With the market taking its holiday break, I thought I would share with you a ‘hot topic’, which many of you have raised with our team through the first half of 2003.

Negotiators negotiate record prices, others leave it to, or blame it on the market. At RWM, we’re constantly honing our negotiation skills, because we believe the market only sets the sale price parameters, negotiation determines the eventual sale price.

Let me share with you, a brief insight into our negotiation strategies, which have seen us achieve record prices for small apartments, right through to the three highest residential sale prices in Mosman.

Note: As a benchmark, may we establish that our opinion of value for a property is presented as accurately as possible. We do not inflate the value and always defend the real value of the property to prospective buyers. Underquoting will only succeed in lowering the price for genuine purchasers.

Our first premise relies on the assumption that buyers must be persuaded to first build an emotional attachment to a property, before they apply their rational analysis. We use a 20 point negotiation process, and apply the PEAK buyer segmentation model, which identifies techniques for dealing with the four basic types of human behavior.

A negotiation strategy applied to the wrong buyer profile, will negatively impact on an agent’s ability to build a genuine and valued relationship with each and every potential buyer. Here are the four key segments and as you read them, select which personality profile describes you.

PROGRESSIVE PEOPLE: Risk takers, innovative, daring, demand effeciency, will confront, direct, results oriented, high ego.
Prepare: to negotiate, brevity is the key, flatter, provide more options and less opinions, close confidently.

ENDURING: Shy, quiet, patient, traditional and family-oriented. Need time to think.
Must earn their trust. give full explanations, be personable. Need lots of visits – be patient.

ANALYTICAL: Conservative, suspicious, non-personal, avoids risks.
Do not rush, hard sell, exaggerate or threaten. Answer all questions before closing. Agree on next steps and deliver.

‘KAOTIC’: Creative thinkers, expressive, impulsive and undisciplined.
Support their dreams and aspirations, allow time for socializing. Don’t lose them in facts and data. When ready, close quickly, be enthusiastic.

Our twenty-point negotiation process is then applied to ensure we remain in control of the entire negotiation process.

We hope you achieve a record sale price for your property, when the time comes.

Here are four key questions that should determine whether or not your agent is a skilled negotiator:

1. What role do you believe the market will play in determining the eventual sale price for my property, versus your negotiation skills?

2. In your opinion, what makes you a skilled negotiator?

3. We must accept that buyers break down into different personality types. What formal processes do you adopt when segmenting buyers, to ensure you are communicating on their level

4. Can you list 20 points of skilled negotiation? eg. here are ten: Power, preparation, role reversal, courtesy, painting pictures, flinch, timing, concessions, terms, pride, everything is negotiable.

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12.07.03Robert SimeonNo Comments »

With the financial year now completed it is interesting to note that less houses were traded in comparison to the previous financial year. Therein lies the clue!! The Mosman property market posted a respectable thirty-nine sales in the Top 200 luxury house sales for 2003. RWM posted twenty per cent of these sales to finish equal first. We did manage to post the highest and second highest sales and secured three out of the top ten sales. Auction numbers were significantly down on last year’s numbers and this explains why home values have remained constant and healthy. The Mosman market has posted just the one significant loss with a home on The Esplanade, which was initially purchased in March 2000 for $5,900,000 and sold in March this year for $5,300,000. This is a classic case of paying too much for a property in the first place.

Another interesting statistic to emerge is that our home unit sales increased by thirty-eight per cent and for the year, they showed a very comfortable twelve per cent capital appreciation. The participants in this market are a blend of investors and owner occupiers and overall, demand is at an all time high. With BIS Shrapnel coming out this week with the prediction that Sydney house prices will jump a further twenty-four per cent over the next three years, the home unit market will remain buoyant for the foreseeable future. It should be noted that with the re-introduction of investors to the market, vacancy factors have risen in the short term, although winter is always a difficult rental time.

With the “Governor of Moolah” deciding to leave the cash rate at 4.75 per cent this week, economists blamed the strong property market for the decision. With the vast majority of economists predicting a reduction prior to the announcement, it is nice to see them getting one thing correct. It’s interesting that they did not take the property market into consideration when they predicted a rate cut.

With all the discussion and debate, about ‘the bridge over troubled waters’, one thing is a certainty, property prices on the Northern Beaches will dramatically increase, which in turn will drive Mosman property prices higher. With Federal MPs getting involved and when the present plan is overturned and a tunnel is announced, home prices in these surrounding areas will skyrocket. This then means that the Government will reap plenty in Stamp Duty. Why haven’t they worked that one out before now? Running true to form the Carr Government has delayed the new property laws from 1 August to 1 September, which in all probability will be delayed even further. With agents facing fines of up to $22,000 for indiscretions, one would think they would rush this one through, given the number of agents who appear before the Department of Fair Trading.

