Podcast: Rent bidding ban and too much information

In this our last Flat Chat Wrap podcast of the year, we kick the tyres of a couple of issues that will have consequences throughout strata. Or will they?

And we suggest some holiday viewing aimed solidly at apartment dwellers.

Given that half the residents of our strata schemes are renters, recent changes in the law could impact on a lot of people living in and owning apartments and townhouses.

The first is the NSW government’s decision to fall into line with Queensland, Victoria and Tasmania and ban rent “auctions”.

As of last weekend, real estate agents and landlords will not be allowed to suggest to potential tenants that they offer to increase the requested rent.

Will it make any difference to soaring rents? And can tenants still offer to outbid rivals? We take a stab at an answer or two.

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We also take a look at how much information tenants are expected to give – you will be astonished – just to apply to rent somewhere.

With cybersecurity under scrutiny, as exposed in a recent TV report, we wonder is we are giving away too much personal information, and what we can do to limit it without restricting our choices.

And finally we talk about three streaming options for your holiday viewing – all with very different strata connections: Only Murders in the Building, The Flat Share on Paramount and High Rise on SBS on Demand.

If you don’t have the commercial TV services, now would be the time to sign up for their trial periods then binge watch. Don’t forget to cancel whn the trial perion is over.

And if that’s not enough, you can read the stranger-than-fiction true stories of the “Only Murders…” apartment blocks HERE.

Have a great Christmas and we’ll talk to you all again in the New Year.

TRANSCRIPT IN FULL

Jimmy  00:00

Christmas is just around the corner.

Sue  00:01

Yes!

Jimmy  00:02

I thought we’d sneak in a quick pod, before we go off for a couple of weeks’ holiday.

Sue  00:08

Okay, great.

Jimmy  00:10

And part of the reason is that not a lot is happening in strata, or anything else. Everybody’s sort of geared-up for the holiday season.

Sue  00:19

Everything’s slowing down, I think.

Jimmy  00:21

But there’s been a couple of things that have come up. New South Wales has introduced no bidding on rental properties and there’s a bit of a concern, about the amount of information that tenants have to give out. So that gives us something to chat about. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue  00:44

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

Jimmy  00:47

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

This does not feel like summer in Sydney, does it?

Sue  01:06

No, the weather’s terrible outside. It’s really windy and it’s been raining, but at least we’re almost on holiday.

Jimmy  01:13

That’s true. People might be able to hear the wind outside, depending on how effective this editing software is.

Sue  01:21

Good luck with that!

Jimmy  01:22

Yes! The biggest news, well, given that 50% or more of people who live in strata are tenants… Last weekend, the government in New South Wales banned rental bidding. So that’s basically where you see an apartment for rent, or a house for rent at a certain figure, and you go along, and the real estate agent says “look, if you agree to another $10 a week, you’ll definitely get this.” Given that there is such a shortage of rental accommodation around, when people are desperate to find somewhere to live, obviously that exploits the situation. I mean, it’s the oldest rule in commerce, isn’t it? That when demand outstrips supply, prices go up.

Sue  02:14

Absolutely. But what happens if people who want to rent a place go in and the rent is $500 and they say to the agent “look, I’m going to offer you $530 a week;” is that outlawed as well?

Jimmy  02:28

I can’t see how it could be. I mean, nobody is doing anything that’s illegal.

Sue  02:35

So basically, they’re outlawing rent bidding. So that means that the real estate agents can’t suggest that or the owners; can’t put pressure on tenants.

Jimmy  02:49

You turn up to the property of a real estate agent’s office, and you fill in the forms and they say “look, there’s 20 other people interested in this apartment, but you know, if you can come at it with a bit more money, then you’re probably going to get it.” And of course, then the next person who walks through the door gets the same story. So it’s really unfair on people who have turned up, expecting to be able to rent somewhere that they can afford and finding out they’re going to have to put more money on the table. Now, New South Wales is quite late to the party on this, because I think the anti -rent bidding laws are already in place in Victoria and Queensland. Sue, you have your finger on the pulse of house and apartment prices; what difference is there between the rise? I mean, we know rents have been going up everywhere… Have they been going up faster in New South Wales than Victoria?

