Repairs & Maintenance
Combustible Cladding in Australian Apartments: Where Things Stand in 2026
Years after the cladding crisis began, thousands of Australian buildings still have combustible cladding. This is the current state of rectification programs, insurance implications, and what owners need to know.
· 5 min read
On this pageWhat to know before you actOn this page
What to know before you act
- Cladding is a safety, insurance, finance and resale issue at the same time.
- A building with cladding needs a funded rectification path.
- Buyers should ask for assessments, orders, insurance exclusions and meeting minutes before exchange.
Cladding is one of those issues where silence is not neutral. If a building has a known risk and no clear plan, buyers, insurers and lenders eventually price that uncertainty in.
After London's Grenfell Tower fire in 2017, Australian governments began identifying and assessing buildings with combustible cladding. Thousands of buildings still have non-compliant cladding, leaving owners with the safety, insurance and rectification costs.
The scale of the problem
Combustible cladding, primarily aluminium composite panels (ACP) with polyethylene cores and expanded polystyrene (EPS), was widely used in Australian construction from the early 2000s through to the mid-2010s. It is light and inexpensive, but dangerously flammable.
State-by-state audits have identified thousands of affected buildings:
| State | Buildings Identified | Rectification Status |
|---|---|---|
| Victoria | Approximately 500+ high-risk buildings identified through the Cladding Safety Victoria program | Most advanced program; many buildings completed or underway, but funding gaps remain |
| NSW | Hundreds of buildings flagged; Project Remediate targeting social and private housing | Government-funded program for residential buildings; progress slower than hoped |
| Queensland | Significant number identified through audit program | Combustible Cladding Checklist Scheme; rectification largely owner-funded |
| WA | Audit program completed; high-risk buildings identified | Building owners responsible for rectification costs |
| SA | Smaller numbers but still affected | Check state building and strata/community corporation guidance |
| TAS | Smaller numbers but still affected | Check state building and body corporate guidance |
| ACT | Smaller numbers but still affected | Check ACT building and owners corporation guidance |
| NT | Smaller numbers but still affected | Check NT building and body corporate guidance |
The insurance impact
Combustible cladding has had a large impact on strata insurance. Buildings with identified cladding face premiums two to five times higher than comparable buildings without cladding issues, excesses for cladding-related fire claims ranging from $10,000 to $50,000 (or even 10% of the building sum insured), reduced insurer appetite (with some buildings struggling to find cover at all), and special policy conditions and exclusions.
For a 50-lot building, the insurance premium differential alone can cost each owner an additional $1,000-$3,000 per year. That money goes to insurers rather than to fixing the problem.
What cladding rectification involves
Rectification is not as simple as stripping off the old panels and putting up new ones. The process typically involves a fire engineering assessment to determine the extent and risk of the cladding, design of a rectification scope by qualified engineers, council and building approval for the proposed works, removal and replacement of non-compliant materials, and certification of the completed work.
Costs vary enormously depending on the building's size, height, cladding extent and accessibility. Typical ranges are $15,000-$50,000 per lot for full rectification, though complex buildings can exceed this significantly.
- Cladding flagged in audit
- Fire engineering assessment
- Listed on state cladding register
- Rectification scope designed
- Funding secured via loan or levy
- Works completed and certified
Government support programs
Victoria: Cladding Safety Victoria
Victoria established the most comprehensive government program, with a $600 million fund to rectify the highest-risk buildings. The program prioritises buildings based on risk assessment and provides funding for rectification works. However, funding has not been sufficient to cover all affected buildings, and many owners have faced long waiting periods.
NSW: Project Remediate
NSW launched Project Remediate as a government-led program to support the rectification of combustible cladding on residential apartment buildings. The program offers interest-free loans to owners corporations to fund rectification, with repayment through levies over up to ten years. The scheme aims to make rectification affordable while avoiding large one-off special levies.
Other states
Queensland, WA and other states have generally placed the financial burden on building owners, with varying levels of regulatory guidance and enforcement. Some owners have pursued legal action against developers and builders to recover rectification costs.
Your legal options
Owners in affected buildings may have legal recourse against several parties:
The developer or builder may be liable if the cladding was installed in breach of the Building Code of Australia at the time of construction. The certifier who approved the building may face claims if the cladding should not have passed inspection. Product manufacturers and suppliers may be liable under Australian Consumer Law if the cladding was not fit for purpose.
Under the 2025 NSW reforms, the limitation period for taking action against an owners corporation for failure to maintain common property has been extended from two to six years, which may also be relevant for owners in buildings where the committee has been slow to act on cladding rectification.
What owners should do now
If you live in a building with combustible cladding or suspect your building may be affected, take these steps:
- Request any existing fire engineering assessment or cladding audit.
- If no assessment has been done, put one on the next general-meeting agenda.
- Check whether the building qualifies for a government support program.
- Review the strata policy for cladding exclusions and excesses.
- Consider independent legal advice about claims against the developer or builder.
- Keep the insurer informed about rectification progress.
The resale impact
Buyers and their solicitors routinely check pre-purchase strata reports for cladding. Buildings with unresolved cladding issues typically sell at a 10-20% discount compared with similar buildings without the problem. Completing rectification improves safety and protects property values.
- Money78
- Maintenance52
- Compliance70
- Records86
- Participation44
How UnitBuddy fits
UnitBuddy's building wellness assessment records cladding status in the overall building health score. Comparing insurance costs and market value with peer buildings can help a committee decide when and how to fund rectification.
Get the assessment, funding plan and insurance position into the building records. Delay keeps the safety risk and insurance penalty in place.
Further reading
- VIC: Update on combustible cladding and fireproofing in Victoria, via LookUpStrata
- NSW: Landmark ruling relevant to owners corporations with combustible cladding, via LookUpStrata
Keep the scheme file in one place the committee and the manager can both open. Features, pricing, or book a tour.