The Crippling Highrise Disaster Continues…

The truth is that recent high rise construction in many Australian cities, are riddled with defects, and someone needs to pay for rectification. This surge in high-rise apartment construction happened as building certification was privatised, costs cut and poorly trained workers employed.

As a result, we have a litany of increased building flaws and quality concerns, such as cracked foundations, water leaks, balcony defects, and flammable cladding. According to the NSW Building Commission strata survey, more than half of newly registered buildings since 2016 had at least one significant issue that will cost an average of $331,829 to correct.

The Strata Community Association NSW found that waterproofing was the most common major issue, followed by fire safety. It also discovered that around one out of every ten buildings had structural and enclosure difficulties, such as roof or facade flaws.

Examples include Sydney’s Opal and Mascot Towers, which were evacuated due to extensive cracking.

Building regulation consultant Bronwyn Weir cautioned that an “enormous” problem had developed whereby “thousands and thousands of apartments have serious defects in their buildings”. “Some of these buildings could potentially be a write-off. We have what is now you know, a systemic failure that is quite difficult to unravel”, she said.

Engineer Leith Dawes warned that purchasing an off-the-plan apartment in Australia had degraded into a game of “Russian roulette” because of the numerous building faults that are frequently overlooked.

Similar structural problems have been uncovered across Melbourne, including leaking buildings, mould, and faulty balconies, Canberra, Gold Coast and many other areas too.

These problems have cost owners and taxpayers millions of dollars to rectify. But the problems are widespread, and many individual property owners are caught in the crossfire.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Crippling Highrise Disaster Continues…
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Government Housing Targets An Impossible Dream As Building Approvals Shrink!

The ABS released data on the total number of dwellings approved in February recently. They say that despite growth in private houses in the month, the total number of dwellings approved fell 1.9 per cent in February (seasonally adjusted), after a 2.5 per cent fall in January. The trend estimate for total dwellings approved fell 3.0%, following a 2.7% January decrease.
Specifically, approvals for private sector dwellings excluding houses fell 24.9 per cent in February in seasonally adjusted terms, driven by a fall in the number of approved large apartment projects. In contrast, approvals for private houses rose 10.7 per cent in February.

This continues to confirm the massive gap between the Government aspiration of 1.2 million new homes over the next 5 years. On a straight-line basis, this translates to a target of 240,000 each year – which by the way is still way under the number needed to house the surging migrants and fill existing shortfalls.

So why not tackle the root cause issue here, too high migration? Entrepreneur Dick Smith fears today’s young people will have no savings and be forced to live in Chinese-style high-rise apartments unless immigration is urgently slashed, according to an article in the Daily Mail.

The veteran businessman and philanthropist says they need to understand the connection between a surging population and climate change. The entrepreneur, who turned 80 last month, fears homes with a backyard in Australia’s capital cities will no longer exist by 2050.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Government Housing Targets An Impossible Dream As Building Approvals Shrink!
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Supply Side Housing A Worsening Fail!

State and Federal Governments have been marked with a massive “fail” in their half-hearted attempts to show they are really committed to increasing housing supply. Of course, the demand side issues of too high migration, and too lose lending are conveniently sidestepped, as big Australia and banks’ profits rule.

But according to a recent AFR piece, the supply of new homes will crash to the lowest level in over a decade by 2026, worsening housing and rental affordability, and leaving the federal government far short of its goal to build 1.2 million homes by mid-2029.

Across capital cities, 79,000 new homes will be finished in 2026, a drop of 26 per cent compared with last year due to planning bottlenecks, labour shortages and soaring material costs.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Supply Side Housing A Worsening Fail!
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Wanted: More High-Rise Purchases Willing To Play Russian Roulette!

Well, finally, the problems in Australian high-rise construction are getting airtime, but many households are caught up with these rolling disasters, as estimates suggest well more than half of recently built apartments are defective.

It frankly remains a game of “Russian roulette” when buying off-the-plan apartments and consumers could be forgiven for asking themselves if it is safe to buy an apartment off the plan with issues frequently emerging in Sydney’s building developments. The current legislation is not effective, and of course the question is who would foot the bill for repairs.? Yet the industry keeps making empty promises, and is claiming things are now fixed. No surprise there.

Lets look back at some of the issues so far in NSW. In recent years building developments such as Opal Towers and two buildings owned by Toplace have hit the headlines for all the wrong reasons, leaving some owners and occupiers out of pocket and traumatised. Last year NSW regulators issued work rectification orders across building sites, including The Laneways Rosebery, which has serious structural defects, and Toplace’s Vicinity complex in Canterbury over “potential serious defects”.

At Mascot Towers in Sydney’s inner-south, residents were offered a settlement at the start of January after being forced to evacuate their defect-ridden apartment building years prior.

Less than a fortnight later, NSW Building Commissioner David Chandler has moved to reassure residents there was no immediate threat to an apartment and retail development in Macquarie Park after concerns about concrete were identified in the building’s basement and ground floor.

“What we have done so far is we’ve told the developer, ‘You are responsible and you are going to fix this under the powers of the NSW [Residential Apartment Buildings] Act’,” Mr Chandler said last Thursday.

