Stuck construction projects are a common challenge in Australia’s real estate industry, with many projects getting delayed or abandoned due to various reasons. However, if you find yourself in this situation, there are strategies to restart and complete these projects successfully. At KEVOS, we specialize in helping businesses and builders overcome these hurdles, ensuring that your project gets back on track and reaches completion.

In this article, we’ll explore why construction projects get stuck, what steps you can take to restart them, and how KEVOS can support you along the way.

Why Do Construction Projects Get Stuck?

Several factors can cause a building construction project to come to a halt. Here are four major reasons:

1. Poor Project Conceptualization and Market Research

A strong foundation for any project begins with market research and proper conceptualization. In the past, particularly around 2010–11, many Australian builders jumped into large housing projects without conducting thorough research on market demands. They assumed the real estate market would continue to boom. Unfortunately, when the market slowed down, these projects got stuck mid-way because they couldn’t sell enough units to sustain development.

2. Financial Shortcomings

Construction projects require significant funding from multiple sources: the builder’s own money, loans from banks, and advances from customers. However, some builders become over-reliant on customer payments. When these payments don’t come in, they resort to borrowing more, eventually accumulating unsustainable debt. Missed loan repayments can stop construction entirely.

3. Partnership Problems

In many cases, landowners and builders form partnerships where the landowner provides the land and the builder handles development. However, if any disputes arise between the two parties, construction may be paused until the issue is resolved. Delays in revenue from customers can also strain these relationships.

4. Approval Delays

Australian cities often require stage-wise approvals during construction. For example, after completing four floors of a 20-floor building, the next set of approvals must be granted before further construction. If these approvals are delayed or blocked by legal issues such as a Public Interest Litigation (PIL), the project can come to a standstill.

Restarting a Stuck Construction Project

Restarting a stalled project requires a clear, actionable plan. Here’s how you can go about it:

1. Appoint a Decision Maker

One of the main reasons projects stall is indecision. To get things moving again, appoint a single leader, like a CEO, who has the authority to make decisions and lead the project forward. This person should be responsible for hiring a competent team, taking ownership of project progress, and maintaining accountability.

2. Make a Clear Plan

Break the project down into smaller, manageable tasks. If your initial plan involved constructing 10 buildings, focus on completing just a few first. For example, if three buildings are already under construction, prioritize their completion and allocate those units to the customers who have already invested. This will rebuild trust with your buyers and free up resources for the next phase of construction.

Remember: Start small, set achievable targets, and build momentum.

3. Convert Your Plan into Financial Numbers

Once you have a clear plan, translate it into a financial strategy:

• Determine the total amount needed to finish the project.

• Calculate the revenue expected from customer payments.

• Secure an initial 20-30% of the required funds, whether from savings, loans, or new investors.

• Begin construction with the funds you have on hand and keep operations lean.

Managing Stakeholders

A construction project involves multiple stakeholders, and managing them effectively is key to restarting the project:

1. Customers

Customers who have invested in your project are understandably anxious when progress halts. Reassure them by maintaining open communication, providing transparent updates, and making a concrete promise for when they will receive their units.

At KEVOS, we help builders establish efficient communication channels and CRM systems to keep customers informed and reassured.

2. Financiers

If banks or other financiers are involved, renegotiate payment terms or request extensions on loan deadlines when necessary. It's crucial to maintain good relations with your financiers, as their support will be critical in moving forward.

3. Contractors and Suppliers

Your contractors and suppliers are essential for resuming work on-site. Sit down with them, explain your plan, and provide a timeline for when they can expect payments. You can offer partial payments or even a barter deal, such as offering them an apartment unit in exchange for their services. This keeps them motivated to continue working, knowing they have a personal stake in the project’s success.

4. Employees

Your employees are the front-line workers managing communication with customers, banks, and suppliers. When the project is stuck, they bear much of the pressure. Reassure your employees by explaining the restart plan, motivating them, and offering guarantees that the project will be completed.

Practical Tips for Restarting a Project

Here are some additional tips to keep in mind when restarting your construction project:

1. Start Work Immediately

Start construction work on-site as soon as possible to build confidence among all stakeholders. Seeing visible progress boosts morale for customers, employees, and financiers. Within a few weeks, you should have contractors back on site with the necessary manpower and machinery.

2. Barter Deals with Contractors

If cash flow is tight, consider offering barter deals. For example, if a contractor’s bill is AUD 1 million, you can offer to pay AUD 800,000 in cash and give them a unit worth AUD 200,000. This aligns the contractor’s interests with the project’s success and ensures they remain committed to completing their work.

3. Engage with Customers

Your sales and customer relations team should actively engage with your buyers. Invite them for site visits, host on-site events, and share regular photo updates to showcase progress. This not only rebuilds trust but also motivates them to continue their payments, which keeps your cash flow healthy.

4. Handle Difficult Customers

If some customers demand refunds or legal action, take a calm, pragmatic approach. Offer them a repayment plan that coincides with the project’s progress. Assure them their money is safe and request patience, reminding them that legal action will only slow things down further.

How KEVOS Can Help

At KEVOS, we understand the complexity of real estate projects in Australia, and we are committed to helping you get back on track. Our team of experts provides:

• Project Leadership: We can help you hire and appoint a dedicated decision maker to streamline the process.

• Financial Planning: We assist with budget restructuring, identifying funding sources, and creating achievable milestones.

• Stakeholder Management: KEVOS excels at managing stakeholder expectations and resolving disputes with customers, financiers, contractors, and employees.

• Operational Support: From mobilizing contractors to communicating with your buyers, we ensure that all aspects of your project are moving forward cohesively.

Conclusion

Stuck construction projects don’t have to remain stuck. With proper planning, strong leadership, and effective stakeholder management, you can restart and successfully complete your project. At KEVOS, we offer expert services to help you navigate these challenges and deliver on your promises.

Let’s work together to get your project back on track. Contact KEVOS today and take the first step towards success!