Podcast: Pets & renters, prices and owner revolts

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Elsewhere in this post

This week’s podcast has placed a ban on the C-word … no, not that one, the other one that’s filling our news bulletins on radio and TV and clogging up our newspapers and online reports.

Instead, we start off talking about pets and renters, courtesy of a guest spot Jimmy did on James Valentine’s Afternoons on ABC radio.

We’ve snipped out his listeners’ contributions but we’ve left in the insights from  Tenants-NSW CEO Leo Patterson Ross about what happens to pet-owning renters who have to move house when a lot of landlords are still saying “no pets”.

You can here the piece in full here, with listeners’ calls, from the ABC Radio website (go to the one-hour mark if you only want to listen to that segment). 

And you can get your own advice from the Tenants Union here (it will automatically connect you with the right website for your state). 


LISTEN HERE


By the way, if you are a landlord rather than a tenant, that website will give you all the information you need about your rights and responsibilities, so it’s a good one to bookmark for the future.

Also in the podcast, we discuss a worrying trend towards unhappy owners trying to sack their strata committees and why, even when they’re successful, it doesn’t always work out the way they had hoped.

And finally, we look at fluctuating apartment prices and where the “sweet spot” may be for those brave enough to take an investment plunge right now.

If you enjoyed listening to this podcast (or reading the transcript), please share it with your friends using the social media buttons on this page.

TRANSCRIPT IN FULL

Jimmy  00:00

We have a challenge.

Sue  00:02

Oh, what’s that?

Jimmy  00:03

We have to try and get through a whole podcast without saying the C word. Oh, I mean the other C word. The new C word.

Sue  00:14

Oh, that’s a good challenge to have, because I’m really…

Jimmy  00:17

Sick of it.

Sue  00:18

Yes, exactly.

Jimmy  00:19

Alright. We’ve done all we can to help people.

Sue  00:22

Yep.

Jimmy  00:23

It’s up to them now; we’re moving on. We’re going to be listening in to a session I did on the James Valentine show on ABC Radio last week, when we were talking about pets and tenants. We are going to be talking about sacking your strata committee and replacing them with a compulsory manager. And, we’re going to be talking about apartment prices and what is going on there. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue  00:55

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

Jimmy  00:58

And this is the Flat Chat Wrap.

[MUSIC]

Sue  01:14

I understand you were on James Valentine last week, Jimmy? What were you talking about?

Jimmy  01:18

We were talking about pets and tenants and the problems that tenants have when they’ve got a pet and they’re trying to find somewhere else to live. And also on the show, was Leo Patterson Ross from the Tenant’s Union.

Sue  01:33

Oh, great!

Jimmy  01:33

So, we covered quite a lot of ground and this is how it went out on air.

James  01:39

Your’e on ABC Radio, in Sydney and Newcastle this afternoon. There was the sad story on ABC News last week, about the difficulty that many renters have, trying to find accommodation, when they have a pet; when they’ve got the dog, got the cat. Many landlords say “nope, you can’t come in.” This is relevant and increasingly relevant, because more and more people have dogs and companion animals; we value that relationship so much more than perhaps we once did. The numbers are increasing; more and more people will be turning up with dogs and with cats and companion animals, when they’re trying to rent. What’s interesting also, is that the situation in New South Wales is different to the situation in Victoria and the ACT, where landlords are not allowed to discriminate against people with the dog; they’re not allowed to say no to the dog. What’s the situation here and what experience have you had? Is this something that you’ve had to deal with? Are you a tenant, are you renting and you’ve tried to rent with a dog and that’s been difficult? Have you had to perhaps, go well beyond where you’d prefer to be, because you wanted to have the dog. Did it take a long time to find a place? If you’re a landlord, what are your thoughts about this? And, where are we up to with the rules in pets in apartment blocks? It’s one of those things that, I must admit, it always just runs away from you, but I go “what, what did we… Where are we? Are we allowed to, or not allowed to, at this point?” That’s why I thought we might start with Jimmy Thomson from flat-chat.com.au to clarify that. Hello, Jimmy.

