“If you can’t hit 0.6 ACH on a brand-new build, you probably shouldn’t be building.”

Let’s stop tip-toeing around the reality of the Australian housing market. We are throwing up volume-built boxes and high-density apartments that are practically end-of-life before they’ve even seen their first winter. We sat down with Linden Thorley, architect, Passive House designer, and chair of the Australian Passive House Association Retrofit Committee.

We take a look into why retrofitting the existing 9.5 million homes in Australia is the single biggest business opportunity for trades over the next decade. Linden walks us through the differences between a cosmetic renovation and a high-performance retrofit, detailing how his team utilises the PHPP (Passive House Planning Package) to model data and manage moisture, insulation, and ventilation risks case-by-case.

We don't hold back on the real pain points of the industry either. We talk about the skyrocketing costs of business insurance, why Australian labour rates are fundamentally shifting project costs, and how to structure building contracts using provisional sums for airtightness so builders aren't crushed by unexpected site variations.

Linden also breaks down his frustrations with legacy bank valuations that prioritise bloated 300-square-meter floor plans over highly efficient, smaller family homes.

Finally, we hit the political wall: how heritage advisors and council planners are actively preventing energy efficiency upgrades, and the clever, practical drawing tricks

CHAPTER MARKERS

00:00 – Introduction

02:08 – The Passive House Association Retrofit Committee & Playbook

04:12 – Finding the Ideal Market: How Long Does the Shift Take?

05:45 – Passive House as a Design-Agnostic Calculation Tool

07:11 – Can a House Be Great If It Doesn’t Reach Certified EnerPHit?

09:00 – Retrofitting Multi-Story Blocks vs. Standard Residential

10:38 – Managing Airtightness Expectations with the Builder

13:36 – How to Contract for Airtightness: The Provisional Sum Solution

15:21 – Dealing with Double Brick and Suspended Timber Floors

16:23 – The Spray Foam Debate in Subfloors vs. Walls

18:41 – The New Build Advantage vs. Retrofit Blind Spots

19:16 – A Case Study: Turning a 25 ACH House into an 8 ACH Home

22:27 – Threading Centralized MVHR Systems Through Bulkheads

23:28 – The Necessity of the ECI Process for Architects

26:16 – Why Don’t We Just Knock Them All Down?

27:43 – Renovation vs. Extension vs. Retrofit

29:47 – Do We Overcomplicate the Carbon Conversation?

31:14 – Lessons from Toronto: The 100 Macnab High-Rise Retrofit

32:38 – Drawing the Line: When to Demolish an Existing Fabric

37:28 – Forcing Council’s Hand with Legal NCC Clauses

39:34 – Is Passive House Actually a Premium-Priced Product?

41:11 – Breaking Down the True Cost of Australian Site Labour

44:46 – Linden’s Fire Loss & Installing His Own INTELLO Membrane

48:26 – Thermal Envelope vs. High-End Cabinetry

53:03 – The Intensity Slump on Modern Australian Building Sites

55:26 – Overheads, Insurance Hikes, and Free Market Economics

57:41 – The 3-Story Walk-Up: How Codes Limit Small Footprint Living

58:21 – Why Banks Hate Small Homes and Force Massive Floorplates

01:01:45 – Macroeconomics, Inflation, and Building for the Top 10%

01:08:37 – MEGT Mindful Moment: Harnessing the Un-Jaded Apprentice Mindset

01:11:16 – Connect with Linden Thorley

LINKS:

Our Sponsors:

Pro Clima - https://mindful-builder.captivate.fm/proclima

MEGT - https://mindful-builder.captivate.fm/megt

Connect with us on Instagram: @themindfulbuilderpod

Connect with Hamish:

Instagram: @sanctumhomes

Website: www.yoursanctum.com.au/

Connect with Matt:

Instagram: @carlandconstructions

Website: www.carlandconstructions.com/

Mentioned in this episode:

Proclima Sponsor

We're filming at the real headquarters of Pro Climber, not our mobile Pro Climber

Studios, um- In Sydney … we've got Gus in the background here, you can't

see on the camera doing some filming.

Um, we're in Sydney, this is fun.

Sydney's humid.

I took it up at 4:30 this morning, it sucked It's not a

bad time of the morning

No, I couldn't sleep last night.

Yeah.

I had a terrible sleep last night.

I did.

So I lo- I loaded up on creatine.

I

can't remember.

I forgot my creatine tablets.

Loaded up on

creatine.

I've watched too many

docos.

Oh, geez, I go on a ramble.

And I had a good 15 grams this morning.

I'm feeling great.

Uh, if there's anyone out there who wants to sponsor the podcast

who's a creatine supplier-

then by all means, hit us up.

Bulk Nutrients, I'm looking at you.

Um- We, uh, have actually been chatting with Lyndon, uh, Thorley for a couple of

years now and saying that we would like to get him on the podcast, and we have

had opportunities to record onl- online.

However, we feel that in-person is the best way to do it.

So Lyndon, thanks for joining us today.

Well, thank you for having me, and yeah, very nice to be, be part of the podcast.

So who are you?

Yeah.

And why do architects hate builders?

And how, um… Yeah.

I was… Wait.

Is this the first architect that hasn't got the turtleneck sweater going on?

It's too hot.

It's too hot in Sydney.

They still have it, and they're rolled over.

It's… Their little skivvy on.

And they're like… I know.

Sorry, architects.

Uh, look- I'm joking … fashion-wise, I'm well and truly a dad.

We don't, don't really go spend our time crafting our clothes in quite the

way we try and craft our buildings.

Oh, good call.

Um, but, um, yeah, look, I'm an architect, um, Passive House designer.

Um, I have a practice in Sydney, which is primarily focused on

single residential dwellings.

A lot of it is retrofit.

Um, we are very lucky that the majority of our projects now, uh, people come to us

wanting some form of energy efficiency and building health as a key criteria of their

project, and a lot of that is Passive House or somewhere in the territory of it.

So all projects are modeled using the PHPP.

We use that to inform our design decisions, um, and, uh, sort of

optimize, optimize a building to suit.

Um, my other hat that I wear is, um, chair of the Australian Passive

House Association Retrofit Committee.

Um, and that's a group of architects, designers, builders, and consultants,

um, that are national, and our job is to work together to help, I think, collate

and share information about retrofit.

Uh, so our current projects are working towards a Passive House

Association Retrofit Month, um, in the next few months.

And also, we've been working on a retrofit guide or playbook, um, which

is primarily targeted at- Let's say stakeholder clients and policymakers.

So we, we're not trying to explain how to do a complete retrofit.

Um, what we're trying to do is, is share the benefits of it, what's possible,

and key risks, and why we think about it in the Australian context.

Um, and that's intended to help build a base of clients that come asking

for a retrofit project that has measurable outcomes and performance,

and ideally in time starts to lead towards funding that might, might

target that measurable improvement.

And it's a key point of difference to a more simple retrofit process where

you may not have some measured outcome.

Do you only do retrofits?

No, we do, do new build as well.

Um, so yeah- Okay … it's, it's a mix of projects for us.

How long-- You said before that, um, most of your clients now are coming

to you for a particular solution, and I know that Matt and I, I would

say 100% of the clients that come to us come for the same thing.

How long did that take?

Good question, Hay.

Yeah, good question.

Um, it's, uh-

It's a little bit of a slow start.

Um, I was very lucky that my first Passive House project was my own house-

I was gonna get to that bit … and we used that- Yeah, and I'd

love to hear about that one

too.

Yeah

Yeah We sorta used that as a way to share in a way that we couldn't share

someone else's house, and that, that grew to people knowing who we were.

Yep

And then we've also been lucky enough to have opportunities to speak

and show projects and, and that's-

Is it luck?

Because I feel like you've put yourself out there to do it, and I, I know you've

gotta be in the right place at the time.

Oh, you've created the opportunity.

Yeah, yeah, yeah, yeah.

Yeah.

Yeah, look-

And that's why I say I don't think you're lu- I don't think you're lucky.

