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

According to the report, strata insurance premiums have experienced a modest increase of 2.8%, rising from an average of $954 to $981 per lot annually 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. The relative stability in strata premiums is attributed to the collective nature of strata properties, which often results in shared maintenance responsibilities and risk mitigation efforts.

The report also highlights the impact of recent weather events, including Tropical Cyclone Zelia and widespread flooding across multiple states, underscoring the importance of climate risk management in the strata sector. Despite these challenges, the Australian Reinsurance Pool Corporation's September 2025 review confirmed that premiums for strata properties would remain unchanged, indicating that current pricing remains adequate for the risk profile of these properties.

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. These reforms are expected to improve governance and accountability, ultimately benefiting strata property owners.

Emerging risks, such as building defects and the increasing prevalence of lithium-ion battery fires, are also addressed. The report emphasizes the need for proactive measures to manage these risks, including regular maintenance, adherence to building codes, and the implementation of safety guidelines for battery usage.

Overall, CHU's 2025 report provides a positive outlook for the strata insurance market, highlighting the sector's resilience amidst climate challenges and regulatory changes. The findings suggest that, with continued focus on risk management and governance, strata insurance can remain both accessible and affordable for property owners.