Equity Economics produced new modelling this month to estimate the total costs likely to result from building defects in Australian apartments built in the last ten years.

Their calculation of approximately $6.2 billion used publicly available information and conservative costings. Where data was limited, a scope of costs was applied to reflect the high level of uncertainty. The estimated range of between $5.2 and $7.2 billion was averaged by the analysts to reflect the cost to building owners and State, Territory and Federal Governments of addressing the potential structural and safety defects in these buildings.

In a statement about their modelling, Equity Economics advised, “this is a conservative estimate that excludes several potential costs including: legal; jurisdiction wide building audit schemes; and increases in insurance. In addition, it excludes the cost of defects for apartments built before 2009. The confidence interval around this estimate reflects that the scale of defects is not known and must be estimated using the available data.”

The Equity Economics report was funded by The Shape Agency and published by the CFMEU on 19 August.