If you’re buying an apartment in Melbourne —
particularly one built between 1994 and 2014 —
combustible cladding is one of the most
important due diligence checks you can make.
Getting this wrong could cost you tens of
thousands of dollars and years of legal
headaches.
Here’s everything you need to know.
What Is the Cladding Problem?
Combustible cladding — particularly Aluminium
Composite Panels (ACP) containing a polyethylene
core — became widely used in Australian apartment
construction from the mid-1990s. The material
is highly flammable and can cause fires to spread
rapidly across a building’s exterior.
The issue came to international attention after
the Grenfell Tower fire in London in June 2017,
which killed 72 people. Australian authorities
subsequently launched audits of buildings across
the country and found the problem was widespread
— particularly in Melbourne.
How Bad Is the Problem in Melbourne?
Victoria has been one of the worst affected
states in Australia. Hundreds of Melbourne
apartment buildings have been identified as
having non-compliant cladding requiring
rectification.
Cladding Safety Victoria (CSV) — a state
government body established specifically to
address the crisis — has been managing a
program to fund and oversee cladding
rectification works across the state.
The scale of the problem is significant:
- Thousands of apartments affected across
Melbourne - Rectification costs ranging from hundreds
of thousands to millions of dollars per
building - Works ongoing into 2026 and beyond
- Some buildings still awaiting assessment
or rectification
Who Pays for Rectification?
This is the critical question for buyers.
The Cladding Safety Victoria program provides
government funding for eligible buildings —
meaning owners may not face the full cost of
rectification. However:
- Not all buildings are eligible for full
government funding - Some owners have faced significant special
levies to cover costs not covered by
government funding - Buildings outside the CSV program may have
no government assistance at all - Insurance costs for affected buildings have
risen dramatically — some buildings have
faced extreme premium increases or
difficulty obtaining cover
Which Buildings Are at Risk?
The highest risk buildings are:
- Constructed between 1994 and 2014
- More than 3 storeys in height
- Have external cladding on the facade
- Located in inner Melbourne suburbs
(Docklands, Southbank, CBD fringe,
Richmond, Fitzroy, Collingwood,
South Yarra)
However cladding issues have been found
in buildings across metropolitan Melbourne
— not just the inner city.
What Should Buyers Check?
Before purchasing any Melbourne apartment
built in this period, check all of the
following:
1. Ask the selling agent directly
Has the building been assessed for
combustible cladding? What were the results?
2. Check the owners corporation documents
Look for any references to:
- Cladding audits or assessments
- Rectification orders from the Victorian
Building Authority (VBA) - Cladding Safety Victoria correspondence
- Special levies raised for cladding works
- Insurance premium increases related
to cladding
3. Check the Cladding Safety Victoria register
CSV maintains records of buildings in its
program. Your conveyancer can assist with
this check.
4. Check with the Victorian Building Authority
The VBA issues rectification orders for
non-compliant buildings. Search their
records for the building address.
5. Get a specialist inspection
For high-risk buildings consider engaging
a fire safety engineer or building inspector
with specific cladding experience to assess
the building before purchase.
Red Flags to Watch For
These are serious warning signs in OC
documents or from the selling agent:
- Rectification order from the VBA — means
the building has been officially found
non-compliant and must be fixed - Active Cladding Safety Victoria
involvement — means works are planned
or underway - Recent special levy for cladding — means
owners have already been charged - Proposed special levy for cladding —
means you may be charged after purchase - Dramatically increased insurance premiums
— a signal the insurer has priced in
the cladding risk - Insurance obtained through a specialist
high-risk insurer — another signal
What If the Building Is Already in the
CSV Program?
This is actually a better situation than
it sounds. If the building is in the
Cladding Safety Victoria program:
- Government funding is contributing to
the rectification cost - Works are being managed by CSV
- There is a clear path to resolution
However you should still understand:
- What stage the works are at
- Whether any owner contributions are
required - How long works are expected to take
- Whether the building is insurable
during works
Impact on Insurance and Finance
Cladding issues can affect your ability
to obtain finance and insurance:
Finance: Some lenders are reluctant
to lend on buildings with unresolved
cladding issues or may require a larger
deposit. Check with your mortgage broker
before making an offer.
Insurance: Contents insurance for
your individual apartment should not be
affected. However the building insurance
held by the owners corporation may be
significantly more expensive — and that
cost is passed on through your OC fees.
The Bottom Line
Cladding is not a reason to automatically
avoid Melbourne apartments built in the
affected period. Many buildings have been
assessed and found compliant. Many others
are well progressed through rectification.
But it is absolutely a reason to do
thorough due diligence before you buy.
The difference between a building that
has resolved its cladding issues and one
that hasn’t can be tens of thousands of
dollars and years of uncertainty.
Always:
- Ask specific questions about cladding
before making an offer - Have your conveyancer review all OC
documents carefully - Get a building inspection from someone
with cladding experience for high-risk
buildings - Speak to your mortgage broker about
lender appetite for the specific building
Disclaimer: This article is for general
informational purposes only and does not
constitute legal, financial or property
advice. Cladding regulations, government
programs and funding arrangements are
subject to change. Always engage qualified
professionals — including a licensed
Victorian conveyancer and building
inspector — before making any property
purchase decision. For current information
on the Cladding Safety Victoria program
visit http://www.claddingsafety.vic.gov.au
Vic Property Guide 
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