More reports of Australia’s shoddily built high rises

Advertisement

By Leith van Onselen

The proliferation of high-rise apartments across Australia’s cities has been touted as not only a solution for housing affordability, but also as a way to save the environment by reducing sprawl, as well as saving the economy by filling the construction void as the mining investment boom unwinds.

ScreenHunter_11295 Feb. 01 08.37

The results have been disappointing, however. While employment has undoubtedly been supported in the short-term, many of the apartments going up have barely enough room to swing a cat. They also come with an expensive price tag of $400,000-plus, along with lofty body corporate fees – hardly an “affordable” solution for young Australians and families seeking shelter.

There is also another worrying trend that has developed – many of the apartments being constructed are poorly designed and built.

Advertisement

Last year, there were numerous reports (here, here and here) about how cheap combustible cladding had been used to cover potentially thousands of buildings across Australia, which in November 2014 sent a Docklands building into a towering inferno.

The problem is so bad that Engineers Australia released a report last year claiming that 85% of strata units built in New South Wales were defective on completion, whereas the Metropolitan Fire Brigade in Melbourne identified up to 50 Melbourne city towers as being high fire risks.

Today, The Canberra Times has reported that some multi-storey buildings recently constructed across the ACT are so shoddy that they would be cheaper to demolish and rebuild than to repair:

Advertisement

Ross Taylor, a consultant who has been working with Access Canberra to develop a more streamlined dispute resolution model for builders and unit owners, said he had been called in on one project where repairs just weren’t economic.

Valued well in excess of $50 million and with over 150 units, the development’s big issues included water leaks, a cracking facade and poor structural integrity.

“While attempts are still being made to have the builder return to carry out the necessary repairs, this seems unlikely,” he said. “The main option remaining is demolition and redevelopment”…

“Over the past four years we have seen a pattern of defects emerging that are endemic to residential multistorey buildings in Canberra,” he said.

“The primary cause of defects, particularly leaks and facade defects, is poor design.”

Similar phenomenon have occurred in other bubble markets, such as the ‘ghost estates’ of Ireland, Spain, California and Las Vegas, and the ‘ghost apartments’ of Miami.

Developers and builders attempt to make hay while the sun shines by selling/building as many homes as possible in a short space of time to frenzied buyers (in Australia’s case, many of whom are foreigners). In the process, build quality and design gets thrown out the window.

Advertisement

[email protected]

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.