Why you need to check your apartment before buying: 26% in Sydney have flaws, says study

Shot of high-rise apartments.

Buying an apartment seems straightforward enough, until you check below the surface. Not all apartments are created equal. 

A new report from UNSW says that more than a quarter of Sydney apartments could suffer from building defects, and a lack of transparency has made it next to impossible for buyers to know if their building is among the defective lot.

The study, conducted by City Futures Research Centre at UNSW Sydney, found evidence of at least one defect in 26 per cent of strata schemes registered between 2008 and 2017.

While this news might be troubling to prospective buyers, it only reinforces the need for comprehensive home inspections prior to exchanging contracts. 

According to Fair Trading NSW, when it comes to strata schemes, building inspectors tend to look at just the condition of the interior and immediate exterior of a unit. 

Buyers are advised to request a ‘special-purpose’ property report to have common property areas, such as common walls and stairwells, inspected. This type of report will also outline any repairs and maintenance work needed.

Generally, the inspector conducting a special-purpose property report will look for: 

  • Structural problems
  • Cracks or movement in walls, floors and ceilings
  • Non-compliance with building standards
  • Uneven floors
  • Issues relating to dampness, asbestos and insulation
  • Drainage problems

More than half of apartments potentially below par 

More than a quarter of Sydney apartments with defects seems high. But more robust data examined by the City Futures Research Centre suggests the number of strata schemes with at least one defect could be as high as 51 per cent. 

Worryingly, the same dataset reveals that 12 per cent of buildings have at least ten types of defects. 

The most common issues recorded were related to water (42 per cent), cracking (26 per cent) and fire safety (17 per cent). The high number of water-related defects is especially concerning, considering that these issues are among the most expensive to fix.

Lack of reporting on building defects a concern

The researchers said there were a number of barriers to obtaining comprehensive data on defects, raising concerns that buyers will face even more difficulties when trying to access such information. 

Reasons for the absence of data range from an industry-wide drive to cut red tape to failure by developers to pass on vital information to building owners. Lenient audit processes were also recognised as a problem.

“Information may be lost because it is not required (or checked) by audit mechanisms, with documentation often the first to fall to pressures for speed and reduced costs,” the report said.

The resulting “data blindness” affects all stakeholders in the apartment market, but it’s buyers that ultimately shoulder the risks.

Currently, strata inspection reports are a buyer’s main means of assessing the condition of a building. But these vary in the quality of record-keeping and the skill of strata inspectors.

What’s more, 12 per cent of strata reports reviewed by the researchers did not consider the issue of defects at all, which can give buyers the impression that the building is defect-free.

To address these issues, the City Futures Research Centre calls for a “clear process to ensure that owners are provided with the information they need, and that the appropriate checks take place to identify and act upon building defects in a timely manner.”

For information on property and lending trends, visit our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

Home loan comparisons on Mozo - last updated 9 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% p.a.

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.