​What’s Driving the Improvement?
CreditorWatch’s data shows a 0.9% drop in insolvencies from April to May and a 12% decrease from the peak in November 2024. Similarly, B2B payment defaults have fallen by 11.8% in May, down over 18% from their peak in December 2024.
This easing of pressure appears to be the result of several factors combining to support businesses:

• July 2024 tax cuts putting more cash in consumers’ pockets.
• Interest rate reductions finally beginning to bite, relieving some cashflow stress.
• Slower inflation meaning less pressure on operating costs.
• Ongoing government cost-of-living support measures.

Where Are the Improvements Most Noticeable?
The industries that were previously among the hardest hit—Accommodation & Food Services and Construction—are now showing signs of stabilisation. Other sectors like Manufacturing and Wholesale Trade are also trending in the right direction.
However, the story isn’t universally positive. Sectors including Healthcare, Professional Services, Retail, Transport, and Real Estate continue to see elevated insolvency rates.
Business Defaults: Signs of Stability
The drop in B2B payment defaults reflects this same stabilising trend. Key sectors showing improvement include:

• Construction
• Food & Beverage Services
• Retail

CreditorWatch CEO Patrick Coghlan cautions that while this trend is encouraging, some sectors—especially those relying on discretionary spending—remain under pressure. He notes that the impact of higher prices post-COVID is still being felt, especially in areas like hospitality, where customers have become far more price sensitive.
Minimum Wage Increases: Help or Hinderance?
Looking ahead, the Fair Work Commission’s minimum wage increase from July 2025 will help boost consumer spending power but will also add cost pressures for businesses, particularly those in Retail and Hospitality.
Chief Economist Ivan Colhoun believes that while this wage rise may pressure businesses, it could stimulate economic activity as the extra income circulates through the economy.
The Ongoing Risk Picture
Interestingly, CreditorWatch highlights Electricity, Gas, Water, and Waste Services as an unexpected area of rising arrears, driven in part by the challenges facing sub-sectors like Waste Management and Solar Installation. However, as interest rates continue to ease, the pressures on these industries may also reduce.
Regional Business Risk: Sydney’s West Still Struggling
The worst-performing regions remain in Western Sydney, where factors like high rents, rising personal insolvencies, and lower household incomes weigh heavily on business health. The Bringelly-Green Valley region is forecast to have a business closure rate of nearly 8% over the next 12 months—the highest nationally.
In contrast, inner-city Adelaide and parts of regional Victoria and North Queensland continue to demonstrate much stronger business resilience.
What’s Next for the Economy?
Colhoun suggests that further rate cuts are likely over the next 6–12 months as the Reserve Bank responds to both global and local challenges. However, uncertainties remain, particularly around US trade and tariff policies and domestic employment figures.
CreditorWatch’s broader economic outlook suggests cautious optimism. While some sectors are still struggling, the broader trend is stabilising, and many businesses are starting to see some relief from the extreme pressures of the past 18 months.
Key Takeaway
The combination of easing interest rates, stabilising insolvencies, and fewer payment defaults paints a more positive picture for Australian businesses moving into the second half of 2025. However, challenges persist in sectors tied to discretionary spending, and ongoing vigilance will be needed.
 

​The Crux of the Issue: New Code, Old Buildings
At the heart of the concern is the proposed update to Section F of the NCC 2025, particularly its waterproofing and water shedding provisions. These provisions set ambitious standards — including fall gradients, slab structures, and substrate approvals — that are generally unachievable in existing buildings without major structural rework.
According to ACRA, the result is clear: owners corporations may be forced out of the "exempt development" category and into costly planning approval pathways.
 
Case in Point: One Balcony Repair, Three Scenarios
A simple balcony repair under current NCC 2022 rules costs around $55,000. Under NCC 2025, the same work could balloon to over $200,000 — a 367% increase — if planning approval is required. Even under a best-case scenario (a future CDC pathway), costs still rise to nearly $196,500, due largely to performance solutions, consultant fees, certifier costs, levies, insurance, and approvals.
 
Why This Matters to You
These changes don’t just affect builders — they directly impact strata owners, who may:

• Face significant delays (up to 12–14 months before work begins)
• Struggle to raise new funds not previously budgeted
• Incur higher building insurance premiums
• Risk legal claims from residents for maintenance delays
• Encounter a shortage of professionals willing to work under the new standards due to liability and insurance gaps

 
Industry Response: Call for Practical Reform
ACRA, alongside strata law experts like Amanda Farmer and Helen Kowal, is calling for:

• A Building Commission NSW-led consultation process
• Recognition that remedial works are not new builds
• A new pathway in the Codes SEPP to preserve exempt status for compliant remedial works
• Enhanced clarity, guidance, and transitional support for practitioners

 
What Can Strata Committees and Owners Do Now?

1. Stay Informed – Engage with updates on the NCC 2025.
2. Plan Ahead – Start forecasting budgets for potential increases in repair costs.
3. Speak Up – Contribute to ongoing consultations or reach out to your strata manager or advocacy groups.
4. Engage Experts – Ensure remedial work is designed and certified by professionals with a deep understanding of both construction and compliance pathways.

 
Final Thoughts
The intent behind NCC 2025 — safer, more durable buildings — is sound. But applying new-build standards to ageing structures without exemptions or alternative pathways risks imposing unsustainable financial pressure on thousands of strata communities.
Without reform, the very repairs that protect people’s homes could become inaccessible — not due to technical complexity, but because of a legislative misalignment.

​Why It Matters
While it might seem harmless, condensation can lead to:

• Mould growth
• Damp patches and peeling paint
• Damage to walls and timber
• Health concerns, especially for people with allergies or asthma

How to Reduce It

• Open windows for a few minutes each day
• Use exhaust fans in bathrooms and kitchens
• Avoid drying clothes indoors (or ventilate if you must)
• Keep lids on pots when cooking
• Leave space behind furniture for airflow
• Maintain steady, even heating

Use Your Air Con’s Dry Mode
All air conditioners have a “dry” or dehumidifier mode—great for removing moisture without cooling the room. It’s a simple and effective way to reduce condensation during winter.

​The Bigger Picture
Across the construction industry, productivity has dropped significantly—housing construction workers are now completing 53% fewer homes per hour than they were 30 years ago. At the same time, demand is rising sharply. To meet national housing targets, the industry needs more than 500,000 new workers over the next five years. However, skilled labour remains scarce.

Cost Escalation by City
Here are the projected building cost increases for 2025:

• Brisbane: +7%
• Sydney, Melbourne: +4.5% to +5.5%
• Canberra, Adelaide, Darwin: +5%
• Hobart: +4%

These increases reflect a combination of labour shortages, global supply chain issues, and volatility in energy and material costs. While some materials have stabilised, workforce constraints continue to push prices up.

Why Quotes Include 'Preliminaries'
Many residents have noticed line items like “Preliminary Costs” in project quotes. These refer to necessary but indirect construction expenses—site setup, insurance, temporary utilities, project supervision, and compliance measures. These costs often account for 10% to 25% of the overall job, especially in multi-storey or complex residential buildings.

How This Affects Your Building
Due to market conditions, all repair and upgrade quotes reflect these broader pressures. Factors like location, project duration, and site complexity can all increase costs. Strata committees and building management teams are working closely to prioritise works, seek competitive pricing, and ensure the building’s maintenance is both timely and cost-effective.
 
Key Takeaways:

• Construction productivity is down, demand is up, and skilled labour is in short supply.
• Costs are rising in every major city, with Brisbane experiencing the steepest increase.
• Preliminary costs are a normal, essential part of any building project budget.
• Every quote today reflects a challenging but industry-standard pricing environment.

​Understanding these broader trends helps explain why repairs and capital works often cost more and take longer than they did just a few years ago.

The Hidden Danger Behind Lithium-Ion Batteries
According to NSW Fair Trading, lithium-ion batteries can overheat, catch fire, and even explode. These incidents often occur without warning and can result in toxic smoke and difficult-to-extinguish fires. In apartments, where many residents share walls, ceilings, and floors, such events can quickly escalate into building-wide emergencies. The source of these dangers often lies in faulty charging, physical damage, or substandard products lacking proper safety certifications.

​Safe Use and Storage Tips
To reduce risks, residents should follow these essential safety practices:

• Buy from reputable sources: Avoid counterfeit or generic battery products.
• Use the correct charger: Always use the charger provided by or recommended by the manufacturer.
• Charge in well-ventilated areas: Avoid charging batteries on beds, couches, or other soft furnishings.
• Avoid overcharging: Do not leave devices plugged in overnight.
• Dispose of safely: Do not throw batteries in general waste. Contact your local council for safe disposal locations.

More tips and official guidance can be found on the NSW Government’s lithium-ion battery safety page.

Role of Owners Corporations: By-Laws and Resident Responsibilities
Owners corporations (OCs) in NSW may consider adopting by-laws that require residents to report the presence of lithium-ion battery-powered devices and ensure safe storage and charging. However, it is critical that such by-laws remain lawful.
Under the Strata Schemes Management Act 2015 (NSW), any by-law must not be harsh, unconscionable, or oppressive. A valid and enforceable by-law could, for instance:

• Require residents to notify the OC of large lithium-ion battery-powered devices.
• Mandate safe charging practices in common property areas.
• Prohibit charging in enclosed or high-risk areas such as fire escapes.

However, it would be unlawful to ban the ownership of such devices outright or impose unreasonably restrictive measures that interfere with individual property rights.

Conclusion
Striking a balance between safety and residents’ rights is essential. By fostering awareness and implementing well-crafted by-laws, owners corporations can contribute significantly to apartment safety without overstepping their legal boundaries. As technology evolves, so too must our strategies for living safely with it.
For further guidance, apartment residents and strata managers are encouraged to consult NSW Fair Trading and legal professionals when drafting or amending by-laws.
 

1. ASSESS YOUR ASSETS:
 
Begin by conducting a comprehensive assessment of the assets within your strata scheme. This includes buildings, common areas, infrastructure, equipment, and any other tangible assets under your management. Take note of their current condition, age, and expected useful life. Document all relevant information, such as warranties, maintenance records, and inspection reports.
 
2. IDENTIFY KEY OBJECTIVES AND PRIORITIES:
 
Clearly define the objectives and priorities of your asset management plan. Consider factors such as health and safety compliance, energy efficiency, resident satisfaction, and financial sustainability. Establish specific goals, both short-term and long-term, that align with the overall vision and objectives of your strata Building.
 
3. ESTABLISH MAINTENANCE AND INSPECTION PROTOCOLS:
 
Develop a systematic approach to asset maintenance and inspections. Determine the frequency and type of inspections required for each asset, considering industry best practices, regulatory requirements, and manufacturer recommendations. Implement preventive maintenance programs to identify and address issues before they escalate.
 
4. BUDGETING AND FINANCIAL PLANNING:
 
An essential aspect of asset management is allocating appropriate funds for maintenance, repairs, and replacements. Create a comprehensive budget that accounts for routine maintenance, emergency repairs, and future replacements. Consider establishing a sinking fund or reserve fund to ensure sufficient funds are available when major asset replacements are required.
 
5. DOCUMENT POLICIES AND PROCEDURES:
 
Create clear and concise policies and procedures that outline how assets should be managed, maintained, and repaired within your strata Building. Document guidelines for inspections, reporting, and decision-making processes. Ensure that all relevant stakeholders, including strata committee members, strata managers, and contractors, are familiar with these policies and procedures.
 
6. MONITORING AND REVIEW:
 
Regularly monitor the performance of your assets and evaluate their condition against predetermined benchmarks and targets. Review maintenance records, inspection reports, and financial data to identify trends and potential areas for improvement. Periodically reassess and update your asset management plan to ensure it remains aligned with evolving needs and best practices.
 
7. ENGAGE QUALIFIED PROFESSIONALS:
 
Engaging qualified professionals, such as strata managers, building inspectors, and specialised contractors, can greatly enhance your asset management efforts. Their expertise and experience can provide valuable insights and recommendations, ensuring that your assets are effectively managed and maintained.

Developing and utilising a simple asset management plan is essential for the effective management of assets within your strata Building. By assessing your assets, setting clear objectives, establishing maintenance protocols, budgeting wisely, documenting policies, and regularly monitoring performance, you can optimise asset performance, extend their lifespan, and make informed decisions. Remember to engage qualified professionals for guidance and leverage their expertise throughout the process. With a well-structured asset management plan in place, your strata Building can operate efficiently, maximise value, and provide a safe and comfortable environment for residents.
 
Disclaimer: This blog provides general information and should not be considered legal or financial advice. The specific requirements and considerations for developing an asset management plan may vary depending on the unique circumstances of your strata Building. It is advisable to consult professionals, including strata managers and legal advisors, for specific guidance tailored to your strata scheme's needs.
​

​1. Evolving Regulations and Standards:
 
One significant factor contributing to increased costs is the evolving regulations and standards related to fire safety and compliance. As authorities and industry bodies enhance safety requirements, strata schemes are required to invest in updated equipment, systems, and procedures to meet these higher standards. These improvements often come with a higher price tag, leading to increased costs for strata schemes.
 
2. Specialised Expertise and Training:
 
Fire services require specialised expertise and training to ensure compliance and maintain the safety of residents. The demand for qualified professionals and technicians with in-depth knowledge of fire safety has increased, leading to higher costs for their services. Strata schemes must engage qualified contractors and companies to meet regulatory requirements, which can contribute to higher expenses.
 
3. Equipment and Maintenance Costs:
 
Fire safety equipment, such as fire alarms, extinguishers, sprinkler systems, and emergency lighting, must be regularly maintained and serviced to ensure their effectiveness. The costs associated with purchasing, installing, and maintaining these systems can be substantial, especially in larger strata schemes. Additionally, compliance regulations may require more frequent inspections and testing, leading to increased expenses.
 
4. Complexity of Compliance:
 
Compliance with fire safety regulations has become increasingly complex, with additional requirements and documentation. Strata schemes must navigate a web of legal obligations, by-laws, and regulatory standards, often requiring the assistance of legal professionals or specialised consultants. The expertise and time required to ensure compliance can contribute to higher costs for strata schemes.
 
5. Insurance and Liability Considerations:
 
Insurance premiums for strata schemes have risen due to the increased focus on fire safety and compliance. Insurance provider’s factor in the risks associated with inadequate fire safety measures when determining premiums. The need for comprehensive insurance coverage to protect against potential liabilities further adds to the financial burden on strata schemes.
 

The rising costs of fire services and compliance in NSW strata schemes are driven by evolving regulations, specialised expertise requirements, equipment and maintenance expenses, the complexity of compliance, and insurance considerations. Strata schemes must allocate appropriate budgets to meet these growing costs and prioritise the safety of residents.
 
To mitigate the impact of rising costs and budget blowouts, it is crucial for strata schemes to engage in proactive planning, regular maintenance, and seek competitive quotes from reputable service providers. Strata committees should also explore cost-saving measures, such as bulk purchasing, negotiating service contracts, and implementing energy-efficient solutions.
 
Furthermore, collaborating with knowledgeable strata managers and seeking legal advice can help strata schemes navigate the complexities of fire services and compliance, ensuring they remain compliant while managing costs effectively.
 
Disclaimer: This blog provides general information and should not be considered legal or financial advice. The specific costs and circumstances related to fire services and compliance can vary between strata schemes. It is advisable to consult professionals, including strata managers, legal advisors, and financial experts, for specific guidance regarding the unique requirements of your strata scheme.
​

​Strata Manager:
 
A strata manager acts as a professional intermediary between the owners corporation and the individual lot owners within a strata scheme. Their primary responsibility is to administer and oversee the day-to-day operations and legal obligations of the strata scheme. Here are some key aspects of a strata manager's role:
 
a. Administrative Duties:
Organising and conducting meetings, including Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs).
Maintaining records and ensuring compliance with legal requirements.
Preparing and distributing meeting agendas, minutes, and other relevant documentation.
 
b. Financial Management:
Collecting levies and managing the strata scheme's financial accounts.
Preparing budgets, financial statements, and managing financial transactions.
Engaging with auditors and overseeing financial audits.
 
c. Compliance and Legal Obligations:
Ensuring compliance with the Strata Schemes Management Act 2015 and related regulations.
Providing advice on by-laws, governance, and dispute resolution processes.
Managing insurance policies and claims on behalf of the strata scheme.
 
Building Manager/Caretaker:
 
A building manager or caretaker, on the other hand, is responsible for the day-to-day maintenance and operation of a specific building within a strata scheme. Their primary focus is on managing the physical aspects of the building and providing services to the residents. Here are some key aspects of a building manager/caretaker's role:
 
a. Building Maintenance and Repairs:
Overseeing the maintenance and upkeep of common areas, such as lobbies, elevators, and recreational facilities.
Organising repairs, inspections, and maintenance work as required.
Addressing resident concerns related to building maintenance and repairs.
 
b. Resident Services:
Assisting residents with inquiries, complaints, and requests.
Managing access control systems and security measures.
Coordinating waste management and cleaning services.
 
c. Facilities Management:
Managing service contracts, including cleaning, landscaping, and security services.
Monitoring and maintaining equipment, such as HVAC systems and fire safety measures.
Implementing health and safety protocols within the building.
 
While both roles are vital in the management of strata schemes, it is essential to recognise the distinction between a strata manager and a building manager/caretaker. A strata manager focuses on administrative and financial aspects, ensuring compliance with legal requirements, while a building manager/caretaker is responsible for the day-to-day operations and maintenance of the building. By understanding the unique responsibilities of each role, strata scheme residents and property owners can better engage with the relevant professionals and ensure effective management of their properties.
 
Disclaimer: This blog provides general information and should not be considered legal advice. Specific roles and responsibilities may vary depending on individual strata schemes and agreements. It is advisable to consult legal professionals or relevant industry experts for precise guidance regarding specific strata management matters.

​1. Shortage in Housing Supply:
 
The statistics reveal a concerning shortage in the supply of housing in Australia. The value of building work and the number of dwellings commenced and completed often fall short of meeting the growing demand from the population. This imbalance between supply and demand leads to increased competition for available housing, driving up prices and making affordability a major challenge for many Australians.
 
2. Increased Demand Factors:
 
Several factors contribute to the increased demand for housing, exacerbating the shortage in supply. One significant factor is the rise in visitor arrivals, including tourists, international students, and migrants. The influx of people seeking accommodation places additional strain on the already limited housing market. Moreover, internal migration from rural areas to capital cities and regional centres further intensifies the demand for housing.
 
3. Impact on Affordability:
 
The shortage in housing supply directly impacts affordability, making it increasingly difficult for individuals and families to secure suitable and affordable housing. High demand and limited supply drive up property prices and rents, creating a housing market that is out of reach for many. The affordability crisis not only affects low-income households but also impacts middle-income earners who are increasingly finding it challenging to enter the housing market.
 
4. Government Intervention:
 
To address the housing supply shortage and alleviate the affordability crisis, government intervention is essential. The government needs to take proactive measures to stimulate housing construction in capital cities and regional centres across Australia. This can be achieved through policies and initiatives that incentivize developers, streamline planning processes, and provide financial support for the construction of affordable housing options.
 
5. Focus on Capital Cities and Regional Centres:
 
It is crucial for the government to prioritize housing construction in both capital cities and regional centres. While capital cities face significant housing supply challenges, regional centres also require attention to accommodate population growth and prevent urban sprawl. Encouraging housing construction in regional areas can help decentralize population growth and promote economic development in those regions.
 
The statistics on the value of building work and the number of dwellings commenced, completed, under construction, and in the pipeline highlight the pressing issue of housing supply shortage in Australia. This shortage, coupled with increased demand driven by factors such as visitor arrivals, has contributed to the affordability crisis. To address this crisis, government intervention is necessary to stimulate housing construction in capital cities and regional centres. By implementing supportive policies and initiatives, the government can increase housing supply, promote affordability, and ensure that all Australians have access to suitable and affordable housing options. Addressing the housing supply challenge is crucial for creating a more equitable and sustainable housing market in Australia.
 
We will be keeping an eye on the next release of data which is due on 12/7/23
https://www.abs.gov.au/statistics/industry/building-and-construction/building-activity-australia/dec-2022