Ducking for Cover !

On October 31 an explosive document came into the hands of the New South Wales Legislative Council and was immediately slapped with a security claim to keep it secret.  It was compiled by Equity Economics at the request of the CFMEU and it lists the 444 buildings in New South Wales which have their exteriors clad with flammable material similar to the substance that caused the appalling Grenfell Tower fire in London that killed seventy-two residents.

What has the government on tenterhooks is the fact that this report clearly identifies the individual buildings at risk for the first time.   It is claimed that its publication would increase the risks of terrorism incidents by naming potential targets and hurt property owners, potentially mislead the public and breach expectations of confidentiality.

What is left unsaid is the need for that cladding to be removed and replaced, and that comes at an estimated cost of six billion dollars.  There are probably thousands of families living in dangerous buildings that are yet unaware that their building is a fire risk.  Little is being done to remove this cladding because it looks like the cost will settle on the shoulders of each individual unit owner.

What seems to be spooking the government is the reality that if this report is released the properties named will suffer a sharp drop in value.   People seeking to sell their unit may find the banks reluctant to provide finance and there will be obvious buyer resistance.  Individual families who have bought in good faith will suffer loss and there is every expectation that they will be angry.

The Grenfell Tower fire happened in June, 2017 and the lack of action to strip flammable cladding from buildings here is simply putting our trust in good luck, and that can't go on forever.  The fact that this report is to be kept secret will condemn many people to buy into a dangerous building because news of that danger is being withheld.   In protecting the home values of existing owners of units in buildings with dangerous cladding the risk is being extended to a new strata of buyers who are being mislead about building safety.

It is a fact of life that 444 buildings in New South Wales have an unacceptable fire risk and sooner or later that has to be removed.  It is simply dishonest to screen that market fact from potential buyers by keeping the locations of affected buildings secret.

It is inevitable that this report will leak and then market forces will come into play.  Prices for units in affected buildings will retreat, which is exactly what is happening in buildings affected by building irregularities or land movement and that is the reality of the real estate market.