4 Jul 2019

Leaky home stigma, it is still a thing. Kinda.

From Nine To Noon, 9:24 am on 4 July 2019

The leaky homes crisis concerned a number of buildings built in the decade from the early 1990s to 2004 that suffered from weather-tightness problems.

In this project involving a full reclad over a cavity after replacement of rotted framing, the windows were removed, refurbished and reinstalled with head flashings that incorporate a stop-end and a modified reveal.

In this project involving a full reclad over a cavity after replacement of rotted framing, the windows were removed, refurbished and reinstalled with head flashings that incorporate a stop-end and a modified reveal. Photo: https://www.weathertight.org.nz

New research showed buildings that have been re-clad are now selling at prices similar to those that have never leaked, but they still carry a stigma that can make them harder to sell.

It was described as the first time there has been comprehensive research into whether "post-remediation stigma" is a genuine phenomenon that affects property values. 

The study's lead author was prompted to do the research after his own personal experience of buying a leaky home in Auckland, that has since been repaired. 

Dr Michael Rehm, who is a senior lecturer in property at the University of Auckland, said he discovered that some buyers of former leaky homes remained sceptical that a building was actually fixed, and used that stigma to discount any offer they made.

He said his research showed that buildings finished in monolithic cladding, such as a plaster system with no joins, had a higher risk of leaking.

Those re-clad in this material tended to sell for an average price that was 6 percent lower than homes clad in weatherboard, for example.

Dr Rehm said he bought a terraced house soon after arriving in New Zealand in 2005. He said it was ironic that even though he taught on the subject, it was a shock to discover he had bought a leaky home.

"I decided to go ahead and convince the other owners on the committee that I was on, to do a bit of a health check on our property because I knew it was coming to the 10-year age for making a claim against whoever might be at fault."

Dr Rehm said about five minutes into the check they discovered they were "the proud owners of a leaky building". He said the discovery was in 2008 and the building had still not received a code of compliance, even though it was now repaired.

His study had drawn on a lot of different data sets, including information from the Auckland Council and the department of property at Auckland University. Data on building consents throughout the country was also acquired, which was how he identified which buildings had been re-clad and which had not.

He said those who had shifted from a monolithic cladding material to weatherboard in the repairs process, had removed the stigma, even though records could never deny it had been a leaky building in the past.

Dr Rehm said it appeared from his research that buyers were putting these homes on a par with homes not affected by leaky building syndrome, which was not a complete surprise.

Despite the challenges and costs to repair his own property, he was glad in their case the owners did not take the advice to bulldoze it and start again, he said.

"The suggestion came from the government, shockingly, and in hindsight it was good advice we didn't take.

"I know of other cases when they've taken it right down to foundations and rebuilt, but what we learned is that you start off with an idea of re-cladding and it seems fairly simple - you tear off the outside and replace the defective timber and put on a brand new cladding system. 

"It seems easy but once you tear the cladding off, the amount of other defects you will find ... the list goes on and on," Dr Rehm said.

He said matters around "passive fire" protection had emerged since the fatal Grenfell Tower fire in London in 2017. The building's cladding was blamed for how fast the fire spread on the building's exterior.

Dr Rehm said it cost them millions of dollars to include upgraded fire protection in their building.

He said it was difficult to provide good advice to anyone faced with owning a leaky home now, but it was worth a thorough investigation into how bad the situation really was. 

"Don't jump into going down the track of re-cladding - it might be the most expensive, and worst option. It might be best to tear it down."

He said there were now new opportunities for using sites for intensive housing developments.