As we start packing up the open for inspection boards for another year, we are reminded that 2004 was a year of fact, fiction and frustrations. The best catch phrase to sum up the year of confusion would certainly be “get the price right”. The grey clouds that many envisaged during the course of the year whilst observing the property market, were nothing more than clouded judgements. When the property market set off earlier this year, the stark reality was that the market had stopped to catch its breath, after eight years of unprecedented trading. The only problem was, that nobody told the agents that the terms and conditions had been adjusted. An amazing statistic of the 2004 market was that property volume was down by approximately twenty-five per cent, yet demand failed to come to terms with supply. The point of difference being that supply had a much higher opinion of itself, whereas demand said, “you come to me as I am not going to you !!” Whenever, the property market has a correction, the heart of the problem is communication. The wires get crossed and agents become confused as they stumble to get an exact positioning. The point is that the property market for residential properties is an emotional market, it is not commercial. However sometimes our emotions cloud our judgements.

It is not hard to cloud judgements as some of the economic journalists could be accused of getting on the eggnog a tad early, when that nasty recession word is discussed. It is well documented that household debt is at its highest level, however the argument of comparing debt levels between 2000 and 2004 is a no-brainer. During this time property prices have doubled (somehow that little pearler, was overlooked). So many are simply working their assets to build wealth and get tax relief. Vacancy rates for residential properties are fast tracking unemployment rates, which gives landlords heart and still encourages them to invest in the property market. Given that Bobby Dazzler’s vendor tax continues to fail, the clear message is that investors have no intention of selling. Many forget that after the corporate collapses of 2001, the investors simply repositioned themselves and went back to bricks and mortar.

So what happens in 2005 ? Well we continue to remain upbeat as the economy is still a protected species. In 2004 the interest rate remained stagnant with the “Governor of Moolah” preferring to be a property voyeur. The theory that property prices will come back down to earth in 2005 is an optimistic one and yes, there are balanced arguments for and against. It is about niche markets and they are all different, despite being thrown into that imaginary bubble that constantly eludes ‘the prick’. The affluent property markets will continue to remain strong as after all, at the end of the day, people just want to live there. Homes at the top end of the market are an investment and an indulgence. The capital appreciation in these markets has been constant and more importantly, responsible, as the property participants are throwing a little caution to the wind. In 2004, we were constantly reminded that this year the market had a much finer balance and when a purchaser spoke you listened. In previous years, we ‘slapped’.

Despite what some say, the market has continued to be positive and productive. Our subscriber sales this week climbed to $277,065,500 and we are just $22,934,500 off reaching our budget for subscriber sales in 2004 (hate those sales that go to non-subscribers). Given that it has been a difficult year, it identifies that our market is not as sick as many have argued. Last week, a home was sold for $6,000,000 plus in conjunction with Christie’s. Also removed from the menu, was a home in Tivoli Street which sold for $2,175,000, a semi in Spruson Street for $1,360,000, an apartment in Brady Street for $1,050,000, and a home in Koowong Avenue for $1,625,000. We remain confident that we can exchange quite a few more keys before the property door closes on 2004.

Well this is our final edition for 2004, and what a year it has been !! In terms of new subscribers, this year has been our most successful as we added just over 2000 email addresses to our database. On behalf of all the team here at RWM we want to thank you for your ongoing patronage. Keep those feisty emails coming. Have a sensational and safe holiday and yes, in Mosman, we do say Merry Christmas !!

We will be back around Australia Day in 2005, for another forty-something editions. Management has decided to leave the cost of subscription at this year’s rate. Spread the cheer, see you in the New Year !! A loud and large, cheers & clink !! ^__^

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11.12.04Robert SimeonNo Comments »

Whilst the local market will soon become distracted by the holiday season, the Expat market is heading home for Christmas. Because of our large Expat database (41 countries), each year we set up a special service for our Expats heading home for the holidays. Our goal is to save Expats time and minimise the hassles of house hunting with our exclusive and innovative Christmas Break House Hunt Service. Here’s how it works… We are asking all house-hunting Expats who are returning to Sydney in December and January, to contact us in advance to ensure that inspections can be arranged.

