Is a storm brewing over Sydney’s construction and development?

Is a storm brewing over Sydney’s construction and development?
Edwin AlmeidaDecember 7, 2020

In light of the much publicised record high building approvals leading up to the end of 2014, I am a strong believer that the majority of Sydney’s developments we are building are what I term million dollar ghettos. To date I’m still not convinced otherwise.  

There are two fronts from which I base my beliefs. The first being that construction standards are not keeping up with construction trends to meet new living style demands, the shifts to urban consolidation (UC). The second, as previously reported, the “dangerous liaison” or  “unique” relationships, between developers and strata managers is becoming increasingly evident.

The demise of construction standards, most would like to believe, hit a slippery slope when private construction certification came into play in New South Wales in 1999 and as early as 1998 in Queensland.

For the most part however, I do not believe private certification to be the demise in quality of construction. I am of the opinion that standards and regulations have not kept up with the construction of mass numbers of highrise building trends, to properly and adequately accommodate living style shifts and requirements. We now have more than one in four residents living in strata titled dwellings.

Building and construction trends, if I may add, that have also seen more would-be unskilled developers and builders enter the arena, and all because of home warrantee insurance (HWI) being relaxed.

Crudely, you may build anything over three levels and you don’t have to provide HWI. Added are the complications and the costly legal process making recourse for rectification, less accessible. A great platform for fly-by-night developers to thrive in a “hot property market”.

The onus should not so much as lay on the certifier, whether they work independent of the local councils or for the local councils. The process of ticking boxes and making sure ventilation ducts are in place, water proofing is laid down and so on, is that: a process.  See it and if it complies, tick the box. Again a crude and very simple explanation of some of the requirements.

If it therefore ticks the box, why are there so many issues? A standard is a measure, a quantifiable outcome to determine whether or not a job was done properly or a structure was built adequately. Why are these therefore not adequate? One of the answers is overbuilding and under engineering. Another is the downgrading and deterioration of materials being used. Yes, the materials and methods of application which still comply with building standards however.

In a way that you may better understand; think back to the three level, walk up, yellow and red brick apartment blocks built in the 70s. The standard for balustrades, balcony rails or balcony wall heights were 850mm, maybe even lower.  Who lived in these apartments? Mostly, it was young couples with very little use of the balcony other than to dry their laundry. We may say, not a lot of risk. Now, these heights are considered too low. Why? Buildings are taller, young families are living in the unit blocks with children utilising the balconies for recreation and entertainment purposes. Balconies have become the new backyards, where backyard cricket rules don’t apply.

Another is the ventilation in bathrooms and laundries. There is a standard that relates to how much air a vent will extract out of these areas. Again, in previous years, most bathrooms and laundries had windows as well as ventilation units. The same standard applies today, but the big difference is that there are now no windows. The mechanical ventilation units are installed to standard, but cannot cope with the work load. Therefore, a large number of units end up with mould issues.

Again, when looking at the new living patters in the habitation of these dwellings, you can comfortably increase the workload of the vent by a further 100%. How can these mechanical vents cope? Truth be told, the ones that only just meet the standards don’t cope at all. Similarly, a multitude of other areas of construction meet the ‘standards’, but with overcrowding and mass construction coupled with under engineering, buildings are not coping.

Now turn your mind to some of the most common issues faced with respect to building warrantees; waterproofing, concrete cancer, falling and cracking render and ventilation problems. The older units built in the 70s and 80s are almost in the same condition because of the high grade materials used at the time and the standards were suitable. Now, most of the unit blocks which face major problems, all fall within two to three years of construction.

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Then, there is what I have referred to in past articles and videos as the “unique relationships” between builder/developers and strata management companies. 

The main issue is that not enough time is allowed for these taller, bulkier buildings to settle properly; to determine issues which should rest on the building company/developer to fix and not the owner’s corporation post the proposed 24 month liability tenure about to be introduced. However, that is only and if the strata management companies compile a report as prescribed in the proposed home Building Amendment Act 2014. In the main, “owner’s corporations” will only have two years to make a solid claim.

The rule of thumb that I use is that it takes a building four to six years to settle properly. Therefore, most faults in the construction: the main structure of the building, will not be evident for two years post the developer/builder has moved on from their fiduciary obligations.

Furthermore, under engineering and use of new construction methods and materials, are yet to be proven. However, one thing is a fact and is resounding true for now.  Large unit blocks have greater levels of maintenance issues than ever before and not in relation to quantity being built, but on averages overall.

Our personal experience in managing newly built apartments across Sydney has only highlighted the need for updated construction standards, as we witness how quickly new buildings deteriorate. Yes, then there is the ongoing battles we have with strata management companies that forever drag the chain when it comes to reporting back to the builder the issues that arise in properties that we manage. Perhaps you can tell me why they may adopt this tact, other than the obvious?

How to avoid being caught out:

  • If buying off the plan, be sure you conduct thorough background search on the developer/builder. This is particularly important if you are buying into a unit complex that is higher than three levels.
  • Visit other complexes built by the development company.
  • If buying into an established complex, ask occupants for building feedback.
  • Check for signs of mould and water marks along ceilings and where wet area walls meet the floors. Signs of issues are bubbling and peeling paintwork to the outer area.
  • Steer away from high rise apartments that have been rendered or will be finished with a rendered exterior for most of the surface area.   
  • Use of low grade materials and the use of fillers in the render, reduces adhesion properties between brick face and render. Settlement cracks also contribute to render falling away as well as waterproofing failure on balconies.

EDWIN ALMEIDA is licensee in charge of Just Think Real Estate.

He is also the creator of Oz Real Estate.TV and a presenter for propertyinvestingvault.com.

Edwin Almeida

Edwin Almeida is managing partner and licensee-in-charge of Just Think Real Estate.

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