Develpr guide

Strata Redevelopment in NSW: Can an Apartment Block Be Redeveloped?

Many older walk up apartment blocks sit on land worth more than the building on it. Owners in those schemes often have a far larger opportunity than they realise.

This guide explains how strata redevelopment and collective sale work in NSW, and what owners should do before a developer knocks on the door.

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The short answer

Yes, a strata apartment block can be redeveloped. The usual routes are a collective sale, where all owners sell together to a purchaser, or the strata renewal process under the Strata Schemes Development Act 2015, which allows a scheme to be terminated and the site sold or redeveloped where the required level of owner support and independent scrutiny is achieved.

Whether it is worth pursuing depends on the zone, the current controls, the site area and frontage, the age and condition of the building and what could be built in its place. Neighbouring blocks are sometimes combined to create a larger site. Owner agreement and proper independent advice are the practical hurdles, not the planning ones.

What is strata renewal and collective sale?

A collective sale is where every owner in a scheme agrees to sell to one buyer, and the scheme is wound up on settlement. It is the simplest route, but it requires unanimity.

The strata renewal process introduced by the Strata Schemes Development Act 2015 provides a formal pathway where full unanimity cannot be reached. It involves a strata renewal committee, a renewal plan, a required level of owner support and review by the Land and Environment Court to protect owners who do not agree.

Both routes end in the same place, a single development site, but the process, the timeframe and the protections differ significantly.

Could this work on my property?

Redevelopment potential comes down to what could be built on the land today compared with what is there now.

Zoning and controls: Current floor space ratio and height limits may allow substantially more than the existing building provides.
Site area and frontage: Larger, regular sites with good frontage are far more attractive to purchasers.
Building age and condition: Older blocks facing major capital works are the most common candidates for renewal.
Number of lots: Fewer owners generally means a faster path to agreement.
Neighbouring blocks: Adjoining schemes or houses can sometimes be combined to create a more valuable site.
Owner circumstances: A mix of investors and long term residents changes how a proposal is received.
Parking and basement feasibility: Whether basement parking can be built affects yield and therefore land value.
Market evidence: Recent collective sales in the area give the clearest indication of achievable value.

What should be checked first?

The planning controls applying to the site and the indicative yield they permit.
How that yield compares with the existing building.
Whether adjoining land could sensibly be included.
The condition of the building and the cost of upcoming capital works.
The number of lots, the unit entitlements and the likely split of proceeds.
The level of owner interest, before any formal process is started.
Independent legal and valuation advice, obtained by the owners rather than by a buyer.

Will I need a DA or CDC?

Complying Development

A Complying Development Certificate is a fast, standards based approval. It is only available where the proposal meets every applicable requirement and the site is not excluded. Miss one standard and the pathway is gone.

Development Application

A DA is lodged with the council and assessed on its merits, with notification to neighbours in most cases. It takes longer, but it allows design that does not fit neatly inside the codes.

Planning approval for the replacement development follows the normal process, usually a Development Application, and larger projects may be determined by a regional panel.

The strata specific steps sit outside the planning system. A collective sale is a contractual process, while strata renewal follows the statutory procedure under the Strata Schemes Development Act 2015, including preparation of a renewal plan and Court review.

Owners should take their own legal advice early, since the sequence of steps and the required support levels are strict.

What can affect the opportunity?

Owner agreement

This is almost always the hardest part, particularly where residents have lived in the building for decades.

Unit entitlements

How proceeds are divided is governed by entitlements, which may not match owners' expectations.

Heritage

A heritage listed or contributory building limits or prevents demolition.

Planning controls

If current controls do not permit meaningfully more than the existing building, redevelopment may not stack up.

Existing over development

Some older blocks already exceed current floor space limits, which reduces the incentive to rebuild.

Process cost and time

Renewal is a long process with legal, valuation and planning costs along the way.

Market conditions

Buyer appetite for development sites shifts with finance and construction costs.

Assessing a strata site in one of these areas?

What should I do next?

Before responding to any developer approach, find out what the site could support and what comparable schemes have sold for. Information is the only real leverage owners have.

If the potential looks significant, a Registered Planner can assess the site against the controls, and a solicitor experienced in strata renewal can advise on the correct process.

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Common questions

Can a strata apartment block be redeveloped in NSW?

Yes. Older blocks are regularly redeveloped, either through a collective sale where all owners sell to one buyer, or through the strata renewal process under the Strata Schemes Development Act 2015. The planning side is assessed like any other development. The harder part is owner agreement and following the correct legal process, which needs specialist advice from the outset.

Can strata owners sell together?

They can, and a collective sale is often the cleanest route. Every owner needs to agree, and each signs a contract with the same purchaser so the whole scheme transfers together. Proceeds are usually divided by unit entitlement, though owners can agree another basis. Independent valuation advice is important, since entitlements do not always reflect current relative values.

What is collective redevelopment?

It describes owners in a scheme acting together to realise the redevelopment value of their site, either by selling to a developer or by pursuing a redevelopment themselves. Selling is far more common because development carries significant risk and requires expertise, funding and time. Either way, the group needs a coordinated position and its own independent advisers.

What is strata renewal in NSW?

A statutory process that allows a strata scheme to be terminated for redevelopment or sale where less than full unanimity exists. It involves a strata renewal committee, preparation of a renewal plan, a required level of owner support and review by the Land and Environment Court, which considers whether the plan is fair to owners who did not agree. The steps and timeframes are prescribed.

Can neighbouring apartment blocks be combined?

Yes, and combining adjoining schemes or adjacent houses can create a much more valuable development site. It also multiplies the coordination effort, since each scheme must reach its own agreement. Where it works, the uplift can be significant because larger sites support better building layouts, basement parking and higher yields than narrow individual sites.

How is redevelopment potential assessed?

By comparing what the current controls would permit on the site with what exists today. That means checking the zone, floor space ratio, height limit, site area and frontage, then testing an indicative yield. Site constraints, heritage status and parking feasibility are then factored in. Comparable development site sales give the value side of the equation.

What should owners do before approaching developers?

Get independent information first. Understand the planning position and likely yield, obtain valuation advice on the site as a development opportunity, and take legal advice on the process. Agree within the owners corporation how the group will operate. Owners who respond to an approach without any of that are negotiating against a buyer who has done all of it.

How long does strata redevelopment take?

Longer than most owners expect. A collective sale with cooperative owners can take a year or more from first discussions to exchange. The formal renewal process typically takes considerably longer because of the required meetings, plan preparation and Court review. Any redevelopment that follows then adds the approval and construction program on top.

Professional review

Get professional advice for your property

Online guides explain the general position. Your property needs to be assessed against the controls that actually apply to it.

Where appropriate, a Registered Planner can review the opportunity and help you understand what may realistically be achievable.

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Related guides

Sources

The planning position described on this page is drawn from the following sources. The requirements that apply depend on the planning controls applying to the individual property, so always confirm the current position for your site.

Planning content reviewed by a Registered Planner. This guide is general information only and is not planning advice for a specific property.

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