14 June 2023
David Chandler OAM
NSW Building CommissionerÂ
Thank you all for inviting me along to this forum this evening as your Building Commissioner.
I acknowledge the current trading environment has been and remains tough. I am often asked whether the pace of reform could be slowed. In effect, might we go easier on defects for now. The reality is that consumers expect quality buildings, and our industry needs its reputation back.
How much has changed since I first spoke with you in 2020.
We are now 4-years into the CONSTRUCT NSW reform strategy.
Consumers are slowly starting to feel more confident about the apartment buildings most of you help to deliver. So much so that the government is now confident to stimulate new supply momentum.
This is good news as we need to lift new apartment starts to 30,000 by 2030 from the current historical low of below 14,000 per year.
The government has also announced that a NSW Building Commission will be in place by December 2023. I will have the task of establishing it.
NSW now has the nation’s first Building Minister — Analack Chanthivong. I am looking forward to you all meeting him as he has hit the ground running. His first message ‘we are not prepared to sacrifice quality for quantity’.
Increasing the pipeline of new developments is complimentary to making sure that what comes out is compliant and does not erode public confidence in our market – back to the 2018/2019 low tide. Many doubted that there would not be much change.
They were wrong.
At the outset, consumers were unable to distinguish between the risky and trustworthy. That is now changing with the market-led iCIRT rating tool and soon LDI insurance. Their view is improving.
If anyone doubts how these two initiatives will change the game, they need a wake-up jab. Consumers are getting smarter every day.
The regulator now has unprecedented powers and capabilities. These will expand into new building classes on the 3 July with Class 3 (Boarding Houses) and 9c (Aged Care). I expect that there will be new reforms flowing into Class 1 where accountability will lift.
In concert with private sector initiatives, the NSW regulator is increasingly being left to focus on the riskiest players.
The trustworthy will be able to enjoy increasing privileges. They can expect to see the regulator less, and they will have lower Defects Liability Insurance costs. They will also be able to access Project Intervene, where a collaborative approach will be taken to address serious defects if they occur. Trusted players are already attracting the best talent. I will have no hesitation in supporting them.
The risky can expect more attention. They are becoming easier to identify.
We started with builder safety records, then certifier history, and now we are building out the risk matrix to identify the riskiest using RAB Act audit reports and combining these with the growing number of apartment owners reporting risky players to Fair Trading.
The Building Commission’s risky player selection is becoming sharper. As the regulator’s data assets grow, the former opacity of risky players fades. Risky players will attract the most regulator attention.
More recently, we have found a new data source. The source of developer funds is now viewed on the land title register. It is unsurprising that this source of intelligence is becoming important. More recently, on projects in Wollongong.
The current spate of insolvencies is also instructive. Not just for the regulator but also for the receivers who must clean up after failed developers, builders, and consultants. There are some notables.
For those who once used phoenixing as a business practice, the game has also changed. Obtaining an iCIRT rating will see that door shut.
The NSW government wants a powerful and well-resourced building regulator. That is how the market can build and maintain the confidence of consumers, financiers, insurers, and investors.
The new Building Commission will see all the Fair-Trading Building elements combined with the Office of the Building Commissioner to create a specialist capability that has the necessary expertise and grunt. There will be more boots on the ground, especially in Class 1.
There will be growing digital deployment across the e-planning platform, licencing, and investigations, all under one roof.
The work since the commencement of the RAB and DBP acts has had an impact on over 35,000 apartments and 440 projects. It is not a case of if a risky developer will be inspected, but when.
We have built strong relationships with all industry bodies who now share intel and communications. Recently our collaboration with the Chinese Builders Association has seen this reach and impact grow.
Sunshine is the best antiseptic. We have started commissioning case studies as a new means of sharing insights into customer, developer, and builder journeys when matters head to litigation. Often these processes get lost in the fight, not the fix. We will release the first case study this week. Two more projects are undergoing this process.
While the introduction of the NSW reforms was heralded with the doom of more cost and project delays. The contrary is being reported. Developments are being better scoped; key building element designs are integrated and declared before construction starts.
Work is now being planned with more certainty. There is less disruption due to rework. There is less waste from on-site processes. There is newfound respect and collaboration amongst designers, contractors, and trades. Risky developers are finding engagement with trustworthy designers, certifiers, and builders harder.
The game has changed in NSW. Let’s make sure we do not go backwards.
Be assured that will be the mission of the NSW Building Commission.