Included in the new legislation is the allowance for an entire strata scheme to be sold if 75%, rather than 100%, of owners agree to the sale, which real estate services firm CBRE believes will be big news for Sydney’s property market.
Rich Gell, residential development manager at CBRE believes the easing of sale requirements will be particularly welcomed by owners in residential and commercial strata agreements who face increasing maintenance and repair bills.
“The changes will promote the urban renewal of dated and near obsolete strata complexes throughout metropolitan Sydney, which are approaching the end of their physical life,” Gell said.
“As Sydney entrenches itself as one of the world's most green, global and connected cities, there is a greater requirement to create sustainable communities for people to reside, particularly in light of forecasts that the city's population will be circa 6 million by 2031,” he said.
In particular, the change could have a significant impact on the market in the Sydney CBD as development opportunities are becoming increasingly scarce and Daniel Courtnall of CBRE's Sydney strata office team believes developers are likely to become more proactive.
“The Sydney CBD is a very tightly held precinct and opportunities to secure freehold buildings or development sites are rare,” Courtnall said.
“The implementation of these laws will create new offerings for developers or purchasers to approach strata owners with proposals that would have been considered too hard or a waste of time and money previously due to the need for a unanimous decision,” he said.
According to CBRE, locally based developers and investors have already approached them and identified assets they are interested in and they believe foreign investors and developers, in particular the Chinese will soon do the same.
While the changes may make it easier for strata sites to be sold and redeveloped, it won’t make it a free for all.
If 75% of owners in a strata agreement do agree to the sale, it will then be referred to the Land and Environment Court to ensure the process has been done correctly and all owners are receiving the appropriate level of compensation.
