As the sun rose over the Eastern Suburbs last Wednesday, it was the very impressive launch by Fairfax Publications Pty Ltd of its Domain East, that shone brightly in the eyes of the residents. The floodgates have now well and truly opened and those “rivers of gold” have swiftly moved from a trickle to a torrent. As quick as a flash, it was straight to www.sensis.com.au to research when the Wentworth Courier last faced a bloodied battle for survival. Back in January 1990, Jonathan Chancellor, Property Editor for The Sydney Morning Herald wrote in his Title Deeds column, “Disgruntled agents are set to challenge the property advertisement strangleholds of two longstanding local publications, the Wentworth Courier and the Manly Daily”. This was the launch of the now failed Eastern Express, which had the backing of estate agents, who took shares in the new venture. Today, the only thing these agents ‘share’ is the will to succeed, and from all reports they are all right behind the latest craze to hit the property industry. It is a bold engagement to take on the might of the Hannan family who own the Wentworth Courier, however in the driver’s seat this time, is the powerful Fairfax Publications Pty Ltd, which also publish Domain in Saturday’s edition of The Sydney Morning Herald. Fairfax, in a perfectly timed, three-pronged attack, is actively promoting its smart and savvy www.domain.com.au property portal. Mindful that its online business required a much more user friendly approach, it certainly achieved it, when it launched its “Dream big, think smart” aggressive online marketing campaign. As suggested previously in ‘Virtual Realty News’ it would only be a matter of time, before one of the players in the Trojan War, would package its businesses together to take a stranglehold in this fierce and competitive battle. Fairfax, has taken this initiative which now positions it in poll position on the grid.

The Fairfax battle plan is strategic, with an air of confidence and for a third of the cost of a whole page in the Wentworth Courier, its show bag is packed with property persuasions. Domain East offers a whole page colour, plus a 10 x 1 colour display advertisement in Saturday’s Sydney Morning Herald, a domain.com.au online listing, and a few other sweeteners (no mention of steak knives). Although in this instance, the knives are well and truly out !! We understand it has no plan to start a Domain North, although one can only assume that it will just be a matter of time. Should it launch Domain North, Domain West and Domain South, the Cumberland Group would then be firmly in its sights. Obviously, its compass attack is East, North, South and West. With the pending launch of ‘Just Listed’, it makes no excuses that it wants to be the number one property portal, which would further consolidate its dominance of classified newspaper advertising.

Given the strong bond that Fairfax already has with Mosman, (this municipality is one of its strongholds), The Mosman Daily would look very vulnerable, and chances of survival would be listed as critical and ‘possibly extinct’. What remains to be seen is when will the Wentworth Courier and the Cumberland Group go into damage control, as ignorance to the growing support of Fairfax would almost certainly lead to its demise. To be remotely competitive it will have to ‘slash’, not partially reduce its colour page costing.

At the end of June 2003 there were 10,001 real estate services businesses operating in Australia, according to the Australian Bureau of Statistics. 3,639 were franchised real estate agents, 4545 non-franchised agents and 1,818 other real estate services businesses. When combined, the total number of those employed was 76,599, and during 2002-03, income generated by these businesses was $7,524.7 million. It makes sense that Fairfax has gone into instant overdrive as it wants to be first point of contact in the battle of the Trojan War !!

With the September Quarter now finished, the home unit market was the star performer for us, with Marize Bellomo smashing the all time office record with eighteen exchanged properties, after 5/37 Moruben Road sold today. On the housing side, 31 Ourimbah Road and 27 Bay Street have also found new owners this week, so we are really looking forward to the December Quarter, as once again there is anecdotal evidence before our eyes, that our property market has changed direction. One of the most staggering statistics for us has been the enormous increase in our web hits here at RWM. Last year, our monthly hits were in the early 300,000, in August we posted our all time highest with 484,420 and we just smashed it again as in September we hit 575,510. The weekly edition every Friday, records upwards of 50,000. Our record was achieved two weeks ago with 61,240. Oh! the power of the Internet !!

