Any number of interest rate cuts will not make non-compliant buildings saleable.
A lack of national strategic leadership in construction regulation and compliance will ensure an increasing number of buildings become vulnerable in the coming years.
Buildings built using unproven building systems by businesses who are here one day and gone the next are eroding public confidence in the built world we are making.
Even the more durable construction firms are under pressure to cut costs and allocate risks to suppliers who are either unable to manage them or have no intention to do so.
Many new building materials have not yet demonstrated their resilience. This will have massive implications for property values, insurance coverage, and in some instances, fitness for purpose to occupy.
To add to the challenge of making new buildings fit for purpose is maintaining them. This is particularly difficult in the residential industry where owners and investors are reluctant to invest in the necessary levels of recurrent maintenance.
There is evidence of deferred maintenance spending in public and private sector buildings such as schools, social housing and health care facilities. In the end, due maintenance becomes unavoidable and the same issues play out – those buildings start to fail; their continued use is questionable, and their value is eroded. Some will become untradeable.
Australia is a country with massive investment in residential buildings. This is reflected in the high levels of household debt – among the highest in the world. When the underlying value of the nation’s residential assets are challenged the knock-on implications will be high. The climate emergency adds to the mix.
The effects of more impactive climate conditions seems to show no abatement
The impact of making (embodied carbon) and using (operational carbon) buildings has a huge impact on the environment. I have recently called for the construction industry to set a target to reduce the embodied energy in making new buildings by 40-percent by 2030.
This is an important initiative and it would be game changing for the entire construction ecosystem. It requires a new approach and skillset, starting with designers who have been coded to design buildings as one-offs.
Designers then try to protect those designs as copyright. I am all for recognising the uniqueness of a designer’s compositions, but the reality is that those compositions are made up of many pieces and parts.
The future for onsite is assembly. Most designers do not have the necessary skills for this and hold the sector back.
This month’s Frame Australia Conference is a representation of the construction industry’s new ecosystem. This ecosystem is in part described as the off site construction manufacture (OSCM) sector, but there is much more to specifying, organising, making and operating today’s buildings.
Buildings are getting smarter. They will need to be organised smart from the get-go, and they will need to become more resilient and sustainable.
The European construction industry leads on many of these fronts. Underpinning the massive modernisation of the European construction sector is the adoption of systematised approaches that enable all of the pieces of construction to come together, in mostly unique ways.
These buildings are less wasteful in their making and because they are made up of manufactured components, they offer more assured quality. They fit together better when they are assembled, the tolerances are impressive – just a few millimetres. Not centimetres. These tolerances also convert to strong thermal and sustainability performance.
Manufacturers have an embedded culture to support their projects well into their lifetime. Often 10 and 20 years is the norm. So, their buildings enjoy more purposeful resilience and functional design – not from traditional designers, but from the makers.
Aussie OSCM to help sustain existing jobs, create new ones and help the economy
The adoption of OSCM in Australia has been gathering momentum for nearly 20 years. This momentum was stepped up following the demise of the Australian motor manufacturing sector.
Governments were keen to see the skills of design for manufacture and assembly flow into other industries, and construction was an obvious choice. But governments have not been good at leading industry transformation.
The achievements of OSCM in Australia reflect this. And this is further eroded by the massive fragmentations that compete with “winner take all” intent without understanding the foundations that were adopted in the early phases of OSCM in Europe.
These came from a sophisticated level of “pre-competitive” collaboration that then flowed into the innovations that followed.
A case for what Aussie OSCM might look like by 2030 is a challenging conversation. Of course, the use of renewable, low carbon materials such as timber will be an important feature of a more sustainable and viable OSCM future in Australia.
The challenge will be to identify the interventions that government, industry and the purchasers of buildings will need to embrace. Business as usual is unsustainable. A realistic snapshot of Aussie OSCM in 2019 is needed.
I believe there are four possible scenarios that may play out from here on. Which scenario is preferred is up to the industry.
Important themes that must be canvassed include the importance of new digital technologies and how a purposeful joining of these will be fundamental to more assured, functional and sustainable buildings.
There’s also a need for winning gamers to ensure that the best of what others have to offer are incorporated from the outset. Steel and concrete are part of this mix.
As is why a unique Aussie OSCM industry model will need to be supported by new skills and business models that are able to hold onto existing construction jobs and contribute to making new ones. At the moment, the trend for OSCM is more offshore focused at the expense to the local economy and national interests.
Aussie OSCM needs a compelling new narrative.
Taking Australia’s construction into a successful future is about new jobs and enterprises
The recent national election has been instructive. The Australian community has spoken. Its interests are in the economy, jobs, and the environment – pretty much equally.
Looking back on the Turnbull prime ministership, initiatives such as innovation and the environment were not communicated in a way that brought the public along.
Both sides of politics now accept that while the challenges of mitigating and preparing for the likely changes in climate press challenges, these steps must be well canvassed, and everyone included.
While technology is important, it will not be the “wow” that drives momentum. It will be the “what’s in it for me?” And “how will our community benefit?”
Aussie OSCM has a similar challenge. The narrative so far has been about the tech and the wow – very few benefits have been presented to the industry’s customers.
The industry is still entrenched in its “let’s drop off the next building and attempt to be as far away as possible by the end of the 12 months warranty period”, and for others, the longer seven-year obligations are around structures.
The recent legal proceedings around projects like Lacrosse show how finger pointing and accountability adverse the Australian construction industry still is today. These deep cultural divides will not provide the successful emulation of Euro OSCM into Aussie OSCM.
It is clear that governments are struggling to respond to the underperforming parts of the construction industry.
Advocacies from special interest groups will have no impact on joining up all the dots to create a seamless ecosystem where everyone plays a reliable role.
Our politicians must be clearly overwhelmed by the recurring holes in the industry’s bucket – a death here, a fire here, cracking over there, leaks here and there, litigations and cost blowouts daily, insolvencies, longtail defect warranty exposures.
On top of that, governance regulatory frameworks that were designed in the last century now need to be transformed to deploy the best technologies and data management applications, that in effect turns regulatory compliance into a service setting not a burdensome overlay that’s best avoided.
Australia’s modern construction future is about new solutions, not more band-aids.
So, in the end, nothing has changed. Everyone is mostly on the same page. The economy needs care, jobs, and productivity improvement.
What most seemed to have missed is that the systemic changes the industry now needs to embrace could be guided by measurably lowering the waste of construction process and lowering the embodied energy used in making our built world.
It would be possible to bolt on an unholy shopping list of all the things that could be done as well – some whimsical, and others that would serve no greater purposed than to dilute the simple message.
Australia has spoken. It’s time to get into the boat and start rowing.
David Chandler is a construction industry practitioner and an adjunct professor at Western Sydney University.