Covid kicks off the podcast again this week, unfortunately, but with both Sydney and Melbourne shut down it’s the first thing that springs to everyone’s mind.
However there are some new talking points – like the surprisingly handy Strata Covid Toolkit produced by the NSW government last weekend, which we highly recommend.
Then, just when they’ve final acquired some Flat Chat Brownie points, the NSW government goes and stuffs it up by issuing Public Health Orders about who can work where, completely ignoring strata and the people who run it.
The in some non-covid chat (praise be!), we talk about some of the astronomical prices being paid for apartments in the Crown tower at Barangaroo.
And we recall spending a night in one of the poshest (and worst laid-out) penthouses in Sydney.
Then we discover “zoom rooms”, the new name for that awkward corner of apartments that developers don’t know what to do with.
Too small to be a study, too impractical to be anything other than a cupboard, now it’s the potential hub of your burgeoning media career.
As our picture of US broadcaster Ira Glass (purloined from Medium.com) shows, you don’t need a special room – just a wardrobe with a desk and lots of noise-absorbing clothes.
Sue also introduces us to once-desirable areas where rents are 30 per cent lower than they were five years ago.
And we get the inside running on the sale of a disgraced League player’s Parra pad.
That’s all in this week’s Flat Chat Wrap.
If you enjoyed listening to this podcast (or reading the transcript), please share it with your friends using the social media buttons at the foot of the page.
TRANSCRIPT IN FULL
I feel like we’re in double duty this week, because we were on Amanda Farmer’s podcast, where everybody actually got to see us for a change.
Yes. Amanda looks so glamorous and we both looked like we just got out of bed.
Well, you had! She does look very glamorous. It was interesting and quite challenging, the three of us trying to speak, all at the same time, often. We still managed to get through a fair bit of material. Today, we’ve got a few things to talk about. We’ve got the new strata toolkit from the New South Wales Government. I noticed it’s branded ‘government,’ not health and definitely not Fair Trading. We’ve got some confusing messages coming out in the public health orders and you’ve got some stories about rents and the sales of fabulous apartments.
Yes, that’s right.
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.
Late on Friday night (which seems to be when they release anything that has to do anything with strata), the New South Wales government released its strata managers and committees COVID-19 handbook.
I’m sorry, it’s a toolkit. It’s not a handbook, it’s a toolkit.
That’s great, isn’t it? Isn’t that the first time they’ve done very much for strata people?
Well, yeah. It’s kind of like they keep forgetting that we exist and keep forgetting that it’s a big chunk of the population and issuing all these very specific rules that leave us out, a lot of the time. We’ve had the whole thing about wearing a mask inside, but your home is being excluded. They didn’t define whether that was apartment buildings, or apartments or whateve, so they brought out this toolkit, which I think looks pretty good.
Great. What kinds of things does it involve?
Well, there are things like the posters for putting up. You download them as PDFs, you print them and you stick them up in your lifts and on your notice boards and on your doors. And, they’re quite specific; they’re saying you must wear a mask.
Oh, good. So there’s no two ways about it?
Yeah. What they don’t have is the thing saying it’s a condition of entry, which has been quite controversial and it’s moved on from ‘we recommend.’ It’s quite specific. We had a complaint to the Flat Chat forum, somebody saying “look, I put the poster up. I saw somebody not wearing a mask and I pointed to the poster, and they said, ‘I can’t even see what it says; the wording is so small and it looks like an industrial mask.'” But, that was the old one. The new one couldn’t be clearer. It’s got two images; one of a person wearing a mask, one of a person not wearing mask. There’s a tick beside one and there’s a cross beside the other.
Yeah, well, that’s pretty good, isn’t it, then?
Yeah, I think so. It’s clearer. There are buildings not a million miles from here, where they’ve still got the condition of entry notice up at the door, which is unenforceable, so why have it there? And, the recommendation notice in the lift, which has been superseded. Having said that, in this building, everybody wears masks in common areas anyway, so it’s not really that much of a problem. So, they’ve got that. They’ve got other posters, which I guess are for notice boards, for hygiene and cleaning, both in common areas and in and around your house. You know, telling you to clean light switches and stuff like that. It’s all very clear.
Practical and common sense kind of stuff.
