Tag: body corporate

Apartments Are Not Just Investments

An apartment is a home, not just an investment product

By Mary R.

 

Much of the anxiety about apartments in Australia comes from measuring them against the wrong yardstick. They have been sold for years as primarily investment products, expected to behave like houses and to compound in value like scarce land. That expectation was always a mismatch.

When resale prices disappoint, it’s easy to decide that apartment purchases are a mistake. What has failed, however, is the false promise attached to them in the first place, not the homes themselves.

Apartments can attract scare campaigns after headline stories about major construction failures. Those publicised failures are truly awful and financially disastrous for their lot owners. Shoddy building work and poor standards, however, also occur in the construction of free-standing houses, with owners often forced to bear the brunt of costly repairs.

Most strata buildings are established and in suburbs where people live genuinely good lives, close to all the amenities and infrastructure that make their location desirable, and often where the cost of a stand-alone house would be too expensive for most of us to contemplate..

Apartments are not about choosing a consolation prize. Many of us are opting for quality of life and the freedom to travel and explore, o.ver the stress of a restrictive and very expensive long-term mortgage.

Strata buildings with apathetic lot owners and poor strata managers can look rundown and neglected in a surprisingly short time. If our buildings are starting to look like slums, for example, that’s a problem we must tackle head on before things gets worse. If we don’t, the value of our apartments will almost certainly fall.

A building with adequate levies and a viable and growing maintenance fund protects both the lifestyle of everyone living in it and whatever value remains in each apartment.

The trade-off is real
Apartments don’t usually enjoy the same levels of capital gain as other forms of housing, particularly where house prices are being driven by the escalating value of land. Some lot owners, particularly in Melbourne, are carrying losses. I am one of them.

But an apartment can have negative or stagnant value growth and still be an excellent home.

Apartments are similar in some ways to vehicles. A family car can start to lose value as soon as we sign the sales contract. That doesn’t stop us buying one when it meets an essential need. We accept the running costs, fees and maintenance because, when the time comes to sell it, we can say: “I got my money’s worth out of it.”

The same principle can apply to a home. We shouldn’t assume that every form of housing will automatically increase in value enough to match or surpass inflation. What matters is what we get from the home while we live in it.

Wages and rents rise over time. For someone who bought an apartment early in their working life, a mortgage can become progressively less burdensome as wages increase. Renters, however, have no such protection from a rising rental market.

In June 2005 the minimum gross wage was $484.40 per week. By 1 July 2015 it had risen to $656.90, and from 1 July 2026 the national minimum gross wage is $1,004.90 per week. The increase over 21 years is more than double, while over the most recent ten years it was about 53%. [Fair Work Commission]

Fair Work Commission fact sheet 2026

Now compare that with apartment rents between June 2016 and June 2026.

Apartment median rental increases, June 2016–June 2026

Adelaide:      $285–$550 — +93%
Brisbane:      $375–$660 — +76%
Canberra:     $400–$580 — +45%
Darwin:        $440–$650 — +48%
Hobart:         $285–$520 — +82%
Melbourne:  $380–$600 — +58%
Perth:            $335–$700 — +109%
Sydney:         $525–$780 — +49%       [Domain Rental Report 2026

[The Domain Rental Report 2016 can be read online]

The figures illustrate an uncomfortable difference. Rents can rise as the costs of materials, transport, labour and other inputs rise, while people dependent on wages do not necessarily see their incomes keep pace with housing costs.

It is difficult to know how much of the dramatic increases in places such as Hobart, Adelaide and Perth reflects genuine increases in costs and how much reflects a shortage of apartments available for rent. But when something as essential to human life as a home is treated primarily as an investment product, these pressures are hardly surprising.

Why good committees matter
When an apartment building has declined or stagnated in value, the market is not necessarily the only factor involved.

The future of Australian cities is going to involve considerably more medium-density housing. Melbourne, Brisbane, Sydney and other growing cities cannot continue expanding indefinitely through detached housing alone. Apartments are already part of that future.

The question is not whether we should have apartments. The question is how we make them good, durable, well-built and well-governed places in which to live.

For future owner-occupiers especially, the appeal should be straightforward. An apartment can provide a good home at a price that leaves more room to enjoy life, or simply avoid taking on a mortgage that dominates the rest of our lives. For retirees, it can also provide a way of remaining in the suburb and community we already know and love.

None of that depends on the market value rising every year.

A well-maintained building is more likely to attract people who want to stay, whether they own their apartment or rent it. It protects the quality of life of the people who live there and, as far as anything can, protects the financial position of its owners.

That is a message that doesn’t require us to pretend that apartment prices never fall or stagnate. Nor does it frighten people away from a form of housing that will become increasingly important as our cities grow.

It simply tells the truth: An apartment is a home first and foremost. And the people best placed to make it a good home are the people who live there and own it, working through their buildings’ committees and, where applicable, their contracted  managers.

 

This is not expert legal or financial advice. It is an opinion based on publicly available information. Circumstances and legislation vary between Australian States and Territories, so committees should check the current requirements applying to their own strata building and obtain professional advice where appropriate. This website is independent and fully self-funded.

Disclaimer: The translation tool generates using automated translation software. While every effort has been made by the tool to preserve the original meaning, errors, omissions, or inaccuracies may occur. If accuracy is important for legal, financial, regulatory, or other critical purposes, the translation should be reviewed and verified by a suitably qualified native speaker or professional translator. In the event of any inconsistency, the original English version should prevail.

