Is strata better in China or Australia?


Earlier this year I was lucky enough to travel to China as part of a UDIA study tour group, whose purpose was to look at how property development is evolving within China.

My personal interest was to investigate how strata plans, which are run to a very democratic model in Australia, are managed within the Chinese Communist System. I cannot claim I have gotten to understand strata in China yet, but I did learn some lessons and I had an opportunity to reflect on where the Australian property industry is at, and where community title legislation sits.

The most memorable experience was the meeting we had with a prominent Chinese property developer and business person. His property development contained approximately 10,000 apartments, several schools, a hospital and other forms of social infrastructure.

This one business person had been responsible for providing housing, creating jobs for the people who lived in the housing, and building the schools for educating the children who lived in the housing as well. There were 40,000 people living in the community, and I estimate that more than 100,000 would have benefited indirectly from the efforts of this specific property developer.

The property developer has been personally successful, and she had also given back to the community through the creation of a charitable trust providing for the residents of the community she created.

During the course of our meeting with this Chinese business person, she confided that she had travelled to Australia and was initially enthusiastic about the potential of our property industry.

She was so enthusiastic that she invested in some Australian land, in particular in the South East corner of Queensland. Her plan was to recreate a community style development, like the one that she had built in China. Unfortunately, she was now thinking of selling the land because it was just impossible to do business.

Her Chinese development of several thousand affordable apartments had been created in a little over a decade. She has had the land in Australia for 5 years and she still could not obtain the appropriate Governmental approvals required to go to market.

While this business person was not critical of Australia, she did make this comment which has stayed with me – “The problem with Australia is that you have too much democracy“.

Can you have too much democracy? At what point is there enough or too little democracy? Would we all be better off if we had just a little less democracy? Weighty questions for a body corporate manager.

The ‘problem of having too much democracy in Australia’ is a very interesting statement on a number of levels. As a matter of fact, solely based on that the statement is made by an entrepreneur operating in a communist political environment makes it fascinating. Furthermore, it is interesting because it is also a statement about bureaucracy within the political environment and how it affects development – whether it is a democratic or communist system. Most importantly, I think it is captivating because the statement is also about having the courage to make decisions and to be a leader.

I think reflection about “the level of democracy” is a question that also has application to community title legislation and strata communities. Anyone who has been in a strata community who had to deal with issues of property maintenance, instigation of legal action, spending of money on improvements to common property, or winding up a scheme, will realise that in Australia we have created a legislative regime.

The regime’s purpose is to protect the rights of the individuals within our strata schemes, but perhaps at the expense of the community as a whole.

Participants in the strata industry need to recognise the cost of protecting the individuals is now an unwieldy administrative regime that can sometimes get in the way of creating benefits and value for the community.

For this reason we need to sometimes step back from the day to day operation of strata property, and make an assessment as to whether we have got a correct balance of protection, process and practicality.



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1 Comment

Geoff On July 2, 2012 | Reply

Having lived in China and Australia, I don’t think the problem lies with the high level of democracy in Australia, rather I think the bureaucracy involved in getting approvals for anything is on par with the state controlled gov’t of China. Of course safety standards, regulations etc need to be met, but this seems to be such an onerous process here, with each level of bureaucracy attracting fees, taxes, and time. I agree that the balance needs adjusting.

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