A luxury apartment overlooking the harbour sells for less than a quarter of its purchase price as Scene One faces weathertightness issues

A luxury apartment overlooking the harbour sells for less than a quarter of its purchase price as Scene One faces weathertightness issues
The Scene One apartment building looking at its south (city facing) side. Its north facing apartments overlook the harbour.

A luxury apartment overlooking the Waitemata Harbour sold for less than a quarter of its 2005 purchase price yesterday as weathertightness issues cause a dramatic loss of value in yet another Auckland apartment block.

The apartment was in the prominent Scene One apartment building located at the start of Beach Rd in Auckland's CBD.

The north facing apartment had spectacular views across the harbour to Devonport, three bedrooms, two bathrooms, two car parks and was rented at $800 a week.

According to QV.co.nz it was originally purchased for $700,400 in 2005, but when it was put up for auction by Ray White City Apartments yesterday it sold under the hammer just $160,000.

Scene One was built in 2004 and the apartments in it were sold at inflated prices that made insufficient allowance for the fact that the apartments were on leasehold titles.

The fact that the apartments in the building are leasehold would make it likely that they would sell for much less than original purchase price when they came up for resale, but now that the building has been identified as having weathertightness issues as well, the effect on prices appears to have been catastrophic.

That fact does not appear to have been lost on existing owners of apartments in the building, because although the one that sold yesterday fetched $160,000, during the auction it was declared to be "on the market" when the auctioneer received a bid of $132,000, meaning the owner would have been prepared to sell at that price.

Another even more spectacular Scene One apartment, with four bedrooms, two bathrooms, four car parks and a huge double sized balcony overlooking the harbour, which according to QV.co.nz was purchased for $857,500 in 2005, was passed in at the same auction with a highest bid of $230,000.

It wasn't a good day for leasehold apartments, with a 58 square metre, one bedroom waterfront apartment in the Princes Wharf complex also failing to sell.

According to QV.co.nz it had been purchased for $223,000 in 2007, but at yesterday's auction it attracted a top bid from the floor of just $61,000, which the auctioneer refused to accept, instead making an $80,000 bid on behalf of the vendor. But when there were no further bids it was passed in for sale by negotiation.

At the same auction, a 40 square metre, two bedroom unit in the 96 On Symonds building sold under the hammer for $210,000 and a 43 square metre one bedroom unit with good city and harbour views in the Regatta Court building on Nelson St, was passed in after receiving a single bid of $375,000.

Scene One is the latest in a string of otherwise high quality apartment buildings that were previously thought to have been sound, to have recently been found to have weathertightness issues, suggesting the leaky building crisis is far from over.

Two other high profile buildings recently identified as needing extensive remediation work to repair water penetration issues are the historic Heritage Farmers building on the corner of Wyndham and Hobson streets and the Scotia Tower apartment block overlooking Myers Park.

 

 

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30 Comments

Have other countries had major problems with leaky buildings or is it just NZ.?
Also is it a material problem or is it shoddy workmanship?

Sometimes there is no waterproofing under tiles; tiles tend to be on balconies which is not such a problem as the water leaks onto the balcony below (another outdoor area).  Sometimes apartments are staggered as they go up the levels so a balcony may be above a unit and the water leaks into the building proper.  In either event they rip up the tiles, waterproof, then re-lay. 
 
You can also have problems with cladding which then needs a reclad.  There can be no or insufficient flashings on windows and doors.  Buildings that have balconies on every level on all or most sides can fair better as the balconies act as a surfeit. 
 
I don't know what the problem is at the Scene 3. 

Generally houses are not built to be waterproof, generally all houses are 'leaky homes' the issue is that for a while regulations assumed that houses were waterproof, and didn't require some structural parts to be built from treated timber.  Untreated timber gets wet and rots.  If the building paper was fitted perfectly there would be very few issues, but not all builders are that anal, so we have leaky homes.
 
