Mascot Tower owners facing financial “execution”

Owners of the 132 apartments in the Mascot Tower, which was evacuated in mid-June after experiencing severe cracking, claim they are facing financial “execution” as the remediation bill surges past $20 billion:

One loan proposal would offer up to $20 million at a 7.7 per cent variable interest rate per annum over 15 years, with funds to be put towards stages one and three of the remediation works which have already started.

One resident, who did not want to be named, said “the options presented to us as owners are like choosing a preferred execution method”.

Another owner said both options are “very bad”, adding he had spoken with a bankruptcy lawyer on Wednesday morning.

“We donโ€™t know whether the $20 million is the end or just the beginning. We have not yet received the final costing,” the owner said. “The strata committee can liquidate me if they push through the motion in the AGM”…

Residents have renewed their pleas to the NSW government for financial assistance.

This comes after residents of the Opal Tower, which was evacuated on Christmas Eve amid severe cracking, were told they face a ten-fold increase in insurance premiums.

As I keep saying, this is likely only the tip of the iceberg given the unprecedented boom in high-rise apartment construction over the past decade:

According to the ABS, around 200,000 high-rise apartments were approved across NSW over the past decade, many of which likely contain significant faults.

The cost of rectification will be massive and will likely fall on both apartment owners and taxpayers alike, with most developers getting away scot-free.

The saga will also dissuade would-be buyers from purchasing high-rise apartments, adding to Australia’s dwelling construction bust.

Privatise the gains, socialise the losses.

Comments

  1. After collecting the 20 million, you can expect the strata to say “building is not fixable, has to be demolished’, and then charge another 40 million dollars for the demolition.

  2. ErmingtonPlumbing

    This was a response to a removed Post by Gav basically saying “buyer beware” and having no sympathy for those who don’t do their “due diligence”.

    No Gav,…the problem is “most developers getting away scot-free”
    It is those developer cvnts who have lobbied away proper Government oversight of Construction and it is they who have run of like theives.
    I would have those that have profited most from this debacle hunted down and executed first.

    • The90kwbeastMEMBER

      Right. So your argument is it actually not the fault of the government by reducing regulation to the current lax standards we have?

      You place too much blame on profit seeking businesses lobbying well. Business is gonna be business in a capitalist economy and twist things in their favour.

      I personally blame this all on the state governments. The NSW govt (and Vic, QLD to a lesser extent) made out like bandits by getting all of the stamp duty revenue from the construction of these shitboxes. They can then pay for the remediation work with said money.

  3. I am living and learning all the time. The lesson becomes stronger every year. Just go with the masses, you’ll be looked after. With a bitter taste in my mouth I can see that, at root, this high-rise debacle is a failure of governance. Therefore, it will be down to the governance body to make good. That will be us, via our elected representatives. Sorry…had to spit just now, too bitter.

    On another subject…spent a few hours with some early baby-boomers this week in an uncomfortable social encounter. Early boomers are now 73-75. They are the luckiest generation ever born. I’m a late boomer (now 60). Those people almost made me chuck. They were so wealthy, so content with themselves. And so sure that it was all due to their innate personal qualities of intelligence and general worthiness. Nothing to do with luck and circumstance. It was just a festival of back-slapping and bad-mouthing the needy and poor. Down with Newstart!

    Sure, I am luckier than some, but not all “boomers” are equal. There’s 15 years between early boomers and the last of the boomers. It’s an eternity in terms of life circumstance and sense of specialness and priviledge.

  4. I am a bit confused.
    – Property development companies have sold products that are defective. The accountability surely stops with them.
    – What is the ACCC doing? Don’t they protect the public from faulty products and scams?
    – Can’t the individuals hiding behind a property development company be pursued, bankrupted and jailed?
    – Are our laws so weak? Have we truly reached the stage of being such a corrupt banana republic?
    – If these issues are not addressed head-on – clearly no one is going to buy an apartment ever again.

    • Tony. I think I get what that is about. Three children living, but two lost. Grief and regret. Beyond caring. Hope it’s not literally your story?

  5. Sadly, a Royal Commission is unlikely because it will make it clear that government (both sides) bears much of the blame.