Jimmy  03:17

Good afternoon, how are you?

James  03:19

I’m alright, yourself?

Jimmy  03:20

Very well, thank you (surprisingly), in these stressful days.

James  03:26

Well, yeah, we were just talking about the effect on young people and perhaps the difference between people of; the younger ones and people of our age, Jimmy. I mean, we tend to be at home most of the time, anyway.

Jimmy  03:36

Yes. It’s like it’s catch-up with all your TV binge-watching and tidying up your office, is another thing, often happening.

James  03:46

The amount of cupboard tidying I’ve done in the last couple of weeks, has been very, very good. The kitchen’s looking terrific. Jimmy, what are the rules? I keep getting a bit lost in this, as to what bylaws we’re allowed to or not allowed to have, concerning pets?

Jimmy  04:01

Yeah, it’s a really interesting thing, because I think last year, we had that ruling from the Court of Appeal, that a blanket ban on pets was not legal in apartments. You couldn’t have a bylaw, that banned pets completely and a lot of people thought “well, that means that I must be allowed to have a pet.” You can’t have a bylaw that says you can’t have a pet. And, it has since been tested at the Tribunal, where somebody had; there was a ban on dogs in their building and they said “well, I want to keep a dog and the Court of Appeal has said this” and the Tribunal said “no.” A ban on a specific pet, a kind of animal is okay. It’s just you cannot have a blanket ban on all pets.

James  04:52

You can’t have a blanket ban on all pets, but you could have a bylaw banning dogs, another one banning cats, another one banning snakes?

Jimmy  04:59

Absolutely, I mean, in this specific building, they had cats in the building and cats were allowed. What would the possible reason be for discriminating against dogs? I don’t know; maybe the building had thin walls? I don’t know. But anyway, the Tribunal said “look, this doesn’t come under the blanket ban thing, because people can still have pets; they just can’t have that particular kind of pet.”

James  05:25

Right! That’s doing my head in!

Jimmy  05:28

Yes, exactly and a lot of people have gone from thinking (until fairly recently); a lot of people have wrongly thought that you couldn’t have pets at all in apartments, which was wrong. And now, people are thinking that pets are almost compulsory, which is also wrong.

James  05:44

Which is also wrong, but I also thought; I was back with that, you couldn’t pass a bylaw about pets, but is it that you can’t pass a bylaw about all pets, but you can pass a bylaw about specific pets?

Jimmy  05:58

Yes and you know, that bylaw could still be tested, but it’s not fundamentally illegal to have that kind of bylaw. As long as there’s some kind of thinking behind it. For instance, we have a lot of native birds land on the balconies and they would be massacred by the cats, so let’s not have cats.

James  06:21

No, okay. Or, the building’s not particularly acoustically sound and so if your dog yaps, we’ll  hear it throughout the building.

Jimmy  06:31

Exactly. That’s probably a much more realistic example than mine.

James  06:35

Someone’s texted “we own a block of beautifully-renovated Art Deco flats. We no longer allow dogs, as they’ve caused enormous damage to the woodwork in the past. We MUST (in capital letters); we MUST take care of our investment, as well as provide good housing for others. Would that be reasonable, do you think?

Jimmy  06:50

I think probably. They seem to have thought about it, at least. One of the problems with the blanket ban was that people were saying (you know, committees and Owners Corporations), ” ooh, pets could be a problem; let’s just not have them.” And, the way to deal with a problem, is to not allow any possibility of that problem. Whereas these people, they’ve thought about it and said (and they may even have experienced it), and said “based on our experience, we’re going to have this bylaw.”

James  07:20

Yeah. Talking about pets in (probably) largely apartments; you know, obviously, the landlord of a house can do what they like, right?

Jimmy  07:30

Yes.

