It’s becoming more common to see when homes are advertised for sale, but few actually know what it means.
Buying a property is the biggest purchase most Aussies will ever make. Across the country, builders and developers have acknowledged that responsibility by voluntarily opening their businesses up to scrutiny.
A newly-built home in the Elara community of Sydney’s growing north-west, constructed by SHAWOOD Homes. Image: realestate.com.au
It’s also one of the stressful experiences that people go through. And with good reason – buying a home can be a complex journey.
There’s the process of obtaining a mortgage, the hunt for a home that suits both lifestyle and financial realities, and then the nerve-wracking question of whether the price represents a good investment.
That can be hard enough to decipher with the home right in front of your eyes. But when building a new home[1] or buying an apartment off the plan[2], the fear is maximised. How can you judge a product that doesn’t yet exist?
For many professionals in the building and development industry, they know this question is going through buyers’ heads. They also know that buyers have heard the horror stories of building defects and builder bankruptcies that have caused some to rule out a new property all together.
Among the industry, a growing number have decided it’s their responsibility to prove that they are up to the task of building quality Australian homes that will live up to buyers’ hopes.
“We’re conscious that people are investing 30 years of a mortgage into something that we’re developing, that we’re building, and the obligations are high – the responsibility is high,” explained Anthony Falas, executive general manager of TOGA[3], an Australian developer whose portfolio includes multi-residential builds.
It’s why TOGA made the decision to become iCIRT rated, opening up their books and building history for an independent and rigorous review process intended to bring transparency into their operations for interested buyers.
The iCIRT logo, which builders and developers can display on promotional material if they are listed on the iCIRT registry. Image: Equifax
An independent evaluation
Officially launched in late 2020, iCIRT is provided by Equifax, the global ratings agency that’s known for its credit assessment services used by banks and insurers. Its development was backed by the NSW government.
The rating that businesses receive from the iCIRT process is based on an assessment across six categories: capability, conduct, character, capacity, capital and counterparties, and the subcategories of transparency, trustworthiness, experience, track record, financial stability and regulatory compliance.
The rating system ranges from zero to five stars, with three star-rated firms and above given “gold star” status and considered capable of delivering a quality home or apartment. iCIRT publishes a register of any company that has gone through the evaluation and received three stars and above.
TOGA, for its part, has maintained a four-star rating through its initial assessment and subsequent reviews, which Mr Falas characterised as a point of pride as well as an important tool for its current operations.
“Confidence is really important,” Mr Falas said. “The least we could do is ensure that the buyer has everything they need to gain that confidence in a developer.”
Prior to iCIRT, the company relied on its six-decade history to prove its credentials, and that remains an important measure of trust. But TOGA also saw the benefit of having an independent rating to point to.
And beyond the benefits to the individual company, leaders at the firm also saw that their participation could be of benefit to the industry more broadly.
Wicks Place, one of TOGA’s newest developments, located in Sydney’s inner-west. Image: realestate.com.au
Growing confidence beyond individuals
“Seeing some of the issues there are in the industry, we thought it was a very good idea to undertake the journey and get the star rating,” Mr Falas said, knowing it would encourage others to do the same.
“I think all developers should have these accreditations.”
At Sekusui House – a developer of apartments as well as house and land under the SHAWOOD brand[4] – the thought process was similar.
“iCIRT brings transparency and accountability to an industry where consumer trust is paramount,” said Hironobu Seto, CEO of residential communities and home building at Sekisui House Australia.
“By encouraging developers and builders to meet higher standards, it raises the bar for everyone. We believe it will help restore confidence in the market and empower buyers to make informed decisions,” Mr Seto added.
The company also received a four star rating, with Mr Seto characterising it as “a reflection of our capability, integrity, and financial strength”.
“We want consumers to know that this rating is earned through a comprehensive evaluation of our character, conduct, and capacity to deliver. It’s a signal that we’re not just promising quality with our SHAWOOD homes – we’re independently verified to deliver it.”
Mr Seto, like Mr Falas, would like to see wider takeup in the industry. Currently, 198 building and development practitioners are listed on iCIRT’s registry.
Public awareness slow to start
Companies that achieve a three-star rating and above are generally keen to promote their certification, and it’s becoming more common to see builders and developers sharing the iCIRT badge on their promotional material – even as they know that there’s a gap in consumer understanding.
“iCIRT isn’t something that people are inherently aware of at this stage,” said Thomas McGlynn, director and CEO of Sydney property group BresicWhitney, though that’s certainly something he’d like to see change.
The real estate brand not only represents existing homes but also works with developers on their new and off-the-plan homes – generally high-end apartment buildings in the inner-Sydney market such as Wirra in Neutral Bay, which was developed by Podia and built by four-star iCIRT rated builder Ultra Building Co.
Knowing that consumers often raise questions about build quality when buying off the plan, Mr McGlynn said that his team members find themselves doing a lot of education around iCIRT.
“It helps you articulate: let’s look at past performance, let’s look at quality.”
“For us to be able to not only talk to people about the history of the developer or builder, but to have this arm’s length, third-party rating to be able to back that up, is fantastic. I do think it creates an extra layer of comfort for buyers because people can be really sceptical around the quality of new builds,” he said.
With ambitious housing targets to meet, Australia is hoping to increase the pace of building in the months and years to come. Image: Getty
But at this point in time, he describes it as an element that buyers often discover as they do their research, rather than something that people are actively seeking out or bringing into the conversation themselves.
Because of that, Mr McGlynn said that he would like to see consumer-facing campaigns that “communicate what iCIRT is to the buying market”.
Like many in the industry who support iCIRT, he’s aware that it’s a bit of a circular relationship between industry uptake and public awareness.
The more people know about it, the more builders will partake, and then quality will naturally rise.
“If we can get it more mainstream and something that buyers are looking for, I think that will help lift the building standards,” he said.
Are you interested in learning more about building or buying new? Check out our dedicated New Homes[5] section.
References
- ^ new home (www.realestate.com.au)
- ^ apartment off the plan (www.realestate.com.au)
- ^ TOGA (www.realestate.com.au)
- ^ SHAWOOD brand (www.realestate.com.au)
- ^ New Homes (www.realestate.com.au)