Sue  03:49

No, they haven’t, Jimmy. It just kind of shows I think, that it was all about the market, rather than the kind of tweaks to the market. Because the latest figures for rents came out in October, and they went up for the year to the end of September, so they’re a little bit out of date already. But those figures showed that unit rents in Sydney, are very high; $550 a week and unit rents in Melbourne are a little bit lower, at $425 a week. But that’s merely the difference in price between the two cities. Property is always more expensive, and rents more expensive, in Sydney, than in Melbourne. But for the year to the end of that September this year, rents went up in Sydney 14.6%.

Jimmy  03:49

Wow.

Sue  04:04

Yes, it is a huge amount, isn’t it really? But rents in Melbourne, went up 14.9%;  0.3% more, so it’s kind of really difficult, how rents went up much more over the year.

Jimmy  04:47

There’s so many factors involved,

Sue  04:49

Well there are. The pandemic hit Melbourne worse than it did in Sydney, because their lockdowns were much longer. So they’ve just about almost recouped all the rent… You know, there was lots of rent discounting, during the pandemic? They’ve almost recouped all that reduction in rent now, so rents are just $5.00 behind what they were in March 2020, before the pandemic really hit. Over the last quarter, they went up 3.7%. In Sydney, they went up 4.8% on the same quarter. But you know, it’s kind of in line with other cities, really. In Brisbane, rents went up 2.2% on the quarter (a bit less), but 12.2% over the year, and they’ve reached a record high of $460 a week, which is considerably more than Melbourne’s $425 and considerably less than Sydney’s $550.

Jimmy  05:41

I mean, there are so many factors involved in how much it costs to rent somewhere.

Sue  05:46

That’s right. It’s interesting; the Real Estate Institute of New South Wales has really criticised the government about outlawing rent-bidding, because they’re saying it presents landlords and real estate agents as the enemy, when they’re helpless as well, because there’s just a critical housing shortage and a critical supply shortage of available rentals. And that’s incredibly true.

Jimmy  06:08

But you will always get the outliers, the people in any industry, who will make the most of any opportunity that arises, whether it’s fair or unfair. It’s like the guys, when there was a crisis in student rentals and overcrowding a couple of years ago (which I sense might be on it’s way back)… You know, rental agents were telling female students they could rent a room, if they had sex with them. Which is awful and horrible, but shows how easy it is to exploit people, if they’re desperate. So I think in a way, I don’t think it’s going to make a huge difference to rents, at least it doesn’t seem to have in Victoria, but it will just make the industry a bit more honest. See, what could be happening, is that agents and landlords are saying “we can’t negotiate up from the price we state, so let’s put the maximum we think we can get.”

Sue  07:16

Yes, so that could be inflationary as well. And then for the people who want to take the tenancies, I mean, what have they got to do? I mean, they’ve presumably got to stay overnight, outside the front door of the apartment building, or something; you know, to be first in, if they’re a good candidate. Because if there’s 30 applicants for one place (which I think happens quite regularly), how does the landlord and the real estate agent distinguish between them? If they’ve all got jobs, they’ve got steady incomes; they seem to pay their bills on time. How do you possibly distinguish?

Jimmy  07:51

I can think of ways I would weed out poor candidates.

Sue  07:56

They might all be good candidates.

Jimmy  07:58

No, no, no! Like, anybody who came and said that they were lawyers; young lawyers. “I’m sorry, it’s already taken.” A friend of ours was renting a house, and they had two or three young lawyers staying in the house, and they would get phone calls saying “we need the light bulb changed. You’ve got to come and change the light bulb.” There was always this implied threat, that if you don’t do exactly what we want, within the terms of the lease, then we’re going to make your life difficult, because we’re all lawyers. No, I would bounce them!

Sue  08:33

But I mean, the real problem is the shortage of housing. And as we know, you kind of talk about a balanced housing market, when there’s about a 5% vacancy rate for rentals. So 5%; okay… In Sydney, it’s 1.1%. In Melbourne it’s 1.3% and in Brisbane, it’s 0.6%. So, it’s incredibly tight.  So there’s no wriggle room for anyone, is there? Not at all. There might be, if lots of people who own residences that they’re putting out on short-term lets; if they put them back into the residential rental pool, that might help a little bit. But you know, we still just need more housing, we need more apartments.

