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Beware of the property trap In Melbourne

The property market in some major Australian cities has seen a significant rise in independent house prices in recent months. However, there is a high vacancy rate in the inner city, and rents have dropped due to the impact of border closures and the work-from-home trend. In particular, apartments in the inner city of Sydney and Melbourne have relied heavily on immigrants and international students, resulting in a difficult situation. It is unlikely that the market will fully recover before 2023.

COVID border closures are not the only factor affecting property prices. The quality of buildings and oversupply are also causing problems. Following the Opal Tower incident in Sydney two years ago, overseas buyers have become increasingly concerned about serious quality issues in high-rise residential buildings in Australia. The Australian regulatory system is seen as being too lax.

The regulatory system's problem can be traced back to the 1990s when the construction industry complained that municipal approval procedures were too slow. To speed up approvals, a new building private certification system was introduced throughout Australia. However, this system created significant conflicts of interest. Developers could choose private certification without going through the government. Private companies providing verification services became overly dependent on developers, and strict experts in approval had no support. As a result, many buildings did not meet standards. Although a professional building commission was established in 2007 to oversee the private certification system, it did not address the problem.

Private certification has caused significant issues. In February 2017, a 39-unit high-rise residential building in the Castle Hill area of Sydney, known as "Northpoint Rise," was exposed to fatal fire safety defects. The private certification organization Terry West issued a qualified acceptance report to "Northpoint Rise" in 2014. However, when the New South Wales Fire and Rescue department inspected the apartment in February, it found that the fire hydrant was installed completely backwards. A large number of fire hoses were unusable or poorly maintained, and the fire and rescue door handles were easily detached, making evacuation in the event of a fire extremely difficult.

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