Strata report highlights insurance growth potential

The Strata report highlights the growth potential for insurance within the strata-titled property market. It emphasizes the increasing value of insured strata-titled properties, which is estimated to be around $1.3 trillion. As the number of residents living in townhouses, apartments, and units continues to rise, the demand for insurance coverage is expected to grow as well.

The report also reveals that a significant proportion of Australians, ranging from 16% to 26%, currently reside in strata-titled properties. This presents opportunities for insurance providers to cater to the specific needs of strata property owners and offer comprehensive coverage.

The report underscores the importance of considering maintenance, building quality, and governance practices in strata properties to mitigate risks and ensure adequate insurance coverage. By recognizing the potential for growth in the strata insurance sector, insurers can adapt their offerings and provide tailored solutions to meet the evolving needs of strata-titled property owners.

According to a recent report, the insured value of strata-titled properties is estimated to be around $1.3 trillion and is expected to increase further as the number of residents residing.

According to a report funded by the Strata Community Association (SCA), currently, a minimum of 16% and potentially up to 26% of Australians reside in strata-titled properties. This includes 10% living in apartments and 6% residing in other strata dwelling types such as townhouses, retirement villages, and strata-titled detached housing.

SCA National President Chris Duggan highlights that the report’s findings emphasize the market’s potential for strata insurance providers.

In the past two years alone, over 200,000 new lots comprising units and townhouses have been constructed, contributing to a total of over three million strata and community-titled lots throughout the country.

NSW, the most populous state, achieved a significant milestone by becoming the first to surpass one million strata lots, with a growth rate of 9% over a span of two years.

Mr. Duggan informed that the strata insurance market will continue to expand, with the demand for strata insurance surpassing the overall growth rate of the sector.

Mr. Duggan emphasized the importance of close collaboration between the strata insurance sector, owners, and managers to effectively meet the critical demand for this insurance product nationwide.

Prepared by the University of NSW City Futures Research Centre, the report serves as the concluding installment in a three-part series aimed at offering an overview of the strata industry in Australia and New Zealand.

The report highlights that half of Australia’s strata building stock was constructed prior to the year 2000, underscoring the significance of retrofitting requirements.

Mr. Duggan suggests that this aspect holds potential insurance implications due to insurers’ emphasis on building quality and maintenance issues.

Mr. Duggan commented, “This data provides us with valuable insights on where to concentrate our preventative efforts.”

Mr. Duggan suggests that the insurance sector will remain focused on ensuring buildings have effective preventative management in place. He believes that buildings with well-maintained facilities and robust governance regarding common property areas will reap the benefits in terms of insurance coverage.


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By Ryan

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