The Strata Manager’s Role: Does it require professional qualifications?

By Mary R.

If you’ve just joined your first strata committee, there are two questions worth contemplating for a few minutes. The answers may affect how much you can rely on your manager’s advice and whether you can just accept it. Let’s start by tackling the first question.

Question One: Is a strata manager an administrator or a professional?

There two ways of looking at the strata manager’s role:

Administrator
An administrator generally:

    1. Carries out decisions made by someone else – typically in our case the committee – within the authority given to them by legislation or their service contract, which may allocate some decision-making tasks.
    2. Performs administrative functions such as processing payments, keeping records, issuing notices, circulating minutes, answering correspondence and arranging and/or attending meetings. Much of this work is repetitive and increasingly capable of being assisted by specialist software and AI.
    3. Does not necessarily need the body of specialised knowledge, formal education and supervised practical experience traditionally associated with a profession.
    4. In terms of amateur versus professional, are they also professional because they earn income for their work, similar to the difference between amateur and professional sportspeople?
    5. Admin officers and assistants are expected to act at all times in a professional manner, including with intergrity, reliability and in the best interests of their clients.

Professional
A professional, on the other hand:

    1. Exercises independent judgement and expertise that the client relies upon precisely because the service provider has both experience and a relevant tertiary qualification.
    2. Works within a body of specialised knowledge that has been stringently tested all the way through to recognised qualification levels.
    3. May be subject to higher professional standards and accountability through a regulatory or professional body with the ability to register and sanction its members.
    4. Spends a lot of their own time updating their knowledge and skills through various available avenues. Their knowledge base must always be current.

The Qld Government, on its web site is clear about it: a body corporate manager is engaged to provide administrative services to the body corporate. And this is the part that may surprise new committee members: there is currently no formal training or qualification of any kind required to do the job in Queensland. (Qld Govt)

Thus the Queensland description of a body corporate manager appears to fit the basic administrator model: the manager is there to provide administrative services and to carry out the body corporate’s decisions with integrity and efficiency, all of which does not require tertiary-level education.

But that is not necessarily how the role works in practice. Strata managers everywhere, not just in Queensland, routinely provide advice about legislation, contracts, insurance, disputes and the proper way for a committee to proceed. Committee members often rely on that advice because they don’t have the necessary specialist knowledge themselves.

And therein lies the problem.

If the manager is only an administrator, then the committee is often the one exercising the judgement and making the decisions. But what happens when the committee does not have the knowledge necessary to make that judgement? Someone must fill the gap. That someone is often the manager.

That doesn’t necessarily make the manager a professional in the formal sense. But it does mean that a role that is labelled administrative can also be performing functions that committees assume is carried out to professional standards.

And now for the second question.

Question 2: Should there be a minimum qualification standard before someone is entrusted with other people’s money and legal obligations?

The person your committee may rely on to interpret legislation, negotiate contracts, deal with disputes and manage funds may have entered the role with no more formal preparation than you had when you accepted your volunteer position.

Perhaps not even that. Some new committee members receive a “welcome” information pack or USB stick from the outgoing committee. It will usually contain, among other things, a clear outline of duties and how to provide good governance for your building, as well as other related topics.

I don’t think the answer here is particularly difficult. It is an argument about basic consumer protection.

Queensland currently sets no formal qualification bar but many strata managers pursue it themselves.

New South Wales is working towards requiring that to be classed as a strata manager after the preliminary “apprenticeship” period, the full Certificate IV in Strata Management is required.

Victoria has currently taken a middle-ground approach, but its requirement is only for part of the above Certificate IV – five units rather than the 18-unit full qualification expected in other jurisdictions. It won’t necessarily provide the level of knowledge that a committee needs.

So, Question One: administrator or professional – what is my answer?
I’m happy to leave that question open. It is a reasonable question, and there are arguments on both sides but titles alone don’t dictate the levels of competence.

I don’t think the question can be resolved simply by looking at the job description. The same day-to-day role can be viewed either way, and different states and territories have taken different approaches. The situation is considerably more complicated than simply saying that some states regulate managers more than others.

But I find the second question much harder to leave open.

So, Question Two: Should there be a minimum tertiary-level qualifications and training standards for strata managers?
In my view, the answer is yes. Queensland should have them, while New South Wales and other states already have them, will have them, or are reviewing their options. Victoria currently has a half-hearted approach, possibly still under review, which fails to provide committees with enough protection to trust their strata manager’s guidance and advice unequivocally. This is where Victoria, while intending to increase the level of trust that committees can place in their strata managers, must avoid ending up with a regulation that is riskier for committees if that increased level of trust is misplaced.

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This website is fully independent and self-funded. It doesn’t offer legal or financial advice. When such advice is needed, always consult a professional in those disciplines. Use the links provided here as a starting point. The author resided in Victoria and is most familiar with Victoria’s strata legislation. Always check and use the current legislation governing your own state. State legislations vary and are state-specific. Links to each state’s own strata-title Act are provided on this “Introduction” page.

Disclaimer: The translation tool generates using automated translation software. While every effort has been made by the tool to preserve the original meaning, errors, omissions, or inaccuracies may occur. If accuracy is important for legal, financial, regulatory, or other critical purposes, the translation should be reviewed and verified by a suitably qualified native speaker or professional translator. In the event of any inconsistency, the original English version should prevail.