The Opal Tower Effect: Sales crash. Confidence shattered.
During the past 12 months, the building and construction sector has been tarnished with all key stakeholders looking for exit signs to parachute. For most law-abiding citizens, what has surfaced in the building and construction sector over the past 12 months beggar’s belief. Put simply, most Australians have a valid case in saying “If I did what certifiers or other service providers did in the building and construction sector, I would be looking at some serious legal and disciplinary actions.” It was Christmas 2018, when owners and occupants of the Sydney Opal Tower woke up and instantly realized that Santa must be lost. Perhaps it was the arctic freeze or satellites not working from solar flares, but after hearing walls cracking for the past 9 months in the Sydney Opal Tower, residents knew the more probable explanation was something is not right. Not the Christmas everyone planned with family and friends.
How is it possible in a world obsessed with smart city technology, that owners and occupants for 9 months did not know whom to contact and report cracking wall concerns?
The best way to manage strata issues is to use a communication platform that empowers owners and occupants. I doubt you can buy a $15k dollar car that would not have a warning light every 6 months on the dashboard to “Check Oil.” The average price of apartments in Sydney and Melbourne is $700k and you get no strata property platform that can assist all the owners and occupants in managing tens of millions of dollars in assets. Since the Sydney Opal Tower debacle, it has been a race to the bottom. For decades every state regulator has had their lights on, but nobody was home. Our local, state and federal agencies in hindsight were toothless tigers focused on short term revenue with hundreds of millions of dollars generated in development application fees, rates and stamp duty.
As reported in The Australian Financial Review on 24th October 2019, “Concerns over combustible cladding and construction defects and weaker consumer demand for new apartments, sales of residential development sites plummeted 38 per cent to $5.1 billion in the 2019 financial year.” The ongoing defects debacle nationally has taken the heat out of the property market.
The cracking walls in the Sydney Opal Tower echoed the cracks in the building and construction sector and has changed the industry forever.
Newly appointed New South Wales Building Commissioner, David Chandler, recently issued a fresh warning. “If I was spending $750,000, it is my opinion that, in fact, I would be down there having a look at the building. I hope other people do that going forward.” Some good advice but now is not the time to put any further responsibility on potential buyers. There are some encouraging signs from the regulators working with the building and constructor sector moving forward.
No doubt, the standard and quality of construction will improve, but what of the millions of Australians living in strata apartments already built? Where to from here? Sadly, many owners will be notified of major structural and construction defects in the coming months and years, that will financially and emotionally destroy hard working Australians.
Related Reading References
Apartment prices crash up to 50% – Australian Financial Review
Sydney high-rise apartment prices lag behind – Sydney Morning Herald
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