In Australia, many people choose strata living as their preferred way of life. However, rising living costs can pose significant challenges for strata management and individuals. As expenses increase, from maintenance to insurance and administrative costs, strata schemes must have a plan to deal with the increases. In this article, we’ll look into how Australia’s cost of living pressures impact strata schemes and how you can navigate price rises.
Impact on maintenance and repairs
When the price of goods and materials increases, there is a direct flow-on to the end user. In this case, we’re talking about repairs and maintenance in a strata environment. Strata fees contribute to the administrative fund for repairs and general upkeep. However, since builders, gardeners and repairers have to pay more for materials, the costs for these services are also increasing.
This basically means the dollars in the administrative fund don’t stretch as far as they used to. Ignoring maintenance needs isn’t an option because it decreases residents’ quality of life and can even be a safety risk. So, strata schemes are encouraged to shop around for services while also being more considered when it comes to non-essential maintenance.
Effects on insurance premiums
Insurance is a significant cost that’s paid for by the administrative fund. With the rising costs of living, insurance premiums have also gone up, by more than 20% in some cases. In many respects, this can actually be a good thing for strata schemes. For example, if your scheme has had the same insurance provider for a long time, it never hurts to reassess your needs. Next time you receive the insurance premium for the coming year, it’s worth comparing other insurance providers to see if you can get a better deal and perhaps even more suitable coverage.
Increased administrative costs
Even administrative duties can be impacted by rising costs of living. If you use a strata management service, their fees may go up. But that’s just a small part of it. Consider factors such as meeting venue hire, legal advice and accounting services because these may also be on the rise. Unless the costs become unmanageable, it’s not always ideal to sever a relationship with legal professionals, accountants or strata managers that know your scheme inside-out. So, it’s worth trying to negotiate these costs or acknowledge the increase in future budgeting.
Rising utility costs
Utilities such as water, power and waste management are a big part of a strata building’s expenses. Again, though, strata schemes may see these rising expenses as an opportunity to actually save money. If you’re not locked into an electricity contract, it’s worth shopping around for cheaper deals. Or alternatively, if your capital work fund is healthy, you might consider sustainability upgrades like going solar.
Aside from this, consider replacing all lights with energy-efficient LED lighting. You can also consider water-saving measures, lights with timers and other sustainability upgrades when the opportunity presents itself.
Need effective strata management to cope with rising costs?
While rising costs pose challenges, quality strata management removes a lot of stress on Owners Corporations and committees. More Than Strata provides expert management services to relieve your burden. From financial management to handling maintenance requests, we can make managing your strata scheme so much easier. Contact us today to find out more.
