CHU's 2025 Report Shows Stability in Strata Insurance Premiums Amid Climate and Regulatory Shifts

One of the key findings is that strata insurance premiums increased by 2.8% in the year to June 2025, 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 the affordability of strata insurance for apartment owners has been maintained despite broader economic pressures.

In comparison, premiums for standalone house insurance rose by 14% over the same period. The report attributes this higher rate to concentrated climate risks and the structural vulnerabilities of detached homes. CHU's analysis suggests that the relative stability of strata premiums may offer a competitive advantage for strata managers and brokers when communicating value to clients.

The report also highlights that 2025 has seen a series of significant weather events, including cyclones and widespread flooding, which have reinforced the importance of climate risk management in strata insurance. Events such as Tropical Cyclone Zelia and Ex-Tropical Cyclone Alfred, along with major floods across several states, have placed additional pressure on communities and insurers.

Despite these challenges, a review by the Australian Reinsurance Pool Corporation (ARPC) in September 2025 found that premiums for strata properties would remain unchanged. The ARPC review concluded 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.

The report identifies building defects and combustible cladding as 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. Western Australia's fire service reported 94 such incidents by August 2025, and New South Wales recorded 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 that 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.