Ever wondered how to navigate the complexities of the strata sector or manage the ever-evolving challenges of the rental market? We've got you covered in our enlightening conversation with John Minns, the pioneer New South Wales Property Services Commissioner. John, armed with his 30 years of experience, unravels the intricacies of the real estate industry and underscores the urgent necessity for reform and uplift to ensure a secure future for the industry. From the power of knowledge in boosting confidence in the property sector to the issues faced by renters and landlords alike, John takes us on a candid exploration of the strata sector.
Our discourse with John doesn't end there; we delve deeper, examining the current market's property management challenges and the importance of fostering healthy tenant-landlord relationships. The conversation gets even more riveting as we tackle the trials of integrating new technologies into the rental system and the repercussions of rent increases on tenants. We further dissect the rental market, explore the concept of digital ID, delve into rental challenges, and discuss the call for more private investment. To cap it all off, we discuss The Room Xchange, Australia's premier verified house-sharing platform. Don't miss out on John's wealth of insights - they’re sure to revolutionise your understanding of the property sector!
Contact The Room Xchange
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Ever wondered how to navigate the complexities of the strata sector or manage the ever-evolving challenges of the rental market? We've got you covered in our enlightening conversation with John Minns, the pioneer New South Wales Property Services Commissioner. John, armed with his 30 years of experience, unravels the intricacies of the real estate industry and underscores the urgent necessity for reform and uplift to ensure a secure future for the industry. From the power of knowledge in boosting confidence in the property sector to the issues faced by renters and landlords alike, John takes us on a candid exploration of the strata sector.
Our discourse with John doesn't end there; we delve deeper, examining the current market's property management challenges and the importance of fostering healthy tenant-landlord relationships. The conversation gets even more riveting as we tackle the trials of integrating new technologies into the rental system and the repercussions of rent increases on tenants. We further dissect the rental market, explore the concept of digital ID, delve into rental challenges, and discuss the call for more private investment. To cap it all off, we discuss The Room Xchange, Australia's premier verified house-sharing platform. Don't miss out on John's wealth of insights - they’re sure to revolutionise your understanding of the property sector!
Contact The Room Xchange
Please leave us a review
Click here for Apple reviews
Connect on our socials
Youtube | Facebook | Instagram | Twitter | Linkedin
Sign up on our website
www.theroomxchange.com
Welcome to the Room Exchange podcast helping you rent better. In this podcast, we're having conversations with industry leaders in the rental market, along with everyday renters, sharing fascinating stories, insights and tips to help you rent better. Hello and welcome to the Room Exchange podcast. I'm Lidwina Daudewig and today I have the pleasure of speaking with John Minnes. Now, john was appointed the inaugural New South Wales Property Services Commissioner in November 2021. His platform of industry uplift and reform is to deliver an empowered, accountable and trusted property sector. An industry leader for over 30 years as a business owner in the real estate strata, professional standards and project marketing fields, his operational experience spans ACT and New South Wales, with a national and international network. John, welcome and thank you for your time. It's great to be here.
Speaker 2:Lidwina, thanks for having me.
Speaker 1:It's my pleasure. I've really been looking forward to this conversation with you. We have had a few conversations prior to this, so we've got a pretty targeted focus today. But before I get into that, why don't you tell us about what your role entails?
Speaker 2:Yeah, look, thanks for the opportunity. I think you covered it very, very well in the introduction and I have to try and keep things simple. But I guess the only additional thing, lidwina, I'd add to what we spoke about was the fact that I'm here for both industry and consumers. So, ultimately, what I know is that any industry that fails to deliver the expectations of its bottom line consumers has got a very uncertain future. So to me, really critical that empowered, accountable and trusted philosophy flows through all of that.
Speaker 1:Okay. So when you say consumers, who are you talking about specifically?
Speaker 2:Well, specifically, I'm talking about the people who sell properties, the people who rent properties, the people who are landlords, who want to lease them out. I'm talking people who are residents or owners or investors in the strata sector and, to a degree, the role also expands to things like business-breaking and a number of other areas as well.
Speaker 1:So are you working on regulation and sort of issues that arise within that sector for those consumers?