With the market going into hibernation for July, most agents can be found at Sydney Airport this month. Steve is attending a property conference in Fiji, and I am attending one in Phuket so Richard will be doing the next two editions. I will see you in a few weeks. Nothing beats a real estate conference at this time of the year!! Cheers and clink… ^__^

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5.07.03Robert SimeonNo Comments »

Once again the NSW State Government showed how out of touch it is with the people, when it delivered its ninth budget. With the Government yet again adopting an Ebenezer Scrooge economic policy, it is no wonder all the leaves are turning brown. In 1998-99 the Government grabbed $1.88 billion in stamp duty. At the end of 2001-02 it was $3.05 billion, in 2003-04 it expects $3.37 billion and in 2006-07 $4.019 billion is expected. With the Government releasing these budget forecasts it is now blatantly obvious that it has no intention of revising the Stamp Duty formula until the next election, which means that the formula will then be twenty-one years old. Over the past ten years NSW has consistently gone backwards economically when compared to the other states, failing to keep pace with the economic growth of Victoria and Queensland. From 1991-92 to 2001-02 NSW could only manage economic growth of 3.7%, Victoria averaged 4.2% and Queensland led the way with 5.0%, I guess the Government will start showing concerns when Tasmania passes NSW. The ‘Garden of Egan’ is forcing the people of NSW to locate elsewhere. Figures show that in 2002, 30,000 NSW residents moved elsewhere, which is more than double the number of five years ago. Looks like somebody can’t see “the forest for the trees”.

With the end of financial year all but upon us, we are coming home with a wet sail as the property market moves into winter consolidation. Over the last week we have exchanged ten properties, and at our auctions this week we posted an eighty per cent clearance rate. Our Internet sales stand at 107 totalling $172,500,000, which clearly identifies that we are the market leaders in combining the Internet with real estate agency practice techniques. Over the next few months we anticipate that the market will swing more towards Internet and private treaty sales, and we very much looking forward to these challenges. RWM now holds the top three sales ever achieved in Mosman and with the recent waterfront sale on Middle Harbour of, my twin brother Richard joined me as the only other Mosman agent to post a ‘double-digit’ residential sale. The highest sale ever recorded in Mosman is $15.5 million, followed by Richard’s waterfront sale, and the third belongs to our very own Steve Patrick who posted a $9.5 million sale in March. We are just one big happy family!! Steve currently has his eye on becoming the third agent in Mosman to join the ‘double-digit club’ and soon we could hold first, second, third and fourth.

Once again this week, the State Government was back in the news for all the wrong reasons as it battled with local residents regarding the “bridge over troubled waters” fiasco. The Spit Bridge debate continues and the residents have been given a ‘don’t argue’ by the “Minister for Pot Holes”, Carl Scully. The combined population of the peninsula and Mosman district is around 280,000 people and sadly the Government fails to acknowledge the stupidity of its proposal. Already the Spit Bridge affects the capital appreciation of many homes due to the ever-increasing traffic delays. It will never improve until decisive action is taken. The State Government is applying a band-aid to a problem that requires a tourniquet. With the Carr Government we have a consistent Government, that is, consistently wrong!!

With this week’s edition being our 116th, it also marks the end of an era, as the brains behind VRN is leaving our employ to pursue other interests. Avril Norman, the creator, architect and builder of our e-business has decided to pursue her energetic healing business and will mix this with her freelance IT consultancy work. Belinda Holmes is taking over the keyboard from Avril and Belinda in time, will be putting her signature on the IT side of the business. For the last twelve months Avril has been building our software programme that we now use exclusively here at RWM. All of us, wish Avril every happiness and success with her new businesses. We are certainly going to miss one of the most talented IT brains on the planet. Avril has been retained as a consultant to RWM.

With just a few days left before the end of the financial year we are busy putting a few more properties to bed. The last financial year has been our most successful ever. So unlike the Carr Government our business plan is exceeding expectations. Very soon we will be making the biggest announcement in our history so we can tell you that our business plan is jumping ahead by leaps and bounds.

