Sydney’s apartment market in crisis as faults proliferate

Sydney’s apartment market is in crisis after a series of high profile structural faults have been reported at major apartment complexes.

The problems began last year over concerns that thousands of apartments across the city might be infested with flammable cladding, similar to that which sent London’s Grenfell Tower into a towering inferno last year, killing dozens.

Sentiment took another hit when on Christmas Eve, residents of the newly built Opal Tower were evacuated after severe structural faults were discovered in the buildings foundations.

Last month, the situation worsened when residents of the 12-year old Mascot Tower were evacuated after severe cracking sent soundwaves across the complex.

Last week, 7 News reported that a 3 year-old residential apartment complex in Campsie has experienced major cracking:

And this week, it was revealed that a 10-year old inner Sydney Zetland apartment building has been abandoned after water and fire safety defects were discovered:

Water damage to a Zetland apartment building was so severe experts warned that a fire could trigger its collapse and residents should be “urgently” evacuated, with the 30 owners told they had to fix in excess of $5 million of defects with an insurance payout of just $1.7 million…

They recount having to live with chunks of plaster falling from the ceiling, widespread outbreaks of dangerous black mould, rotting carpet and floorboards, and water streaming through the ceiling “like a waterfall”…

Early owners recall “a whole bunch of defects right from the start.”

Amid growing pressure, Premier Gladys Berejiklian yesterday assured voters the government is addressing the situation, committing to appointing a building commissioner:

Premier Gladys Berejiklian on Wednesday said she wanted to assure the public that the government knew there was a problem around building regulations.

“We know there’s a gap in legislation. We allowed the industry to self-regulate and it hasn’t worked,” she told reporters on Wednesday.

“There are too many challenges, too many problems and that’s why the government’s moving to legislate.”

This is all too little too late, I’m afraid, and akin to closing the gate after the horse has bolted.

Sydney has just undergone the biggest high-rise apartment construction boom in its history, which has left the city with potentially thousands of defective buildings and billions of dollars of potential rectification costs:

Nothing short of a warts-and-all royal commission will do in order to finger those responsible, recommend reforms, and prevent a recurrence in the future.

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  1. Another commissioner, another review, another minister of making housing great again. All weasel bullsh1t words that won’t do anything. How about a royal commission into the cosey deals between various levels of government and dodgy developers? Lets put Guy Mathews first on the stand. Bob Carr we should keep in the gimp dungeon until we get to his pathetic role in all this. Trigoscum can come to the party too if we can separate him from Gotti underneath his desk slurping away.

  2. Quick get the whole set of “Yes Minister” reruns because the current ones is not funny. SFA gets done.

  3. Opal Tower
    Mascot Tower
    What do they all have in common?

    => All high rise migrant only slums.

    Shoddy high rise tower block cage housing.

    Now cracking under the load of foreign dirty money and temporary migrants in cash in hand sublet bunk share.

    • What surprises me is the sheer number of people evacuated from these buildings. Most apartments are small one or two bedrooms yet the number of people evacuating means that there are about 5-6 people per apartment. What surprises me is that no one really seems to care about how over-occupied these buildings are.

      • boomengineeringMEMBER

        What’s so surprising, if you load multiple times the expected safe carrying capacity number of people in a jumbo why be surprised if it fell down.

      • I’m not surprised they are slums, I’m surprised like you say the media hasn’t talked about this element to it. But thou must not mention the Ponzi / Third World living conditions we are creating thanks to mass immigration.

      • Yes, I saw the report which I think you’re referring to which had the number of residents and thought it must be a mistake. I can’t find it now, does anyone have the link?

    • Ronin8317MEMBER

      The one in Zetland is not high rise : it is 2 floors, and it still have issues. The water leakage cause the walls to lose their fire rating, but instead of fixing it, the strata manager prefer to evacuate and leave the place empty.

      Someone is looking to mop up those townhouses on the cheap, then sell/redevelop the whole block into high rise. The strata management is helping that ‘someone’ to do it by informing the media.