If you are a local subscriber and would like to add your property to the Expat Inspection List, please call our office on +612 9969 7622

IT IS ALL ABOUT CAUTION – NOT DISTORTION !!
It’s the ‘analysis of paralysis’ again, where the property market again finds itself under the microscope facing its usual dismemberment. When the Australian Bureau of Statistics released the October figures identifying that once again, the Building Approvals still continued to head south, the calls that the imaginary property bubble continues to deflate still remain as the chorus. The reason why Building Approvals remain on the decline is simply because less properties are changing hands and many who purchased, say five years ago, have now completed renovations. Whilst nobody (well most) would agree that prices have remained steady, the numbers of properties sold in 2004 is well down on 2003 sales. Australian Property Monitors statistics show, that in 2003 there were 362 house sales and this year it is 228. The median house price in Mosman last year was $1,593,000 and in 2004 it currently is $1,562,000. In 2003, 277 homes were listed for auction, this year the number fell to 126. We are of the collective opinion that this pattern will continue for quite some considerable time to come. A Westpac economist predicted this week that houses would not return to an annual growth rate of ten per cent until 2008. This is certainly not a negative market positioning, as historically the majority all buy and sell in the same market environment.

The interest rate debate was next on the agenda, with some schools of thought suggesting a rate reduction, whilst others preferred to use the strong investment and employment figures as the reason why we will see, maybe just maybe, a small increase in 2005. The release this week of “News and Interest Rate Expectations:A Study of Six Central Banks” makes riveting reading and is highly recommended for sufferers of insomnia. The writers state that “Central banks around the world have become considerably more transparent over the past decade. An important part of this has been the increased efforts by central banks to communicate their views about economic outlook and its implications for monetary policy.” Well if our ‘Governor of Moolah’ is so transparent, then why do the vast majority get their miscalculated predictions wrong all the time. When it comes to interest rates it isn’t difficult to make a mountain out of a molehill – just add dirt !!

The Real Estate Institute of NSW this week released the September Quarter figures which identified that the annual volume of house sales in Mosman fell 12.12 per cent. The unit sales in Mosman identified an annual volume decline of 33.93 per cent. Overall, Mosman again remained ‘numero uno’ as the most expensive Municipality in Sydney. Whilst house sales declined across NSW by 27.59 per cent it should be noted that nothing happened in July, and we had a Federal Election campaign running in September.

With so much captivating literature available for human consumption, the awaited release of the Annual Report for the Office of State Revenue, certainly mystified many. With property sales still on the decline, the “Blunder Cruncher” of the State’s moolah, delivered another compelling performance. With the budget for NSW 2003-2004 set at $12,803 million, Bobby Dazzler’s boys collected $13,587 million. Yet again, the “Duties” was the star performer with collections of $5,492 million, and expectations were exceeded with the budget set at $4,917 million. Overall, “Duties” were up $333 million on the previous year, with contracts and conveyances up sixteen per cent above estimates. Land Tax came in also over budget at $1,339 million, the budget was set at $1,241 million, in 2003 Land Tax brought in $1,154 million.

Hopefully the market can continue trading for another three weeks, and we can report that it still has life left in it. We have around twelve properties out to contract or under negotiation, so from that perspective we still remain positive. Where many are confused by the true positioning of the property market, the anecdotal evidence of budget surpluses clearly demonstrates that the property market continues to be the star performer in the “State of Decay”.

Many spend too much time addressing possibilities, facts do not change, feelings do !! Cheers and clink, final edition for 2004 next week ^__^

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Confidence is the feeling you have before you fully understand a situation. In our case, confidence represents the real estate agents, and the situation equates to the property market. Nobody can deny that the 2004 property market has been a ‘cocktail of confusion’ and it has had some potent mixes thrown in. A war, threats of interest rate increases, an Olympics, a Federal election and the normal school holiday disruptions along the way. There were cries throughout the industry that “you must first be a believer if you would be an achiever”, and cries of praise to the “Governor of Moolah”, for leaving the rates alone !! The only problem is that for the first time in many years the property market remained in a “State of Confusion”, not to be confused with Bobby Dazzler’s “State of Decay”.

The property markets in 2004 were delivered on the perfect economic platform – a strong global economy, companies posting strong after tax profits and a booming resources sector, record low unemployment levels, and cheap money. To the surprise of many the most cursed market, that being the home unit market, has in all probability out-performed the house market, given the unprecedented volume of trade over the last eight or so years. In Sydney the latest figures released from the Real Estate Institute of Australia, identify that between June and September the median price of a home in Sydney fell by 3.1 per cent. However, over that period the “State of Confusion” was distracted by an ongoing war and spruikers suggesting likely Federal election dates. Because many believe that we reside in a society based on excuses, the minds of the property players were well and truly marinated in confusion.

So where do we go from here…….

