With the media dominated by the passing last week of Barry Humphries and Fr Bob Maguire, our Artificial Intelligence first-rough transcriptions service managed to conflate our brief tributes to both and come up with Barry McGuire.
Boomers may recall that that Barry was the singer of the Dylanesque Eve of Destruction, back in 1965. Although we will miss our Barry and Bob, both giants in their fields, it’s not quite that bad. Or is it?
In any case Sue spent a large chunk of last week remembering her friend (and Biograpy subject) on radio and TV before jetting off to New Zealand for interviews for her next book, from where she Zoomed-in her end of this podcast.
Among the topics are new NSW Treasurer Daniel Mookhey who says he’s focussed on solving the housing crisis, inspired by some radical icons, such as Barack Obama, Martin Luther King and Malcolm X.
We look at parents who’ve taken the “Bank of Mum And Dad” concept a stage further to make sure their son has somewhere he can afford to rent.
And we welcome our new Victoria correspondent Julie McLean. You can read more about her HERE.
TRANSCRIPT IN FULL
The newspapers this morning are full of Barry Humphries.
Sue Williams 00:04
Yes, that’s very sad, isn’t it?
He was 89 or something like that, so he’s had a good trot. God, pages and pages in the Sunday Telegraph, and a couple of pages in the Sun-Herald and of course on radio, was given over to a tribute to him. He’s been around for a long, long time.
Sue Williams 00:28
He was such a clever, gifted, clever man; he was fantastic. I mean, it’s been a really sad week. One death that particularly affected me was Father Bob McGuire, the Catholic priest in Melbourne. I wrote a biography about him, 10 years ago now, and he was an absolutely fabulous man. A really great humanist and I was really sad about his death. He hasn’t been well for a long, long time now, but I mean, it’s just very, very sad to see them go.
I just remembered (since we’re supposed to be talking about apartments)… One of Barry Humphries, great lines was about moving to Sydney, from Melbourne and he said “we had this flat with this lovely lacquered coffee table… It was only when it moved, we realised it was a cockroach.”
Sue Williams 01:22
That’s fantastic. And Father Bob McGuire was always really interested in apartments as well, because his parish in South Melbourne had a huge number of apartments in it, alongside some of the beautiful, old terraced houses. And you know, many Housing Commission residents were there, and that was basically his constituency. That’s the kind of people he was looking out for. Most of them he’d classify as battlers and people struggling a bit. And those were the people that he felt were most in need of his help. He dedicated his life to those people, so I’m very sad about that, too.
They could probably do with him around still, the way things are going. This morning, we’re going to talk about Daniel Mookhey, the New South Wales Treasurer, and his plans for housing. We’re going to talk about a novel way parents are helping their kids with their housing issues. And, we’re going to have a quick chat about our new Victorian correspondent, Julie McLean. So we’ve got a lot to get through, and you’re in Auckland, just to make things more awkward. Yes, I am. I’m just doing some interviews with some people for a new book. It hasn’t stopped raining here yet, but I guess New Zealand is known for rain. It is; the land of the long white cloud. I’m Jimmy Thomson. I write the Flat Chat column for the Australian Financial Review.
Sue Williams 02:55
And I’m Sue Williams and I write about apartments for Domain.
And this is the Flat Chat Wrap.
There was an interesting profile of Daniel Mookhey in the paper the other day; I think in The Guardian. I’ll put a link to that up on the website. Quite a progressive character.
Sue Williams 03:25
Yes, absolutely. He sounds very interesting, doesn’t he? Quite a different approach to many of the other Treasurers we’ve seen in New South Wales over the last few years.
Well, look at his background… He comes from an Indian family, which really shows again, the diversity that the Labor Party have brought into their cabinet in New South Wales. His heroes are people like Barack Obama, the American politician or activist John Lewis, Martin Luther King, and even Malcolm X. I mean, that’s a pretty radical lineup of African Americans.
Sue Williams 04:00
Absolutely. He’s also getting a bit of inspiration from Jim Chalmers, so there’s some local names in there, as well.
