Podcast: Premiums soar thanks to sins of the past


Elsewhere in this post

We admit we can get a little city-centric here at Flat Chat so last weekend it was good to get out of the urban jungle and find out what’s happening elsewhere.

And the news is that Newcastle is booming, beach holiday homes are bouncing back and the roads are almost as crazy as they were pre-covid.

Back in what passes for the real world, in this week’s Flat Chat we talk about how construction insurance premiums for low rise buildings and renovations are getting out of control, based on this story.


And we chat about the pretty disappointing investment on affordable housing announced by the government, as covered in this story in the Guardian.

We also discuss Sue’s major piece in Domain about why apartments may be better for families than you think.  We have an edited extract HERE.

And we talk about whether charcoal barbecues can be allowed on balconies.  That’s kicked off in the Forum again, HERE.

All in all, a pretty varied and wide-ranging podcast. Enjoy.


Jimmy  0:00 

We just got back from Newcastle. Well, not Newcastle (although we’ve been to Newcastle); up to Forster and…

Sue  0:06 

The mid North Coast and then Newcastle and then Lake Macquarie. Just having a bit of an explore, really.

Jimmy  0:13 

Newcastle is going gangbusters on apartments; the skyline is full of cranes. Most prices are higher than the cranes are!

Sue  0:22 

Yeah and apartment prices are getting pretty expensive as well. Some of those new ones, off the plan; I mean, the architects have won prizes for the designs and the prices really reflect that.

Jimmy  0:33 

Right, okay, but we’re not going to be talking about that in this show. We’ve got so many other things to talk about. We’re going to talk about building insurance. We’re going to talk about barbecues on balconies. We’re going to be talking about affordable housing and families; are apartments appropriate for families, or even better than houses? Is that possible? I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue  1:00 

And I’m Sue Williams and I write about property for Domain.

Jimmy  1:03 

And this is the Flat Chat Wrap.

Did you see that story about insurance premiums for new buildings?

Sue  1:25 

Yes, that they’ve gone up five times in the last few years.

Jimmy  1:28 

And, do you know what it’s all about?

Sue  1:31 

I get so confused about home warranty insurance in apartments. It just seems so complicated.

Jimmy  1:36 

So basically, that’s because with any apartment block over three storeys high, the builder doesn’t need to take out building warranty insurance.

Sue  1:46 

Right, so our insurance though (for the people in those blocks), is just going sky-high, it seems.

Jimmy  1:52 

Well, the ones who will be buying properties that are covered by building warranty insurance, are finding (and there was a report earlier, and we mentioned it on the podcast), that the fund for these insurance claims was $700 million in debt and so they’re trying to claw that back by increasing the premiums. But, it’s a very strange system. That insurance only kicks in if you have building defects and it’s within the first six years and the developer is either dead or has gone out of business. So, it’s very limited and narrow, but everybody’s got to pay the insurance premiums.

Sue  2:37 

Okay, because I guess if there are defects, and if a builder has gone out of business, then people can be up for millions of dollars  in costs, I suppose. That’s why maybe premiums are going to be so high?

Jimmy  2:50 

Well, exactly, because what it comes back to is buildings being badly-constructed and that’s what the much-mentioned David Chandler is trying to deal with and is doing so with some effect. But, it still leaves this $700 million hole. So what it means is yet again, we are paying for all the mistakes that have been made over the past few years, and all the dodgy buildings that have been put up by bad builders and bad developers. Yeah, it’s okay to run around and say ‘oh, we’re not going to approve this block. We’re not going to give you a Certificate of Occupancy. You’ve got to repair these things.’ There just needs to be more done, doesn’t there?

Sue  3:38 

I mean, retrospectively, repairing those buildings is so much more expensive than if they were just done right in first place.

Jimmy  3:46 

Yeah, if I come to you and say “hey, look at this fabulous diamond; give me $100,000 for it,” and then you take it to a jeweler and the jeweler says “that’s not a diamond, it’s a piece of glass.” I go to jail, because I’ve committed a fraud. But if I come to you and say “here’s a fabulous apartment; it’s going to be terrific. Give me $700,000 for it,” and you move in and you go “well, it’s not terrific. There’s holes, there’s leaking, things don’t work. The doors don’t fit, the windows don’t close.” I go “ah, tough. You should have been more careful.” They really have to start looking at developers and builders who deliberately, consciously set out to defraud homebuyers. Make it a criminal offense. It’s a fraud. That’s it; that’s the only answer.

Sue  4:39 

That’s right, because that’s the only motivation that’s going to make people build better buildings.

Jimmy  4:46 

Yeah, or get out of the industry. 

Sue  4:50 

And there’s so many people there, thinking they can make a quick buck and they really shouldn’t be there in the first place, because they’re not there to build quality homes. They’re just there to make a profit.

