Combustible Cladding in Australian Apartments: Where Things Stand in 2026
The combustible cladding crisis that began in earnest after London's Grenfell Tower fire in 2017 has been one of the defining issues of Australian strata living. Nearly a decade later, thousands of buildings across the country still have non-compliant cladding, and the financial, insurance and safety implications continue to affect hundreds of thousands of apartment owners.
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's lightweight, inexpensive and aesthetically versatile. It's also 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 / TAS / ACT / NT | Smaller numbers but still affected | Varying levels of government support |
The Insurance Impact
Combustible cladding has had a devastating 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 ,000 to ,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 ,000-,000 per year — money that goes to insurers rather than to fixing the problem.
What Cladding Rectification Actually 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 ,000-,000 per lot for full rectification, though complex buildings can exceed this significantly.
Government Support Programs
Victoria: Cladding Safety Victoria
Victoria established the most comprehensive government program, with a 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 a copy of any fire engineering assessment or cladding audit that has been conducted. If no assessment has been done, raise the issue at your next general meeting and push for one. Check whether your building qualifies for government support programs in your state. Review your strata insurance policy to understand the cladding-related exclusions and excesses. Consider obtaining independent legal advice about potential claims against the developer or builder. Ensure the committee is keeping your insurer informed about any rectification progress.
The Resale Impact
Cladding significantly affects property values. Buyers are increasingly aware of the issue, and their solicitors routinely check for cladding in pre-purchase strata reports. Buildings with unresolved cladding issues typically sell at a 10-20% discount compared to similar buildings without cladding problems. Completing rectification doesn't just improve safety — it protects and restores property values.
How UnitBuddy Helps
UnitBuddy's building wellness assessment includes cladding status as a key factor in overall building health scoring. By understanding how cladding affects your building's insurance costs and market value relative to peers, you can make informed decisions about rectification timing and financing.
Combustible cladding remains one of the biggest financial and safety challenges in Australian strata. The sooner your building addresses it, the sooner you stop paying the insurance penalty and start recovering your property value.