Yeah. There are many posters. These are things that you could just put up on notice boards or add to your newsletters and things like that. Little reminders that only one person should go shopping for food and things like that. Lots and lots of material. One thing I thought that was really clever, was a pro forma newsletter, explaining all the new regulations, but with a gap for you to put in your building’s name. Although, I suspect the way these things work, a lot of people will just send it, without changing anything. There is a link to the toolkit on the show notes that go with this podcast. You’ll be able to download that. It’s a PowerPoint, which I thought was an interesting way of presenting it.
As long as it’s easy to download from a PowerPoint.
Well, you download it, you open it up and then there are links on the PowerPoint, that take you to all the various bits of the toolkit.
Maybe it’s for building’s websites or something, so you can put it up there for people to have a look at. Or, maybe if they’ve got AGM’s or meetings, they can play them?
I suppose they could, but nobody will be having meetings.
Well, that’s true. Maybe they can, if they have a zoom meeting; they can actually play it at the beginning or something?
You can see how it’s constructed for stratum or building managers (and committees that don’t have building managers). It’s there to be used to dip into; a toolkit. You don’t use every tool in your toolbox, every time you go to fix something. There’s plenty of material there for people to download and use. I think it’s quite clever.
Yeah. Good on you, the New South Wales Government.
For once! Another thing that’s come out in the past week, is the public health orders are kind of a bit confusing, about who can travel where, especially coming out of the hotspot area around Fairfield. How about building managers?
Ah, okay. We actually need the building managers in the buildings, don’t we?
To put up all these posters and things.
So really, if a building manager lives in Fairfield, he or she should be allowed to travel somewhere else, if their building is in a different area. They haven’t actually said that. They’re just saying it’s important for commercial premises, but they haven’t said strata residents.
They haven’t specified strata residents at all, or people who work in strata.
Even cleaners; I mean, sure, domestic cleaners… You wouldn’t if you’re in an apartment and your cleaner happens to come from Fairfield or Canterbury-Bankstown. You wouldn’t be allowed to have them in. But, if the cleaners for your building come from there, maybe you would?
Well, you would think that if they’re issuing posters that say you’ve got to clean the light switches; you’ve got to clean the handrails, you’ve got to clean the lift buttons… Who do they expect to be cleaning these? I don’t think they mean for building cleaners to not be allowed to travel; I just think they’ve forgotten, again.
Those people are offering a real public service, aren’t they? They’re keeping strata residents very safe, so therefore, they’re part of the anti-COVID movement.
Yeah, I think that one of the problems (and it was raised in our building), was domestic cleaners who are spending an hour or two in one apartment and then moving to another apartment and another building, then another apartment and another building. They could be carrying the virus with them.
Absolutely. It’s like removalists.
Indeed. Whereas, somebody who comes in, clocks on at eight o’clock in the morning and clocks off at six o’clock at night and just stays in your building, cleaning it; that’s a whole different thing. I think they’ve tried to move quickly to deal with a problem, that is developing quickly, but as so often happens, they issue all these edicts and public health orders and somebody in strata has to come along and say “well, what about us?” We seem to have fallen between the cracks, again. I guess we’ll get subsequent orders to come out, probably tomorrow; Monday. There’ll be more stuff, which will supersede anything that we’re talking about now.
Absolutely. It’s a shame that they don’t have somebody from strata in there, talking to them, when they’re issuing these orders, though. Presumably, they have a representative from industry looking at the orders and saying “yeah, they look fair enough.” Presumably, they have a representative from other groups.
What about Fair Trading?
Well, Fair Trading should be representing us, shouldn’t they?
Well, they don’t and it’s been years since they ever did. I suspect that the health mandarins in the health department, when Fair Trading comes along and scratches on the window and says “can we have a little bit of input here,” they go, “no, go away. Go and fix your broken toys; we’ve got grown ups here, doing serious, important business.”
Obviously, they’re doing the best they can. It’s a shame when they do omit big populations like strata, but they’re doing a job under intense pressure. It’s really hard to keep up with. I mean, people have been saying “well, the COVID situation is changing, not even hourly, but half-hourly.” All kudos to them, for for doing the best they possibly can, but we would like to be remembered
The conversation should be along the lines of “what are we going to do about shops and offices? What are we going to do about public transport? What are we going to do about people’s homes? Oh, and what are we going to do about strata?” That last bit; they never get to that, because they think we’ve covered everything and they quite obviously haven’t. One of the other aspects of this that came up in the website (I think we talked about this last week, actually), was can you have bylaws where you impose your own mask wearing? I think with the lawyers that I spoke to, it was almost 50/50 on bylaws have got nothing to do with it. Some lawyers were saying (or some strata experts and others were saying), “absolutely; this is exactly what bylaws are for.” So yeah, I guess the civil servants in Fair Trading and Health are not the only ones who are confused. When we come back, Sue, you’re going to bring us up to speed on some very, very, very expensive flats, that have been for sale?
