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Near ‘impossible’ for Sydney buyers to know if their unit is defective

·3-min read
It's difficult for buyers to find out if their apartments have defects, a new report is warning. (Image: Getty).
It's difficult for buyers to find out if their apartments have defects, a new report is warning. (Image: Getty).

Buyers purchasing apartments in Sydney will find it “almost impossible” to discover if their new home has defects due to a poor oversight and building culture, a new report has found.

The UNSW Sydney and University of Technology Sydney study reviewed strata schemes registered between 2008 and 2017 and found evidence of defects within 26 per cent of the schemes.

However, this likely understates the size of the problem, with the researchers noting that among strata schemes with more robust documentation, some 51 per cent of projects had defects.

The most common defects recorded were water issues, which the researchers estimate are present in 42 per cent of the schemes with the better reports.

“Over the past 20 years there hasn't been a thorough process of collecting information about the quality of buildings, and documenting issues with buildings,” lead report author and planning law expert Dr Laura Crommelin said.

“So it's currently almost impossible for a regular consumer to do proper research about what they're buying – and this is in a system based on the idea of ‘buyer beware’.”

She noted that even the expert team of researchers had difficulty finding which projects had defects, and which type, raising questions around ease of access for regular buyers.

“The drive to construct more buildings more quickly has been a huge part of the urban planning orthodoxy for the past 20 years, not just in Sydney, but in all cities where higher density development rather than ongoing urban sprawl is seen as a way of dealing with population growth,” she said.

“But with the pressures for speed and reduced costs, and the trend towards deregulation, high quality oversight and documentation can be among the first things to fall by the wayside.”

It comes after a building in Sydney’s south-west was nearly evacuated over concerns it could collapse.

An engineer described the Canterbury building as possessing serious structural flaws, however the Public Works Advisory has since said there is “no immediate safety risk” to residents.

Information available to sellers but not buyers

The researchers also found that where information is available, it was often more easy to access for sellers than buyers.

And it’s a specifically residential problem.

While the buyers of large commercial buildings are often powerful companies with the power to advocate for their own interests, the buyers in residential buildings are individuals.

“In the apartment market you have a very significant power imbalance between the vendors – in this case developers – and the buyers, who are essentially a fragmented group of individual purchasers,” Crommelin said.

“They're not coordinated, so there's a lot more room for them to either be taken advantage of, or to make decisions that aren’t in their best interests.”

The 2018 and 2019 Opal Tower and Mascot Towers evacuations led to the establishment of the Office of the Building Commissioner.

A recent report from the Building Commissioner found that 39 per cent of strata buildings in NSW have “serious defects”. Of those, only 15 per cent had been reported to Fair Trading.

The Building Commissioner is tasked with reforming the building and construction industry, however Crommelin believes the government still needs to do more.

For example, developers should provide buyers with user-friendly building manuals and the building inspection regime needs significant strengthening.

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