Speaker 2:The answer to that is yes, but regulation on its own Lidwina will never be the solution. So I view my role as pretty critical that when we're starting to talk uplift and when we're talking about excellence, it's really important that it's not just regulation that's used as a tool to ensure compliance. In fact, it's far better if an industry or a practitioner is prepared to say you know what we're going to deliver it higher than the minimum standards that you're expecting. So I want to work with everybody to take the base that we've got at the moment, build it up, because that's the one thing that's going to increase confidence in this sector and that's just so important to all Australians.
Speaker 1:Now, john, you talked about strata, and that's a conversation that I haven't as yet had on the show, and I think it's really important, particularly in the area of rentals, and a big part of our market, or most of our market are actually people who are looking for rentals. We have a lot of people who are landlords, who are listening, that wanted to be better at being landlords as well. I have a girlfriend who lives in Australia building in Sydney, and that's the only kind of information that I get in terms of what it's like living in Australia building. I personally haven't in the last 30 or so years. So why don't you give us a bit of insight on what's happening with strata and what are some of the challenges and issues that renters and landlords perhaps face in that area?
Speaker 2:Yeah, look, there's a number of them, and I guess even coming out of industry, I perhaps didn't have as complete a picture as I'm starting to develop of the challenges that are there. But probably more importantly, let's start with the fact that Strata is providing some amazing lifestyle opportunities for so many people, and what we do expect to happen is that, for example, in Greater Sydney, that 50% of residents will live in Strata by 2040, and that's not that far away. So I guess the challenges that I see in many cases is that owners, residents and also future buyers often don't know what they don't know. So part of our role is to make sure that we provide knowledge, and that knowledge can be very powerful. And the more knowledge and the more confidence people have in what they're buying or in what they're living in, then the greater confidence we're gonna have in the property sector as a whole, because Strata is just so important and central to confidence in the entire property sector.
Speaker 1:John, tell me, how would you actually define Strata?
Speaker 2:It's actually a really good question, isn't it?
Speaker 2:Because so many people, when they buy in Strata, are buying in for the first time and what they're used to is owning a house or living in a house or something that's on a separate title, and they've got a block, they've got four walls, they've got a garage, they've got gardens, they've got all these bits and pieces.
Speaker 2:It's all theirs and it's all their responsibility. The difference, when you move into a community space, which is ultimately what Strata is, is that you've got a combination of what you own, what your lot comprises, which may be those four walls, maybe the car park that's attached to it. Downstairs, you've then got common areas, which could be car parks or corridors or a number of other things attached to that, and you may well have some common facilities like swimming pools and gardens and other things that everybody is going to use. And what I think people don't always recognise is that it's not just what happens inside the four walls that counts, that if there's, for example, a roof leak in the building next door, that is the responsibility of the owner's corporation or the body corporate and that is therefore everybody's responsibility. So it's just important to understand that community mindset is what Strata is ultimately all about, and when it works well, it works incredibly well.
Speaker 1:It's interesting that you use the word community, because that was going to be my next question. One of the things that I sense from my girlfriend Tracy, when she lives in apartment blocks with Strata, is that there does seem to be a very strong sense of community. That happens because everybody who has invested in that building, they all have a common goal of making sure that that environment that they're living in not only functions well, but the people within it are actually happy living there.
Speaker 2:I'm really glad to hear you say that, because I don't think that's everybody's experience, unfortunately, in Strata and your friend is therefore in a very good community if everybody's taking responsibility and I guess that's what we want to see more of and that means people need to feel empowered and they need to feel confident in what they own. Too often we see people who are actual owners, and therefore proprietors of the body corporate or owners in the owner's corporation, who talk about Strata as if it's an entirely separate entity to themselves, when they're actually part of it, and I think it is just important for people to understand that, yeah, get the community right, then your own individual experiences become so much better.
Speaker 1:Tell me how it works with Strata. If, say, somebody owns an apartment and they rent it out, obviously there are restrictions and guidelines around who can live in your space when you are renting a space, and what I'm, I guess, alluding to or trying to sort of drive this conversation towards at the moment in regards to co-living or people subletting or renting an additional room. So, within the context of the room exchange, for example, if people have a spare bedroom and they want to rent it out to someone, if you own an apartment in Strata or if you're renting an apartment in Strata, what are some of the limitations that might be around that that people should consider there's a couple and when the first one is, we all have responsibilities as human beings, whether we're the owner or the tenant, to behave in a way that is supportive of the community around us.
