The state of the market has never looked better, and the October sales will once again prove that the only people who actually know what they are talking about are the participants themselves. With stock levels doubling over the last few weeks, it is now up to the waiting lists to absorb the new properties, which once again will send out a resounding message to the property sceptics. An interesting trend at the moment is that the Eastern Suburbs’ buyers are casting more than an interested eye on our Balmoral properties, and the top-end of the market continues to deliver conclusive market results.

A home in Hopetoun Avenue, reputedly sold for a respectable $6,385,000 this week, and historic ‘Harston House’ sold well ahead of the scheduled auction for apparently, $7,600,000. For the Mosman market to remain robust this is the end of the market that must lead the way and continue to deliver the desired market stimulation. The responsibility for the continuance of this pattern remains solely in the hands of just a few agents. Purchaser enquiry levels are more than encouraging, and our Internet visitors are well on the way to eclipsing our all time record number for a calendar month. Thank goodness this month has thirty one days!

The vast majority of the properties on offer must sell this month to ensure there is a November market. If the October properties fail to sell, they will then become the November market. The new properties will in all probability decide to wait for the New Year, to allow the property market to re-gain composure after the annual Christmas hiatus of rest and relaxation. The current market is without a doubt, one of the most exciting that we have encountered for quite some time. It is challenging to say the least and once again we have very little doubt that it will be rewarding for those participating in the modern-day game of changing houses. We will be adding another $25 million dollars of property to our comprehensive menu of homes to satisfy the insatiable appetites of our buyers, over the next fortnight, and these homes, together with those currently on offer, are some of the best offerings that our property market has seen in years.

As I said to one vendor this week, we have around twenty great homes on the market at the moment, so really, all we need to do is identify the twenty buyers, which really is no big deal. The market is consistent with previous markets, and it could be said that some areas are at an all time high. Some of the top-end homes are an indulgence, which explains why they attract such interest. Having said that, if you paid capital gains tax on the principal place of residence, the market would not be what it is today. It is that simple!!

Each week, millions of people fill out Lotto tickets in the hope that their luck will change. The same could be said with our property market, as each week the property players are doing exactly the same, the only difference being that with property, the players are all winners, and some have pocketed millions of tax free dollars. From humble beginnings to handsome households, they know all too well that the odds are stacked in their favour and our market is a long, long way from being finished.

Already we have early action with some of the homes on offer so watch this space for some fantastic results. At this time of year, buyers have one simple request, they want to take up residence before Christmas. Yep, it is nearly that time again, time flies when you are having fun… cheers and clink ^__^

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12.10.02Robert SimeonNo Comments »

I once read a quote “Many people are gossips; however, some of us are merely being informative”. This is so true, and predictions should not be construed as facts. Personally, I follow the ‘sold by’ signs when I am assessing the market, as each sale provides the actual evidence as to the state of the property market. As for predictions, like many others, I prefer to simply stick with the facts, and go with the flow.

So let’s take a peek at some more facts that emerged during the course of “The Week That Was”.

The Bureau of Statistics announced their new “experimental estimates” survey, which revealed that the wealth of the average household rose 45 per cent from 1994 to 2000 as the property market and sharemarket boomed. NSW was the richest state, which was helped by the fact that it had the most expensive real estate. This simply confirms why so many play the property market, as building wealth is what it is all about. After all, the gains derived from property trading with the family home, are tax-free.

Building approval figures released this week revealed that for the month of August, they were up an impressive 23 per cent. Retail spending on the other hand, could only achieve an increase of 0.2 per cent. While total private sector building approvals rose 26 per cent to 17,350, private house approvals increased by 8.7 per cent to 11,000 , which is still the highest level in 18 months. These statistics send out a clear message that just like the “experimental estimates”, Australians are still focused on building wealth. It could be argued however that they are not focusing on “the bubble”, preferring to read the market.

Let’s take a closer look at these intriguing facts. What caused this up, up and away statistic? Look no further than the units and townhouse market. This increase represents a staggering 73 per cent, which is the highest, reported since 1994. What will bring it back to earth is that these figures, for the moment, are based on paper approvals opposed to physical building work commencements. In all fairness, this has nothing to do with our property market, as we have very few new developments under way.

It does paint an interesting scenario. However, an investor in the market today would be prudent to conduct a thorough due diligence on the specific area of interest. If the particular area is over reliant on new developments, it could be seen as a volatile market where significant capital depreciation could be experienced.