The market has just metres to run before we lock the front doors for 2004, although we always leave the backdoor unlocked for those expats that drop in over the festive season. The markets will take a much deserved break, and re-align themselves for (hopefully) a property market in 2005 with less distractions. It would in all probability be best served if I refrain from using the word ‘confident’ for next year’s market, so I will suggest that we have faith in the up-coming market.

If you have been watching our Internet sales you will see that as each week goes by, our sales keep increasing despite the “State of Confusion”. This week we posted our 155th sale to a see the overall total sit at $269,490,500.00, so we need another $30,000,000 to reach our budget for 2004. The Internet has been the star performer in 2004, with recent statistics identifying the major sites continuing to enjoy record numbers of unique visitors. Our new website is running well behind schedule, so it looks like a 2005 launch, for our new look. The thought process behind the upgraded website is to continue to maximise sales, by constantly reviewing its performance which in our case is monitoring traffic and constantly increasing our subscriber sales. September for RWM was our record breaking month with 575,510 hits, October was 533,937 and in November we will be well over the magic 500,000 mark. Our strategy with the Internet is to set measurable goals so that we can further improve on our business development plans. This is exactly why stand alone agent websites continue to offer clients a much easier navigation to look at properties.

Again it can be confusing if you look at the record numbers of Internet visitors lately. Many obviously just wanted to look and not physically inspect the properties. Possibly the emphasis is on statistics, which probably suggests that this year, statistics collect facts, then draw their own confusions………… Cheers and clink ^__^

Retraction

On 2 and 8 October 2004 I wrote articles concerning the launch by Fairfax Publications Pty Limited of Domain East and also the pending launch of Just Listed magazine by Sensis. It has been brought to my attention and I accept that when comparing the cost of a page of advertising in the Domain East with the cost of a page of advertising in the Wentworth Courier it is relevant to take into account that Domain East is a newspaper publication whereas the Wentworth Courier is published on magazine quality paper and has a different “look and feel” to Domain East.

It has also been brought to my attention that it is unnecessary for the owners of Wentworth Courier to slash their prices in order to compete with the new publication since the 2 products are quite different in quality.

I acknowledge that the articles may have been misleading. I offer my sincerest apologies to the publishers of the Wentworth Courier and the Sydney Weekly Courier.

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If the property market is going to trade-well into its ninth consecutive year, it will be imperative that it finishes strongly, so that market perceptions remain up-beat for 2005. At the beginning of 2004, the market got off to a slow start as confusion reigned following the two rate increases in November and December 2003. With just over four weeks to go in 2004, agents face a larger than life mission to clear the current available property. Having said that, we still remain confident of a successful outcome.

If you look at Mosman houses alone, in The Sydney Morning Herald Domain on Saturday, there were eighty offered for sale, which is the peak number for the year, so now we need to see these numbers diminish. Of the eighty, we are carrying fifteen and with a few more still to come onto the market, it will be a most interesting finish to the year. Naturally, when Macquarie Bank announce that they are yet again on track for another record annual profit, the market moves up another notch as it is well documented that it has a passion for those special numbers “2088″.

The markets are consistently holding their own, with Mosman for the twelve months to 31 October, posting an average house sale price of $1,907,250. This saw the median change for the twelve month period sit at seven per cent. Units in Mosman average out at $596, 122 and the median sitting on four per cent. Cremorne houses posted an average of $1,321,118 with the median sitting at nine per cent. Apartments were much the same in Mosman with the average price being $580,896 and the median, four per cent. Neutral Bay, had an average of $1,250,221 and the median was one per cent. Apartments averages are $619,635 with 0 per cent change in values. Cammeray has an average of $1,055,478, its median was five per cent for houses and apartments sat on $528,181 with a zero per cent median change. These figures send out a clear message that the Lower North Shore market is very balanced, confident and comfortable to trade at the current levels.

Whilst interest rates are not as great an issue as in other markets around Sydney, they still play a part in market temperatures. Building approvals have fallen by twenty five per cent, which shows why investment financing for houses has had ten months of continual decline. No doubt the ‘Governor of Moolah’ will not be following the path of his mates at the Bank of England, who tortured the market with five interest rate rises in a year. These rate increases then saw house prices fall at the sharpest rate since the 1990′s. Our property market is much more protected these days with current economic factors indicating that rates will remain on a steady path for most of 2005.

This week we sold 2 Inkerman Street Mosman for a price in the mid-two million range. The apartment market continues on its impressive path in 2004 with 409/433 Alfred Street Neutral Bay selling for $520,000 and 303/55 Harbour Street, selling for $375,000. The market is moving gradually and somewhat conservatively, but we remain confident. At the same time, we are keeping a very close eye on every move and breath it takes.

