Industry Information

 

About the owners corporation or strata title industry in Victoria

Changing lifestyle choices of Victorians and demographic shifts have led to rapid growth in higher density dwellings and the owners corporation industry.

With 88,475 owners corporations and 747,336 lots in Victoria and about 1,500,000 Victorians or 1 in 4 people living in or affected by owners corporations, it represents the management of property worth over $50 billion. More than $1 billion per year is collected and spent.

Owners corporations represent about 25% of existing building stock, but about 50% of new building stock.

They comprise residential properties ranging from 2 units in a suburban street to many hundreds of units in inner city apartment buildings. Owners corporations also encompass commercial, retail, lifestyle resorts, retirement villages, car parks, storage facilities, industrial and, increasingly, mixed developments comprising more than one form of development.

Owners corporation managers facilitate the management of:
- People in a community living environment
- Billions of dollars of other people’s money on an on-going and not a single transaction basis
- Entire communities and their current and future assets and facilities

About the owners corporation or strata title industry in Australia

The industry continues to grow rapidly in Australia with around 270,000 owners corporations comprising 2,000,000 lots Australia wide. It represents the management of property worth more than $500 billion.

There are approximately 2,500 owners corporation managers in Australia; with 3.5 million people living or working in owners corporation schemes. Conservatively, it is estimated 20,000 Australians work in and derive their income from the strata title industry.

Urban planning policies around Australia are targeting annual growth of more than 10% for the next 15-25 years, so the prevalence and importance of this sector is increasing

How does owners corporation management fit in the picture?

Management fees are only one component of owners corporations expenses. Generally it can be expected that the management fee would comprise about 10% of the total expense budget of the owners corporation.

The other 90% is made up of items larger than the management fee such as insurance premiums, maintenance, legal advice and any maintenance fund.

For one individual owner in an owners corporation, total annual owners corporation fees can currently range from $1,000 per lot in a traditional subdivision (such as a block of flats), to $6,000 per lot for upmarket inner-suburban subdivisions (such as townhouses) to $20,000 per lot for city subdivisions (such as high-rise apartment towers). As stated above, a manager’s fee is only one component of total owners corporation fees.

Of the 10% of the total fees that is for annual strata management fees, this includes standard functions and duties that typically includes administration, accounting, insurance, documentation [records, register], AGM, maintenance, guidance, and generally implement decisions of OC. Additional services are charged either as fixed fees or hourly rate.

Owners corporation management businesses are small businesses. More than 90% of owners corporation management businesses employ less than 10 people. More than 80% of owners corporation management businesses employ less than 5 people.

 

Strata Research

SCA (Vic) partners in a number of research projects with universities and local governments.

Mediation in OC internal disputes

This investigates alternative dispute resolution processes, in both metro and regional OCs, and will publish an online tool on cutting edge mediation strategies. It is a research project grant of $40k from the Victorian Legal Services Board; as a joint project by Rebecca Leshinsky of Swinburne University, and Kathy Douglas of RMIT University. SCA (Vic) is an industry partner for the project. This will help chart the ways that conflict is dealt with in owners corporations, and aims to get managers views of the best ways to deal with conflict and whether the current legislation is meeting the needs of residents.

Having now been completed, the online conflict management tool may be found at www.apartmentlaw.com.au

Research project - 3D land & property

“Land and Property Information in 3D” is an Australian Research Council Linkage Project research grant to the University of Melbourne over three years. SCA (Vic) is one of the Partner Organisations and will provide in-kind support.

Australia’s population growth results in multiple uses and stacked villages in 3-dimensional (3D) arrays of buildings and facilities in cities. This project will facilitate use of 3D technologies to support the land market, streamline legal requirements, decrease delays and reduce costs for designing, planning, building and managing modern cities.

Sustainability project

The Melbourne City Council Hi-Res sustainability project “Energy efficiency in higher density residential buildings” was funded from the Sustainability Fund. This project worked in three local government areas [Cities of Melbourne, Yarra, Port Phillip] and has now been completed. It identified energy efficiency solutions for higher density residential buildings and developed a toolkit to assist owners corporations to overcome some of the legal, administrative and institutional barriers which currently hinder energy efficiency upgrades in these types of properties. It developed a toolkit for retrofitting higher density residential buildings, for owners corporations, owners and tenants.

SCA (Vic) was a Project Partner.

Resources published include:

Infographic
This “How to make positive change around your apartment building” toolkit is presented as an “infographic” which is a graphic representation of information and knowledge.
These graphics present complex information quickly and clearly. They illustrate information that would be unwieldy in text form, and act as visual shorthand.

Owners corporations, strata levies, special resolutions – let’s face it; doing things around your apartment isn’t simple.

This guide will walk you through everything you’ve ever needed to know about making change within an owners corporation.

How to make positive change around your apartment building 



Good Practice Guide: Facilities Management – Multi-Unit Residential 
Smart management improves building performance. You can make a big difference in your building’s sustainability by changing how things are operated and maintained.

This guide, developed with the FMAA, is an in-depth resource about managing multi-unit residential buildings smarter and more efficiently.

Good Practice Guide: Facilities Management – Multi-Unit Residential 




Here is a directory of qualified service provider companies for owners corporations from the Energy Efficiency Council.


SCA has now been awarded a $1 million energy efficiency grant. The federal EEIG project, Sustainable Strata, will develop an on-line tool-kit and run education forum seminars across Australia.
It builds off the findings of the just completed City of Melbourne Hi-Res Project.


Why managers are perceived by owners so poorly

Antoinette Hall of the University of Liverpool, UK, is doing a thesis that will look at owners corporation management businesses and ethics, and consider why managers are perceived by owners so poorly. The proper subject is: How do the strategies adopted by Owners Corporation management companies meet their stakeholder service delivery requirements in Victoria, Australia? Stay tuned...

Do OCs with strata managers perform better than those self managed?

In plain speak this is the research thesis being done by PhD student Erika Altmann, through Victoria University. Her thesis is How do effective sourcing strategies relate to organisational capacity and governance requirements? The case of owners corporations as volunteer organisations responsible for large assets. It explores the relationship between outsourcing theory as it applies to the employment of owners corporation managers, governance, professionalism and capacity to function within an owners corporation environment. This is a largely unexplored area of management and organisational theory that requires a broad range of skill sets. SCA (Vic) is a key stakeholder in this area, and as such is adding to the robustness of outcome by providing support to her.