A 2-Bedroom Apartment in Central Sydney for $229,000. What’s the Catch?

A two-bedroom apartment in Ultimo — walking distance to two universities, a major shopping centre, and Central Station — listed for $229,000. In a suburb where the median unit price is $750,000. That's not a typo.

The building is 185–211 Broadway, formerly UniLodge on Broadway. It's a heritage Grace Brothers department store converted into 586 student apartments. And behind the eye-catching price is one of the most extraordinary strata disasters in NSW history: a committee coup, over $1 million in legal fees, a compulsory strata manager, levies that jumped from $1,000 to $11,000 per quarter, and units that have lost half their value in a decade.

This is the story of how it all went wrong — and what every apartment buyer can learn from it.

The building: a department store reborn

The Grace Brothers department store on Broadway was one of Sydney's retail landmarks. Founded in 1885, the store grew from a small drapery shop into a sprawling complex that dominated the Broadway streetscape for over a century. When Myer took over Grace Bros in the early 1990s, the Broadway store was vacated.

In 1998, the building was converted. Part became the Broadway Shopping Centre. Part became 586 student accommodation apartments managed by UniLodge, plus 27 commercial shopfronts — 613 strata lots in total, registered as SP 54026.

The apartments are tiny. Studios start at around 13–17 square metres. Loft apartments run 28–31 sqm. What's listed as a “2-bedroom” is typically a loft with a mezzanine counted as the second bedroom. But the location is undeniable — it's directly across from the University of Sydney and a short walk to UTS, with a heated pool, gym, and 24-hour security.

For years, the formula worked. Investors bought units for $170,000–$200,000, leased them to students through UniLodge, and collected modest rental income. Then everything fell apart.

Catch #1: Students only

The first catch is structural. Only full-time students can live in these apartments. This is locked into the management arrangements via lease agreements with Sydney Campus Apartments Pty Ltd, a UniLodge subsidiary. You can't move in yourself. You can't rent to a non-student.

This restriction eliminates owner-occupiers from the buyer pool entirely. Your only market is investors — and investors buying student accommodation price in a lot of risk. Most banks cap lending at 60% LVR for these properties, if they'll finance them at all.

Catch #2: A heritage awning and a safety hazard

In 2015, the City of Sydney flagged the heritage awning at the front of the building as a public safety hazard. The council issued a notice of intention to order its repair, warning of likely “catastrophic failure.”

The strata committee began planning repairs. Contractors were engaged. Owners were levied. The building was on track to fix the problem.

Then the politics started.

Catch #3: The strata committee coup

At the December 2018 AGM, a faction of lot owners staged what NCAT would later describe as a leadership coup. They voted off the existing strata committee, cancelled the repair contractors, and refused to accept proxy votes from the hundreds of lot owners whose apartments were managed by UniLodge.

The new committee, led by the principal of a real estate agency next door to the UniLodge entrance, refused to proceed with the awning repairs. This triggered a cascade of legal battles at both NCAT and the Supreme Court.

The NCAT principal member's ruling was blunt. The main dysfunction was the “improper refusal to accept as valid, proxy and corporate owner nominee forms submitted prior to numerous general meetings, disenfranchising hundreds of lot owners.”

In other words: a small faction had seized control of a 613-lot building by refusing to count the votes of the majority.

Catch #4: The levy explosion

Once the compulsory manager was appointed and the true scale of deferred maintenance became clear, the bill came due. The building needed an estimated $20 million or more in repairs. Combined with the $1M+ in legal fees the owners corporation had already spent fighting the appointment, levies had to increase dramatically.

For investors who had bought studios for $170K expecting modest rental returns, this was devastating. The annual rental income on a student studio doesn't come close to covering $44,000 in levies alone — before mortgage payments, rates, insurance, or maintenance.

A group of 178 owners formed an action group. They wrote to the Minister, to Bright & Duggan, and to NCAT. None intervened. They planned a march from Sydney Town Hall to Parliament House in March 2022 to deliver a petition to the Premier.

By mid-2022, over 40 units were listed for sale simultaneously. Few were selling.

What the sale prices show

The price data tells the story of a building in freefall. Units that originally sold for $170,000–$200,000 in the early 2010s have seen no capital growth — and many have gone backwards.

Some units have sold for as low as $116,000–$120,000. The building median is $159,000, compared to an Ultimo suburb median of $750,000. That's a 79% discount — the second-worst price performance of any building in our analysis of dispute buildings across NSW.

8 tribunal cases and counting

In our database of 2,004 published NCAT and Supreme Court decisions involving strata schemes, 185–211 Broadway has 8 published cases — tying it for the joint second-most litigated building in NSW. Only two buildings have more: one in Ultimo (9 cases) and one in The Entrance (9 cases).

As we found in our analysis of buildings that can't stay out of court, repeat litigation is one of the strongest predictors of ongoing dysfunction. Buildings with 5+ cases are chronic. This one has 8.

The five catches, compounded

No single factor explains the 79% price discount. It's the combination that makes 185–211 Broadway a perfect storm:

Each problem amplifies the others. The student-only restriction limits your exit options. The tiny sizes limit price comparisons. The governance collapse created the repair bill. The repair bill caused the levy explosion. The levy explosion caused the price collapse. And the price collapse means you can't sell without taking a massive loss.

What to check before buying a “bargain” apartment

The $229,000 listing sounds like a deal of a lifetime. But every red flag was there before the price collapsed — if you knew where to look. Here's what to check before buying any apartment that seems too cheap:

This building isn't unique

185–211 Broadway is an extreme case, but the pattern is common. In our analysis of dispute buildings across NSW, we found 21 buildings trading at more than 50% below their suburb median. They share common features: large lot counts, inner-city locations, and construction defect or governance disputes.

The lesson from 185–211 Broadway isn't “never buy a cheap apartment.” It's that the reason it's cheap is always worth more than the discount. A 79% discount sounds like a bargain until you realise the levies alone can cost more than the apartment is worth.