If you’ve spent any time in the Australian property corners of TikTok or YouTube, you’ve probably seen him; The man in black, pointing at cracked slabs, leaky balconies and bowed walls, calmly explaining why someone’s “brand new dream home” is actually a very expensive renovation project.
That bloke is building inspector Zaher Khalil, and his viral videos have done something governments and industry bodies struggled to achieve for years: they’ve made ordinary buyers viscerally aware that the Australian building industry has a serious quality problem.
This piece takes Khalil’s spotlight as a starting point and asks a Hollow Centre question: what do the numbers actually say about the state of the building industry – and are we fixing it, or just learning to live with defects?
A sector under pressure – and going broke
First, the big picture.
Australia needs more homes, fast. Governments talk about 1.2 million new homes in five years; industry groups already warn we’ll fall well short. At the same time, builders are dropping like flies:
- Almost 1,400 construction businesses collapsed in the second half of 2023 alone.
- By early 2025, more than 2,600 construction companies had gone insolvent in the previous year.
Reports from insurers like QBE describe an industry facing high material costs, labour shortages and falling volumes, with a forecast 5% decline in both residential and non-residential work in FY2025.
So we’ve created a system where we want record output from an industry that is financially fragile, short of skilled workers, and squeezed on margins. That is rarely a recipe for quality.
How bad are the defects, really?
Behind the viral videos there is a growing pile of research. It paints a picture that’s worse than a few badly-finished townhouses.
Apartments and strata buildings
- A Deakin/Griffith University study of 212 new multi-residential buildings found 85% had at least one defect. In NSW, the figure was 97%.
- NSW’s own Strata Defects Survey for 2023 found 53% of strata buildings had serious defects in common property, up from 39% in 2021.
- A separate analysis of water-related problems found that 85–97% of insurance claims on multi-residential buildings in Victoria involved water defects, while in NSW 97% of apartments surveyed had at least one defect, most commonly waterproofing. Queensland studies showed around 71% of multi-res buildings with defects, again dominated by moisture issues.
These aren’t chipped tiles; they’re issues that go to structure, waterproofing and fire safety.
Freestanding homes and the wider housing stock
The problem isn’t confined to towers:
- Inspections by the NSW Building Commission in 2024 found defects in almost one in two new freestanding homes and significant problems in about a quarter of apartment buildings.
- Media reports summarising new research have claimed that around 70% of Australia’s 10.9 million homes have some form of major building defect, ranging from waterproofing and plumbing failures to structural issues.
Even if you discount the headline numbers, the direction of travel is clear: defects are normal, not exceptional.
The bill for “cheap” building
Someone always pays.
Research commissioned by the CFMMEU estimates that fixing defects in apartment buildings completed in the past decade could cost more than $6.2 billion nationally.
That’s money that either:
- Comes from owners (special levies, forced sales, or drawn-out litigation), or
- Gets socialised through insurance premiums and government bail-outs when things go really wrong.
No-one sells an apartment “$150k off because the balcony leaks”.
The trust collapse: buyers vs builders vs regulators
It’s not surprising that consumer trust is cratering.
An Equifax survey found 85% of Australians are concerned about building quality and potential defects, and 80% are worried about builders going insolvent.
That combination – high defect risk + high insolvency risk – explains why people are turning to social media inspectors like Khalil in the first place. Traditional information channels (contracts, certificates, marketing material) all say “everything’s fine”. The photos of mould behind the plaster say otherwise.
Academic work backs this up. A 2024 paper on building defects and “information asymmetry” argues that buyers simply can’t see what they’re buying; developers and builders know more, and the incentive is to push risk downstream.
In other words: the system is almost designed to generate exactly the sort of horror stories that go viral.
Zaher Khalil and the politics of embarrassment
Khalil’s videos – and similar content from other inspectors – serve one key function: public shaming.
- The ABC has highlighted how his clips exposing defects in new homes have attracted hundreds of thousands of views and become a kind of informal complaints channel for frustrated owners who feel they’re getting nowhere with regulators.
You don’t have to endorse every aspect of his work, or his past in the industry, to see what’s happening: enforcement by embarrassment. The more inspectors film bowed walls and “waterproofed” balconies that behave like colanders, the harder it is for regulators and ministers to pretend the problem is a one-off.