Catch you soon, cheers and clink ^__^

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28.06.03Robert SimeonNo Comments »

For many who reside in Mosman the name Bob Carr does not actually go down all that well; and why would it? His property taxes are an outright disgrace and this year, Land Tax assessments were described by a judge as being defective, unduly selective and lacking in supporting data. Bob, said he was waiting on legal advice!! Well five months later nothing has been said. Nothing has been done except that many householders have been overcharged and the figure has been estimated at $350 million.

A few months ago I wrote to the Office of State Revenue, to enquire as to how the Stamp Duty rate is calculated. It was of great interest to me to find that the current applied formula has not been revised since December 1986. As most would know, hardly any homes in Sydney were worth $1,000,000 then so why hasn’t this formula been revised and reduced, based on current property values? I was politely referred to the department where the sun does not shine. The NSW Government collected $1 billion in Stamp Duty last year. This prompted me to go back to my monthly sales statement for December 1986 to see what we were selling then. I sold a waterfront in Cowdroy Avenue for $630,000. I well remember this one, as the reserve price was $475,000. It would now be worth around $5,500,000. In December 1986 I also sold a three bedroom, older style apartment in Central Avenue Mosman for $93,000, today it would be worth around $850,000. A luxury home in Everview Avenue, with pool and Middle Harbour views sold $390,000. Today it would be worth around $3,500,000. A renovated Federation home in Spencer Road, with a north facing garden sold for $297,500, today it would have interest at around $2,500,000. So why hasn’t the Stamp Duty rate been adjusted? Well in all probability, Bob is using his experience to make an old mistake in a new way!!

The recent NSW Opposition report revealed that Stamp Duty has tripled in 170 suburbs since 1995. In an article in The Sunday Telegraph last weekend, the head of Residex John Edwards, said “higher stamp duty helped inflate the market by acting as a disincentive for people to up-grade their homes”. Yep, you had better read that little beauty again. I had to! I am sure that the NSW Government does not see it that way! Yet again the Stamp Duty budget was in surplus with just over $1 billion. Aside from Stamp Duty, one must not also forget the Premium Property Tax, which returned just over $100 million because a chosen few were taxed for living in nice homes. It wont be long before Bob will be forced to review these fraudulent taxes which could swing many electorates.

Bob keeps going from strength to strength. His Spit Bridge band-aid solution where he plans to add two additional lanes to cross the creek is an absolute joke. The only people who would benefit are those who suffer from hydrophobia. It is all about the notorious traffic bottleneck that leads to the bridge. At a cost of $90 million to build this ‘meccano mishap’, have no fear as Mosman contributes around $100,000,000 each year to Bob in Stamp Duty. There is a peaceful public rally at the Spit Bridge this Sunday at 11.00 am, but don’t expect Bob to be there. In all probability, he will be at Clovelly Beach, feeding sushi to his protected gropers.

Much is being said about further rate cuts, and it will happen sooner rather than later. However what needs to be resolved is what the ‘Governor of Moolah’ is going to do as his term as Governor is up in September. Will he take another term in the ‘bank bunker’ or will he leave quietly and play in the bunkers of Manly Golf Club. The last Governor who backed up for a second term was also a member of Manly Golf Club. H C ‘Nugget’ Coombes 1949 – 1968. One can only hope that the tradition continues. ‘Big Al’ is into his eighties!! Macca, after you have read this edition, just e-mail me and I will release it here, cheers mate!!

The Mosman market is in a controlled canter at the moment and we are seeing some great sales, some indifferent sales and some lonely sales. A Burran Avenue home sold this week for $6,750,000 after being announced on the market at $6,100,000. Congratulations to the successful purchaser. Please forward a cheque to Bob for $383,801, which is your contribution to the Spit Bridge. The auction market has just a fortnight left before the July lay-off, due entirely to school holidays. July will be a private treaty month. We have seven properties awaiting exchange, so hopefully we can report on those next week.

See you at the rally, cheers and have fun…^__^

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21.06.03Robert SimeonNo Comments »

These days, many who proclaim to be industry sources by offering information on the basis “I think that I know ” are actually a collection of those who simply don’t know!! It is that time of the year when those evil words start doing the rounds. ‘Clearance rates’ or as I prefer to call them ‘smear rates’. The clearance rates, which are compiled weekly on auctions conducted from Palm Beach to Emu Plains, offer as much insight into the property market as some agents quoting a likely selling price for an auction property. More often than not, the figure is ambiguous. For those who believe that the state of the property market is based entirely on clearance rates, they are seriously mistaken. It would be fair to suggest that it has no correlation to the state of play in the market as sales in mosman cannot be compared with sales in Mulgoa.

