Podcast: Bank rate hogwash, strata dog wash

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With half of Australia still on holiday or in hangover mode, and half of Sydney stuck on a railway platform somewhere, this is a short and (we trust) sweet Flat Chat Wrap podcast this week.

First, we look at a new trend in affordable and comfortable co-living, which already exists in two completed blocks in Sydney, with another one on the way.

Then there’s the revelation that the price gap between houses and apartment narrowing dramatically, as houses get a bit cheaper and apartments get dearer. And we wonder how accurate interest rate predictions can ever be.

And finally there’s news of a new and possibly trend-setting addition to a planned apartment block which will doubtless get tongues and tails wagging with its direct appeal to dog owners.

That’s all in this week’s Flat Chat Wrap.

Transcript in Full

Jimmy

It’s the Sue Williams show today. You’ve got three stories for a Sue. So we’re going to be talking about…

Sue

What a terrible thought.

Jimmy

People will be switching on in their droves when they know it’s more you than me today. We have a story about co-living, which is becoming more popular. We’ve got the latest house prices or apartment prices and we’ve got a story that’s good news for dogs in apartments and their owners.

I’m Jimmy Thomson. I edit the Flat Chat website, flatchat.com.au.

Sue

And I’m Sue Williams and I write about property for the Sydney Morning Herald, the AFR, The Age and Domain.

Jimmy

And this is the Flat Chat Wrap. Sue, you’ve got a story about co-living.

Sue

Yeah, I guess we’ve all heard about co-living before, you know, in those new kind of boarding houses, the new iteration of boarding houses. Well, they kind of call them new generation boarding houses. We’ve heard about this before where you have a kind of a little tiny room, but you all have communal living.

You share a kitchen and you share a big lounge room and stuff like that. And it’s much cheaper. Yeah, that’s right.

And it’s kind of real affordable living. And so that’s fine for some people, probably kind of young people and older people who can’t really afford anything else. But it’s not very good for families or couples or anyone else, really.

But now there’s this new trend coming in, which I find fascinating, really. And it’s quite big in Europe and in the States. And it’s having this co-living principle, but applied within regular developments, regular apartment developments.

So there you’ve got a big block and you’ve got the usual one bedroom places, two bedroom, three bedroom, maybe pent houses. But also within that same building, you have these tiny studios, but also lots of communal living areas, lots of places where you can go and sit and work or places where you can sit and lounge around, that kind of thing. So those are within the same building, which does mean suddenly those big apartment buildings, they might become affordable, even for people who don’t really have very much money or access to much funds.

Jimmy

Don’t have enough money to buy whatever the median price for an apartment is.

Sue

That’s right. They might not be able to buy just might not be able to buy a one bedroom place, or they might not have access to enough credit because there’s a real crunch down on the amount people can borrow. Or they might not have access to the banks of mum and dad or grandparents, which is helping so many young people these days.

But this kind of might offer a real credible alternative for them, which is fantastic.

Jimmy

Are they actually being built?

Sue

There’s three so far that have been built or are under construction in Sydney. There’s one in Kirrawee, which has been finished. And there’s one in Glebe, which is obviously very close to the centre of the city.

That’s been finished as well. And there’s another one in Camperdown in the inner west, which is under construction.

Jimmy

Right.

Sue

So these three, I mean, if they do really well, I’m just trying to find out what the demand has been like for the little studios within their apartment buildings. But it’s really cheering people up because they’re thinking, well, this is a good way without putting people, you know, people who don’t have very much money, putting them way out of town or putting them in the boarding houses. This actually gives them a credible alternative, living with people who can afford it.

Jimmy

Yeah, because some of these affordable living places have been run by charities. And I know we did a story recently about one development where it was that fully co-living thing where they had the room and the bathroom, but the kitchen was shared and the laundry was shared. But this is more than that.

You’ve actually got a little studio flat. You don’t have to mingle with people in the rest of the building, but the spaces are there to do it if you want.

