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50 Years of Strata Title in AustraliaNAMASA INDABA 6 May 2011Johannesburg, South Africa

+Introduction

Australian housing overviewed

Strata in Australia begins

50 years of expansion & change

Some highlights along the way

Existing & emerging trends

Challenges for the future

Questions

+Translations

Body Corporate = Owners Corporation

Common Property = Common Property

Developer = Original Owner

Rules = By Laws

Owner & Unit = Owner & Lot

Sectional Title = Strata Title

Sectional Plan = Strata Plan

Special Resolution = Special Resolution

Unanimous Resolution = Unanimous Resolution

+Strata Housing in Australia

Mostly a country of urban sprawl but it’s changing

7.6 million square kilometres, 22.5 million people, 8 major cities (the largest with 4 million people)

A strong culture of property ownership, stable banking & long term low interest mortgage sector with taxation incentives for residential rental investment property

An enthusiastic property development sector operating in boom-bust cycles

Multi unit housing represents 25% of total Australian housing

51% of new housing in NSW in 2010 was multi unit housing

+Strata Begins

Apartments appear in the early 20th century

Early ownership structures via company title

The post war period see many more low rise apartments mostly rented to younger couples saving for a home

1950s income & wealth levels of baby boomers lead to pressure to own apartments

Innovators looked at apartment titling options and Lend Lease (via Dick Dusseldorp) lobbies for & initiates strata title laws

The Conveyancing (Strata Titles) Act 1961 starts on 1 July 1961

+The 1960’s

First strata laws in NSW begin

Only 29 sections and two schedules (one schedule with only 10 lines

Laws copied in Tasmania, Queensland, Western Australia, Victoria & South Australia

First strata building remains in existence

Pioneering times for everyone

Surveyors dominated strata title matters

Approximately 8,000 strata buildings created

+The 1970’s

Strata laws introduced in Australian Capital Territory & Northern Territory

Major reform of NSW laws in 1974

New laws have 200 sections, 4 schedules & separate regulations

Australian laws copied in Canada, New Zealand, Singapore, South Africa, Indonesia, Malaysia, Fiji, Philippines, Cayman Islands, India & Hong Kong

Negative gearing promotes strata rental investment

Development of a specialised strata management industry

Approximately 18,000 strata buildings created

+The 1980’s

Major law reform in NSW with community title laws allowing estate subdivisions

Steady growth in strata numbers, popularity & values

Introduction of large scale foreign investment in strata property ownership

Professional strata associations/groups emerge

Regulation of strata managers in 2 states

Holiday apartment syndrome starts in Queensland

The first 500 plus lot strata schemes created

Approximately 30,000 strata buildings created

+The 1990’s

Major law reform in NSW with 2 part laws splitting development & management

In NSW over 400 sections, 13 schedules & 2 sets of regulations

Major law reform in Queensland in 1997 creating core Act & Regulation Modules for different building types

In Queensland over 250 sections & 5 modules with over 800 clauses

Australian Property boom means massive growth in strata numbers

Long term (25 year) on site management contract emerge

Separation of administrative work from building management/maintenance

Approximately 38,000 strata buildings created

+The Naughties

Australian laws copied in United Kingdom & United Arab Emirates

Proliferation of law reforms in every Australian state

Over 33 separate strata Acts, with 1600 sections, 3000 regulations & 70 schedules

Proliferation of legal decisions in Courts around Australia

GFC puts pressure on property values & strata cashflows

Larger & more complex strata developments emerge but smaller sized housing units become standard in strata

Strata manager business polarise with large oligopoly style operators & micro businesses

Approximately 42,000 strata buildings created

+Highlights over 50 Years

Frequent law review & reform

Promotion of flexible development options

Specialist dispute resolution

Regular superior Court consideration & decisions

Wide commercial acceptance of strata title

Public adoption of strata living within 50 years

Low level of manager regulation

+Trends

Decentralised control away from committees

Increasing owner empowerment

Hyper-regulation of strata scheme operations

Degeneration of management into over-formality

Owner apathy & ignorance

Haphazard application of other laws

+Future Challenges

Operational complexity

Effective strata scheme support services

Rapidly rising operating costs

Appropriate owner engagement

Tennant status vs. responsibilities

+Some Thoughts

Demographic, economic & urban planning trends require more high density strata housing

But, owner & tenant experiences of strata owning & living are poor

Processes & outcomes need significant improvement

Otherwise strata will be a necessary housing evil and not a desirable option

People involved in strata will continue to struggle to be properly recognised & rewarded

+Contacting Me

Contact me anytime about Australian strata matters …

francesco@strataexperts.com.au

And, follow my blog on worldwide strata matters …

www.francescoandreone.blogspot.com