Sixty per cent of apartment buyers say they would pay more for apartments if they were more confident of the build quality and were sure that the contractor or building professional had a trustworthy reputation.

However, only three in ten Australians start with a positive perception of the construction industry, according to a survey by global data, analytics, and technology company Equifax.

Equifax, the company behind the NSW Building Commission’s iCirt star rating, says that on average, buyers would pay 6% more for the reassurance of a good reputation compared to those with an unknown status.

The survey results come as the industry has faced a tumultuous year with record construction company insolvencies, supply chain issues, and severe labour shortages, with the flow-on effects being felt by consumers left with incomplete or poorly built homes.

The quality of builds is increasingly becoming a significant concern for consumers, with 41% of Australians revealing there was visible damage and structural or design issues with their homes. Adding to consumers’ woes, over three in five (63%) of Australians acknowledge that living in homes with defects causes stress. 

The survey also shows that nearly two-thirds (65%) NSW residents admit that they are concerned that the low level of supply with high demand will negatively impact building quality in Australia (e.g. builders cutting corners to deliver homes faster and increase supply).

Only one in four (23%) NSW residents say they are aware that there’s an independent rating tool available to help consumers find trustworthy building professionals.

NSW Premier Chris Minns’ recent unveiling of new legislation to strengthen the powers of the Building Commissioner, is clearly intended to further boost consumer confidence.

It includes new powers for inspectors to enter buildings under construction and order defect remediation before the buildings are completed.

There are also plans to crack down on “phoenixing” – developers deliberately going into receivership to avoid debts and defect claims, then starting up under a different guise to do the same thing all over again.

The key survey findings are;

• A plucky 45% of Australians intend to purchase, renovate or build in the next five years. A third of this cohort (32%, approximately 2.9 million Australians) say they have a negative perception of the construction industry in Australia.
• Overall, only three in ten (30%) Australians have a positive perception of the construction industry, including one in ten (10%) extremely positive.
• Around seven in ten (68%) Australians say they are somewhat (28%) or very (40%) concerned about the rising number of construction company insolvencies and their potential impact on housing supply.
• Three in four (76%) Aussies who intend to buy, build or renovate a property in the next five years say they are willing to pay more to get assurance of working with trustworthy property developers or building professionals.

Brad Walters, Head of Product and Rating Services at Equifax, said the industry is facing a number of challenges. “Only one in three Australians have a positive perception of the industry – and there is a big gap to bridge. However, we know there are many capable, reliable and resilient industry players that are dedicated to doing the right thing. The opportunity is there to rebuild consumer trust, and for trustworthy building professionals to benefit from improved market confidence.”

Equifax reveals that while over two-fifths (45%) of Australians intend to invest in property (i.e. to purchase, renovate, or build a home or investment property) in the next five years, nearly half (47%) cite lack of trust in the building or construction industry (34%) and/or a lack of qualified contractors or builders in the market (32%) as the biggest barriers.

For those consumers aware of the Independent Construction Industry Rating Tool (iCIRT), developed by Equifax, the chance of an improved perception of the construction industry in the past 12 months increases to 76%.

“The correlation between the awareness of independent rating tools and change in perception of the construction industry is tangible,” commented Walters. “It is understandable that consumers have construction and property concerns, but rating tools like iCIRT help provide them peace of mind.”

The introduction of a star rating system into the residential construction industry aims to give certainty around one of life’s biggest purchase decisions. The iCIRT star-rating system gives developers, builders, building and design practitioners, certifiers, trade contractors and consultants a rating of between 1 and 5 stars, with businesses that obtain 3 gold stars and above classified as trustworthy.

This system gives consumers transparency and visibility, allowing them to choose building professionals confidently. Already, Equifax understands some customers have requested their purchase contracts include a termination and refund clause, in the event the developer does not obtain and maintain a trustworthy iCIRT rating before practical completion.

“We’ve seen Australians familiarising themselves with independent rating tools and learning to use them when looking for credible construction firms and building professionals. One in three of those with property plans are aware of the tools, which is a testament to Australians’ increasing education and due diligence,” said Walters.