Sue

That’s right. That’s right. So, you know, you might have the penthouse owner might go down and use the workspace for a bit of probably high tech work.

That’s how they got their money maybe. Or, and then you can go in the same space and you can have a chat with them and it’s kind of a nice way of mixing and mingling.

Jimmy

And then they get really annoyed because they’re trying to work and you’re trying to chat with them.

Sue

They might offer you a really good job.

Jimmy

They could. Yeah. Yes.

But you know what this reminds me of? It makes me think of cruise ships. You know, a cruise ship, you’ve got your little, except you don’t have a kitchen in your cabin, in a cruise ship.

Sue

That’s interesting.

Jimmy

Yeah.

Sue

So, so you have ones, people within the inside things without even a porthole.

Jimmy

Yeah.

Sue

Mixed with the ones in the fabulous penthouse suites and the cruise ship.

Jimmy

Yeah. I’m going to call, start calling them landships. No, I’m not.

Well, that sounds great. And, and, uh, it look, it’s, it’s great to see some innovative thinking. I was, I looked at one press release we got, uh, this week where, uh, they referred to thoughtful design and I thought, as opposed to what, as opposed to thoughtless design, somebody sitting in a cafe in the inner West on the back of a, or they wouldn’t have a poster saying, yeah, it’ll look like this.

And they hand it to the builder and say, build me 12 floors of this. It doesn’t happen though. Does it?

Sue

No, but I mean, this is coming from an architect place studio, which are really a well-known architect and, um, and an award winning architect, James Alexander Hapsaz is, and he feels this is the real way of the future. And, you know, hopefully it will catch on.

Jimmy

And is it profitable for developers? That’s the other big question, because they won’t build them if they can’t make lots of money out of them.

Sue

That’s right. Well, you’d think it would be because you can fit in lots more studios than you can big three bedroom apartments. So maybe, maybe all kind of out, you know, ways out in the end, really.

Jimmy

We were at a conference last year where somebody said that a lot of apartment design was dictated by the people who sell apartments, the, like the, the marketers, that’s like, they go back to the developers and say, yeah, look, the trend is for three bedroom apartments or whatever. And the developers go, okay, I’ll go where the money is. And if somebody out there is listening and can crunch the numbers and prove that this is profitable, then they will be built.

Okay. When we come back, we are going to talk about how much it actually does cost to buy an apartment in Australia today. That’s after this.

And we’re back Sue, apartment prices, are they going up? Are they going down? What’s happening?

Sue

They are still going up.

Jimmy

A lot?

Sue

Not by very much. But when you think house prices are actually going down a bit in most places, say in Sydney, they’re certainly going down. Unit prices are actually going up.

Jimmy

So the gap is, is narrowing.

Sue

Yep. That’s right. And unit prices are at record highs in Sydney, Brisbane, Adelaide and Perth.

Jimmy

Wow.

Sue

So that’s amazing really, I guess, because Perth, Brisbane and Adelaide are kind of a bit more affordable than obviously Sydney and Melbourne. So people are buying apartments there because they can afford it really. But in Sydney, it was the weakest outcome for December quarter since 2022.

And I must say, this is the latest domain house price report for the December quarter.

Jimmy

Right.

Sue

So they’re kind of looking back over the last year and over the last quarter as well. So Sydney house prices actually fell by 0.1%. Right.

Jimmy

Which means that you’re, what’s the median price for a house?

Sue

$1.645 million.

Jimmy

$1.645 million. So you’ve just saved $16,000 on that $1.6 million house. Woohoo.

Sue

Well, I’m going to have to take your word on the math. But Sydney unit prices increased by 0.4% over the December quarter. So they’re kind of moving in the opposite direction.

Jimmy

OK.

Sue

And they’ve reached a record high of $812,863.

Jimmy

So that’s amazing. Anybody else is doing the maths, it means that they’re costing you about $30,000 more, which is significant.

Sue

Yeah, absolutely. I mean, Melbourne is a bit different because Melbourne, as you know, was hit so hard by COVID, it hasn’t quite recovered.

