CHU's 2025 Report: Strata Insurance Premiums Remain Stable Amidst Industry Shifts

One of the key findings is that strata insurance premiums have experienced a modest increase of 2.8%, rising to an average of $981 per lot in the year leading up to June 2025. This increment is notably lower than the 14% surge observed in house insurance premiums during the same period, indicating that strata insurance remains relatively affordable for apartment owners.

The report also highlights the impact of significant weather events, including cyclones and widespread flooding, which have reinforced the importance of climate risk management in strata insurance. Despite these challenges, a review by the Australian Reinsurance Pool Corporation (ARPC) in September 2025 found that premiums for strata properties would remain unchanged, with the review concluding that current pricing remains adequate for the risk profile of strata properties.

Regulatory activity is another area of focus in the report. Reviews in New South Wales, Western Australia, and the Australian Capital Territory are introducing new requirements for transparency, consumer protection, and professional standards. In New South Wales, recent reforms include standardised maintenance planning, enhanced conflict-of-interest disclosures, and improved hardship protections for owners. Western Australia is considering new professional qualifications for strata managers, while the ACT is reviewing potential licensing changes.

Building defects and combustible cladding remain ongoing issues for the strata sector. The 2025 NSW Strata Defects Survey has been launched to gather updated data on the prevalence and management of defects. Legal precedents are increasing builder accountability, and the report suggests further regulation may be needed. Another emerging risk highlighted is the rise in lithium-ion battery fires, with Western Australia's fire service reporting 94 such incidents by August 2025, and New South Wales recording 25 by February. In response, regulators have issued new safety guidelines, and many strata managers are implementing formal battery management policies.

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.

Kimberley Jonsson, Chief Executive at CHU, commented: "Right now, one in 10 Australians live in strata, with more than three million total lots across the country, and that number is only set to rise. As density increases, so do expectations. The strata sector has an opportunity to set a new standard for urban living across Australia."