Building standards a not being followed, and a major incident is ‘inevitable’. Here’s hoping nobody dies.
I’m a property bull…full stop.
Currently I’ve got about $8 – $10 million of townhouse development in the pipeline… 2 and 3 bedroom townhouses in a blue-chip Melbourne area.
But here’s a property style that I’ll NEVER buy… and I’m constantly warning you to stay well clear of. It’s the 1-bedroom / 1-bathroom chicken coop.
A few weeks ago I wrote about how dodgy building practices were responsible for the fire that tore up the Lacrosse Building in Melbourne.
Turns out the cheap cladding that was used – which was not up to Australian standards – was highly flammable.
Not what you want from apartment cladding.
From there, one cigarette left unattended on a balcony caused a major fire. It tore up the cladding and jumped 13 floors in 13 minutes.
Luckily, no one was killed.
The problem seems to be that new buildings, especially ones being built by off-shore developers, are not following the codes they’re supposed to. A drive to lower costs and boost profits has meant that developers have gone for the cheaper, weaker, more flammable material options.
The codes are in place, but they’re not being monitored or enforced.
A now a report from Engineers Australia says that 85% of strata units in NSW were defective upon completion.
85% !?!?
That’s not a handful of rouge operators. That’s almost every unit building in the state!
They’re conclusion is that “the building system in New South Wales has broken down”.
No kidding.
They also reckon that a major fire in a high-rise Sydney apartment is “inevitable.”
Let’s hope it’s not home to someone you love.
But everyone is loved by someone, so let’s hope it never happens at all. But it’s not looking good.
It’s scary stuff.
And one of the report's authors, engineer Robert Hart, said the situation was only going to get worse.
“There are something like 20,000 new units coming on stream over the next few years, and we know they are being done by developers who are totally inexperienced and [have] no real interest in anything other than making money and this is causing major concerns.”
“There is a raft of issues. It is occurring daily but no-one is inspecting this stuff.
“This is what is going to cause a major incident at some point.
“There are some very clever fire engineers in this city and they have the most appalling stories.”
He said the major problems are
- Fire separation between apartments;
- Almost no fire gaps installed correctly;
- Fire dampers that prevent the spread of smoke are very seldom installed correctly;
- Electrical installations not properly done.
The Master Builders Association has agreed there are pockets of the industry that had problems.
(Can 85% of a market be a ‘pocket’?)
But MBA executive director Brian Seidler said that it’s not just about developers. Architects also made mistakes and clients made requests that did not comply with all building codes.
“Australia is being inundated with non-conforming products from countries where they don't have any standards yet clients specify that they be put in place.”
But this is exactly the kind of soil where tragedies thrive. No one knows what’s going on, and no one’s policing the rules.
It’s a recipe for disaster.
In Australia, we still don’t have an apartment mentality. We’re still living in the detached quarter acre block 60s.
But from here on, it’s all going to be about apartments. Last year we built more apartments than houses for the first time ever. There’s no going back now.
We need to get used to that reality.
And we can’t say that we didn’t see it coming.
We’ve been driving ‘urban consolidation’ for decades. Our planning policies try to limit urban sprawl and encourage higher densities closer in.
And nothing builds density like apartment towers.
And so the planning framework was there.
And for a long time, progress was slow. Australian developers maybe just didn’t believe that Aussies wanted to live in apartment towers.
But Asian developers didn’t have such a cultural cringe about apartment living.
And they looked at the economics of our housing market. Massive population growth projected over the coming decades. An existing shortage of housing. Land on a drip-feed supply. Planning policies promoting high-rise.
The only way is up. Literally. The only realistic vision for our cities was to grow up – into higher and higher towers.
This is the reality for ‘international’ cities. Sydney and Melbourne can’t escape that. And neither can Brisbane or Perth… The other cities have a little longer to prepare.
And so with development opportunities drying up at home, cashed-up Asian developers saw the Australian market as a gold-mine.
Boom. Rush time.
But it caught us napping. Australian developers were used to playing by the rules. They definately didn’t want an incident like a major fire on their hands.
But the market changed. Suddenly there was a rush of new developers.
But if there’s a fire in a building from a Malaysian developer, how are we going to hold them to account? They’ll just fold up the paper company they had in place in Australia, and disappear.
If there’s a major incident, Australia will be left footing the bill for compensation. Australia will be left to console the victims’ families.
