Everythings going up except strata management fees in the Shire

Spending on goods rose 2.6 % in the past year outstripped by spending on household services (paid gardening, washing, cleaning) that grew by 3.8 % reports the Australian Financial Review (27 June 2011).

You wouldn’t know it, however in the Sutherland Shire, New South Wales, a reader of this blog spotted this A-frame advertising board on the back of some poor struggling student at a train station last week. I have obliterated the strata manager’s name to protect the guilty.

This has been the conundrum for strata managers for thirty years. Lots of talks at conferences about increasing fees matched only by actions like this, dragging the base fees down for everyone. So much so that many believe the base secretarial fee of $120 per lot per annum hasn’t moved much at all in three decades.

Usually when this happens in a market, a category killer will come along and decimate the competition by a price cut of 30 – 40% achieved through wholesale purchasing power or real innovation. Think ‘Jet Star’ for successful reform to budget travel, no frills on-line bookings and check in, reduced baggage allowances, pay to eat catering and in-flight entertainment and presto two-thirds the fare for the same basic service. Qantas is now the poor cousin to its more profitable stable mate.

In strata management, purchasing power is irrelevant so it’s likely to be via on-line innovation so that amateurish price cutting stunts like the A-frame board at the train station, are relegated to the dustbin. Real innovation for strata owners will be 24/7 online access to everything including accounts, paper free meetings and levy collection, electronic voting for annual general meetings (which no one sees any sense in attending anyway) and Skype committee meetings.

When this happens, watch the strata manager responsible pick up more than their fair share of the increase in spending on household services by time poor strata owners.

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