From towering infernos to leaky homes

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By Leith van Onselen

Over the past two years, there has been multiple reports decrying Australia’s poorly designed and built apartments.

Last year, there were several 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 in 2015 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.

Back in February 2016, it was 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.

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Then in September, The SMH reported that a new 400-page review by former treasury secretary Michael Lambert found practices for ensuring apartment fire safety were “totally ineffectual” and had caused unsafe buildings to be approved.

Poor quality housing is not confined to the apartments space, however, with experts last month warning that Australia’s detached homes are also so poorly constructed that they could become “solar ovens” that cook their inhabitants on hot summer days.

Now a new fiasco has hit, with widespread leaking and flooding being reported amongst many new Melbourne housing developments. From The Age:

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Victoria’s faulty and leaky buildings will be probed in a government inquiry, amid revelations apartment ceilings have suddenly collapsed and stalactites have been discovered in multi-storey complexes.

Some of Melbourne’s poorly built towers were exposed when a major rainstorm hit the city last month, leading to a shortage of mould dehumidifiers and other drying equipment…

Up to 30 centimetres of flooding was reported at some new apartments when litres of water leaked into roofs, pooled among the insulation and crashed through ceilings, rectification teams reported.

The Victorian Building Authority (VBA) has announced it is holding an inquiry to determine if there are “systematic problems” with the standard of building and plumbing work across the state.

It follows an ongoing investigation by Fairfax Media exposing residential buildings in Victoria so poorly constructed they are dangerous, or are likely to fall prematurely derelict…

The VBA’s chief executive, Prue Digby, has acknowledged that substandard waterproofing is a “possible systemic issue” in Victoria…

David Pockett, a specialist in plumbing defect insurance claims, said Victoria could also be sitting on a multi-billion-dollar problem, describing the situation as a “huge public scandal”.

“You’re talking billions in long-term costs, because people’s homes are going to be prematurely destroyed by water,” he said.

“Houses that should be lasting 50 years are going to last 10. It’s just insane.”

Mr Pockett said there had been a widespread failure to enforce Australian standards around gutters and drains, resulting in rainwater overflowing into roof spaces and flooding homes.

New Zealand has experienced a similar systemic problem of leaky homes built in the mid-late 1990s, affecting between 22,000 to 89,000 dwellings, which has cost the New Zealand economy an estimated $11.3 billion (in 2008 dollars) in repair and transaction costs.

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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.