Top 7 Building Defects Found in New Sydney Properties: How to Spot Them

Sydney’s skyline is rapidly transforming, with new developments rising across the city to meet the demands of a booming population. With growth comes development, and with development comes the promise of modern, low-maintenance living. Understandably, many buyers assume that new properties are free from issues. Unfortunately, that’s not always the case.

Research by UNSW Sydney paints a different picture. Over half of Sydney’s apartments were found to have at least one type of defect, and more than one in four had three or more different defects. This reality makes the already lengthy and expensive home-buying process even more challenging.

As licensed builders and building inspectors with decades of industry experience, BeSafe have inspected countless “brand new” properties that appear flawless during initial walkthroughs but revealed serious issues beneath the surface, with structural cracks, water ingress, and roof defects being some of the most common and reported on.

Ensuring the quality and integrity of your home isn’t a luxury; it’s a non-negotiable. Knowing what to look for and when to look for it can make all the difference. In this article, we’ll guide you through the top defects found in new Sydney properties and provide expert insights that purchasers need to make informed decisions.

Understanding the Risks Behind New Sydney Builds

Sydney’s construction landscape has shifted dramatically in recent years. In a race to keep up with housing demand, developers have filled the skyline with new apartments and residential complexes. But while these new builds may look modern and move-in ready, the reality is that many are plagued by serious, and often hidden, defects.

According to the NSW Building Commission’s 2023 strata defects survey, defects were identified in 53% of buildings, a significant jump from 39% just two years prior. And, these aren’t just minor cosmetic issues. These are serious structural faults, fire safety risks, and waterproofing failures that can have major financial and safety implications for buyers.

So, what’s driving Sydney’s construction rush?

The NSW government has set ambitious housing targets, aiming to construct enough homes to address a severe housing shortage. This creates immense pressure on the construction industry to build fast and at scale. This fuels a dangerous balance between speed and quality, where the need to keep projects moving can lead to shortcuts and oversights.

Until recently, regulatory oversight has been minimal. One review of the industry revealed that many building regulators lacked the authority or the resources to enforce proper standards. And with private certifiers often employed directly by developers, there’s a built-in conflict of interest.

Compounding the issue is a widespread shortage of skilled labour. As demand for new homes rises, the construction workforce hasn’t kept pace, leaving fewer experienced professionals on the ground to maintain quality control.

Why New Doesn’t Always Mean Better

There’s a common misconception that new properties are problem-free. But recent data suggests that among buildings with detailed documentation, 51% had defects, and 28% of those had at least three different types. Even more concerning, 12% reported more than ten.

Some of the most common and serious defects include:

• Waterproofing failures and leaks (42% of documented cases)
• Structural cracking (26%)
• Fire safety system deficiencies (17%)

Why It Matters

For homebuyers, this means the stakes are higher than ever. Purchasing a new build might seem like the safest bet, but without proper due diligence, purchasers could be stepping into a long-term financial and legal predicament.

Read More: The Impact of Sydney’s Building Boom on Inspection Standards

7 Warning Signs To Look Out For

When looking at a new property, it’s easy to get caught up in the surface-level appeal; fresh paint, modern fittings and finishes. However, through our extensive expertise, we have seen that many newly built homes and apartments are plagued by recurring defects, some of which carry serious safety, structural, and financial consequences.

1. Structural Cracking and Movement

Structural defects may not always be widespread, but when they do occur, they can be significant and costly. Around 15% of buildings with serious defects are affected by structural issues such as cracking and movement.

Look out for:

• Cracks wider than 5mm
• Stair-step patterns in brickwork
• Gaps forming around windows and door frames

These often result from reactive clay soils (common across NSW), poor footing design, or substandard construction practices. Early identification is key to avoiding future instability and expensive remediation.

2. Waterproofing Failures and Water Ingress

Waterproofing is the most reported building defect in NSW, but easily missed. Improperly sealed wet areas, balconies, and roofs can allow moisture to seep into walls and floors, leading to rot, mould, and long-term structural damage.