Auction results are determined by a phone call from those who collect the data, post auction. Some results are brushed under the carpet, but ‘sold’ results are always given. Funny that the rest are either withdrawn, sold prior, or under negotiation. Now it should be noted that these results do not include expressions of interest, private treaty sales and off-market sales, those being the hushed ones. It was reported last week in “Title Deeds” that Mosman just attained its second highest price ever, with a $10 million plus waterfront sale. In March we posted Mosman’s then second highest price with a $9.5 million sale. Neither of these sales will be used in the compilation of data.

From our perspective we concentrate entirely on what the RWM machine is doing and not what others are doing. We mix our sales between auction and private treaty, usually via our database, as against some agencies, which are total auction agencies. Whilst some agencies have a fixation on the number of ads they have in The Mosman Daily, it is clear to many that this is not always the most effective business plan. If you look at the websites of local agencies, it is very clear that between fifty to sixty per cent of their current listings are failed auctions. If there was no commission payable on the sale of a property for public auction, clearance rates would be higher than ninety-five per cent. It is the agents who provide the opinion of value. What needs to be disputed is the value agents place on the property, so they can be assured of being appointed as selling agent. For the record, some local agencies are battling to better a clearance rate of twenty-five per cent this year.

Last year yet again, real estate agents successfully maintained their gold medal for highest number of appearances at the Department of Fair Trading, with 1361 complaints lodged. In August this year the much awaited and overhauled Property, Stock and Business Agents Act comes into force. One can expect that the number of visits by agents to the Department of Fair Trading will double, because now the consumers will fight back. Those agents who continually under-quote at the door, and over-quote to the vendor can now be assured of quite a few speeding tickets being sent their way. Of late it has become quite obvious that the property market is not consistent between agencies. One can now sit back with confidence as the agents and agencies will soon be accountable.

There have been three sales in the last week which clearly identify that the property market is on an even keel. An apartment in Awaba Street, which sold in spring last year for $1,525,000, sold last week for $1,626,000 and a Cremorne waterfrontage, which sold for $4,700,000 in July, just sold again for $4,700,000. A home that was purchased in November last year for $2,525,000 just exchanged this week for $2,725,000. It is refreshing to see some factual evidence about our market.

Who sold Mosman’s second highest priced property? All we have heard is that it was an agency that is very computer savvy!! Have a great weekend!! Cheers and clink…^__^

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14.06.03Robert SimeonNo Comments »

As they say, “the easiest way to start an argument these days is to get two economists together”. ‘The Economist’ ran an interesting story last week predicting a global fall in property prices, based on the theory of “I know boats”!! Once again, we see the supposed property bubble being blown up or blown out of total proportion again. The simple truth is that nobody can predict the future, so I will offer this little one about the property market, ‘it has to rain, before we see another rainbow’.

The Sydney Morning Herald journalist Stephen Bartholomeusz, gets a gold star for his interpretation on this latest AOMD = Article of Mass Destruction. Mr Bartholomeusz correctly identified that many ingredients make up the property industry, and the only sector of the market that could cause concern is that of the investment market. Given that the ‘Governor of Moolah’ has decided to leave the cash rate target at the same level for twelve months, it appears that our economy is trading well au naturel!!

We have always grown up looking at statistics, personally when I was a kid I was only concerned about Racquel Welch and her vital statistics. If you look at the statistics published this the week, you will see that the average price for a home in Mosman for the twelve months to April was $1,776,001. This figure is down by a life threatening $9348 from the previous month where it peaked at $1,785,349. Does this mean that the value of a home is easing back? It certainly does not! It means that more, less expensive homes were sold during this period, and this does not include private treaty sales. On the other hand, The Mosman Daily excelled itself again this week, when they ran a story headed “Mosman Slips in Price”. One does not have be a brain surgeon, to identify that in 2003 the market has been tight with properties, hence 49 properties were sold in the Mosman area with an average price of $1.19 million. Now here is the funny part, they are comparing it to the December quarter, which recorded 56 homes sold for an average of $1.5 million. Nothing ever happens in January, and these figures do not include private treaty sales, nor those where the vendors place a confidentiality statement on the sale price. In this period we sold a home in Burran Avenue for $9.5 million, and another in Hopetoun for $6.00 million, neither were used in the calculation!! Also, that does not include another six homes we sold greater than $2m that escaped the system. Great to see the asylum is still running true to form. Even more amazing is that some agents believe these figures, and some are telling vendors to cash in now before it is too late.