It will be compelling viewing over the next few weeks to watch how fast the new Domain East flourishes. Word is that the Double Bay heavyweight agents who were absent from the first edition, are entering the ring, and they too are sitting in the Fairfax corner. Memo to Fairfax !! When are you launching Domain North ? There will be plenty of cheers and clinks at that launch……^__^

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2.10.04Robert SimeonNo Comments »

Continued from last week………As the Trojan war gains momentum the one thing you won’t see are protesters. What you will see, is agents who won’t be neutral on these issues. This week, it was Fairfax Digital, that broke cover and launched the new branding for its website, and a $1.5 million campaign launch “Dream big, think smart”. “Australians are sophisticated and driven about real estate and the property market, and are eager for authoritative information that is easy to access and compelling. And “they want an Internet site that delivers it all” said Chris Meehan, General Manager of www.domain.com.au . “Our new-look web site reflects this as the new campaign will drive people to domain.com.au, adding value for clients”. I must admit that I like the look of the new site. It is a huge improvement on the previous one, which reminded me of a clothes line as it had everything hanging off the home page. ‘Just Listed’ e-mailed me also during the week, to advise that for the moment it is adopting the BP approach, “the quiet achiever” !! Telstra/Sensis has lodged global patents for part of its new Internet search engine, which is already in battle with Yahoo and Google. No doubt, the agents who have signed up with ‘Just Listed’, will get a prominent placing on Just Listed’s search results. I guess realestate.com.au may be adopting the BP approach also, as we have not heard much from them, on how they are positioning themselves. That is not to say, they should tell us. How they play this Trojan war is entirely up to them. It is just that ‘Virtual Realty News’ is the self-appointed media outlet for the Trojan war !!

The scuttlebutt, coming from the bunkers is that, “in coming weeks we will see some epic encounters as News, Fairfax and Telstra go ‘head to head’, and you ain’t seen nothin’ yet !!”. To anyone who thinks that the subscribers are not intrigued with this battle, think again. Last Friday the edition sent browsers crashing with an all time record 61,420 hits at RWM. Our apologies to those who lost valuable work. The hits eased back on Saturday with 15,683, Sunday 10,546, back up on Monday to 17,357. This war for those “rivers of gold” will be won by those who instigate the smartest strategies which have now been identified as far reaching, and have potential for terminal consequences. This is about winning the collective approval, of agent and vendor. The stark reality is the climbing spiral of advertising costs, which could possibly lead to the demise of the print media incumbents. It is the agents who direct the advertising monies to the media outlets that position their clients who will have a distinct advantage, as vendors are looking at value for money. The previous approach by the incumbents requires radical change, as today, it now appears that they may have priced themselves out of the property market. The new contenders will identify this very point in weeks to come, as the Trojan war continues to focus on those “rivers of gold”.

Now back to the property market which appears to have found its fighting qualities again as the ‘sold by’ signs appear on the signboards in good numbers. Gone from our property menu 22 Cobbittee Street Balmoral, 1 Elfrida Street Mosman (first week), 19 Wyong Road Mosman and, 31 Myahgah Road Mosman. These properties represent just over $10,000,000 in sales. At one home the vendors pocketed a cool $1,000,000 profit in just three years, and all they did was live there !! The market required anecdotal sales evidence that it was back, and now we are delivering it.

In the Apartment Division Marize Bellomo broke an agency record by negotiating the sale of fifteen properties this quarter, with still one week to go. This week the Apartment Division sold 2/6 Mosman Street, Mosman Bay, 14/56 Harbour Street, Mosman, 304/450 Military Road, Mosman, 12/3 Yeo Street, Neutral Bay and 5/137 Belmont Road Mosman. That is nine exchanges over the week.

There has been no denying that Winter market sales have been somewhat of a disappointment, however we knew that it would ‘spring’ back, and that is exactly what we have found this week. It is all about accurate property pricing, as the purchasers are conducting their own pricing enquiries. Some are now saying, “What do you mean it has sold? Nothing has been selling, we were hoping to acquire it for a cheap price”. The coming months will be very interesting !!

