So, Who Actually Wants to Spend Strata Money?

We’ve all heard the whining about how people in strata don’t want to spend money.  It’s a universal problem that needs addressing.

And, it’s come up again in Jimmy Thomson’s recent Flat Chat column ‘Double Downsize Eases Squeeze’ where he focuses on pressure to downgrade building services by empty nester owners on tightening fixed incomes.

That it got me thinking about how most people in strata can’t or don’t want to spend money - not just empty nesters.  After all (when you think about it) this is what we're all facing.

Firstly, there's investors who don’t want to spend any more on strata levies than they have to because it lowers their rental yields (which is fair enough) - but since that’s almost half of the strata owners in Australia it makes for a big part of strataland.

Secondly, first time apartment owners who have stretched themselves to buy, are happy to keep their strata expenses down (and that’s also pretty reasonable) - and that group could represent 10% to 15% of strata owners.

And finally, there’s the retirees (whether wealthy or not) who rely on investment income that’s fixed and been declining so want to be as frugal as possible with their money since they aren’t making any more of it (which is what I’d do too) - that group might represent another 10% to 15% of strata owners.

So, we’ve got 75% to85% of strata owners with real and legitimate reasons to spend less in their strata buildings.

So, who’s left?  The remaining quarter of the owners who don't have personal reasons to spend less probably don’t actually want to spend more either.  Plus they're probably busy working and occupied with all the pressures of family, business and life.

Since democratic owners’ rights and legal obligations just don't cut it because of these structural factors mitigate to frugality, it tells me that unless there are incentives given to and pressures placed on strata owners nothing will change.  Investors need financial imperatives, retirees need security incentives and new home owners need some help.

How these get created, who will do it and how they’ll filter through strata decision making is anyones' guess.  But at least realizing the nature and extent of the problem is a start.

See you at the strata bank saving your strata pennies.

Francesco …