Podcast: Pets, new-build guarantees and refugees

This week’s podcast may have an international flavour – Jimmy is in Scotland and Sue in Sydney —  but it covers familiar territory.

First up we talk about a campaign to bring NSW’s rental laws into line with Victoria’s where landlords may not unreasonably refuse a request by a tenant to bring a pet into their property.

Given that both states now have strata laws that mean schemes can’t impose blanket bans on pets, could it mean an open-door policy for pets in apartments?

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It will be interesting to see what compromises either of the major parties will come up with because they won’t want to be left behind but they won’t want to copy Victoria either (for reasons too dumb to explain).

Meanwhile we also discuss the first win in Building Commissioner David Chandler’s campaign to get insurers to offer guarantees for new-build high-rises.

And Jimmy discovers a novel plan to rescue Scottish apartments and house Ukrainian refugees, plus an Art Deco flat in Glasgow’s city centre for about $200k.

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

TRANSCRIPT IN FULL

Jimmy  00:00

Hello from grey Scotland.

Sue  00:03

Oh no, is it raining over there?

Jimmy  00:05

Not raining, it’s just kind of threatening. Apparently, there’s a weather system heading this way, called ‘the beast from the east.’

Sue  00:13

Oh, that sounds a bit menacing.

Jimmy  00:15

Especially since I’m supposed to be flying out of Glasgow on Thursday. It’s supposed to hit round about then.

Sue  00:22

Oh, dear. This could be the last podcast you ever do.

Jimmy  00:26

Thanks for that thought.

Sue  00:30

Well, I’m in Sydney, and we’re getting our hottest day ever I think tomorrow, or the hottest day for a long time. It’s real chalk and cheese, I suppose.

Jimmy  00:39

I suppose we should apologise to our listeners for the sound quality, which may be a bit rough, because you’re in Sydney and I’m in Glasgow. I’m actually not in Glasgow; I’m in Dumfries, which is my hometown. I’m sitting in my sister’s spare bedroom, which is our temporary studio. So if somebody walks in and says something like “would you like some toast,” in a Scottish accent, you’ll know what’s happening. Today we’re going to talk about some flats that have been given over to refugees. We’re going to talk about insurance for new blocks. But first of all, we’re going to talk about proposed changes to the laws on pets in apartments. Okay, we better get on with it. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review. And I’m Sue Williams and I write about property for Domain. And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

Sue, I should also explain to the listeners that your normal dulcet tones are affected by something else, other than distance.

Sue  02:05

And emotions, missing you… Yes, I have a cold, I’m afraid. I got soaked in a big rain storm the other day in Sydney and me and my poor escooter… It affected that much more, but I’m hoping that it’s drying out and it’s going to be okay. It’s drying out now and I just have a bit of a cold, but I’m fine.

Jimmy  02:28

Is this your illegal escooter?

Sue  02:31

That’s right, yes. But it’s great; I love it.

Jimmy  02:38

Right, now tell us about the latest on pets and apartments, because I feel we’ve been through the wringer on this one a few times. What is going on now? 

Sue  02:48

This is kind of different, because it’s about renters and pets, and it’s apartments and houses really. In New South Wales, renters with pets don’t really have any protection. I mean, if they apply for an apartment or a house to rent, and the landlord says they don’t want pets, there’s nothing they can do about it, so it’s really hard for them to get rentals. I mean, as we know, it’s hard for everybody to get rentals now. Just last week, the new vacancy rates came in and they where 0.8% in Melbourne and 0.9% in Sydney and 0.6% in Brisbane. So there’s not much available there really. And as we know, rents have gone up hugely; they’ve gone up 15% in the last year and 33% in the last two years, which is quite astonishing. So it’s really hard for all renters, but for those with pets… If you’ve got a landlord who’s got 20 applications, and one person has a dog, it might be possible that the landlord would just choose somebody else without a dog, because they can. But the thing is, in Victoria, they have much more advanced legislation than New South Wales in this case, which is unusual, really. But in Victoria, if you’ve got a pet, and you’re a renter, a landlord can’t refuse without good reason. And if you don’t think the reason is good enough, you can take him to VCAT (or he has to go to VCAT, or she has to go to VCAT), and explain why they have a really good reason not to allow a pet. And now the Animal Justice Party here… I mean, in the run-up to the New South Wales election they’re saying, why can’t we have the same legislation as Victoria? It would be much fairer for renters with pets, and lots of people have got pets now, and they should be at an equal playing field.

