New strata laws in New South Wales, which came into force on 30 November 2016, will make it easier for apartment owners to update or redevelop their ageing unit blocks.
Prior to the reforms, a strata scheme could only be terminated if the owners universally agreed to that decision. From the end of November onwards, a vote of only 75% will allow the collective owners to either sell the property or redevelop it themselves.
Paul Morton, CEO of Lannock Strata Finance, says the reforms represent a golden opportunity for owners of ageing apartments to update their homes to improve the value of their assets.
“The new laws have been designed to not only make it easier to update ageing buildings, but to increase density as part of the government’s urban renewal strategy,” he said. “Apartment owners can choose to cash in by selling to a developer, but they may be better off holding on and redeveloping their property to perhaps add a penthouse or other amenities with the benefits shared by all owners.”
A report conducted by the UNSW City Futures Research Centre, Renewing the Compact City
, indicates that up to 15% of strata schemes (2,600 schemes) registered before 1990 could be redeveloped as low-rise buildings up to three stories, and a further 33% (5,729 schemes) up to 10 storeys.
The report suggested gentrification of low-rise schemes would most likely be the driver in locations such as the eastern suburbs, north shore, and near the ocean and harbour. Densification up to 10 storeys would be more likely in middle-ring suburbs.
Currently, approximately one-quarter of housing in Sydney is strata titled, and this figure is predicted to rise to 50% by 2040. Currently, 65% of new housing approvals are for apartment development.
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