Let’s see if we can nail a few big ones before next week. Like the eternal optimist, when we go fishing we take a camera with us !! Cheers and clink ^__^

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There are four stages to accomplishment: Plan purposefully. Prepare ponderously. Proceed positively. Pursue persistently. What we have had to contend with all year is a property market, that has been procrastinating painfully! With the benefit of hindsight what we needed was a February Federal election as now the market tries to make up for lost time, with just a five week selling window remaining that will then close the front door on the 2004 market. Collective opinions agree that interest rates will remain unchanged until early 2005 and we can finally get down to what we do best ‘trading places’. Last Saturday, we auctioned a property at 17 Arkland Street, Cammeray which sold $150,000 above the reserve, with the hammer finally dropping on the bid of $1,902,000. Would it have achieved the same result six weeks ago ? Definitely not !! As we suggested a few weeks ago, the run-in to Christmas will be fast and furious. This will all but guarantee that the 2005 market will start with confidence, and we see no reason to suggest otherwise.

The Australian economy is powering along, and we absolutely love the tabloids for publishing executive salaries as it assists us when identifying purchasers. With companies posting record profits, it is no coincidence that the top-end of the market is enjoying an unprecedented run on sales. Even the International Monetary Fund, congratulated Australia for its outstanding economic management. Mentioned in dispatches for exceeding expectations was the long period of uninterrupted growth, consistent budget surpluses, falling public debt, low inflation with low unemployment. Whilst many still bask in the sunshine of success, it is clear now, that not everyone got it right.

Spare a thought for Bobby Dazzler, and his ‘State of Decay’ as many are not aware that if they purchased a home on January 1, 2004 they no longer qualified for his Premium Property Tax which was abolished from the 2005 tax year. This actually meant after 31 December 2003. The REI of NSW is currently investigating what damage the ‘Dazzler’s’ Vendor Exit Tax has inflicted on the property market (yes, I filled out our form). Our investigations identified little to no serious effect on our business, which coincides with the data, that the Vendor Exit Tax still remains well and truly in the red. The last few weeks have seen plenty of action in the rental market which has been running fast. The REI of NSW released the property management survey results this week. They further confirm that the months of September 2004 and October 2004 saw the Residential Vacancy Rate fall below 3.00 per cent which is the first time in over a year . September 2004 for Sydney dropped to 2.8 per cent and October 2004 saw it finish on 2.9 per cent, so why would an investor sell !! Millions have been missed with the Premium Property Tax abolition, given the recent run of top-end sales, and John Brogden is on record saying that he would never introduce it. No wonder this end of the market is bullish. The purchasers are the big winners here, so spare a thought for all those asset rich and cash poor vendors who were forced to sell because they could not pay this tax.

With the news still reverberating that Fairfax is in full-swing with its Domain North, the Cumberland Newspaper Group raised more than a few eyebrows, when it upped the ante with the launch of its “Moving On Up”. Sounds like a song from Australian Idol !! Together with a totally revised and improved real estate section, clearly their plan is to take on Fairfax’s dominant property doyens, the Chancellor/Blok combination. Congratulations to Cumberland. The new look is a huge improvement on the previous model and goes to show what a bit of competition can do. No doubt they will be hoping that (gets ready to click the fingers, and shake) “Moving On Up”, takes off as well as Domain East, where a little bird just told me, it has cracked the one hundred page mark.

The vendors and agents are really enjoying all these new innovations in our property market. If you can’t think up a new idea, try finding a way to make better use of an old one !! Cheers and clink ^__^

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Why RSS? Benefits and Reasons for using RSS

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6.11.04Robert SimeonNo Comments »

The first Tuesday in the month of November, is always a contradiction of fact and fashion. Twelve months ago, on Melbourne Cup Day, the “Governor of Moolah” applied his first rate increase in a bold attempt to slow the property market. Twelve months on he decided to let the cash target rate remain at 5.25 per cent (as we predicted). Obviously, he still likes the current pace of the property race, given that the weight for age property market is now eight years old. The track has quickly moved from slow to fast.

The fashionable place to be on Cup day, was no doubt the Fairfax marquee on Queens Lawn at Royal Randwick. Sensis, must have been aware that something was happening as they had the adjoining marquee, with champagne glasses affixed to the walls. The much awaited announcement that Domain North was confirmed for a 2005 launch, made bigger news than the announcement that Vinnie Roe was racing. With double-sided tape sales on an all time record at Royal Randwick, the Domain East and Domain North marriage annoints a strategic positioning that unites Sydney’s most powerful property markets. It was cheers and clinks all round as the property voyeurs were distracted by a landscape of ‘walking bougainvillea’. Amidst the cheers and clinks, punters were mesmerised by the kaleidoscopic creations of the ‘partying’ faithful.

