Just over 50 years ago a new type of property ownership was introduced in Australia. In 1961 the Conveyancing (Strata Titles) Act was introduced in NSW. This act created a legal mechanism for the vertical subdivision of multi-unit housing. This meant that for the first time individual flats could be bought and sold unencumbered by the collective decision making process that formed part of company title arrangements, making banks much more comfortable to issue home loans on these new strata properties at interest rates equivalent to loans for detached properties.

In the years that followed many small blocks of flats were converted from company to strata title ownership, and many others were built, and now the ‘six pack flat’ on a ‘gun barrel block’ is a common sight across Sydney’s suburban landscape.  Since the 1990s urban planning in Australia has increasingly emphasised urban consolidation and as a result of this focus and a rapidly increasing urban population, multi-unit strata titled housing now comprises over 70% of all new dwelling construction in Sydney.

The above map shows the historical progression of strata schemes across Sydney, from being concentrated initially in a few small pockets on the North Shore and Eastern Suburbs, to being spread right across metropolitan Sydney.  Where there is an obvious intensity of strata development in central and eastern areas of Sydney, strata developments have now become an important feature of the housing landscape in all parts of Sydney.

Strata titled development accounts for a very large and increasing share of Sydney’s housing.  There are now over 35,000 strata schemes (developments) and more than 535,000 lots (units) in Greater Sydney and according to the Australian Bureau of Statistics, in 2011 27% of all dwellings are flats units and apartments.  More than one third of all schemes were registered more than 35 years ago and approximately 58% of all schemes are relatively small, between 3 and 10 lots in size.

A little recognised legacy of strata titled property is the difficulty it created in ending a strata scheme so that buildings could be knocked down and rebuilt.  Currently 100% of owners are required to agree to cancel a strata scheme.   This has meant that it has been very difficult to end a strata scheme and rebuild those buildings.  The NSW State Government is actively considering new legislation that would create a new process to allow for less than 100% of lot owners to agree to the termination of their strata scheme (as proposed in the Strata Title Law Reform position paper).

Obtaining consent from all owners is only one part of a complex process that groups of owners will have to work through to terminate their scheme.  There are a range of other issues that people may be faced with should they decide or be forced to proceed with a termination of a strata scheme with different risks for all involved.

City Futures, in collaboration with industry partners (UrbanGrowth NSW, Strata Community Australia (NSW), Australian College of Community Association Lawyers, The Owners Corporation Network of Australia and NSW Fair Trading) have been working on a 2 year project funded by the Australian Research Council on this critical issue of strata renewal.

The project titled ‘Renewing the Compact City’ is focused on the issues surrounding strata renewal and on exploring the ways in which existing multi-unit housing can be effectively, efficiently and equitably redeveloped where appropriate.

The first part of the Renewing the Compact City project aimed to established the characteristics of strata schemes across Sydney: where, how big and how old they are, and also who lives in them. The first report details this baseline data and gives a comprehensive overview of the strata sector in Greater Sydney.

Click here to view the full report.

If you would like more information about this project, visit the project page, or contact Laurence Troy at City Futures.

To see more of City Futures Research Centre work, please visit: www.cityfutures.net.au