realestatebusiness logo

Website Notifications

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

rpm logo latest

Property investors slugged by poor construction

13 September 2019 Emma Ryan
Steve Jovcevski

Investors are being slugged nearly $6,000 in additional costs due to poor construction standards leaving leaks, cracks and other defects, a report has found.

According to research released by Mozo, Australians have spent an additional $10.5 billion on such defects over the past decade alone.

Commenting on the report’s findings, Mozo’s property expert, Steve Jovcevski, said that “while buying a bright and shiny new property might seem like a good idea, the reality for many Australians is one of costly repairs and years of remediation”.


The new costs finding comes as regulators continue to grapple with fallout over the serious safety issues plaguing apartments in Sydney, Melbourne and Brisbane. 

Internal water leaks, cracking to internal or external structures, water penetration from the outside, guttering faults, tiling problems and defective plumbing have been indicated as the most common problems for newer property owners.

“Australia is in the middle of the perfect storm when it comes to building defects,” Mr Jovcevski indicated. 

He said the “construction boom that saw some developers and builders cut corners to meet demand coupled with the weakening of regulatory oversight has seen defects rain down on home owners”. 

Mozo found that 58 per cent of apartment owners facing defects have had to contribute to a sinking fund and 25 per cent were forced to pay special levies to fund the repairs.

Most apartment repairs (57 per cent) were completed in under three months, but 21 per cent of buyers had to wait up to six months.

Nine per cent of affected owners are still waiting for the defects to be fixed.  

Building defects tips and traps

Mozo’s report provided the following tips for investors to try to mitigate some of the costs caused by dodgy building practices.

Before you buy:

 If buying off the plan:

  • Research the developer and builder
  • Engage your own consultant to check critical stages of the development
  • Run a body corporate records search on an existing apartment to check the minutes for any issues raised around building defects
  • Get an independent building inspection done on the property when completed.

After you buy:

  • Notify your apartment’s strata manager of any defects as soon as they occur 
  • Get an independent assessment of any defects
  • Seek remediation work and/or costs from the developer
  • Don’t delay making a claim as builders’ warranty has fixed time frame in each state and territory
  • If your builder goes into liquidation and you are still facing repair costs, make sure you disclose your debt to the administrator as soon as possible.
Property investors slugged by poor construction
Steve Jovcevski reb
lawyersweekly logo
Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of editorial at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]com.au

Recommended by Spike Native Network


Subscribe to our RPM mailing list



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.