We won’t see a market like 1991-1993. I well remember when I watched “60 Minutes” some years ago, a National Party Senator in Queensland said, the definition of recession is when your neighbour loses his job. The definition of depression is when you lose your job, and the definition of recovery is when Paul Keating loses his job. The property industry is so much smarter today, and the property dynamics are changing right before our eyes. What is evolving is that we are seeing certain months where campaigns will not be run, due to public holidays and school holidays. April was a classic example with Easter, Anzac and school holidays taking up most of the month. July has school holidays from the 5th to 20th, so that month would also not be recommended as a great month to run a campaign. What we will see is more private treaty and Internet marketing of properties, and again this week, we proved the power of our Internet business. We listed a property at 123 Middle Head Road, which was a failed auction with another agency and what they could not do in eight weeks, we managed to do it in 48 hours!! So you can guess how happy the vendors are.

We are more concerned about working the property market, as against those who are fraudulently using statistics to bring the market down. Afterall, “an economist is a man who figures out tomorrow why the things he predicted yesterday, didn’t happen today”. The property market today is transparent, however some never let the facts get in the way of a good story. Statisticians prefer to work with confusion, as against conclusion, and Raquel Welch never looked better!! Cheers and clink… ^__^

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7.06.03Robert SimeonNo Comments »

Many are voicing their opinion on the real estate market at the moment, however does this give them the right to be wrong about the facts?? The Real Estate Institute of NSW came out this week with their quarterly report, which showed that in the March quarter 2003, NSW continued to show healthy price gains, although there was a decline in the volume of sales. The markets are evenly balanced at the moment, with demand marginally exceeding supply as whilst buyers are actively looking, a vast majority sit on the fence. Our auctions this week produced a fifty per cent clearance, and whilst 27 Cowles Road and 11 Wolger Road posted new street record prices, this is certainly not a market where we will see sharp capital appreciation. Already we are seeing some agencies recording less than twenty five per cent clearance rates and in the vast majority of cases it is the agent, not the market that is to blame.

So long as the agents adopt some intelligent propriety and accept greater responsibility with the opinions of value, property will continue to remain on the positive side of the ledger and it is the house market that will cause the greatest concerns. Sydney median house prices have increased by 11.1% per annum since the March quarter of 1995. Overall the price of a home in NSW has increased 9.4%. This has been the sixth consecutive quarter where house prices have increased. The top-end of the market will be of enormous concern, with some agents blowing out values as they play their modern day mockery of ‘pin the tail’ on the vendor. We are starting to see a pattern evolving at the moment with fewer properties being offered to the market place. The March quarter recorded a 26.6 % fall in the number of house sales in Sydney with just 7,751 going to the market. We should also mention that this figure is a bit light on, as it does not record off market sales. Home unit sales fell by 35 % to 6,971. Once again a high proportion of home units sold are never advertised. As they say, “statistics are like witnesses – they will testify for either side”.

Clearance rates will also play a vital role. The auction clearance rates in the March quarter posted a respectable 64.5%. This is an excellent result when one takes into account the fact that there was also a war running and Australia was a participant. When the property market is peaking, the clearance rates run at plus seventy per cent. As long as the media contains itself and desists from running ‘AOMD’, that being Articles of Mass Destruction, there is no reason to suggest that the June quarter will not be a spitting image of the March quarter. However one must not rule out supply V demand. Once upon a time it was purchaser V vendor, but with stock levels reducing at the moment, it is agent V agent and we all know from past experience what happens next. Clearance rates drop well below 30%!! And some thought insider trading only happened in the share market!!

This week we posted our 100th Internet sale, which is a remarkable feat. The Internet ledger now shows 100 sales totalling $161,902,000. I just love it when a plan comes together!! With the Cowles Road and Wolger Road properties, both the vendors and purchasers are VRN subscribers. We had nine contracts issued on Cowles and of these buyers seven were subscribers and on Wolger two contracts were issued with both buyers being VRN subscribers. At the moment on average we are adding between fifty and seventy-five new subscribers a week, which is exactly where we want our business plan to be. It costs vendors no more to use our technology and I have a strong argument that it actually can cost them more, if they don’t use it.

