Things have gone from bad to worse for Australia’s apartment market, with firefighters identifying 10,000 buildings along Australia’s east coast with suspected flammable cladding. From The Australian:
Firefighters have drawn up a hit list of up to 10,000 buildings across the eastern states with suspected highly flammable cladding…
Combustible aluminium polyethelene, which fuelled the rapid spread of flames at Grenfell, as well as a similar firestorm at Melbourne’s Docklands in 2014, where the blaze spread 13 floors in 10 minutes, has been found wrapping structures across the nation…
Right along the east coast, apartment owners are being stung by huge costs and are embroiled in legal battles to rectify their buildings, leading to long and expensive legal battles whereby the defendants along the supply chain all pass the blame. While lawyers are making a killing, the apartment owners and potentially taxpayers will likely end up being liable for the remediation works.
When viewed alongside growing concerns around structural integrity and build quality – as highlighted by the huge cracks found at the newly constructed 34-storey Opal Tower at Sydney’s Olympic Park – the reputation of Australia’s high-rise has taken a battering.
Moreover, this reputation hit has come at precisely the wrong time, given there is a veritable flood of apartments yet to hit the market:
We already know from CoreLogic that many recent apartment buyers are drowning in a sea of negative equity:
The situation will likely get much worse as wary buyers avoid the segment, settlements fail, and delinquencies and developer insolvencies lift.
A high-rise bust is looking more likely by the day.