Jimmy  04:33

There used to be a difference between New South Wales and Victoria, in that we got the law changed here that said that the strata committees couldn’t refuse pets, unless they had a very good reason to do that. Has Victoria fallen into line with that now?

Sue  04:49

They have as well, yes. But this is about landlords now. They’ve solved the strata problems, but now it’s kind of bringing landlords to heel (kind of).

Jimmy  05:03

I have spotted a couple of cases at VCAT (the tribunal in Victoria), where pet-owning tenants challenged a decision by a landlord not to allow them to have pets. And I think in all the cases I read, the pet owners won.

Sue  05:11

So it’s kind of weighted against the landlords who just don’t want pets. Because you know, you pay a bond when you’re a renter. You have to clean the carpets and stuff before you leave and that’s exactly why you pay a bond and why you clean the carpets, to get rid of pet hair. So what’s the problem really?

Jimmy  05:41

I think there are some landlords who are just obsessively against people having pets. A case came up on the forum the other day, where somebody went into a share house, and discovered that one of their new cohabitee’s had a little dog and they allowed it to just pee and crap everywhere and the apartment (or house), just stank of pet urine. So there are some irresponsible pet owners around.

Sue  06:16

Sure, but nearly all the pet owners I’ve spoken to are incredibly responsible, because they really want to find a nice rental and they want to make sure it’s kept in good condition. They’re really grateful when they can find a nice rental, really. So I think your example is probably the exception. Sometimes landlords just need a little bit of education. You know, if they’ve never had a pet, they might tend to think oh, yes, the dog’s going to destroy things. But a dog that has a really responsible owner, is going to be really well-behaved; probably much better behaved than if the renter had a child.

Jimmy  06:50

Oh right. Can you imagine the government here, in New South Wale saying (because they hate doing stuff that’s the same as other states have done), “we’re gonna bring this in, but we’re also going to have a special pet bond.” What do you think?

Sue  07:08

Well, how much more can people pay, in terms of bonds? I mean, bonds are pretty expensive now, because rents are so expensive. I mean the average rent in a capital city in Australia is now $470 a week. That’s nearly $500; that’s nearly half $1,000 a week. So if a bond is even more than the regular bond… I mean, it’s just really unfair on renters. Just give them a break, really.

Jimmy  07:35

And the other thing I’m thinking is, given what you’ve been saying about the lack of availability of apartments; is this going to make any difference? Because the landlords can pick and choose; they’ve got so many candidates to choose from, they don’t have to say “we’re not letting you, because you’ll bring your dog,” or will it be that you don’t have to tell them in advance that you do have a pet?

Sue  08:04

That’s an interesting point. I think you probably do have to tell them in advance. But if you’re a really good candidate, and you’ve got a great record of always paying your rent in time and you’ve got a steady job; that kind of thing, maybe you would be able to say “well I think somebody else has been chosen over me and I was the ideal tenant and the only thing that was different between us was a pet.” And maybe it would just make landlords nervous about discriminating against people with pets, so they won’t do that, really.

Jimmy  08:33

So who, again, is promoting this idea?

Sue  08:37

This is the Animal Justice Party; Emma Hurst. The Animal Justice Party has got two seats in the legislative chamber in New South Wales. And I mean, they obviously think that coming up to an election (and rents are a big election issue)… They’re talking to Chris Minns of the Labor Party, and they’re approaching the Liberal Party, as well. I think the Labor Party is sort of saying “oh, we want to go some way towards that, but not all the way towards adopting Victorian legislation wholesale.”  I think the New South Wales Government hasn’t really moved. They conducted an inquiry in October last year, into pets and renters, and they still haven’t revealed or released the results of that inquiry. Emma Hurst is saying “I want the results of that inquiry now.” And she’s threatening to make a demand to access the results of that inquiry, under the GIPA Act.

Jimmy  09:36

Freedom of Information; that’s interesting.

Sue  09:40

So she’s threatening to do that, if they don’t come forward. I mean, you know, you kind of adopt an inquiry; how can you not release the results?

Jimmy  09:53

Because the result isn’t what you want, or expected. It’s that old thing of, don’t ask the question unless you already know the answer.