With the month of May all but finished it has been another great month with $25 million in sales. Whilst we fell $10 million short of our March record-breaking month, the signs are there for some, that the market still remains strong and we have a sales team of just four!! Oops, just dropped another clue, cheers and clink!! ^__^

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31.05.03Robert SimeonNo Comments »

Nothing beats a classic piece of journalism and an article that appeared in The Sydney Morning Herald last Saturday by John Garnaut headed “Property falls hit the hardest at the high end”, was a beauty!! I loved this one by John Edwards who is Chief Executive of Residex, “It’s too early to call, but it looks to us that we’ve reached the end of the housing cycle”. Well if it is too early, why comment! Or could he perceive the market to be ‘descending down’ just love all this property prophesying. The article went on to say “After taking into account preliminary figures for April, Sydney house and unit prices fell about 0.5 per cent on average over the last three months”. Well nothing happened in April as we had a combination of school holidays, Easter and Anzac Day, so it was not a month to market property, and let us not also forget that a war was playing in the background. As for March, well that was actually a record month for many agents and we sold $35 million dollars worth of property, which was our all time record month. March also saw RWM post the second highest sale price ever recorded in Mosman!! Woo hoo, I loved this one also “The biggest falls in some of Sydney’s most exclusive suburbs, with prices in Mosman down by over 7 per cent”. What an absolute load of rubbish. The market is actually up this year by around 10 per cent, based on our statistics recorded, and the real test will be next week when the May auction results are posted. Now to add to the confusion, the article stated “The Residex figures measure repeat sales rather than median home prices”. Well that would explain it, as the current average price for a home in Mosman is presently at an all time high at $1,785,349 and the figures for April will show the price climb higher.

The Internet came to the fore again this week when we posted two quite amazing sales, given that both purchasers never inspected the properties. One lives in the United Kingdom and another in Hong Kong. We sold a brand new apartment in the new Mirvac development in Hickson Road Walsh Bay for $1,795,000, and an apartment that had been on the market with another agent for six months in Shadforth Street for $1,342,500. Our Internet side of the business has now sold 94 properties, totalling $155,462,000. Now that is what I call a smart business plan! Both the properties in this case were identified exclusively on rwm.com.au. It just goes to show that some “never leave home without it”. This week I read the most amazing quote by the author of The New New Thing, wherein Michael Lewis states “The future will be so different that the past will no longer even be able to serve as a reference – there’ll be no point in examining track records when the race is no longer run on a track”.

It will be very interesting to see how the ‘Governor of Moolah’ responds to the ascending ‘Ozzie Ollar’. The meeting in early June could very well see a rate cut. Now that will make the property market very interesting! Given that we anticipate a strong auction result next week, June could very well have plenty of heat in it. So why not pop down to the auctions next Tuesday night, and Bon Appetit, as the menu will be awesome. Smoked salmon, creme fraiche and caper canapes, mushroom duxelle bouchee, prosciutto wrapped asparagus spears, plus a few more to whet the appetite. We are still deciding on the wine list, and I have always been partial to a soft Merlot in May. There is no point buying a property on an empty stomach!! Some offer Minties, but we much prefer to do our auctions differently as it is important that all our clients end up with a smile.

See you at the opens, or we will see you at the auctions. What you won’t see is the Mosman market down 7 per cent. But there again, the vast majority already knew that!! I wish the guy who keeps writing this stuff, and who also wrote in January “Housing heads from boom to gloom” would subscribe to VRN. In all probability I will have to subscribe him myself. Now there is a clue!! Cheers…^__^

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24.05.03Robert SimeonNo Comments »

The ‘Ozzie Ollar’ went Oi Oi Oi!! Peter Perfect delivered “Fudget ’03″. His defining moment was to ring JH as he prefers to be called whilst oiling it up in Texas, to tell him about his tax cut incentives. Surely these tax cuts would be better directed towards our public education and hospitals. That way our state schools would have the facilities of the private schools and give all our kids a better standard of education. It would also take the pressure off the parents, who are faced with the dilemma of huge private school fees. The most important asset of this nation is our children. After all, they are the future of our country. Or, with your extra $5 to $10 a week, you can buy one or two steaks at Hotel Mosman! What Fudget ’03 clearly identifies is that the Ozzie economy is alive and well.

The big decisions about the property market still remain entirely with the ‘Governor of Moolah’ and how he rates our economy, and by all accounts he is not perplexed with what is going on. Since he took control of the throne in September 1996 he has been forced in to action just eighteen times with interest rate adjustments. The cash rate target was 6.5 percent when he grabbed the reigns and eleven of his rate adjustments have been reductions. At next month’s meeting the rate will have remained unchanged for twelve months. Given that Macca, is just the eleventh ‘Governor of Moolah’ since the throne was first occupied in June 1912, the clear pattern is that he prefers to leave the economy on auto-pilot.

