From towering infernos to leaky homes

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.

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:

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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Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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  1. Its just as well that many of the apartments purchased by O/S investors down at Docklands remain unoccupied due to the fire hazard. Not surprised to see people sleeping rough on Melbourne’s streets because of this fire hazard.

    • Perhaps the newly discovered water retention properties of the buildings is an inherent design hedge against the flammability of the other sub-standard components?

    • GDP is such a wonderful measure as it hides all sorts of sins and is simple so the politicians can pretend they understand it.

  2. I live in a new apartment in the ACT. Last year we noticed mold growing up through the carpet. There are numerous leaks in the building with water coming through near switchboards. We’ve had the carpets replaced already but I suspect the leaks aren’t sealed. It’s a really dangerous situation.

    • How long is your building insurance? Not that it would matter if there’s a billion dollars worth of claims all at once.

      • The bodycorporate replaced the carpet and only did so in response to the mold report. They’re doing their best to ensure the insurance company doesn’t find out. Not sure about their insurance policy.

    • Co-worker has a six year old apartment and both the showers grout is crumbling to the point of needing to be resealed. That’s only one story of the shoddy build quality of Canberra buildings. In short, don’t buy new in the ACT.

    • Apologies for the screamingly obvious question but isn’t the developer on the hook for these kind of issues? It’s a new building, no?

  3. A possible upside is that it will provide work for the construction industry should the bubble ever go pop.
    But, if the bubble pops, who will be able to pay for it?
    Looks like we better hope that we really are different here and that we have pop-proof bubble.

  4. TailorTrashMEMBER

    “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”…………………hope those “investors ” insurance companies pony up the money ………or those “investments” might turn negative and ” be under water ” pretty quickly ………..

    • TT – I think, in this case, the Gov, RE, devlopers and insurance companies will be hiding this under the carpet until one buildings burns and kills 20-50 people. Sad and it is not something I am wishing to see but that is the reality.

  5. adelaide_economist

    Nah, you’ve got it all wrong. You just cannot lose with houses, mate. Bricks and mortar (and flammable alucobond), safe as. Only in Australia do universal laws associated with decay, poor workmanship, low quality materials and the passing of time itself suspend themselves when it involves housing.

    And being Australia, nothing will be done until we do in fact have a towering inferno where a non-negligible number of people die (preferably in a visible and tragic way) at which point suddenly there will be demands for ‘action’. It’s just so predictable.

    • Its fine. None of the people who die are likely to be politicians, related to politicians, or wealthy liberal doners, or property owners. So its ok. There is no need to fix or do anything. Anyone that dies will be replaced in less than a week with our current immigration plan.

  6. Solution is simple. Lower the bar so that all the houses and high rises come back into compliance.

    • reusachtigeMEMBER

      Yep, exactly! The standards are way too high and just add to costs and therefore reduce profits.


    ACTIVITY in WA’s property market has reached its lowest point in 12 years, but new-home sales are increasing.

    The total number of documents lodged with Landgate — a barometer for total sales across new and established homes — was down 2 per cent last month and down 12 per cent from the same time in 2015.

    Wonder if those new homes are going to be leaky ?

    • My local plumber here in WA, who is about to retire and son will take over the business, has said new builds have ensured a 30 year gold mine for his son.

      Talks about the dodgiest shit.

      • Anything specific in the plumbing area one should look out for.
        I had to pay to replace the entire sewage in my mums 25+ year house,as it was virtually destroyed by tree roots.
        I had to try 4 plumbers before i found someone who would do it for a realistic price. Lucky for me, becasue all they did was replace sewage pipes so they kinda specialized and experienced in that area that kept the price down. All the other plumbers where a total bunch of wanker rip off merchants.

      • i) Using the cheapest polymer pipes internally.

        New estates tend to have rats.
        Punters put rat sack to kill rats.
        Rats can smell the water as they are dying and can chew through pipes.

        Water leaks from ceiling,

        Hilarity ensues.

        ii) Plumbers not tying down cheap polymer pipes.between wall cavities.

        Unlevel washing machine vibrates and races from the wall.
        Washing machine pulls tap fixtures from wall because tip fitting are fitted with no care and pipes aren’t tied down.

        Washing machine ends up 3.5 metres into main hall way, then pulls enough to burst and cause a 15 mm pipe to have a high pressure leak.

        Hilarity ensures.