Plenty happening in the property industry off and on the paddock. What remains to be seen is which players are on the paddock and who will end up permanently, off the paddock !! The Telstra, News, Fairfax battle will be aggressive with definitive strikes on the potential contenders. Many egos will be bruised as they are forced to change their ‘not so perfect’ business plan for 2004. Times change, it is just that some never believed that their precious businesses would come under attack. Just Listed, started the Trojan war, now we will all watch to see who will finish it !! This is not game over, rather game on !!

Thirsty work !! Cheers and clink !! ….. ^__^

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25.09.04Robert SimeonNo Comments »

In today’s computer world, a Trojan horse is defined as a “malicious, security breaking programme that is disguised as something benign”. The same analogy could be applied to the latest property portal ‘Just Listed’ which in recent times has looked more like Rip Van Winkle, than a cutting edge property portal. How looks can deceive, as Alan Kohler wrote last week in The Sydney Morning Herald, ” In six months, Telstra/Sensis has signed up 1700 Sydney, Blue Mountains and Central Coast agents (80 per cent of agents) to ‘Just Listed’, by simply giving away Internet property listings for free. Next it will use the website to sell classified ads in the new print publication and start charging for Internet listings “some time” in the future”.

It was only days before, that the appointed spin doctors of ‘Just Listed’ had met with us, to unveil a comprehensive battle plan to eventually become the number one property portal, and there will be casualties along the way. Hidden away in the interior of this Trojan horse was the major player Telstra, who over the years has fought some very public battles with Optus. Who could forget Super League. Telstra, loves a stoush and this time it has News Limited and Fairfax firmly in its sights. Its battle plan using its Trojan horse ‘Just Listed’, will come from two fronts and it will be very interesting to see what firewalls News and Fairfax have in place. We predict that this will not be a short battle. It will be drawn out as the battle over subscriber rates and classified advertising intensifies.

In the red corner you have News Limited, which will be doing its all to protect its Cumberland Newspaper Group, and online business realestate.com.au. Over in the blue corner we have John Fairfax Publications, and its online business domain.com.au. In the orange corner we now see Telstra, which is aggressively launching its Sensis online information business, in hand with its new property portal ‘Just Listed’. This is all about taking ownership of those ‘rivers of gold’ which in turn will reveal the plimsoll line of the embroiled combatants. Not survival of the fittest but, survival of the wealthiest.

Telstra, Australia’s largest Internet provider, has struck the first online blow, offering agents a free subscription effectively valuing its online business ‘Just Listed’ at zero. Obviously, to be the biggest Internet provider you need a broad knowledge of the Internet and this is where it believes it will identify the Achilles heel of its competitors. By stating that the service is free, they are hoping that the agents will look at the subscriptions to realestate and domain, and view them as an added expense in difficult times. It is widely known that there is only room for two portals in real estate and should ‘Just Listed’ grab the gold, then the battle is on between realestate and domain for the silver, as there will be no bronze. We chart our property activity each week, houses units so we know better than most, how the online dynamics work.

With the impending launch of the Telstra classified colour newspaper, its aim is to mount a challenge to The Mosman Daily, North Shore Times and Manly Daily which will have to take a chainsaw to its page charges. Also, FPCCourier which owns the Sydney Weekly Courier is also at risk of survival. This battle is not just contained north of the bridge, the Wentworth Courier will come under attack as well. The ramifications of this battle are far reaching, and there will be an abundance of humble pie on offer as in times gone by many of the companies have treated the agents with total disdain. Now, they will be rallying the agents urging them to continue their support. Being the incumbent will not hold any significant advantage on these battlefields.

So how do we anticipate the blue and red corners will respond ? Given that all are playing their cards very close to their chests, we anticipate the separate entities to join forces and package new deals as one. So Cumberland will offer new advertising rates with realestate combined, and Fairfax will do the same with domain.com.au. It will be a pricing war, where the consumers and agents will benefit greatly. It will be very public with all the telling blows being well documented, and importantly one must remember there is no referee in this.