Common red flags include:

• Discolouration on ceilings or walls
• Damp or musty smells
• Efflorescence (white, powdery residue on masonry)

3. Roofing and Guttering Defects

Roof defects are among the most commonly overlooked issues in new builds, until internal damage begins to surface. Cracked tiles, poorly installed flashing, and blocked or misaligned gutters can all result in water ingress.

Watch for:

• Water staining on eaves or interior walls
• Overflowing gutters or downpipes
• Damp spots in the ceilings near roof penetrations

Improper guttering can also create ideal conditions for termites, particularly when moisture is allowed to collect in wall cavities.

4. Plumbing Failures

Plumbing issues are another common building defect and are often due to poor workmanship or inferior materials. Leaking pipes, incorrectly installed fixtures, and poor drainage are common, especially in multi-residential developments.

Warning signs include:

• Low water pressure or slow drains
• Water stains under sinks or cabinetry
• Gurgling noises from toilets or pipes

Tree root growth into sewer lines is another frequent problem in Sydney, especially in older suburbs or poorly protected systems.

5. Electrical System Non-Compliance

Electrical defects can pose serious safety risks, including fire hazards and electric shocks. In new homes, these often stem from rushed or non-compliant installations.

Be aware of:

• Flickering lights or tripping circuit breakers
• Warm or buzzing power outlets
• Insufficient or poorly positioned power points

While older properties may have outdated wiring, many new homes still suffer from inadequate systems that fail to meet current electrical standards.

6. Combustible Cladding

Although affecting a smaller proportion of buildings, combustible cladding remains a high-risk issue, with the NSW Cladding Taskforce having identified thousands of buildings requiring remediation.

There are a number of factors that are considered when determining whether external cladding poses a risk. These include:

• Total coverage
• Vertical coverage
• Positioning around balconies, windows or doors
• The types of building
• And the way it is used

Current regulations focus on metal composite panels and insulated cladding systems in residential apartments, hotels, hospitals, and public assembly buildings.

7. Fire Safety System Failures

Fire safety systems are the second most frequently reported defect, affecting 24% of buildings with significant issues. These include failures in smoke detection, fire separation, suppression systems, and non-compliant escape routes.

Red flags include:

• Missing or damaged smoke detectors
• Blocked or inadequate fire exits
• Unclear or missing fire safety signage

Since 2023, stricter fire safety schedules have been introduced across NSW. Still, many buildings fall short of compliance, placing occupants at increased risk in an emergency.

What These Defects Could Cost You

The financial impact of building defects extends far beyond surface-level repairs. For property buyers and owners, defects can undermine market value, increase insurance costs, and trigger unexpected expenses that affect both short-term budgets and long-term investment returns.

Defect-related repair costs can vary significantly depending on the severity of the issue. Where moderate repairs can cost as much as AUD 10,000, more extensive problems can escalate even faster, running anywhere from AUD 9,000 to AUD 60,000.

One Melbourne building has combustible cladding that costs close to AUD 8 million to repair and only split between only 33 residents. The concern is that these costs are not always recoverable, causing significant financial strain on homeowners.

What about the impact on property value?

Beyond repair costs, major defects can have a substantial impact on a property’s market value. In many cases, values drop by as much as 20%, as buyers become wary of hidden issues and potential repair costs. This reduction in perceived value leads to fewer offers, lower sale prices, and a longer time on the market.

How to Spot Defects Before They Escalate

Early identification of building defects is critical in protecting both the structural integrity of a property and the financial investment behind it. What may initially appear as a minor issue can rapidly escalate into a serious problem if left unaddressed.

For buyers considering a newly built or off-the-plan property in Sydney, understanding how to identify potential defects during early inspections is essential.

Visual Indicators to Watch for During Walkthroughs

While a licensed building inspection is always recommended, prospective buyers can improve their due diligence by recognising common warning signs during initial viewings. Many of these indicators suggest underlying issues that may not be immediately apparent to the untrained eye.