Early breaking property news this week was that ‘Mandalay’ had also sold for apparently $20,000,000 and the recent unprecedented bull run in the Sydney market continues for top-end properties. Over recent times we have witnessed more launches in the property “Trojan War”, than a Sydney to Hobart. This week, it was upstaged with the launch of 1 Kirkoswald Avenue Mosman, which is the biggest property story in the Mosman market since our sale of the record-breaking $15,500,000 Balmoral home in 2001. Michael Dunn of Richardson & Wrench Double Bay, is teaming up with our Steve Patrick to market one of Mosman’s largest private estates, set on approximately 3,200 sqm of prime Balmoral land.

That other topic that refuses to die is the speculative debate on what property prices are doing. We are of the opinion that over the next six weeks we will see an extraordinary market as finally the property market has a clear run home to Christmas. There has been plenty of confusion this year in the real estate market. Take a few rate increases at the end of 2003, a war, an election and the Olympics which all contributed to de-stabilising consumer confidence. Then throw in the inaccuracies of how property data is collated i.e ancient data is resurrected as modern data due to the entire system being termed by the “Governor of Moolah” as “hopeless”.

So back at the Fairfax marquee, I had an interesting conversation with Rowen Kelly, President of the Real Estate Institute of NSW. It appears that our Institute is looking at following the path of the Victorian model, whereby, its member agents supply the data to the Institute on exchange, which in turn releases the accurate quarterly information. From an agents perspective we would much prefer to see the distribution of ‘our’ actual completed sales evidence distributed from our Institute, and not that of the Reserve Bank / Australian Bureau of Statistics. No doubt we will have some interesting updates on this in coming weeks. We welcome Rowen to his first edition of ‘VRN’. At the end of the day it is all about providing an accurate picture of the property market, and “inaccurate” data, does not do this.

We negotiated our 151st Internet sale this week, when we exchanged a Chinaman’s Beach property. Both vendor and purchaser are subscribers and the purchasers are Aussie expats living in Singapore. We are now on 151 sales to a value of $264,498,000. We are confident of hitting $300,000,000 in subscriber sales, before our Christmas Party. Sometimes it takes a little bit longer, as we experienced with an apartment in Bridlewood Gardens this week. Eighteen months ago, Marize Bellomo presented an offer of $1,100,000, and this week it was finally exchanged. It took the vendors that amount of time to find a new home. Obvioulsy, given upward property market movements, the purchasers revised their long-standing 2003 offer, and the apartment finally exchanged this week at $1,340,000.

The current market is as exciting as some of the Royal Randwick fashion statements. Hopefully, bougainvillea will be pruned back !! The Melbourne Cup may be twelve months away, however the good money is on a strong finish in 2004 for the property market. The weight is presently right between vendors and purchasers and talk of the market being out to pasture is yet another total contradiction of the facts. Real estate, will be a fashion statement for quite some time to come !! We are posting the results each week. Cheers and clink ^__^

P.S. To “Thelma and Louise” at Fairfax, as promised in the marquee, welcome to our world, ladies !!

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All eyes are on our ‘Governor of Moolah’ who on Melbourne Cup day, may be looking at a totally different sweep for the property market, when the Board meets to set the cash rate target. This will mark the twelve month anniversary of November 5, 2003, when he bumped the rate by +0.25 per cent. This week’s announcement that the consumer price index rose by just 0.4 per cent in the September quarter, which as it turns out is down on the anticipated 0.7 per cent growth expectations, should ensure that the cash rate target remains at 5.25 per cent. Many are now anticipating a December rate increase as the property market will be breathing plenty of fire in November, as already, the market is posting record sales. The prospective purchasers are now embroiled in a totally different property market with many vendors expectations being exceeded.

The Eastern Suburbs, laid a solid foundation with ‘Rona’ selling this week reportedly for around $20,000,000. Next, John Laws sold his home for a record price which is believed to be in the vicinity of $7,750,000 to $8,000,000. In Mosman, a waterfront that had been on the market for just over two years has reportedly sold for just over $10,000,000, which is the third double digit sale in just over a week. We set tongues wagging in September last year when we sold a home in Holt Avenue for $2,225,000 as this was the first time a sale had been posted in excess of $2 million. In August this year, a nearby home eclipsed that sale with a $2,270,000 sale. This week the record was smashed with a $2,450,000 sale which, when you consider the home is on just four hundred and fifty square metres, shows how strong the ‘Mosman $’ is at present.