Speaker 2:And that's also the case if we live in a house. Playing very, very loud music with a very deep baseline at 2.30 in the morning is not acceptable anywhere Ludwena, and it's probably a little bit more noticeable if it happens in Strata but I guess the specific things that people may need to think about is the owner who's bought there is required to be responsible for complying with things like the bylaws that are passed within the development and should also be part of ensuring that they're fair and reasonable and that they understand what's going on. They need to provide that information to anybody who's going to be a tenant, and that tenant also has responsibility to be compliant with those bylaws and therefore should be in breach of a lease if they don't. Because what we're looking for here is people to actually work together to collaborate on a good experience for everybody, and a lot of the time, those sort of bylaws and rules that happen around these projects are in the interests of everybody to ensure that community functions the way it needs to.
Speaker 1:So if somebody say, lived in a three bedroom apartment there was just one person on their own, they were renting and they wanted to share this space with somebody, say from the room exchange, it would just be a matter of obviously applying to the owner of the property. And if it was a three bedroom place and they were only having one additional person there, I'm assuming it wouldn't be against bylaws of the strata.
Speaker 2:Well, strada doesn't look at who's living within the individual lots because that is actually separate to the responsibility of Strada. They look at the interests and Strada deals with the common areas and deals with the common interest. So who's living in the unit is not something that Strada has control over. The issues and the questions that have been raised and I think particularly with short-term residential accommodation, the airbnb and these of the world and others is if any anti-social behaviour is experienced as a result of that, often due to poor controls or poor vetting by owners of units, and that causes a problem for the community, then there will be repercussions and there will be repercussions on the owner and it's one reason why a number of Strada schemes have sought to limit the use of some of that short-term residential in buildings because they've had problems in the past.
Speaker 1:Yeah, and from what I've heard as well, it also adds to additional wear and tear in the common areas of the building, which is not favourable.
Speaker 2:Yeah, you're entitled to live in a unit and use the facilities, aren't you? So the issue is not the correct use of things. It's incorrect or anti-social use of them or selfish, selfish attitudes, people thinking of themselves and not thinking of somebody else.
Speaker 1:Hmm, well, that's good. I actually have a better understanding of Strada now, so thank you very much for that. All right, let's move on to property services. How can we improve property services and management to make the tenancy process more efficient, transparent and equitable?
Speaker 2:I think there's a journey that we're all on to continue to see improvement there, and again I'd go back to the fact that in property management in particular, yeah, there are some great property managers delivering amazing experiences out there already and there's a lot we can learn from people who are doing things really, really well.
Speaker 2:There's some who aren't, and I guess the one point I'd make as part of this conversation is that right now we have to accept the market is challenging and it's challenging in particular for tenants for everybody, but in particular for tenants.
Speaker 2:So we've got affordability issues, we've got low supply issues and we've got issues of limited choice for people. So we know that there's issues that are creating anxiety and increasing cost of living and causing people a fair bit of grief in the way that they want to live their lives. Second, part of that is also not great for landlords in every case at the moment either, because interest rates have gone up dramatically, more than rents have gone up. Costs of ownership are escalating and costs and availability of trades when maintenance is required have also gone up in many, many cases. And if we're also looking at some of the challenges at the moment, we've got property managers often running out of hours in the day to deliver what both tenants and landlords expect. So the first comment I'd make in terms of how do we improve it is we have to remember it's all about the experience, and great property managers know that.
Speaker 1:Yeah, I actually don't envy property managers. At the moment, from what I'm hearing, there's multiple people applying for properties, and even just the concept of having to go through the filtering process to decide who that's going to be it must be heartbreaking for them at some point. But apart from that, just the multitudes of applications for the one property that have now gone up from what they used to be, it's just absurd.
Speaker 2:That's very true, and one of the things that's escalating anxiety for property managers is the fact that they, as the intermediary, often get blamed when people don't get what they want or don't get the outcome that they were looking for. So one risk I see is that we don't want to lose great property managers to the industry, and finding ways of making their job more friction-free and being able to get them away from the mundane tasks and dealing at a higher level with people relationships is such an important part of getting this right.
