Strata Management Fees in Victoria: Why They’re Rising and What Committees Should Look For

Committees across Victoria are asking for more from their Owners Corporation Managers. Faster responses, stronger oversight, better reporting. At the same time, many are pushing back when fees go up, or shopping for a cheaper alternative at tender.

The problem is that those two expectations work against each other. And the gap between them is getting wider.

This is not just a local issue. Macquarie Bank’s 2023 Strata Management Benchmarking Report found that 78% of respondents identified rising staff costs as a major driver of declining profit margins across the industry. Strata management in Victoria has become more complex, more regulated, and more resource-intensive than it was even a few years ago.

This article looks at why that shift is happening, what it means for management fees, and how Committees can make better decisions when the time comes to appoint or reappoint a manager.

Why strata management fees are increasing in Victoria

The Work Has Become More Complex

Owners Corporation management in Victoria looks very different from what it did five years ago.

Legislative changes, cladding rectification obligations, and evolving building safety requirements have added significant compliance work to every manager’s role. These are not optional tasks. They carry legal obligations for both the Owners Corporation and the manager responsible for administering them.

Beyond compliance, buildings themselves are becoming more operationally demanding. Larger residential developments, mixed-use sites, and aging building infrastructure all require more coordination, more contractor oversight, and more time spent on maintenance planning and emergency responses.

The cumulative effect is that the scope of work behind a standard management contract has grown substantially, even where the fee has stayed the same.

Retaining Good Managers Is Getting Harder

At the same time, experienced Owners Corporation Managers are in high demand across Melbourne and regional Victoria.

Qualified managers are heavily recruited, particularly those with experience in larger or more complex buildings. Management companies are investing more in salaries, training, internal systems, and support staff simply to hold onto capable people and maintain service standards.

This creates a direct link between staffing costs and management pricing. As one senior executive from a large Victorian management company recently put it: “The price is the price.” That statement is not about overcharging. It reflects the cost of running a professional management operation in a market where good people are expensive to find and difficult to keep.

For Committees, the practical takeaway is straightforward. The fees you are being quoted today reflect real increases in what it costs to manage your building properly. The question is not whether fees are rising. It is whether your building is getting the level of service those fees should deliver.

What Committees Often Get Wrong About Management Fees

One of the most common mistakes Committees make is treating management fees as the primary point of comparison when evaluating proposals.

A Chairperson of a Tier 2 building that recently changed management companies put it well when responding to an owner who questioned the Committee’s decision:

“OCM fees are a small fraction of the total levies, the pricing differences between proposals are usually minor, and like any professional service, quality matters more than simply choosing the cheapest option.”

That perspective reflects a broader issue. Management fees typically represent a relatively small percentage of a building’s total annual costs. The difference between competing proposals, once distributed across all lots, is often modest. But the downstream consequences of choosing the wrong manager are not.

Cheap Management Fees Can Create Expensive Problems

A lower-cost management arrangement often means fewer resources behind the scenes. In practice, that can look like maintenance issues going unaddressed for months, higher manager turnover disrupting continuity, inexperienced staff handling complex compliance or defect matters, and reactive decision-making where proactive planning should be.

These problems compound. A delayed maintenance program leads to larger repair costs. Weak communication erodes trust between the Committee and owners. Compliance gaps create legal exposure that far exceeds whatever was saved on the management fee.

The Role Is Bigger Than Most Committees Realise

Part of the disconnect comes from underestimating what an Owners Corporation Manager actually does. Depending on the building, a single manager may be responsible for financial administration, AGM coordination, insurance, maintenance programs, contractor management, resident disputes, emergency responses, and ongoing compliance tracking.

For larger or more complex buildings, that workload increases significantly. When a Committee selects a manager primarily on price, they are often selecting for a business model that spreads its people thinner across more buildings to make the numbers work. The building may not see the impact immediately, but it surfaces over time.

This is why the better question for Committees is not “which proposal is cheapest?” but “which manager has the capacity and systems to actually deliver what our building needs?”. Strata Management Consultants helps Committees review these factors before making a decision.

How to Evaluate a Strata Manager Beyond the Fee Proposal

Price is one factor in a management decision. It should not be the deciding one. When reviewing proposals, Committees should be assessing whether a management company has the operational capacity, experience, and structure to properly support their building over the long term.

Here are the areas that matter most.

Scope and Service Clarity

Not all management proposals are structured the same way. Some include a broad scope of services within the base fee. Others keep the headline fee low and charge additional disbursements for work that other companies would consider standard.

Before comparing prices, Committees should compare what is actually included. Key questions to ask:

• What services are covered within the base management fee?
• What gets charged as an additional disbursement or out-of-scope fee?
• How does the total cost compare across a full 12-month period, not just the headline figure?

A proposal that looks cheaper on the surface can end up costing more once additional charges are factored in across a full year.

Staffing and Portfolio Load

The experience and availability of the people managing your building matters more than the brand on the proposal. Committees should ask:

• How many buildings will the assigned manager be responsible for?
• What support staff sit behind them?
• What happens when that manager is on leave or moves on?

High portfolio loads and thin support teams are often how lower-cost management companies make their pricing work. The trade-off is slower response times, less proactive management, and greater disruption when staff turnover occurs.

Communication and Reporting Standards

One of the most common complaints Committees have about their managers is poor communication. This is worth testing during the tender process, not just after appointment.

Ask how the company handles routine owner enquiries, how quickly they commit to responding, and what their financial and operational reporting looks like. A management company that is vague on communication standards during the proposal stage is unlikely to improve once appointed.

Experience With Similar Buildings

A manager who has worked across a range of building types is not the same as a manager who has specific experience with buildings like yours. A Tier 1 high-rise with complex infrastructure has very different management needs from a small residential plan with 10 lots.

Committees should ask whether the company has current experience managing buildings of comparable size, complexity, and operational profile. Past experience with similar challenges (defect matters, large-scale maintenance projects, mixed-use operations) is a strong indicator of how well they will manage yours.

Making the Right Decision for Your Owners Corporation

The better question for Committees is not “who is the cheapest?” but “which management company is best equipped to support this building properly?”

That is the question Strata Management Consultants helps Committees answer. We work with Committees to understand what their building genuinely requires, identify which management companies are operationally suited, and assess whether pricing reflects the actual complexity of the work involved. We are selective about how we run tender processes, and our focus is always on long-term operational stability rather than securing the lowest possible fee.

If your Committee is considering a change in management or wants to understand whether your current arrangement is delivering what it should, you can contact us here.