And, some cheap flats, which are for rent.
Cheaper than they were five years ago.
Yes! Absolutely! Hard to believe, isn’t it?
I think we’ll have to check that out, after this.
Okay, let’s start at the top end of town. And, by the top end, I mean the upper floors of the 65-storey Crown Tower at Barangaroo.
Lucy Macken from Domains wrote a really interesting piece about this, because she was saying that in the old days, Astor; remember the Astor building? A really fabulous building and that was where the Sydney’s rich list really went to. And then, it was the Horizon and then it was the Residences on Hyde Park. We know that building very well. Now, it’s Crown residences at Barangaroo. This is where rich people are buying apartments. This is where James Packer bought his two storey apartment for $16 million dollars. He’s buying it off the plan; he hasn’t settled it yet. It just seems to be lots of barons of industry… Tech people, finance people, the founder of Investors Mutual has bought a place up there. Bintelli, Packer’s right-hand-man bought a place and they’re paying huge sums. You’ve got $41 million; Bob Blan has bought a place. $40.75 million, Tony Chang from the investment company. Incredible!
Do you ever feel you’ve missed out, when you look at these people, spending those amounts of money on apartments?
Well, they’re getting a bargain, really, because just over the road from them. One Sydney Harbour; it’s a LendLease tower, which is only half-built so far. I mean, Crown Towers is kind of almost completed. It looks pretty finished, but One Sydney Harbour, that’s where Australia’s most expensive property sold for $140 million. I don’t know; if I had $140 million, if I’d spend that much on an apartment.
Well, I’m guessing if you had $140 million to spend on an apartment, you’d have a few other million’s tucked away somewhere, to spend on yachts and things like that.
You kind of think, what’s in the apartment to make it worth $140 million?
Its location, isn’t it? With every bell and whistle. It would be quite nice, I’m guessing.
Yes, I guess so. I went for a walk yesterday around Barangaroo and at Crown Tower, on one of the floors (about halfway up), there was this kind of a blanket, flapping in the wind from the balcony. It was kind of weird; we stood and looked at it, because it just looked very strange. You kind of thought “wow! It’s gonna be really windy up there on some of those balconies.” I mean, they’re all a bit ‘inset’ into the building. Maybe when you’re actually standing on them, it’s not quite so windy, but it was really windy yesterday and this blanket was really flapping.
So, they don’t have the bylaw about not drying your laundry on the balcony?
I don’t know what it was; it looked kind of strange, really. As I was standing looking at it, somebody else stopped and started looking as well and very soon there was a crowd of people, all standing looking, because when you’ve got somebody looking up at a building, you think there’s something going on. You start thinking maybe there’s somebody standing on a balcony, ready to take off, but there’s nobody living there yet anyway, I don’t think. It was was really interesting, looking at the building. I mean, it’s a stunning building. But would I pay $60 million to live there? Even if I had the money, possibly not. Great views, obviously. Great location, especially if you work at Barangaroo; around there. You’ve probably got a few study’s in there, so you could work from home as well.
We stayed in the Residences in Hyde Park; overnight in there. It was okay.
What do you mean? As I remember, you really didn’t like it at all. We were staying in the penthouse and we had dinner there. Do correct me if I’m wrong, you said “I’m going home now,” and I said “no, I’ve got to stay here, because I’m writing about it.” I said “I thought you were going to stay with me?” You said “well, I really don’t like it.” I think that apartment was $10 million; on the market for $10 million.
I think it was more than that. I think it went for $20 million. It was two levels; it had a lift, an indoor lift.
It had a pool upstairs; it’s own private pool, but actually, it was really badly designed. I was looking at it and thinking well, would I want to live here, even if they offered it to me for $1 million, which obviously they’re not going to. I thought, no, I wouldn’t, because I want a bedroom and I want a study and I want a lounge room.
Do you remember the study?
The study was pathetic.
The tiny little alcove.
That’s right, so there was no proper room for a study. It was lots of open plan living everywhere, which is great, but you do need some rooms where you can close a door, I think. It sounds very old fashioned, but if you’re working from home, you want to be able to close the door and not be able to hear your computer pinging and zinging all through the night.