Jimmy

I’ve got to say, I think I’m over Melbourne blaming everything on COVID. It was like 100 years ago.

Sue

Oh, it was huge. It was huge for Melbourne.

Jimmy

It was big. But yeah, they had the big lockdowns there, didn’t they?

Sue

That’s right. And it’s good for Melbourne apartment prices because they’re now increasing and they just increased 2.1% over the December quarter. So that’s by about $12,000.

Because their median is now $577,405, which is hugely less than Sydney’s.

Jimmy

Yeah.

Sue

So they’ve got a lot to make up for really.

Jimmy

But that’s because you’ve got a 50% chance of your neighbour having put their apartment on Airbnb. No restrictions in Melbourne, folks. It’s come on down is the policy, the government policy there.

Sue

But really, I mean, for people who own apartments, this is good news, really. The apartments are faring much more strongly than houses because, you know, during COVID, houses did so much better. But now units are a really good investment.

It’s not so good for people wanting to buy apartments, of course.

Jimmy

No, but this is something that perplexes me that I’m reading elsewhere that rents are softening, but which means that they’re going up but not by as much as they have been going up. And I’m reading also that more individual investors are coming back into the market, which seems counterintuitive. If the rents are not going up by that much, why are more people coming back into the market with, you know, people who own properties?

Sue

Because price growth is slowing. So therefore they see it’s a good time to get in the market because prices aren’t going up hugely anymore. And rents are still very healthy.

So the returns are still extremely good for investors, particularly on apartments.

Jimmy

Okay. So generally the picture is good for apartment buyers?

Sue

Well, apartment buyers coming into Sydney, yes, it’s kind of good because apartments aren’t going up by quite so much. Apartment buyers in Melbourne, not so good because apartments are really racing ahead. But for those who own apartments, it’s great news.

The value of your place is increasing.

Jimmy

And what’s the latest skinny on interest rates?

Sue

Well, it’s interesting, isn’t it? Because when we started the year, everybody was predicting that interest rates would go down towards the end of this year, certainly in the second quarter.

Jimmy

Right.

Sue

But now because the economy is quite weak and the Australian dollar is plummeting really in value, people are now starting to forecast that rates could go down as early as February, as next month, which is incredible, really. I mean, it just is such a moving feast. It’s impossible to predict, I’d say.

And always, I liked economics at school, but I didn’t really much enjoy it at university. It became very, very mathematical. And I preferred macroeconomics rather than all the maths and stuff.

But they always, in the old days, I don’t know if it’s the same when they teach economics now, but you would always, when you were looking where the prices were going to go up or housing supply down, that kind of thing, you would always first assume a perfect economy. Which is so bizarre, which is absolutely ludicrous. There is no such thing as a perfect economy.

So, yes. I mean, it’s so imperfect. There are so many different things that can go up or down or go wrong or go right that it’s kind of really hard to know what’s going to happen, really.

And it seems it’s exactly the same today as it was back when I was studying.

Jimmy

Which is to say that anybody who predicts anything is probably wrong. When we come back, we’re going to talk about a great new deal for dogs. I assume it’s dogs.

Sue

Yes.

Jimmy

That’s after this. Well, it’s raining cats and dogs outside at the moment, but there’s news and developments for dogs, much more so than cats in a new development on the North Shore.

Sue

Cats always miss out, don’t they? It’s not fair.

Jimmy

I think they’d be happy to miss out on this one.

Sue

Yes. There’s a new, there’s a fabulous new apartment development being developed on the North Shore of Sydney in Wurrunga and it’s from the developer Capital Corporation and it’s called the Residences at Wurrunga Estate. And it’s 128 apartments and they’re actually really nice.

I’ve to see them. I’ve looked at the display apartment, they’re just kind of being built at the moment. But the most interesting thing is they’re going to have a dog washing area together with a hose and an area where you can brush your dog and stuff in a communal space on the outside of the building.

Jimmy

Like a car wash bay.

Sue

Exactly.

Jimmy

There’s going to be a dog wash bay.