Jimmy  09:04

The one thing that the government’s will not address, is the short-term rental issue. Anybody who has any awareness of the number of homes that have gone into short-term rentals in all states, over the past few years, knows that it’s made a big dent in the availability issue. The government will never say anything about it. There’s two things: one, they don’t want to be seen to be taking money out of people’s pockets, that they could be earning (this myth of the sharing thing). And the other one is, they want tourists to come here; they really do. I mean, as we were talking about last week, hotels are making a comeback, because people try out the Airbnb, or the Stayz or whatever experience and discover that yes, they do like to travel to other countries and other cities. But when they get there, they want a level of comfort and security, that they’re not necessarily going to get, because the Airbnb thing can be a gamble, as we discovered in the past.

Sue  09:15

For sure. So this is a step in the right direction, but there’s still an awful lot more that needs to be done.

Jimmy  10:29

I think it’s a step in making the whole process more transparent and honest. I don’t think it’s going to have a huge effect (from what you’re saying with the figures there); I don’t think it’s going to have a huge effect on the rise in rents. Rents are going to keep going up, until we reach a point where people are just going to go and live somewhere else, because they can’t afford to live in our cities.

Sue  10:54

Absolutely. And at the moment, they’re saying that the figure for first homebuyers is really down; it’s down by 26% now, to what it was a year ago. People are saying, well, because rents still keep increasing and because the vacancy rate so low, that might start persuading a lot of people who prefer renting (you know, maybe it’s a lifestyle choice, or an economic choice), it might force them into becoming first homebuyers; to buy their first place. Because interest rates; yes, they’re a bit higher than they’ve been, but they’re probably stabilising now. There’s probably only a couple more interest rate rises going to happen, early next year, because inflation rates still seem to be coming down a little bit. Because there’s fewer first home buyers out in the market, and there’s fewer investors in the market and fewer owner-occupiers, there’s less competition, so they can negotiate with vendors a little bit better. Prices are softening in lots of places, as well. Apartments are presenting extremely good value, because their prices have fallen a bit more and didn’t go up as much as houses. So at the moment, the experts are saying that apartments offer great value. Maybe, it just might persuade more people who rent apartments to actually start buying them, instead. Especially because houses just aren’t being developed very much at the moment; the figures are really down. But apartment developments are still going up.

Jimmy  12:22

With individual houses, your quarter-acre block (well, the nobody’s got a quarter-acre block anymore), but these mansions that are built right onto the boundary of the property, they are the least efficient way of housing people.

Sue  12:38

And there’s far fewer of those around now, as well. All the new land and package developments, they’ve all got much smaller blocks and they have gardens as well and they have proper entertaining areas in the gardens.

Jimmy  12:53

And people are trying to build communities. I mean, a friend of ours has just moved into an apartment block, or a scheme; a multi-block scheme, in the innerwest of Sydney and they have a monthly Social. She went along for her first one the other night and she said it was nice, and she felt that there really was a community there. She would be about 40-ish and the funny thing is, she said contrary to what I would have expected, most of the people there were over 50; the people who came out for the social. We tend to think of apartments as being the provenance of younger people, but it’s actually older people, especially downsizers. People who found a nice, comfortable way of living and staying in the city, which is where they want to be.

Sue  13:47

But then again, Jimmy, there’s probably a lot more younger people there, but they don’t go to social drinks, because they’ve got busy social lives, coming up to Christmas. Yes, it’s incredible now. I mean, you kind of have to give your wage, your salary, whether you’re expecting to go up in the company you’re in. How secure your job is.

Jimmy  13:54

They’ve got real social lives. When we come back, we’re going to talk about the amount of information that you have to give out when you’re basically, doing anything these days, but especially becoming a tenant. That’s after this.

[MUSIC]

Jimmy

I dropped in on LinkedIn and I saw a post by Victor Dominello, the Fair Trading and Digital Minister and Innovation. He’s got more ministries than Scott Morrison (but legitimately), and he was responding to a piece that had been on channel seven, I think, about the amount of information that tenants are expected to give. Really?