James  07:32

Sorry; I suppose with the landlord of the house, it’s not a bylaw, but the landlord could decide in New South Wales, not to rent to anybody who turns up with a dog.

Jimmy  07:42

There is nothing in the basic rental agreement that says anything about pets, but landlords can put in a clause in the rental agreement saying, you’re not allowed to have pets. It’s different in Victoria, where the landlords can refuse to have pets, but they cannot ‘unreasonably’ refuse. In a couple of cases, landlords have gone to their Tribunal there and said “we want to refuse pets,” and the Tribunal has said “no, you can’t, because it’s not a good reason for doing that.” The Owners Corporations can still say “we don’t want pets in the building,” or “we don’t want cats and dogs and snakes and spiders.”

James  08:28

You may have a budgerigar. Jimmy Thomson is from flat-chat.com.au and we’re talking about pets in the buildings. It’s a perennial. Next correspondence says “I am a landlord. I don’t want animals in my investment property. If I’m forced to take renters with pets, then I’m being discriminated against.” “I should have the right to say no to pets, as an owner,” says Mike. So, this is where it gets to Jimmy, isn’t it? This sort of ‘you can’t unreasonably refuse.’ But then again, I’m an investment. This is how I make my living, or I’ve got investments in this sort of stuff… What happens to my rights?

Jimmy  09:05

I think in New South Wales, the landlord still has the upper hand and they can choose not to have pets in their property and there’s not much that a tenant can do, especially at a time when getting a rental is so competitive. You turn up and say “okay, I want to rent your property, but you’ve got to take out this clause about animals.” The landlord can just say “yeah, I’ve got some other people interested.”

James  09:32

That’s right. I’m talking to Jimmy Thomson from flat-chat.com.au And also, Leo Patterson Ross, who is the CEO of the Tenant’s Union of New South Wales. Leo Patterson Ross, good afternoon.

Leo  09:43

 Good afternoon, James.

James  09:45

This is, I mean I said at the start, I imagine this is a growing issue, because more and more people are having dogs and we’re often encouraged to have dogs, for health reasons and for other purposes.

Leo  09:58

Absolutely. Australia  is really a pet-owning nation. 60% of Australians have a pet and the expectation, I think, for most people, is that if you’d like one, you should be able to have one. It’s not for everyone; not everyone needs to have one, but culturally, that’s really a bit of a shared value and it’s a shame that so many renters are not allowed.

James  10:20

Yeah. Do you have a sort of estimate, like of said properties in New South Wales, how many have pets? Do you reckon it’s like, 20% you’re allowed to have pets, or is it more than that?

Leo  10:33

Well, I think there’s the official figure and the unofficial figure, unfortunately.  One of my family friends actually had an investment property and would have been okay to have pets, but their real estate agent had a default policy of saying ‘no pets’ on the ad and they found out later that the tenant had moved in with a pet, hadn’t asked permission. The problem was, they would have said yes, if the tenants asked, but the tenant can’t ask, because they know if they do, they’re going to be put at the bottom of the application pile in general and they’re going to be told no by default, because of what industry standards are set out, rather than what the landlord actually might have thought about the question. So people are very scared, because as Jimmy said, landlords hold (very much), the upper hand in these negotiations.

James  11:18

So, is there much movement; why is it any different in Victoria, then? How did Victoria get to a point, where they’ve got the law where you, the landlord, can’t unreasonably refuse you turning up with the dog or the cat?

Leo  11:30

Well, it’s important to say what the Victorian law actually is. So, they can’t refuse, once you’ve moved in and you ask for permission to have a pet, but they can still discriminate at the application stage, if you disclose that you would like to have a pet moving in. And, that is the experience that Victorian renters are facing now, is that they’re being pushed by these reforms to be even sneakier, because you just don’t tell the landlord that you’ve moved in, because once you do, you have the protection of the law; before then, you have no protection. But, the rate that you know; the applications at the Tribunal show that people are being allowed to have pets at a higher rate. People are being able to make much more sensible decisions about how they are going to run their lives, as renters; as adults, in our community. And, then we’ll have to deal with the consequences (responsibility), if there is cleaning, or if there is damage. And really, this is what this debate is about often; is how much do we want to treat renters as adults who take responsibility for their actions and how much do we want to tell them that they don’t have that decision-making ability?

