Mascot Towers incident: Negative stigma could impact unit prices in troubled building
Unfortunate owners in the Mascot Towers complex could see up to 40 per cent of their affected units’ value wiped away due to negative stigma attached to the building.
In scenes similar to what happened with the Opal Tower in Sydney Olympic Park, residents were evacuated on Friday night and structural support added to the building in Mascot after it was noticed that cracks in the building were getting wider.
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Real Estate Buyers Association of Australia president Rich Harvey said the incident now puts a dark stigma over the property which could impact future prices.
“With stigmatised sales properties could sell from anywhere between 10 per cent to 30 or 40 per cent lower than true market value,” Mr Harvey said.
“It is obviously the second major case that has highlighted why building standards need to be scrutinised.”
Around half of all residents within the 10-year-old building will not be able to return to collect personal items for at least a week, while 64 of the 122 units are partly accessible.
Mr Harvey added that as a buyer’s agent, 98 per cent of the stock his clients buy are established properties, but stressed the need to do your due diligence when buying off-the-plan.
“Any buyer needs to do a pest and building inspection to verify the structural integrity otherwise you have major issues,” he said.
“It shouldn’t deter people who are considering a brand new property, but you need to go in with your eyes wide open and buy from a reputable developer and builder.”
On top of this, an owner’s rights advocate also told the ABC that the owners would be out pocket for the repair bill as the warranty period of six years had expired.
“Consumers have nowhere to go in these sorts of situations, there’s nobody for them to sue, there’s nowhere for them to turn,” Stephen Goddard, a spokesperson for the Owners Corporation Network, told the ABC.
“Anybody looking to purchase in a building less than 10 years of age is foolish because the defects will not have yet surfaced.
“People have more consumer protection buying a fridge than a million-dollar apartment.”
Apartment owners within the building will now need to pay for repairs, likely through increased strata levies.
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Of the 392 units in the Opal Tower building, 155 of them are still unable to be reoccupied six months after it was evacuated on Christmas Eve last year.
“We’re now seeing owners confronted with the possibility that their investment … may be lower than their outstanding mortgage,” Mr Goddard added.