Strata reforms in New South Wales great for potential investors

By the resi financial blog team, 25 November 2013

Strata reforms in New South Wales

Property investment in New South Wales apartments and units could be set to be revitalised, with a number of strata law reforms announced by Fair Trading Minister Anthony Roberts late last week (November 14).

These reforms are expected to help improve the attractiveness of strata complexes as investment opportunities, while simultaneously increasing the living conditions for the people living in the buildings.

According to Mr Roberts, there are more than 72,000 strata schemes across the state, with an average of five new ones added every day. By 2030, it has been predicted that half of all housing stock in Sydney will consist of multi-unit complexes.

Therefore, these reforms aim to strengthen the culture surrounding strata complexes and help to improve the cooperation and coexistence of everyone involved in the successful running of the properties.

There have been 70 proposed changes to the strata law by the New South Wales government, which Mr Roberts said aim to support "democratic, accountable and transparent decision-making and empower strata communities to chart their own futures".

For example, during development, the imposition of a new high rise bond will help to protect homeowners from building defects. The bond will be the equivalent of 2 per cent of the costs of the construction work.

This will provide a direct address for defective work and provide a safety net for consumers should the developer become insolvent. The bond will be released once the an independent inspection has double checked the integrity and any defects have been fixed.

The changes have also been praised by a number of industry bodies, with Urban Taskforce Chief Executive Officer Chris Johnson stating these reforms will provide more confidence for the real estate industry as a whole.

"New South Wales is leading the country in terms of the number of strata apartments and it is essential that we have the best builders and developers involved in constructing these buildings so that owners corporations can be assured of quality results," said Mr Johnson in a November 14 statement.

He stated the changes will provide the platform for an "effective maintenance regime" to be established in the industry, giving peace of mind back to developers and owners when it comes to managing defects.

Furthermore, Mr Johnson said it was essential for developers and owners to begin working together rather than engaging in skirmishes over defective issues - especially with multi-unit dwellings set to become a huge percentage of Sydney's real estate market.

This was echoed by Stephen Goddard, chairperson for the Owners Corporation Network, who said that it was contrary to the public's interests to have strata titles that are unable to adapt to the modern age.

Categories: Home Loans, Property Investment