Clover Moore Reforms NSW Strata

The Hon. Clover Moore MP is the Mayor of Sydney and Member for Sydney in the NSW Government.

And since her electorate is inner city and contains many strata schemes (some very  prominent) she has been more interested in strata title matters than many other politicians.

So interested in fact that in 2009 Clover Moore launched a campaign to introduce a private members bill to the NSW parliament to reform strata title laws.  So far that’s involved –

• Distributing a discussion paper – contact me for a copy
• Holding a public form at Parliament House in October 2009
• Speaking directly with key industry stakeholders for feedback on reform issues
• Working with lawyers, Makinson & d’Apice to analyse legal issues & prepare documents
• Submitting a request to parliamentary counsel to prepare a draft bill 

Her latest news on the topic says that –

• She is still working on a series of bills to update strata to improve transparency, amenity, management and dispute resolution
• Substantial drafting is needed
• She hopes the bill will be ready by the end of the year

If you would like to receive a copy of the bill when it is available, contact her office on 02 9360 3053.

But, the process is slow but moving forwards.  And, probably, the NSW state election in 2011 will adversely impact her plans.

But, at this stage the likely areas for proposed reform by Clover Moore are –

• Banning original owners from executive committee and
• management positions
• Improving disclosure requirements
• Introduce a Code of Conduct for executive
• committee members
• Giving residents and prospective owners
• better access to documents
• More Tribunal more power to resolve problems
• Measures to prevent overcrowding

Regardless of all the and others’ criticisms … I say go for it Clover and fix those strata laws!!!

Francesco …

How much Strata Service can you Handle ?

There’s a common disconnect between what people in strata apartments want and what they will pay.

Which is surprising since strata is all about the most valuable asset most people own and the owners involved have at least enough capital and income to own the apartment and the occupiers can afford the rent.

And worse still, this approach and these beliefs have come to characterise much of strata title as ‘value conscious’ and ‘frugal’ .. if not downright cheap. 

But, that’s not the situation throughout the strata sector.  There are strata schemes, owners and occupiers who will pay more for better services and outcomes and who are seeking and demand more than they can currently source.

At the extreme end of the strata market the properties featured in this recent Wall Street Journal article called "Living in the Lap of Luxury" define a new standard in strata apartments and services.  And, (I think) they reveal more about how owners and occupiers really want to interact with their apartment homes.

To quote the article “Imagine if your apartment made you feel like a VIP. Walk in and your freshly laundered clothes are neatly stacked in your drawers. Your fridge is stocked with your favourite delicacies and a bubble bath is waiting for you—at precisely the perfect temperature.”

These new ultra-luxury zero-maintenance developments are in locations like

Milan, Italy; Mont-Pèlerin, Lake Geneva, Switzerland; Hyde Park, London, UK; Verbier, Switzerland; Zurich, Switzerland; Berlin, Germany; Hamburg, Germany and Istanbul, Turkey and are providing better than hotel service within the privacy and security of your own residence. 

One new owner at Du Parc in Lake Geneva, Tony Parker, an NBA San Antonio Spurs basketball star, described it by saying "Being at home feels like living in a James Bond movie".

Of course, none of this comes cheaply.  For instance prices at Du Parc in Lake Geneva range between 4.7 million Swiss francs for a two-bedroom apartment to 24 million Swiss francs for a penthouse (AU$5.0 million to AU$28.0 million).

Charles Weston-Baker, head of estate agent Savills International says "The international super-wealthy are cash rich and time poor. They are snapping up this sort of development" and that doesn’t surprise me.

And, at different levels so is everyone else who chooses to live in high density … so maybe there’s lessons for all apartment development in these extreme examples.

See you after my spa and massage at home ….

Francesco …

And the President gives Awards (at NCTI)

When the President speaks the world listens.  And, when the President gives awards we all notice.

Another way National Community Titles Institute awards its best is with the NCTI President Award.  It’s given

to people who have contributed to the development and aims of the National Community Titles Institute and the national strata title agenda.

