Media reports of stress fractures and dodgy building quality are just the beginning of a serious problem for Australian real estate.
That’s according to Right Property Group’s Steve Waters, who said the situation will get a lot worse before it gets better.
“The idea that newly completed unit blocks could be suffering structural weakness, to be honest, did not come as a shock. How is it possible in contemporary Australia that we’re shutting down new towers because of stress fractures?”
“In today’s disposable society, the quality of everything – from political discussion to offshore-manufactured toys – is falling in the pursuit of bigger margins. And there’s perhaps no more vivid an illustration than the standard of housing construction.”
Take a stroll through any major Aussie CBD and look at the quality of 100-year-old buildings. They are thoughtfully engineered with craftsman-level building techniques and durable materials.
“These are structures established to withstand several lifetimes of exposure and designed to provide their residents with a functional, practical and resilient home,” Mr Waters said.
“They still stand strong today – a far cry from the buildings being thrown up in the modern era.”
Mr Waters believes recent news around construction problems are “the tip of a very dire iceberg” as most of the troubled unit towers are in the investor sector.
“That’s the very area where there is a pipeline of stock under construction and due to be released,” he said.
At the moment, there are hundreds of purchasers waiting for their new tower units to be completed, and they’re watching the latest reports of stress fractures and forced vacancies with wide-eyed anxiety.
They are undoubtedly on the lookout for bad news about their new construction unit tower. So too are the councils, certifiers, engineers, valuers and anyone else with a stake in the game.
“While we hear about the big problems, I’d bet my bottom dollar there are more minor infringements like gas leakages and waterproofing issues [that are] sure to play out as well,” Mr Waters said.
“I speculate that greed has played a major role in the scenario. And it’s not just developers willing to cut corners in order to make a bigger margin on their project either.
“There’s also those who certify these projects. And how about construction contractors who may have been willing to compromise on elements of the build to win a deal. There might even be councils who benefit from higher density projects in their jurisdiction who have been willing to negotiate building guidelines in order to promote development.”
Mr Waters, a seasoned investor, advises anyone looking to buy a new unit to wait for the fallout and do their due diligence on the property.
“If you do feel the need to invest in the sector, make sure you’re dealing with a reputable builder and developer that has a track record of solid, dependable construction,” he said.
“Also, ensure off-the-plan contracts contain insurances and warranties. Better yet, have a property solicitor with experience in construction, go through the deal on your behalf.”