Brad Walters from iCIRT by Equifax Market Insights

Episode 64 Market Insights: iCIRT rating system by Equifax aims to boost confidence in the property market by providing transparency for buyers, and helping developers enhance their credibility and trustworthiness.

The property market is facing a significant confidence crisis. Equifax's data shows that only 30% of people feel confident enough to move forward with their property purchase. This lack of confidence stems from concerns about build quality, developer reliability, and construction collapses. In response, iCIRT was introduced, an independent rating system that aims to rebuild trust among property buyers and investors, particularly in the off-the-plan market.

During a recent discussion with Urban.com.au's CEO, Mike Bird, Brad Walters from iCIRT highlighted that regulators, funders, and insurers have increasingly relied on external data, ratings, and market insights to make informed decisions. Walters shared that iCIRT was developed with input from government agencies, industry bodies, and market associations to create a rating system that measures a developer's capability, reliability, and resilience. The goal is to offer buyers transparent information to make informed decisions.

One of the key findings from Equifax's research revealed that 76% of consumers who are aware of iCIRT have reported increased confidence in construction projects. The rating system is designed to provide an independent evaluation of developers and the entire building team, helping buyers identify trusted professionals in the industry. This rating system is becoming more widely recognised, particularly in New South Wales, 26% of medium-to-large businesses in the residential building market have already adopted iCIRT ratings.

From the developer's perspective, obtaining an iCIRT rating aims to provide more than just consumer confidence. It offers valuable insights into their governance structures, quality assurance programs, and financial profiles. Walters mentioned that the financial return for developers with an iCIRT rating is significant, with consumers willing to pay an average of 6.9% more for rated projects, offering a substantial return on investment.

iCIRT is also making waves in the broader construction industry. The rating system extends beyond developers to certifiers, architects, engineers, and other professionals in the building process. Additionally, commercial construction sectors are now recognising the value of iCIRT ratings. Public and private sector procurement professionals are even incorporating these ratings into their tender requirements, further driving adoption.

Equifax reference that the iCIRT rating is an increasing factor for financial institutions lending decisions. Walters noted that 82% of funders have enhanced their due diligence in the construction space, with some lenders even refusing finance to developers without an iCIRT rating. Similarly, insurers have started incorporating the rating into their processes, offering discounts on premiums for businesses with an iCIRT rating.