Sue  14:52

Yes, because the thing is, if you’re competing amongst other would-be tenants for positions, you’re encouraged to give as much information as you possibly can.

Jimmy  15:04

But as we know, that information is not necessarily going to be secure.

Sue  15:07

No, absolutely not.

Jimmy  15:09

I remember a couple of years ago, I was buying a new phone, or getting a new mobile contract and the people in the shop… They needed more information from me, and I didn’t have it on me at the time and I sent them a fax. It was stuff like bank account details and credit card numbers and things. I said “I don’t feel very comfortable about this,” and they said “no, it’s fine. You know, we do this all the time. It’s very safe. You know, it’s very private.” So I went down to the shop to get my phone and I said “well, you know, can I get my phone now?”  They said “oh, you never sent that thing.” I said “yes, I did. I faxed it to you.” Remember faxes? The guy said “no, no, no, no,” and then he went through the back shop, and came back and said “oh yeah, we found it.” I said “what do you mean, you found it?” He said “well, it was sitting on the photocopier.” I said “so this is your level of security? You just leave things on the photocopier?” He said “mate, I don’t know why you’re getting so upset. It doesn’t matter.”

Sue  16:09

And he was probably photocopying it busily and getting all the details!

Jimmy  16:13

And then just the other day, I was online; I was about to buy something. There was a point where it said ‘what’s your driving licence number,’ whatever. And I thought  “I’m buying, like a pot, or something, from a department store. Why do they need my driving licence number?” And I actually thought this is ridiculous, that we have to give so much detailed information. I wonder, would it help if we all had a an identity card?

Sue  16:46

Yes, that would make it much easier, or even a little chip in a finger. Do you remember, a few years ago, we were going on holiday to a place in South Australia and the resort where we were staying ( it was a tiny, bespoke place)… They sent us this huge questionnaire and it was like ‘what’s your favourite food? What’s your favourite music?

Jimmy  17:09

What’s your favourite wine?

Sue  17:11

What do you like doing in your holidays?’  All these questions.

Jimmy  17:14

You refused to fill it in.

Sue  17:15

I thought, wow, this is really invasive; I don’t like this. Whereas, you filled it in. When we turned up there, they were playing on the music system, your favourite music. They had a chilled bottle of your favourite wine there.

Jimmy  17:29

They had a guitar.

Sue  17:32

Because you play guitar and they had a menu with all your favourite meals on and I thought “bugger! Why didn’t I do that?!”

Jimmy  17:41

That was benign. I wonder if they’ve still got that information. But you know, it can be quite sinister, when people start putting bits of information together. I’ve had my identity stolen three times. Once, somebody managed to clone; it was a taxi driver. The trick is (and here’s a word of warning, if it ever happens to you); they put your credit card through a machine and then they go “oh, that machine’s not working. Can we put it through this machine?” One of those machines is copying the information on the chip and the other one is copying your pin number, when you put it in, although nobody needs to do that, so much these days. So that was how I got caught. They managed to pull about $10,000 out of my credit card account before… I was overseas. I was in Vietnam, and I got a call from you saying “can you please pay our credit card bills, because they’ve just stopped my credit card?” It turned out that we were being filleted by somebody who had scammed it. I remember somebody once got my credit card details and they were in Melbourne and they bought themselves a computer, they bought air tickets to Sydney; none of which they could use. Because to get the computer, they would have to have given their address.

Sue  17:49

That’s ridiculous.

Jimmy  18:02

And to use the flight, they would have to turn up at the airport with ID. They were just seeing what they could do with somebody else’s ID. I don’t know, there must be a verifiable system… You have an ID card, it’s got a hologram on it, it’s got your thumbprint on it and it’s got your picture on it. And that’s the only thing you ever need to give anybody. I think especially with tenants, because in this LinkedIn thing, one person wrote in and said, they were once accidentally sent an email by a real estate agent and in that email, there was the profiles of four applicants. It had their bank details, their credit card details, where they worked, where they lived; all that stuff, just accidentally sent out. We know from the Medicare scandals and other stuff, that this stuff is not secure. Probably at some point, the government is going to have to come in and say “you need to wipe everything that you don’t need to do your business and start again.” Okay, well, Christmas is around the corner, as we said. Are you looking forward to a break?