NSW’s Building Commissioner, David Chandler, has publicly suggested that 60–70% of developments may have defects that are still unreported, even after tougher laws.
If that’s even close to accurate, the Khalil-style content isn’t sensationalism – it’s under-reporting.
Are reforms working, or just catching up?
To be fair, not everything is going backwards.
- NSW’s 2023 strata survey found that while serious defects are still common, the rate in newer buildings has started to trend down since 2020.
- The proportion of buildings reporting defects to the regulator has more than doubled (from 15% to 34% between 2021 and 2023), suggesting owners are more willing – or better able – to seek enforcement.
That’s encouraging, but we’re starting from a very low base. “Slightly fewer disasters” is not quite the slogan you want for a trillion-dollar housing asset class.
At the coalface, many owners still report:
- Confusing complaint processes
- Long delays for rectification orders
- Builders disappearing into insolvency before repairs are completed.
Meanwhile, media reports predict a “second boom” in defective apartments as another wave of rapid high-rise construction hits Sydney and Melbourne.
Why this keeps happening
Strip away the legalese and engineering jargon and a fairly simple pattern emerges:
- Volume targets + cost pressure
Governments want more homes; buyers want them cheap. That encourages fastest-bidder procurement and “design & construct” contracts where quality is a variable, not a constant. - Fragmented responsibility
Developers, builders, subcontractors, certifiers and product suppliers all intersect. When something fails, each points helpfully at someone else. - Short corporate lifespans
Many developers and builders are single-project entities. If defects surface years later, the original entity may no longer exist. - Information asymmetry
Buyers can’t see behind the walls. Even if they could, they often lack the expertise to know what they’re looking at. Regulators struggle to inspect more than a fraction of projects.
Add a housing market where fear of missing out routinely overrides caution, and you have an industry where systemic defects are a rational – if deeply unhealthy – outcome.
What would a “grown-up” response look like?
From a Hollow Centre perspective, the question is less “who do we yell at?” and more “what structural changes would actually shift the incentives?” A few possibilities that are regularly suggested by experts and consumer advocates:
- National standards and data, not state-by-state patchwork
Defects data is scattered across tribunals, insurers and commissions. A national defects database – anonymised, but detailed – would let policymakers see patterns, not just scandals. - Mandatory, truly independent inspections at key stages
Buyers shouldn’t have to rely on YouTube to know if their balcony is waterproof. Staged inspections by independent professionals, paid via a levy rather than by the builder, would reduce conflicts of interest. - “Decennial liability” or long-tail insurance for major defects
Some jurisdictions overseas require builders or developers to carry long-term structural defect insurance (10 years is common). That aligns incentives: if you know you’re on the hook for a decade, you’re more interested in doing the job properly. - Licensing that actually bites
It’s hard to restore trust while high-profile defect cases end with everyone involved simply moving on to the next project under a new entity. Transparent disciplinary registers and meaningful bans for repeated offenders would help. - Better consumer tools before contracts are signed
Public ratings of builders’ defect histories, plain-language guides, and model contracts that don’t require a law degree to decipher would all reduce the advantage that “insiders” currently enjoy.
None of these fix labour or material shortages. But they do tackle the part of the problem Khalil’s videos keep highlighting: we are building a lot of homes that don’t actually work as homes.
So where does that leave us?
Australia is trying to do three hard things at once:
- Solve a housing shortage.
- Keep building costs under control.
- Lift building quality from “hope for the best” to something closer to “European boring”.
Right now, we’re nailing the first two only intermittently and largely sacrificing the third.
The emergence of public figures like Zaher Khalil is less a personality story and more a symptom. When people have more faith in a bloke with a camera and a moisture meter than in state regulators, insurance schemes and certification processes, that’s not just a PR problem for the industry – it’s a structural one.
The real question for policymakers is this:
Do we want a building industry that delivers the maximum number of keys this year, or one that delivers homes that are still safe and dry in 30 years – and what mix of regulation, incentives and transparency will get us there?
Until that’s answered honestly, the Australian dream will keep coming with a complimentary bucket and towel – and a viral video waiting to happen.
– The Hollow Centre
