Buy an older apartment, beware of off the plan, building expert warns
The co-author of a landmark report on how to fix Australia’s building industry has declared she would not buy a newly built apartment, given the scale of the problems.
“If I was going to be investing in an apartment, I’d buy an older one. It’s common sense, isn’t it? It’s just logical,” Bronwyn Weir told a Four Corners investigation into Australia’s building industry.
“I wouldn’t buy a newly built apartment. No.”
Ms Weir and former senior public servant Peter Shergold co-wrote the Building Confidence report commissioned by Australia’s federal, state and territory building ministers.
The report, delivered in February last year, made 24 recommendations including a crackdown on private certification of buildings and registration of every person involved in the building process.
At a meeting in July, building ministers committed to implementing the reforms, but Ms Weir told Four Corners that would not fix the legacy of decades of inaction.
“The existing building stock is what it is. We have hundreds of thousands of apartments that have been built across the country over the last two, three decades,” she said.
“Probably the prevalence of noncompliance has been particularly bad, I would say in the last say 15 to 20 years. It’s gotten worse over that period. And that means there’s a lot of existing building stock that has defects in it.
“[The new reforms] won’t improve existing building stock unfortunately. So there’ll be legacy issues for some time and I suspect there’ll be legacy issues that we’re not even fully aware of yet.”
Beware of buying off the plan, Ms Weir warns
Ms Weir said for those looking to buy an apartment, it was more prudent to opt for a building “that maybe is, say, five years plus [of age]”.
“You would like to think that if there are major issues with that building, they’ll have started to show,” she said.
“So I think if people are looking at investing, there are ways to do good due diligence. Buying off the plan is a really tricky proposition at the moment.”
Ms Weir said high-profile cases such as the evacuation of Opal Tower and Mascot towers in Sydney meant “there is a lack of confidence” in the building industry.
But she hoped some better builders would give people assurances it was safe to buy “and try to salvage what has been a pretty damaging impact of these latest news stories”.
A recent study of apartment building defects in Australia by Deakin University and Griffith University found 97 per cent of buildings examined in NSW had at least one defect in multiple areas. In Victoria the figure was 74 per cent and in Queensland it was 71 per cent.
One of the study’s authors, Deakin University’s Nicole Johnston, told Four Corners previous calls for reform had gone largely unheeded.
“People have been jumping up and down about this for years and years and years,” Dr Johnston said.
“There’s been lots of committees formed, there’s been lots of task forces, there’s been lots of consideration around these, but really nothing has happened”.
NSW missed opportunity to bring in stricter laws
One glaring example of inaction is how NSW failed to implement laws that could have addressed a major underlying reason for defective building work: dangerous or inferior products.
In 2017, Queensland introduced new laws to police dangerous building products — also called non-conforming products — including flammable cladding that was responsible for the fire spreading in the UK’s Grenfell Tower, in an incident which killed 72 people.
The laws — known as chain of responsibility laws — ensure every person who uses or supplies a product on a building can be held personally responsible if it fails.
Later that year, NSW showed a draft bill of its own proposed law to a meeting of building industry groups.
“What we saw was a draft bill that was the Queensland legislation but on steroids — it was better,” Rodger Hills, the executive officer at the Building Products Industry Council, said.
“They had taken a lot of time to incorporate all the learnings and findings from the Queensland experience and wrapped it up into a piece of legislation that was robust, it was easy to use, and it would have done its job.
“The industry representative left that meeting very hopeful that this was something that was going to be useful and it actually worked properly.”
When the bill entered the NSW Parliament, Mr Hills said the industry was shocked to see it had been “absolutely gutted.”
“We counted up about 80 clauses that had been pulled out of the documentation,” he said.
“Those clauses were all around non-conforming building products. In fact, the definition of a non-conforming building product wasn’t even in the bill.
“All of the clauses to do with chain of responsibility and duty of care, they were all taken out. As were all powers, the recall powers the minister had to recall defective products.”
Government did not want to add more red tape
Four Corners has confirmed the NSW Cabinet rejected the proposed chain of responsibility law due to concerns it would impose more red tape on the building industry, potentially slowing it down.
The NSW Minister for Innovation Kevin Anderson would not comment on Cabinet deliberations but said: “The NSW Government is currently implementing the largest reform to the building and construction industry in the history of the state.”
“As part of those reforms, the Government is considering a raft of measures that will improve the transparency, accountability and quality of work within the sector,” he said.
Mr Anderson said the current situation “is a collective making of industry and the need for more modernised legislation”.
The property industry disputes that there is a crisis, but is backing calls for state governments to implement the recommendations of the Shergold-Weir report.
The chief executive of the Property Council of Australia, Ken Morrison, told Four Corners “the overwhelming majority of people in the industry are doing the right thing and, in fact, there’s great projects right across our cities”.
“I think that statistic [on building defects] points to the fact that when you’re doing something very complicated like building a high-rise apartment building, there are going to be things which need to get fixed up,” he said.
Asked if he would buy a new apartment, Mr Morrison replied: “I would, absolutely. I think I would be a discerning buyer looking for quality, but absolutely I would.”
Watch Sean Nicholls’ investigation, Cracking Up, tonight on Four Corners at 8:30pm on ABC TV and iview.