Finance & Levies
The rising costs of strata living: what Australian owners need to know in 2026
Strata levies have risen by 20-30% in many Australian buildings over the past two years. Here is what is driving the increase, and what owners and committees can do.
· 5 min read
On this pageWhat to know before you actOn this page
- What to know before you act
- The numbers owners are seeing
- The five cost drivers
- 1. Insurance
- 2. Construction and maintenance costs
- 3. Energy costs
- 4. Regulatory compliance
- 5. Strata management fees
- Deferred maintenance makes the bill larger
- What committees can do
- Review your insurance
- Reduce energy costs
- Fund capital works properly
- Benchmark your costs
- What individual owners can do
- What committees can control
- Further reading
What to know before you act
- Rising levies are not automatically bad. Unexplained levies are.
- Insurance, defects, energy, compliance and deferred maintenance are the major pressure points.
- Owners should ask whether increases are buying resilience or just catching up on neglect.
Levy increases are not automatically mismanagement. The question is whether the building can explain the increase and show what owners are getting for it.
Opening a levy notice can be a shock. Across Australia, strata owners are dealing with levy increases that far outpace general inflation. In some buildings, quarterly levies have jumped 20-30% in two years.
The main pressures are insurance, construction, energy, compliance and management fees. Committees cannot remove all of them, but they can test quotes, fund work earlier and explain the trade-offs.
The numbers owners are seeing
The average strata levy in Sydney now sits at approximately $1,200-$1,500 per quarter for a standard two-bedroom apartment, up from $900-$1,100 just three years ago. Melbourne and Brisbane are following similar trajectories.
In buildings with pools, gyms and concierge services, quarterly levies of $2,000-$3,500 are now common.
The five cost drivers
1. Insurance
Strata insurance premiums have been the largest contributor to levy increases. For many buildings, premiums have risen 40-80% since 2023. The main reasons are:
- Floods, storms and bushfires have increased insurer payouts.
- Construction cost inflation means it costs more to replace damaged buildings.
- Buildings with non-compliant combustible cladding can face premiums 2-5x higher than comparable buildings.
- Several insurers have left the strata market, reducing competition.
2. Construction and maintenance costs
Construction costs have stayed well above CPI. Prices for materials and trades have risen sharply:
| Item | Approximate Increase (2023-2026) |
|---|---|
| Painting (common areas) | +35-45% |
| Waterproofing | +30-40% |
| Plumbing labour | +25-35% |
| Electrical work | +20-30% |
| Lift maintenance contracts | +15-25% |
| Concrete remediation | +40-50% |
As a result, a capital works plan costed three years ago may now be underfunded.
3. Energy costs
Electricity for lifts, lighting, car park ventilation, fire systems and pool heating can be a major expense. Buildings without solar or LED upgrades are more exposed to energy cost increases.
Many older buildings are now spending $15,000-$40,000 per year on common area electricity alone, depending on size and amenities.
4. Regulatory compliance
New and updated regulations add costs for strata schemes:
- Annual fire safety statements and essential services maintenance
- Window and balcony fall-prevention standards
- Mandatory cladding remediation for affected buildings
- Asbestos registers, electrical testing and contractor management
5. Strata management fees
Strata management fees have increased by 10-20% over the past two years because labour costs are higher and modern strata schemes are more complex to manage.
Deferred maintenance makes the bill larger
Deferred maintenance means keeping levies artificially low by postponing necessary repairs. It is one of the cost drivers that can do the most damage.
When a committee delays painting by five years, that's five extra years of weather damage to surfaces, potentially turning a $200,000 paint job into a $350,000 remediation project. When waterproofing is ignored, water ingress can damage structural elements, turning a $50,000 membrane replacement into a $500,000 concrete remediation.
Buildings that have consistently underfunded their capital works fund often face a significant levy increase or a large special levy. For an explanation of why this long-term fund has different names across states, and how to assess it in any jurisdiction, see our sinking fund vs capital works fund explainer.
What committees can do
Insurance, construction inflation and underfunded capital works affect each other. Managing them starts with the building's overall strata finances, rather than one budget line alone.
Review your insurance
- Get multiple quotes each year. Do not auto-renew without testing the market.
- Consider a higher excess. Moving from a $1,000 to $10,000 excess can reduce premiums by 15-25%.
- Use a specialist strata insurance broker. They can access underwriters that general brokers cannot.
- Fix known issues such as water leaks and maintenance defects that increase premiums.
Reduce energy costs
- Install solar on common property. Payback periods of 3-5 years are typical for strata buildings.
- Upgrade common-area lighting to LED. The work often pays for itself within 18 months.
- Review the electricity contract. Many buildings are on default rates and can save 15-20% by switching providers.
- Install timer and sensor controls to reduce waste in car parks, corridors and outdoor areas.
Fund capital works properly
- Commission a current 10-year capital works plan that uses 2026 costs rather than 2020 estimates.
- Fund maintenance before repairs become more expensive.
- Consider levy smoothing. Gradual, predictable increases are easier for owners to manage than sudden jumps or special levies.
| Year | On plan | Held flat |
|---|---|---|
| FY26 | $1,840 | $1,840 |
| FY27 | $1,980 | $1,840 |
| FY28 | $2,120 | $1,840 |
| FY29 | $2,260 | $3,100 |
Benchmark your costs
A committee can compare its building's costs with comparable buildings.
- Levy notice arrives higher
- Read the financial statements
- Identify the main cost drivers
- Benchmark against similar buildings
- Tender, optimise, or fund works
- Approve realistic levies at AGM
If insurance is 30% above the median for similar buildings, it is worth shopping around. If cleaning costs are well below average, that may explain why common areas are not being maintained to standard.
What individual owners can do
Even if you're not on the committee, you can:
- Attend your AGM. This is where levies are set and budgets approved.
- Read the financial statements to understand where your money goes.
- Ask about the capital works fund balance. Is it tracking to the 10-year plan?
- Vote for realistic budgets. Voting against necessary levy increases only defers the problem.
- Use tools like UnitBuddy to see your building's financial health and compare it with peers.
What committees can control
Some cost pressure is outside the building's control. A committee cannot reverse construction inflation or change the insurance market by itself. It can tender properly, keep maintenance records, deal with small defects before they become claims, and explain levy increases before owners assume the worst.
Owners are more likely to accept a painful increase when the committee can show its work: the quotes it obtained, the options it rejected, the risks it priced, and the cost of doing nothing.
Further reading
- NSW: How to convince owners to increase levies or approve a special levy in strata
- NAT: Race to the Bottom or Sustainable Future? The Strata Management Fee Debate
Keep the scheme file in one place the committee and the manager can both open. Features, pricing, or book a tour.