Oh, in all the excitement I nearly forgot the property market !! The good news is that our ‘Governor of Moolah’, left the cash rate target at 5.25 per cent which is good news week for the property market. With all the hoo ha about the correlation of property statistics, the agents are saying very little and not reporting the sales. The Real Estate Institute of NSW is set to make an announcement about its move to control the data, with property announcements based on exchanged contract data. Now the market will get an accurate positioning of the respective property markets, not the previous mumbo jumbo that has been the case in the past. Another agent victory !!

The bosses of Fairfax, News, Telstra, realestate, domain, ‘Just Listed’ and Cumberland are subscribers, so if you have anything to share, just send me an e-mail and we will publish it next week !! Welcome to the brave new world !! Cheers and clink ^__^

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18.09.04Robert SimeonNo Comments »

It is true that at some stage we all make errors, however to continually remain in error is just plain stupid !! Memo to : Governor of Moolah, would you please confirm that the method of collecting property data sales evidence still remains “hopeless.”

The Bureau of Statistics, came out with a statement that Sydney house prices fell a staggering 5.4 per cent in the June quarter. The Sydney Morning Herald ran a headline on the front page “Record slump in house prices”. This quote brought tears to my eyes. Not from sadness but, from laughter !! Even more interesting that they could not produce any evidence to support their claim, which is the same as saying that Sydney had a recorded rain fall of 936.5 millimetres although we don’t know exactly where. The funniest thing about this method of collecting sales data is that it is based on properties that settled during that quarter, not as most people assume, on exchange of contracts. A number of the more expensive homes that we have just exchanged, have settlement periods ranging from six to ten months, which means that although they should be in the upcoming September quarter figures they will appear in the March quarter of next year. So when the March quarter is published it will contain data that was relevant, three quarters back, which identifies exactly why this application is basically a ‘no brainer.’ Little wonder the ‘Governor of Moolah’, described the process as ”hopeless.”

Last Saturday, I enjoyed reading an article in the Business News section of the The Sydney Morning Herald, by Alan Kohler. (Alan is a subscriber of Virtual Realty News too !!) He titled his article “House price fall: real data an absolute rout” where he highlighted that” on Thursday, the ABS (Australian Bureau of Statistics) reported that house prices in Sydney had slumped 5.4 per cent in the June quarter; on Tuesday the REIA (Real Estate Institute of Australia) had reported that Sydney prices were steady.” The only way that these figures can ever be accurate is for the agents to pass on the information each month on exchanged properties, and there is fat chance of that happening. The interesting part is that the major franchisors require franchisees to furnish all sales at the end of each month. We have not auctioned a property for the past few months, all our sales having been by private treaty. This means that firms like Australian Property Monitors can’t access this information. Only this week, we have started listing properties again for public auction. Make no mistake, the property market is slower based on previous markets, however we are still selling them. You only have to look at our property menu to see that quite a few big ones are missing from last week’s edition. Therein lies a clue !!

Great article in The Daily Telegraph by Kevin Bissett, who unveiled in an exclusive that “Foreigners snapped up homes and units worth $7.3 billion in NSW during the property boom.” The United Kingdom came in first with $1.686 billion, next Malaysia $1.067 billion, Singapore $1.027 billion, Germany $715 million, Not determined $445.68 million, United States $255.39 million, China $239.82 milliion, Netherlands $177.68 million, South Africa $85.72 million and tenth on the list was Japan $39.43 million. ‘Virtual Realty News’ goes to every one of these countries. The number one suburb for the most sales was surprise, surprise, Mosman with 61 sales and we are confident that we made the majority of these sales. The period was from July 1, 2001 to June 30, 2004. Second was Balgowlah 44, Bondi 36, Sydney CBD 36, Vaucluse 36, St Ives 30, Surry Hills 27, Castle Hill 27, Balmain 25 and Baulkham Hills 25. Oh yeah, the power of the Internet. I am sure that more than a few subscribers overseas will be having a chuckle on that piece of information.

