With prices climbing for single-family homes, more and more Australians are opting for flat living. Over the past few decades, apartment dwellers have increased to encompass 10% of the population, with an estimated occupied flat for every five houses.
Nearly half the residential property listings in Sydney and Perth are for apartments. But in recent years even the rising expense of purchasing traditional residential property isn't pushing people into units, due to concerns about shoddy construction and high renovation costs. How do you protect yourself from poorly built apartments?
If you have committed to buy, you may be able to access a sellers certificate or owner's corporation certificate, which will give some details of strata accounts. But a surer way to identify problems early in the process is to order a proper strata or body corporate inspection from professionals. These inspections typically cost under $500 and can reveal existing building defects and similarly serious issues.
Cladding is one of the top concerns as a result of recent (and highly public) disasters. Many high-rise developments in Australia were built with flammable cladding, and depending on your location, it could be up to you to determine if a building in which you're seeking to buy a unit was constructed using this material.
Water damage from leaking roofs and walls is one of the most common defects, but can also be difficult to track due to lack of transparency and deregulation across Australia. Check with other current and former owners in the building and gather as much information as you can before committing.
Since building defects seem to becoming the rule rather than the exception, it's important to know what methods of redress are available should you buy a unit with problems that appear later. Due diligence in this area is vital. Those living in structures constructed by Tier 1 builders may have recourse if defects become apparent, but if the building is attributed to smaller companies that have folded or can't be reached, there might be no financial avenue for a necessary repair outside of footing the bill yourself.
Buying off the plan can let you see work in progress, check out the builder and developer and avoid a significant hike in stamp duty. It's certainly a gamble: If successful, you could end up with a property worth more than what you paid, but you could also end up taking a loss.
Older buildings may not have all of the amenities of newer structures, such as balconies, underground parking and extra storage, but can have attractive period elements and maintain their value well. Typically, any structural issues will have come to light already, and you can avoid buying into a unit that will be crumbling in a few short years.
Strata fees often fall approximately between 0.3% and 0.7% of the property's value. However, amenities can drive this figure as high as 1.2%, especially if the building has up-to-date facilities such as a gym or swimming pool or provides luxuries like a concierge service.
High fees may be justifiable in the right property, but can also slow buy-ins and slow capital growth in your unit. Ask what is "in the sink" in case serious repairs across the board need to be made.
By doing your homework in advance and preparing yourself for any eventuality, you can make an informed decision before buying a unit. Flat living can be an attractive choice, but not if your apartment becomes a safety hazard or starts falling to pieces around you!
Ready to embrace apartment living? Contact Ray White Surfer's Paradise and we can help you find and purchase a quality flat.