TRANSCRIPT: 

Adrian (00:00): The Victorian budget was released this week, as we know. So let’s talk about what’s on offer for the housing industry in particular, Ian Ugarte, from Small Is The New Big is back on Ticker. Good to see you again, mate. How are you today?

Ian Ugarte (00:12): Great. Thanks for having me back.

Adrian (00:13): You had to listen to that previous guest. Did you take anything from that?

Ian Ugarte (00:17): Yeah, I mean, it’s definitely one of those things. We’re building the building market and the ability for the builders to be able to make up a better outcome for community and it sounds like it’s a great opportunity as well for builders.

Adrian (00:28): So what have you seen as well? I mentioned the budget there. You talk about the fact that we’re in a bit of a housing crisis, so maybe just define that crisis for us and what have you seen with some of this recent news?

Ian Ugarte (00:40): Well, we’ve got a marketplace that’s upside down. We got 60 to 80% of the people that are looking for accommodation are singles and couples and 60 to 80% of the housing is four bedroom houses plus, and when it comes to the budget, Adrian, $5.3 billion in Victoria to go towards social housing to produce 12,000 houses seems like a massive amount of money, but the outcome is 12,000 houses. We looked at that and that’s $441,667 per dwelling that they’re going to produce. Now, if you gave me $5.3 billion, I could do a lot better than that.

Ian Ugarte (01:15): And I know it’s a great outcome for social housing, but St. Vincent’s De Paul’s research shows that there’s 100,000 people sitting on the Victorian housing waiting list and 12,000 houses in the next four or five, six years, or however long it’s going to take them. It’s just not enough. What’s going to happen to the other 88,000 people that are on the waiting list? And so it doesn’t even touch the tip of the iceberg. And this is an old model that’s just failing and they’ve done it before and we need to get a better outcome. Just homelessness is growing bigger than 12,000 people a year. So we need to do much better than that.

Adrian (01:48): So let’s talk about what we can do. You’ve got solutions in mind in terms of what governments can do. What have you got?

Ian Ugarte (01:55): Well, for me, I mean, I’ll start with Einstein’s definition of insanity, doing the same thing over and over again and expecting a different result. We got here because of the problems of the past. And so for us of all the places, Victoria is the most unique because it already has a policy in place. It already has the best policy in the country to be able to produce community outcomes, which are much better. Community housing providers, they take way too long. It’s going to take a long time for the construction industry to be able to kick in because they need approvals and all the bits and pieces. The answer here is the mom and dad investors to be able to create micro apartments where every person will have their own bathroom, their own kitchenette, their own sitting area, their own bedroom within an existing house.

Ian Ugarte (02:36): So you can get full micro apartments every house that gets produced. And from that, we end up with an outcome where we can flood the market, which means it’ll have a better outcome very in the short term. And it’s not hard to address the immediate need that we’ve got right now. And if the government did want to create some incentive, well, they could. They’ve already got a land tax exemption for type of strategy that could tweak it a little bit. And there’d be a huge amount of mom and dad investors that will fix this marketplace literally overnight.

SCROLL DOWN TO PREVIEW ONE OF OUR STUDENTS’ MICRO-APARTMENT PROJECTS!

Adrian (03:07): So just finally, if each state government was to include mom and dad investors as part of the solution to this crisis that you talk about. What sort of numbers of new affordable places for people to live do you think it would create?

Ian Ugarte (03:19): Yeah, look, and I want to slow this down. Not because I don’t think people would be able to pick it up, but I’ll actually really make a real big point about this. Currently in Australia, the ATO shows that there’s 500,000 investors that own two or more properties. Now, if only a quarter of those properties were to be converted, that’s 250,000 homes converted into four micro-apartments each. That’s 1 million brand new front doors onto the marketplace in the space of months. We’re not talking years, we’re talking months. And as end comes as a bigger base for community, it actually starts to build community. And so I would say, “Adrian, what would you prefer, 12,000 homes over six years or would you prefer 1 million in the next 12 months?”

Ian Ugarte (04:01): And governments are just not aware that the answer to the problem is the mom and dad investors, not grow cons, not lend leases, not the big boys at the end of the game. And as an example, in the last three months, we’ve converted six properties creating 28 brand new front doors. And that’s how quickly and how quickly it can be converted, but more importantly, we’ve got a construction industry that can start working now, not in three years time. And so this budget is failing more than it helps unfortunately, as much as there was a good intention from the beginning of it all.

Adrian (04:34): Yeah. And we have heard from different people, small business, we’ve had a number of small business advocates on Ticker saying that there are holes in the budget. So we appreciate your time in breaking it down. We know you’re very passionate about this side of things. And I tend to agree with you. Housing, we clearly have massive issues in Australia. There’s no doubt about it. Mate, just to wrap up, where can we head to find out more in terms of what you’re offering in up to at the moment?

Ian Ugarte (04:56): Yeah, sure. All you need to do is go to sitnbdev.wpengine.com. Lots of information on there that people can have a read of and download. And again, I just want to thank you for having me back on.

Adrian (05:06): Absolutely mate. We’ll talk again soon.

Ian Ugarte (05:09): Cheers.