James  12:44

Is there any proposal to say perhaps there should be a separate pet bond, or something like that? Or, is the bond enough? You know, it’s usually a month’s rent, that kind of thing. Should that be enough to cover any damage, or cleaning that comes from the dog?

Leo  13:02

So, bonds are really about a risk assessment and they’re an insurance product, really, for the landlord to say “I’m going to know that my tenant has enough to cover any issues at the end of the tenancy.” What we see consistently, is about 55% to 60% of bonds are returned in full to the renter; only about 10% to 15% are claimed in full by the landlord. So, 85% or higher in any year, the bond covers all the problems. Actually, most of the time those funds are claimed in full, it’s not about damage to the property or cleaning, it’s actually about rent arrears, or someone needed to break a lease early and you pay out the costs associated with that. So, the bonds certainly cover this issue. WA brought in a pet bond that was intended to cover the cost of fumigation. So it is about $200 at the moment, that you’re allowed to charge, as a landlord. We really didn’t see an uptick in the number of pets being accepted, actually, because at the end of the day, landlords didn’t have to and the competition meant that they were saying no, anyway. So, the pet bonds; really, they don’t help. What they do is increase the costs of renting and in an inefficient way, because it doesn’t actually address the basic problem. So really what we should be moving towards, is a system where we think about what kinds of pets are appropriate, for what kinds of properties? Is it appropriate to have a draught horse in a penthouse? No, of course, it’s not; you shouldn’t be allowed to do that. It’s not fair on the horse, or anyone else.

James  14:35

It depends on the size of the penthouse and the access. The lift is big enough! But yeah, I think hopefully, that is where we’re heading to, with this kind of thing.

Leo  14:45

This is really the problem with that Victorian process. The applications process; how a landlord and agent make their decision, is not actually transparent. You can’t see and you can’t get any real feedback on the experience and so we do see (consistently), a range of discrimination, from completely unlawful, with racial and gender and so on, to these kinds of lawful… But, we might question whether they’re really the system that we want around pets and source of income and permanent, versus high-paid casual tradies and so on, might might face barriers. And so yeah, this is where that comes in; that application process. You don’t know why you’re being knocked back and there’s no obligation on anyone to tell you, so you can’t do anything to fix it, either. You can’t go away and work on your resume, like you might in an employment situation.

James  15:38

Jimmy Thomson, you know, we’ve been talking pets in flats for about 15 years, I think and I feel like, we’re no further.

Jimmy  15:45

At the very least! It’s interesting that we’re talking about the pet bonds, because two of the buildings that were at the center of  the big court cases we mentioned earlier, have now been compelled to allow pets, in some shape or form. I believe that one of them is charging (I’m not sure if it’s an application fee or a bond; I’ve got a feeling it’s an application fee). One of them is charging $1,000 per pet and the other one is charging $300 per pet. Now, that’s discrimination, just by another means, I think.

James  16:21

Yeah, I feel like I’d like somebody to undertake a study. You know, like, how many places are actually damaged and what actually happens? You know, I feel like we’re all just dealing with anecdote here.

Jimmy  16:34

Yeah, there’s a great deal of that. It’s interesting to hear those figures from Leo, because those were things that I didn’t know. They might have actual claims against the bond, the pet bond, with minimal rules.

