PICA Group Highlights Potential Risks to Strata Industry Viability

Lehane highlighted that the aged care industry experienced a decline in profitability, leading to an exodus of skilled professionals and investors, which ultimately resulted in deteriorating services and government intervention. He warned that the strata management sector is on a similar trajectory, with declining profitability and increasing operational costs.

The New South Wales Government is currently exploring reforms that include the potential removal or replacement of insurance commissions. Lehane expressed concern that such changes, without a viable alternative, could exacerbate the financial strain on strata management firms, leading to reduced service quality and increased costs for property owners.

A recent survey conducted by PICA Group revealed that a significant majority of strata owners are opposed to changes that would impact management fees. The survey indicated that 71% of respondents preferred to maintain current commissions that help offset management fees, while only 29% supported removing insurance commissions if it meant increasing management fees.

Lehane stressed the importance of ensuring that strata living remains a sustainable and viable housing option for Australians. He called for a balanced approach to reform that considers the financial health of the strata management sector and the affordability for property owners.

As the debate continues, stakeholders are encouraged to engage in discussions to develop solutions that protect the interests of both the industry and property owners, ensuring the long-term sustainability of strata living in Australia.