And his thoughts on housing… I mean, he does seem to have that as one of his priorities. He and the Housing Minister are looking at ways of getting more affordable housing on the market. I mean, everybody agrees that the big problem with soaring rents is just lack of availability of places for people to rent. So I guess as treasurer, he can pull the levers, in terms of helping with benefits and grants and stuff like that. And also, tax breaks.
Sue Williams 04:49
For developers to start building and maybe, even streamline some of the bureaucracy that they have to deal with, I guess. Because sometimes I think local councils can take a long time to agree to development applications, or turn them down, and it would be great if they could be hurried up in some way. We don’t want to remove a lot of the proper checks and balances, of course, but it would be nice if it was a bit of a faster process.
Well, somebody was saying just the other day, that there’s no place for NIMBYs in Sydney anymore. It’s not that Sydney is full; it’s just the space that’s available for housing is not being used efficiently. And it is local councils that get elected by people who don’t want to have even medium-rise apartment blocks on their streets. But you know, if everybody takes that attitude, then you’re either pushing people out to even more distant suburbs, or you’re preventing people from having houses built for them.
Sue Williams 05:51
And that’s crazy. I mean, I think NIMBYISM is in decline hopefully, in Australia, because maybe it tended to be older people who said “no, we like our suburb as it’s always been. We want it to be low-rise; we want it to be just houses.” But now, a lot of those older people are retiring and they want to downsize into apartments, which are within the same neighbourhoods, so they can stay close to their friends, and their communities and their families, and all the places they like to go to, whether it’s bars, or restaurants or cafes. And they suddenly need apartments to move into. There are lots of companies now talking about building apartments for older people, or lots of developers now talking about building apartments that are suitable for older people, as well as for younger people. They have all different sorts of entry points; all different sorts of entry sizes, prices, designs, and lots more developers are saying “well, we want to accommodate downsizers much more comfortably than before and we want to make it easy for them. Maybe they want a two-bedroom place, or a three-bedroom place. Maybe they want their children to live in the same building, so we’ve got small apartments; one-bedroom, or studio apartments, at a much cheaper price point, so that they can move into the same building, as well.” I think that idea is really picking up now. A lot of older people are starting to say “well actually, I wouldn’t mind a few medium-density apartment buildings. Not too high-rise; not towers in lots of suburbs. I would like some of those there, to give me some more options.”
It’s interesting that one of the things they’re talking about is the use of freeing up Commonwealth land… Basically, to say to developers “look, if you want to take advantage of this land that we’re freeing up here, you’re going to have to commit to something like 30% affordable housing in your development.” Now, the benefit there (the hidden benefit)… I don’t know if you recall, when the Horizon building was being built in Darlinghurst? It was on the site of the old ABC Studios?
Sue Williams 08:09
That’s right. It was Federal land, yes.
Yes. People were shocked at how high that building was allowed to be. Is it something like 30-storeys, or something like that? It’s huge, and really just blew away all the height restrictions for the area. But they were able to do that, because it was previously Commonwealth land. It had been an ABC radio station and so they were able to build basically, as high as they wanted. And if that’s the kind of incentive that the government is able to use for developers; to say “look, forget NIMBYs, because they don’t have any say, and we’ll consult with the local council, but we can build decent-sized buildings on Commonwealth land, and build them according to what’s needed, rather than what people don’t want.”
Sue Williams 09:01
Yes, absolutely. We were one of the neighbours of the Horizon. We were looking straight onto that site and then we heard that they were going to be building this massive building there, and it would kind of block out our views and sunlight, probably. We were one of the ones who were a bit dismayed, but then you look at Darlinghurst and the presence of Horizon has really lifted the whole profile of Darlinghurst. I mean, all around that area, it was kind of pretty grim. There were lots of sex workers operating there; there was lots of petty crime, that kind of thing. And now, it’s a really smart neighbourhood. The building is great; people love it. And it’s kind of quite a thin profile, so it doesn’t actually block out sunlight to many buildings, really. It’s a very elegant building, and I think it’s kind of a bit of an iconic landmark these days. So as long buildings are designed well; you know, even if they are high, if they’re designed really well and thoughtfully, they can work extremely well in certain locations.
Who was the architect?