I think that you just made the right decision as a move to head down that way

We, yeah, we- look, we were lucky, but it was also, it, it, it is about

being open, um, similar to the way you guys have been, um, in sharing how we

go about projects, why we think it's important- Yeah … bringing people along.

Um, trying to step away from talking about numbers a little bit, and- Yeah

talk about-

Numbers are boring

… about outcome.

Outcome,

outcome's

better.

Recognition is- Yeah, I think that that's one of the biggest, um, hurdles

that we face when we talk about Passive House is people wanna dive into the

numbers too much, and it's like, I've, we were just chatting with Gus, the

communications manager at Pro Clima.

He's like how, like talking about how do you tell the architect you wanna put in

Pro Clima into sort of the Passive House.

I'm like, "Just don't tell them.

Don't talk about it.

Just, we're building a health- Just specify it … we're just doing-

Just specify it … a healthy building, and this is part of

the process, and this is how…

Like, if we want a healthy building, this is what you need to do to get there.

Absolutely.

Um, I think one of those key things about Passive House is that it's, it is

a design and material agnostic standard.

Like, it's, it's a- If you wanna keep your existing building exactly the way it is

and try and lever it into being a Passive House, then it's probably possible,

'cause all it is is a calculation, and it's about crunching numbers

and adding enough thermal resistance and enough shade to make it work.

Um-

Or, or opening enough, enough to the northern light to let

s- yeah, all, all of that.

Yeah.

That's right.

But it's, um, yeah, i- if you wanna do it in a optimized way and a cost-effective

way that is really focused on that healthy, comfortable home outcome, then

it's actually about using those numbers to inform things along the side and

make decisions as you're designing.

So I, I love the fact that the PHPP, as a architect's or designer's

tool, is incredibly powerful without needing to become the ultimate nerd.

Yeah.

So I wanna head more down the retrofit.

Yeah.

Have you got a question before we go?

Yeah, I was just gonna say, um, I don't wanna poke the bear too much

here, but I'll take a leaf- Okay, Matt

I'll take a leaf out of Matt's book.

Given the challenges around meeting Passive House on a existing building,

'cause there are challenges- Mm … um, and I know you're part of this committee

that are advocating for, um, Passive House retrofits, there's some very

explicit characteristics and criteria around calling a Passive House a

Passive House and not a Passive House.

Are you in, in, in your committee still advocating for better buildings

that don't have to be Passive House?

'Cause I'd argue that-

Are you calling EnerPHit not a Passive House?

Just to clarify.

Well, no,

no, no, EnerPHit's a Passive House.

Yeah.

'Cause, yeah, yeah, we'll do that … but,

but, like, airtightness is a real thing, and I wanna touch on that for a sec 'cause

you've got hands-on experience with that.

But, you know, I, in my opinion, we can still get to a house that's not reaching

EnerPHit and is still a good house.

Absolutely.

Um, I think-

When I've got my retrofit committee hat on, I need to be mindful that the

association's focus and mission, um, is-

More, more Passive

houses, more certified Passive houses

is, is certified Passive House.

Yeah.

It's not, it's not, yeah, the Passive House Association isn't the- Yeah

… Almost Passive House Association.

Which, which

I agree with, by the way.

Yeah, yeah.

I,

I

agree with it.

Absolutely.

Um, so we, we want to have that focus.

The, the benefit of the Passive House standard is that it's

third party certification- Yes

on that everything's been done correctly and properly, and that you

have attained that level of project.

So-

And is that a project more relevant that needs to be checked over

than a retrofit, 'cause they're arguably the most dangerous?

Well, this is, this is where things are, uh, when we move into the retrofit

space, the key differences are that from an air tightness point of view,

we're no longer chasing .6, we're chasing 1, which is also the fallback

position for low energy certification.

Yeah.

The other thing about a retrofit is that you can do it a few different ways.

You can, you can pretty much obliterate the existing building, or slip a

brand new building inside an existing building, and you can relatively

easily get really good air tightness.

If- Easy, you say?

Relatively easy.

Did you hear that, Cam?

Um, now- When we start to try- It's not … and wrap it from the outside, or we try

and keep a large majority of the existing building fabric- Yeah … and, and we're

calculating with the intention of just scraping in and meeting the standard-

Yeah And when, and when we say we're just scraping in, it's still fucking good.

That's right.

0.001% of buildings- If you scrape in, it's incredible

… stop.

It is, but it's, it's, uh, you know, we are trying to minimize the

amount of change to the original building fabric, and that building

fabric was never intended to be the criteria that Passive House is.

So, from a early stage expectation setting with clients, um, and everybody

involved with the project, as an architect approaching a retrofit

project, I need to be very careful to make everyone understand that until one

air change an hour has been achieved on site, or less, it's not a Passive

House, and it's not going to be.

Pat, no, airtightness is… I, oh, can I say this?

It… You can.

No, how so?

You can say it.

I, I know.

And you probably will.

Yeah.

I'm trying to work out how to be clear about what I'm about to say.

Achieving airtightness is so easy.

If you get INTELLO, there's real no reason for not getting… If you, if

you're using INTELLO on a project, you should be able to get under

0.6, not 0.1, or under one, sorry.

I ac- Absolutely … I

actually think it's super easy … that, that is a continuous

membrane all the way through- It's so easy … the new building envelope.

Yeah,

yeah, yeah.

Um- So,

yeah

… if we're trying to, if we're gonna peak a three-story walk-up block of flats, and

we're gonna rely on the existing render, um, and concrete slabs as our- Yeah

our barrier, and we're gonna put new windows into that-

Yeah, you're not gonna get-

… then we have, we, until we, until we have a substantial amount of work

done and a substantial amount of money spent, we're not totally going

to know what the air change will be.

Um, there's a very good chance that we're gonna hit exactly what we

planned to or better, but, you know, we don't know what service penetrations

there are already through the cavity.

We don't know, um, what's happened to this building in the past.

We've got unrendered purpins of bricks around window reveals and

door reveals- Yeah … that we may or may not have access to.

So, those things could all mean that we don't quite hit the air changes an hour.

And, um, it's then a financial decision about whether or not, in the middle

of the project, we're gonna sit there and chase that, or whether we're going

to draw back, and we're gonna reassess where we got to, reassess our modeling-

Yep

and decide whether or not we've got a good building.

Now, as an architect, I would argue that all of the work that we've done in

the lead-up to getting to this point in modeling the building, using all of the

Passive House fundamentals of touching all of those points that we're supposed

to, making sure that we've got thermal fridge, ridge-free design, airtight, good

windows, ventilation, um, so- we've still got a really capable building that is well

above code and There is value in that.

And when we sit there and try and quantify that value, energy-wise, we might only

be talking about the difference of one solar panel on the roof in order

to offset the difference in energy consumption- Yeah … because we're

already in a really, really tight band.

Um, but it- the fundamental that clients have to understand, and all

of us involved in making that project happen, particularly the builder who

really is seen as the one who's got to deliver that air change, is that it-

if we don't quite get there, that's not actually a terrible outcome.

It's still a good building.

It's just not a Passivhaus.

Yeah.

I love that approach, and I think there's a lot to learn from that approach.

I've got two comments.

One comment is, how are you contracting on this?

Is this a builder, like, committing to an air change?

Or is this a- Mm … builder committing to, "We're gonna do our absolute best

given the scenario that we're given"?

'Cause it's really- Air tightness is like a

provisional sum.

Yeah.

I, I… That's what I'm getting at.

Like- Mm … 'cause w- we- we're talking at the moment with a project

where there is questionable details.

There's i- like, an interesting floor structure, which we can get

to underneath, but trying to manage air tightness there is challenging.

And I've said to the client, "I actually feel that w- we should do a provisional

sum for air tightness, and we can then make the call." And and I know, I-

Otherwise, we just r- risk-

Say, say Matt and I saying this to you, y- you would probably have confidence

in knowing that we're gonna do the right thing, 'cause we've done this a lot,

and we've got a reputation to do it.