No doubt our esteemed Premier ‘Bobby Dazzler’, will be rubbing his hands together at the thought of the Stamp Duty coming his way to help the ailing ‘State of Decay’. His ‘Exit Tax’ is delivering only forty per cent of the anticipated earnings which explains why we are fast tracking a budget deficit of $555 million which will be the first in a decade. We are experiencing horrendous problems with water, transport, health, education and the lack of police and with the recent blackouts, agents were showing properties with the aid of a torch!! We would also like to thank Energy Australia, for all the work we lost with the black-out on Tuesday and it was very nice to receive apologies for the inconvenience caused??

The average price for a home in Mosman managed just a five per cent increase for the twelve months to 30 September 2004, now you need $1,938,501. Apartments climbed three per cent where the average price is $584,486. Cremorne homes posted a zero price increase to leave it at $1,375,101, and apartments climbed five per cent to see a new average of $574,394. At Neutral Bay, the average home climbed nine per cent to $1,285,900, apartments fell two per cent to see the average at $610,522. Cammeray homes dropped three per cent, to see the average at $1,035,541, apartments were up four per cent to $537,139. Overall, a very positive and promising spin on the property landscape.

‘Just Listed’ was very upbeat with its successful launch last week, and is now very optimistic given the positive feedback. Cumberland Newspaper Group, today launched their new product “Moving On Up”, which is a full gloss section that will appear each week in The Mosman Daily, and the North Shore Times. It too, is a sleek and clean look which will feature twenty modules to a page, it is very affordable and will offer vendors in the lower price range, effective colour advertising. Domain East jumped to eighty pages, and word is that its newspaper publication will be up further in next week’s edition. The rumours that another group is set to launch into the ‘Trojan War’, won’t go away either !!

Over the next few weeks we will be launching some fantastic new homes, two in particular are landmark Balmoral properties. It has been a tough year for the property market, and the current environment certainly makes the wait worthwhile. Cheers and clink ^__^

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30.10.04Robert SimeonNo Comments »

Anecdotal evidence is required to formulate an educated opinion on the property market, and this week it performed with honours. Historically, for the market to be dominant it requires the top-end to identify that purchasers are still happy to trade, thus revealing that ring of confidence in the market. Given that negotiations on top-end properties are not concluded overnight, there is no denying that our property market has responded accordingly to the re-election of the Howard Government. The October, November and December markets will be intriguing and property players can remain upbeat as long as the ‘Governor of Moolah’ continues to leave interest rates at 5.25 per cent.

The highest sale for the week, was a waterfront on Shellcove Road, Neutral Bay which posted the second highest price ever achieved on the North Shore with a $13.5 million sale (two million short of our record price). Another waterfront on Rosherville Road, reportedly sold for in excess of $10 million, and a home that sold on Bradleys Head Road for $5.3 million in April last year, has just sold again for over $6.00 million. The property on Balmoral Avenue, Balmoral that we were marketing has found a new owner too! Whilst many are somewhat surprised at the sudden ‘feeding frenzy’ on property, it appears that it is happening across the board. One only has to look at the record visits that the property portals are posting, to identify the ground swell. Bear in mind that September record results have just been posted, not October figures, so we can expect even higher results.

For those who were of the belief that the property market would capitulate, think again, because here is our take on the state of play. If we take Mosman as the example, there are roughly 5,900 houses in the Municipality. On average the market trades anywhere from ten to twelve per cent per annum. This is now set to reduce dramatically given that the market has now been trading positively since 1996. We would expect that the volume of trade could drop as low as five to six per cent per annum in 2005, which all but confirms that home values will remain constant with some sharp increases dependent on supply V demand. The present property run is unprecedented, eight years and still going strong. It’s an all time record! However, the reduction in volume will have its fair share of casualties. It won’t be the home owners who suffer. It will be the agents, as they too now face a survival of the fittest.

It took us four years, but it has been a remarkable voyage as this week our Internet sales climbed over the $250,000,000 mark. We have now made 148 sales with a value of $257,248,000. Our target for 2004 is $300,000,000, and we are very confident of achieving our goal. This would then equate to $75,000,000 per annum to subscribers. We should be in a position to launch the new website in the coming weeks, so from our perspective, the news keeps getting better. The online side of our business model is crucial to our survival in the marketplace and it is reassuring to know that we are considered market leaders in this category.