If I recall, the original buyers of that apartment were a Chinese family, for their kids, who were going to be students here.
There’d be plenty of ‘pinging’ and computers, going on there.
I haven’t been into Crown Tower, but I’ve been into the display suite for One Sydney Harbour and the finishes were just stunning. Lots and lots of marble and greenstone and imported from Turkey and imported from Italy. It’s all quite fabulous. Lots of sliding doors and rooms that could become open or closed, as you wanted. The kitchens are just stunning in lots of oak and beautiful timbers. It was really, really nice, but I kind of think once you get all your old pots and pans in there and start making a mess, it does look a bit different.
Talking about people working from home; I think if you’re buying an apartment for $20 million, you’re not exactly sitting there, churning out newspaper articles and stuff, every couple of hours. You might be on your phone a bit, telling other people what to do, rather than actually doing stuff yourself.
Sure and I guess you probably have a chef in there, wouldn’t you? Cooking for you. You can close the doors on the chef and then he could just (or she could just), open them when it was time for you to eat.
That apartment had a maids bedroom, was it? They had a bedroom for the staff? So yeah, you’d have live-in help.
It’s really interesting, when you look at people’s studies; I was looking at a developer in the Hunter Valley. They’ve caused a little bit of a stir on social media, because they’re advertising the homes that they’re building as having not a study, but a zoom room. When I’ve asked what a zoom room is, apparently it’s kind of like a little tiny nook, so it’s not really big enough to be called a study. It’s not really big enough to be called a nook really; a study nook, because the desk that you can fit in there is just tiny, but it is just enough for a screen and a chair. You could have a zoom conference there, I suppose.
And, a halo light. They can’t call it a zoom room unless they have a built-in halo light.
That doesn’t take up very much space. It’s really interesting that developers can find new names to make areas sexy. You know, like normally in the old days, that might be called a cupboard or a broom cupboard, but now it’s a zoom room.
Butler’s pantry, is another one; another name for a cupboard.
That’s right. That’s kind of much sexier as well, isn’t it? Isn’t it amazing, how imaginative they are. I think it’s quite extraordinary, really.
That’s how we get to be able to afford to buy apartments in Barangaroo.
That’s right and I bet they all have halo lights. I’ve got a halo light now, for my zoom conferences, because I was doing so many. I was looking as if I was in a dark dungeon and now, I’m completely illuminated. I did a zoom conference the other day, giving a talk at a library festival about a new book and it’s about an Aboriginal woman and she was on the zoom thing as well. It was terrible, because I was so light and bright and lit up and Aunty Di, the Aboriginal woman (a fantastic woman, who’s the subject of the book), she’s quite dark anyway; olive skinned and she didn’t have much lighting.
She was in a cupboard.
That’s right and it just felt terrible. I was just so dazzling white. It was all quite dark in there. I asked the publisher to buy her a zoom light as well, so the publisher has bought one, so that’s great. Next time, she will be brightly lit, as much as me.
You know you got that light? There’s a smaller version; there are several sized versions, but there’s a smaller one, which comes with a handle and a bracket in the middle. It’s a donut; it’s a halo of light. There’s a bracket in the middle and you fix your phone in it, so when you’re going around doing your influencing, you’re always perfectly lit. It comes with a battery pack, so you can use it outside. You don’t have to worry about backlighting and all that. The whole industry built around, you know, people doing selfies, videos and things like that.
That’s fantastic, isn’t it? Somebody should tell Barnaby about that, because we were watching him on TV today. He was presumably talking on a screen. He was really dark and there was sunshine behind him.
He had his giant hat on, didn’t he?
That’s true, but the zoom light would have really lit up his face, but maybe he wasn’t so keen to be lit up.
He tends towards red a little bit. Okay, we’re gonna take a wee break and come back. We’ll talk about places that are cheaper to rent than they were five years ago, that’s after this.
Well, we’ve kind of established what we’re going to be talking about, which is places to rent, that are cheaper than they were five years ago. Where are these mythical places?
It’s funny; there’s a new Domain report just came out on rents and I kind of thought… Rents have gone up so much. I mean, they’ve softened a bit in the unit market, but I would never have thought there’d be rents today for apartments, that were cheaper than they were in 2016, but actually, there’s quite a lot. It’s astonishing and for quite a lot less. I mean, in Sydney, units in Millers Point; do you remember Miller’s Point?
Millers Point is just by The Rocks; near the Bridge.
