Thinking about buying a new apartment? Don't do it

This is the advice of Philip Gall, chair of the Owners Corporation Network, in an opinion piece which appeared today. He speaks from experience having purchased a two bedroom apartment in a six-level complex in Sydney in 2008. The development had won environmental awards and the building inspection report produced no major issues. What could go wrong?

This apparently:

Within two years we were in full pursuit of a home owner warranty insurance claim to fund about $3 million worth of defect repairs. The external render was falling off, and balconies and bathrooms were leaking into apartments. The builder and developer had evaporated, leaving the insurer as the last resort.

He goes on to say:

The predicament facing Opal Tower and Mascot Towers apartment owners is only the visible tip of a very big iceberg.

So my advice to my kids today, and anyone who'll listen, is this: do not buy a new apartment, especially if it is over three stories high.

He also quotes a builder who told him "if they buy rubbish, we will build rubbish".

He calls for effective public policy initiatives, including effective consumer protection for apartment owners and I would add for all homeowners.

Link to opinion piece here:

https://www.abc.net.au/news/2019-06-19/ ... d/11220972

Those Opal Towers Sales marketing Images with vertical Green gardens and architectural environmental awards are worthless when the building is near to collapsing. "Doctors (and Engineers) bury their mistakes, Architects Can Only Advise His Client To Plant to cover them up"
Well That's going to work in this instance Mr Frank Lloyd Wright (dec)

That must be an industry aphorism because I have heard that before. Sad!

Good advice! Having said that, being the owner of investment apartments that haven't had these type of issues there are some good builders out there. I personally wouldn't buy into a development over 3 levels either, but in Sydney that type of complex is a rarity I guess.

I actually build apartments for a living so I am fully aware of some of the issues in the industry.

Unfortunately I have to agree with about 80% of what the article says, my caveat is that there are still some very reputable builders and developers who are an exception to the rule. The unfortunate thing is that over the last 10-15 years our industry has been inundated with a bunch of low lifes who simply dont care about quality.

I would still buy an apartment from someone like Mirvac, Frasers, Crown, ( my own company) etc. I guess its a bit like buying a car, make sure the brand has a good history with quality.

As an interesting side note I used to work for the man who said that quote, but it was slightly different. he actually said " I build sh$t for sh$t" and has become a billionare many times over

Sean Nicholls’ investigation into the building sector, Cracking Up, is airing on Four Corners tomorrow night (19 August) at 8.30pm on ABC TV. If you miss it, you will be able to catch it on Iview for as long as it is around. See related news story entitled A Legacy of Defects which includes the following chilling lines:

Right now, there are plans to build close to 140,000 more apartments around the country.
There is no guarantee these new developments will be built under the stricter regulations recommended in a report by lawyer Bronwyn Weir and former senior public servant Peter Shergold, commissioned by Australian state and federal building ministers.


https://www.abc.net.au/news/2019-08-18/ ... e/11413122

Some more in the news today about the Four Corners investigation airing tonight on ABC at 8.30:

One glaring example of inaction is how NSW failed to implement laws that could have addressed a major underlying reason for defective building work: dangerous or inferior products.

In 2017, Queensland introduced new laws to police dangerous building products — also called non-conforming products — including flammable cladding that was responsible for the fire spreading in the UK's Grenfell Tower, in an incident which killed 72 people.
The laws — known as chain of responsibility laws — ensure every person who uses or supplies a product on a building can be held personally responsible if it fails.
Later that year, NSW showed a draft bill of its own proposed law to a meeting of building industry groups.
"What we saw was a draft bill that was the Queensland legislation but on steroids — it was better," Rodger Hills, the executive officer at the Building Products Industry Council, said.
"They had taken a lot of time to incorporate all the learnings and findings from the Queensland experience and wrapped it up into a piece of legislation that was robust, it was easy to use, and it would have done its job.
"The industry representative left that meeting very hopeful that this was something that was going to be useful and it actually worked properly."
When the bill entered the NSW Parliament, Mr Hills said the industry was shocked to see it had been "absolutely gutted."
"We counted up about 80 clauses that had been pulled out of the documentation," he said.
"Those clauses were all around non-conforming building products. In fact, the definition of a non-conforming building product wasn't even in the bill.
"All of the clauses to do with chain of responsibility and duty of care, they were all taken out. As were all powers, the recall powers the minister had to recall defective products."

And yet the chief executive of the Property Council of Australia, Ken Morrison, has complete faith in the apartment building industry:

Asked if he would buy a new apartment, Mr Morrison replied: "I would, absolutely. I think I would be a discerning buyer looking for quality, but absolutely I would."

Of course this immediately puts the blame for their troubles on the poor buyers into the Mascot and Opal Towers apartment blocks who were not discerning enough and had no eye for quality - but still they are new apartments. I suggest they ask Mr Morrison if he would like to buy one from them.

For those who missed it last night here is a link to the Four Corners investigation entitled Cracking up:

https://iview.abc.net.au/show/four-corn ... 903H028S00

Bronwyn Weir, co-author of the Shergold Weir report, uses these words to describe the construction industry...lack of competence and .... a lack of integrity - which unsurprisingly echoes my exact words to my own builder several years ago: