3 February 2026
The Reserve Bank has increased the cash rate by 25 basis points following higher-than-expected inflation data. While interest rate movements are often discussed in the context of mortgages, their impact extends well beyond individual households.
Strata communities are not insulated from this environment.
The flow-on effects for strata
Higher interest rates and sustained inflation place pressure on strata schemes in several ways:
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Insurance premiums continue to rise, driven by reinsurance costs and broader economic conditions
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Contractor pricing increases as labour, materials, and financing costs rise
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Maintenance and capital works become more expensive to deliver and harder to defer
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Levy sensitivity increases as owners face tighter personal budgets
These pressures are already appearing in budgets, tender responses, and committee discussions.
Why transparency matters more in this cycle
When costs are stable, inefficiency and poor communication can hide in the background. When costs rise, they cannot.
In a high cost-of-living environment, owners reasonably want clarity, not just what is increasing, but why, and whether those increases are unavoidable, deferrable, or within the scheme’s control.
Transparency in strata isn’t about more reporting or more complexity. It’s about:
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Clear explanations of financial movements
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Early communication about emerging cost pressures
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Plain-English distinction between mandatory obligations and discretionary choices
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Decision-making that is documented and defensible
This reduces frustration, prevents misinformation, and supports better decisions, even when the decisions themselves are difficult.
Calm governance over reactive decision-making
Periods like this can create pressure to react quickly or cut costs without context. In strata, that often leads to deferred maintenance, under-insurance, or short-term decisions that increase long-term risk.
Good governance doesn’t remove financial pressure, but it does ensure trade-offs are understood, deliberate, and fair.
As interest rates and inflation remain elevated, the role of strata management is not to amplify anxiety, but to provide clarity, structure, and steady decision-making.
When money is tight, confidence in how it’s managed matters more than ever.
JM
Founder + Managing Director
Bettr Strata