CHU's 2025 Strata Market Report: Stability Amidst Climate and Regulatory Challenges

One of the key findings is the relative stability of strata insurance premiums. Over the twelve months leading up to June 2025, premiums increased by 2.8%, with the average annual premium per lot rising from $954 to $981. This growth rate is lower than the 3.4% increase in household incomes over the same period, indicating that strata insurance remains affordable for apartment owners. In contrast, premiums for standalone house insurance surged by 14%, highlighting the resilience of the strata sector amidst broader economic pressures.

The report also addresses the impact of significant weather events in 2025, including Tropical Cyclone Zelia and Ex-Tropical Cyclone Alfred, which underscored the importance of climate risk management in strata insurance. Despite these challenges, a review by the Australian Reinsurance Pool Corporation (ARPC) in September 2025 concluded that premiums for strata properties would remain unchanged, affirming the adequacy of current pricing structures.

Regulatory developments are another focal point of the report. Reviews in New South Wales, Western Australia, and the Australian Capital Territory are introducing new requirements aimed at enhancing transparency, consumer protection, and professional standards within the strata industry. For instance, New South Wales has implemented reforms such as standardized maintenance planning, enhanced conflict-of-interest disclosures, and improved hardship protections for owners.

Emerging risks identified in the report include building defects and the rise in lithium-ion battery fires. The 2025 NSW Strata Defects Survey has been launched to gather updated data on the prevalence and management of defects, while regulators have issued new safety guidelines in response to the increasing incidents of battery-related fires.

Looking ahead, the report forecasts that affordability, climate resilience, and regulatory compliance will remain central themes for the strata insurance sector. Key developments anticipated in 2026 include further reforms in New South Wales, the conclusion of Western Australia's five-year strata law review, and the next ARPC Cyclone Pool assessment.

For property owners and strata managers, the insights provided by CHU's report are invaluable in navigating the evolving landscape of the strata industry. Staying informed about premium trends, regulatory changes, and emerging risks is essential in making informed decisions and ensuring the continued resilience of strata communities.