But if it's Joe Blow off the, off the street, I can understand from an

architect's and a client's point of view, there is some concerns there

if they're just gonna be like, "Well, it's all Ken, no responsibility."

So, how are you managing that?

Look, it, it does need to be a little bit case by case.

Yeah.

So, you know- Yeah

if, if I did have that continuous INTELLO line all the way through

the house, I, I think I'd be pretty hard-assed about making sure that-

Yes … we're gonna hit our air change.

Yeah.

Um, if, if we're talking about a project that is a little bit unknown about

the outcome, like we're, we're working on a couple of projects at the moment

that are brick veneer or double brick.

We're over wrapping.

We've got five sides of the box really well sorted.

We just don't know what we're gonna get in the interaction with

the sixth side, being the floor.

What floor have you got?

Um, framed.

Um-

Timber framed?

Yeah.

So we-

Just put the Vista on it, and Pro

Clima.

Yeah.

It's how we brea- how we get across the cavities, um, and whether or not

we can get someone underneath to render down to the ground and use the ground

as an airtight layer, or whether-

Can you get under the floor?

Well, not always.

And sometimes it's, the answer is part of the way.

Yeah, okay.

And so we really don't know where we're gonna go.

And that's, that's where, like, to me, the real skill in retrofit projects

and interacting with builders- is in picking an appropriate scope

or scale that we're gonna target within the t- the tender documents.

Because if we are overly optimistic, we will end up with a project that is the

right number, but has so many variations that it's, it's gonna be difficult.

That's kinda what I was getting at, yeah.

That's why, that's why I think a provisional sum's safer, so you don't

just- Yeah … keep getting hit with- Yeah

variation, 'cause that's not, well, that wasn't on the plan, and we didn't

know that, and we didn't… And then that quickly could be taking the piss.

Yeah.

I'm, I'm hoping, I'm hoping someone's superhero's not gonna die when I say this,

but, um, we've got a couple of projects at the moment where I've suggested to

clients that we explore using spray foam.

I've- Closed cell spray foam in the subfloor.

It can fail.

I just had this wolfied.

Yeah, okay.

Well, I mean- Yeah, yeah, yeah, yeah … these are things that we're exploring.

I, I, I thought it was- And I was chat- chatting with Cam about it, because

there's, there's tricky details where you're trying to get, um, air tightness,

and how do you connect the air- Yeah

like the walls with the subfloor?

And, you know, filling it full of closed cell foam, like well, that probably-

I, uh, people poo-poo spray

foam- When you say, when you say fail-

It was just not part… It wasn't, it was a mold risk on that wolfy.

Right.

So- Whereabouts?

Um, this is a double brick.

But where was the foam?

Uh, it was sprayed up in a cavity against the double brick.

Like, yeah, but it's not subfloor though?

'Cause that's different.

No, no, no, no.

It's a completely different- No … moisture's moving differently there.

Yeah, yeah,

yeah, yeah, true.

F- actually, fair point.

But-

I wouldn't be concerned in a subfloor, and but I'd never consider

it for walls or in a roof- Yeah

'cause moisture's moving differently.

But on a subfloor- I've done it on a

subfloor, and-

I, I, I-

… it's actually a very good solution, 'cause you get airtight.

But people poo-poo foam, and yes, we should try to avoid it.

Yeah.

But what's better?

A house that's gonna leak and be energy efficient and not comfortable, and

then the health, durability, comfort of the, the occupants are at risk?

Or one that we use- Well, I think- … a product like that

that's gonna be fine and last?

And I think this is where you just need to look at it all, like everything,

you said something before about case, everything's case by case.

Like, I would not recommend this for e- every home- Ah … home we build.

So this is literally when you…

My, my, one of my questions is you've got the, uh, you and you're exploring

to do a retrofit, and you'll, the, the passive house pointing to this retrofit

document, you c- it's, you can't give advice on how to retrofit, 'cause it

just literally, as Cam say, it depends

It absolutely does depend, and it's, it's about making sure that you,

a- as a client or procur- someone procuring these projects, you actually

know to include this in the scope.

Yeah.

Because otherwise it's, it's a… If you don't have someone who's got some

knowledge, um, around how to retrofit the building and the risks that occur

when you start doing it, then you're actually opening yourself up to-

They're the, they're the- … problems

… they're the most dangerous.

Like, y- building new is easy.

Honestly, you get a free shot at a new building.

If you can't hit a Passive House Point 6 with a new building, you

probably shouldn't be building.

If you've got the right systems, honestly, like, it's a very simple process.

Retrofitting, yeah, you, you don't know what you're getting into.

You don't know, yeah, the, is there less weep holes than you thought, and

they're blocked up with all the, the back of the mud or the, the mortar is

completely filling the cavity or…

You can't see that th- unless we've ripped the whole house apart before

we start, you just don't know.

Yeah, well, like, we, we were lucky enough to have a project not long ago

where- We did the design exercise, and we, we modeled the existing house.

So on th- in this case, it was pretty much a finished house inside.

They didn't actually want to do anything to the house to change it.

They… All they wanted to do was improve energy efficiency

and comfort- Yeah … and health.

So, um, we sat down, we did the modeling exercise.

We produced a PHPP, showed how the existing building compared to the

NAHFIT standard, and then we also showed a number of design variants

that showed different ways that we could either hit that standard or go

close to it, um, using the low energy set as a reference point as well.

Yeah.

Um, and that, the response from them was, "This is great, but, you know, we

are interested in seeing what happens if we do little bits at a time, and

we don't necessarily want to go the whole hog and finish it." And so

we were put in a position where the brief became, "Yes, we know the risks.

We would like to play in that space."

Who signs off on this?

Um- This is what I was gonna s- I was about to say, like,

'cause… Yeah, sorry, go.

Yeah.

So we, the way we, we approached that was we'd done a preliminary

blower door test of the house.

We knew, we had a good idea where most airflow was coming in, and

so we targeted those areas, and we essentially sealed up plaster vents.

Um, we sealed up ceiling roses.

Um, we had a few areas that we had planned to target with, with some Intello.

We, we rendered the insides of fireplaces, and we put a membrane

underneath their floor, which already had some polyester insulation.

We just, we put a membrane in- Yeah … and we rendered it into the footing.

And we were able to significantly improve.

We couldn't pressurize the building on that first blower door test.

We were able to improve things.

Did, did it

give you, like, a guesstimate?

Do you remember?

Like, 'cause a lot of those give you a guesstimate.

Yeah, look, we were, we were up around the, you know,

25-plus air changes an hour.

Yeah.

And we managed to get it kind of in the direction of, uh,

off the top of my head, 12.

Yep.

Wow.

Um, on that first round of just plugging the big holes.

And on that second blower door test, we walked around, and we found another

bunch of low-hanging fruit to target.

Um, that was done alongside some window swaps for, they had some good windows.

When

you say the second time, this is a different stage

of building, or was it, it-

Yeah, we, we literally did- They

were

do- … plus-plus with the builder, and we did a discreet, kind of these

are the first- Yeah … this is the low-hanging fruit on this building,

and this is how we're gonna attack it.

Um, this client already had some monitoring in the house.

They had an idea of humidity and temperature.

Yeah.

Um, so that all stays.

Um, and then, yeah, second round, after doing some windows, we managed

to get it a hell of a lot tighter I think we, we ended up getting

pretty close to eight in the end.

Yep.

It's not Passive House, but it's, you know- Better … it's

a very, very big- Yeah,

but li- the

lived

experience in there would be- Improvement

wildly different.

Yeah.

And then we paired that with putting a H- HRV in.

Yep.

Um, so that we've- Centralized … have got some, a centralized HRV.

Yep

Um, that's managed our condensation.

How, when, where are you running that?

Are you, did you create bulkheads or you've got insulated ducts

above in the ceiling space?

Uh, a mix of everything.