Yes, where they had lots of Housing Commission tenants, but they were all moved on. The rents there, over the last five years, have crashed by 33.8%. Now, the median rent is about $660 a week.
I remember when they kicked out all the Housing Commission people in those lovely old terraced houses and sold them privately and a lot of people immediately jumped in and put Airbnb in. Well, I guess that’s not an option anymore?
No and lots of them have been renovated and they’ve just not got the tenants for them anymore, because people are moving out of the CBD’s. They don’t really want to live in the CBD, because they don’t have to work there anymore.
And, they wouldn’t have level access.
They want to avoid the city. So yeah, those rents have gone down. The second biggest area was the southwest; Canterbury-Bankstown.
Which we’ve been talking about. I’m guessing rents there are about to take a further nosedive.
That’s right. Then, Bass Hill; rents have fallen 29.1%. That’s a lot, isn’t it? They’re down to $433 a week.
We’re talking about an average of (what is it), a two bedroom house or apartment?
These are apartments; this is a two bedroom apartment average. The place where it has fallen by the most (the third place that it’s fallen by the most), is surprising. It’s in the upper North Shore; North Ryde and they’re 29% cheaper than they were five years ago. They’re just $477.00
North Ryde is not hugely posh North Shore, is it?
No, not really. I think they’ve had a lot of building of apartments there, so they’ve probably got a bit of an oversupply. Then in Melbourne, the biggest losers were (you can probably guess), Melbourne’s Docklands and South Bank. Rents for a Docklands unit have gone down by a quarter; 24.5% to $400 a week now. South Bank was exactly the same; 24.5% down and that’s just $390.00.
And again, it’s that flight from the city. I mean, Docklands was like 30 to 40% Airbnb or other holiday rental places. You’d think okay, Airbnb has moved out, but it’s not really like ordinary residential tenants are going to be rushing to move in, because they would know that the first opportunity the landlords get, they’re going to get kicked out, so they can make more money on Airbnb.
That’s right. And I think there were lots of overseas students living in the cities as well. They lived in Docklands and Southbank, to study in Melbourne. Lots of hospitality workers would have been living there as well, to staff the cafes, and the hotels and the restaurants. Many of those have lost their jobs as well, so they’ve kind of gone back to their parents, or gone back to share houses. There’s a high vacancy rate for those places too, so that’s really pushed rents down. If you’re a tenant, it’s kind of good news, because there are lots of areas in our major cities where you can find rents a lot cheaper than five years ago, depending on where you want to live. For apartment investors, it’s not such great news in those areas.
If I was an investor/owner in an area like that, I would be saying “come and rent my apartment, on a one year or two year basis. We’re not going to throw you out as soon as tourism picks up again.” I think that would make it a much more attractive proposition for a lot of people, who might not otherwise get the chance to rent a fancy apartment in Docklands.
A near-new apartment, really.
If you’re faced with the prospect of, after six months, or even a year, that you’re going to have to move again… I mean, that has all sorts of attendant costs and hassles. You’ve got to find somewhere else to live, for a start. You’ve got to get removalists in, you’ve got to change your address. Yu might not be able to find the school for your kids.
I think that’s why buld-to-rent is proving so popular with lots of tenants really, because you can have a long-term lease and you can keep renewing it, as long as you possibly want to. I think that’s a real motivation for people to go and live there.
Even though those rents are higher, because you’re not having to move and you don’t have that additional expense; you don’t have that additional hassle and that stress, it actually evens out quite quickly.
That’s right and you do have high-level facilities there. I mean, they often have gyms and pools and things like that there too, for tenants.So yeah, interesting times for tenants. If you’re looking for an apartment in Parramatta, there might be one going a bit cheap. The news that NRL star Jarryd Hayne has just given instructions from his prison cell to sell one of his investment apartments in Parramatta. He’s got an apartment in Parramatta that he’s selling, because he doesn’t need it.
Because, he’s living at her Majesty’s Pleasure, at the moment.
Yeah. I think he’s planning to launch an appeal, so maybe he wants some money to fund that appeal, perhaps. So, you could be doing him a favor, if you wanted to.
It’s always a bit of an icebreaker at parties; “guess who used to own this apartment?” Or, maybe not.
Would you actually boast about that?
I don’t think so. I think we’ve covered just about all the bases. Thank you again, Sue, for your considerable contribution.
And, thank you all for listening.
And, good luck. Stay safe!
Yeah and wear masks, all the time!
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.