On September 15, “Virtual Realty News” will have its fourth birthday and one hundred and seventy five editions later we are still going strong. It is great to launch our new branding look on this milestone, and I can promise you it keeps getting better, as our new website is not far from launching and it is mind blowing. The new “Virtual Realty News” still has a few bugs and hopefully we will have ironed them all out by next week. Thanks for sharing our fun on the Internet, we would simply not be here without our loyal subscribers, so charge your glasses, cheers and clink !! ^__^

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11.09.04Robert SimeonNo Comments »

Yet another distraction to the real estate industry, that little thing called a Federal Election !! “Who will you trust”, is the catch cry and who can you trust to run our economy, the salient issue. History clearly identifies that the Liberals have a much better working relationship with the property market, than the Labor party. What remains to be seen, is will this be an election based on asset protection? I well remember after the last election when Kim Beazely was licking his wounds, he made a comment that, with the benefit of hindsight, he should have been more transparent on policies and he should have released them sooner, rather than later. Looks like “Achey Breaky” Lathan has a different spin on this, however it is quite ironic that a politician who has been in parliament for ten years, and never been given a portfolio, now believes he has what it takes to be Prime Minister.

With household spending climbing 6.1 per cent over the past twelve months there will be quite a few keeping a very close-eye on the election and the property market. Latest figures released by Home Price Guide showed that the average price for a Mosman home fell $10,602.00 for the twelve months to July 31,2004. Overall, Mosman is maintaining a 12 per cent capital appreciation for the twelve months. Mosman apartments fell $21,110.00 with capital appreciation sitting on 3 per cent. However July is a dead rubber in terms of activity, as the vast majority are away on holidays and this is one of the quietest months on our selling calendar. Mosman, started the year at $1,950,043.00 and seven months on, it is $1,928,826.00. So much for those who declared that the market has come off ten per cent !! Apartments started the year at $586,058.00 and in July they currently sit at $582,790.00. This identifies clearly what we have been saying all year, that today, we have a consistent property market. It is important to note that with our apartment sales, this is an established market of consistency. It should not be construed as a dodgey, speculative market, as the current investors are long term.

Whilst on apartments, Marize has sold another four during the past week, and not one went to an investor. Three of the units went to first home buyers, and they were all under $500,000.00. The other at $1,200,000 went to a home occupier. With the economy performing so well at the moment it is not just the Mosman market that is performing well, the Noosa market has been a solid performer for years. I was chatting with Peter Butt, principal of Richardson & Wrench Noosa this week who recently auctioned an apartment at “First Point”. They had ten registered bidders and none were from Queensland. It was evenly balanced between NSW and Victoria and price expectations were around $5,000,000.00 which is not bad for a weekender. The bidding opened at a bullish $5,200,000.00 and the hammer dropped at $5.65 million. He subsequently has placed another two purchasers at $5 million plus. Richardson & Wrench has a great newsletter on their property market. Subscribe to www.rwnoosa.com.au

Whilst on newsletters we will launch our new look in next week’s edition, and I might add that it is awesome!! The new website is still a few weeks away, however we are confident we will get it out before “Achey Breaky” Latham’s much awaited tax policy. My feeling with all the election banter is “when you listen to a political speech it’s like shooting at a target – you must allow for the wind !! ” Cheers and clink !! ^__^

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4.09.04Robert SimeonNo Comments »

Today, what we need is less government in business and more business in government. The property market is a classic example of this as the government allowed it to go un-checked for way too long. Now it is a monster that still remains out of control. As the property market simmers along just like the upcoming Summer, we predict that it will provide plenty of heat in the coming months. The housing affordability issue still remains unanswered given that the governments realise that today, they have made monumental mistakes by not paying more attention to the 1987 – 1993 markets. Many will argue that as a direct result of those markets, rates were deregulated, which then brought about the introduction of cheaper money, which then ignited the property market. What we are seeing today is a focus on inflation which in turn determines where interest rates sit. So how can some suggest a rate increase when inflation is down around two per cent? Maybe they see also, that the property market is set to launch again !!