Sort of we were, we're lucky enough to be working with Nick Soden from

Soden Constructions, and we had fresh ventilation, um, as a, a local

HRV supplier who was, um, helping-

Yeah

… make all that happen, and so we, we scoped it quite carefully.

We looked at where we could thread things through the building.

Yep.

Um, I think we ended up with one bulkhead.

Yep.

Um- That's pretty good … a few things inside wardrobes.

But no- Yeah … no improvement on, um, any external insulation

or a- any insulation upgrades?

Uh, in the end, we did the roof, and we did cavity fill insulation.

Okay.

Um, so we, we did breach the cavity.

So it's double brick?

Um, it's double brick house.

Yep.

Single brick upstairs.

Yeah, do, do in- Um, or brick veneer upstairs … yeah, do

you do your own modeling?

Yes, we

do.

And do your own WUFI or ex- uh, source that?

We do not know how to do WUFI.

Yeah, the- We, we, that one's something that I think you-

Don't

know … you, it's best to get someone who's doing it regularly-

Yep

um, to help on those.

It's subjective

' cause you can make anything pass.

That's right.

Yeah.

And just when your brain's not in it all the time- Yep … it's, it's

not really the thing that we should be- So do you- … focusing on

… do you, so throughout that process, you said there was a builder

that was there on Cost Plus.

Was he als- or he or she also involved during pre-construction on that project?

Um, in this case, no.

Um, but an equivalently experienced builder was, um, and it just

came down to availability.

Okay.

Um-

And

yeah, okay … and, you know.

But that, I've just got ACI question marks circling.

Oh, you cannot

do a retrofit of that.

Yeah, I was just gonna say- No chance … um, so that's something that you,

you, you practice within your firm?

Absolutely.

So I, I, I realize I have missed answering a question right from

the beginning, which is, um, architects don't all hate builders.

Um, we love them.

Um-

We also love architects too … it's- That's not what you

said on the plane this morning.

Yeah, but that was off camera, mate, so that doesn't count.

Yeah, look, we,

I worked very hard to be knowledgeable about the materials and the build

ups and the performance of what we try and put together and to

understand how to model things well.

Um, but ultimately, I'm an architect.

I draw stuff.

Yep.

And I lean very heavily on people who physically put stuff together, um, to

understand whether something is feasible or to understand the labor involved.

Um, so we- You know, I, I might think that it's very, very easy to carry these

five things in and lay them down and put them together in a particular way and,

you know, a builder will look at me and just go, "You are mad." Like, that's just

the most inefficient way of doing this.

And, you know, the benefit of, uh, something like an ECI process is

that the floor is open, they are literally being paid to be in the room-

Yep

and to tell me that so that we can get it as optimized and focused as we can.

But even with that, Haim, like, this time, like, uh, the, the

same process applies to builders.

Like, we don't know anything or everything, and we l- we lean on our

specific trades to get expert opinions-

Oh,

totally … from their trades.

So it's like, it's, there's no difference between an architect asking the builder to

be involved than a builder also relying on the trades to help us get to the answer.

We- we're, we're just, yeah.

Can I, can I jump in, Haim?

Because, like, this all sounds hard.

Why don't we just knock them down and start again?

Well, 'cause there's nine and a half million existing houses that I think most

of them were built pre-energy efficiency

provisions Yeah, but like

just

knock them down and start again

Like, we, we can't even build enough new ones to cover the additional

people that we have at the moment.

And, you know, and I, I don't know the Victorian context

particularly well- It's shit

but up here in Sydney, like we've just had, there's six and a half

thousand homes at the end of my street.

There's 10,400 in, um, kinda in the Bay's West precincts.

Yeah Um, the old, old cement works and docks.

Um, we've got 18 and a half thousand proposed for North Bur- Burwood, which

is, you know, Burwood's a big center.

It's got some big buildings, but, you know, we are massively

changing the population of a relatively suburban part of Sydney.

And, you know, it makes sense to make these molehills around

transport infrastructure.

Um, and so I can see why they're putting them there, but it's…

And I don't dispute the need for those buildings to be- Mm

put there.

Right now, I'm looking at it just going, this is going to be the

retrofit work of the future because- Yeah … none of them are being

done particularly well We said that

to, we said that

to David the politician We said, we said that- DJ Dave

… the volume builders are

the, uh- Gaff- … fu- fu- future retrofit projects.

So- Yeah … because I think there's also, the reason I ask that, is it leads,

it sort of leads nicely into where I wanted to go, because there's renovations

and extensions, and there's retrofits.

They're a little bit different.

Yep Um, and I wanna touch on that because, uh, to, to me a retrofit is sort of

touching almost everything on the inside.

Reno- renovation is probably inside- Bathroom … inside.

Now ren- Kitchen … in, I take those inside and out

A renovation?

Uh, okay.

Sure.

Yeah.

Yep.

Potenti- And then the next renovation extension is like

this, like it's adding on.

Yeah

So it's like a new build plus…

Yep.

Um, look, uh, we are definitely exploring a number of projects that aren't heavily

focused on changes to the building.

They, they're, they are, you know, purely retrofit.

There might be a new kitchen, there might be move things around a little

bit, but- They are very much focused on are houses spatially okay or adequate.

Yeah, it's a good starting convers- Um, and- So what do,

where do you start with that?

That's right.

And then the, the other thing that we're overlaying that, on that is, you know,

as a retrofit strategy, what's our scope?

Are we, are we gonna try and improve everything from the inside?

Um, which means we have to negotiate footings and internal walls.

Just

stripping everything back.

Um- That's, that's practically going down the renovation path.

That's right.

And we- we're also probably putting ourselves in a slightly riskier

place from a moisture management and condensation point of view.

Um, that's where the wooly is really, really important.

Um, whereas, um, if we're working a little bit further out of the inner

parts of the city and we happen to, you know, A, own our walls, and B,

even have a little bit of space around those walls, then we're really starting

at looking at overwrapping houses.

Like

an out-of-it.

Yeah.

That's, that's a, that's a very different scope of work.

Yeah.

So all the, all the homes that you're talking about now, when, when we talk

about retrofits, we're talking about not only replacing kitchen, bathrooms

and ma- Yeah … freshening it up inside, we're also addressing the

thermal performance of the home as well.

Yes.

And that, that's something that we will choose how we speak about a project

based on what a client's objectives-

Yep

… are.

Um, you know, if they're coming to us saying they don't necessarily want

to change the planet, they, they are just wanting a comfortable home, um-

Then that's, that's not a reason not to address thermal comfort

and airflow through a house.

Mm.

That is simply that we don't necessarily need to explain the

carbon, uh, operational carbon saved by what- Yeah … we're doing.

Yeah.

Do we, do we, do we overcomplicate the carbon conversation sometimes?

Like, do we need to tell- To some

people.

Yeah, yeah.

I think to the broader, broader- Yeah … market, yes, but to some people, no.

Yeah.

I, I, I, yeah, but- Yeah … but it's like some people wanna know the passive

house data- Yeah … but it's like the, like, 90% or 90% don't care, they just

wanna know it's comfortable, the 10% wanna know the, how did you get to that number?

Probably the same with the carbon.

I think carbon's gonna be one of those things that it's probably gonna become

more of language in retrofits soon.

In my- Like, you know, everyone's like sustainability and thermal

comfort and performance and health, I think carbon's gonna be the

next thing that's talked about.

But shouldn't that be a conversation in new builds, not

so much renovations and retrofits?

Because you're kind of keeping- I think it's gonna be across

the board.

Yeah, because kind of the most sustain- sustainable, loose, whatever

word we wanna say, building- If

you, if you look at-

Yeah … a

project like 100 Macnab, which was the first high-rise NFIT- Yeah

um, certified project, um, which was in Toronto, it was

designed by ERA Architects.

They started with a project brief of, um… or at least my understanding of it

is their brief was essentially to knock the building down and build another one.

It was a building that was end of life, and they were the ones that

put back on the table, "Hey, we could actually improve this building."

And so-

How did they, how do they, how do they come to the conclusion that

this building is end of life?