The most interesting observations about the current markets and previous markets are that they were completely different. Given the boom markets of 1988 – 1990 we saw prices double in the space of twelve months to two years when the official interest rate in January 23 1990 was 17 to 17.5 per cent. This time around, the market has been much slower to react, with the property market taking anywhere up to six years to double in price. When Sydney was handed the Olympic Flag in Atlanta to host the 2000 Olympics, this triggered and ignited the dynamics of the property industry, at the very same time Macca, took up residence on the throne.

Whilst many still predict that interest rates will blow out, at this point I just can’t agree as it is supply and demand that best controls our property markets. Once again we will see a strong Winter market, as this is when demand always exceeds supply. It was this time last year when clearance rates peaked at eighty per cent. Last weekend they climbed back to seventy-four per cent which reinforces my prediction that we will see a very strong May and June market. At one inspection last weekend we had just over two hundred people inspect a home in just one hour!! The clearance rates this time will probably hit the magic eighty per cent again, and many will agree that this is the prime selling period on the calendar.

The participants in the property market are much smarter today, as they maximise their asset. Figures just released clearly identify this, as renovations of homes are now beating new home constructions. 2002 was a record year with $4.03 billion being spent on home renovations, according to figures released from the Housing Industry Association. With the latest figures revealing that in the March quarter alone, $1.08 billion was spent on homes. This is nearly twenty-five percent higher than the December quarter of 2002. Real estate today is an entirely different industry and will continue to remain the country’s number one employer.

Always happy to help a worthy cause, some of our subscribers (well four ladies to be exact) are embarking on a fundraising mission this Friday, straight after they read this week’s edition. How is this for dedication, it is a 100 kilometre walk through Aussie bush land and it has to be completed within forty-eight hours. The proceeds from their efforts are for a charity called OXfam, which assists impoverished countries. Our great ‘Ozzie Mossie’ team are trying to raise enough money to pay for a water pump to provide clean drinking water for up to fifty families in a Cambodian village, and technical training for the local water user group. They are only after donations between $10 and $20, so let us know if you would like to assist them with this worthy cause, after all you are $5 to $10 better off this week thanks to Peter Perfect!!

Cheers and have a great week… ^__^

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17.05.03Robert SimeonNo Comments »

Whilst Barry Humphries is rehearsing his new character (my grapevine says he lives in Mosman) there are many Owen Steeles that fit the bill. For those nursing a hangover it could be interpreted as Owe n Steal !! Whilst many would spring to mind, AMP would be this week’s finest candidate! Or as they were best referred to this week as AMPutated! Many people found themselves investing further as they tried to average-down their investment. Nonetheless, that did not stop the property market from posting an $80,000,000 weekend in Sydney as owners and purchasers traded places! Not to forget a $4,000,000 windfall to Bob ‘The Builder’ Carr with his outdated Stamp Duty tax.

It was most interesting to observe the market and look at the sales evidence. Yet again the property market, unlike the sharemarket, is exceeding all expectations. A garden apartment in Cremorne Road was auctioned this week and sold for $855,000, after being announced on the market at $750,000. The happy owners purchased the property in December 2001, for $693,000 and did not even have to renovate. Over at Balmoral a Coronation Avenue home was sold prior to the scheduled auction for just under $5,000,000. It was purchased for $4,162,000 in March last year.

It was over to the ‘Governor of Moolah’ this week to ponder and cast his reflections on the state of the property market. After much deliberation it was deemed that the target cash rate should remain at 4.75 per cent. It has not moved off this since 5 June 2002. Given that the property market will hit an all time high this month, The Gov may well be excused for a lack of concentration between shots as he enjoys his weekend round of golf at Manly Golf Club. This could be short lived based upon the information released this week from the Housing Industry Association saying the ratio between the cost of buying a house and servicing a loan has stabilised. The median house price across the nation jumped 13.7 per cent to March. This statistic renews the thought process that investors are buying outside their respective capital cities.