Speaker 1:Yeah, and we'll talk more about that in a moment. When we talk about technology in this space Technology they must feel like the meat in the sandwich. I hear complaints about property managers and it's just like, yeah, well, just try and put yourself in their shoes. Sometimes and I'm a self-managed landlord as well as being a tenant and a homeowner, so I've got experience from all angles of this conversation. So I also have an agent that I deal with directly for when I applied to the house that I live in, so I do understand very clearly the process of it and they have responsibility.
Speaker 1:I think first and foremost to the owner of the property, the landlord, but then having to choose the right person for the landlord and then having to also then experience the number of people who are getting rejected constantly from properties only because of the fact there's limited supply.
Speaker 1:I just wanted to throw that in there, because they get thrown under the bus a lot, but I don't think people actually hear that side of it.
Speaker 1:But the other thing that you mentioned as well, with the interest rate hikes as a self-managed landlord, my tenants in my place the two young guys haven't put the rent up in a couple of years and the lease is coming up for renewal and I'm going to share this because I think I worked out very favorably for all of us.
Speaker 1:I said to the guys look, we haven't put the rent up and you know that we were planning to this year. I don't actually want to give you an amount. I'm going to ask you whatever it is that you can afford, we will accept. And then they asked me for a benchmark. I gave them a benchmark and they sort of came back with somewhere in the middle and the outcome of that conversation was so quick and so simple and it has just worked so well. And I think, as a owner of a property, I don't think it's fair to put our investment costs on our tenant, but understandably that each year you can marginally put your rent up according to the index. But I just thought that that was a really great outcome and a great way to deal with something like that.
Speaker 2:Yeah, in a private rental situation compared to an agency rental situation, you just need to be cautious. That approach is compliant. But yeah, that's a negotiation we're talking about there. But the one point I would observe, based on what you just said in a balanced market, just because your costs go up, you don't have the option to increase the rent, whether we're on a month-to-month tenancy or whether we're on a fixed term.
Speaker 2:One of the pressures that's on at the moment due to the lack of supply and the lack of choice is, of course, that people are recognising that if they're going to stay in a tenancy, it's often going to cost them more, and if they're going to look for a new one, it's often going to be quite expensive.
Speaker 2:What I've seen over the years, though and I think we had quite a number of properties under management in the business that we ran was that the vast majority of owners and tenants were really keen to work together, and my personal experience as an owner of a property and a tenant of a property I'm renting in Sydney at the moment when I'm down here is that when you work together and when you've got your mutual interest at heart, things just work incredibly well, and owners don't want to necessarily maximise the increase in rent they're asking, unless they're forced to for some reason. What they'd really like to know is that if they've got a great tenant who's looking after the property well, they've got a good relationship. Communication's good, that maintaining and keeping a long relationship there is more important than an extra five or 10 or $15 a week.
Speaker 1:Yeah, absolutely, I agree. I agree. There's nothing better. It's like, yes, we're coming up to the least renewal time, we don't have to think about exiting and then getting new people in. But looking at maintaining that tenancy and building that relationship with your tenants, I think it's really important. There's something that we've done for a number of years and it's worked really well. Let's move on. Let's talk about technology now. What are some of the roadblocks around implementing new technologies into what I would call an RK rental system? So we've got this influx of new tech I'm in the proctech space. I'm here and constantly, all the time, new technologies coming in to help make this process easier but then we've got a very old rental systems that have to integrate that technology. How do you manage all that?
Speaker 2:RK. It's a wonderful word, isn't it? I'm not 100% sure I endorse RK, because there's some really good processes that are coming in. But, more seriously, I think there's two sides that I would give to the answer to that question. One is around the quality of the technology itself, and the second one is around the systems within the business. So if I had to just quickly touch on quality first, what I do know is the proctech sector is doing a great job at producing some really, really smart solutions.