Our market is not as complicated or delicate. I pondered the Mosman market this week and asked why Mosman is the star pupil in bricks and mortar. The answer is simple, we have the largest waiting list!! So many purchasers are on the waiting list for a home and this simple fact is what keeps turning the properties over. The higher the turnover, the larger the waiting list.

What remains to be seen is how the market conducts itself over the next sixty or so days, with the waiting list stretched to its limit as we embark on our busiest selling period. To further put this into perspective, we have ‘been there and done that’. It happens at this time every year. Once the signs emerge that the waiting list is all but exhausted, the market closes up the shop and starts again the next year, after the Australia Day long week end. By that time the waiting list has grown to vast proportions and it is on again for a new year.

Whilst we don’t believe that it will be a ‘get in, sit down and hold on’ market, it will be a profitable market, and in the end that is what it is all about. Slow and steady wins the race, and this is the longest race that any of the agents have participated in before. We are somewhat fortunate that Mosman is considered the ‘smart choice’ suburb, which reciprocates by presenting those who participate, with the greatest capital gains. Much to be said for being healthy, wealthy and wise!! Cheers and clink… ^__^

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5.10.02Robert SimeonNo Comments »

With removalists still at their optimum fitness levels, thanks to a property market that commenced well before the foundations were dug at Stadium Australia, what remains to be seen is whether the Spring market will be a ‘sell-out’. Much will be determined when we see whether or not the property market in October is ominous or outstanding. For it to continue to be outstanding, it must not become ‘overweight’. Without a doubt, the September market maintained control and balance with property volume considerably less than previous years. To maintain confidence, the property market will require a vast improvement next month. Whilst we recorded some great sales this month, and ours are slightly up on September 2001, we are not forgetting that September 11 brought the market to a stand still last year.

The market requires controlled aggression. Whereas before, the auctioneers were conducting a chorus of purchasers, today the tune is sometimes not as sweet to the ear. This has been largely due to blatant inaccuracies with regard to vendor expectations. For the market to exceed one must first find the market value and build from there. Agents and purchasers have become strangers and the trend now seems to be that the agency focus is on attaining the property prior to finding willing purchasers. We have changed that focus and are now identifying the purchasers again, and leading them to the property, which is how it used to be in years gone by. This process becomes even more difficult when the purchasers play ‘hide n seek’, however the good news for us is that we have most of them on our database.

Whilst on facts and figures, there was a very interesting article recently about where the millionaires live, and once again the leading postcode was 2088. Figures from the Australian Taxation Office in 1999-2000 revealed that three in every four millionaires live in Sydney. Mosman identified 120 self-declared millionaires, and Toorak came in second with 85. It would suggest from these figures that quite a few have used creative accounting to keep their taxable incomes below the seven figures. Or, could it mean that Mosman has the highest borrowings of all?

Well it is litmus test time. Over the next few weeks we will be launching another 35 million dollars worth of property to the market, and we are very much looking forward to the challenge. One change that we have already addressed with our vendors is that the market is no longer a one-way street and everybody must approach it with more liberal expectations. One statistic that seems to be lost is that the market is already up, and values still remain at an all time high. A buyer in the hand, is worth two in the bush, and many vendors today wish that they had heeded that advice.

For those who believe that the market is finished, nobody bothered to tell us!! What remains to be seen now, is which agents can make the most of what they have to work with, and I for one will not be handing out any clues… cheers, clink… ^__^.

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21.09.02Robert SimeonNo Comments »

Whilst many would like to turn back the clock with the benefit of hindsight, there is no denying that the property market has withstood the test of time. There is a noticeable difference within the property industry, as vendors become purchasers at the drop of a hammer. Such is the loyal allegiance to bricks and mortar, steadfast in their resolve that when it comes to building wealth, their code of conduct is driven by a post code. There are just a few significant post codes, and 2088 is one of Australia’s stars. Australia’s rising home prices now lead the world, with the recent figures identifying the biggest yearly increase since the boom of 1989. The Bureau of Statistics has just released the statistics for the year to June 30, with Sydney leading the way with a 21.7 per cent increase, Brisbane finished a close second with a 21.3 per cent increase. Britain recorded a respectable 18.8 per cent increase, and Spain posted a 15.7 per cent increase.

