The ticking time bomb under Victoria’s apartment market
/By David Dawn, Licensed Conveyancer at Victorian Property Settlements
Imagine buying a shiny new apartment in Melbourne—secure parking, slick finishes, vibrant location. But five years later, leaks streak down common walls, the lifts fail fortnightly, and your body corporate fees explode to fund long-neglected repairs.
Welcome to Victoria’s sleeper issue. While investors and first-home buyers fixate on stamp duty, interest rates and growth, a far bigger financial threat looms inside thousands of apartment complexes: ageing, poorly-managed buildings under outdated body corporate laws.
And unlike mortgage rates, this is a problem we can’t simply refinance away.
Victoria is asleep at the wheel — while millions flood into apartments
Let’s be blunt. If the Victorian government is hell-bent on forcing millions more people into the Melbourne metropolitan area over the next decades, they’re going to be living in body corporates.
So if we don’t get this right now, what exactly are we leaving for future generations to deal with?
It’s one thing to chase a big Australia and pile people into high-rise towers. But with the building industry currently riddled with “cowboys”—throwing anything up, charging a premium, then disappearing—maintenance is the only real insurance policy against disaster.
Yet Victoria’s Owners Corporation framework simply isn’t fit for the 21st century—let alone the 22nd.
How we compare to NSW & Queensland
Victoria’s Owners Corporations Act 2006 is looking tired and inadequate compared to the bold reforms we’re seeing in New South Wales and Queensland.
NSW’s recent overhaul (2024-25) forces strata managers to come clean on conflicts of interest, cracks down on unfair contracts, and empowers owners to sack incompetent managers.
Queensland’s reforms (May 2024) ban blanket pet restrictions, let bodies corporate ban smoking, simplify towing of obstructive cars, and allow schemes to wind up with 75% owner support — so decaying towers don’t drag everyone down.
Meanwhile, Victoria’s “tiered” approach looks more like window dressing: it adjusts paperwork depending on scheme size, but does little to enforce robust maintenance or proper sinking funds. Developers often keep initial fees artificially low to sell units fast — leaving owners to fund enormous future costs once warranties run out.
The hard costs when we don’t act
This isn’t theoretical.
In Footscray, a 60-unit building slapped owners with $40,000 special levies each to replace crumbling balconies and fix flammable cladding. Fees had been kept low by an owners corporation with no meaningful long-term plan.
In Docklands, repeated insurance claims for failed fire systems pushed premiums over $1 million annually, triggering emergency special levies. Many owners are now trapped—unable to sell without heavy discounts.
Even in regional Victoria, buyers are pulling out at contract after discovering body corporates with zero reserves and urgent works looming.
Multiply these stories by thousands, and we’re seeding a future crisis—one that will hammer individual finances, devalue whole suburbs, and potentially require taxpayer bailouts down the line.
It’s not about cheap now — it’s about value later
Buyers often recoil from “high” owners corporation fees. But here’s the irony: a building with realistic levies and a solid 10+ year capital works plan is far safer and worth more in the long run.
Meanwhile, the low-fee “bargain” tower may be one committee meeting away from hitting you with a $50,000 special levy — or worse, failing to act at all until the building becomes uninsurable and unsellable.
If Victoria doesn’t force more rigorous maintenance planning and funding now, we’re going to see entire postcodes of decaying apartments by the time our kids grow up.
The political elephant in the room
It’s fair to say Victoria’s government has a bit of a “spend now, worry about who pays later” philosophy—especially under Labor’s massive infrastructure and planning push. But that mindset is a luxury we can’t afford in strata.
These buildings need to last 50, even 100 years.
That requires serious long-term maintenance, proper funding, and tough rules to stop dodgy operators from gutting future value.
Otherwise we’re just stacking problems higher — literally in our skylines — and leaving the next generation to clean up the mess.
What reforms should look like
Victoria should urgently follow NSW and Queensland’s lead, and go further:
✅ Compulsory, independently audited 10+ year capital works plans, with penalties for underfunding.
✅ Transparent manager disclosures to stamp out cosy deals and kickbacks.
✅ Simple pathways for owners to remove incompetent committees or managers.
✅ Clear consumer protection rights to void unfair service contracts that fleece owners for decades.
Buyers: protect yourself right now
Until laws change, the only safeguard is thorough due diligence:
Get the last three AGM minutes — look for big disputes or unpaid fees.
Demand the maintenance plan. If there’s no funded 10+ year plan, that’s a red flag.
Check the sinking fund balance vs known upcoming works.
Ask about insurance claims. Frequent water or fire issues mean higher future costs.
Talk to residents. Are they content or constantly complaining about emergency fixes?
A building that costs a bit more to run today is usually worth a lot more tomorrow.
Let’s build a legacy, not a liability
At Victorian Property Settlements, we see every day what happens when owners corporations run buildings into the ground — or simply fail to plan ahead.
If we want Melbourne to be liveable for the millions who are coming, we need owners corporation laws fit for the next century, not just the last one.
🏡 Considering buying into a body corporate?
Don’t gamble with your future. Let us review the owners corporation records before you sign.
With over 25 years helping Victorian buyers and sellers, we know exactly what red flags to spot.
👉 Contact us today and buy with eyes wide open.