Sue  10:02

I talked to a couple of pet owners who both rent , and happily, they’ve got good landlords, who allowed them in. They’ve both got really little tiny dogs. One is a toy sausage dog, and the other one’s a toy cavoodle, so they’re really small. They both said it’s taken them ages to find a rental, because they kept getting turned down before. They say “we are on our very best behaviour. We do everything to make sure our apartments are really fabulous, because we’re so grateful for being there and we’re terrified all the time, of being kicked out, because we’ve got dogs,” and that anxiety; that’s horrible. People suffering from mental health issues; you kind of think, being a renter and having a pet… It’s just one more element in the strain that some young people are under.

Jimmy  10:54

Absolutely. We had a neighbour, who was desperate to find a bigger flat or a house to rent and couldn’t do it, but he had a Great Dane, so that was a consideration.

Sue  11:06

Great Dane’s are fantastic apartment dogs, because although they’re big, they’re really lazy and languid and they don’t really do very much; they just kind of sit around on the sofa. So they are the perfect dog, and they’re not noisy at all. They’re very loving and very affectionate.

Jimmy  11:24

Yes, but they terrify people in lifts, and when you say they lounge on the sofa, they lounge on ‘their sofa.’ They need their own sofa. But they’re lovely dogs and they are, as you say, in many ways,  perfect dogs for apartments. Okay. When we come back, we are going to talk about some interesting developments in the whole business of insuring new apartment blocks, when they’re being built. That’s after this.

[MUSIC]

Jimmy

And we’re back. Sue, interesting developments in the whole area of insurance for brand new apartment blocks. What’s happening?

Sue  12:07

Yes, well, you would know as much as anybody, that in 2002, they had no more home warranty insurance for any blocks that were higher than three storeys. You could only insure a block that was three storeys or lower. That has been the case, up until now. But now, with David Chandler’s work on getting buildings rated with an iCIRT rating; with developers and builders getting a good rating… Now, for the first time, the insurance companies (or one insurance company), has finally come in, and has agreed to insure some of those buildings, where the developer or the builder has a really good rating. It’s really interesting, because the insurer sends in experts at every stage of the building’s construction, and just checks that everything has been done right. So they’ve got experts checking on experts and that’s the thing that has always been missing. You know, we had lots of buildings that were self -certifying, and that was possibly the big problem with construction in New South Wales, in apartments. But now they come in and they do a series of checks at every stage and if they’re happy, at the end of all those checks, they award those buildings insurance. I mean, it’s expensive, but it’s a lot cheaper than going back and rectifying defects afterwards. And there’s now four buildings that are being given insurance (because the insurance only becomes active when the buildings are finished and these buildings haven’t quite finished yet). I had a look at one, which is in Castle Hill in Sydney, and it is kind of almost opposite another building, which has been the focus of a lot of attention; the Toplace group’s Skyview. You’ll probably remember, David Chandler said that building had serious defects. The developer, Jean Nasssif, is now in the Philippines and he’s been asked to come into an inquiry and his daughter has been charged with allegations of fraudulently using sales contracts (falsified sales contracts, I think), to raise money from the banks for that building. So it’s really interesting. It’s kind of like a tale of two buildings. You’ve got this one building, the Skyview one, where everything is going wrong, really. And then you’ve got this other building opposite, called Grand Reef, and the builder, Dasco, has got a 4.5 star iCIRT rating, which is one of the highest given to date. The only higher one I think, is Mirvac, so far. That’s going to have a 10-year insurance policy against building defects. And that is fantastic news for owners, because which building would you choose to buy into?

Jimmy  14:45

I mean, you say it’s going to be expensive…

Sue  14:48

Expensive for the developer. Say with this building; a two- tower, 192 apartment development. The developer has paid $3 million for the insurance, so it’s expensive for him; it’s part of their costs. But you know, for the owners, they don’t have to pay anything. And it just means that they are more or less guaranteed that there won’t be any defects, or if there are, that they will be rectified very, very quickly. It’s fantastic. It’s kind of the dawning of a new era, really.

Jimmy  15:24

You’d have to think that the cost of the insurance will be passed onto the apartment buyers in some way or another. But, the offset of that is the confidence that they’re not going to have years… It’s not just the expense of getting these things fixed, it’s the misery that people go through.

Sue  15:47

And all the legal fights and the battles; worrying that the building’s falling down under you… The kind of stuff that we’ve seen in Mascot Towers and we saw earlier at Opal Tower. It is fantastic news and you’re right; these apartments will be more expensive than other apartments, but at the same time, they’re kind of using the fact that they have insurance now, in their marketing campaigns. The problem with the off-the-plan in the apartment industry was that consumers just didn’t feel confident about buying apartments and now, for the first time, they’re going to feel confident, because they know they’ve got that iron guarantee, that any defects are going to be sorted out immediately.