Having dropped the ‘missed it’, this week saw the inaugural launch of ‘Just Listed’. The ninety-four page first edition presents very well and offers something that has (sadly) been missing for quite some time now. Over the years, there has been a reliance on whole page advertising that edged the lower priced properties out of the market. It is refreshing to see that our Apartment Division can now make greater inroads into a new and larger market. Of even greater interest will be how the www.justlisted.com.au portal, tracks interested parties. I will give it a few weeks before comparing its traffic to that of www.realestate.com.au and www.domain.com.au.

There is so much to look at in the overall property landscape at the moment, as times are on the change. For the moment, we are concentrating on our subscriber sales as we are just $42,752,000 away from winning a bet !! As to the reality of whether or not we will achieve this goal, it is said ‘right place at the right time’, and our property market appears to have timed it perfectly !! Cheers and clink ^__^

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23.10.04Robert SimeonNo Comments »

The real estate market in 2004, will be remembered with mixed emotions due to the constant interruptions that agents have had to contend with. It started with the hangover of the two rate increases in November and December 2003, then the uncertainty of an election date. It is a fine balancing act, to manoeuvre advertising campaigns around the constant school holiday breaks, throw in the Olympics, and then an election, and what do you have ? Hopefully, a clear run to Christmas. The release of the September quarter auction results have certainly identified that as in 2003, the number of properties auctioned was 5499, in 2004 it was 2482 across Sydney. On top of that the value of housing finance commitments fell 0.7 per cent in August, which is in line with the reduced property offerings in the overall marketplace. When the property market is down on confidence it is very easily distracted. It has always had a weak retention period, which is exactly why the figures are down. The same cannot be said for realestate.com.au who has just announced its record breaking month.

In September, it eclipsed its all time record with 1.2 million visitors to its site. It was broken down with 1,074,121 eye spies from Australia, and 123,474 overseas onlookers. I called the jubilant CEO, Simon Baker and asked for a breakdown of the numbers and here they are: NSW 350,000, Victoria 310,000, Queensland 200,000, Western Australia 93,000 and South Australia 65,000. These figures clearly identify an eastern seaboard domination. Domain, came in next with 649,091 visitors, and Just Listed had approximately 100,000. This week was supposed to be the much awaited launch of Just Listed and yesterday, it was known as “just missed it”. The inaugural launch was postponed until next week due to technical difficulties. We look forward to reading the first edition, which will also see its online visitors jump significantly. It is actually very exciting to see what its recorded traffic will be as we have not had the opportunity to monitor a new portal for quite some time. The property portals are jumping ahead in leaps and bounds, and the three major players in the Trojan War, are very much reliant on the continued success of their property portals.

I met this week with the General Manager of Cumberland Newspaper Group Mark Elgood, and as a group it is excited, positive and very much looking forward to the new challenges that lie ahead. I was advised that the group is very much upbeat and is presently engaged in discussion to “meet the agents, to address their thoughts on what they believe we need to deliver”. Sounds like the group has a new plan of engagement. Whilst page costs were discussed he played his cards very close to his chest, although I did notice the occasional wink !! Time will tell, and he does have time, as Fairfax is playing a “mum’s the word”, on a Domain North launch.

Whilst much has been said about the distractions to the property market, the constant innuendo about the impact of the “exit tax” simply won’t go away. So much so that Bobby “Dazzler” Carr, and his “State of Decay”, continues to fall behind in the paperwork regarding his innovative exit tax. Given that he has recently failed to lodge his monthly statements for his brainchild, most are now somewhat curious as to how embarrassing this tax is fast becoming. Bearing in mind that Dazzler hoped that his new tax would raise close to $690 million a year, which averages out at $57.5 million a month. In June it delivered just under $500,000, and in July it delivered just $10 million, another blunder-crunching example is delivered yet again. I guess the reality is that Mosman awoke to a blackout this morning, (and my car still remains in the garage), further endorses that the “State of Decay” remains the Premier state.