Many argue that over the last four years property prices have jumped 70 per cent, but it will be the investment market that remains under the microscope, given that they accounted for more than half of the increase in new housing loan approvals. Many investors are finding it increasingly difficult to fund their new acquisitions given that tenants still remain few and far between. This could present opportunities further down the track, as some property debutantes discover that not every letter box has a silver lining. If some new developments were to be sold, they would be lucky to break even. Over the last few years we have repeatedly been asked by previous clients to advise their children, who were embarking on their first purchases, on the do’s and don’ts of property. Most were at school and university when we endured the ‘recession that we had to have’ and they have only seen property prices on the rise. Many of the nouveau riche suburbs that have experienced huge capital gains with new developments, will in all probability be re-named ‘struggle street’ as they attempt to survive the current overtures of doom and gloom, not to be confused with the agent’s sales pitch of zoom and boom.

Once again we turn the spotlight back to the Mosman market, home of the Mosman $dollar$ that continually proves to be the most expensive in Australian housing currency. Real Estate Institute figures just released, clearly show that Mosman sales during the June quarter made up just 0.6 per cent of all sales in Sydney over this time. June quarter figures revealed that Mosman posted just 559 sales in the category of the top five local government areas with the highest median house prices. The common denominator is that of the 559 sales, every one posted substantial capital growth. This week we listed a semi on Ourimbah Road. It was sold within 48 hours for $760,000, yes Marize again!! Interestingly enough, we sold an identical semi to this exactly twelve months ago, only a few houses down for $622,000. That is a capital growth of $138,000 in twelve months. The September quarter figures will be very interesting.

What we have today is a much greater focus on the property industry. The statistics, facts and figures are now readily available for all to draw their respective conclusions on the state of the market. I was looking at a home this week, and yes the owner is a subscriber. He suggested that he spoke to another agent who basically echoed what I had written in the previous week’s edition of VRN. I see this as a positive because at least they now know what they are talking about, and it is better that agents talk about our market on a united and informed front. As for the most popular quote in the media at the moment “Economists predict the property bubble to burst”, Mosman has plenty of economists who all own homes, and to the best of my knowledge we don’t have any waiting to purchase, so you can work out where their money is!!

It really is no wonder why so many property stories are doing the rounds at the moment. You see, for the majority it is all good news, and we know that good news travels fast. Just as fast as your edition of Virtual Realty News. When and if the market has a significant adjustment, it will in all probability be here where you read it first, although I am sure that the Property Editor at The Sydney Morning Herald will have a few words to say to me about that one.

Thirsty work this… cheers and clink… ^__^

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14.09.02Robert SimeonNo Comments »

As the property market waltzes out of winter, it was a most memorable quarter given that sales volume for units and houses was the highest since the September quarter last year. Quite an amazing statistic! We are now entering our strongest quarter statistically. By all accounts we can expect a Spring fever, although all the evidence before us is still very much circumstantial. Whilst nobody could disagree that the overall numbers at open for inspections have diminished as compared to previous months, this is not necessarily cause for immediate concern. What we are finding is that the people who attend an open are actually genuine buyers, which in turn allows the agents a greater opportunity for buyer identification. Many will agree that as each year passes, agents are interacting less with purchasers face to face, as our industry moves into what many people prefer, the privacy of e-property. Once upon a time an agent would telephone a purchaser when a suitable home was listed. Today the prospective buyer receives an e-mail alert.

Virtual inspections of homes are now increasing whereby it could be argued that purchasers prefer to inspect by stealth, as against the previous more open relationships. Here is an excellent example, 20 Morella Road, Clifton Gardens, appeared for the first time last Saturday, in The Sydney Morning Herald, contracts were exchanged at 9.30 am that morning. During the course of the week there were 195 Internet page views for that property of which one just so happened to be the actual buyer. Now if the property had been opened for inspection, current figures suggest that ten couples would inspect, although in the week preceeding, nearly twenty times that figure had a virtual inspection. It was a great milestone when the Internet side of our business broke the $100,000,000 mark in property sales. We have just celebrated the second birthday of ‘Virtual Realty News’, which explains why we are ahead of fellow agents, as we lead the way in this Internet development. I can assure you that this is just the beginning. Currently we have a team of five working on new software programmes that will take our industry to a level that it has never seen before. Given that we will own all the intellectual property, this new service will be exclusive to our thousands of subscribers. When it comes to technology, Richardson & Wrench Mosman puts its money where its mouth is!!