Jimmy  16:33

That sounds terrific; that’s very helpful. And across the road, there’s the poster child for how not to build buildings.

Sue  16:43

That’s right.

Jimmy  16:45

And where not to invest.

Sue  16:48

It’s great. I mean, the Building Commissioner always said this was his aim, to try and get insurance back on for buildings, so that we didn’t face all these horrendous things we’ve faced in the past. I’m sure he’s absolutely delighted and I think most people are really pleased. So I think it’s great news.

Jimmy  17:07

And this is the first one and it can only get easier and better after this. They will find out how to do this properly and easily and cheaply and the prices could come down quite a lot, once the insurers start having more confidence in the builders and they realise that they can work together on stuff. It’s great idea.

Sue  17:30

Because it’s only one insurance company at the moment that’s offering it and it might be that other insurance companies come in. But this one company, Resilience Insurance, has issued four or five policies, and they’re pricing another 42 for developments now. Lots of developers or builders are approaching them and saying “we want insurance for our buildings as well,” which is what David Chandler was hoping for.

Jimmy  17:52

Great! When we come back, we will be talking about stuff that’s happening much closer to where I am now, and how they’re repurposing old apartments. That’s after this.

[MUSIC]

Sue  18:10

One of the good things about you being overseas, Jimmy, is I know you always combine your loves; your love of Scotland, but also your love of looking around at apartment buildings and seeing what’s happening in other countries. And what have you found is happening around Glasgow?

Jimmy  18:25

Well, near Glasgow. I mean, it’s funny, because I was reminded when I came here… You remember the Commonwealth Games in Glasgow? They were going to end the opening ceremony by demolishing six high -rise towers, in an area of Glasgow called Red Road and they were going to demolish them… In the final fanfare, somebody would press a plunger and these six buildings; huge buildings… At one point the highest apartment residences in Europe; they were going to tumble down, one-by-one, like dominoes.

Sue  19:01

The Commonwealth Games, that was in 2014 in Glasgow, wasn’t it?

Jimmy  19:04

Yes and somebody said this was a wee bit tasteless, at a time when there was a housing shortage and all the people who’d lived in these apartments… I have to say that these apartments became notorious for just being the wrong idea. There were no childcare facilities around. Some architect and engineer thought it’d be really good to build some really high buildings and put people in them. And the people who moved in initially; it was back in the day when people were happy to have toilets inside their houses. So you know, everybody thought it was great, but then the lifts would break down, there’d be vandalism, there was crime, and they decided to demolish them. And then, they decided not to. Well, certainly not ceremonially at the end of the Commonwealth Games. They’re now demolished; they’ve gone now.

Sue  20:05

So what did they do to them?

Jimmy  20:06

Well, they blew them up. But two of them refused to fall over. They had to go back in again. Can you imagine going into a building that’s been dynamited once and half of it’s still standing? They’ve got rid of it now and they’re rebuilding houses there; low-rise and townhouses and stuff that is much more acceptable for people to live in. But you know, sniffing around just outside of Glasgow,  there’s a couple of little towns. One of them is called Coatbridge, and the other one’s called Wishaw. They were about to demolish apartments (a total of 200 units), in two buildings and the local council has said “hey, we’ve got all these refugees from Ukraine. They’re staying in hotels; they’re miserable… They need somewhere proper to live, because it doesn’t look like they’ll be going back to Ukraine anytime soon.” So rather than demolish these apartments, they put people in to refurbish them, and bring them up to a livable standard. I think that’s fantastic.

Sue  21:17

Yes, that’s great, isn’t it?

Jimmy  21:19

And so these refugees will be moving into (not brand new apartments, by any means), apartments that have been refurbished, up to a decent standard, which is a bit heartwarming, really, isn’t it?

Sue  21:31

Oh, it’s fantastic. Could they do something like that with Mascot Towers?

Jimmy  21:36

Well, that’s what a lot of people are saying, My master plan for Mascot Towers is that the government takes it over; just buys it off the residents who’ve been moved out, and then puts in… I’ve got this crazy idea that they could use TAFE students to go in and fix it and learn how to not build buildings while they’re doing it. But go in there and fix up the building, fix up the apartments and then rent the apartments to people and once people have confidence in the building, start selling them to make their money back. But that sounds a bit too much like socialism for our government, so it’s not going to happen.