Sue Williams 10:05
Harry Seidler. I was really interested, because Daniel was saying that he is against rent caps. I mean, some councils or some states have been talking about rent caps for a while… He doesn’t feel that that’s really worthwhile, and he’s going for the long-term solution. I would have thought rent caps were quite a good idea, for the short-term. Because obviously, if you’re going to build more apartments, that’s great, but it’s going to take a while for them to come through, so rent caps in the meantime… When we’re hearing about people having 100% rises in their rents, or 50% from landlords… We have to think well, they’re a bit greedy, really.
So it was always going to be quite different and quite special. I do recall that we were living in the apartment before it was built, or planned. We were renting and we liked the apartment so much, that the guy above us had an apartment; same profile, same layout, but was never there. We wrote to him and said “hey, would you be interested in selling your apartment, and we’ll pay $50,000 over the going price?” He came back with a very snotty letter, saying maybe if we offered $500,000 over the going rate, he might consider it. And then the plans for the Horizon came out and we got this very pathetic letter, saying “oh, I’ve had a think and I wonder if you’re still interested in buying my apartment?” I wrote back and said “oh, so you’ve seen the plans for the Horizon too, have you?” And that was it. We dodged a bullet, that’s for sure. So they’re talking about opening up Commonwealth land…They’re talking about persuading people just to not be so negative about development. One of the comments was, you know, a lot of people who are now NIMBYs benefited from 10-years of change, when they were first getting into the housing market. And you can’t really benefit from changes like transport and things like that, and then benefit for 10 years, and then suddenly turn around and say “okay, stop changing stuff.” That’s the nature of cities; they change all the time. It’s that thing of investing in residential accommodation as an investment; purely as a business. And you’re going to take the opportunity to make as much money as you want. People generally don’t invest in property because they want to house other people; they invest in property because they want to make as much money as they can.
Sue Williams 12:51
Yes, but it shouldn’t be like that. I agree, but you know that opportunism is quite distasteful, I think. Okay, you want to make a bit of a profit on your place, but most apartment tenants are now paying really quite handsome rents, anyway. And you know, you can put them up by CPI, or maybe even just over, and still get a good rental yield, and your capital value will still increase long-term. So you really shouldn’t try and gouge people for more money. I mean, I think you should be a lot more responsible than that.
Well, the area with the lowest rent rises over the past year (Canberra, or the ACT), is also the only state or territory in Australia that has rent caps. And that’s based on the CPI, plus a maximum of 10% over that. So they’re not restricting it purely to CPI, but they’re saying look, we’re going to put a limit on how much windfall profit you can make. It’s probably significant that most of the tenants in the ACT will probably work for government in some form or another, so they may have influence there.
Sue Williams 14:07
I think that’s eminently reasonable as well. I quite like the rent caps in lots of ways. Especially because, when you look at apartments across Australia over the last year, the rents have gone up 22.2%. I mean, that’s a huge amount, really. CPI was about 7%… You know, that’s a big profit for apartment owners; investors. I just think they should be a little bit more generous and forego some of that possible profit; share it with those people who are living there That’s their home and that’s where they want to stay.
Well, the problem is, built into our rental system is basically, six months’ turnover of leases in most areas and the idea that you’re investing in property for profit. This is why governments are really reluctant; this is why they didn’t want to bring in rent controls, because that seems to be undermining the whole principle of getting people to invest in property in the first place. Which is a valid argument to some extent, except when it’s not working, and it’s quite clearly not working, right now. Okay. When we come back, we’re going to talk about a novel way of parents (‘the bank of mum and dad,’ as it’s become known); helping their kids find accommodation in Sydney.
Sue Williams 15:45
So Jimmy, what is this new way that parents are finding to help their kids find a place to live?
I don’t know if it’s necessarily a new way. I know, I did say that, but it’s certainly come to some prominence, because as we know, it’s so hard for people to find rental properties, and there is huge stress involved. You know, every six months, or every year, the rents are going to go up. They’ve given the notice; the four-weeks notice, or whatever it is. They’re told either your rents’ gone up, or you’ve got to move out, and people are already struggling. And of course, the other thing; the bank of mum and dad, has been this thing of people who cannot save enough for a deposit to buy their own home… Mum and Dad step in and say “look, I’ve got a lazy $100,000 laying around in my super fund; why don’t you use that as a deposit for your house?” But there’s a story in the paper today about a couple who realised that their son was living under a lot of stress; really struggling to pay his rent and worried about what was going to happen next. So they went out and bought him a house. Now, when I say they bought him a house, they bought a little terrace house as an investment, and said okay, you can rent this from us.
