Australia: Supply Constraint and the Staircase Code

Construction costs in Australia rose sharply in the years after 2020, with labour shortages, materials prices and builder insolvencies all contributing. Planning and approvals add time. The result is that replacing an existing building, or adding new stock, is slow and dear. That strengthens the position of existing buildings in well-located precincts, and raises the stakes of keeping them competitive.

It also explains a pattern seen in When the Building is Not the Asset: in tightly held locations, the land and the consent can be worth more than the building on them.

The National Construction Code sets technical requirements for new building work, but each state and territory decides when to adopt each edition. NCC 2025 illustrates the result. Its energy provisions include mandatory on-site solar for new commercial buildings, and adoption has become a staircase. Victoria adopted from 1 May 2026. Western Australia and the ACT began on 1 May 2026 with transitions that allow NCC 2022 until 2027. New South Wales, Queensland and South Australia’s building provisions are deferred to 1 May 2027. Tasmania applied the new edition for a few days in June 2026 and then returned to NCC 2022 until May 2027. The Northern Territory remains on NCC 2022 with no adoption date. Two codes will run side by side until at least 2027. When the Shed Becomes a Power Station sets out what this means for industrial stock.

For existing buildings, the code matters mostly when major work is done. Significant alterations can bring parts of a building toward current requirements, and the extent depends on the state, the work and the building surveyor’s assessment.

In Australia the code is national, the timing is local, and the trigger for existing buildings is usually the next major project.

The staircase is easiest to see laid out. The position below is as published at review; states continue to adjust their adoption, so the governing instrument should be checked for any particular project.

For an owner the consequence is that the same building type, built in the same year, can be governed by different editions on either side of a state border. A national portfolio cannot assume one standard for new work, and a register that records the edition a building was approved under is more useful than one that records only its age.

For commercial classes, NCC 2025 concentrates on four areas: mandatory on-site solar photovoltaics for new Class 3 and Class 5 to 9 buildings, tighter commercial energy efficiency across Section J, strengthened water management provisions to reduce water ingress in commercial and apartment buildings, and revised car park fire safety provisions. Residential energy provisions were largely held at NCC 2022 levels, with building ministers signalling a pause on further residential changes toward the end of the decade.

The adoption picture is uneven and still settling. Victoria moved first. The ACT and Western Australia began on the same date with transitions. New South Wales, Queensland and South Australia deferred to May 2027, with Queensland flagging variations. Tasmania applied the edition for a few days in June 2026 and then returned to NCC 2022. The Northern Territory has not adopted it. Two codes will run side by side until at least 2027, and in the Territory for longer. For an owner of an existing building, the practical consequence is that the standard a major alteration will be assessed against depends on the state and the date, and a building surveyor’s advice is needed early.

Under the Commercial Building Disclosure programme, most office spaces of 1,000 square metres or more must disclose an energy efficiency certificate, including a NABERS Energy rating, when offered for sale or lease. NABERS ratings have become a market signal for offices well beyond the legal requirement.

Fire safety maintenance is state-based. Victoria requires owners to maintain essential safety measures and produce annual reports. New South Wales requires annual fire safety statements. Other states have equivalent regimes. These records are among the first things a buyer’s adviser will ask for.

Combustible cladding remains a live issue, with state programmes and building audits following the cladding fires of the last decade, and with implications for insurance and finance as well as safety.

Mandatory climate-related financial reporting under the Australian sustainability reporting standards began for the largest entities from financial years starting 1 January 2025, with a second group from 1 July 2026 and a third from 1 July 2027. For property owners, this brings physical climate risk and transition plans into formal disclosure, as discussed in Climate as Physical Risk.

Strata ownership is common in Australian commercial property, especially small offices, medical suites and industrial units, with state rules on maintenance planning and funds; Why Shared Buildings Defer covers the dynamics. And make-good obligations at lease end are a standard feature of Australian leases, explored in Who Pays. Adoption and variations are still settling, and this note is reviewed every six months.