Rising insurance premiums and proposed regulatory changes are likely to place increased financial pressure on homeowners in Australia according to Property Council of Australia (PCA).
Rising insurance premiums and proposed regulatory changes are likely to place increased financial pressure on homeowners in Australia according to Property Council of Australia (PCA).PCA has said that the hikes will also have a potential compounding effect on housing affordability – particularly in the Australian Capital Territory (ACT). It said that the planned regulatory reforms in the ACT would inadvertently add to housing costs.
Property Council ACT and Capital Region executive director Ms Ashlee Berry said that the introduction of mandatory latent defects insurance, flagged under the Property Developers Act 2024, could increase the cost of new homes by 3% to 5% – adding between AU$15,000 and AU$35,000 to the price of a typical home in Canberra.
Ms Berry said, “In principle, we support strong consumer protections – but these must be balanced with affordability. We are concerned the Government is adopting policies that sound good but risk becoming a hidden housing tax at the worst possible time.”
Latent defects insurance covers structural issues after construction. It is a ‘first resort’ product that remains uncommon in Australia, with developers facing significant cost and complexity in securing cover.
“The ACT is in danger of navigating a housing crisis with one hand tied behind its back. Regulatory changes like this, introduced without a ready market or complementary reforms to liability, could make things worse,” said Ms Berry.
The Property Council also urged the ACT government to introduce proportionate liability laws – already in place in other jurisdictions – to fairly apportion legal and insurance responsibility across the construction supply chain.
With ambitious housing targets, ongoing building reform, and increasing construction costs, the Property Council said it was essential for the ACT to modernise its insurance and liability settings.
“If we’re serious about delivering more homes, we need a regulatory system that supports investment and shared responsibility – not one that adds cost and uncertainty,” Ms Berry said.