An issue within our industry which has been a recent focus of my attention is defective building work and combustible cladding.
Fortunately, GPS has not had any issues with combustible cladding. This is mostly due to GPS funded projects being too small and most buildings not having any cladding. This is more an issue for higher rise projects.
Defective building works is an age-old issue that has been highlighted by Mascot Towers. Once again, GPS has not seen any escalation of this issue. It has been more centered on larger projects in boom areas such as Sydney.
While I only have anecdotal evidence, there appears to be a trend of purchasers moving away from the high-rise apartment buildings and towards townhouses and smaller unit developments. This is the GPS market.
I note that due to the high number of sales of high-rise apartments to non-Australian residents, and the vagaries of that market, I doubt we will ever be able to achieve statistically accurate numbers to back this up.
The biggest impact which I have seen is the response from local authorities. They are more than a bit concerned that they will get sued. In Brisbane, a taskforce has been set up by Brisbane City Council. They are effectively auditing the Certificate of Classification for projects despite this being under the auspices of the Queensland Building and Construction Commission, which is a state government body.
This further bureaucratic process is causing delays. This is not good for our borrowers who are sitting at peak debt and usually have purchasers who are keen to settle.
There was no point in taking the taskforce head on. I have spent considerable time developing a good working relationship with members of the taskforce so as to be able to provide assistance to GPS borrowers and hopefully expedite the process.
Other than this, it remains a matter of maintaining our tight management of projects and working proactively with the GPS borrowers.