Jimmy  4:59 

And we can see on the horizon, another spate of substandard buildings, with the government announcement and the budget the week before last, that they are going to put $124 million into affordable housing. Somebody has quite rightly said, ‘well, the government is banging on about putting $10 billion into infrastructure; isn’t housing infrastructure?’ Does it have to be a bridge or a road or something, that you can point at and go “hey, look, look at this?”

Sue  5:30 

Good point, actually. Yeah, housing is infrastructure, isn’t it? It helps keep the world turning.

Jimmy  5:37 

It helps keep the rain off people’s head. It gives people homes. In America, their big investment in trying to recover from the disaster; the giant disaster of Trump and COVID… Joe Biden is saying preschool is infrastructure, allowing parents to put the kids into preschool, allowing the kids to learn and grow in preschool, allowing the parents to go back to work, that is infrastructure. And of course, the republicans are saying ‘no, no! It’s got to be a bridge or a road or a railway line,’ because they’re hard of thinking. But I think housing certainly has infrastructure and all the ancillary things that come with that; the new roads and railway stations and things like that. So we’ve got to be less blinkered about how we spend our money. The Labor Party says “$124 million? We top that. When you elect us (if you elect us), we’re going to put $10 billion into affordable housing.”

Sue  6:41 


Jimmy  6:42 

 Do you believe it?

Sue  6:43 

That’s a big difference, isn’t it? It’s easy to make those kind of promises in opposition, isn’t it, really? But I mean, there is no doubt that we need to have a big investment in affordable housing. We need to have really important workers like nurses, doctors, police officers, fire officers…

Jimmy  7:02 


Sue  7:03 

Maybe not journalists so much, but we need to allow those people not to have to commute for two hours from the far reaches of the CBD’s into the CBD’s  to service all those people like us, who need their services.

Jimmy  7:18 

It’s perfectly logical; it makes common sense. It’s morally correct. All of those boxes are ticked; why doesn’t the government just…

Sue  7:26 

Get on with it.

Jimmy  7:26 

Okay. When we come back, we are going to talk about families and whether apartments are appropriate, or even really, really good places for families to live. That’s after this.



And we’re back. Sue, you did a huge article in Domain magazine, is that correct?

Sue  7:53 

Yep. That’s right.

Jimmy  7:54 

And it was about comparing apartments and houses for families.

Sue  8:01 

Yeah, it’s really interesting, isn’t it? You know, apartments always used to be for couples, for single people, for people downsizing, retired couples. But really, there are more and more families now living in apartments and many of those families really love apartments. It’s not just a stepping stone to a house. So I thought I’d talk to one family who live in an apartment and who really love it, and one family who live in a house and really love it too and then talk to them each about what the advantages and disadvantages are of each type of housing and it was really interesting. The apartment family adore apartments. Their kids love apartments as well, because they can walk to school. They may not have a backyard, but their backyard instead are the local parks, so their parents take them to the parks far more often than perhaps people in houses do. Because, people in houses say “well, we’ve got a great lawn, we’ve got a backyard. We can go and play there instead.”

Jimmy  8:57 

You can go kick a ball against the neighbor’s fence. The other parents take their kids to the same parks, so they all hook up; they all meet and play together in the park.

Sue  9:11 

Yep and in an apartment building, there are other families and the kids are good friends with the other families in the same block. So they can have sleepovers really easily and  they think it’s a really healthy way to live because the kids are getting exercise all the time, walking to the park rather than just…

Jimmy  9:28 

Slumping in front of the TV.

Sue  9:29 

Well, that’s right.

Jimmy  9:30 

Or, kicking a ball against the neighbor’s fence.  What were the disadvantages?

Sue  9:35 

Space is always a disadvantage, but you know, there’s two sides to the coin. The people in the house said ‘it’s fantastic having our own spaces.’ You know, the kids have each got their own bedroom. They’ve each got their own ensuite. They’ve got a separate living area to the parents as well. They’ve got an underground, big playroom, where they can have fun to their heart’s content and it’s not too noisy.

Jimmy  9:59 

Playing  video games.

Sue  10:00 

Yeah and dancing and things and the family in the apartment, they have a lot less room, so the kids have their own bedrooms, but they don’t have their own kind of living spaces. But, at the same time, we talked to a psychologist who was saying that it’s really healthy for families to spend more time together,  rather than each drift off to their separate spaces and spend time individually there. So, that’s kind of an interesting idea, isn’t it?

Jimmy  10:28 

So, if you’ve got too much space, the family members become socially disconnected.

Sue  10:35 

That’s right and kids; they may be sharing bedrooms, or they may be sharing lots of spaces, they learn how to share. That’s really important for kids as well and they learn how to compromise, they learn how to get on with their siblings, because they have to, really. That’s pretty interesting as well.

