By
Michael Bird
March 26, 2025
•
6
min read
In this episode of Market Insights, Urban.com.au CEO Mike Bird speaks with Robert Furolo from Deicorp about a key challenge in the off-the-plan property market—buyer confidence. As purchasing off the plan can be an unfamiliar and sometimes daunting process, developers are increasingly looking for ways to provide security and peace of mind to their buyers. One emerging solution making waves in the industry is Latent Defects Insurance (LDI).
Deicorp, one of the industry’s early adopters, has embraced LDI as a way to enhance consumer trust, improve project credibility, and stand out in a competitive market. The conversation highlights the growing importance of LDI and its potential to become an industry standard in the coming years.
Latent Defects Insurance (LDI) is a specialized insurance product designed to protect property buyers from structural defects that may not be immediately visible at the time of purchase. These defects can emerge over time due to construction issues, material failures, or design flaws.
Traditionally, buyers had to rely on statutory warranties and defect rectification processes, which can be lengthy, complex, and uncertain. LDI provides a more proactive and structured solution, offering buyers financial protection and assurance that any major defects will be addressed without prolonged disputes.
For developers, LDI signifies a commitment to quality and accountability. It acts as an independent verification process, as insured projects undergo regular inspections by technical specialists throughout construction. This ensures compliance with high industry standards and gives both buyers and financiers greater confidence in the project.
Deicorp first applied LDI to its 546-apartment Downtown project in Zetland, after initial discussions with resilience partners in 2023. While LDI was a new concept, the company saw its potential as a game-changer in the off-the-plan market.
To ensure a smooth transition, Deicorp initially implemented LDI midway through the project. However, given its positive impact, they have now incorporated LDI into all future projects from the feasibility stage, ensuring it is factored into costs and planning from the outset.
The market response to LDI has been overwhelmingly positive. According to consumer surveys, 70% of buyers indicated they would be willing to pay more than 1.5% extra for a property covered by LDI compared to one without it. This suggests that LDI is becoming a key factor in buyer decision-making, offering a tangible advantage in sales.
While off-the-plan sales remain highly competitive, Deicorp has found that LDI differentiates its projects from others in the market. Buyers increasingly favor apartments with LDI over those without, helping Deicorp sell units faster.
A critical component of LDI is the independent technical inspection service. Deicorp has fully integrated these inspections into its quality assurance program, ensuring high construction standards are maintained.
By implementing regular inspections, Deicorp ensures that any potential issues are identified and addressed before completion, reducing the risk of post-handover defects and costly repairs.
Initially, industry observers believed that smaller developers—those without strong brand recognition—would adopt LDI first to gain consumer trust. However, established developers like Deicorp have led the way, recognizing its value as a long-term investment in reputation and buyer confidence.
“We see this as being the way of the future, and I’m sure in the future it’ll become mandatory for all projects to have LDI.” ~ Roberto Furolo, Deicorp
Beyond developers, financial institutions are now taking notice. Many lenders see LDI as a safeguard against potential project risks, with some considering it a future requirement for development financing.
Robert Furolo predicts that over the next 5 to 10 years, LDI will become:
LDI is proving to be a transformational innovation in the off-the-plan property market. For buyers, it offers peace of mind, protection, and confidence in their investment. For developers, it enhances credibility, ensures higher construction standards, and strengthens their market position.
With Deicorp leading the charge in adopting LDI, the industry is on a path toward greater transparency, consumer protection, and quality assurance. As more developers recognize its value, LDI is set to redefine industry best practices and reshape how off-the-plan properties are sold.
For a deeper dive into how LDI is influencing the market, watch the full interview with Robert Furolo on Market Insights EP 75.
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