Many are looking at building approvals as a market identifier however this could be misleading, as many investors are applying the “lock and load” theory as they are renting the properties out. If you look at property, it is blatantly obvious that long-term, it never goes backwards. With the help of the Internet, investors are travelling the countryside looking for investment opportunities. Our Apartment Division is more active today than ever due to our market offering positive cash flow returns. Now we are seeing rents rising as we re-let properties, and much of this is due directly to the vendor duty tax of 2.25 per cent. The mind-set of “lock and load”, means that less properties will be offered and prices will continue to climb. This again brings us back to the housing affordability, “as rents climb savings decline”. Now that a crisis is declared, it will be interesting to see how governments intervene. The median cost of a home in Sydney is more than nine times annual earnings, whereas seven years ago it was six times. Saying that house prices are cooling, is an absurdity as the property market still has plenty of sting left in it. Newcastle is a classic case of a strong property market, it is still posting an annual growth of 21 per cent. There is a very strong pattern evolving with investors concentrating on the eastern sea board as all these areas are still very much in the black.

Again if one needs to aim the blame, the Internet is very much a culprit, as the entire eastern sea board can be tracked from the comfort of one’s home. Data is so easy to obtain (but we need to be careful with that, don’t we) and acquisition strategies can then be applied. Where positive cash flows are applied, investors are applying leverage against their assets, and with a positive return the asset then goes into debt reduction, which today is happening faster as rents are now on the climb. The vendor duty tax is really about building a better future for the property owner, which is the direct opposite of what ‘Bobby Dazzler’ Carr had expressed when he introduced it. Real estate agencies are also pushing for rent increases as it improves their bottom line. It is fair to say that this tax will be an outright fizzer !!

Congratulations to Steve Patrick who won the Ronald H. Pillinger Award when he was declared the number one sales principal nationally in the Richardson & Wrench network for 2004 . Richard Simeon came in seventh which also is a fantastic effort, and yours truly sneaked in at ninth. Great effort to get all the Directors in the Top 10. Without a doubt one of the finest stars of the future is Marize Bellomo, Manager of our Apartment Division who in just three years with us came in seventh in the Top 10 salespeople in our network. Many thanks to all the other members of our staff who really put it in those hard yards which saw us finish second as the top office, behind Double Bay. We were the number one office in the network for the North Shore. If you thought the Olympics made for fantastic watching, keep watching the property market over the next four months. Cheers and clink !! ^__^

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28.08.04Robert SimeonNo Comments »

Some things will never change !! Aussies love a punt and making predictions. When will be the next interest rate increase? When will the Federal election be? So far not many have got a single prediction right! Then you have those who always have an opinion on the state of play with the property market. Ross Gittins of The Sydney Morning Herald wrote an amusing piece this week titled ”Why economists are hopeless forecasters”, where he mentioned an old joke “God created economists to make weather forecasters look good?” When it comes to the property market the ones who thus far have been on the money have been the real estate agents. They are after all, the eyes and ears of the market. Many of us have vehemently stated that there is no bubble, and the property market consists of niche markets. Still, many predict a crash even though our economy stays basking in sunshine. The data coming out of our industry is diminishing as each week goes by. We now refuse to hand over any data, as we are all aware of how incorrectly it is applied.

The June quarter home figures suggest that national house prices fell 8.5 per cent, and a further suggestion that Sydney house prices topped the list with falls as great as 8.5 per cent also. Shock horror it can’t be !! The Home Price Guide figures identified that Mosman property prices for the twelve months to June 30, 2004 were positive with 12 per cent capital appreciation, certainly contrary to other schools of thought. The average price for a Mosman home as at 30/6/2004 stands at an all time high of $1,939,428. For those looking to purchase, valium can only be prescribed on prescription. Now the apartment market in Mosman identified a modest 3 per cent increase over the twelve month period. Once again the average price for an apartment climbed to $582,790, which is exactly in line with what we have been reporting all year. Cremorne houses had an 11 per cent increase over the twelve months also where the average price of a home is $1,461,564. An apartment in Cremorne posted 5 per cent gains to see it sit at $560,741. Neutral Bay houses posted a modest increase of 1 per cent to see the average price achieve $1,188,415, and the average price for an apartment also climbed 4 per cent to $635,770. This is yet another example of why we look at the markets as niche markets, although in all honesty I would question the accuracy of these figures. To quote our ‘Governor of Moolah’, another “hopeless” rendition of the property market.