This year the award was presented to Anna Edwards of Adelaide Strata Management.

Anna is a director and principal of Adelaide Strata Management and has been involved in strata title for 19 years.  Since 1994 (5 years before NCTI was formed) she has been involved in creating and developing a national agenda for strata title stakeholders.  She was an NCTI council member for 10 years and its President for 6 years.  And over the last 10 years she has (almost single handedly) driven the education agenda to create nationally recognised competencies for strata management, a national education framework, an nationally recognised course and the adoption of those standards and course a the qualification for strata managers wherever licensing or registration is required in Australia.

Well done NCTI, its President for recognising outstanding efforts.

And, well done to Anna as the recipient and thanks for your commitment to strata title.

Francesco …

How many times do I need to tell you ?

Are you listening ???

The future of real estate is strata, community and other group titled property. 

No doubts !

No questions !

No arguments !

And, wherever you look at the data, it just proves it more (and more).

Recently information published by RP Data reveals the following interesting high density facts.

• 15 years ago only 25% of capital city home sales were units or apartments whilst today they account for about 35% of home sales
• Despite the proportion of unit and apartment sales moving down since 2005 (after the last significant property boom) from 2009, due to the First Home Owners Grant and sharply dropping interest rates, first home buyers returned to the market resulting in a rebound in demand for units and apartments
• The proportion of unit and apartment sales in the combined capital cities is, as you would expect, higher than across the rest of the nation
• As at August 2010 unit and apartment sales across the combined capitals accounted for 35% of sales compared to the 30% nationally
• In Sydney and Melbourne, there is an even greater proportion of unit and apartment sales. In August, unit and apartment sales in Sydney accounted for 43% of all dwelling sales and 37% in Melbourne

The following graph shows volumes of house versus unit and apartments sales since 2001.

Contact me if you want a full extract from the article.  And, get on the high density craze with me.

Francesco ….

Calling the roll at NCTI

I've posted about the National Community Titles Institute a few times on this blog.


But, I thought it would be good to record the people who have worked at NCTI as committee members and support staff over the years.


So here they are (based on the year they took on a role).


Colin Archer - 1994 to 2001 & 2010 to date
Anna Edwards - 1994 to 2008
Bryan Forby - 1994 to 2004
Cheryal Griggs - 1994 to 2002
Francesco Andreone - 1998 to 2007
Rob Pitcher - 2000 to 2005
McCalls (Peter McCall, Sasha & Katrin Schmidt) as secreteriat and PR firm - 2001 to date 
Wally Patterson - 2001 to 2005
Ros Janes 2002 to 2006
Mark Atkinson - 2003 - 2007 & 2009 to date 

Robert Beck - 2005 to date

David Binks - 2005 to date
Matt Amber - 2005 to date
Jacky Courtney - 2006 to 2008
Glenn Ettridge - 2006 to 2007
Bernie Herbert - 2006 to 2008
Tim Carrigg - 2006 to 2008
Michael Hurley 2006 to 2008
David Morris - 2007 to date
Howard Stewart - 2008 to 2009
Erick Adriaanse - 2008 to date
Viane Watson - 2008 to date
Bernie Galletti (Executive Officer) - 2009 to 2010
Mark Lever (Executive Officer) - 2010 to date


That's a lot of work by a lot of people over a long time .... so well done and thanks everyone.


Keep supporting NCTI and see you at the next NCTI Convention.



Francesco ...

Sunset over Melbourne

Another nice way to end the week is to watch the sunset.

So here's a great video of the sun setting over the Melbourne cityscape made by John McLovin.  The YouTube link is http://www.youtube.com/watch?v=ZUu2nv5hypc



Enjoy.


Francesco ...

OCN has its AGM

The Owners Corporation Network is holding its 2010 annual general meeting this Saturday.

The OCN is the leading owner and scheme association in NSW and (like all volunteer associations) needs more member involvement and support.  So, if you're a strata owner, executive, manager or supplier why not come along?