Sue

Yeah, that’s right. Isn’t that a nice idea?

Jimmy

It is. I mean, look, it’s in terms of bang for your buck in increasing the appeal of the building at minimal cost. A dog washing bay is actually a very low cost inclusion.

Sue

That’s right.

Jimmy

That will get a lot of attention.

Sue

Yeah, absolutely. Australia has one of the highest pet ownership rates in the world. Around 69% of us own pets.

Jimmy

Right.

Sue

So you think it’s going to be extremely popular for people really, because it’s hard, particularly if you’ve got a big dog, to get them clean in a small apartment. You know, you kind of, you know, if they’ve been running out in the mud and stuff, especially on a day like today, it would be terrible. So to bring them back and wash them before you get back into your apartment.

Jimmy

Yeah.

Sue

What a great idea.

Jimmy

So I wonder if they have big hairdryers. Those big wooly furry dogs.

Sue

Maybe. That would be kind of nice, wouldn’t it really?

Jimmy

Yeah.

Sue

The only better thing probably would be to have a pet groomer on site and you just press a button when you’re there and somebody rushes down.

Jimmy

How long will it be before we see a parking bay that says exclusive use for the pet groomer’s van? Because that’s what will happen. You know, pet groomers will come into a building and say, look, we’ll put our van in here on Wednesday afternoons if you book now.

Sue

Yeah. And it’s interesting. I mean, this is a development.

There’s lots of greenery all around. There’s woodlands and stuff. So there’s lots of places to walk a dog.

So you’d expect a lot of dog owners to go to in a place like this. Yeah. So to service them this well is excellent really.

Jimmy

Do you know what the most popular name for dogs is in Australia?

Sue

Fido.

Jimmy

Luna.

Sue

Luna. Isn’t that popular for cats as well?

Jimmy

It is also the most popular name for cats.

Sue

Wow. It’s actually quite a nice name.

Jimmy

It is a nice name, but where does it come from?

Sue

How come there are so many people picking it?

Jimmy

I don’t know. Somebody’s been in the park and heard somebody shouting, Luna, Luna. Oh yeah, I’m going to call my cat that.

I don’t know.

Sue

I reckon it’s a great name for a cat, not so much a dog. I don’t know.

Jimmy

Yeah, I think it’s a cat name.

Sue

Yeah.

Jimmy

I think your dog, if your dog is called Luna, just check its mental health. It might be suffering anxiety.

Sue

Well, there seems to be a bit of a trend now as well for calling dogs names of people, you know, like Trevor or… Yeah, what’s the…

Jimmy

Colin from accounts.

Sue

Exactly. That’s what I was trying to think of as well.

Jimmy

Yeah.

Sue

And in your new book, I think you called a dog Iris.

Jimmy

In my new book, which I’m just about to finish. That’s in terms of writing, not reading. Yeah, I don’t know where the name Iris came from.

The character explaining it to somebody, we were looking for a seeing eye dog and this was the best we could do.

Sue

Very funny, Iris. Yeah, very good.

Jimmy

Yeah. My sister used to have a little kitten, a little white kitten called Snow. But she would, standing on her back step, this is in the Highlands of Scotland, calling the kitten to come home and she’s standing there and it was snowing and she’s standing on her doorstep going, snow, snow.

And her neighbours are looking at her going, yeah, yeah, we’ve seen it before. And on that silly note, thank you, Sue, for bringing us those stories.

Sue

Pleasure, Jimmy.

Jimmy

Thank you all for listening. We will endeavour to be back with you next week with more stuff from Strata. Bye for now.

Sue

Bye.

Jimmy

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, or your favourite podcatcher. Just search for Flat Chat Rap 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.

 Transcribed by TurboScribe.ai.

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    Jimmy-T
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      A new trend in affordable co-living, the narrowing gap between house and apartment prices, why economists deal with pie in the sky, and dog washing bays in unit blocks.

      [See the full post at: Podcast: Bank rate hogwash, strata dog wash]

      The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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