      • ErmingtonPlumbingMEMBER

        I still haven’t tooled up for plastic/foil gas pipes,.. but all of my plumber mates use it.
        I still prefer to use copper for gas and prefer to silver soilder it, but have recently purchased a kempress tool for o-ringed copper press fittings for water and gas.
        It halves the install time (compared to soildering),… but recently after installing a 25 meter run of 20mm gaspipe in between the rafters and roof tiles (32mm battons) I couldnt help thinking, how long are these pressed oring fittings gona last,…esp with the expansion and contraction from temp differences.
        Orings in cistern cocks and tap spindles leak all the time.
        But the stuff is approved and everybody else is using it, so I am too.
        But although I use plastic for water,…its a bridge to far for me on gas.

  8. So, that’s how we’re going to bring down the Ponzi economy? By re-posting the articles on the poor construction quality? The politico-housing complex must be shaking in their boots. Good job!

    • Michael Faraday

      Its funny because its true.

      This may sound, well, to you, crazy, but a great number of powerful city states, nations, fiefdoms, feudal rulers, principalities etc have been brought down by shitty living conditions.

      From Paris to London with sewerage, to Rome with fresh water. The history of vast numbers of people living in incredibly tight, cramped shitty conditions is the absolute MAINSTAY of civil uprising. In fact, pretty much the only outliers have been salt and some tea.

      So yeah – if you don’t want to be dragged out of your bed for a super close neck shave at 3 am provide the following.

      Food, Water, Shelter, Entertainment.

      And of those fail – and you can be assured of a merry dance, if you know what I mean.



    INNER city units in Sydney, Melbourne, Brisbane and the Gold Coast sold off-the-plan have been declared a “clear and present danger” to property buyers due to over supply forcing down prices.

    A report by trends forecaster Hotspotting said the number of apartments being released exceeded current demand.

    If only someone could have predicted this.

  10. reusachtigeMEMBER

    Hey, it’s a friggin free market! If people want to buy these shoddy apartments then flog them off down the track to unsuspecting buyers thus making huge profits then that’s great for the economy!

  11. Doesn’t surprise me in the least after 11 years in construction (I’m a steelfixer). I can vouch for the fact that the majority of building companies who’s projects I’ve worked on regard clients as mugs and view cutting corners and doing the cheapest possible quality build as “part of the game”. Case in point John Holland and the Perth Childrens hospital, without the CFMEU watching them all the problems with that project would have been swept under the carpet by JH and the government

    • you know what I always feel like asking builders when I walk past their sites, do you take any pride in your work? is it soul destroying to know that you’re building shit that people will have to live crappy squashed up lives in for fifty years? for the sake of one extra foot to the width and ceiling height and one extra pane of glass on all the windows you could have had something quite liveable. you could have built a level concrete slab and proper pooling into the drain and sealed the corners of walls and windows properly. of course I know the developers and building inspectors are the actual criminals. or is it the government and banks? But go the CFMEU. nice to hear.

    • We were living in NZ as the ‘leaky building’ syndrome began to unfold. Mrs Nut’s uncle was a builder and I asked what was going on. The relly said there were many aspects that included dumbing down of the trade, poor building materials, basically deregulation of the market. I said where were the Master Builders Association, you know “the guarantee of quality”, said relative rolled his eyes and said “so long as you pay your membership, they don’t care.”

      • ErmingtonPlumbingMEMBER

        The masterbuilders association is run for the benefit of profit seaking private companies. You are delusional if you think “they” are focussed on maximizing or improving building standards,… infact they lobby for the opposite.

        Government regulation, inspection and enforcement is the only solution to the current free for all.

  12. Michael Faraday

    My family had already built Australia’s highest rated eco-development. Our buildings were considered amongst the best in Australia, quality, eco, durability, heritage – we had endorsements from around the world – we even had people like Kevin McCloud do a special, amongst many others, on the developments.

    All four retail banks REFUSED to fund future phases despite 100% pre-sale due to lack of profit margin.

    Yes the development was based around limiting the profit level in return for high quality, sustainable urban development.

    Banks shut it down because it was “too good”.

    Literally – refused to fund a 30 million dollar project because the profit margins were too low based on quality.

    Where is the oversight on this ? Absolutely sickening.

    We were told outright to remove sustainable quality design and replace it with cheap, dangerous, flammable, cancerous shit in order to scrape in a few hundred grand of extra profit – or no deal.

    The problem is not shitty construction, its not even shitty governance – its the same thing Macro-business has always said it was – the total overtake of the entire economy by the finance sector.

    Really, really angry.

    When we are facing a global environmental catastrophe, and the actual solution to that catastrophe is being actively blocked by banks – they need to be investigated.

    Sorry – end rant.


    • Even StevenMEMBER

      Well, on the bright side, your story supports the view that the banks are more conservative (read self-interested) than many on MB give them credit for.