Speaker 2:There is a but, though. Yet there's at the moment, few that deliver on transaction management, good reporting, financial management and customer experience all at the same time, and do them exceptionally well. What we are seeing is a high level of investment, and I think we're getting closer and closer to transforming that digital experience for agents, landlords and tenants. At the same time and that's one of the things that is going to be necessary for this to really take place at the level that I think it needs to I always had the view, when we're involved in digital transformation or changes within the business, that if you want your customers to use it, you've got to make sure it works, they understand it and that it improves their life, because if we don't and we can't get people to engage or adopt, then they're actually going to make your life hell and the technology is going to be a detriment rather than an advantage. So we want the tech to be right and then we want the implementation to be right.
Speaker 1:One of the challenges I think that we have with it is when I went through the process of applying for this rental property it's like two and a half years ago now there were very different technology processes for different agencies to different houses that we applied for. Now I understand that's a couple of years ago and I'm sure that's refined now, but what do you think about having a uniform or one application process that is done across the board?
Speaker 2:I think it depends on what that means. If it was, there's a single piece of tech that everybody has to use because it's mandated by government, I can't imagine that would work particularly effectively. Because if we're saying there's a standard approach that needs to be taken in terms of the information that's collected, the way it's collected, the way people can communicate, capability and capacity to be a great tenant, to have the references and to be able to afford the property, I think consistency and consistency of expectation is really, really important. But I'll make one observation just in relation to systems. People run businesses, not technology. One of the great problems I've seen with technology adoption is the presumption, sometimes amongst leaders in business, that I just put this in and all my problems are fixed At 10.30 at night. If my hot water service blows up and floods half the house andI want something fixed at that stage, I need to know someone cares, not just that there's a really good robot in the background who's aware of what's going on yeah, good point.
Speaker 1:So how do you resolve that then? Do you think?
Speaker 2:Well, I think a lot of it is going to come down to leadership. When we talk about technology, it's often ignored that change management is a leadership requirement, that if the leaders in the business genuinely get how important this is, then what they're going to do is they're going to ensure that we're creating better and better experiences for the people who are doing business with us. But, probably more importantly, the first objective they should have is to make sure their frontline people are engaged, empowered and supported in adopting the technology, because if they believe in it, it doesn't have to be perfect. They will make it work.
Speaker 1:Yeah, there are some real challenges there. There's got to be some kind of uniform system, and I understand what you're saying in that who's going to own that. It's going to be the government. You don't see that happening. But when you've got so many different application processes and you're providing all of your personal data and private information and banking and copy you driver's license and all those sorts of things to various different rental application processes, it's an incredibly arduous process that, with the influx of more people applying for rentals and that part of the industry growing, there needs to be something that happens in there that simplifies that. I don't know the answer to it. There really has to be technology, but I don't know how we're going to create that in a way that is simpler for everyone.
Speaker 2:Yeah, look, I've actually given a fair bit of thought to that and I understand exactly where you're coming from with this. If people have to go out and apply for six or eight properties this weekend, we don't need them to have to spend an hour and a half on each application. So I think this is where that nexus between technology and human beings becomes so incredibly important, and often there's a bit of confusion here, but an example I would use is the importance of proving who you are and being able to identify who you are without having to give away all of the points of identification in PDF files or in hard copies. That would allow someone to steal your identity. And I think what is becoming a really important part of this and it will be executed well and I think it'll be executed pretty quickly around the world is the concept of digital identity, where I can prove who I am through the use of a trusted digital identity whether that exists at government level or somewhere else and no one needs to see my passport, my driver's license and all the other details that it might take to get 100 points of identity, and they certainly then don't have to store them in a filing cabinet or on a server, somewhere that someone could access and steal and potentially deal with identity theft or other more serious issues. So digital identity will be a really important front end part of that.
Speaker 2:The other thing that there is technology that's now doing and there's a dance going on, I think, between technology developers and regulators to ensure that innovation is empowered and that we reduce friction for people, but without putting them in a position where they're taking higher level risks.
Speaker 2:So what I'm talking about there is that proof of capacity to pay.
Speaker 2:Yeah, it is possible and there's here products that do this at the moment that you can actually deliver a full set of confirmation, I think, to a tenant which you own, or, sorry, to a landlord or to a real estate agent you own this information, but that it confirms that you're good for the money, that you've got a good financial track record, that you've got great references.
