Ep 86. Why I Love Older Buildings - And The Three Hidden Costs You Need To Know
If you’re a buyer in Sydney, you’ve probably heard the horror stories about new builds — and most of them are true. With 53% of new builds showing serious defects and repair costs often far higher than reported, it’s no wonder so many buyers are turning back to older buildings.
As Michelle says in the episode, “a well‑run 1970s block over a brand new tower is a no‑brainer” .
But older buildings aren’t perfect either — and knowing what to look for can save you from a six‑figure surprise special levy landing in your inbox.
In this episode, Michelle breaks down the real pros and real risks of buying into older strata buildings, without the fear, hype or assumptions.
We talk through:
Why older buildings get so much right — from solid concrete slabs and double‑brick construction to quieter acoustics and better thermal stability
The three major categories of hidden costs every buyer needs to understand
Balcony defects — concrete cancer, failed waterproofing and balustrade compliance, including what the strata report language really means and how much repairs typically cost (often $5k–$30k+ per balcony)
Fire orders — why councils are issuing them, what they cover, and how remediation can range from a few thousand to multi‑million‑dollar cladding projects
The “secondary stack” of issues — asbestos, outdated electricals, plumbing corrosion, terracotta drainage, rising damp and what these repairs realistically cost in 2026
How to read a strata report with context — what’s normal, what’s a red flag, and what’s simply the cost of owning a building that’s been standing for 50+ years
Why a building with a $100k special levy per unit can still be the better buy — and how to assess that with confidence
And most importantly, what all of this means for your buying strategy — whether you’re actively searching or still preparing behind the scenes.
If you’ve ever wondered whether older buildings are “safer,” “cheaper,” or “less risky,” this episode gives you the clarity you need to make an informed, confident decision.
Listen to the Episode Now
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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Transcript
Michelle:
Last week on the podcast, we were very lucky to speak with Corey Nugent, who is the CEO of Resilience Insurance, the only LDI insurer for new builds and off-the-plans apartment blocks in New South Wales and Australia, in fact, talking about that, 53% of new builds have serious defects and the cost of that.
283 is the quoted number, but he reckons it's at least double that, if not more, which is obviously a serious issue and concerning. So what then instead? Well, you know that my building favorites have always been older style buildings, anything from Art Deco all the way up to, about twenty years ago and I still think that a well-run 1970s block over a brand new tower is a no-brainer.
But of course, is that really true? Is an older building all that it's cracked up to be? Because of course, there is a version where you buy in an older block and angels, and you live happily ever after, but there's also a version where it's very well possible that you end up with a six-figure bill, special levy that ends into your inbox because the executive committee have found issues. So today I wanted to talk about, older buildings and what could be the issues with them and sort of prepare yourself and what to look out for in a strata report and what are the most common things that you need to look out for and sort of a ballpark figure as to how much that could cost you. So here we go.
To start with, I want to talk about what is really great about older buildings, because, let's be honest, an older building gets a lot of things right. First of all, the build quality. It's just not there in this day and age, right? We've got solid concrete slabs, real brick, often double brick in 70s to 80s, 90s blocks. We've got generous ceiling heights.
Potentially even things like sash windows and genus period features. And we've got floor plates that feel like actual rooms instead of corridors, leading up to, really small rooms with windows onto blank walls. Also acoustically, these buildings tend to be quieter, but also because they're double brick.
Therefore it's thermally more stable and after 50 years of settling, it's still standing and it's quite likely to keep standing for quite a while longer. Other than that, of course, you've got the suburb, the inner and middle ring of Sydney were built with apartments during that era. You've got your Marrickville, Dulwich Hill, you've got your Summer Hill, all around Sydney, there's lots and tons of really great older style apartment whereas newer builds tend to be a bit further out or in higher density areas such as Waterloo, Mascot, Wolli Creek, all that kind of stuff. So you've got to think about, you're not just buying four walls, you're also buying into decades of suburban infrastructure. You've got your schools, your transport, not unimportantly, your cafes, you've got a lot. And then you've got typically older blocks with fewer units on a bigger parcel. So you know, I think your 12 units on a generous block versus your 200 units, you know, eight, nine stories high on a similar footprint at the same time. So when you're buying into strata, the reason why it's cheaper than buying a house is because you're only buying a
portion of the land, right? You've only bought a portion of that. But of course, if your block stands on a bigger parcel of land, you get a better share of that. And of course land appreciates whereas the building depreciates. So think about that for a future capital growth potential as well. So then you've got your known versus your unknown defects.