Not a week goes by where Marize does not weave her magical wand on the unit market. Here is another great story. We had listed an older style unit on Wolseley Road, Mosman and after the first two weeks nothing had happened, so I thought the price needed to be reduced from the $545,000 asking price. I telephoned the owner to suggest a reduction in price, however I was not able to speak with him as he is a busy barrister, so without his instructions (for obvious reasons) we went to the market again at the same price. On Monday this week we had three buyers on the property at the asking price, and after skillful negotiation, contracts were exchanged at $560,000. Who said the investment market for units in Mosman was suffering? As I have said for ages, our choice is to lead the market, not to blame it! Straight after this sale Marize received the following e-mail from another happy purchaser. Thanks Marize!

“I would like to let you know, and please pass this on to your manager, that you are the loveliest real estate agent I have ever had the pleasure to deal with.

My husband & I had some very unfortunate experiences with other agents before meeting you, one in particular was very unethical and difficult to get straight answers from, resulting in us losing a place to someone else the day we were meant to exchange.

From our first meeting you have been friendly, helpful, honest and professional – thank you for making buying our first home such a wonderful experience.”

The above would explain why Marize sells more units than any other agent in the area.

So, we look forward to the Spring market as our early successes allow us to offer some fantastic properties over the next six weeks. I am sure of one thing however, no matter how many people attend the opens, the number of Internet visitors will far exceed those numbers. Today, real estate is a much bigger picture, it certainly helps when you know what you are looking for… cheers, and clink… ^__^

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7.09.02Robert SimeonNo Comments »

Learning history is easy; learning its lessons is almost impossible. Or is it? The property market is set to enter its seventh consecutive bull run with Summer fast approaching, and yet again its timing is perfect. Amid economic gloom, threats of war, and a weakening global sharemarket, the property market is occupying poll position for all the right reasons. Interest rates will remain stagnant, with a slight hint of reductions as the US rates look set to fall. For the moment, property has proved itself to be the ‘safe bet’, as the business community faces massive reform with a new push for greater corporate accountability. This will no doubt see the Toms, Dicks and Harriets, adopt a more conservative approach to the stockmarket.

Already we are starting to see the one-time sharemarket investors, venturing back into commercial and retail property, which will leave just the big institutions in shares. This was further evidenced with this week’s auctions, which clearly demonstrated that commercial property is well and truly back in the spotlight. All the properties sold above reserve and there was standing room only in the commercial auction rooms. The little guys today have a much greater faith in property. We are coming up to the ten-year anniversary of the mortgagee sales in Mosman, and to the best of my knowledge I have seen just one of these sales in recent times. Maybe the cruel lessons of the early nineties have taught many a lesson, and today it is clearly evident that the property market is not on borrowed time, nor are the foundations rubbery as some scribes have suggested. Records are being achieved that attest to this theory, as against News Corporation posting the biggest loss in Australian corporate history. Investors see property as a ‘safe house’ and by all accounts that will remain the case until such time as the corporate world can prove to all, that they don’t have any more skeletons in their closets.

We are all aware that there is no such thing as a sure bet, however once again as was the case after the events of September 11, the expats are out-registering the locals on our database. We do live in the lucky country, and more importantly the turmoil overseas just confirms why so many see Australia offering a great alternative lifestyle. Whilst Winter traded on the conservative side in terms of volume of property, we could not be happier with the number of properties that we are about to release to the marketplace. In terms of volume, it is the greatest number of homes that we have offered to the Spring market in recent times. We also believe that the top-end of the market will hit dizzy new heights, and this in turn will drive up the other price categories. As one client said this week, “when was the last time you saw somebody lose money on their principal place of residence, given the present market conditions of low interest rates?”

Whilst it is acknowledged that rental vacancy rates are at an all time high, it is seasonal with winter, and in all probability with summer fast approaching, this figure will be absorbed and reduced back to more respectable levels. What remains to be seen is whether or not my predictions will come to fruition. All we can ask is that the market gets off to a good start, and for that to eventuate we require an even balance of property at all price levels.

