From 'Wild West' to Gold Standard: How NSW's Building Commissioner Revitalised a $24 Billion Industry
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From ‘Wild West’ to Gold Standard: How NSW’s Building Commissioner Revitalised a $24 Billion Industry

Buyer confidence returns to the multi- residential market as certification kicks in

By Mercedes Maguire
Wed, Oct 25, 2023 9:46amGrey Clock 4 min

There was a time not so long ago that the NSW building industry was referred to as the Wild West. One in 10 new residential apartment blocks in NSW had serious defects and there was no way to tell the good developers from the bad, as buyers crossed their fingers and hoped for the best when choosing a new apartment. As NSW Building Commissioner David Chandler joked, people buying new apartments had less consumer protection than someone buying a toaster or washing machine.

Add to that the scenes that played out on the nightly news of the thousands of residents evacuated from their Sydney Olympic Park apartment block on Christmas Eve 2018 as it threatened to collapse, followed by the 130 residents given hours to flee their Mascot apartment months later.

Into this scenario stepped the first ever NSW Building Commissioner, David Chandler. In just four short years, he has managed to bring a new transparency and confidence to the $24 billion industry. As one industry expert put it, “he managed to turn the Titanic around” not only because of the positive changes he brought to the industry, but the speed with which he did it.

“I remember back in the day the barbecue conversation was ‘You wouldn’t buy an apartment built in the last 10 years’,” says Urban Development Institute of Australia NSW CEO, Steve Mann.

“That was probably not right but there were enough problems for that to be a reasonable conclusion for consumers. We lost the confidence of consumers and no industry can afford to do that.

“So, although that was just true of the fringes (of the industry), we had to hone in on those fringes and reign it in.

“And that required very strong leadership.”

It is almost universally accepted in the building industry that one of the most positive changes in recent years is the introduction of the independent Construction Industry Rating Tool (iCIRT). It allows consumers buying a new or off-the-plan apartment in NSW to check the credentials of the company delivering the work.

So far, more than 200 companies have been rated through an independent and rigorous process, which experts claim is giving consumers the power to choose wisely, for the first time ever, who builds their home.

“Consumers are now asking for iCIRT ratings when visiting display units,” says Karen Stiles, director of the Owners Corporation Network of Australia. “And savvy real
estate agents are now focused on marketing rated developments.”

Fabrizo Perilli, the NSW president of the Property Council of Australia, calls iCIRT a “catalyst for change” in the multi-residential property industry.

“We are yet to see consumer confidence and the purchasing of apartments return to pre-COVID levels, however we anticipate this to improve as more and more developers and builders adopt the iCIRT rating,” he says.

“In the current market, trust, transparency and certainty are paramount for buyers and investors.” Perilli adds it’s also an effective way for developers and builders to differentiate themselves from their peers when communicating to purchasers who are rightly seeking an additional layer of certainty and peace of mind.

NSW chapter president of the Australian Institute of Architects, Adam Haddow, says Chandler’s cleaning up of the industry benefits not only consumers, but all elements involved in the building process.

“From an architect’s point of view, the checks and balances that Chandler has been able to put in has reigned in some of the challenges we felt with the construction of apartments,” the director of architecture firm SJB says. “Before Chandler came in, a lot of things like materials could be swapped out during the construction process and we had little control.

“He brought in more constraints over what can be changed, so you just can’t swap brickwork for aluminium, for example. Most new apartments in NSW are sold off the

“plan and consumers commit to buying an apartment on the info provided during the marketing phase. Now there’s more consumer confidence that they will get the product they committed to.”

While Chandler’s four-year role was due to expire in August, the Minns Government has encouraged him to stay on until the new Building Commission is established by the end of 2023.

The Building Commission was a Minns election promise to ensure quality building and an increase of supply to stem the ongoing housing crisis that has dominated public debate in recent months.

Despite the positive changes, Mann says the apartment sector is “in turmoil” in terms of supply. At its peak in 2018/19 new apartment builds represented almost half of all new housing stock, delivering around $33,000 apartments a year. Mann says that number is down to around 10,000, highlighting a crisis in housing shortage.

“We have a whole lot of economic challenges,” he says.

“There has been layer upon layer of challenges, through the COVID years, the financing of these big projects and construction costs have become more difficult.

“But with the deep affordability challenge we’ve got, apartments must be the big future, it has to be.”

President of the Strata Community Association of NSW, Stephen Brell, agrees.

“The government has predicted NSW needs 30,000 strata lots per year just to keep pace with current demand and given that we are falling behind, that is a challenge for the government and for the planners,” Brell says.

“With affordability, in Sydney in particular, being very expensive the Minns Government has a focus on medium-density living, particularly around the major transport hubs of Sydney. As Sydney is bounded by national parks to the north and south, mountains to the west and the ocean to the east, the only way is to go up.”

Brell adds the future of the apartment sector in NSW looks bright because Chandler is not only looking to improve the quality of new builds, but also to maintain the existing stock.

“By 2030, 60 percent of strata schemes will be more than 30 years old so we need to focus attention on existing buildings, of properly maintaining them,” Brell says.

“We have to make the industry resilient going into the future.”



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