Sue  22:20

It’s a shame. You know, those people are still there. They’re still renting, aren’t they? They’re still getting rent relief from the government, with no end in sight whatsoever.

Jimmy  22:28

They’re still paying their mortgages.

Sue  22:30

Yes, it’s just a terrible situation.

Jimmy  22:39

We were talking about this the other weekend. The Labor Party says they’re just going to do a buyback (or is it the Greens)? Anyway, the Liberal government came in and poo-pooed the whole idea. I’ve given the job to Superman to fix (by Superman, of course, I mean, David Chandler). He’s going to go in and do a report about what needs to be done and how much it would cost to do it. Which is good, except you think “why didn’t you do this about a year ago?” I mean, you’re sitting on your hands; the building’s not going to fix itself, so why don’t you find out what it needs? But now they’re trumpeting this as their brilliant idea, to do something they should have done years ago.

Sue  23:28

Just as long as they actually do it.

Jimmy  23:33

And other news from Caledonia, a place that at one point in it’s life was the halls of residence at Strathclyde University when I was there… It was originally, in the 1930s, built as the Beresford Hotel, in Sauchiehall Street, in Glasgow. It’s now apartments; a beautiful old art deco building from the outside, which was at one point, the highest residential building in Glasgow. It was called Glasgow’s first skyscraper. Take a guess how many storeys it was?

Sue  24:12

Twelve?

Jimmy  24:13

Seven. But if you get a hankering to go and live in Glasgow, you can buy a one-bedroom apartment in there (which they say needs a bit of TLC; it needs a bit of a reno). You can buy one for 110,000 UK pounds, which is roughly about $200,000 Australian dollars.

Sue  24:40

Wow. That’s a huge difference to prices here, isn’t it?

Jimmy  24:43

Absolutely. I mean, even a crappy old apartment in an old art deco building here; a one-bedroom is going to cost you three times that. But then the other side of this is, you would be in Glasgow and not in Sydney, so you have to take that into consideration. It’s a hell of a commute.

Sue  25:06

Yes. And it might be nice in the summer, but in the winter… I mean, what’s the temperature there now, and what’s it going to be tonight?

Jimmy  25:13

At the moment, I’ve got sunshine coming through my window, so it might be quite warm outside, but I went to a football match… My old team ‘Queen of the South,’ I went and watched them play and the temperature felt subzero, but I think it was about six degrees. Oh, chilly.  I’ve got the thermals on.

Sue  25:36

Did they win?

Jimmy  25:37

They did. Three-two; it was quite exciting. Five-goal thriller.

Sue  25:43

Five goals, fantastic!

Jimmy  25:46

Well, you know, they went two-nil up, and then Airdrie came back one goal and then they went three-one up, and then Airdrie came back again. But they held on; mighty Queen’s… They held on to the bitter end.

Sue  26:00

We are very much queens of the south here at the moment, because obviously, it’s the last vestiges of WorldPride, sadly.

Jimmy  26:08

Did they march across the Harbour Bridge; did I read that somewhere? That must have been quite spectacular.

Sue  26:14

Yes, it certainly was; incredible. I mean, I think it was a ticketed event and you had to apply for tickets, but I think they were massively oversubscribed. Everybody wanted to get in on the act. Gosh, wouldn’t it be nice if we had WorldPride here every year? But anyway, at least we’ve got Mardis Gras here very year, so that’s good.

Jimmy  26:34

It’ll probably seem a bit tame next year, after this one. It’s been quite spectacular.

Sue  26:43

Nice to talk to you from Scotland, Jimmy.

Jimmy  26:45

And nice to hear you and I hope your cold gets better soon.

Sue  26:49

I’m sure, hopefully.

Jimmy  26:54

I think the next time I speak to you, I will be in Hanoi.

Sue  26:59

Oh, okay.

Jimmy  27:02

More travel and more news. I’ll have to check out what’s happening in the apartment situation there.

Sue  27:10

Fantastic. Well, safe travels, and we look forward to talking to you in a week.

Jimmy  27:14

Thanks very much. And thank you all for listening. We’ll talk again soon.

[MUSIC]

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, Stitcher, or your favourite pod-catcher. Just search for Flat Chat Wrap 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.