An older building will have already shown you its problems over time. You've got your strata report telling you, you've got your Capital Works Fund telling you, your AGM minutes, whereas of course a new build, you're really flying blind with that. You've got no history whatsoever and with over half of new builds having serious defects, you're kind of trading one set of risks with another.
I want to have a proper chat about what those defects in an older building could be like. because it's fair to say, when you're buying anything you need to do maintenance. If you don't, then you're gonna be paying for that down the track, right? So what I want to do with you today is, what is it you need to look out for in a strata report and then the context around it, right? Because it's important that you have context. It's not just about, my god, this is scary Or let's just not buy it all. You just need to be, forewarned is forearmed Or which one is it? Forearmed is forewarned. But either way, if you know what you're looking at and you know how much it's potentially gonna cost, you can make an educator decision.
So let's start with number one because nine times out of ten, it is balcony issues. Let's start with balconies, concrete cancer or spooling, same thing. So this is when water finds its way through the cracks or failed waterproofing to the steel reinforcement inside the slab, right? and then the steel rusts and the rust expands, and then the expansion pushes the surrounding concrete out from the inside and you'll see that as rust stains running down the underside of balconies, you see hairline cracks, you see drummy patches of plaster, when you tap it, and eventually chunks of concrete actually falling off and exposing that rust that you'll see. And once the steel is exposed, that's just gonna continue to deteriorate because every wet season, every drop of rain will make that worse. And it's not a problem that fixes itself. It really needs to be fixed as such. Then you've got your waterproofing failure. So the membrane that sits under the tile bed on a balcony does actually do the work of keeping water out of that slab, out of the concrete. But when it fails, the water will end up into the concrete and potentially also in the balcony below, etc. So what you'll see is your water staining on the ceiling in the units below, you get your white salt deposits, which is the efflorescence I've spoken about before and then you get your lifting of tiles, etc. And again, there's no shortcut for that fix. The whole tile bed has to come off, a new membrane needs to go on, and the tiles will need to get relaid.
About five to twenty-five thousand per balcony for a typical strip and seal job, but severe concrete cancer can push that way beyond thirty thousand per balcony. Now, this is the sort of trade that I have researched online and I will send you the sources at the end of the podcasts for you to download as well. So of course that is per balcony, and then you've got to multiply that by the number of balconies in the block.
But you need to start off with engineering reports, of course. So that will be like $1,500 to start that whole process off. Now with balconies, you'll also have a thing called, your balustrading compliance. So over the years, the Australian building code has changed, and currently the minimum balustrading height is a meter, and you can't have any horizontal climbable elements and no gaps wider than 125 mills.
And of course a lot of sixties to eighties buildings were built at a lower standard, they may have bricks with, also decorative steel rails or too low, too wide a gap, etc. So that replacement is usually triggered when other things on that balcony will need to be done because you know the balustrade and the scaffolding is already there. So let's just do the whole thing in one go.
And that for a glass and aluminium replacement, again based on 2026 trade quotes, it would be for a glass and aluminium one about 5 to 12k per unit, but if you've seen one of my last TikToks, where I talk about a building in the inner west, they were quoted over 100k for two balconies per unit.