Like, what's, what, what's the criteria for accessibility?

I think we

just thought, probably just thought it was.

From a building owner's perspective, it was just kind of, "There's

too much maintenance to do here."

Okay, okay.

Um, you know, it's not, it's not necessarily, floor

plates are not great or-

Okay.

So- You know, good designs … so it's a

structural, a structural thing.

Okay.

Um, but I, you know, as I say, I'm, don't know huge amounts of that, about that,

but I do know that that building got delivered, I think, at a very similar

cost to delivering a new building at a significantly less price tag.

Um, and with a massive kind of carbon argument that-

Yeah

… that just blew it out of the water.

So it was just like, "Hey, this is, this is actually- Everything stacks

up,

yeah

… something that we should be- Yeah … be looking at doing." Um-

Yeah, and, and creating a, a, like a, um, like a hallmark project

to say that this can be done.

That's

right.

And, and we're preserving this beautiful building.

Like, yeah.

Where, where do you draw a line that you will say, "No, we should knock this down"?

I know, like, 'cause it's a, the reason I ask it, it's a difficult

question when you're on a retrofit committee pushing retrofits.

Yeah.

There always comes a point, and I joke with Dylan from Owen all the

time, like, "Just knock it down.

Like, who cares?" As, as a joke.

Yeah.

But, like, the question is, like, there, there becomes a point where you

kind of… it starts to go, "Hmm, do we do it or… Do we do that or not?"

I think the it depends question or answer comes up a lot.

Yeah.

It's, um- You know, our reasons for why you would not retrofit

a project might be that, that

the cost of a new building is relatively line ball-

Mm

and the potential risk of retrofit versus new build, given we're already pushing

someone's budget, is, is too high to-

Yeah

… to go down the retrofit path.

Um, other times it'll be, you know, the quality of the existing building-

Structure … and whether or not you can actually work with it enough or

the, you know, things like moisture-

Yeah

coming up through walls and the like.

Yeah, I mean, you- How well can you control … it, it sounds like a lot

of the projects that you're dealing with are, um, double brick maybe.

I don't… Do you use sandstone, um, footings here?

Yeah, okay.

Yeah.

So this is the kind of things that we're talking about here.

And new heritage overlays, you start

to kind of- A- and, and heritage overlay.

Yeah.

Like, I went to… Probably for me to answer that question, I went to, uh, look

at a new project last week where there was two options under the table, new home and

an extension renovation of the existing.

Extension renovation of the existing, I think, on paper was a couple

hundred grand in their favor.

And I, I was looking at the, the building and I'm like, "Okay, has this

been taken into consideration? Has this been taken into consideration?" Even

talking to them, we knew that, like the front right-hand side of the house

was dropping, so that's new stumps.

Okay, there's new roof, new cladding.

And like, if you can bring your budget up for a new home, you're

gonna get a much better outcome and a much more predictable outcome.

And rather than use the new h- the existing home there as

a design consideration, get rid of it and have full range.

Now, I'm not saying that that has to happen for every project, but- Just

knock them down, Hamish.

Knock them down.

' Cause I'm a big advo- advocate- No, no, okay … for keeping new buildings.

Uh, for, for keeping existing buildings.

But there are… There's a point of, you know what?

I understand this building has some sort of heritage value or some kind of

carbon value that needs to take into consideration, but you're gonna be better

off in the long term by getting rid of it

Uh, absolutely.

I think, I think once you take into account heritage, and you also take

into account a few other factors, sometimes there's not a lot of choice.

Yeah,

okay.

Yeah Often the ones that you are embarking on retrofit are that y- you know.

There's a council nearby here where if you've got sandstone footings and

they can't even be rendered, they've, they've got to, they've got to stay

as sandstone footings and visible.

Wow.

Um-

So this is my, so this is where-

because I feel like heritage advisors are the ones holding back energy efficiency

and building better a lot of the time.

Now- … you don't have to say it, I'll say it.

But, uh, yeah

I, I wanna learn how to work really well with heritage people.

I, my whole career I've worked on heritage, and I absolutely see

the value in keeping buildings.

But when we keep them in a way that makes them really uncomfortable

or means that they degrade-

Is it really

heritage?

That's, that's, that's not achieving the outcome

' Cause there's the argument to say, "What we're proposing is gonna

prolong the life of this building for another 100 years." That's

right.

So, but if we do what you're doing…

And they ignore code, so perfect example is now we've got to batten out our

cladding.

Yeah.

Are, are they allowing that?

Um- 'Cause they kinda got no choice

… it tends to be a little case by case and negotiating.

Um, I think there's, yeah, i- it's a, you know, your typical terrace house,

the first thing that I want to be allowed to do is to take the roof off,

add, add some above sheathing, um, ventilation, and put the roof back on.

And, you know, that's 100 millimeters of difference in height.

Yeah.

And it's a argument that I don't think I've won yet.

So, so, so, so why can't you

go, "That's fine, that's cool, but here's a legal letter that if there's issues

with condensation, 'cause it's now in the code, you guys need to sign off on this"?

Because that, ultimately, you as the architect have done your job.

The builder wants to build that way.

The clients want it that way.

So you now remove the risk from you guys.

"We want, we have to build this way due to NCC, 'cause of this clause

here. Can you sign and say that you accept that, that we've advised on

this, and if there's any issues, it will come back on you?" And watch how

quickly they'll change their tune.

Well, the w- the way that we do that is that we keep it in the

plans, and we make them modify it.

You just

do it.

So it's, it's modified by the consent.

Like,

they, they are actually- Ah, right.

So you, you, you keep the drawing.

So this is how we've drawn it, and then,

yeah, okay They've gotta pick it out

themselves.

Yeah.

I show, I show the above, like the- Detail … extra height on the- And then

you just

put like a circle around it

across the roof, and they circle to it.

Yeah, yeah.

So yeah- And say, "That's not

allowed to happen." But the other one, the other one i- Is that, yeah,

but if they say that, then, "Oh, you can't lift it", what do they say?

Um, it's usually the response is it's good enough for most people, so

why is it not good enough for you?

Um-

Oh, that would drive me insane … which is- I would lose my shit.

Well, look, you know, council, working with councils, working with

planners and heritage advisors, we're all coming from different angles.

It's a bit like architects versus builders.

But this is

a selfish, this is a selfish reason.

Everyone else is really happy to give a bit and take a bit.

I don't think they are.

I, I would say that the younger, particularly female heritage

advisors and planners coming through, are a lot more open to a-

Holistic

approach … broader, holistic discussion- No, and I agree … about

what we're trying to achieve.

Yep.

And, you know, our, our approach is usually to go in pre-DA with- Yeah

a full open book strategy of here's all the non-compliances, here's our

best a- argument for why we think it's okay, and have a chat about it.

Yeah.

But how about win- like windows, single glazed windows where they now want

you to put little, I don't know if it happened to you, the little sticker

to say that's the original glazing.

I can't… Oh, we can't make windows like we used to.

Well, why don't we just go, "How about you… Like, there's a, there's a space

that they could make so much extra money as council, and we're gonna come inspect

these in stages to make sure that window looks exactly like it used to be."

Look, it, there's always gonna be someone resistive to it.

It's just, you know, we- you think about it, like five years ago we had

to explain what Passive House was.

Yep.

Whereas now people know what it is, people are coming and asking for it.

Yeah.

Is Passive House mainstream yet?

No.

It's definitely not mainstream, but it's, I, I would say that it's desirable.

Yeah.

Um, and you know, at least in my little bubble-

Yeah, yeah, yeah.

Do you think it's affordable?

… a lot of, a lot of people are quite keen on it.

Um, it's a

It's, that's a very, very tough question right now.

Um, it's, we're, we are focusing on some projects that we had

been incredibly careful on scope, ambition, the way that we, we

designed in order to make things easy.

Um, and that, that is something that we're still seeing high prices come back.

Um-

Is that due to the performance, or is that due to the architecture?

Like, in res- respect to you've gotta be an architect,

you've gotta design something.

