- NSW government said the tool provides stakeholders with strong independent data
- This in turn can be used to make informed decisions
- Both buyers and financiers of projects stand to benefit
Using a brand new digital tool backed by the New South Wales government, developers will now be able to have their projects risk-rated.
The NSW government said this provides consumers, financiers and insurers with strong independent data that can be used to make more informed decisions.
Kevin Anderson, the Minister for Better Regulation, said the tool – the first of its kind globally – uses thousands of data points to determine the trustworthiness of a constriction project, which it argues increase consumer confidence in purchasing an NSW apartment.
“Over the past 18 months, we’ve worked with developers, financiers, insurers and consumers to facilitate the development of tools to help both the regulator and the buyer understand the trustworthiness of each developer and their projects. These ratings will provide an independent assessment from a trusted source,” Mr Anderson said.
The tool was created by Equifax, an American based consumer credit reporting agency.
Known as iCRIRT, the tool also considers credit ratings, the relationships between development counterparties, the entity’s history in corporate dealings along with nominated directors to judge the capability and capital of each developer.
iCRIRT then rates housing projects from one to five stars.
“Ratings will paint a clearer picture of a developer’s trustworthiness and the predictability of whether they are likely to construct a compliant and safe building and have the capacity to fix issues if they do arise in the future,” Mr Anderson said.
“These ratings will also be a powerful weapon in our fight to stamp out phoenixing, exposing risky developers with a history of leaving owners high and dry after they have moved in.”
Kevin Anderson, Minister for Better Regulation
Karen Stiles, Executive Officer at Owner Corporation network, said the tool takes the guesswork out of buying an apartment.
“The last thing prospective owners need is to spend their life savings buying into a problematic building, but in the past consumers have had to rely on the developer’s word that the property is a safe and sound investment,” Ms Stiles said.
“This tool will give each development a clear risk rating that the buyer can weigh up before committing to a purchase.”
Mr Anderson added the government has a target of 50 developers rated on a voluntary basis by the end of the year. Developers will then be encouraged to publically display the ratings for each project.
“As well as making a project more attractive to consumers, we anticipate that the financial sector will use these ratings to determine which projects they will lend to, and those that may qualify for new insurance products such as decennial liability insurance,” Mr Anderson said.
“And for those with a chequered past or a history of disappearing after the sale – there will be nowhere to hide.”
The announcement follows the lifting of the prohibition order on Toplace’s Skyview tower in Sydney after the developer agreed to an ongoing maintenance program that is backed by a long-term financial guarantee.