So depends on how deteriorated the balconies are, of course and everything may just look hunky-dory from the outside. You may not realize there's anything wrong when you're walking through the building at the time. But the words I need you to look out for in the strata report are things like spalling, concrete repair, membrane, waterproofing, balustrade upgrade, engineering report attached. That's a good sign in the sense that they've been looking at things and potentially already done the work, but it's on their radar. And you can look for those things throughout the whole report, but specifically in the Capital Works on forecast when that report was done, when did they think it was needing to be done? So that's sort of like the savings account schedule, forecasting what the specialist thinks needs to be repaired based on day one for the next you know 10 to 15 years. Then you've also I guess looking at the special levy history. Have they raised special levies in the past? Is there something on the radar? Is there something current? And then of course also in the meeting minutes, so the AGM and just throughout the year the EGM minutes, do any of those words come up? And then of course I think for me looking at all these reports, a massive red flag is when a building's been talking about that work for like three or four years and they have done nothing about it, because that tells you two things, in that period of time the work has most certainly gotten bigger and more expensive. I mean I think post COVID, how much the cost of goods and traders have gone up. But also the committee can't agree on how to fund it. Maybe there's a lot of older people living there. They may be asset rich and cash poor, maybe they're hesitant to get a loan, but you know it's gonna have to be dealt with at some point and that's a special levy waiting to happen. So if nothing has been done in a reasonable amount of time, that's a special levy that is going to be slapped on top of your quarterly levies, because that problem is certainly not going to go away.
Then we've got fire orders. So fire orders are a thing that a lot of buyers will never have heard of until they own a building, and then suddenly, my gosh, it's all they can talk about. So because this is something that's triggered by council, so council fire safety audits and councils across New South Wales are doing these building-by-building audits also.
Specifically after the Grenfell Tower tragedy in London that happened. I don't know if you're familiar, but that's when that building set alight due to cladding that wasn't adequately fireproof, and a lot of people died. So in Australia since then they have implemented the cladding safety register and also within the building, of course, they need to make sure that everything is up to scratch. So the council will issue a notice to the owner's corporation, usually they have about two weeks to respond to go, okay, this is what we think you need to do, and then they can negotiate a time period in which they will get the work done because normally you have what they call an annual fire safety certificate. So if you haven't got that in the strata report and it's up to date, that might mean that there is a fire order or they're working on something, right? so you have a certain period of time where you can appeal these things, but I mean really it's a good idea that you get your building up to code, right? And make it safe for everybody to live in. What the council is looking for is I guess you can call it compartmentation. So the ability for a fire to move from one part of the building to another or the lack thereof as such, holding back the fire long enough for everyone to get out safely.
For example, the fire-rated doors in common areas very commonly have to be upgraded. The wooden timber doors in the 70s definitely don't make the cut, but we're also looking at exit signage, hardwired into interconnected smoke alarms, and then again that combustible cladding, therefore look for that annual fire safety certificate. Now there is a caveat here. Some very old, some very small blocks may be exempt. so you might not see that certificate in the strata report, but then call the council and confirm whether that building is actually exempt or not. Now the cost of a fire order, this can vary greatly. You know, it could just be that you need fire doors and signage and that's it. It could be a lot more in depth than that and your thinking about just the replacement of the door, those doors can be around fifteen hundred dollars each then you know the cladding that can be a massive major expense, full remediation could be three hundred thousand to two million, obviously that's divided per lot owner.
I've seen some very hefty bills for the removal of cladding and also once that order arrives, it can't be insured adequately until that has all been fixed. Now in New South Wales we've got project Remediate in place, which can offer interest free loans to the body meaning the owner corporation.
So it's definitely worth looking into as a strata to see whether they can help with this rectification. Definitely making sure that you know part of the process so you've got your fire orders, you've got your balconies and your water ingress there.
Now the third stack is sort of an amalgamation of other things that you also need to be looking out for.
First and foremost, I'd say asbestos. Pre nineteen nineties and even after nineteen nineties up to two thousand and three, it is possible that there will be asbestos in the building somewhere. So you'd need to get that looked at and then if you want to remove asbestos depending on how prevalent it is within the building, it could be anywhere from fifteen hundred dollars to ten thousand dollars. That is partially because you need specialist removalists to get rid of it properly and it's fine when it's in place, when it's not broken, because it's the particles, once they are free in the air and you inhale them, that's when they become toxic and cancerous and obviously very serious.
