For over two years, a prominent new residential skyscraper in the heart of Parramatta has stood completely vacant, its windows dark and its promised apartments empty. The 24-storey Observatory Place, once marketed as an 'architectural marvel' in Sydney's second CBD, became a stark symbol of the city's deepening construction quality crisis.
A Tower in Limbo: Defects and Delays
Completed in 2022 on the former site of the Lone Star Tavern, the premium development was intended to be a key part of a booming precinct. Instead, it transformed into what locals dubbed a 'vertical ghost town'. The crisis began in May 2023 when NSW Fair Trading refused to issue an occupation certificate after inspectors uncovered serious defects that rendered the building unsafe.
The most alarming issue was defective plumbing in the basement, which created unhealthy and potentially dangerous conditions. This, alongside other construction faults, was deemed severe enough to legally bar residents from moving in. Consequently, buyers were not forced to settle on their off-the-plan purchases, sparing them the burden of paying for uninhabitable apartments.
Developer Collapse and a Familiar Family Saga
The developer, Parkmeng, initially promised to rectify the problems but failed to do so. By 2024, the company had collapsed into external administration, leaving the tower's fate mired in uncertainty. Behind Parkmeng were familiar figures in Sydney's troubled development scene: Fayad Fayad, Remon Fayad, and their father Sam Fayad.
This is the same family behind the Dyldam property group, which imploded in 2020. Dyldam was once Australia's second-largest residential developer but has since become synonymous with defective apartment projects. Sam Fayad also presided over what is believed to be the largest personal bankruptcy in Australian history, with debts exceeding $2.8 billion.
The Road to Rectification and Systemic Reform
Now, after years in limbo, a breakthrough has been confirmed. The NSW Building Commission stated that liquidators Ernst & Young and receivers Newpoint Advisory have appointed a builder to carry out essential rectification works. Work is expected to commence early next year to address the Building Work Rectification Order.
Construction lawyer Bronwyn Weir argues this saga underscores systemic failures. She advocates for the licensing of developers, a reform the ACT Government will adopt in 2025. 'Licensing would mean that a developer's history could be checked,' Ms Weir said. 'It would also mean that they could be excluded from developing again if their projects are defective.'
She noted that while Observatory Place buyers endured years of disruption, they 'dodged a bullet' compared to a scenario where an occupation certificate was issued and settlements forced through. The best consumer safeguard, she contends, is preventing defective projects from proceeding to completion, as post-construction fixes in strata buildings are far more complex and costly.
This case echoes previous building disasters that have shaken confidence in New South Wales' apartment market, most notably the Opal Tower evacuation on Christmas Eve 2018 and the cracking at Mascot Towers in 2019. These incidents collectively highlight an urgent need for stronger independent oversight and regulatory power during the construction phase itself.