Jimmy  10:55 

That thing of teaching kids to spend time on their own, do exactly what they want, when they want. Well, we know how those kids are going to turn out, don’t we?

Sue  11:05 

I mean, it’s good to teach them how to be independent, but it’s sometimes not such a big disadvantage when they can’t spend time on their own, all the time. Of course, most people in apartments, they live close to the city, so they live close to amenities. They live close to parks and schools and shops and cafes. People in houses often have to get into a car to drive to those places. So, that’s an advantage as well. Some people in houses say ‘well, it’s nice to be away from the city.’ It really evened out, but it was interesting to see families who were so passionate about each different type of housing and those in apartments who were very happy there, who had no desire whatsoever, to gravitate to a house.

Jimmy  11:51 

And you asked the little boy in the apartment, if there was anything he wished the building had, that it didn’t have.

Sue  12:00 

That was very cute. I mean, he’s only a little boy, he’s, how old was he? Six, years old, I think he said. There’s one thing he’d love in his apartment building that he doesn’t have and that was a TV as big as 16 cinema screens. He worked it out very, very carefully, he said, but unfortunately ‘I don’t think we’re going to have room for that.’ So, that was kind of cute.

Jimmy  12:20 

Not very realistic, but it’s nice to dream. When we come back, we’re going to talk about a question that has been raised many times in Flat Chat, both in print and on the podcast and on the radio (when occasionally I’m on the radio), and it’s about barbecues on balconies. That’s after this.



And we are back. Just as we arrived home, I received an email to the Flat Chat website, from somebody saying ‘are you allowed to have charcoal barbecues on balconies?’

Sue  13:03 

Charcoal barbecues; wow, that’s a new one. It’s usually about gas barbecues, isn’t it?

Jimmy  13:04 

Well, gas barbecues are the most common ones. I mean, look, you know from way back, I think barbecues on balconies are the most selfish, disgusting (often THE most selfish and disgusting), thing people can do on their balconies because of the stink. The stink of cheap meat being burned, the stink of last week, or last month’s fat being burned off to clean the barbecue.

Sue  13:38 

Don’t pull your punches, Jimmy!

Jimmy  13:38 

I was talking to somebody on the radio about this; I said about, you know, burning off the fat and he said ‘but, that’s my favorite part of the whole process.’ Are people really that dim, that they don’t realize that the smoke going up, is going into another person’s apartment? Do they choose not to care?

Sue  14:04 

Maybe they just assume that everybody loves the smell of burnt meat and they would love getting smoke into their apartment as well. I remember being in an apartment and a huge waft of smoke (a huge cloud of smoke), came into the apartment and we all ended up coughing in there.

Jimmy  14:22 

That was very specific, because you were having an executive committee meeting, in which you were discussing whether or not the former chairman should be allowed to have a barbecue on his balcony and the smoke came pouring in. And we used to live in an apartment block, where every weekend, a couple came down from the country. They fired up the barbecue, they’d burn off the previous week’s fat and then cook up whatever they brought with them. We asked them to be a bit more considerate and they said ‘surely it’s not that bad.’ Then we discovered (to our joy), there was a bylaw already existing in our bylaws, saying ‘you cannot have a barbecue on the balcony’ and they had to get rid of it.

Sue  15:04 


Jimmy  15:05 


Sue  15:07 

Small victories.

Jimmy  15:08 

So you know, charcoal barbecues; it could be like a big, cut oil drum, I suppose, with coals in it or it could be one of these…What are they called, Hibachi? The little Japanese thing that you can buy in the supermarket and it’s got a fire lighter in it. Are they allowed? Well, what do you think?

Sue  15:26 

I guess if there is no bylaw against them, then they are allowed, aren’t they?

Jimmy  15:33 

I think you’re right.

Sue  15:37 

Would they be worse than gas barbecues?

Jimmy  15:40 

Oh, for sure. I mean, you’ve got smoke. Charcoal is, or I guess it could be burnt wood, but it’s just a form of carbon. The smoke coming off that is (I’ve read somewhere),  there’s a French greenie’s movement called Robin Des Bois, who say that the smoke from a barbecue is something like 50 times worse than the smoke from smoking a cigarette.

Sue  16:08 

Oh, my goodness!