Key areas to assess include:

• Structural movement: Doors and windows that stick, misalign, or fail to close properly may indicate foundation movement or wall displacement.
• Moisture intrusion: Watermarks along skirting boards, bubbling paint, sagging ceilings, or a musty odour often point to waterproofing failures or leaks.
• Cracking in walls or ceilings: Cracks running diagonally or those wider than 5mm may signal structural instability and require professional evaluation.
• Plumbing concerns: Slow drainage, leaking taps, rusted pipes, or pooling water under sinks may reflect poor plumbing installation or material failure.
• Electrical system issues: Flickering lights, warm power outlets, or outdated fuse boxes can indicate non-compliant or unsafe electrical wiring.
• External building elements: Damaged roofing, misaligned guttering, visible wall cracks, and poor site drainage can suggest larger construction or design problems.

Unusual odours, noises, or visual irregularities should also be considered, as these may be early indicators of more extensive issues requiring professional investigation.

The Role of Independent Building Inspectors

While government and council certifiers focus on regulatory compliance, their inspections often do not cover the full spectrum of workmanship and material quality. As a result, many properties that meet code requirements still present serious defects, many of which only become evident after occupation.

Independent building inspectors provide a comprehensive, unbiased assessment of a property’s condition. Unlike compliance-based inspections, these evaluations examine construction quality, adherence to industry best practices, and the presence of both existing and potential defects.

BeSafe Property Inspections employs a team of licensed builders and building inspectors with extensive experience in construction and property assessment in Sydney. Our inspections are designed to deliver detailed, accurate, and timely reports, enabling clients to make informed decisions before finalising a property purchase.

When to Schedule a Building Inspection

To ensure adequate protection during the buying process, a professional inspection should be carried out at two key stages:

• Pre-purchase inspection: Conducted after an offer has been made but prior to signing contracts. This step is vital in identifying major or minor defects before a legally binding commitment is made.
• Pre-handover inspection: For newly constructed properties, this inspection occurs before possession is taken, allowing the buyer to raise concerns with the builder while still within the defect liability period.

These inspections act as a critical safeguard against unforeseen issues, offering peace of mind and protecting long-term financial outcomes.

What Is Included in a Comprehensive Property Inspection?

At BeSafe Property Inspections, all assessments are performed by Australian Standard AS4349.1 for pre-purchase building inspections. As members of Master Builders Australia, our team upholds the highest industry standards across every inspection.

Each inspection, which typically takes between 1 and 3 hours, provides a thorough evaluation of:

• Structural elements (interior and exterior)
• Roofing systems, flashing, and guttering
• Roof cavity and insulation
• Subfloor areas and foundations
• Site drainage and external water management
• Moisture ingress and ventilation
• Compliance with general safety standards

These assessments are designed to provide a complete picture of a property’s condition, highlighting both visible and concealed issues that could affect livability, resale value, and long-term maintenance costs.

Protecting Your Investment Against Hidden Building Defects

Property defects in new Sydney builds are more common than most buyers realise. The evidence is clear, and financial risks are real. Repair costs can escalate quickly, and property values drop when major defects surface. Yet these problems are often preventable with the right approach.

Ultimately, early detection remains the most effective way to avoid these costly outcomes. A comprehensive, independent building inspection can identify existing and potential defects before contracts are finalised or keys are handed over.

Compared to the financial risks of hidden structural, waterproofing, or fire safety issues, the cost of a professional inspection is minimal, yet the value it provides is immeasurable. It empowers buyers to negotiate repairs, reconsider purchases, or plan proactively, safeguarding both financial well-being and peace of mind.

At BeSafe Property Inspections, we’ve built our reputation on thorough, honest assessments that give purchasers the full picture. Our team of licensed builders and building inspectors understands Sydney’s construction challenges and knows exactly what to look for in new properties. We examine every accessible area, document our findings with photographic evidence, and provide clear recommendations you can act on. If you’re considering a property purchase in Sydney, contact BeSafe Property Inspections today.