649 replies to this topic

[RustyNail]

Welcome to the wonderful world of strata ownership. Expect 10-15% increases every year. Insurance is the #1 driver of skyrocketing strata fees, IMHO.

15% seems a bit steep. If my strata fees are 300 right now, a 15% annual increase puts them at ~920 in only 8 years or ~1215 in 10 years.

Any condo owners of over 8+ years care to weigh in with their experiences? Have your condo fees tripled in only 8 years or quadrupled in 10 years?

Edited by RustyNail, 19 April 2021 - 06:23 PM.

[Nparker]

Excessive strata fee increases only started happening in the past couple of years, Prior to that my annual increases were quite moderate.

 

Edit: My strata fees went up 22% since 2017, but I expect larger increases in the coming years.

Edited by Nparker, 19 April 2021 - 07:19 PM.

[RustyNail]

Excessive strata fee increases only started happening in the past couple of years, Prior to that my annual increases were quite moderate.

Ah okay - when you mentioned to expect 10-15% every year I figured you were speaking from decades of experience.

I think after another year or two things will settle down to a new, much higher norm. Didn't something very similar happen to insurance rates and condo fees during the leaky condo crisis a few decades ago?

Edited by RustyNail, 19 April 2021 - 07:13 PM.

[LJ]

what do they expect you to plug in in that kitchen's 3 plugs?  toaster.  coffee maker.  what else?  george foreman grill? 

 

power bar

[Nparker]

...I think after another year or two things will settle down to a new, much higher norm. Didn't something very similar happen to insurance rates and condo fees during the leaky condo crisis a few decades ago?

We've been told to prepare for higher insurance costs for the foreseeable future. I know my personal condo insurance has also skyrocketed in the past 2 years.

[lanforod]

After a massive insurance hike last year, my condo's insurance moderated down a bit this year, thankfully, and the deductible especially relaxed to a number that insurers are willing to provide reasonable coverage for individual units.

 

In 12 years my strata fees have gone from about 300 to 440, with the biggest jump last year of about 11%.

[RustyNail]

My strata fees went up 22% since 2017, but I expect larger increases in the coming years.

That's an average increase of about 5.1% per year since 2017. Last couple year's increase is probably what bumped the average above 5%.

After a massive insurance hike last year, my condo's insurance moderated down a bit this year, thankfully, and the deductible especially relaxed to a number that insurers are willing to provide reasonable coverage for individual units.

In 12 years my strata fees have gone from about 300 to 440, with the biggest jump last year of about 11%.

300 to 440 is a total increase of ~46.7% over 12 years. This works out to an average increase of 3.24% each year.

I'm thinking there is still another year or two of big price adjustments in the industry and then I think things will settle back down to the small annual increases previously seen... at least I hope so anyway cause I'm moving into my first place soon.

Edited by RustyNail, 19 April 2021 - 10:21 PM.

[Mike K.]

It’s largely driven by earthquake coverage, no? I decided to drop earthquake coverage for my house as it was headed for $2,000, plus a $45k or $50k deductible. Without earthquake it’s 1/3 the cost.

Furthermore, after jokingly discussing the potential for earthquake-related insurer default with my former broker, who was adamant such would never ever happen, their latest letter accompanying renewals speaks to the “relatively low” likelihood of insurer default. Relatively low, eh?

[Nparker]

It’s largely driven by earthquake coverage, no? I decided to drop earthquake coverage for my house ...

I doubt my strata is going to drop its earthquake coverage anytime soon.

[Barrrister]

I just got rid of my house insurance altogether this year. Rather a unique situation since my property is actually worth more without the house on it. 

[Mike K.]

You must be mortgage free then? My mortgage requires insurance, and I assume that's what every traditional/bank mortgage requires?

[lanforod]

It’s largely driven by earthquake coverage, no? I decided to drop earthquake coverage for my house as it was headed for $2,000, plus a $45k or $50k deductible. Without earthquake it’s 1/3 the cost.

Furthermore, after jokingly discussing the potential for earthquake-related insurer default with my former broker, who was adamant such would never ever happen, their latest letter accompanying renewals speaks to the “relatively low” likelihood of insurer default. Relatively low, eh?

No, it's not. Every report and article I've read on this is that the insurers increased premiums due to an increase in claims, and more specifically, water damage.
Now, I don't know why all of the sudden those claims supposedly increased.

[Victoria Watcher]

Now, I don't know why all of the sudden those claims supposedly increased.

 

that's the mystery right?

 

the insurance industry is smart enough to know how to spot issues with certain building types or construction techniques.  but it seems the increases are across the board - from two-level townhomes to 45-floor towers.

Edited by Victoria Watcher, 20 April 2021 - 07:12 AM.

[Nparker]

...Every report and article I've read on this is that the insurers increased premiums due to an increase in claims, and more specifically, water damage....

This is what my strata has been telling us.

[Mike K.]

that's the mystery right?

the insurance industry is smart enough to know how to spot issues with certain building types or construction techniques. but it seems the increases are across the board - from two-level townhomes to 45-floor towers.

It’s an earthquake hedge.

[sebberry]

No, it's not. Every report and article I've read on this is that the insurers increased premiums due to an increase in claims, and more specifically, water damage.
Now, I don't know why all of the sudden those claims supposedly increased.

 

Water claims are a big one.  A small pinhole leak in a pipe on the 3rd floor can cause thousands in damage.  Older buildings in Victoria, especially high-rises are quite susceptible to soft water corrosion causing pinhole leaks in copper pipes.  There are ways to mitigate this but stratas usually only decide there's a problem once they've forked out more in insurance deductibles and repairs than the preventative measures would have cost.

 

My fees went from like $170 ish back in 2002 to $430 now.  

[RustyNail]

Water claims are a big one. A small pinhole leak in a pipe on the 3rd floor can cause thousands in damage. Older buildings in Victoria, especially high-rises are quite susceptible to soft water corrosion causing pinhole leaks in copper pipes. There are ways to mitigate this but stratas usually only decide there's a problem once they've forked out more in insurance deductibles and repairs than the preventative measures would have cost.

My fees went from like $170 ish back in 2002 to $430 now.

What are the mitigating measures for the soft water issue? Some sort of water hardening filtration system for the building? I'm moving into the Vivid soon and I'm curious if our building has any mitigating measures in place for this.

What were your strata fees a couple of years ago?170 to 430 in 19 years is about 5.01% per year. I'm assuming your biggest yearly increases have come in the last few years?

[sebberry]

What are the mitigating measures for the soft water issue? Some sort of water hardening filtration system for the building? I'm moving into the Vivid soon and I'm curious if our building has any mitigating measures in place for this.

 

https://hytecwater.com/

[LJ]

It’s largely driven by earthquake coverage, no? I decided to drop earthquake coverage for my house as it was headed for $2,000, plus a $45k or $50k deductible. Without earthquake it’s 1/3 the cost.

Furthermore, after jokingly discussing the potential for earthquake-related insurer default with my former broker, who was adamant such would never ever happen, their latest letter accompanying renewals speaks to the “relatively low” likelihood of insurer default. Relatively low, eh?

You know that your gas line is going to break in an earthquake right? You have matches in your emergency kit, right?

[Mike K.]

You know that your gas line is going to break in an earthquake right? You have matches in your emergency kit, right?

 

I'll let the other guy blow up the neighbourhood, thank you very much