Sue Williams 17:15
That’s a great idea, isn’t it really? It just feels a bit like a win/win, because presumably, they’re going to be quite reasonable in setting the rent and yet, they’ve also got an investment that’s going to repay them in the long run, too. That seems like a really good plan.
I think so. They’ll probably benefit from (I don’t know if there has to be some sort of arm’s-length agreement), but they’ll probably benefit from negative gearing if they set the rent level, so they’re not actually making a profit, when it comes to the interest that they pay on any loans that they have. Look, it does involve people having enough money, or enough ability to raise money, to be able to step into the market and buy somewhere outright, but it’s a really clever idea.
Sue Williams 18:06
I mean, I know I’m kind of a bit old-fashioned; well I suppose I am a baby boomer, but this thing about parents buying their kids houses and just letting them live in them for free… I’ve never really liked that idea. This does sound terribly old-fashioned, but I just kind of think if you give kids everything, they’ve actually got nothing to aim for, really. I mean, I guess it’s nice to have rich parents who can do anything for you, but it is nice for kids to have something to aim for, and to fight for and to save for and to achieve. So the idea of just giving someone a house; this doesn’t do much for me. The idea of renting a place from your parents; you’re making a contribution. It’s your own place and look, I think everybody would agree that a lawyer would have to get involved to draw up the agreement. I think that would be the safest thing, because I mean, I’m sure too many family relationships get broken when things go wrong. If you’ve got a lawyers’ agreement, there are things in black and white, but I think it’s an excellent idea. I mean, it might be that those parents; the rent that their child pays them, they might put it into a bank account for his or her kids’ future education, or something; they might be putting it away. But at least that person is paying their own way in life and they’re getting a fair deal. They feel that they’re not being ripped off. And everybody’s happy.
You’ve just reminded me of something the lead guitarist from Pink Floyd said, about how he looks at his kids and he remembers when he was young and just starting out. And he said “all the pleasure I got from life, came from having to work hard to achieve things.” He said “I didn’t want to do deprive my kids of the satisfaction from achieving things by working themselves, so I’m only giving them a million pounds each.”
Sue Williams 20:12
Only! It’s funny, when I was a kid; I’ve always been the same… When I was a child, I used to have this recurrent nightmare and it was that I won the lottery and suddenly, I was given all this money. A million pounds, or a million dollars, or whatever. And suddenly, life was a bit empty, because I had nothing to aim for. And I was thinking “yeah, well, what career would I choose? Well, I wouldn’t need to have a career; I wouldn’t need to achieve anything.” And it’s so funny; as a kid, I remember feeling profoundly depressed whenever I had this nightmare about winning the lottery. I mean, isn’t that bizarre? It’s crazy; most people would be really excited about it.
That is kind of bizarre.
Sue Williams 20:58
Maybe if I won it now (although I’ve never bought a lottery ticket in my life), I’d be quite happy. But I don’t know; I just feel that you just have to have something to aim for and something to work towards. And so I agree with that musician, even though a million dollars doesn’t seem too ungenerous.
No, but I suppose it’s all relative. I mean, these kids would have been brought up in fabulous houses and you know, they’d have a lifestyle to which it would be cruel to take away from them completely; maybe. When we come back, we’re going to talk about our new best friend in Victoria. That’s after this.
