realestatebusiness logo
Subscribe to our newsletter SIGN UP

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Collapses, cracks and cladding create headaches for NSW agents

19 August 2019 Reporter
Apartment buildings

Developers going under, substantial defects in new builds and the widespread use of flammable cladding has created a wave of uncertainty in NSW buyers. Is this a media storm or a long-term consideration? Data experts and national networks weigh in on the debate.

The quality of new developments in NSW launched into public debate following faults appearing in the newly-opened Opal Tower apartment blocks in Sydney’s Olympic Park.

The Opal Tower fiasco began in December last year, and has since proven to be the tip of the iceberg in terms of build quality problems in NSW.

Combustible cladding has since been detected on a wide range of new development sites, faults surfaced in prime developments such as Mascot Towers in Sydney’s inner south and the ATO has flagged that some developers are getting creative with corporate structures to skirt their legal duties.


The impact on buyers

CoreLogic’s senior research analyst, Cameron Kusher, said there is a “level of caution” among buyers now about the quality of new builds.

He notes that in Sydney and Melbourne also, off-the-plan apartments are increasingly coming in at below contract price when it comes time for settlement.

Despite the scepticism among buyers, particularly around apartment developments, Mr Kusher said it’s not the “end of days” for the new housing market.

“There are some challenges at the moment, but I think the industry will work those out,” he said.

Mr Kusher agreed that there are similarities to the asbestos crisis. A total ban on asbestos was first imposed in 2003, but most homes build in the 1980s and prior would have asbestos throughout. Asbestos was used in thousands of building products including fibro, flue pipes, drains, roofs, gutters, brakes, clutches and gaskets.

“The first house I ever bought had asbestos in it,” Mr Kusher said. “You then learn with time what you can and can’t do, where you can and can’t drill,” he added.

What should agents do?

For Adam Sparkes, general manager at McGrath projects, quality developers and developments are still prevalent in the Australian market for agents and buyers alike to engage with.

Buyers and agents should, however, be conscious of doing background checks on vital points in the construction chain - particularly developers and builders.

“My advice to any potential purchasers of brand new or off-the-plan properties would be to undertake a thorough background check on both the developer and the builder. What legacy buildings have they delivered in the past? Check for local, National and International industry awards,” said Mr Sparkes.

“Medium to large scale Australian developers such Frasers, Mirvac, Crown Group all have an impressive portfolio of past projects and leave no uncertainty as to the quality of construction in each of their delivered projects,” he said.

“For the smaller scale developers, understand who is behind the company, and who they have aligned with from the design and delivering standpoint. A few thorough background checks will go a long way to highlight if there are any genuine concerns to consider.”

This email address is being protected from spambots. You need JavaScript enabled to view it.

Collapses, cracks and cladding create headaches for NSW agents
apartment buildings reb
lawyersweekly logo
Recommended by Spike Native Network

Why we’ll keep delivering for our communities in the face of COVID-19


As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of REB.

Read more
Do you have an industry update?
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.