And right now, if I were an investor in one of these apartments, I’d be pretty nervous.
The Engineers Australia report noted that NSW insurance companies reported repair costs of an additional 27% over other states.
It won’t be long til insurance companies wise up to this. Soon, there’ll be premiums for apartment buildings just so they can protect themselves.
And maybe they just won’t pay claims where it can be easily proved that codes weren’t followed?
And if there is a major incident, what’s going to happen to the rental market. Even the best real-estate agents will have trouble marketing that one.
‘Well appointed unit in widely known death-trap for rent. All offers considered.’
There’s nothing to love about this story. Developers are walking away with the money. Investors are left holding the baby, and worst of all, lives are genuinely at risk.
The government needs to get on top of this one fast.
How do we fix this mess?
Would you invest in apartment towers?
victorshengli says
The answer is more inspections and harder to get certificates of occupancy. If sub-standard materials have been used then order the building demolished. Change the laws and make developers liable for jail-time if they flout the rules and regulations. Investors must insist on contracts that specify that rules, regulations and standards are being met or money back.Investors money must be held in trust until the building has been certified as complying. (By Government appointed inspectors – inspectors who would need to be liable to jail-time if they pas a sub-standard building)
Katrina Smithy says
I agree that the problem of poor building standards is extremely serious. I live in
Brisbane. Several years ago, we had a carport and deck done on our house. We provided the builder with copies of our piering plans from a structural engineer for his use with our plans.Should have been simple, right? Wrong. This guy ignored our piering plans and did his own version of piers, assuring us that he was also an engineer and could do this. Our pier holes were filled without a certifier or engineer inspecting them first, before the concrete was poured. When we asked for the certificate, he couldn’t produce it. As toothless as the BSA is in our State, we had to go to a solicitor and send this wonder guy a notice of major defect, giving him a chance to fix things up before we cancelled the contract. (A building contract is harder to get out of than a marriage, or so it would seem). This was just for starters. Qld is one of the better States, actually, for building. I agree that building safety is a real issue, Jon, and I hope that responsible Ministers pull their fingers out.
BJ says
Thank you for bringing it to the notice of the general public. Whether it is Malaysian or otherwise, none of the builders cannot build apartment or any other major residential structure in Australia with out development consent and construction certificate. Once anybody apply for DA or CC, the council is supposed to be doing at least 4-5 inspections. Are the councils or other planning authorities were sleeping? or have they being adequately remunerated by those developers?
Although this is not directly related to building standards, it is hard to believe that guys in the foreign investment review board were sleeping for 9 years! An investor trying to buy a property in Point Piper in Sydney can afford to pay another $50,000 to anybody to get it approved. I think police should investigate how the people working for foreign investment review board have such big bank accounts.
MrConsult says
The problem is older and more widespread than most realise. I have inspected a major townhouse complex in the western suburbs 10 years ago that had no fire rating between the 20 or so units in the complex, all timber construction with “fire rated” party walls.
Another one, also fully inspected and certified, with non compliant party walls. Any fire would result in the progressive collapse of the entire row of townhouses, all 6 of them x 8 or so in complex.
Making inspections tougher is a great idea, problem is it is unlikely to work unless something is done about better knowledge and check inspection by an independent body to the Building Certifier.
peter says
I have been trying to alert Mr Rod Stowe /The Commissioner of Fair Trading NSW since 2011/ about a dodgy/ so called builder/ since Oct 2011 who is getting into residential property with a quote of $1035/which was just over the limit at that time/ and ending up pocketing estimated $90,000.oo all in cash!!! Nobody inspects structural damages on balconies or waterproofing on 1st floor bathrooms.Nobody checks unlicensed electrical,plumbing and gas installation. Smoke detectors?? use of proper electrical material?? Yes Mr Stowe issues warnings,but no check ups on quality and legality of work.He even covers A1 Construction and Mr George Lee for his certificate No 21713S and contractor license 82703C where none of them can be found on tradesman website Mr Stowe is in charge of. Is Mr Rod Stowe negligent,lazy,incompetent,corrupt or all of it. He is our servant probably on $200+K/year of yours and my taxes. Will he go to jail if occupants get electrocuted,gassed or get crippled by collapsed balcony? How many politicians or public servants went to jail after 4 deaths in pink insulation scheme?