James  16:48

Yeah. We had discussion not  so long ago,  talking about dogs being allowed on public transport, which,  it’s only for guide dogs and assistance dogs and things, at this sort of point. But, this was a similar issue; because we’ve got an increasing dog population and because we want people to use public transport, we’re going to have to allow it at some point. And so, how do we do that? How do we manage it? How do we manage “I don’t like dogs and I’m allergic to them?” ” I need to take my dog on public transport.” How do we manage these two conflicting things? One thing we came up with was a kind of; almost like a certified dog ownership, because it’s really the dog owner that you need to understand here, isn’t it? You know, like, does this person actually have control of their dog? Can they actually look after it?  I wonder if that sort of thing would work in flats. It’s like “yes, I’ve been through training. Yes, the dog is, what I say the dog is. Yes, I’ve got some level of understanding of you know, how to control my dog.”

Jimmy  17:47

I believe that there are some apartments, that conditional on approval of having a dog, is that the dog has been to some sort of training program with the owner. It’s not usual, but it makes sense.

James  18:04

Does that seem workable? I mean,  putting aside the details of it, but in so many ways, we just check that you actually know how to control a vehicle or we check all sorts of things… Would it wouldn’t matter if for this sort of thing, you’ve got to do a day’s training and everyone says “yep, that person can control the dog; the dog is what we say the dog is.”

Leo  18:25

I think that’s getting very close to the solution. I think part of what’s missing here is a discussion about the animal’s own welfare and actually, from that perspective, you might say the same thing. You know, we want to say that, if you’re in charge of something else’s life, you should be able to take care of it and provide a really good environment; a safe environment. A place to exercise and feed and all that kind of thing. Actually, that probably should apply everywhere, not just in apartments.; semi -detached housing, as well. But, they would solve a lot of the problems that people fear around apartment living with pets, that a well-trained, well-looked-after, happy animal is much less likely to be causing noise and nuisance and scratching of the door, and so on, because  they’re content; they’re in a safe environment. So, if we did have a much more sensible way to work out, is this particular property suitable for this particular animal? If it is, then basically, everyone else should butt out. Then you would find a much more more harmonious approach here, I think. That’s where the expertise of people like RSPCA and veterinarians should be coming in to say “this is what’s needed. This is how you should judge whether a place is appropriate.” Not really a strata committee, a landlord; they’re not trained in animal welfare and they don’t really have a clear framework to work around, in making these decisions. So this is what you were talking about with that study; looking at, okay, well, how do we really make a good decision here? What’s the evidence that we need?

James  19:59

Leo, great to talk to you. Thanks so much.

Leo  20:01

Thanks, James.

James  20:02

Leo Patterson Ross is the CEO of the Tenant’s Union of New South Wales. Few people texting Jimmy, going “I’d rather have pets than children.”

Jimmy  20:11

Yeah, we don’t have to get any training for children, so why do we need it for a cat?

James  20:18

Can you (I suppose plenty of people, do); they don’t rent the place to people with children, for similar sorts of reasons?

Jimmy  20:24

I guess so. It’s interesting, though, that the one thing that’s often overlooked (and this applies to both the law in Victoria and NSW)… It has been in strata law for years, that if a pet, if an animal (it’s very specific), if an animal proves to be a nuisance, then the committee can tell the owner to move the animal out of the building. That has been there long before all this debate about whether bylaws were permitted or not.

James  20:54

Right, but that would then involve you know,  confronting the person, then going to Tribunal, then potentially court, right?

Jimmy  21:04

I guess. If they don’t like (and they probably wouldn’t like), a negative result at the Tribunal; yeah, you would end up in court. But, at least there’s a check and balance here. It’s not just somebody in the building going “I don’t like the look of that dog. I don’t like getting in the lift, when a dog has been in it.”

James  21:21

That’s right. Jimmy, good talk to you. Thank you so much.  No, that’s right.

Jimmy  21:21

There actually has to be a reason. Thank you.

James  21:27

Jimmy Thomson from flat-chat.com.au Get onto that site for lots of different forums and articles and insights into living in strata, in Sydney, in particular.

