Defect reports rising… but so is confidence

Here’s a question for policy makers and potential apartment buyers alike – does an increase in reported strata defects mean that there are more defective buildings?

Or does it actually reveal that more problems are being reported – rather than being evident – because owners think there’s a better chance that they will be fixed?

A survey by Building Commission NSW in conjunction with the strata managers of Strata Community Association NSW (SCA-NSW) has revealed a huge increase in the percentage of recent buildings with reported defects, but an even bigger increase in the likelihood of owners to report them.

And that second figure could be taken as a positive – it may well be that more strata schemes are reporting defects than are trying to hide them in the hope their property prices won’t be affected before they sell.

This latest Building Commission NSW survey of the experience of NSW strata communities in dealing with serious building defects, has revealed that 53 per cent of buildings surveyed had serious defects in common property, up from 39% in the previous survey 2021.

Strata managers demand more protection from defects

However, defects in newer buildings are trending downward since 2020.  Meanwhile the level of reporting of serious defects has more than doubled since the 2021 survey. 

That means 34% of buildings with serious defects reported them to the regulator in 2023, compared to 15% in 2021. Given that this survey was conducted in 2023, these results must be seen as a direct consequence of former Building Commissioner David Chandler’s hard-ball approach to dodgy developers

However, one thing that hasn’t changed is the nature of the most common defects. In the recent survey, as in 2021, waterproofing and fire safety systems were the most prevalent defects (42% and 24% respectively for 2023).

That said, the prevalence of waterproofing defects has declined in recent years.

The survey also revealed that defects are mostly being resolved by agreement with the builder or developer and almost half are being resolved within one year.

As a result, almost half of strata managers (48%) agreed reforms have increased consumer confidence.

The survey was open from 26 June to 31 August 2023 and was completed by strata managers who managed Class 2 building strata schemes only (four or more floors above ground level) and which were registered between July 2016 and June 2022

There were 642 surveys completed, up from 492 in 2021 and representing 41% of qualifying buildings.

You can download an infographic showing the key information HERE and the full report HERE.