Soaring insurance costs and poorly designed regulations are threatening housing affordability in the ACT, according to the Property Council of Australia.
During a recent appearance before the ACT Legislative Assembly’s Inquiry into Insurance Costs, the council urged the government to reconsider the impacts of new rules on property development and insurance.
Property Council ACT & Capital Region executive director Ashlee Berry (pictured) warned that new mandatory insurance requirements under the proposed Property Developers Act 2024 could significantly drive up the cost of new homes in Canberra.
“In principle, we support strong consumer protections – but these must be balanced with affordability,” Berry said.
One of the council’s main concerns is the planned introduction of mandatory latent defects insurance, a rarely used form of “first resort” structural cover in Australia.
Developers are expected to bear the cost of this complex and expensive product, which Berry said would ultimately be passed on to home buyers.
“The introduction of mandatory latent defects insurance... could increase the cost of new homes by 3 to 5 per cent – adding between $15,000 and $35,000 to the price of a typical Canberra home,” she told the committee.
The Property Council is urging the ACT government to take a more balanced approach that doesn’t undermine its broader housing goals.
“The ACT is in danger of navigating a housing crisis with one hand tied behind its back,” Berry said. “Regulatory changes like this, introduced without a ready market or complementary reforms to liability, could make things worse.”
New ABS data shows the ACT is making progress, with 1,278 homes completed in the December quarter — up from 958 the previous quarter and exceeding the territory’s target of 1,059 dwellings. While encouraging, the Property Council warned that rising costs and regulatory risks could stall this momentum.
A key recommendation from the council is the introduction of proportionate liability laws, which are already in place in several other Australian jurisdictions.
These laws would ensure legal and insurance responsibility is fairly distributed across the construction supply chain, instead of falling entirely on developers.
“The current ‘last person standing’ model puts all the burden on the final party – typically the developer – regardless of where responsibility lies,” Berry said. “It’s outdated, it’s unfair, and it drives up costs for everyone involved – especially home buyers.”
With the ACT facing mounting construction costs, ambitious housing targets, and sweeping building reforms, the Property Council said the territory must urgently update its approach to insurance and liability.
“If we’re serious about delivering more homes, we need a regulatory system that supports investment and shared responsibility – not one that adds cost and uncertainty,” Berry said.