[MUSIC]

Jimmy  21:41

It’s really tragic, isn’t it? When you’ve got somebody who’s got a pet; a beloved pet… Their lease runs out, or their landlord decides that they want to put the rent up, or whatever and then they have a struggle, to find a place to stay. You wrote about this recently, didn’t you?

Sue  21:58

Yeah, I did. I wrote an advice piece for people who have pets, or who were thinking of having pets, moving into apartments (or houses, as well). It’s obviously much more complicated with apartments, because you have to persuade your landlord, firstly, to allow you to have a pet and also, you have to persuade your strata committee. You know, you’ve got to have a building which is pet friendly. I talked about lots of things you can do; talking about getting up a pet CV, putting on a picture of your pet (because, if your pet looks particularly cute, it’s quite hard for a landlord to say no). I mean, lots of people ask for extra bonds for pets, in case they do any damage, but then most people letting out properties, will obviously make sure that they’ve got property that isn’t too fragile and delicate; that won’t be damaged, anyway. Of course, they can’t refuse to have people with kids in properties and kids will often do far more damage than a cat or a dog. But yes, I think it’s kind of getting a bit easier, because landlords now are much more friendly towards animals, I think and they realize that pet owners tend to be quite responsible people. They’re going to look after the property, because they’re going to want to stay in there, because as you say, it’s quite hard in the first place, to get a property where you can bring your pet. People are going to be very grateful and are going to be very careful to look after the place as well as the owner would.

Jimmy  23:28

And you know, that thing of, when you do decide to put the rent up; well, maybe a renter with pets is less likely to say “oh, okay, I’m off. I’ll find somewhere cheaper.” It’s quite a cynical view!

Sue  23:42

But, they tend to want longer leases as well, because they don’t want to keep moving from place to place.

Jimmy  23:48

Yep. So I’ve just made a quick note of why  having a pet is good for you and good for your community. It’s companionship, especially in these…

Sue  23:59

No, don’t say the word!

Jimmy  24:01

Exercise (apart from cats).

Sue  24:04

Cats are hopeless at exercising!

Jimmy  24:08

Community, because you can relate to other. People meet each other through, you know, somebody who’s got a similar dog, or another cute dog, will stop and talk to you. The dogs will stop and talk to each other.

Sue  24:21

And lots of people know the names of people’s dogs, even if they can’t remember the names of the owners.

Jimmy  24:26

And one of the problems is that people really don’t understand the rights or the responsibilities. People think that because of the court cases last year, that apartment blocks cannot prevent pets from coming in and that’s not the case. Some people think that landlords can’t refuse to have pets. That is not the case. So you do have to check this out. Sue’s written about this, as we said. It’s on the Flat Chat website and it’s on Domain, so you can track that down. Very well-written and well-researched article. Just as a kind of side note, Jo Cooper, the woman who took her building to (ultimately), the Court of Appeal and won, on the pet’s issue…

Sue  25:13

To overturn the no-pets blanket ban?

Jimmy  25:15

 Yeah.

Sue  25:15

 In her building.

Jimmy  25:16

Now, she has recently gone to NCAT to have her committee removed and replaced with a statutory strata manager. That wasn’t a successful move, but it is indicative of something that is happening increasingly in strata, which is that people are going “I don’t like the committee. I don’t like their decisions. I don’t like the way they work. I’m going to get rid of them.” So, we’re going to be talking about that after this break.

[MUSIC]

Jimmy

Okay, so we’re looking at the question of removing your committee.