If you built a house out of timber treated the same way fence-posts are for example, you wouldn't have to worry how much it leaked, because it would never rot.

oh right and the gib linings? carpets?
No, simple.
The roof, with adequate eves act as a huge umbrella as long at that is properly done there should be no issues with leaks. the building paper should have indeed been isnatlled properly with a good cladding material like wood that flaxes and that maintained.
Instead the industry to reduce costs moved to smaller or no eves and cheap cladding that didnt flex like wood hence tended to crack or pop at joints. 
The second layer of defence was the building paper.
The third is the bottom of the walls should be designed to allow any water to drain out.
In older houses like my one this is how it works and the house has no issues.  (Well except for one spot where the moron of a builder broke the above rules, which I fixed 15+ years ago).
Rot? the gib is paper lined, it will rot, as will your carpets and wallpaper. Mold will be rife and on top of that after some decades of being wet the treatment will leech out and it will rot anyway.
Then there is rust of the nails that hold the frame together and corrosion of your electrics.

Sure, building with treated lumber will prevent rot, but it won't prevent mold, or other  health issues that arise from leaks.   The US has been building homes with untreated timber for decades and has no massive leaky homes problem. Surely NZ can achieve the same success without going thru the expense of requiring treated lumber.

Not with untreated Linus radiate they haven't.

Really should check spellcheck. Pinus radiata damn it.

it is a range of factors, much of which was the industry wanting the freedom to build cheaper.
Mostly from my perspective its poor design for the NZ weather conditions NZ experiences. Often that was architect driven purely on looks. eg internal balconys with drianage inside the walls no less.  Mexican style bungaloos, yes a great idea in NZ.
On top of that we then had poor building techniques and finishing.

material, workmanship, and design.

Old buildings "breathe".  so air flow sees that areas are cooled and dried. mositure doesn't sweat into cavities.  Older building shad less linings and less material for condensate to form on.
 Slopes were greater on old roof designs. They didn't have building paper to trap moisture, and use of timber versions a varierty of other materials means less moisture issues.  also teimber was slowly aged and dried - expensive but reduces moisture and mold issues.
   Mold will grow on top of anything which has moisture and energy (eg heat).
 The sofits were wider making it much harder for weather to lift mositure into walls AND most facings had mositure slots to stop miniscus water being drawn into the building.  Window areas were small for the wall size, and the frames area the wndows contained plenty of gaps so could dry out easily.
 Very old buildigns didn't even have nogs/dwangs, so airflow went right up the wall cavity without obstruction.

Canada had problems with leaky buildings before NZ
http://en.wikipedia.org/wiki/Leaky_condo_crisis

Yes, western Canada has similar issues. As does Australia. Anyone who has lived in England knows it is endemic there but they don't seem to care much. "It's just rising damp" to them.

In California as well, they just pull them down and start again.

Gold Coast has a few leaky high risers, but mainly due to shoddy workmanship rather than bad design.  What will be the big issue in Australia is “concrete cancer”, this is like our leaky building symptom and expensive to fix.
Best to stick the old fashioned weatherboards.. 

But didnt "leaky buildings" start before the turn of the century. Surely new in 2004 should mean it's design and build should have covered this problem. How come they get away with this sort of shoddy building.

Maybe this will answer some questions Redcows.
http://en.wikipedia.org/wiki/Mainzeal

As I posted above, the issue is with the regulations that allowed the use of untreated timber.

No.
The regs allow un-treated timber as there was great concern over builders breathing the contaminated wood dust of treated timber from sawing it up.  The old treated timber was anti-borer only, ie H1 not H3.
The key is really a design with an eve to keep water well clear of the top of the wall, old house designs mostly had thet eg 1950~1960s but architects thought these were boring and wanted freedom to design anything they wanted eg mexican bungalows.
Even if the timber had been treated once water is in in quantity then mold will start in the linings, carpets  etc  So yeah sure the walls wont rot if its H3.1, just the rest  of the house, lungs wont be too happy either.

While untreated timber is one of the standards that has been mentioned.....it does not explain why many older homes built from untreated timber have not rotted........
 
You can suck water through the tiniest of holes using pressure......if the outside air pressure is greater than the inside then moisture can be sucked in........it is a bit like if you puckered up your lips around a straw and sucked in the liquid transfers......now try sucking on the straw keeping a space between your lips and the straw......