Like-

Hang on.

Can we just, can we just clarify something for a second?

The prices that are coming back are higher than what the client wanted to spend.

Yes, which is normal.

Exactly, yeah.

Yeah.

Yeah.

That's what we're alluding to.

Yeah.

That is absolutely normal.

Um, and-

No, no, no, I, I was just more clarifying because with respect to designers and

b- architects, when people say, "Oh, the price is too high"- Compared to?

… or, "That's too" or "You're too expensive", I'm like, "Hang on a minute.

I'm not the one that designed this."

Yeah.

And I'm, I'm being quite carefully, and I'm, I really wanna kinda talk

this through here, 'cause I'd just like just to change the language

just around it a little bit, 'cause I think that's important- Mm

'cause it is bringing everyone into solving the problem.

It's not shifting the blame.

Yeah.

Um-

Especially when you're digressing- No, because es- especially when

you- I do apologize … mate.

I didn't mean to, didn't mean

to- I, I totally agree with you.

Um, so I, I think, you know, the, the message to me, first one, is

that I don't think Passive House is particularly expensive over doing

what I'd call well-built sevens, like minimum code seven stars.

Or,

or, or another custom home.

Or just, and just architectural homes.

Yeah.

Yeah.

Like, it, it's just about the fact that you're building one of them-

Yes, agree

… and, um, you are trying to… Like our relationship and the client's relationship

with the builder on these types of homes is always going to be one team

with their subbies, and the way that they can manage their risk for that

team during the process of that build.

And so they need,

if we propose something that is a cost saving-

Then, then that actually has to save labor.

Like, the, the components of cost for all work, whether we're seeing

it as part of the price inclusion or whether it's cost plus or whether

it's a variation, there is a margin on top that relates to business costs.

Yeah.

There is a margin on top that relates to appropriate profit margin, bearing

in mind that there is a warranty commitment on a building, and there is

responsibility in the longer term that you might have to come back and fix stuff.

So it's not pure profit.

It's, it is money

to keep the- Is this the first architect that's got it?

I am sitting here

just- Sorry,

not that- … just nodding and

smiling

and-

Like, the, this is we- … hoping this is real.

Yeah.

This is, we bang on about this all the time.

Yeah.

Yeah.

And s- people are just like, "Oh, you make all that money." It's

like, "No, I don't make 25% profit." So- Like, I can tell you we don't.

Yeah.

I, I'm not cl- disclosing any profit margins.

No.

But I'm- Yeah … I'm saying kind of there, there is a- Yeah … significant

component of price that is attached to just running the builder's business,

covering the insurances they have to have- Yeah … and having the

QA systems and everything else they have to have, plus that risk.

And then after that, you have to go off and buy the materials.

You can walk around Bunnings.

You can check-

Yeah, yeah

… how much stuff costs.

The builder's price isn't really that much different from most

of your building materials.

Yeah.

You might get a little bit because you buy a lot, or you might get-

They've all got to be competitive, these big companies.

That's right.

It's, you're not saving huge amounts for that, and then the

only other component is labor.

And that's…

And, yeah, no, labor is a significant cost.

We need to think, um, in our minds like, I would have thought-

Like an average man day is somewhere between $600 and $800 per day-

Yep

… on site.

And if we're gonna have…

It's usually two people doing stuff- Yeah … and one person helping them.

So there's three people, and that's, you know, you have to cover that wage

for the full extent of the job, and that is, that is the component of price.

Can I- can you start doing projects then in Melbourne?

I will do your projects.

I can tell you that there are people in Melbourne who

know, know this stuff as well.

Okay.

Yeah.

It's a, it's a… But this is what we're trying to pull together, and

so when we try and pull together- And retrofits use more labor … a client's

wish list- Yeah

… and we manage the minimum obligation and costs to have a builder there, we've

got to mash that together into a bu- a budget that can work for a project.

And retrofits have more labor, and like on a typical, if we say a $1.5 million

build, 'cause building's not cheap, there's gonna be between two, 2500 to

3000 carpentry hours, which is pretty much bang on with what you roughly, if you

work out the maths quickly, like, yeah, you, you times that 600 by th- three.

By the way, it's not they get paid 600, the wage, they might get paid their $50

an hour, but it costs us double to run them by the time we have work cover,

payroll tax, all these other things.

The other thing that I was going to, um, say, and again, I've gone

completely blank on this, retrofits-

We can edit this out.

It's fine.

Ah, it was really good.

It was on labor.

Here's a question while Matt's thinking.

Um, do you think that you've got a much better appreciation of labor having

done the Intello on your own home?

Yes.

Um, that, like the things that I learnt by having to go and do that.

So the, the reason why I ended up doing it was I worked… It was

my first Passive House project.

I worked with a builder who wasn't a Passive House builder, but I had

a very good relationship with, and-

Who's the builder?

Shout 'em out.

Um, it's Life Structures.

Great.

Um, Mark Ferrigie and Matt Rabessa.

Um, and so- Mm … you know, they… What was great about that project was that

they were happy to try something new.

Yep.

And when we got talking about what a Passive House actually meant in this

context, the thing that was perceived as risky was the airtight barrier.

And so external wraps and sealing those, that felt pretty normal.

That's, that felt, "This is what we normally do as a builder"-

Yep

… " and we're happy to do that, and we don't see that as, as a particularly big risk.

It's a little bit more finicky than normal, but it's, it's fine."

And, you know, we were using Mento and Extesana, um, and Tescon

tape, so nothing super difficult.

Um, airtight, you know, I used OSB 4 as my airtight layer- Really?

so I needed to, I needed to go and, um, seal all of the joints.

Do you do that anymore, or is it just Intello?

No.

Um, we were, we're using a SIP system.

Um, we haven't found that to stack up on further projects,

um, doing things in that way.

We're- So you just- Intello is definitely quicker

Oh, you- oh, so you used SIPs.

You didn't do install the ply.

Okay, cool.

Yep.

So we made use of the fact that we had something there.

Um, I was also, I, this house-

was a unexpected project.

Um, and it, it, we had very limited time.

We were in insurance process.

I had very limited time to suddenly design a new home and get building.

Um, and so I used a system that I

knew- Your house caught fire, wasn't it?

Is that, is that you?

We had a fire next door.

Yeah, yeah.

So we, we had a total loss claim.

Yeah.

Yeah.

Um, and it's a, like we, you know, I-

Was it an extension reno, or

was it new?

No, it was

a totally new build house.

Totally new build.

Okay.

Um- So Passive House Classic certified?

Uh, we are not certified yet.

We are on track for Plus.

Nice.

Um, but-

Yep.

Have you finished?

No.

Oh, so you're still constructing.

We're out in the truck.

You're still… So, 'cause g- this goes back to the whole cost conversation.

Mm-hmm.

Is it just okay if we say Passive House is more expensive, it's a premium product?

I think it's okay to say it's more expensive, but it's, it's, it's the

reason for it being more expensive.

But it's like saying, it's like comparing the Ferrari to the, the Suzuki Swift.

Like, sorry if you design a Suzu- Suzuki, or if you drive a Suzuki Swift.

They're two different products.

Yes.

So-

What are

you comparing it to, though, as well?

That's kinda what I

wanna know.

Yeah.

And that's, that's what I'm saying.

Like, what are we comparing, 100%, what are we comparing it to?

Yeah.

Because if we're to, if we're gonna go and compare it to someone who's

got a $10 million budget and build this house that's got hydronic

heating and all these commercially glazed, uh, um, steel windows,

Taite, what would have been cheaper?

A Passive House.

Absolutely.

And, and the reason- But like, the reason for that is that it depends

on where you're spending your money.

So the, the investment in a Passive House is on the external building envelope.

So in my- You reckon?

In my case- Oh … I spent-

Was that sarcasm, Matt?

No, no, I actually don't think it is.

I think every building is, like, now wraps externally, has

the batten system externally.

It shouldn't change anything.

