A patched-up ceiling in a new townhouse in South Morang, where water crashed through the ceiling during the December 29 storm. The Victorian Building Authority (VBA) has announced it is holding an inquiry to determine if there are "systematic problems" with the standard of building and plumbing work across the state. It follows an ongoing investigation by Fairfax Media exposing residential buildings in Victoria so poorly constructed they are dangerous, or are likely to fall prematurely derelict. It also came to light that stalactites are considered "common" in the basement of new residential buildings – with the formations evidence of slow and persistent leaks from upper storeys, often caused by inadequate waterproofing of gardens or bathrooms. "It's essentially like body cancer, in that you have to cut out the affected area of concrete or the cancer will keep on spreading," said Sahil Bhasin, the national general manager of Roscon, a company that specialises in identifying building defects.

A collapsed ceiling in a new townhouse in Kingsbur.y Experts say stalactites are common in basement carparks in Melbourne. Roscon received 170 call-outs in the wake of the December 29 rain storm, including ceiling collapses in Taylors Lakes, St Kilda, South Morang, Kingsbury and Macleod, where owners were met with a wave of water when they opened their front doors. In Greensborough, all 20 units in one apartment complex were flooded and the water leached out into the corridor, the flooding so deep the footsteps of the residents walking to their units sent ripples along the carpet. A man navigates through the corridor of a flooded apartment complex in Greensborough in December.

The VBA's chief executive, Prue Digby, has acknowledged that substandard waterproofing is a "possible systemic issue" in Victoria. Foreshadowing what could be in store locally, New Zealand has experienced a leaky building crisis with an estimated cost to the nation's economy of more than $11 billion. David Pockett, a specialist in plumbing defect insurance claims, said Victoria could also be sitting on a multi-billion-dollar problem, describing the situation as a "huge public scandal". "You're talking billions in long-term costs, because people's homes are going to be prematurely destroyed by water," he said. "Houses that should be lasting 50 years are going to last 10. It's just insane."

Mr Pockett said there had been a widespread failure to enforce Australian standards around gutters and drains, resulting in rainwater overflowing into roof spaces and flooding homes. He said owners were being left many thousands of dollars out of pocket, as many insurers refused to cover flood damage caused by defective materials or workmanship. Though for many homeowners, headaches like this are just start of a much bigger nightmare, with protracted legal disputes leaving them traumatised and financially crippled. In Abbotsford, retiree Julie Gaffney has become the reluctant owner of a luxury apartment since declared "not fit for purpose". Ms Gaffney said she paid $780,000 for the off-the-plan apartment, perched on a hilly riverbank overlooking the Yarra, but has been unable to live in the unit for 20 months due to toxic mould, algae, rotting carpet and building debris in the air-conditioning unit.

Julie Gaffney in her luxury Abbotsford apartment she believes is too dangerous to live in. Ms Gaffney said the home flooded fives times between July 2013, when she moved in, and May 2015. She stepped out of bed one morning and was shocked to find her feet soaked in water. "I just thought 'my God'," she said. "The water was an inch and a half deep across the whole bedroom floor. It squelched as you walked on it."

Mould and water damage to the carpet in Julie Gaffney's Abbotsford apartment. Credit:Aisha Dow Building regulation experts du Chateau Chun inspected Ms Gaffney's apartment at her request and concluded the unit was not constructed according to the building permit or the requirements of the Building Code of Australia, with water likely leaking through two walls not adequately waterproofed. However the builder, Hamilton Marino, denies there was a breach of the building code. Director Fred McKenzie said in a statement "the building has been designed and constructed in accordance with the BCA and this has been verified by independent consultants". "We have investigated the defect upon being notified of it and have put together a solution for it to be rectified," he said. "We have been denied access to attend to the defect for reasons unknown to us and the owner has decided to go to VCAT."

Ms Gaffney has recently been hospitalised with a severe a respiratory illness, and believes the toxic mould may have worsened her existing asthma, although the mould connection has not been investigated or proven by experts. "For most of the time I was living in the apartment, I was waking up in the middle of the night coughing, scratching and wanting to pull my nose off," she said. Ms Gaffney and a neighbour are now taking the builder and developer, Trenerry Property Group director Robert Dicintio, to the Victorian Civil and Administrative Tribunal. They are seeking more than $240,000 in compensation, including for lost rent and damage to valuable books, some originally owned by Ms Gaffney's late husband. Developer Robert Dicintio said he couldn't comment because he did not want to prejudice the planning tribunal case. "But all parties are participating in the legal process and I'm sure a suitable outcome will be achieved," he said.

There was a 44 per cent increase in building complaints made to the VBA last financial year, an increase the regulator attributes to its "raised profile" following an $117,000 advertising campaign. The VBA's inquiry into failures in domestic buildings is due to be completed by August but chief executive Prue Digby said the community should have confidence in the majority of building work in Victoria. "Victorians should expect that buildings will be built to the required standards, unfortunately for some consumers things can and do go wrong. The VBA will continue to address issues of poor workmanship and improve outcomes for building consumers," she said.