So we’ve been talking and writing a lot about the situation with apartments in Victoria. And every time I write about it, I have this nagging sensation that I might not have the full picture. So recently, somebody has come under our radar. Her name is Julie McLean and she is the president of SCA Victoria (that’s Strata Community Association), which is the strata manager’s association across Australia, but she’s the president of the Victorian branch. She seems like a really smart, savvy person, so I’ve been in touch with her and she’s going to be making contributions to Flat Chat, to the website and actually giving us a bit of information along the way, where we might occasionally fudge it a little bit, because as we keep saying, strata laws are very, very different in different states. The other day she was on Amanda Farmers’ podcast, and she was talking about the lack of professional training for strata managers in Victoria. She said the only qualifications you need to be a strata manager in Victoria, is a steady pulse, a mobile phone and a chequebook. And it just made me think about how things used to be here, because 15-years ago, when we first started writing about strata, it wasn’t that much better in New South Wales. But now you’ve got a very structured… I mean, anybody can get a strata managing ticket, whatever you call it; a licence or qualification. I mean, they only take five days and a lot of the big strata management companies run courses, so they can get people in and get them trained up to the level where they can start working and start learning how to be a strata manager. But they have ongoing professional training through SCA New South Wales, which is a pretty high-standard, from what I can see.
Sue Williams 24:05
Yes, and they always seem to be trying to lift the standards, as well.
But not in Victoria, and the other disturbing thing about Victoria is, when people sign up with a strata manager, the strata manager brings the building manager with them, as part of the package, and they’ve got these long contracts. I think they might have gone to the one-year initially and three-year’s thereafter only very recently, for strata managers in new buildings. But until recently, they had contracts for 10 -years.; 10 plus 10, and stuff like that. Absolutely ridiculous.
Sue Williams 24:44
It sounds like Julie is going to be a really good addition to the team.
Absolutely, because I was asking her the other day, is it true that strata schemes in Victoria don’t have to issue agendas, before their strata committee meetings? I was saying that there’s a lack of transparency there; people are not allowed to attend strata committee meetings, unless they’re invited. And you’ve also got the thing of the chair of the committee has a casting vote and nobody knows how accurate the minutes are, because there’s nobody there to observe. So I said “so is it true that they don’t even have to issue an agenda?” It’s a really interesting little quirk; the law in Victoria is, they have to create an agenda for every meeting and they can basically, only discuss stuff or reach decisions on stuff that’s on the agenda. But, they don’t have to send it out to the owners.
Sue Williams 25:46
Oh, my goodness!
If the owners want to see the agenda, they have to go to the strata manager and ask to see the any documents that they’re allowed to see and among them will be the agenda for the next strata committee meeting.
Sue Williams 26:02
Wow! That’s crazy, isn’t it? Surely, that’s sort of an oversight from the legislators?
Oh, absolutely. And as she said, the vast majority of strata committees in Victoria will do the right thing. They’ll write up their agenda, they’ll send it out to people; they might even invite people to come to the meetings and it’s all done above-board and transparent. But as we know, there are people in strata who will take advantage of any loophole they can find, and basically, ride roughshod over people’s rights. And they get away with it, because of lack of transparency. But she has been involved in meetings just recently, with people in the Victorian Government and one of the things that they’ve been talking about… They’ve been talking about housing shortages and things like that, and about training strata managers, and stuff like that… But I noticed that they also mentioned a phone-line for owners corporations to get advice.
Sue Williams 27:13
How fantastic would that be?
Absolutely. I mean, that’s a major step forward. I’m hoping that next week’s podcast, we’ll get Julie on, and get her to talk about what she sees as the challenges and what they’re doing about it.
Sue Williams 27:28
Fantastic. Oh, that’d be great to have a fresh voice.
Are you sick a particular sound of my voice? I don’t blame you. It’s so hard for me, when I’m editing these podcasts; I just fall asleep. My own voice sends me to sleep; it’s a terrible thing.
Sue Williams 27:43
It’s a bad sign.
Maybe people use me, instead of sleeping pills?
Sue Williams 27:51
For bedtime, yes.
And then they get woken up by your dulcet tones. We’re running out of time on this zoom call, but great to catch up with you. I hope the rain eases off, for your last 24 hours in Auckland.
Sue Williams 28:05
Fantastic. Well, I’ll be back in Australia very soon.
Well, by that time, this should be out on air. Thank you for breaking into your busy interviewing schedule to talk to us and thank you all for listening.
Sue Williams 28:23
Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website, flatchat.com.au. And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, Stitcher, or your favourite pod-catcher. Just search for Flat Chat Wrap chat with a W, click on subscribe, and you’ll get this podcast every week, without even trying. Thanks again. Talk to you again next week.