No,

I think, uh, were you s- were you talking about the thermal envelope?

T- thermal envelope.

So including- Yeah … windows, including- Yeah … including- Wow … wraps,

including additional insulation.

Like here in Sydney, we're, we tend to get away with, you, you

can do it with a 90 mil frame-

Yeah

um, with a high risk.

Um, 140 mil frame is a pretty standard approach.

When, when you say high risk, you're talking more about whether

or not you're actually gonna reach the criteria of Passive House?

Um- And the- … I'm thinking more that your potential for cold spots- Okay, yep.

Okay, yep … and, and kind of weak points.

So

I wanna challenge you on this, because I think that the cost of the

project difference is the inside.

If we look at the difference in material costs for a 140 to 90 mil

wall, what's it gonna add to a project?

Fi- let's just call it five grand, it's probably not gonna be that.

Yep.

The, the wrap should be the same.

Yep.

The roof setup should be the same.

Like, there should be external, there should be a roof membrane

with the cavity batten system, and the same with the walls.

Okay.

The windows are arguably can be the same price, if you want it to.

Yep.

Insulation, if you're installing a 90 mil batten or a one, uh, a 140

batten, it should be the same price.

Yes.

So where does the cost go?

Air tightness, the, 100% is there is an inherited cost in

the air tightness, internal battening, 30 to f- 30 to 45 grand.

30, yep.

Where is the, the cost difference?

Well, it's, I guess where I was leaning with it was it's

where you spend your money.

So for me it was like, I want the Passive House building envelope, and

the compromise ended up being that I build all the cabinetry, which is

why the house is not finished yet.

But even if we compare- You living in it?

Huh?

Yeah.

You living in it?

So e- even, like even if, even if we- What's your relationship with your wife?

Um, well- … she would like cupboard doors.

I'm now, I'm now single.

Um, but if, if we- I'm now

sleeping out the back in

a tent.

No, so if we… Yeah,

build my own Passive House dog house.

She very much appreciates Passive House, but would like cupboard doors.

But,

but-

Is your ventilation system on?

Yes.

Yeah.

So but if, but even, okay, let's just compare this to then a standard

build, and you'd use 90 mil walls-

Yeah

… with the, what, the, the membrane and battening system on the

outside should be the same.

The windows shouldn't be really any different.

Well, it-

In, in this climate, they can be quite different.

However, I bought Logic House windows- Yep … for the same price

that I could get single-glazed hardwood made here in Sydney.

Um- And so- Was that

because Harley gave you a ripper deal, or is it-

No, I-

That's why I've seen Lyndon as the face of

Logic House

I met Harley in order to kind of, to do, put this order in.

Like, I, I had no previous relationship with- Right.

Okay, yeah

… with anyone in the passive house world.

They're

pretty good to deal with,

aren't they?

Are you using them on most- They're amazing.

Yeah … Are you using them on most of your projects?

Um, we'd like to.

We also work a lot with, with Kinsel, um, and do uPVC.

Okay.

Yeah, that must

be, like,

a good- What extrusion are they using?

Uh, they're using the Aluplast.

Yeah.

Ideal.

Are

you- Yeah.

So yeah, they, they offer quite a nice install

service.

Um- Okay.

It's annoying when it's- Logic House, you know, offers a backup for something

that's an imported product, so it's- But

you look, it's- … makes it possible … Logic House, like I

know Harley and Jason are over in Poland for the first time checking

out their windows as we record this.

But it's really crazy when you look at the raw cost of what it costs them

to produce the windows over there, and then we've got to add on the shipping

conversion fee, blah, blah, blah.

It's, like, cheaper than, like, the crappiest windows you can get here.

Yeah.

And that's that, that… And that's the, like- It's because

labor's cheaper, though.

So this, so this is… Labor's the cost of a project, and I've said it before, that

no one wants to talk about this, because we all want everyone to get paid well, so

no one's willing to have the conversation around labor because of, "You just want

to take away from the small people."

They're like… A- and, and it's an awkward conversation, but the reality

is, yeah, that's what's driving the project costs up, especially in Victoria.

We've had the big build.

Everyone's gone across there, earned a huge wage for doing very, very

little, and now they want to come back and earn the same amount.

You know what?

I reckon one of the biggest problems is, and I've been in the industry

for about 20 years now- I'm probably gonna annoy some people when I

say this, work fucking faster.

Like, I have seen a drop in intensity on site.

Yeah,

and

100% agree.

And I even see, you know, on some of our building sites, and, you know, maybe I'm

gonna piss off some of my own team, like there is not the same intensity that's

on site that I would've- We used to run

that I experienced when I was- We used to run.

And I'm, and, okay, and I'm not saying it needs to go back there, 'cause a lot

of yelling, fucking hammers flying past your head and all that kind of stuff.

I'm not saying we need to go there, but show up to work with intention

and integrity, and do a good day's labor, and don't just clip your ticket.

I think that's a big problem at the moment.

Anyway, we're digressing.

No, no, I- We're digressing a little bit

there … I, the amount of time I just see people on their phone just sitting there.

Yeah.

I'm like, "What are you doing?" They're like, "Messaging a mate." Why?

Anyway, we're, we're digressing from- Yeah, I,

I can see where you're going with that, but I, I'm also like, you

know, there's a, there's a very…

You know, most of the crews that we work with, you know,

rain day isn't necessarily-

Shut up shop

… that, that everyone's shut up shop.

Most of them are out there with a raincoat on getting work done.

Yeah, yeah, yeah.

And they're working-

Look, for, for, for any of my team that are listening, right,

like you guys- You got a job opportunity at Carbon Construction

you crack on, you're amazing.

We, we, we- But I'm, I'm just saying, like, the… I've, I've,

I go past some building sites and there's just no, no intensity.

So the other thing that, and we don't talk about this, and- I don't wanna get

canceled for saying this, but we also, if you go to somewhere, and again, I

agree that everyone should get paid well.

In Europe you'll typically have, like, the Romanians, the Polish that

will come in, they'll work cheaper.

In America, a lot of the Mexicans will migrate up.

In Asia, labor's just cheap.

We don't have that- The pressure.

Yes We

don't have the upward

pressure.

We don't have… Yeah, we don't have the c- yeah, everyone's at a minimum

wage base rate, which is perfect.

It should be, but the problem is we don't have other people that will

do it cheaper, and that's… And t- and we, we removed all manufacturing

'cause we couldn't do that.

We don't manufacture anything because we couldn't keep with the rates of

everyone else in overseas countries.

That's the reason we lost that.

But we're never gonna have that luxury of h- uh, use luxury as a really loose term

there, but, like, of that competition-

Yeah … of

labor rates.

I,

I agree.

No, no,

I, I agree with this.

And it's not, I don't mean that in a real negative way, the way I say that.

I just, it's the reality.

And I think sometimes I talk about reality.

Yeah.

Well, I think this is where we bring things back to retrofit and affordability

and all of that sort of thing.

Like, ultimately, when we're talking about the cost that we can do something

at, a living wage for people in our industry now needs to include, you know,

paying, paying rents that is equivalent, equivalent to what many pay in a mortgage.

Um, and so your ability to save to have a mortgage is not there.

When you go to get your insurance renewal each year, you're getting a

30% or 40% premium increase, which is just stacking on, stacking on,

stacking on, and that's happening every single year, and it's happening across

every single aspect of a business.

Oh, our insurance is ridiculous.

Like, what's, what was our VMI insurance that Porter Davis went

down and they doubled our rate?

Yeah.

And I, I, a $1.5 million project is roughly 20 grand

in insurance straight off.

Bang, gone.

See you later.

I'd say it's more.

If you're in, if you- More … talking about contract works, too, it's more.

I'd not think… That'd, that'd just be domestic building insurance- DBI,

yeah … and c- and contract work.

Yeah That's it.

Nothing else.

Yeah, no, that's what I'm saying.

I reckon it's more- But- If it's DBI and contract works, it'd be more than that.

But that's something you guys are calculating inside

your business overheads.