And, besides I always think it's interesting to see groups of people in charge of meetings hold their own meeting.

The details for the meeting are as follows.

Between 10:00am - 12:00pm on 20 November 2010

At The Station, Jackson’s Landing, Bowman Street, Pyrmont

http://maps.google.com/maps?f=q&source=s_q&geocode=&q=Bowman%20St,%20Pyrmont%20NSW%202009,%20Australia&ie=UTF8&z=16

See you Saturday.

Francesco ....

What happened at the NCTI/ISTM 2010 Convention ???

Last month the National Community Titles Institute and the Institute of Strata Title Management held their 2010 Convention at Darling Harbour, in Sydney.

So, what happened of interest ?  Quite a bit including –

• A forum of manager and supplier business principals who learnt about the initiatives between all Australian strata associations and NCTI to work towards a single national association
• A fascinating presentation by Mark Bouris (former Wizard Home Loan founder) about what makes interest rates rise and fall in Australia
• Revelations by Mark Bradury (Australian Olympic Gold Medal winner for ice staking) about the many years or hard work it took to succeed
• Over 50 display and exhibition booths to browse
• Presentations on risk management, latest strata cases, communication, strata management challenge
• A gala dinner and awards night at Luna Park
• Awards given to Colin Grace of Grace Lawyers (the Max Dunn Award) and Anna Edwards of Adelaide Strata Management (the NCTI President’s Award)
• And, lots of business and social networking

All in all, another great convention so well done NCTI and ISTM.

If you missed it … don’t make the same mistake in 2011.

Francesco ….

Reckon Aussie real estate is Tough ? Try Somalia …

Over the last 24 months I haven’t stopped hearing about how tough the Australian real estate sector is these days - with interest rates up by 1-2%, property values stagnating, no finance for projects and a lack of new stock for development.

But, it’s really just whinging when you look at what’s happening elsewhere in the world.

For instance, in Somalia where the internal warfare for power over the last few years has resulted in some major real estate sector impacts like –

• more than 1.5 million people (out a 9.0 million population) have been forced to leave their homes
• over 51,000 people have adandoned their homes in the capital, Mogadishu, because of bombing and violence
• most displaced people have to live in makeshift camps in the safer rural areas
• there aren't too many buyers for real estate where the violence exists (that's a tough selling market !)
• the safer areas are controlled by rebel groups (and I'd call that a seller's market ...)

But despite that some property developers are thriving, making money and providing for the housing needs to many.

The Wall Street Journal has a short article on this phenomenon (here) which explains that developers  -

• are buying people’s abandoned homes in cities like Mogadishu for 20%02% of their former values in the hope of refurbishing them and re-selling them when the war ends
• are doing deals with rebel groups to develop forested and rural areas to build new housing
• importing building materisls and contract workers to build new housing
• building affordable housing at different price points for families and others who need somewhere new to live

It’s really amazing what’s going on and for once  (at least) I think it’s time to thank the developers for helping people with their housing needs when no-one else can.   

And, so what if they make a profit ?

See you in a war zone real estate market.

Francesco …

Run Rabbit ... Run Run Run

I was thinking about how the green agenda means that we should use cars less and more of other kinds of transport - like pushbikes, etc.  And in Sydney there is a significant push for that by the Hon. Clover Moore MP with her cycleways around the inner Sydney areas.

The most obvious things that's done to Sydney has been giving up some of the road ways to cyclists as you can see in these photos.

This is probably a trend that will continue (for good or bad reasons). 

But what if we took this kind of green initiative even further and promoted walking, jogging or running more and handed over the road ways to people (rather than limit them to the footpaths).  You might think it's a bit crazy and unlikely but stranger things have happened.

And if it does it might look a bit like this time lapse video of the runners at the 2010 New York Marathon taking over the roads, bridges and freeways.  It's amazing !!!

See you on the new Sydney running ways to be constructed in 2020.

Francesco ...  