Jimmy  16:09 

Now, when the new laws were coming in in 2016, I think the Daily Telegraph was running stories, fed to them by Fair Trading, saying that barbecues would be banned under the new laws and that never happened. Because they said, the smoke from barbecues would be banned under new laws. I remember calling up Fair Trading and saying ‘I’ve read the proposed new bill, and it says smoke from smoking, not barbecues’ and they said ‘no, no, no; it’s barbecues as well.’ Then, of course, it turns out (surprise, surprise), Fair Trading didn’t know what they were talking about. It wasn’t barbecues at all, it was smoke from smoking. There is a general law (not a bylaw), that says you cannot create a nuisance and a nuisance in strata law, I’ve been told, isn’t just something that’s a bit annoying. It actually has to have a detrimental effect on people’s health or comfort. Now, smoke from charcoal would certainly cause a lot more discomfort than the fumes from frying sausages and burgers and steaks. So, that’s one element. Then we have the other issue of flammable cladding and fire safety. Is it a good idea to have naked flames in your charcoal barbecues, basically inside the building; within the boundaries of the building? I would say it’s probably arguable, that you could say this is dangerous, especially if you’re one of these buildings that has flammable cladding on the outside of it.  But, you’re right, I think it comes down to the bylaws, and our bylaws in our building (which thanks to the idiot original chairman), allow barbecues, specifically don’t allow charcoal.  It’s got to be a gas barbecue, or an electric barbecue and naked flame barbecues are not allowed

Sue  18:20 

So basically, people have to check their own bylaws, but really, it will be good idea if they don’t have any bylaws on barbecues, to make sure you can’t have naked flames and charcoal barbecues, even if you want to allow gas and electric barbecues.

Jimmy  18:36 

Yeah and I think if you don’t have a BBQ bylaw in your building, you should get one and that will require canvassing the wishes of the majority of people. I mean, in our building, you know, of over 100 units, I’d say there’s maybe 20 barbecues, on the balconies, most of them clustered around my flat.

Sue  19:01 

Just to annoy you!

Jimmy  19:02 

Like The Brady Bunch, with all the corners. But whenever that issue comes up for a vote and we say ‘can we pass a bylaw banning barbecues?’ The vast majority of people say ‘no, we don’t want that.’ It’s the same thing as the swimming pool. Should we stop heating the swimming pool in winter? ‘No, let’s not do that,’ is the overwhelming vote, even though a tiny number of people actually use it. I think it comes down to the saleability that people perceive their apartments to have; is my apartment going to be less saleable, if we ban barbecues; if we stop heating the swimming pool in winter?

Sue  19:48 

Or, is it going to be harder for me to get tenants when I’m renting it out?

Jimmy  19:51 

That’s another issue.

Sue  19:53 

But it’s funny; one of the latest trends is fire pits.

Jimmy  19:57 

Well, let’s have them on the balcony!

Sue  19:59 

Fire pits on terraces and things; in houses, seems to be THE thing that people want now, or in their garden or on their back verandah, but you kind of think, you wouldn’t allow a fire pit on an apartment balcony, would you? So, why would you allow a naked flame with a charcoal barbecue; it’s the same kind of thing.

Jimmy  20:26 

Absolutely, but on the other  side of this thing is… It’s funny; if you want to build a house and build a permanent barbecue structure, it has to be something like 10 meters away from the nearest wall of the house. That’s in most of the planning laws. Yet, you can stick a barbecue on the balcony (which as I said is inside the boundaries of the building). Logic dictates (if  only logic did dictate), that you shouldn’t have barbecues anywhere near the individual balconies. Have a barbecue out the back, have a great big barbecue that people can go and they can put a $2 coin in. They can book it. People can meet there, they can socialize. It becomes an asset to the community, rather than this selfish ‘oh, I’m sorry about this smoke that’s stinking out your apartment, but I do need to have my sausages well-burned.’ 

Sue  21:39 

Now you’ve got that off your chest!

Jimmy  21:39 

It’s been interesting, travelling down through the Central Coast.

Sue  21:39 

Yes, amazing, seeing how many new apartments are coming up around there. I mean, lots of new houses, but also lots of new apartments everywhere, really.

Jimmy  21:47 

 Yeah and the prices are just astonishing.

Sue  21:49 

They are, I mean, I guess since COVID, lots of people are moving out from CBD’s, down the coast and up the coast and to the regional areas. So therefore,  there’s kind of a real drive to urbanize  those areas further away from the cities. They’re having cafes, they’re having restaurants, they’re having more and more apartments. It’s becoming a lot more like the city in those places too, but just on a much smaller scale, obviously. Interesting to see some of the prices and some really nicely designed, really good architectural structures coming up, but people are really paying the price for them.

Jimmy  22:30 

I guess (getting back to that whole thing about the insurance), if you want quality, you’ve got to pay for it. Or, to put another way, you can only get what you pay for, but sometimes you don’t even get that.

Sue  22:44 

 For sure, Jimmy.

Jimmy  22:44 

Thanks, Sue.

Sue  22:47 

Thanks, Jimmy.

Jimmy  22:48 

A busy weekend and it’s gonna be another busy week, I feel, coming up. Thank you so much for coming in and talking to us. And thank you all for listening. Bye.



Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website www.flatchat.com.au And if you haven’t already done so, you can subscribe to this podcast completely free on
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