Speaker 2:It all sits in one place and it can be used in every application that you make. And, provided that's compliance and we're not forcing people to give away information that they don't want, those sort of products are going to be really, really important, I think, in future to people, because, even if they cost $15 or $20 for someone to gain something that'll last them for six months if they're applying for multiple properties, would be so much easier for them to put together their application, to send it off to as many agents as they need to and probably do it within five minutes of inspecting a property on Saturday instead of having to collate all this information just so they can get it across by Monday night so they can apply for a property that they're at risk of missing out on any like.
Speaker 1:Yeah, we did an interview recently with someone who's actually in the property market and he was applying for a property for his daughter.
Speaker 1:He was in Brisbane, she was in Melbourne, she's going to uni and he was saying that he had to provide because he self-employed 10 years of bank statements or proof of finances to get a $400 a week property for his daughter. So there are challenges there. And when you're talking about digital ID, we've actually had digital ID by Australia Posts incorporated in our technology for six years, since we started six years ago, and that we don't hold any of that information and it's integrated via an API. So it's just whenever they register, whatever information their name and the date of birth that they put when they register on our platform if that doesn't match information on their ID, they don't get passed. If it does, they get a badge on our platform and that's all we need to know. And it can be as simple as that and it's very cost effective. So there are definitely ways that that can be done. How do you see the rental market in the next six to 12 months? What do you see happening?
Speaker 2:I would really love to say it's going to start to free up a little bit and there's going to be more properties around and we're going to go back to balance. I've always tended not to want to predict either markets or interest rates, because you really get it right better than 51% of the time and if you only get it 49%, then everyone thinks you're an idiot. Where we're sitting at the moment, there's no obvious major increases in supply, but the most positive thing that I think I've seen is that, for the first time, governments around Australia are now talking about supply. We are talking about supply, whether it's the development industry or the real estate sector. People are starting to look for solutions that are going to give yet to provide more opportunities over the medium term, and ideally, what we'd like to see is Everyone being able to take a deep breath and to be confident that this market will come back to balance, because the one thing I do know from a number of years in the industry, lord Warner, is that easily the best time to be able to sell a property to an investor and we need more of them buying at the moment is when they felt that there was a degree of certainty, regardless of the market.
Speaker 2:We often found that when vacancy rates were 3% or 4% and yet they could expect to have a property vacant for a week or two a year, that it was more compelling that they knew they could afford it on that basis, with interest rates at 13%, 14%, 15%, and sometimes it is now when they're hoping to get 100% and they're worried about what their costs are going to look like. So if we can start to get a situation which incentivises private investment, which still delivers 90% of private rental accommodation in Australia but also ensures that affordability can be managed for tenants and costs don't escalate unnecessarily for anyone and probably, lastly, we don't continually have a conversation that says it's landlord versus tenant and says that we're all in it together, that's when we're going to start to find those solutions over the next hopefully 12 months, but certainly over the next two to four years.
Speaker 1:Thank you for saying that I'm all for the landlord and tenant relationship and strengthening that. I often liken it to any other business relationship. You're spending $25,000, $30,000 a year with you as a tenant. That's a pretty good customer in my book. I think. If we can start looking at it a bit more in that, how can we take care of our customers, our tenants and also the tenants, how can we do the best that we can for our landlords and I think we can look more at improving that relationship, we'll have a much better tenancies, I think, moving forward.
Speaker 2:Isn't it great to finish on a note of unity.
Speaker 1:Absolutely. Thank you so much, John, for joining us. People want to get in touch with you. How can they do that?
Speaker 2:Like an email property services commissioner at customerservicenewsouthwilesgovau.
Speaker 1:Fantastic, you're on LinkedIn as well, john Mew.
Speaker 2:Absolutely.
Speaker 1:My NNS. Well, thank you very much and I look forward to getting you back on the show in the future.
Speaker 2:Thanks very much for the time. Pleasure, bye-bye.
Speaker 1:Thanks for listening. If you're looking for your next rental, head over to the Room Exchange, australia's first verified house sharing platform. Our profiles make it easy to match you based on personality, values and lifestyle, and you can choose to rent or offset your rent, saving you time and money. To find out more, go to theroomexchangecom. You can connect with us across our social media platforms at theroomexchange or email admin at theroomexchangecom.