This article discusses the key industry shifts shaping strata management 2026, from staffing and technology to reform, risk and future business models.
Strata management businesses spent 2025 under more pressure than ever. Regulatory reform, scrutiny of insurance commissions, rapid technology change, and intense staffing challenges all pushed the sector to rethink how it operates.
In September, LookUpStrata hosted the national webinar Strata management in a changing environment, a challenge or an opportunity with Michael Teys from Michael Teys Strata Advisory. The response from across the country was huge, and there were far more questions than could fit into the live session.
To keep the conversation going, Michael joined us to record a follow-up Q&A focusing on questions we did not have time to cover. The discussion runs for just under half an hour and looks squarely at what is changing for the strata industry, and what that means for owners and committees heading into 2026.
Below is a summary of the main themes we covered, and why they matter for your business and your building.
Staffing, systems and support: recruitment and retention
Staffing came up more than once, from recruiting new managers to keeping good people in the role.
Michael’s starting point was that internal systems problems can sometimes present as a recruitment problem. Turnover in strata management sits at around one-third of the workforce, compared with much lower averages across other industries. That points to issues with how roles are structured, supported and resourced.
Instead of focusing only on how hard it is to find staff, he suggested that firms:
- look closely at their internal systems and processes
- allocate the right tasks to the right people with appropriate tools
- ensure managers are not asked to carry responsibility without support
When those elements line up, it becomes easier to recruit, easier to retain staff, and easier to meet client expectations.
Later in the session, staffing came up again in the context of managers leaving within 12 to 18 months of joining the industry. Michael referred to benchmarking work that compared employers’ perceptions of what staff want with what staff actually value. The results showed a clear gap between perception and reality. Business owners often assume salary is the main driver, while many managers place more weight on support, training and workload design.
In that context, he encouraged firms to:
- take a hard look at the quality and relevance of their training
- move away from training for its own sake, or training offered simply because it is free from suppliers
- focus training on how to be a strata manager, rather than trying to turn managers into lawyers, accountants or builders
- design internal support structures they can clearly describe to potential recruits
Firms that can demonstrate real investment in management skills, support and sustainable workloads are better placed to attract the people they need and keep them in the industry.
A sustainable model for small and medium firms
Another question came from a medium-sized Victorian business dealing with rising wages, technology investment, and pressure to reduce insurance commissions. They asked whether a sustainable model exists for smaller firms that want to stay competitive without burning out their team.
Michael’s answer focused on specialisation. He described small firms that deliberately choose to manage only townhouse schemes, or only commercial strata, and as a result operate at a high level of profitability. Because they work with a single building type, they can streamline systems, simplify training, and focus on doing one thing very well.
He also suggested:
- specialising by geography, building type, use or age
- creating different internal portfolios for small, medium and large schemes
- building specialist roles within the firm, such as core management, repairs and maintenance, defects remediation or retrofitting
The difficult part of specialisation is learning to say no to work that does not fit. But the reward is a clearer value proposition, more focused training, and more sustainable workloads for managers.
AI and technology: promise and risk
There is a lot of buzz around AI tools for minute taking, task automation and compliance tracking. One question asked about the real-world risks that strata firms should consider before they integrate AI into their workflows.
Michael drew a distinction between:
- interpretive AI, such as general language tools
- agentic AI that will, over time, start to carry out tasks with less human intervention
His main warning was about data and privacy. When you upload information into general AI platforms, you may not be able to fully control where that data goes or how long it is stored. That creates risks for intellectual property, confidential client information and personal data.
He suggested that firms:
- seek advice from AI specialists about how to ring fence data
- understand the terms and conditions of any AI tools they use
- treat AI as a powerful tool, but not one that replaces the need for proper governance and human oversight
AI is not going away. The question for 2026 is how firms will adopt it safely and strategically, rather than reactively.
Life after insurance commissions
The move to phase out insurance commissions in New South Wales is already having national ripple effects. One question asked how this shift is likely to affect management fees and whether firms will need to raise fees or absorb the change.
Michael noted that formal data is still limited, although the New South Wales Productivity Commission has been asked to examine the issue. At the same time, industry practice is already moving. Strata Community Association branches in New South Wales and the ACT have publicly committed to eliminating commissions, and some large and small companies have already changed their models.
Early experience suggests that:
- if the right arrangements are made with brokers, base management fees might not need to change dramatically
- there may be new processing fees to reflect the work done around insurance
- firms and owners corporations will need to negotiate harder and more transparently with brokers
He also pointed to emerging interest in AI-driven, lower-cost brokerage models that aim to challenge traditional approaches.
Even if government decisions change or slow down, the direction of travel within the industry is clear. Firms that plan for a future without insurance commissions will be in an advantageous position compared to those that wait.
Vertical integration and conflicts of interest
Several questions touched on vertical integration, where a management company also owns or has interests in related service providers such as maintenance, fire services, reporting, law firms or utilities billing.
Michael explained that vertical integration is unlikely to be banned outright. However, conflicts of interest and related party transactions sit at the centre of current reform work across Australia. The real issue is how these arrangements are disclosed and managed.
At the moment, many firms use different entity names and contract structures, and owners and committees do not always receive clear information about relationships and benefits. That makes it difficult for them to give informed consent.
Michael expects this area to come under heavier scrutiny, in part because of independent research that is due to be released and which aims to bring hidden conflicts into public view. Firms that rely on vertically integrated models will need strong answers about transparency, disclosure and value if they want to maintain trust.
Regulation, reform and the need for national leadership
The final question asked whether state regulators are keeping pace with structural shifts such as AI, private equity roll-ups and offshoring.
Michael observed that:
- New South Wales currently leads reform activity and has a dedicated strata commissioner that is actively working through complex issues
- the Victorian review process has taken a different approach, with questions about timeframes and access to research
- Queensland continues to follow its own path
He also pointed to a broader problem. Australia lacks cross-jurisdictional research that compares approaches across states and identifies best practices. That gap stems from the need for strong national leadership.
At present, the main industry body operates as a federation, and different branches hold different positions on key issues such as insurance commissions. In Michael’s view, this fragmentation makes it harder for strata management to evolve into a fully recognised profession.
Why this Q&A session matters for 2026
The follow-up conversation with Michael Teys does more than answer a handful of leftover questions. It captures how 2025 reshaped the expectations on strata managers, and it sets out the structural shifts that will continue to shape the sector in 2026 and beyond.
If you’d like to understand where the industry is heading, this session offers:
- a candid look at the business pressures behind staffing, specialisation and profitability
- practical guidance on technology, training and internal systems
- clear insights into how reforms on insurance commissions, conflicts and disclosure may unfold
You can watch the full recording to hear the full discussion in context and to reflect on what these themes mean for your own building or business as you plan for the year ahead.
Michael Teys Michael Teys Strata Advisory E: admin@michaelteys.com P: +61 419 644 288
This post appears in Strata News #774.
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