Like all aspects of the property industry, very little goes by without some comment revealing the intrigues of observation. I love all the speculation about the international celebrities who are supposedly house-hunting in Sydney. If such scuttlebutt proves to be correct I can’t wait to see how they all attain their respective FIRB approvals (approvals for non residents), but there again, it is common knowledge that next year’s Oscars will be held in Sydney. Much depends on which Sunday newspaper you read. If people read it, some property journalists will write it. As for the property crash, only time will tell. I know where my money is on this one… cheers, clink… ^__^.

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17.08.02Robert SimeonNo Comments »

Learning history is easy; learning its lessons is almost impossible. Or is it? The property market is set to enter its seventh consecutive bull run with Summer fast approaching, and yet again its timing is perfect. Amid economic gloom, threats of war, and a weakening global sharemarket, the property market is occupying poll position for all the right reasons. Interest rates will remain stagnant, with a slight hint of reductions as the US rates look set to fall. For the moment, property has proved itself to be the ‘safe bet’, as the business community faces massive reform with a new push for greater corporate accountability. This will no doubt see the Toms, Dicks and Harriets, adopt a more conservative approach to the stockmarket.

Already we are starting to see the one-time sharemarket investors, venturing back into commercial and retail property, which will leave just the big institutions in shares. This was further evidenced with this week’s auctions, which clearly demonstrated that commercial property is well and truly back in the spotlight. All the properties sold above reserve and there was standing room only in the commercial auction rooms. The little guys today have a much greater faith in property. We are coming up to the ten-year anniversary of the mortgagee sales in Mosman, and to the best of my knowledge I have seen just one of these sales in recent times. Maybe the cruel lessons of the early nineties have taught many a lesson, and today it is clearly evident that the property market is not on borrowed time, nor are the foundations rubbery as some scribes have suggested. Records are being achieved that attest to this theory, as against News Corporation posting the biggest loss in Australian corporate history. Investors see property as a ‘safe house’ and by all accounts that will remain the case until such time as the corporate world can prove to all, that they don’t have any more skeletons in their closets.

We are all aware that there is no such thing as a sure bet, however once again as was the case after the events of September 11, the expats are out-registering the locals on our database. We do live in the lucky country, and more importantly the turmoil overseas just confirms why so many see Australia offering a great alternative lifestyle. Whilst Winter traded on the conservative side in terms of volume of property, we could not be happier with the number of properties that we are about to release to the marketplace. In terms of volume, it is the greatest number of homes that we have offered to the Spring market in recent times. We also believe that the top-end of the market will hit dizzy new heights, and this in turn will drive up the other price categories. As one client said this week, “when was the last time you saw somebody lose money on their principal place of residence, given the present market conditions of low interest rates?”

Whilst it is acknowledged that rental vacancy rates are at an all time high, it is seasonal with winter, and in all probability with summer fast approaching, this figure will be absorbed and reduced back to more respectable levels. What remains to be seen is whether or not my predictions will come to fruition. All we can ask is that the market gets off to a good start, and for that to eventuate we require an even balance of property at all price levels.

Like all aspects of the property industry, very little goes by without some comment revealing the intrigues of observation. I love all the speculation about the international celebrities who are supposedly house-hunting in Sydney. If such scuttlebutt proves to be correct I can’t wait to see how they all attain their respective FIRB approvals (approvals for non residents), but there again, it is common knowledge that next year’s Oscars will be held in Sydney. Much depends on which Sunday newspaper you read. If people read it, some property journalists will write it. As for the property crash, only time will tell. I know where my money is on this one… cheers, clink… ^__^.

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17.08.02Robert SimeonNo Comments »

As they say,”markets move in mysterious ways”. What we are witnessing now is a combination of anomalies, that are thought-provoking yet, at this point, little more than “a storm in a tea cup”. The top-end of the market is as strong as the Australian swimming team, as long as the property is assessed on market value, as against an ‘ego’ value, which see agents buying listings continually, as they fight for survival. Like many businesses today, the death knell is loud and clear for those who failed to move with the times, and did not recognise the game plan that would see growth and prosperity. Presently, we are seeing that property markets are not moving as one, and in some instances the vendors are adopting a ‘batten down the hatches’ approach. This could be further argued with the interest rate reprieve, which again saw the Reserve Bank decide against a further increase in rates.

