Weigh up the pros and cons of strata title
On the plus side:
1 Prices are generally lower – because you are not purchasing land – making apartments a more affordable alternative. For example, in Melbourne the median unit value at the end of January was $584,000, according to CoreLogic, compared with a $900,100 median for a house in the same city. In Sydney, the relative medians were $769,000 (unit) and $1.206 million (house).
2 There is less maintenance as the common areas are looked after by the owner’s corporation. This makes it easier to lock-and-leave your apartment without worrying about who will water the garden, for example.
3 Many strata complexes provide greater security than standalone properties, particularly apartment buildings with locked front access or gated complexes. For some it’s a comfort to have neighbours close by who are coming and going at different hours.
4 You may be able to access facilities, such as lifts, pool, gym or secure parking, without having to pay the entire cost of purchasing and maintaining these facilities yourself.
5 Location. First homeowners or older people have the option to purchase a property in a desirable area that would otherwise be unaffordable if they were buying a house.
6 People with little or no family can become part of a community in a strata building and can get involved in running the place.
On the minus side:
1 You will be up for strata levies (owner’s corporation fees), which can be expensive, especially if your property is in a complex with facilities such as a lift or pool. These are usually paid quarterly and are subject to change and most likely to increases over time. And on top of this you will also have to pay council rates.
2 You’ll likely be bound by certain restrictions, depending on the strata by-laws specific to your building. For example, you may only be permitted to park your car in certain areas, there may be limits to what pets you can own, you’ll need to gain permission to renovate and you mightn’t be allowed to do renovations or modifications that don’t match the overall aesthetic of the complex.
3 You’ll be living close to your neighbours, so issues such as noise disturbances may occur.
4 You’ll discover that decision making by an owner’s corporation can be a lengthy process, and there’s always the potential that your ideas or preferred course of action could be voted down by other members at meetings. 5
The value of your property is linked to the overall complex and it depends significantly on whether or not the building is maintained well/upgraded or heads downhill.
Pam Walkley, founding editor of Money and former property editor with The Australian Financial Review, has hands-on experience in buying, building, renovating, subdividing and selling property.