TALL ORDER

Purchase property with caution, especially when considering an apartment, writes Harvey Grennan.

The cracked exterior of Sydney’s Opal Tower and combustible cladding across various sites in Melbourne have raised red flags about the risks of buying new apartments.

But the issue of building quality in apartment blocks is hardly new.

There have been many cases of apartment complexes requiring millions of dollars of repairs, parliamentary inquiries into building quality in NSW (2001) and the

ACT (2018), and a host of other investigations. And still governments keep promising stricter regulation…

Most dodgy buildings escape publicity. A 2012 report by the University of NSW City Futures Research Centre found that 85 per cent of apartments built since 2000 have major defects; another report in 2015 found that the average cost of rectifying faults in new apartment buildings was 27 per cent of the original construction cost. The most common – and most expensive – problems are faulty waterproofing and poor fire insulation between units.

So what do you need to do before buying an apartment? The first mistake many people make is that they don’t believe they need a professional building inspection if it is a new building. The opposite is true: the likelihood of defects is greater than in an older building where most of the defects may well have been rectified.

The next thing is to obtain is a strata report. This will reveal any past, pending repairs, planned or needed repairs. You can sight these records yourself or order one from a strata inspection company (your solicitor can arrange this).

Also ascertain what regular strata fees are payable and whether there are any additional ‘special levies’ to cover larger capital works or repairs. What is the owner-occupier/tenant mix? Is the complex pet-friendly? Is there sufficient parking? Are there noise problems?

When buying off-the-plan, the best guide is the developer’s reputation so check their previous developments as well as the builder’s record on the fair trading website for your state. It is vital to get a solicitor to check off-the-plan contracts – these tend to be complex and may allow the developer to change plans and fittings prior to completion. Ensure financing is confirmed as lending strictures can change between signing of contracts and building completion, as many have found to their cost.

David Crombie, national chief executive of Professionals Real Estate, points out there is now a much wider choice of off-the-plan apartments in some regions because of the fall in the market. But take your time and don’t buy on emotion, he counsels. “Apartments with larger balconies or attractive outlooks can enhance the resale value. North-facing and corner units with fewer common walls also features add a point of difference.”