Whilst many are stating that investors are back into the property market, the rental vacancy factors are adding further confusion to this assumption. Last Saturday in The Sydney Morning Herald, I counted the number of units for lease in Mosman, the total being 177. In the price bracket, in excess of $1,000 per week, there were two properties advertised, the $500 to $1,000 category just the fifteen properties. In the up to $500 a week category, a massive one hundred and sixty units all searching for a tenant. For the first time in ages we are seeing rent free terms being offered, and rents being slashed to attract a tenant. So what will happen? Many are hoping that this will present an opportunity to buy well at the expense of another, and I can assure you that there are plenty who are cashed up and waiting to purchase. Once again the business plan comes into play, well at least for us it does because we have the only ‘apartment specialist’ in Mosman, and I can assure you that Marize is one very busy lady at the moment. Because of her knowledge of values, which is further assisted by her qualifications as a registered valuer, the opinion of value is precise and correct. Having the largest database of buyers in Mosman certainly benefits our clients at both ends of the spectrum. This is one of the better examples of the ongoing benefits the Internet offers, with enquiry levels at an all time high. It is amazing how a solid business plan can change a negative into a positive.

We are experiencing many idiosyncrasies on a daily basis, and for the first time in ages we are seeing different areas of the market changing direction. It is usual for the lower end to be strong then the market moves up from there. I anticipate a very strong top-end of the market, because confused and battered sharemarket investors will focus entirely on their principal place of residence. They will use their principal place of residence as the mother ship, and run their borrowings from there to develop their investment portfolio. In 2001, out of the ten highest sales in Mosman we negotiated six of them, so this really is the market that we know better than most, and I am more than happy to pass on what buyers are telling us. One would have to agree that it makes plenty of cents and sense for some!

The stage is set for a very interesting Spring market, and we already have some fantastic property awaiting release to the marketplace. As for it being a soft market, I can’t agree with that theory. One must remember that it takes just four weeks for the property market to boom, and eight months for it to plateau. The market has traded quite well through winter, mainly as a direct result of reduced volumes of property being offered. It would be a very brave person who would suggest that the market is finished. We see this market as the perfect opportunity to establish quite a few more records. Like most things in life it is mind over matter, plus a business plan. We can’t elaborate too much on that because too many agents subscribe; how else are they going to find out what is happening in the market. Other agencies followed our lead, by e-mailing the open for inspection lists each week, they learned it here first. Yes, we were the very first.

We have a simple philosophy here at Richardson & Wrench Mosman, “don’t blame the market, lead the market”, and it is most obvious that we are doing that. We focus harder than most on our reputation for being honest, making us the smarter choice of agent. An agency today needs to provide so much depth and sophistication of service, learning how the Internet works would be a great start for some of the other agents!! Cheers & clink ….^__^

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10.08.02Robert SimeonNo Comments »

The week that was saw my triplets celebrating their first birthday, whilst their 3 year old big brother conducted calculated acts of terrorism to steal the limelight. Much-the-same can be said of the USA where any brief celebration related to a rise in the stock market, turned into another swan-dive, as corporate terrorists brought another major institution to its knees. Just as I cannot predict the plotting mind of my little boy, nobody can predict the USA’s next external or internal terrorist events. Over the last two years, $12 trillion AUD have come off the value of the US stock market. So when will it find a bottom? Even “El Presidente”, the Texan cowboy, is now seen pleading for a return of investment.

So what does all this mean in down town Mosman? Growth during June was just 0.7% adjusted annually to a figure of 2.8%, which is well below the government’s desired 3 to 4% target. As correctly predicted in past weeks, it’s almost certain that interest rates will not rise now. So, the really good news here is that Sydney’s journos will stop publishing the ‘rise then fall, fall, fall’ of Sydney’s property market.

At the moment Mosman’s property market is quiet, due to an absence of stock and some overly nervous purchasers. For example, have a quick look at property for sale in the Mosman Daily, at the normally popular price range of $2.5 to $3m. There appears to be only four or five properties, of which we have three (6 Major Street, 102 Prince Albert Street and 2 Milner Street). In two months time you can expect comfortably triple that amount, as the Spring market takes off. So what will happen to prices, I hear you ask? Well, that has to remain as your gamble, I’m sorry to say. At the moment the market is flat and extremely well priced, but if any positive news out of the USA can be added to build on the low interest rate story, then prices will rise as an excess of buyers compete for property in the open market. If we receive more bad news out of the US then I anticipate the market will remain stable but not drop. Premium value property will always demand a top price, however, comparatively less attractive property will rely on the negotiating strengths of the real estate agent to achieve better than the vendor’s ‘most realistic’ price expectations.

