Nearly 20 per cent of all ‘households’ in the ACT are not, in fact, in houses at all.
And it’s estimated that during the 2030 decade, half of all Australians will reside in apartments and Canberra is leading the trend, but we’re completely unprepared as an industry.
The strata sector is still behaving as though the landscape consists of petite unit buildings with quaint lawns and two flights of stairs that need cobwebs swept away periodically.
The word strata, up until 20 years ago, largely referred to two and three storey buildings with a small number of residents. Today, we’re effectively building massive communities within suburbs.
One-in-10 people in the ACT now lives in an apartment or townhouse. That’s nearly 40,000 of us. I’m one of them.
Our young professionals, who are most likely to live in apartments, make up 62 per cent of the occupants.
Couples with no children make up 26 per cent of the unit residents, and singles another 39 per cent.
Families are taking to apartment living too. We know this because children, or at least under-20s, make up 11 per cent of the apartment population here. Couples with children occupy 9 per cent of apartments in the ACT and single parents occupy another 4 per cent.
So apartment living is a part of modern life in the nation’s capital. But little is properly understood about the needs of people and communities choosing strata living.
The UNSW City Futures, Australasian Strata Insights Report, is about the only decent detailed analysis reports ever produced on the Australian strata sector.
That alone is concerning. And the lack of decent analysis means we’re lagging decades behind on national regulatory frameworks as a result.
Economically speaking, this industry generates more than $6 billion annually just in sending out tradespeople, cleaners and all the rest of it. Another billion-plus dollars a year is generated through the engagement of accountants, lawyers and other professional services.
The sector also accounts for more than a trillion dollars of property value. I don’t mean real estate value. I mean actual replacement insurance value – bricks and mortar. And who are the custodians of a trillion dollars of replacement-insured property value? The custodians are, more often than not, volunteers.
Without dissecting the national state of professional standard requirements, I am prepared to go on record as saying that a national standard is urgently required for the industry, which is ever increasing in complexity.
Why? Because once upon a time the national average number of units in a strata scheme was about 12. The vast majority of this sector was made up of really little apartment buildings, two and three story walk ups, but that low average lot number is no longer indicative of the strata world of today.
In some of the really small buildings, the strata manager is not much more than a mailbox, and that model worked well enough in the past, even if service levels and the reputation of the strata management industry weren’t stellar.
These days it is not uncommon for a strata manager to be responsible for a building with several hundred units that, for example, will have multiple basements, a natural spring running underground with two pumps to prevent flooding, HVAC contracts, 1851 Fire Compliance, and more than a dozen other building standards or best practices.
The strata industry is currently in the midst of an awakening as the requirements of the relevant strata legislation are being challenged by the physical needs of the buildings that the same laws presume to protect.
No one’s ever really paid much attention to the strata management industry, and that’s about to become a problem. The strata sector is profoundly influencing our social and economic landscape. The reality is that we have to start talking about it. The industry is growing faster than our determination to put regulatory frameworks in place to protect both residents and investors.
Strata is the ugly second cousin of property: it’s easy to look at it for what it isn’t. Just ask your friendly local commercial or residential real estate agent. But the opportunity that exists within this sector of property is really exciting if we can be bothered to take the time to know it.
Chris Miller is managing director of Vantage Strata, National Council Member of Strata Community Association, and current president and founding member of the ACT chapter of Strata Community Association.