Sue  20:24

Oh, I really am. It’s been a long year. It’s been a great year, but it’s been tough for a lot of people. Hopefully, if the weather picks up a bit, it’s always good in the summertime. Everything’s always much better in the summertime.

Jimmy  20:39

We quite like Christmas, because a lot of people go away. After Christmas shopping is over, the city gets quite quiet for a week or so. Everybody goes away. People stopped calling us up and demanding all the stories that we’re late with.  Well, it’s funny, because I was going to say we get a chance to relax and we get a chance to do some work. But actually, for us, that is relaxing.

Sue  21:04

I mean, we get to do our book projects, I suppose, over this period of time.

Jimmy  21:08

I  have to finish my edit on my novel.

Sue  21:10

Haven’t you finished that yet? Oh, my goodness, you have to hurry up. I finished my edit, but it was only because I had a really tight deadline. But the trouble is, they haven’t given you a deadline for your edit. I think I’m going to relax this Christmas. I’m going to watch some more of ‘Only Murders in the Building.’

Jimmy  21:28

That’s the new series.

Sue  21:29

Yes. Because season one was great. It was that comedy with Steve Martin and Martin Short and Selena Gomez.

Jimmy  21:37

Martin Short; I think Martin Shore is a British detective actor.

Sue  21:42

I keep muddling them. It’s a great series about people who live in the same apartment building, with some nefarious goings on there, that they kind of try and solve.

Jimmy  21:53

I read an article about that apartment building and it was a really interesting building, where everybody rented and the the building was gradually deteriorating, because they couldn’t put the rent up, because it was rent-controlled. It was beautiful; it took up like an entire block in New York. And then somebody came in and started buying up bits of the building and buying the tenants out.  I think there was one person left there, who refused to go, but as they bought the tenants out, they could increase the rent and then once they’d done that, they started selling the individual apartments. A fabulous building.

Sue  22:39

Oh, it looks beautiful in the TV show.

Jimmy  22:41

It wouldn’t it be cheap, buying in there, I wouldn’t think. Or renting, for that matter. What else have you got?

Sue  22:47

And there’s another TV series just starting, called ‘The Flatshare.’ Have you seen any of that yet?

Jimmy  22:53

I’ve seen some promos for it. It’s an interesting concept, that a couple decide they want to share the cost of a flat, but they don’t want to actually spend any time together. So they kind of do hot-desking, or hot-bunking. They’re never in the flat at the same time, so they communicate with each other through post-it notes.

Sue  23:17

Okay, sounds fun. Might be good to see.

Jimmy  23:21

I thought you were going to suggest that we could start doing it.

Sue  23:25

Might be an idea, actually!

Jimmy  23:27

And the classic apartment movie is ‘High-Rise.’ I’m trying to think of the name of the science-fiction author who wrote the book.

Sue  23:37

We’ve got it somewhere, I think. That’s quite dystopian, isn’t it?

Jimmy  23:43

Basically, it was written back in the 60s, when high-rises were just beginning and like the reality of many high-rises, the rich people live further up the building, and the poorer people live further down the building. There’s a crisis of, they can’t afford to keep their facilities going and so they shut them off to the poorer people in the lower floors and this starts a civil war within the building. Sounds like a typical day of an apartment block in Sydney. It’s streaming on one of the streaming services. Just so as to not frustrate our listeners, ‘Only Murders in the Building’ is on Disney, is that right?

Sue  24:31

Disney +.

Jimmy  24:32

And ‘The Flatshare’ is Paramount +plus, and I think ‘High-Rise’ is either on Stan or Netflix. It’s there somewhere.

Sue  24:38

And you’ll probably put it on the internet.

Jimmy  24:48

The internet; the good old internet.

Sue  24:52

You’ll probably put it on your Flat Chat site, when you talk about this podcast.

Jimmy  24:56

I think that’s quite enough from us, everybody. Thank you so much, for listening to us for the past year. We’ll be back in January, creating more trouble for people, who need trouble created.

Sue  25:09

Have a happy Christmas and hope you have a magnificent new year. I’m sure 2023 is going to be a belter for us all.

Jimmy  25:17

I think so too.