Once upon a time when eighty per cent of our properties were sold by public auction, it was much easier to collect the data. Today, it is near impossible. In our area, auctions still remain on the nose, although having said that we are hopeful that the up-coming summer sell-out (forever optimistic) will change that, as we always think ahead of our expectations. Auctions in Australia are a century-long tradition, and like a punt and a prediction, Aussies love them also. The hammer will fall again in Mosman. It is not the market that has taken a hammering, just those who wanted to predict it !! The safest and most proven way to predict the property market is with your eyes and ears. Our property market still holds plenty of excitement for those who want to take a punt on it, and that is not a prediction !! Cheers and clink ^__^ !!

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21.08.04Robert SimeonNo Comments »

There is still plenty of energy in the property market even though many continue jumping to conclusions that property prices have finally been fenced in. Even the Un-Productivity Commission declared that “houses do more than provide shelter, they are also the major store of household wealth.” Here in the “State of Decay”, just last month “Bobby Dazzler Carr” introduced another two property taxes which will have a direct effect on the market. The major problem is that Governments appear hell bent on stifling that dream of investing to secure one’s future. Fortunately, the vast majority can see past this as Reserve Bank figures indicate that today, housing makes up nearly two-thirds (65 per cent) of all Australian household assets. In dollar values, that equates to $2.7 trillion, so you can imagine how strong that fence needs to be.

So, it was interesting this week to watch our very own “Governor of Moolah” evading the issue of when he will raise the rate this year. Since June 5, 2002 we have had three +0.25 increases. America has just had two in two months, and there is plenty of action in the “Old Dart”. Since November they have had five increases with the latest increase going from 4.5 per cent to 4.75 per cent, their highest levels in three years. Our highest level in recent times was 6.25 per cent back in August 2, 2000 just before the Sydney Olympics. Despite the rate rises, house price inflation in the United Kingdom jumped in the second quarter of this year. The average price of a home jumped 17 per cent, which was their biggest jump since the first quarter of 2003. So it would be fair to suggest that our property market is simply healthy, wealthy and wise. It is somewhat ironic that those expressing the most concerns are the real estate agents and agencies alike, who are engrossed in a battle of survival of the fittest. With supply at record lows, agencies are now looking at what needs to be implemented to ensure that they will continue to be recognised as a formidable force in the eyes of the public. For many (with respect), they should have been looking at this quite some time ago.

On September 12, 2004 we will celebrate our fourth year anniversary for “Virtual Realty News” and that is when we entered the world of e-business. I guess for us, the proof is in the pudding as currently we have made 140 Internet subscriber sales with a value of $235,564,100 and we are on the way to increasing our annual turnover threefold. To mark our anniversary we will be going live on September 10, with a totally new website and branding of RWM.

“Hitwise” has just concluded its annual survey and the results are sensational for the truly online businesses. They revealed that traffic increased at enormous levels with travel up 44 per cent, employment up 30 per cent, and property up 28 per cent. Overall for business and finance – property, realestate.com.au finished first, domain.com.au came second, ljhooker.com.au came in third, property.com.au came fourth and realestateview.com.au was fifth. With regard to ljhooker.com.au it should be noted that, in its network, it does not have a single stand-alone office website. If you are not hosting your own website you are missing out on an amazing journey, as one of the major reasons the property industry has enjoyed such success is significantly due to its marriage with the Internet.

It is that time again when we all start singing Aussie Aussie Aussie oi oi oi !! Whilst some believe that the property market will once again come to a halt, we don’t subscribe to that theory. It was totally different in 2000 as the Olympics were here in Sydney.

