Construction forecast trends and future risks - NSW Australia

The Australian construction industry is becoming increasingly regulated with wide-reaching legislative reforms rolled out in stages.  The reforms are in response to the combustible cladding crisis and were moved forward by the evacuations of Opal and Mascot Towers after the buildings were declared unsafe. 

In December 2023, the NSW Government introduced the Building Commission, the state’s first-standalone building regulator, to ‘turbocharge’ the work the State is doing to ‘restore trust and integrity in the building sector’. 

The aim of the latest policy reforms is to continue to secure behavioural change in the building industry and to improve the quality, safety, and durability of buildings in NSW. The reforms are intended to restore consumer confidence in the industry by enforcing individual and collective responsibility for defective and non-compliant work.  Further legislative reforms are earmarked for 2024 and 2025.

These commitments to address housing supply and building safety and durability create challenges for those operating in the industry but also opportunities for the construction sector.

This report seeks to raise awareness for insurers and insureds about the legislative and regulatory changes, how the Australian courts are interpreting these changes, and the implications for the insurance market.

Related items:

• No proportionate liability defence for claims for breach of statutory duty under the Design and Building Practitioners Act 2020
• Opal Tower – who can sue (and under what policy)?
• How the State de-clad the corporate veil
• Location, location, “location insured” – the Full Federal Court interprets a rainfall exclusion in a contract works policy
• High Court of Australia dismisses insurers’ appeal to quash class action