As residents of Sydney’s Opal Tower found out they would spend another week away from their homes, subcontractors in Australia’s building industry say the high pressure being put on them, coupled with chronic underpayment problems, is resulting in faults such as those discovered at the troubled tower.

On Friday evening, the company that built Opal Tower, Icon Constructions, announced that residents would remain in hotels for another seven days – despite promising last week that they could return by Monday.

Also on Friday, the spokeswoman for the Australian Subcontractors Association, Louise Stewart, said a “toxic culture” had developed where subcontractors were forced to work for unreasonable rates and asked to do extra unpaid work, which created low-quality buildings.

Opal Tower, a new apartment building in Sydney’s Olympic Park, developed a large crack on Christmas Eve. Further faults were later discovered and the New South Wales government has announced an emergency investigation.

However, the developer and builder have said the tower is safe, structurally sound and poses no threat to safety.

Stewart said the faults highlighted how subcontractors across the industry were expected to work for rates that were “too competitive”.

“The subcontractors are asked to price jobs at the tender stage and even if the work is won, the prices are then shopped around and they are expected to drop their rates,” she said. “It’s the nature of the industry, that’s the way it’s been working for years and it’s part of the problem.

“[Builders] might come back and say ‘You need to drop it by 10%’. Subcontractors will price a job at fair market value and then they get completely screwed down by the builder.

“The subcontractors are also asked to do extra work that is outside the scope of the price. And if you know you are not getting paid for it, you are not going to do your best work.”

Stewart said subcontractors made up 82% of the building industry, resulting in an increasingly competitive market.

“Fifty years ago, builders employed large workforces and the trades were employed by the builder. Now almost none of the trades are employed by the builder. They are all subcontractors. And the subcontractors are played off against each other to get the lowest price.

“It’s destroying the industry,” she said. “It’s eroding the quality of projects.”

A spokeswoman for Icon rejected the claim that it used too many subcontractors.

She said Icon used a “very small percentage” of subcontractors, well below the industry-wide figure of 82% cited by Stewart.

“Icon was very happy with the contract price that was awarded, of which a very small component was for subcontractor works,” she said.

Icon said it did not ask subcontractors to do too much extra work – known as variations.

“In terms of variations, there was no greater or less number of variations [than] on any standard build of this kind,” the spokeswoman said.

On Friday, the NSW planning minister, Anthony Roberts, announced the results of an “interim briefing” he had received from the two professors of engineering commissioned to investigate the Opal Tower fault.

“We can say from our initial assessment there is no evidence of any issues with the foundations of the building, though we believe that there are a number of design and construction issues that require further investigation,” they said.

The review is being led by Mark Hoffman from the University of New South Wales and John Carter from the University of Newcastle.

Roberts said he did not believe any residents should be moved back into the building until an “initial report” had been completed by the professors.

Later on Friday, Icon announced it was taking this advice.

“Accordingly, Icon advises that it has secured ongoing hotel accommodation for residents until next Friday, 11 January,” a statement said. “We are hopeful that the independent investigator’s initial report will be made available in the course of the next week.”

On 27 December, Icon had told residents they could move back into their apartments within 10 days – that is, by Monday.

But on 1 January, the builder announced that more cracks had been found on another level, and those affected could not move back in until those cracks were repaired.

The premier, Gladys Berejiklian, told the tower’s residents they should “absolutely” look into legal action against the developer, Ecove, and the builder. “I would if I was in their shoes,” she said.