But once it's in place and in good order, a lot of buildings will leave them be. But of course, it's important to understand that it's there quite often; it's at the back of electrical boards as well, because it was used as a sort of fire retardant material. And particularly post-second world war, there are the fibro homes you may have heard of. That very often has asbestos in it so in Australia, there's a huge amount of asbestos still part of the building industry. Then we've got electrical things, that may be an issue, because sort of pre eighties a lot of the wiring had no earth and no residual current devices, the R C D, so the safety switches and the switchboard that cut off the power. If there's a fault so again, it's something that insurance companies love to check because they're gonna give you premium loading if it's the old standard and sort of rewiring a full unit can be three and a half to ten grand, for example you've got to think about your switchboard that needs to be upgraded, that can be around three thousand dollars. so electricals need to be in good order.
Then you've got your plumbing supply. Your galvanized pipes are corroding so you might get brown water on the first run, you get poor pressure, you've got slow drains. that can be quite costly. A full unit replumb can be five to fifteen thousand. Just think about how much it costs to redo a bathroom, for example we're starting sort of at $35,000 - $40,000 to do a like-for-like bathroom replacement.
Making sure that your actual plumbing is up to scratch is important as well. Then you've got your drainage, you've got your plumbing water in, drainage water out, water out quite often terracotta sewer and storm water, which was the standard in Sydney from the early 1900s until sort of the late seventies, eighties when PVC took over. Therefore you've got Motor joint cracks with ground movements, tree roots, then getting repeat blockages, sewer smells, which is not great and the owner is responsible for the line from the building to the property boundary, and then you've got Sydney Water who takes it from there. For example, for a drain camera inspection, you can be paying anywhere between three to five hundred bucks spot repair.
A couple grand to five grand, pipe lining can be four hundred to a thousand per meter and then you've got your typical residual residential mainline, three to eleven thousand. Again, the numbers that I'm quoting are the 2026 trade ranges and what you're looking for in the strata report there are things like block sewer, sewer route, or stormwater and invoices, and obviously your financials.
That should be something you need to be looking out for. What have they been spending their money on, right? then potentially look for rising damp as well. So you have, your bubbling paint, your musty smells when you're walking in. Those are all telltale signs and in order to fix that, you can have your chemical injection, which they do per linear meter, that can be sort of two to four hundred dollars per linear meter. You could also look at improving the subfloor ventilation if there is one. Whether that's an electrical current or fans or things like that and of course, if you want to replaster your walls, for a full unit, that could cost around four grand to fifteen grand, including replastering for that.
If you want a reference point for these numbers that I've just quoted you, the Archicentre Australia Cost Guide is a free document that is put out by the Australian Institute of Architects and is updated every year and it covers everything from wet area fit outs to extensions to new roofs, etc.
We'll link that in the show notes, but also if you DM me, I can send that to you and that's also the same reference point that we use for clients just to give them a ballpark figure. Obviously, there's always cheaper and more expensive turnouts depending on your personal situation, right?
So older buildings love them, love them, love them. But these are the three categories to look out for. You've got your balcony, you've got your fire, and then you've got your secondary stack, your plumbing, your drainage, all that kind of stuff. So now that you know what to look out for, you need to be using that knowledge to go through the strata report. And if you found this interesting, you might want to listen to my next episode where I'm actually going to look at two separate strata reports, buildings that look very different physically and then looking at the strata report they tell two very different things. One unit block in Carlton, one unit block in Dulwich Hill. One of them had a hundred K special levy per unit, the other one had nothing and yet I still recommended the 100k special levy one and I will explain exactly why.
So tune in for that one in two weeks. I think you'll find it interesting too. DM me for the Archie Center Cross Guide or look at the link in the show notes. I hope you found that interesting. Thanks for listening and until next time.