We have received many e-mails about the Trojan War from subscribers and this one still remains the office favourite thus far. “Regarding the Trojan War, the combatants would do well to remember the words of the greatest political manipulator that ever lived and who taught Sir Humphrey Appleby everything he knew: “Their is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new.” Niccolo Machiavelli. Now we have the Internet and property portals, which are a vital key to the equation of the battle. Cheers and clink ^__^

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The fascinating voyeurism of the Trojan War took yet another twist when Sensis, delivered its Media Release “Sensis launches Just Listed magazine”. With Fairfax Publications Pty Limited fast becoming the centre of attention with its highly successful launch of Domain East, Sensis have quickly followed suit. “The first edition of the Just Listed magazine will hit the streets on Thursday 14 October and is Sensis’ unique solution to unprecedented demand from agents and house hunters. The launch comes just two years after the release of the complimentary web site, www.justlisted.com.au . As an indication of market demand, the online site has managed to attract 80 per cent of Sydney’s agents and more than 100,000 unique users in September with minimal supporting advertising”. Anyone doubting the strong resolve of Just Listed should think again. They are now serious players in this Trojan War. “So powerful is this proposition that the Just Listed team signed up 500 agents to the new print publication in the last few weeks alone, further complementing the 1,700 agents on the web site”.

In yet another possible twist, ACP seem to have taken a sudden interest in ‘Virtual Realty News’. You see, registrations leave finger prints, and the acp.com.au on the registration forms reveals all. Could it possibly be that Kerry Packer is putting the gloves on too, with a view to launching his highly successful New Zealand operation Property Pictorials Magazine !! If so, will this mean another property portal, taking the number to four, or will he launch through his partnership vessel Ninemsn ? The only problem with that, is that News Limited is the majority shareholder of www.realestate.com.au which operates out of Ninemsn. The plot thickens !! Should it decide to enter the fray, it too will have to value its property portal at zero.

There is no doubting that Fairfax Publications Pty Limited is well out in front of the other contenders in the Trojan War, however I am mystified by one single point. Domain East, has become the talk of the town following its successful launch, yet in the two editions released thus far, www.domain.com.au fails to crack hardly a mention anywhere !! Interesting that it is packaged in the launch, yet Fairfax (strangely) doesn’t want to heavily promote its new-look website in Domain East. Must be a lover’s tiff !!. The latest figures have identified that more than half of Australian homes are now connected to the Internet and now identifies its online business domain.com.au as a major attraction to online consumers. The Bureau of Statistics has just reported that 53 per cent of households now have Internet access. This is up from 46 per cent in 2002, which is yet another clue as to why Sensis valued the Just Listed property portal at zero to the agents.

If you think that Fairfax Publications Pty Limited, is not looking at a Domain North, you probably also think that the Democrats will win the Federal Election tomorrow. Cumberland Newspaper Group, now faces a major uphill battle to win the support of the agents as I pointed out to the Manager of The Mosman Daily, in a one-on-one meeting this week. The Mosman Daily has had a ‘sweetheart’ arrangement with two other major franchises (despite our objections which continually fell on deaf ears) whereby they rotate them to appear first in The Mosman Daily each week. We understand now that an announcement is pending !! With our average advertising campaigns coming in at $10,000.00, Cumberland is the benefactor, pocketing $7,500.00 of these monies. So you don’t think that Fairfax and Sensis, are not eyeing those “rivers of gold”? Of course they are! This is what the Trojan War is all about !! The only way Cumberland can survive, is to cut the cost of a whole page by half, which means a whole page will go from $2,390.00 to $1,195.00. “Kill the chicken to scare the monkey”. Sun Tsu….The Art of War.

The real estate market was smiling this week when our ‘Governor of Moolah’ decided to leave the interest rates steady at 5.25 per cent. It now appears to be highly unlikely that they will move either way until next year at the very earliest. This now gives Sydney property a green light, with the school holidays finishing this weekend. For the first time this year, the property market can really move up a few gears. The confidence is creeping back and a recent ASX Investment Performance Report by Towers Perrin has confirmed that, “for the first time in more than a decade, residential investment property has outperformed listed investments over the previous ten years”. This was released in June and it went on to say “The results of the latest survey, released by ASX today, revealed that residential investment property provided after-tax returns of between 11.4% and 9.3% per annuum (depending on income bracket); while Australian shares returned between 8.1% and 6.1% per annum over the same period. This is the first time property returns have been higher than shares since the survey was first commenced 12 years ago”.

This war is riveting stuff !! Fairfax has brilliantly launched, Sensis launches next week, Australian Consolidated Press is lurking in the shadows, and News Limited has not said boo !! Could it be that it doesn’t have the newspaper classified representation in real estate, that Fairfax dominates ? Or, maybe just maybe, it has “been caught with its pants down”. Fpccourier, appears to be in denial with its Wentworth Courier and Sydney Weekly Courier. I guess the fact that its figures no longer stack-up, would be of serious concern. Oh well, as we said before, ‘welcome to the brave new world’ !! Cheers and clink !! ^__^

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