Many buildings leak all over the planet , but NZ is extemely wet and windy  so the problem is magnified
 

and up until the leaky home decade houses had evolved to cope with these fine.   then we let the "professionals" like architects and materials manufacturers get in the way.
 

You guys have hit some of the issues e.g untreated timber, but one of the majors problems was the building code did not specific a gap between cladding and timber framing.  No gap means ANY moisture that enters gets trapped (no air to circulate and dry it out between rain), and the untreated timber doesnt last long.
The council bascially ticked off buildings that were doomed to rot in response to any leakage.
They then got bailed out to some extend by the govt. after every man and their dog tried sueing them, so govt. pays half the costs I think of fixing the council F up.  
The statute of limitations has meant any building work older than 15 years is exempt from questioning, i.e cant sue the council.
Not a lot of accountability, just hard nosed legal battles which often cost more than the work.
New code makes it law to have (if I recall correctly) 30mm min gap between exterior cladding and timber frame work.

Uh, building paper?
My house has no such gap BTW and after 50 years its still A1. None is needed the water drains away, if there is any.
On top of that the treated timber for frames is H1 (or H1.2) which is anti-borer only, you need H3.1. or h3.2 for anti-rot.
The council inspectors btw work to the code, somethings they dont like in it but legally they cant agrue for tougher with the developer for "better" (who builds as cheaply as possible) if its meeting the  building code already.

Not having it leaky is about basic concept of the building.
Single story, large overhang and wide sofit, with reasonably sloping roof.  Even with average cladding you will have no real issues.
Go double story.  Little bit more tricky.
Go ten stories, no overhang.  You have to have wonderbar cladding, perfect installation, and a lot of luck before you can expect it to keep water out of walls.
Flat roof.  You are history, no matter how well you do it.

Lots of older commercial buildings achieved acceptable weather tightness.  I still keep coming back to a feeling that the newer buildings are just to built to cheap and nasty.
 
 

It's good that these articles appear here to whack a cold teaspoon onto the tumescence apparent in mainstream media over property investments.  
These apartments were built in 2005 - leaky buildings fresh in the memory.   They were built using materials that were considered weathertight at the time but have now proved not to be.  So people who will have got a report done would have got a big tick.   That report will have had disclaimers a gogo, so you're on your own.   Hard cheese.

I fully, well mostly, understand the physics of it I built my my own house. What I fail to understand is how after the year 2000 we still have buildings designed, built and certified that are leaky, are these "professionals completely bloody stupid or negligent.

Architects? most ive met I consider "bloody stupid" and a few negligent, ie they just want to make it look good.  If its inherent shape and design is suseptible to leaks they dont care.
 

Older architects relied on what works and had to be conservative.
Modern architecths are often not trained, and anything the customer wants and they can throw on a CAD screen ends up in a design.

The NZBC is fundamentally flawed (still) compared to other countries. In the US you must have an "architect of record" to sign off and take liability for making sure the building is built right.  This means they have the ability to charge a fee to do the work of making sure it's built right and incentive to do so.
 
In NZ (in an attempt to make things 'cheaper') the Building Code gave this responsibilty and liability to Councils. This means that if a client is offered a fee to have a building inspected properly they will always will refuse the service - because they are already paying Councils for same job at a much lower price (and we know how well they do it).
 
It meant that drawings and specifications were routinely ignored and altered to make things cheaper. The 90' was the boom in young project managers who would go through projects substituting cheaper crap products/systems and then boasting to clients how much money they'd saved them justifying their fees. Whatever timber one specified didn't matter - builders would tell your clients that H3 was overspecified and they could save $$$ by going untreated - 100% of clients would take this saving as Building Inspectors would sign it off.
 
So buildings are still constructed without adequate oversight and given CCC's even though not neccessarily built to designers spec. A few inspections from a Building Inspector is cheap - but not adequate.
 
 
 
 

What this article has not mentioned is the new owners have bought a lemon. It doesn't matter how little they purchased it for, they are now liable to pay for any remedial works and prior to that contributing to the legal fees to chase responsible parties, if they exist anymore.
And don't forget leaky building two syndrome is starting to appear because as they make building more airtight to stop external moisture from entering, they are preventing internal mositure from escaping.