Interesting to read today, that Dr Morgan of Westpac believes that we are seeing the end of the housing cycle, because prices have jumped forty per cent over the last two years. The Doctor of ‘The Bank’ who has spent more time on the chaise longue of psychedelic lending believes, “that we are now seeing investment housing overtake owner-occupied housing as the predominant source of new lending and clear signs of overcapacity in certain parts of the investor market.” Actually doc, the latest Australian Bureau of Statistics figures reveal that for February, over-all housing finance commitments are continuing to rise, with the strongest growth in refinancing and borrowings for renovations. What we are seeing, and not through rose coloured glasses, is that the home owners are using the principal place of residence to finance investment borrowings in the property market. The balance sheet for property still reads very well, and after all they don’t make land anymore!! I predict that our housing market, especially Mosman, looks very sound, and it will continue to more than hold its value for the foreseeable future.

You can’t really blame them for having a go at the property market. We are now five months into 2003 and nobody has even started to be critical or sceptical of the market. Those who predicted the prick in the bubble last year, have simply fallen by the wayside. Thanks partially to the brilliant way our CEO’s have been running the public companies. It is simply called an alternative solution!!

Plenty of Berocca was handed out this week as Mosman’s most respected real estate agent celebrated the big 50!! Yes, our very own Steve Patrick notched up the big one, and what a week-long party. It started with a surprise party at a secret Balmoral venue last Saturday night for seventy-five thirsty friends, then moved to the Flower Drum in Melbourne for some Peking Duck, and ended up at the Mosman Hotel. There are not enough superlatives to describe Steve, just happy to be a great mate.

Oh! And I invite the doc to our open for inspections this week-end… sorry I won’t be able to chat, we will be too busy chatting to purchasers!! Cheers and clink…^__^ (and trying to locate Owen Steele!!!)

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10.05.03Robert SimeonNo Comments »

If ever a vendor was to take the opportunity to sell in a bull-market, now is the time. With the full time whistle about to be blown on Iraq, it is now back to business. Thanks to the merging of Easter and Anzac Day, the April property market was all but a month of umbrella exercise, combined with rest and relaxation. We did however manage to reach a milestone when we recorded our 91st Internet sale to reach $151,994,500 in subscriber sales, and we have another $4,000,000 in the pipeline.

Perhaps the second greatest boo boo for 2003 after a share purchase recommendation of Pan Pharmaceutical, would be that the property market would collapse. Such mind-sets have once again been likened to April Fools Day, with the average sale price for a Mosman home now at $1,785,349 as at March 2003. I did predict a little while ago that this average will climb to $2,000,000 by the end of this year and I still stand by that. March was a record month for quite a few real estate agencies. It appears that many in the industry benefitted with the Reserve Bank of Australia releasing the latest figures. Once again housing borrowing increased in March by 1.6 per cent, with credit for housing reaching 21 per cent in the year to March. This is the highest rate in eight years. With the investors storming back into property, their borrowings now account for thirty per cent of the total in housing loans. This statistic is almost double what it was ten years ago.

This week we released some sensational properties to the market, now you can watch quite a few all time street records get smashed in the sales process! Listed for our First Eight auctions for May 27 are: 27 Cowles Road, 7 Hunter Road, 39 Killarney Street, 11 Wolger Road, 21 Ida Avenue and 48 Killarney Street. One interesting point that always comes up in a strong market is that of selling prior to auction. Is this the best method? One thing we do hear of a fair bit, is agents exchanging prior to auction and many interested parties not being offered the opportunity to participate in the pre-auction negotiations. Some sell prior because they have more properties coming up, and they need to make times available to fit the new properties in, so they don’t miss out. This could be construed as not exactly acting in the vendor’s best interests, however this is camouflaged pretty well. It will only be a matter of time before more get caught out. What we have done in the past, is to bring the auction forward, that way all the parties are extended every opportunity to participate on a level playing field. I believe that we should be seeing more of this in strong market conditions, however in most cases with real estate, circumstances do change.

It will be all eyes on the market indicators, to monitor just exactly how strong the current market is and we anticipate Internet page views to climb to record levels. The numbers at open for inspections are another great indicator and we believe that some properties will attract more than one hundred couples at each open over the coming weeks. Such numbers are a great test of resources as this is the perfect opportunity to work and maximise our database, which allows us to further build on our subscriber base and improve our client care side of the business. In markets like this we send out thousands of emails each week, working the database, which would explain why we have made so many Internet sales.

Without a doubt, all the dynamics of a strong property market are before us, and many will be watching with interest what happens over the coming weeks. It would appear that due to the recent extenuating circumstances, the winter trading market could very well surpass those previous, in terms of property turnover. With property volumes in April falling across the board by ninety per cent, watch the market strike back in May, see you at the opens !! Cheers and clink ^__^

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3.05.03Robert SimeonNo Comments »