As buyers gamble this year on the selection of the best time to purchase, vendors will face a more challenging task. Who are the best agents to achieve the highest price for their property, amidst buyers with potentially increased purchasing power? More now than ever before, agents must develop informed selling strategies, prior to commencing the campaign by linking the property for sale to the local market as it is influenced by broader market conditions. Top negotiation skills are derived from knowledge, which creates the power to control proceedings. If your agent isn’t an active market analyst then your buyers will dictate proceedings. So here comes Spring, best of fortune for the vendors and good hunting for the purchasers.

Watch out next week, as brother Bob returns to the author’s chair, after two weeks in the Balinese sunshine. Will anyone be spared? We guess not.

27.07.02Richard SimeonNo Comments »

While our resident author, Robert, is away on holidays (no doubt ear bashing the locals about Mosman real estate!), it is left to us ‘mere mortals’ to carry on his illustrious column!!

It seems each week the real estate editorial debates get longer and longer, involving more and more analysts and self-appointed experts! We’ve never seen the market so confused, so we though we’d clear up the mess and give you a local perspective, but remember, we all know there are no guarantees.

We talk to hundreds of buyers/sellers in Mosman every week. The foremost questions at the moment are, “what’s happening to the market? Is the market really soft at the moment? Will prices rise in Spring? What will happen in the longer term? Will I receive a good price for my property?” They’re Mosman’s million dollar questions.

The short answers are: yes, the market is seasonally soft, coupled with confused buyers who are justifiably, yet unnecessarily nervous about buying property at the moment. It’s all an apparition, just as it was after Sept 11, when buyers picked up great deals for a couple of weeks only. Unlike the share market, which is still searching for its bottom, Mosman’s property market is set to keep rising in the short and longer term. Spring, which is only weeks away will see a ‘small avalanche’ of property hit the market, which will in turn, see prices strengthen as buyer confidence returns. Here’s why.

Interest rates will remain in check as the U.S. economy may remain sluggish for up to 3 years. As Morgan Stanley’s Stephen Roach warned, “the U.S. has better than a 50/50 chance of falling into ‘double-dip’ recession before it can make a meaningful recovery.” The Australian economy should remain strong and the government will do anything to keep growth between 3 to 4% coupled with falling unemployment. So you can expect maybe one ¼ % rate rise this year.

Mosman’s decreasing property supply versus increasing demand, will keep prices high. Mosman is a niche market, not reflective of Sydney’s bigger picture. Ten years ago, approximately 950 Mosman properties sold in the year. This year, the figure will drop to about half, or around 450 properties. It’s well documented that Mosman has captured more of Sydney’s prestige buyer market, than any other suburb. Just recently, Mosman’s average housing price skyrocketed to number one, well ahead of Woollahra in second place, which is reflective of future growth. And, if supply were to increase, the only drop in Mosman’s property will be in the waiting time for its buyers.

When the share markets rebound, Mosman’s property prices will follow suit. If Mosman has any residential bias at the ‘top end’ it would lean toward the finance, banking and asset management fraternity. When the share market starts to recover, watch-out! The prices for prestige property will rise. Yes, it may take a couple of years, so what, it’s a comforting growth factor that you can bank on.

Prestige buyer database has grown by 84% over the last 6 months. For the record, from our registered database of over 2,000 buyers, the $3,000,000 group is the fastest growing segment. So again, with limited supply it’s only a matter of time before demand and prices for prestige property receive a massive boost.

Push – Pull effect will drive property prices up in all price segments. As prices rise at the top end there is a follow-on effect, which lifts the value of all Mosman property. Just consider what you can buy for between $1,000,000 to $2,000,000 in Mosman these days? Only a couple of years ago $1,500,000 bought a generous Mosman property. Today the median sale price in an incredible $1,700,000. Upgrading your property now, may pay a significant ‘Mosman dollar’ dividend in the future.

Analysts predict 11 to 12% growth in property prices over the next 3 years, followed by a boom. So where’s the risk? Also, where else will you find these returns in any investment opportunity, and tax-free of course!