      • Yep that’s my read on the Zetland fiasco. I wouldn’t be at all surprised if it’s not being agitated by the Developer that owns the site next door and already has a court case scheduled. He is suing the strata for the devaluation suffered by his site through the neglect of their apartment building and apparently has a really good case.
        What a coup if he wins in the courts and drives the value of their site to zero. the owners face the prospect of walking away with nothing …absolutely nothing except a huge debt that is.
        Lets hope that stupidity continues to have consequences, it’s the only way that we’ll ever fix this mess, sure a few people will get ruined but that’s a small price to pay if it permanently kills the Aussie RE brain bug.

      • The strata would be getting an insurance pay out to cover the cost of rehousing the residents. In the interim, the entire block will be on the market, set for demolition.

  4. TailorTrashMEMBER

    One of strayas world beating “export” businesses
    in trouble ?…wonder how all those Chinese who were stampeding to buy this sh1t now feel .
    Wonder if their censured media is getting any
    of this unwelcome news .

    • kiwikarynMEMBER

      And since they can’t offload them to other foreign buyers, and locals won’t touch them with a barge pole, they are effectively locked into these “investments” for life. I wonder how many will be posting in the keys to the banks, and simply disappearing. People always assumed there would be no jingle mail in Australia, how wrong they will be!

  5. There’s no problem here. The book value for tax purposes of these residences was already running at close to zero. The owners haven’t suffered any losses.

  6. Wonder level of debt held by Syd and Melb construction industry jobs. Looks like not going to be serviced for much longer.

    • The construction workers employed to put up these towers will be employed to fix these towers (flammable cladding etc.), they will service their debt. The higher leveraged buyers who will be hurting will be local owners as foreign owners will just walk away.

  7. mild colonialMEMBER

    Sydney’s apartment market in crisis as reporting by the media of faults proliferates.

  8. “There are too many challenges, too many problems and that’s why the government’s moving to legislate.”

    Good on ya dopey Gladys. Finally you’re going to… start doing your f-ing job?

      • Maybe that’s the right outcome.
        What sane individual would purchase an apartment if there was absolutely no warranty.
        The result of such a move would be to return apartment ownership to the corporations (primarily banks, insurance companuies, pension funds…) that can properly monitor construction (done on their behalf) AND own a sizable hammer with which to hit back at shoddy construction.
        If you’re a builder/developer and you screw a few small one time buyers than maybe your name gets trashed a little but there are no real consequences because much like the mythical Phoenix you’re quickly reborn. However just imagine your construction is so shoddy that the building must be tron down. If the market for apartments was 100% corporate than your name would be at the top of a black list and you’d never work again in construction.
        In many ways the private ownership of individual parts of this shared building is the root cause of the problem, so maybe that’s where we should try to create change.

    • bolstroodMEMBER

      but… too late… too late .
      The trust (credit) has been destroyed.
      Even if the govt can overcome it’s small govt. conditioning, what to do about the thousands of buildings already built ?
      The Greed God has won.

  9. PalimpsestMEMBER

    The fallout from the banking RC lasted about 6 months before subverted by the banking lobby. Even with the tightly constrained terms of reference it took a lot of effort and finally the permission of the banks before the Government considered it. Worse still, despite the constraints it actually produced some effect. No one is going to let another RC loose in construction.
    Developers and property owners abound in all major parties and, after all, NSW has “fixed” the problems now. We need to all keep quiet and settle down lest it affect property prices.

    • Agree it’s all good for the moment. The current crop of flawed apartment builds (Opal, Zetland, etc) could be (& will be) swept under the rug. Maybe if another 1-2 appear on the scene they can be swept under the rug too. This is assuming the damage is low-medium only, i.e. no-one hurt and the building can be repaired and doesn’t need to be demolished.

      Game-changer though if someone gets hurt (or worse) and / or a building is condemned. RC won’t be avoidable at that point.

  10. JunkyardMEMBER

    We don’t need another royal commission. Waste of taxpayers money. These crumbling new buildings are the best entertainment I’ve seen in a long time. What we need is Sportsbet and Ladbrokes to start taking bets on which building will get demolished first.

  11. Oh no highrise construction down

    now Epping and Mascot will not each have more residential cranes than all of NYC
    And Sydney will stop beating all of the north America in crane index

  12. It is baffling that in an industry with the integrity, honesty and customer focus, self-regulation in property development could fail.

  13. scottb1978MEMBER

    Sounds like we need an ongoing royal commission that can direct its attention at whatever the latest ballsup is