Let's Discuss Mortgage Interest Rates

Everyone’s been very excited about interest rates in Australia and what Reserve Bank action will do to mortgage rates.  And, rightly so since it affects the real estate and property related markets in so many ways (adversely when interest rates increase).

But, that made me think of another issue around mortgage interest … their tax deductibility.

Most countries do not allow taxpayers to reduce their taxable income by the interest paid on a loan which is secured by their principal residence (or, sometimes, a second home).  Australia is one of them.

But some countries do allow it … and they are the Netherlands, Sweden, Switzerland, and the United States.

It’s an interesting proposition with arguments for and against as follows.

Reasons why mortgage interest should be deductible

• Deductibility incentivises home ownership
• In countries that impute tax income on home ownership the deduction is for income-producing purposes
• The increased number of owned properties and the likely higher prices/values of properties will create other taxable income

Reasons why mortgage interest should not be deductible

• Deductibility does not significantly impact home ownership either way
• It allows taxpayers to circumvent the general rule that interest on personal loans is not deductible
• The deduction disproportionately favours high-income earners

Whilst I think that there are social equity issues, in an economy and society where home ownership is a cultural requirement and the key wealth development strategy for most people … I think we should allow home mortgage interest to be deductible.

See you at the ATO refund counter queue.

Francesco …

The Biggest Question in Strata ?

What’s the biggest question in strata ? 

Should Sydney have more high-rise apartments ?

Funnily enough not everyone agrees about the answer.

The SHM Domain recently published an article on the topic canvassing the views of an architect, a developer, an academic and a resident.  Their views are mixed and worth reading.

I know what I think … keep building them, build more and builder them bigger.

What do you think ?

Francesco …

Investing in Strata

A recent article by Monique Sasson Wakelin in the SMH Domain called Investment: What’s best? A house or an apartment? Makes some interesting comments about the benefits of investing in apartments.


Monique focuses on capital growth, reveals that over the last five years some apartment prices in Sydney and Brisbane have grown faster than house prices.


The median price for Brisbane apartments grew by 42.5 per cent while houses grew by 38.2 per cent.


In Sydney, the median price house growth was 30.1 per cent, which was ahead of the median price apartment growth of just 10.5 per cent. But for when we look at inner Sydney apartments price growth was higher 33.6 per cent.


And, in Melbourne, prices growth for houses and apartments was almost dead even at 55.3 per cent and 54.4 per cent respectively.


She concludes that “With a budget of $800,000 or more for a city property, a house is usually the better option. At $700,000 - $800,000, depending on the location, either option will work. Under $700,000, an apartment is usually a better investment.”


I have to agree and add that from a rental income perspective I think strata investment is also better in most cases since –

• the yield is generally higher compared to similarly priced houses (since you buy less house amenity than apartment amenity for the money)
• the operating costs are lower since you own less building and open space
• the operating costs are shared with the other apartment owners lowering them further and supporting you when things are tight
• more ownership costs are likely to be tax deductible since they are included in administrative fund levies

So, see you at the next apartment auction.

Francesco …

Andreones, Lawyers on Facebook ...

For almost 10 years I ran Andreones, Lawyers as Australia's leading strata law firm in  (if not the leading strata law firm anywhere).


It's all over now and others (TEYS Strata Lawyers) have taken over what remained of the business at the end.


But, over that time there's been -

• a lot of work done by the many people who worked for and with us, 
• many exciting initiatives, events & challenges, 
• so many interesting designs, ideas & graphics, and 
• a lot of fun.

And, the law firm has spawned a plethora of imitators, new businesses and individual success stories.


So, I've decided to create an Andreones, Lawyers Facebook page and load the images and information that I have from my time there.  I've made a start and will keep adding to it from time to time.


I hope you become a fan/friend and use my new social network archives to re-live some good times.


See you on Facebook at Andreones, Lawyers page.




Francesco ....http://www.facebook.com/pages/Andreones-Lawyers/127829803937257