    • ErmingtonPlumbingMEMBER

      Well I hope you remember that anger, next time someone is pontificating to you on the benefits of small government, deregulation and “the Market” and promptly punch them in the face.

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

    So when these houses (I infer that includes units) become unsaleable and uninhabitable in large numbers due to these defects, what happens then?

      • Property kaboom as in crash and lower prices, but also the huge risk of picking up a lemon, piece of shit property.

    • Two possible outcomes:

      1st – if majority owned by baby Boomers: Government bail out by taxing those that work (i.e. generations after boomers) to repair an unforeseen, unavoidable issue.

      2nd – If not majority owned by baby boomers – tell the young they personally need to dig deep to correct their circumstances, that’s just life!

    • ErmingtonPlumbingMEMBER

      Im looking forward to the knocking down of the Bennalong appartments next to the opera house (the toaster).
      At the time of sale these appartments were the most expensive per m2 appartments in Australia and probably still are at around 10 to 15 million a pop.

      During part of its construction I ran a small crew of 5 or 6 at a time, at our workshop in Mascot, prefabricating sections of Copper stack for the 70-80 plumbers we had there and I visited the site many times and got to hear the many stories of seawater inundation of the foundations and half poured concrete columns,…5 to 10 years later (up to 2007) im a minor-works forman ( jobs under 6mths and less than 400k in plumbing) for the same company, usually in the City, Eastern suburbs or Nth Sydney and was always getting sent to Bennalong, from my small jobs, to investigate and fix mirriad plumbing and water ingress issues there. (It was one of our only facilities management gigs, due to the building manager “loving” my minor workes supervisor, who years eairler was the plumbing construction supervisor of these same buildings when they were built.)

      With 2 or 3 carpark levels below sea level (with a gym and pool at the bottom) it used to amaze me all the 2,3,4 and 500 thousand dollar cars parked under cracked concrete slabs with salt crust along the crack lines.
      This weird orange shit uesd to ooze through the sandstone into channels between the Rock and bessa block walls (had to hose them out twice a year) which all drained down to about 7 spaced out 2m x 2m pits in the very Bowles of the place. The 65mm copper pump out lines from these pits went paper thin and started to burst less than 4 years after construction and were replaced with pressure PVC.
      The flaps in the 200mm castiron reflux valves at the sewer connections were also rusted out by this time.

      Externally the marble or granite cladding leaked like a sieve in Rain and erupted in all kinds of unfortunate places. Even the roof and downpipes leaked into the service ducts, ruining the carpet in the bedrooms of these near brand new appartments,…I spent many an hour spraying the roof area with fire hoses and tipping over “otto”bins full of water, trying to identify the source of masterious leaks, that only occured when the rain was windswept from a certain direction.

      The water services within the appartments had to be changed due the the piping system used (wisbo,…no longer available) kept spring leakes everywhere esp the hot water piping.

      But my favorite leak was in the ceiling space above the offices of the Arab Bank, one floor above the promenade level, near the cinema.
      The cracked concrete slab above the ceiling tiles was leaking everywhere and the solution was to install folded copper safe trays and drain through 20mm electricsl conduit !!!.
      The one I installed was the third one up there and 2 m long!!. These leaks were eaisly 10 meters in fron the edge of the building!!

      Concrete cancer is going to get these buildings for sure and in less than 50 years! Discracefull!

      • I used to know people who lived there and visited a few times. It’s a great location and I expected great things, but internally the place seemed like a dark and dingy dump. Like so much modern housing, it seemed to have been designed to maximise the profits of the developers at the expense of livability. It seemed very cramped, the ceilings seemed oddly low, and generally I thought that I wouldn’t want to live there.

      • Ermington beauty of a post thank you. re-reading for the horror of it.
        Vic building sectors are amazingly incompetent in my experience compared with Sydney, especially for residential plumbing. so has to be much worse in VIC.

    • I’ve noticed obvious imperfections in an awful lot of the new-build properties in our area … both new-build and units. I find it incredible that these imperfections aren’t picked up by the building inspectors / valuers as they are visually obvious. The future costs to occupiers / investors are going to be astronomical.

      As some commenters as have hinted at, many of these buildings will probably be demolished in the years to come.

  14. The smallest and worst built apartments built in Tokyo were in the years leading up to the bust. ie late 80’s. A friend of mine living there has inspected many and says people just cant sell them now, even worse some people still have massive mortgages on them from that particular era.
    Imagine the body corporate fees and sinking funds needed on our crap buildings in 20+ years time.

  15. Dale SmithMEMBER

    Fire prone buildings will kill you fast.
    Leaky moldy buildings will kill you slow.

    Take your pick.