The recent Sydney Opal Tower incident may have major ramifications on the Australian property market as apartment prices plummet.
An independent review into the cracked Opal Tower found that although the building is structurally sound it would require “significant rectification works”, with every floor impacted by repairs.
The report, shared with state government last week, ruled out extreme weather and dodgy materials as causing the damage, but found several factors could have contributed to the huge crack in the Sydney building.
“We’ve identified a number of design and construction issues, a combination of which caused the observed damage,” University of NSW dean of engineering Mark Hoffman told media at the time.
The disaster sparked concern about the quality of new developments.
“The incident will not only affect prices in Opal Tower itself, but across the sector as a whole.”
Now analysts say the incident will not only affect prices in Opal Tower itself, but across the sector as a whole.
Independent property analyst Martin North from Digital Finance Analytics told ABC News that the Opal Tower situation had softened confidence in off-the-plan high-rise apartment complexes.
He said property valuers have already pushed down the price of off-the-plan apartments by 16 per cent since the Opal Tower incident.
“We were already seeing in our surveys that people were quite twitchy about the high-rise developments,” North told ABC News.
“And now some people who are contracted to buy off the plan may well walk away.
“Forward demand was already shrinking, and there is no doubt we will see considerable slides in prices.”
“Now some people who are contracted to buy off the plan may well walk away.”
Landslide for apartment prices
Just prior to the Opal Tower disaster, data revealed that apartment-owners are at risk of losing up to 8 per cent of its value by the end of 2019.
Based on approvals, Core Logic data predicted a further 31,499 units could hit the greater Sydney market this year.
Core Logic’s latest data reported a 6.28 per cent price drop for Sydney apartments for the 12 months to the end of the October.
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