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

According to the report, strata insurance premiums increased by 2.8% in the year leading up 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.

In contrast, premiums for standalone house insurance rose by 14% over the same period, driven by concentrated climate risks and structural vulnerabilities in detached homes. This disparity highlights the relative stability of strata insurance premiums amidst broader market fluctuations.

The report also underscores the impact of significant weather events in 2025, 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 current pricing deemed adequate for the risk profile of strata properties.

Regulatory activity is another focal point of the report, with reviews in New South Wales, Western Australia, and the Australian Capital Territory introducing new requirements for transparency, consumer protection, and professional standards. These reforms aim to enhance governance and accountability within the strata sector.

Emerging risks such as building defects, combustible cladding, and lithium-ion battery fires are also highlighted, with regulators issuing new safety guidelines and many strata managers implementing formal battery management policies to mitigate these risks.

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, CEO of CHU, commented that with one in ten Australians living in strata and more than three million total lots across the country, the strata sector has an opportunity to set a new standard for urban living across Australia.