Now we’ve convinced you that the market is strong, don’t just ask your agent to anticipate the value of your property, ask him/her “what he/she will do that’s different and will result in achieving the highest price.” If you’re not satisfied with their answers, then you know what to do. RING RING

PS. For an update of last weeks auction, 24 Clanalpine St exchanged for a very healthy undisclosed figure. 2 The Grove is still in negotiation, with five potential buyers, and an exchange imminent. 12 Shellbank Parade exchanged for $4.7m yesterday – not bad for land value!

20.07.02Richard SimeonNo Comments »

With the scribes now content (keeping a foot in both camps), it came as little surprise this week when they announced that there was a fifty per cent chance that The Reserve Bank would be raising interest rates. Initially the rates were marginally increased to take some of the fire out of the property market. As the financial markets are under-performing at the moment, this could well backfire. Investors may soon have no better option than to direct their ‘hard earned’, back to bricks and mortar. The ‘Big Aussie’ – AMP came out this week declaring that earnings were down due to a slide in the share market. I have a new name for AMP, “Aussie Meat Pie”! Why? Cause it is soft around the edges and starting to run! I await my little fully-franked ‘party pies’ at the end of the financial year! You only have to pick up the business section these days to understand why the death notices, follow the share market prices!

Good old Bob (the builder) Carr, you know the one who states that “Rome was not built in a day” finally approved some legislation last week! Yes, finally the Property, Stock and Business Agents Act 2002 was stamped! (June 28, 2002). Good news for the honest agents. Bad news for the agents who were the reason this legislation needed to be introduced! No names, no pack-drill, we all know who they are!! The main features which will be progressively implemented are: 1)- Auction ‘dummy bidding’ will now be a thing of the past – for some of us it has been for ages. 2)- New rules of conduct for agents. 3)- No more over quotes to get the business, then under quotes to lure the purchasers. The legislation has plenty of bite and most appealing fines, should the dishonest practices continue! This legislation will provide interesting reading for many of us in the future. Now purchasers and vendors have real ammunition to shoot the bad agents where it really hurts!!

Whilst on new legislation, “A cooling-off period should be introduced at auctions to protect consumers from unscrupulous agents” says maverick agent and author Neil Jenman. “Heeeee’s back!!!!!!” He is the guy who wrote a book titled “The Essential Truths”. His dos and don’ts when selecting an agent. I touched on these a few weeks back, but here are a few more… Beware of overdressed salespeople. They may be too wrapped up in themselves! Later he says… look for an agent with a nice pen and a watch and a nice pair of shoes. Last but not least, he offers a real charmer… “Never employ an agent, who asks to use your bathroom”! When nature calls, maybe he is suggesting that we find a nice private place in the garden!! *lol* That’s enough of that… back to ‘cooling-off’… We recently had a few properties that sold for a few hundred thousand dollars above the reserve prices. They were announced as, ‘on the market’ at the auctions and everyone made fair bids. In essence, what Jenman is suggesting, is that a purchaser can bid whatever he/she likes at auction and then rescind on the contract later on!! The last time I looked up the ‘Ethics of Real Estate’, it categorically stated that an agent should be working in the vendor’s best interests at all times… looks like some have a differing opinion! Our vendors and purchasers are intelligent professionals. It is their choice to use the method they prefer when selling, and their choice as to how much they intend to bid on a property at auction.

If you want to see how an auction is run honestly, drop down to our First 8 Auctions next Tuesday night to observe how they’re done correctly! And yes, the hot food is being served.

We finished the end of the financial year with quite a bang!! We are happy to announce the sale of 21 Killarney Street for $1,200,000, 29 Medusa Street for $2,517,000, 246 Raglan Street for $2,900,000, 20 Botanic Road for $2,160,000 and 49 Prince Albert Street has offer and acceptance. Our market is far from broken.

The biggest news for the week was the purchase from the ‘Australian of the Year’ – Mr. Pat and his beautiful partner Lara are moving to Balmoral!! (and no, you don’t have to stop subscribing, now that you have purchased!!) Well mate, you beat us in the State of Origin, and you can ‘kick my butt’ in golf, but under no circumstances will the Balmoral Cellars stock that un-drinkable XXXX beer! We can drink Crown Lager in God’s country!! Welcome! Cheers, and clink!! ^__^

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6.07.02Robert SimeonNo Comments »