the entire construction market, not just residential construction. And so you are looking at subcontracting businesses, civil contractors and all sorts of businesses in there. So I businesses in there. complexities around that one, which are still obviously unfolding. And they were working on a very high volume sort of slim margin kind of business, which given the kind of economic climate obviously weren't able to particularly weather the storm. But the advice I give to people wanting to build a new home is still do but make sure that you have a good new homes contract. Go out to the display villages and look at the homes but also make sure that your builder carries a form of warranty insurance, because that will protect you.

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