ICA gives two thumbs up to new building code decision

Enhancing home resilience against weather could save an estimated $4b yearly. 

The Insurance Council of Australia approved the decision made by the Commonwealth, state and territory building ministers to include building resilience as a specific objective of the Australian Building Codes Board (ABCB) from 2025.  

“Providing this mandate to the ABCB is the first step to ensuring the 2028 National Construction Code includes requirements that new homes are built to withstand worsening extreme weather events,” the ICA said in a media release.

A study by the Centre for International Economics for the ICA found that strengthening the National Construction Code to enhance home resilience against extreme weather could save an estimated $4b annually. 

This includes reducing average annual building costs by $2b for cyclones, $1.5b for floods, and $500m for bushfires.

A separate analysis by the McKell Institute for the ICA in 2022 predicted that the economy-wide costs from extreme weather events will grow by 5% annually (before inflation), reaching $35b per year (2022 dollars) by 2050.

The ICA also praised the ministers' commitment to improving the safety and reliability of building products. 

Defects in up to 72% of Australian homes cost approximately $2.5b annually, and reducing these costs could help lower insurance premiums.

Additionally, the ICA supported the ministers' agreement to provide a voluntary pathway in the 2025 National Construction Code for commercial buildings to measure their embedded carbon footprint, with a potential minimum standard in the 2028 Code.

“Our homes should be built to last a lifetime, so they need to be able to withstand intensifying cyclones, more severe bushfires, and worsening flooding. Insurance prices risk and unless we reduce long-term risks through strengthened homes there will continue to be pressure on premiums.” ICA CEO Andrew Hall said in the statement.