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Developing measures to combat insolvency in the residential construction industry

What we are doing and why

The residential construction industry is a key part of Victoria's economy. However, inflation, supply chain problems, and shortages of workers and materials have led to a sharp rise in construction company insolvencies. These insolvencies are now higher than before the pandemic, and account for around a third of all company insolvencies in Australia.

The BPC supports research by Victoria University, through a research grant awarded in 2024, to examine Victorian residential building companies to better understand company behaviour before they are confronted with insolvency risk.

The research aims to create a roadmap with practical steps that can help protect the viability of and build confidence in, the residential construction industry.

The results of this research could help provide a better understanding of the financial health of residential building companies. It could also establish benchmarks for identifying financial risks in the industry, which could guide policies aimed at managing the impact of insolvencies.

Victoria University’s Associate Professor Malindu Sandanayake is leading the research.

What we have achieved so far

The research commenced in February 2025, and is due for completion in 2026.

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