ARCHERS - connecting strata communities

Strata Community Australia, (SCA), the new peak body for the strata and community title services sector was formally launched by Mr David Bradbury, Secretary to the Under Treasurer, in Canberra on 5 July 2011.

One of the first initiatives of SCA is to respond to the Natural Disaster Insurance Review initiated by the Brisbane floods but now expanded to include the cyclone prone areas of Northern Australia.

The cost of insurance in Northern Australia, with the exception of the Northern Territory which has the Government backed Territory Insurance office (T10), is threatening the affordability of home ownership in strata title communities.  The high insurance costs, regularly in the range of $70-$100 per week per unit, are severely affecting the value of existing unit developments. SCA have put this matter forward over the past three (3) months and it is pleasing to see Mr John Trowbridge, the Panel Chairman, acknowledging in his recent response to the Insurance Council,

"There's a problem in North Queensland where strata title insurance has gone through the roof."

and recognizing the lack of competition.

"Now you've got an availability problem and you've got an affordability problem."

More importantly it has virtually bought to a halt the development of much needed strata accommodation in the "booming" northern cities of Mackay and Townsville with the developers of 5 of the last 8 medium rise buildings in Townsville & Mackay being placed in receivership.  

In all cases, whilst the projects have been completed, the receivers and existing owners have had to complete building defects without assistance from the Building Services Authority - no insurance over 3 stories.

Little wonder our major Queensland mines can see little alternative to the fly-in/fly-out lifestyle their workers are being forced to adopt - if investors can't get a return in Townsville or Mackay who will be prepared to invest in Haypoint, Moranbah or Bowen.

Needless to say, this "affordability crisis" is also a major threat to the viability of the investments in tourist zones and in turn the viability of tourism in North Queensland labouring under the twin effects of the escalating dollar and the global financial crisis.

This insurance cost coupled with extensive rises in power, maintenance and general living costs is simply forcing people out of North Queensland.

SCA has promoted to the Government the concept of Automatic Natural Disaster Insurance supported by appropriate pooling and subsidization where risks exceed the markets capacity thereby assisting to support the viability of home ownership both by the home owner and investors.