Sue  25:55

And as you say, it seems that people; when they get into a fight with their strata committees, they’re more and more saying “oh, look, I’m going to go to NCAT and I’m going to get them replaced.”  I think in the past, strata committees have been a bit worried about that, because they think, well, if someone’s successful in that move, it then means the building will be for one or for two years, without any strata committee at all. Without any, they won’t be able to vote; they don’t have meetings. It’s just somebody who’s put in place, to make sure everything’s just ticking over, but it means the complete lack of democracy. The building is really kind of paralyzed. They can’t make any big decisions and that’s really, really difficult. So I think they’re always really worried about that, but then, as you said, last week, NCAT came back with a decision on a case brought by Jo Cooper (who successfully overturned the no-pets bylaw in the Horizon building). She, along with a few other owners, had put in an application to sack the strata committee and NCAT looked at all the evidence (and I think there were many, many pages of evidence that was presented to them) and said “no, this doesn’t show any financial irregularity; it doesn’t show the strata committee weren’t meeting their obligations. It doesn’t show that the building wasn’t being well run,” and it dismissed the application. So obviously, NCAT is looking very closely at these applications in future

Jimmy  27:18

Without getting too bogged down in Jo Cooper’s case… I mean, that’s just an individual case and I’m sure she and her supporters felt justified in; you know, the amount of money that the building spent on pursuing the pet thing, only for it all to fall flat… A lot of people would feel very aggrieved, when they found out the impact that would have had on their levies.

Sue  27:41

But at the same time, they won the case; they managed to get the no-pets bylaw dismissed. You kind of thought, they would have been happy to have lived with that then.

Jimmy  27:50

Yeah, but also, there’s an indication of (obviously), a rift in the building; that some people want the building to be run in a certain way and some people want it to be run differently. I think the thing is (and this is not related specifically to this case, but this is something that I always talk about as being one of these ‘be careful what you wish for’ issues;  if you get a compulsory strata manager in there, as you said, democracy has gone, for the duration of the terms of  that placement of the strata manager. The strata manager makes all the decisions for the building about what to spend money on, what not to spend money on. A lot of strata managers will say “I’ve got a statutory duty here, to do exactly what the law says,” and will take that as a very serious responsibility. In normal circumstances, a strata committee will say “we should be doing this, but we kind of can’t really afford to do it at the moment. We don’t want to put the levees up; can we let this roll over for a couple of years and then look at it again?” You’ve got a statutory manager in, they’re going to go “this needs to be done; if the levies need to go up, that’s too bad.”

Sue  29:10

That’s right. Nobody has a say in that. You have to put in an awful lot of evidence and it’s got to be quite compelling, to persuade NCAT to take that big step.

Jimmy  29:11

Some strata, statutory managers will keep in contact with the members of the committee, to try and get a sense of what the community wants, but they don’t have to. They don’t have to even pick up the phone. The other thing is (I’ve heard this a couple of times), that tradies who have relationships with strata managers; compulsory strata managers, say it’s a license to print money, because the strata manager can say “you need this plumbing work done. These are the plumbers that I have decided you should use and so, that’s what we’re going to do.” Again, you don’t have any say in it. All they can do is go back to NCAT and say “can we get this rescinded, or can we have another strata manager put in place?” You have to remember that NCAT has already decided that the committee and the owners are not capable of running the building properly. It’s a big U turn to ask them to turn around and say “oh, we made a mistake and we’re going to go back to what was there before.” Somebody said to us recently, it’s becoming more common, that owners are reacting to their committees and saying “let’s get rid of them.” I don’t know if it’s more common that it’s actually happening, though. I think it’s quite a high bar.  All right. When we come back, we’re (very quickly), going to talk about what’s happening with apartment prices, in this ever-volatile market.

[MUSIC]

Jimmy

Sue, you’ve been looking at apartment prices; what’s going on?

Sue  31:05

Yeah, well, again, it’s a tale of two cities, really; Sydney and Melbourne. In Sydney, there’s a huge gap. It’s the biggest gap ever between the prices of houses and apartments, because houses during this period (not using the ‘C’ word), they’ve really increased in value, because people are spending a lot more time at home; they’re wanting bigger spaces to live in. Some of them want the back garden, they want outdoor space. They’re moving towards houses. So, there’s a big demand for houses and a less of a demand for units. But, in the last three months, we’ve discovered that because private house prices are so high, people are now increasingly trying to buy apartments. So, with the extra demand for apartments, prices for apartments are also going up. They climbed 3.2% in the last quarter, which is a huge jump.

