Older Strata Schemes …Are they just Baby Boomers or Ready for Retirement ?

Some of the data that has come out of the research being undertaken by City Futures Centre at UNSW (see blog Watch Out !  UNSW is Researching Strata Owners’ attitudes) about NSW strata schemes reveals interesting things about the age of strata buildings in NSW.

One of the factors researched by Professor Randolph was whether NSW strata schemes were older than 30 years or younger than 3 years (in other words registered before 1979 or after 2007).

And, although the research is preliminary and the data is not completely reliable (since is it based on strata plan registration dates which in the case of conversions of existing buildings suggest that there may be more older strata schemes) it gives us some very interesting information about our ageing strata schemes.

• In overall terms 21.3% of NSW strata schemes are more than 30 years old.  That’s one fifth of all the strata schemes and lots in NSW.
• Obviously there are more older (over 30 years old) strata schemes in Sydney than the rest of NSW (28.4% in Sydney and only 7.3% in the rest of NSW).
• In Sydney, the Rockdale, Botany and Ashfield local government areas have the most older strata schemes with over half of the strata schemes there being over 30 years old.
• Interestingly, in 6 Sydney areas more than half of the strata schemes are older than 30 years and in 21 Sydney areas more than one third of the of the strata schemes are older than 30 years.
• Outside Sydney, Bellingen (on the NSW north coast) has the highest number of older strata schemes with 32.3% being more than 30 years old. 

I can’t say what these older buildings are like but I wonder how long they have before significant work needs to be done to them.  Maybe it’s another 10 years or maybe they can wait another 25 years. 

But, either way, compared to newer buildings these strata schemes need to think about operating in middle aged way by doing the following things -

• preserve things in the building that are already there to last longer than they might otherwise
• look at strategic work to the building that will enhance the amenity and longevity of the building
• get advice about and plan longer term capital works and/or improvements to the strata scheme
• start planning as to how to fund the longer term capital works – whether by sinking fund contributions, loans, sale of assets or a combination of these strategies

And, despite all this the strata scheme will eventually just be too old to bother maintaining; and need re-developing in some way (or demolition).

It’s likely that many older schemes will just not realise that buying more time costs money, that sooner or later work will need to be done, and good planning has to be done before the crisis happens.

Francesco …