With the Governor of Moolah announcing that he has accepted a further three year term, the property market is all but guaranteed to reach ten years of continued growth. Never before has the property industry experienced such a long period of prosperity and Macca has identified himself as the all time super coach of the economy with his ten year reign. Whilst building approvals climbed 6.2% for June thanks to a 13.6% jump in approvals for private housing, apartment approvals fell 10%, so watch for a huge turnaround in new apartment approvals following the announcement.

From the super coach to the mini bus, (and I am not referring to Eddie Jones), enter the shadow treasurer Mark Latham who announced that he is examining prudential guidelines and the potential to smooth out property cycles. Well, history has shown that all that is needed to send the property industry into a tail-spin, is to elect the Federal Labor party, who apply a monetary policy of balance your budget – rotate your creditors!! Australia has 122 home loan providers, so it really is the responsibility of the Australian Prudential Regulation Authority to ensure that the respective lenders can survive a downturn. I am somewhat amazed how they continually refer to the 1991-92 recession, considering that in 1991-92 the cash rate started at 12% and finished up at 5.75%. All up, we saw eight reductions over the period. Today the rate is 4.75%, and the super coach has not touched it since 5 June 2002. With the word ‘bubble’ seemingly removed and the word ‘cycle’ inserted, the major concern for the property industry is the investment market, which is not to be construed as the family home. From our perspective, the local home unit market has never been stronger which is understandable as Mosman does not have an abundance of home units. With so many new apartments being built, all they need to do is tighten up the lending requirements, although a research paper released this week, identified that even though debt has more than doubled in relation to disposable income in the past twelve years, the households still remain comfortable with their financial commitments.

The fact that the average price for first homebuyers in June 2002 was $368,900, and has now jumped in June 2003 to $467,600, clearly identifies, that for the younger generation, owning property is a greater priority than ever before. What we are already starting to see is the first homebuyers heading west in the search for affordable home acquisitions, so overall the property market has a greater balance. This in turn will see the State Governments having to reduce Stamp Duty, which is great news for the property industry although ‘Cranky Franky’ Egan would not agree. Since the introduction of the $7000 first home owner’s scheme the Government has now assisted 480,000 home owners. The one fact that many failed to recognise is that so many people were such strong participants in the property market. This now suggests that property was under-valued ten years ago.

The Mosman market continues to contract with the number of houses available showing no sign of improving. This all but guarantees that the prices will continue to climb. Overall we are witnessing the most intriguing market that I have ever encountered, and it continues to defy all who question it. We could be facing the a Spring market that offers next to nothing in terms of volume, and this once again, will be an all time first. Understandably we had slim pickings in the recessions, yet it is quite extraordinary that we have very little property in a bull market. As we said last week, with nearly seventy per cent of the housing market having traded over the last seven years, there had to come a time when the Mosman market exhausted itself. Just goes to show that when it comes to property, it has a mind of its own!! Take a look at the “property of the week”. Now that is a hot property!! Cheers and clink ^__^

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