Jimmy  31:58

But, that was off quite a low base, wasn’t it?

Sue  32:01

That’s right, but it’s only a little bit behind the peak price in 2017, so it’s quite substantial. The median apartment price now is $786,000. It’s a lot, isn’t it, really?

Jimmy  32:18

I suppose it is that ‘swings and roundabouts’ thing you know; as demand decreases, prices go down and then, because prices go down, demand increases and prices go back up. So, you’ve got to find the sweet spot.

Sue  32:30

Yes, absolutely. But in Melbourne, the vacancy rate, it’s really interesting… It’s also about the vacancy rates. In Sydney, they’ve come down (vacancy rates), but in Melbourne, they’ve actually gone up this quarter, which has taken everybody by surprise, because around most of the country (apart from Adelaide, which is its own little market), all the vacancy rates have gone down, showing that people are coming back into apartments. There’s not so much of an oversupply anymore, because demand is rising to meet it. In Melbourne, vacancy rates have gone up and they tend to think that’s because (you may have seen the Australian Bureau of Statistics; brought out more statistics last week, which showed), lots of people were leaving Melbourne. They’re also leaving Sydney, but in fewer quantities. They’re leaving Melbourne; they’re going to the Mornington Peninsula, they’re going to Daylesford, they’re going to Mount Macedone… They’re going to Queensland, because they’re sick of all the lockdowns. I mean, Melbourne’s  had, you know, a horrendous run of lockdowns last year and this year, again. New South Wales, it hasn’t been so bad, up to now.  I spoke to somebody who was saying that just before this latest lockdown (which is now their six, I think), people were walking on eggshells because they kind of felt, it’s gonna come soon; we’re gonna have another lockdown. And, they were quite right. People are just locked-down fatigued there, so they’re looking for new places to live. They’re actually leaving apartments, so the vacancy rates are going up in Melbourne. Prices are very soft in Melbourne, whereas in Sydney, they’re recovering.

Jimmy  34:09

Where’s the best part of Melbourne to buy an apartment; cheapest?

Sue  34:15

Well, Dockside.

Jimmy  34:16

Right, which was like the ‘golden zone,’ at one point.

Sue  34:20

It was, a long time ago, but there’s an oversupply of apartments. Some of the quality’s been questioned. So really, prices have really come down there. In the long term, it might be a good buy to buy now, because prices are quite low, considering what you’re buying. Hopefully in the long run, the market will pick up, so you’ll get value.

Jimmy  34:43

And what about Sydney?

Sue  34:45

Well, in Sydney, the prices have gone down in the southwest of Sydney.

Jimmy  34:50

Surprise, surprise!

Sue  34:52

 They’ve gone down by 4.5% over the last year and 6.4% over the last quarter, so I guess there’s some good buying in southwest Sydney, around Liverpool, with lots of new apartments there. There’s some really smart new apartments too. I mean, it’s an area that’s rapidly densifying, so that may not suit a lot of people. Also, around the Hawkesbury and the Hills District; prices have been falling a little bit there, or they’re going up less fast. And, in the Blue Mountains, so there are some spots where apartments are still very affordable, but, check them out quickly, I’d suggest! Hopefully, when we come out this lockdown, people believe that the market will really rebound hugely, because we’re putting all our plans on ice, while we’re in lockdown and we’re going to be out looking for bigger apartments and houses and stuff, as soon as we get free.

Jimmy  35:48

Okay and on that very positive note, thank you, Sue, for coming in and talking to us again.

Sue  35:56

Pleasure, Jimmy and it’s not so far to come.

Jimmy  35:58

It’s not so far, no. It’s just the other end of this apartment, which isn’t that huge, really. And, thank you all for listening. We’ll talk to you again soon. Bye.

Sue  36:10

Bye.

[MUSIC]

Jimmy  36:12

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website, flat-chat.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 favorite 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.

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