Victoria Reveals Bonds for Developers Under Reforms

Developers of project greater than three storeys will be required to lodge a bond under a raft of changes to Victoria’s building regulator. The plan has already raised the ire of developers in the state with one saying the plan will lift the price of homes for buyers. The proposed bond would apply to apartments and be used to cover the costs of fixing substandard building work. It is part of the state’s plans to introduce a new 10-year insurance product for apartment buildings. The Victorian Government said it planned to consult with an industry working group on the next steps. Samuel Property founder and managing director Illan Samuel said the bond would potentially be added to the cost of apartments. “ If it costs us, that cost needs to be passed on to the consumer, ” Samuel said. Samuel said it did nothing to solve the issue of apartment supply. “ It is just more red tape that disincentivises the private market to produce supply, ” Samuel said. “ Developers aren’t builders, engineers or architects—we pay people with qualifications and their own insurance.” Samuel said that “the whole concept is framing the industry negatively as a starting point rather than positively thinking about apartment supply”. “Not all developers are the same and you get what you pay for,” he said. “We need to respect the buyer and not wrap them in cotton wool—they know cheap is cheap but some still buy that,” he told The Urban Developer . ▲ Developer Illan Samuel: Consumers will cop the cost of the bond. The changes are part of the Victorian Government’s efforts to address concerns with the Victorian Building Authority (VBA). It announced today [October 24] that it would rename the regulator the Building and Plumbing Commission and give it more powers than the VBA. It will oversee building and plumbing industries across Victoria and for the first time will bring all aspects of building quality control, such as regulation, insurance and dispute resolution, into one agency. Under its power, the commission will be able to direct rectifications to buildings not only before but also after occupation. The VBA could only direct builders to fix substandard work before occupation. A time period has not yet been set as the Victorian Government intends to consult with industry to define it. It will also be able to stop apartments with serious defects from being sold and will increase reporting requirements before occupancy certificates are signed off on new builds. There will also be a 50 per cent increase in the number of auditors and frontline inspectors, funded by a $63.3-million investment in Victoria’s 2024-25 Budget. An inspection blitz will also be launched and will include a crackdown on unregistered building and plumbing work. Under the reforms, there will be better access to insurance to circumvent the need for legal claims against builders, which is currently the only option. ▲ The Victorian Building Authority will be known as the Building and Plumbing Commission and will have greater powers. There will also be more changes made to the dispute resolution process with more streamlined pathways to resolve disputes. The Victorian Government has also announced that it would work with industry and consumer groups on fair reforms of the domestic building contract rules. Legislation around this is expected to be introduced next year. Many of the changes were prompted by an independent review into the VBA and its practices commissioned this year by VBA chief executive Anna Cronin. Cronin was appointed in July, 2023, to transform the VBA—its board members had all resigned by December of that year after consumers raised concerns about the its practices. The Victorian Government has anounced a host of housing and planning policies this week. They have included stamp duty cuts, new planning controls or Activity Centres for 50 areas with the first 25 near train stations to boost housing supply, and a plan to tackle strategic planning creation for precincts . There has also been an integration of the Victorian Planning Authority with the planning department, EoI campaigns for more sites in the Small Sites program, VicTrack land near two train stations opened up for housing and an overhaul of the infrastructure contributions scheme . As well, four consortiums have been asked to participate in a Request for Proposal process for the Arden precinct. The announcements are an update to the state’s Housing Statement that was announced in October last year just before then-premier Daniel Andrews resigned.

Victoria Reveals Bonds for Developers Under Reforms

Want to read more?

Bhutan’s Mindfulness Masterplan Resetting How Cities Work

Time to Rethink: Fresh Bid to Unlock Prison’s Prime Site for Homes

‘The Machinery Underneath is Broken’: Inside NSW’s Housing Divide

Queensland Decade of Gigaprojects a Developer’s Goldmine

Industrial Subsectors Win Investor Attention as Demand Blossoms

Victoria Reveals Bonds for Developers Under Reforms

Want to read more?

Bhutan’s Mindfulness Masterplan Resetting How Cities Work

Time to Rethink: Fresh Bid to Unlock Prison’s Prime Site for Homes

‘The Machinery Underneath is Broken’: Inside NSW’s Housing Divide

Queensland Decade of Gigaprojects a Developer’s Goldmine

Industrial Subsectors Win Investor Attention as Demand Blossoms

The Risk Developers Keep Ignoring Until Too Late

How Rising Costs are Rewriting Portfolio Strategies

Queensland Apartment Pipeline Hits Historic Low

The Risk Developers Keep Ignoring Until Too Late

How Rising Costs are Rewriting Portfolio Strategies

Queensland Apartment Pipeline Hits Historic Low

Bhutan’s Mindfulness Masterplan Resetting How Cities Work