Yeah.

Whereas every single person that you're paying to be on the site- No,

that's

coms.

We, we- … has to get, has to get themselves You know, ha- has to feed,

clothe, and shelter, and they have to get themselves to and from work, and

all of their costs are becoming so high-

Yeah, yeah, yeah.

I, I- The system's gonna break.

Something's gonna break … look, I, I, I, I hear exactly what you're saying.

Yeah.

And, and the thing is I, I, I would love that, you know, that

everyone just gets paid really well and what they wanna get paid.

I'd love that, but that's not how a free market economy works.

It's not how a free market economy works, but it's where we should

be targeting things like retrofit.

Like, the, the biggest difference between a three-story walk-up apartment

block and one of the very new ones that we're looking at through here out the

window, um, which is, you know, your very typical Sydney apartment block at

the moment, um- Ugly … is the size.

And it's, it's a, you know- A three-story walk-up apartment is, is relatively tiny.

It is only what you need to live in.

And- Is that a good or bad thing?

… it suits a, it suits a massive need for, like, there are so many people that

they would just be delighted to have that one bedroom, um, or even a studio

that's their own and not have to share.

And, like, that, we can't build buildings that small anymore.

The code- Mm … does not allow us to do that.

And-

So you're saying we have made an error there in the code?

Well, there's a, there's an error in the code, but there's also

in the perceived, the perception about what it is that is valuable.

So, you know, when we're talking about single houses, you know, banks

are interested in funding houses that are kind of 250 to 320 square meters.

I'm interested in designing houses that are somewhere between 100 and, say,

160 square meters for a family home.

Yep.

That's, that's- Which is enough … kind of- That's enough.

It's enough.

That's

enough.

But the banks want 300 square meters.

Yeah.

Once I design that small house, one of the questions they

ask is, "Why is it so small?"

I

hate banks.

And it's, it's the perception that it's a higher risk to

plug that house in a fire sale-

After they've just

made- … because it's small

… billions and billions and billions.

Right?

Yeah, and it, it's, like, tho- those sort of things, it's the same thing

happens in the apartment world where it's, like, the market perception is

that we want two-bedroom apartments.

We build huge amounts of, in New South Wales, it's a minimum of,

I believe, 70 square meters for a two, two-bedroom apartment.

Um-

So you can't have a one-bedroom apartment in Sydney?

You can have a one-bedroom apartment- Okay … but there's,

there's minimum apartment sizes.

Yeah, yeah.

Okay.

And so we, we are forcing people to build a space that I think is

probably too many square meters, and that's driving up the cost-

Mm

of delivering these homes.

And, and, and, um, you're losing an opportunity of getting more in there.

You're losing the opportunity of getting more, but you're also, there are so many

other layers to that business choice about what it is that you're gonna build.

Like, in Singapore, it's pretty normal to have five-bedroom apartments.

Um, in Australia it's usually twos, maybe threes.

Um, if you're needing a four or a five, you're probably, you know, heading for

a house, and the perception is that you might not have been successful 'cause

you bought an apartment for that size.

Yeah.

Okay.

And that,

that's a- Yeah, I see what you're saying.

Yep.

This is where- Yep … market perception and costs of things get

conflated with what people need and enough, and that's where I would

like to see the conversation change.

And- I think new builds should be allowed to build smaller.

We should have ways of having more variety in apartment size.

But retrofit, to me, is a really good way of demonstrating that to everyone, because

if we can retrofit a few, you know, not

likable or apartments that people wouldn't otherwise want, and we can

turn them into something that's really, really good by getting the energy

performance sorted out and doing a few nice changes inside, um, that

are very, very modest, then I actually think we've then got a flagship project

saying, "Hey, actually, it's not the size of these apartments that's the problem.

It's, it's the way that we perceive what is enough."

Yeah.

It's

a really interesting conversation, that.

I, I, I, I'd like to sit in this for another podcast because I think

there is an interest… There, there's a, there's a problem that

needs to be solved, and I think Liam from Hip First Hype is, is certainly

exploring it with Park Life- Yeah

'cause I'm pretty sure there's one-bedroom apartments in there.

But banks just- Correct me if

I'm wrong … uh, what I hate about banks so much is interest rates go

up, they pass it on the next day.

But when they go down, oh, it takes us 30 days to work it out.

Come on, guys.

Isn't that fucking stupid?

Well, no, we, I mean, we've seen it with the, in the fuel- I-

in the, in the bowser right now.

Like- Yeah.

They

ain't dropping any of

the time.

No.

And I, and, and all this money, all this going up is, it's incentive.

The government are incentivized for it to go up.

They make more money as things become more expensive on GST alone.

It's, at the moment, let's use fuel right now.

It's gone up a dollar.

They just made 10 cents extra per liter instantly on GST.

Think how many liters of petrol they just are selling

You know, I think the more worrying-

I think it-

… discussion is that, you know, transport industry today is claiming that, um,

they're gonna go bust if they can't pass that cost on, which is quite probably

true, but the people they want to pass it on to is Coles and Woolworths, and that

then just translates to the inflation that we just got an interest rate rise to stop.

Yeah.

So, yeah.

The only way, the only way, the only way, honestly, and this is where…

And the only way that inflation goes down is unemployment, and that's

where AI will probably kick in.

Like, that- that's, that's the other key metric that we look

at, is, uh, employment rate.

If employment rate goes up, unemployment rate goes up, inflation drops.

Yeah.

The reality is, if y- you've got to be rich to build.

You've got to be rich to buy a home.

Like, can we just accept that now

and- And do you know what?

If you've got money, it doesn't matter.

If you've got, if you're- Yeah … if you're cash funding, it doesn't matter.

I, I, I understand that not everyone's in that situation.

Like, I totally respect it, but it's reality.

And I think too often we sit here, "Oh, we wish every, uh, Passive House was

affordable for everyone." Like, so do I, but we sit here, and I build for clients

with over a million dollars, you design for cle- clients over a million dollars.

We all want the bigger projects because it makes our life easier.

We want rich clients.

Can we just say that and move on the conversation?

Well, that comes back to the way that Passive House tends to

evolve in the, in the market.

So, you know, the, the first wave of Passive House is almost always

expensive houses for rich people.

Yeah.

And, and it's a, it is an unattainable something for quite a while.

The next wave then is starting to look at, um, social and affordable housing usually.

Yeah.

And it's retrofit of buildings, and so, you know, the US, Europe, the UK, they've

all had funding models that are tied to measurable improvement of buildings.

And- Passive house has been used as a measure for that.

And, you know, retrofit codes like the fires retrofit code take into account

other things like building resilience, how long can you stay in your house, um,

without, without power supply on, and, you know, can you last out some pretty

extreme conditions for six or eight weeks?

Um, they also have a, a lens on embodied carbon with that.

So it's, you know, there's breadth in there that ticks funding or political

objective or policy objective, and that's where the market grows,

and it, it actually opens up to a much larger cohort of people.

Um, and I would argue that making that happen in Australia right now

is, is a critical thing because-

Big, huge shift in politics

we are knocking down a whole lot of, of the smaller, older homes that

are more accessible to most people.

And it, uh, again, I don't quite know the debate down in Victoria quite

the way that I do know it up here.

Um, but up here we're starting to see councils say, "Hey, you can't actually

knock down a block of flats and put less, more luxury apartments on.

You've got to, you've got to keep the numbers."

Yeah, right.

Um- Our councils and politicians

are outdated down in Melbourne.

Yeah.

So that- … will lead to the idea that we're actually gonna have to

try and fix some of the ones that we've got, and, uh, it should strand

from- Yeah … a development point of view, a few of these buildings.

I, I think if you're a designer, architect, a builder, chippy, trades

person, the existing buildings provide probably the single biggest

opportunity for us in the next 10 years.

80% of my inquiries right now, retrofits.

Oh, yeah, yeah.

At least.

Yeah.

Yeah.

Yep.

Um, we're gonna wrap this up.

I've got a question for you here.