Buying a new, just built apartment in Sydney

Hey there - we're looking at buying an apartment to live in. The unit we like is new and was completed in 2019. The building already has most units occupied.

How do we make sure we're not buying another Opal tower...

Our broker says you wouldn't normally get a building report for a strata unit, but how else can we get a good view on the quality of the build and the materials used?

We will get the strata report, and should we get a building report, pest inspection, ask for a list of known defects that current residents have reported...do they need to disclose defects to us?

Any tips on what else we should be doing for our due diligence - we are working directly with the selling agent and don't have experience buying apartments in Sydney.

Thank in advance.

 

The choice of property type IS the risk.

 

It all comes down to your budget and area as to what type of property you buy.

Few here will say that buying an apartment is a good choice, but you have to live somewhere, and currently you may find some bargains to be had, particularly the remaining unsold stock of a finished development.

You could try to obtain the miniutes from strata/body corporate/committee meetings and see what issues have been raised and or dealt with already.

If there have been any issues they may have already obtained their own report to pursue the builder to rectify any defects (you may see expenditure for this in the financials if they won't provide the minutes)...

I have noticed a number of developer owned buildings lately that have up to 50% commission/Govco housing with 5-10yr leases, with none of the OTP private buyers being aware of this until after settlement and moving in !

Finally, hang out the front and chat to those coming and going (at the req'd safe distance) as you may learn that there are other issues, like you don't like a single one of them and or grow to hate the place !

Don't rush into anything

 

You can’t. There is no way to conduct due diligence on a new build. You can do checks on the developer/ builder. But that’s not going to help you if they built on a swamp with uncompacted fill and your building subsides in 5 years time.

 

Thanks guys - we will do research on the builder, seems like the only thing that can be done.

 

Maybe don't choose a new highrise?

If a 6 pack brick 3 level unit has been there for 40 years, chances are all the issues are visible.

 

It's not a highrise, only 5 stories tall, the outside is double brick, not sure if that makes any difference. We are not interested in highrise cardboard shoe boxes There are unique aspects of the property which are desirable to us.

Also another question, I have experience buying apartments (Warehouse conversions in case you're interested Trainee ) in New Zealand. There you simply receive the strata report for the whole building as part of the documentation to review before buying. The realtor just sends it to you. It contains notes from previous strata meetings, and overview of the financials of the building etc.

Here it seems I need to contact a third party company to provide the strata report, specifically for the individual unit we're interested in- why is that?
What info will be in this report?
The company I have been recommended is eyeon - anyone have any experience with these guys or have another recommendation?

 

Many things including:
Amounts of cash in the administration & capital works (sinking) funds.
Harmony in the building.
History of special levies being raised.
Ongoing court cases with builders. etc.
Money owed by owners.
10 yr plan on how to spend the capital works monies.
Other owners making claims to repair water leaks, cracks, etc
Tenants issued with notices (for being disruptive, not following OC rules, noise, common property issues, parking in the wrong spot issues.
....and so on.

 

In any other time I'd suggest hanging around the building entrance and asking anyone who comes in or out what they're opinion of the building is - not totally reliable, but you might learn something that's not in official records. But now, you'd probably get arrested!

Who is the building/OC manager(s), and on what terms are they appointed? With my Docklands apartment the original managers were appointed by the developer on long term contracts and stood in they way of pursuing building defect issues. Us owners all owe the then OC Committee chair for going over their heads and getting multi-million remediation works done.

 

In QLD it's usually the solicitor or conveyancer that gets this on the buyers behalf - from the Body Corporate Manager, and there is a fee involved.
The body corps don't like giving it out to just anybody, possibly due to privacy laws, so they only provide it to buyers once the contract is signed (generally forms part of the Building and Pest inspection clause)

 

I’d avoid like the plague. I bought an apartment that was 8 years old at the time, total disaster. Was so happy we got out a few years later, almost lost a heap of money. Was such a stressful experience too. The dodgy developer is still building crap.

 

Thanks everybody - really appreciate it.
We quite fortuitously bumped into a resident during our first visit, who is also a builder and on the strata committee. So he had a few things to say then. Might see if it would be ok for us to call him (he knows the realtor) and have a further chat.
Good tip on the building managers, we'll find that out.

 

The dodgy apartment I lived in was double brick, three storeys. I saw the dodgy developer who is still building them is doing less than 5 storeys in double brick too. They’ll be trash like the rest of his builds. No waterproofing, illegal plumbing, maybe they’ll even have no fire certificate like ours!

Not sure if they’re double brick but I think those Clemton Park apartments that hit the news are less than 5 storeys too.