But Lachlan’s Line is just one of many, with building work rectification orders “issued all the time” by Building Commission NSW. “We’re probably issuing four or five orders a week at the moment,” Mr Chandler said.

The ABC writes, In December, the NSW Building Commission was given extra powers to order fixes during construction, aimed at boosting public confidence in buying homes off the plan.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Wanted: More High-Rise Purchases Willing To Play Russian Roulette!
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Stupid Promises Collide With Reality As Housing Targets Won’t Be Met!

The NSW government has already announced plans last month to build more than 200,000 homes and focus on higher density living by building up, not out. But now NSW Premier Chris Minns says the state will not meet its housing target, but is doing its best to boost supply.

The plan includes 138,000 new homes at rezoned sites in 31 suburbs, and 47,800 homes near eight major transport hubs, with the latter to be completed over the next 15 years.

Those suburbs include Bankstown, Bays West, Bella Vista, Crows Nest, Homebush, Hornsby, Kellyville and Macquarie Park.

The government will offer developers in those zones a fast-tracked approvals process, called a state significant development, to ensure apartments are built quickly.

It will be offered to developments over $60 million, and construction must start within two years of approval.

The government also intends to relocate Rosehill Racecourse and replace it with 25,000 homes as part of the plan.

But Housing industry insiders say they are not surprised by the NSW premier’s admission that the state will not meet its housing targets agreed to just last year.

The target, which was set out by the federal government in August, would see an average of 75,000 new dwellings a year over the next five years. It is part of a broader plan to build 1.2 million homes across Australia during that period.

Premier Chris Minns said the government would fall short of the goal but was working on building as many houses and units as possible to alleviate housing shortages and skyrocketing costs.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Stupid Promises Collide With Reality As Housing Targets Won’t Be Met!
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Construction Firms Are Failing Faster Than Ever!

News.com.au reported that a staggering 2,349 construction firms have collapsed in the past year – with fears more may fall soon.

A “perfect storm” of high interest rates, soaring material costs and an ongoing worker shortage across the Aussie industry have sent tradies into freefall.

Insolvencies in the construction industry have reached an annual record this year, according to fresh data published by the corporate regulator ASIC.
The September quarter was the worst for the industry in 2023, where 785 construction businesses traded as insolvent. Just this month four building companies went bust in the first three days of the month.

And amid a chronic shortage of housing fuelled by Australia’s record overseas migration intake, the collapse of builders, contractors and subcontractors will not only have an immediate impact but could crimp future supply of new homes.

We look in more detail at the numbers…

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Construction Firms Are Failing Faster Than Ever!
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More Than Half Of NSW Strata Buildings Have Defects!

A new report has revealed 53 per cent of NSW buildings have had serious defects over the past 5 years, with only half resolved within one year.

The number has risen from 39 per cent in 2021 with the most common defects including waterproofing, fire safety, structural and key services issues such as lifts and plumbing.

The report, by The Strata Community Association (SCA) NSW and the Office of the Building Commissioner, has revealed that more than half of all strata buildings had serious defects between 2016 – 2022, with an estimated $79 million spent by owners corporations to fix the issues.

The average cost of rectifying serious defects was $283,000 per building.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
More Than Half Of NSW Strata Buildings Have Defects!
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Housing Affordability Busted For Good…

Whatever announcables may come from the Government, the truth is housing crisis in Australia is far from over.

As I discussed with Leith van Onselen on Tuesday, high migration is the root cause of the problem – a problem created by bad policy and ultra-high migration. Yet some are arguing we should import more construction workers to build more homes. Sounds like shoot ready aim, to me.

Sure it is true that as Australia’s housing affordability crisis worsens, governments are spending more on housing. But as a recent The Conversation article says, without coordinated action to increase supply, government grants will have little practical effect on house affordability anytime soon.

Victoria’s Andrews government has announced a suite of reforms (such as boosting social housing and making planning processes faster) in an effort to get 800,000 extra homes in Victoria over the next decade.

Federally, the Albanese government’s A$10 billion Housing Australia Future Fund, or HAFF, has passed the Senate with the help of the Greens, who supported the bill in exchange for another A$1 billion for social housing.
And this year’s federal budget has expanded eligibility for the Home Guarantee Scheme so more people can buy a home with a smaller deposit.
But is Australia ready for a house construction boom?

Supply chain constraints say no. Ballooning construction costs and labour shortages have already claimed well-known building firms across the country. Delivering thousands of extra new homes in the coming years will not be easy.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Housing Affordability Busted For Good...
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Land Banking Is Part Of The Housing Problem!

We unpick the “supply-side” problems which are often blamed for high home prices, and in the light of a recent report, find that Land Banking is a significant issue, as large players hold on to land parcels to exploit prices rises. This means you cannot solve affordability by changing planning rules! In addition, there is significant information asymmetry and financial players benefit from the current arrangements – while State and Federal Governments look the other way. Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Land Banking Is Part Of The Housing Problem!
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The Fallout Continues – The DFA Daily 7th June 2020 [Podcast]

The latest edition of our finance and property news digest with a distinctively Australian flavour

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Fallout Continues - The DFA Daily 7th June 2020 [Podcast]
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