Greece is a long way away, so we will be catching highlights at home in the evenings. If the Aussies perform well so will the property market, as success breeds success!! One must not forget that many, many property voyeurs have also won gold medals in their chosen sport of real estate !! Cheers and clink, there is no better feeling than being an Aussie when the Olympics are on …… ^__^

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14.08.04Robert SimeonNo Comments »

It is that time of the year when we cruise along Adversity Avenue and Determination Drive, making sure that we bypass Struggle Street as the market enters the final run for 2004. Our ‘Governor of Moolah’ has opted not to apply a rate sting. November is his preference with another annual market slap aimed more at the annual credit card Christmas curse. The only clear pattern that appears to be evolving is that supply for the remainder of the year will continue to be restricted, which will guarantee that housing prices remain constant. Despite current speculation in relation to the overall property market, for the past eight years the bricks and mortar debate has continued to demonstrate a recurring theme. We see no reason to suggest that the coming selling period will show too many flat spots, although we are now coming to terms with the fact that much of the glamour and stimulation ‘have now left the building’. Although, that recurring theme still remains as music to our ears !!

Should the property market look for any reassurance, one only has to cast an eye at the continual strength of our economy. The all ordinaries index has exceeded expectations having risen by thirty per cent over the last eighteen months. This can only strengthen consumer confidence. Unemployment levels currently at 5.6 per cent are the lowest in 23 years. Our economy is now in its thirteenth year of economic expansion, and the gross domestic product is forecast at 3.8 per cent in 2004. It is blatantly clear that our economy is well managed. Today, many businesses that endured the hardships of the early nineties are applying the mental notes that they experienced then, to ensure that the mistakes made, will today, only remain a history lesson. We were told that every Olympic city goes straight into recession at the completion of the games, however Sydney refused to take notice. International distractions such as the Asian crisis, and the dot com crash were simply parked in Determination Drive.

What is difficult to fathom is the demise of the auction market, given that the market dynamics of supply and demand should guarantee a much stronger performance. The anecdotal evidence on the property market’s door step is that in comparison to last year, numbers of properties auctioned were down fifty five per cent. Last month just 934 properties were up for auction compared to 1446, just twelve months prior. Unfortunately, the “hopeless” system of recording the data does not show us how many homes bypassed public auction, preferring the methods of private treaty and expressions of interest. Over the coming months we anticipate that agents will apply preferential treatment to clandestine home sales, which will confuse the data records even more.

The major property portals are experiencing increasingly strong Internet activity, which clearly identifies that property voyeurs feel very much at home with this medium. We are on average, adding between sixty and ninety new subscribers a week, and we are witnessing a healthy mix of local and overseas subscriptions. This week, two separate blocks of 4 x 2 bedroom apartments at 2 – 4 Lavoni Street Balmoral sold for $5,735,000 which is a very healthy price as they sit on approximately 1400 square metres of land. The successful purchaser was an expat, and the word is that both blocks will be demolished to make way for a single residence. Just another example of the strength of the ‘Mosman $’. It is one of the strongest currencies in Australia. Last month our highly talented Apartment Division, exchanged eleven properties which was a record in terms of volume. Yet again that recurring theme is an even balance between first home buyers and investors.

So we continue down the road of character addresses and by all accounts it will be business as usual. Struggle Street is certainly not on our flight path, although the Federal Election may briefly stall the market’s retention period.

Thanks to Geoff Grist for the last two editions whilst I sampled the ‘Bintangs of Bali’. For the month of July, Bali was full of Aussies, and that beautiful place in paradise has well and truly recovered, I just can’t say the same for my liver !! Here we go again cheers and clink !! ^__^

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7.08.04Robert SimeonNo Comments »

Archicentre, the architects’ building advisory service has reported its finding this week that the costs of renovation have jumped up in the last 12 months by 10%. According to Archicentre, the costs are related to the lack of apprentices in the building industry, which means we are paying more for fully qualified builders to knock up a side gate because there is no cheaper help around.

It’s easy to see that anything we do to make our homes more comfortable will cost us money, which we expect to get back when we sell it. We invest in the property now, for a better return later. When we renovate extensively, we expect a premium price when we sell down the track. As more Australians buy expensive houses, the simple result is, “more expensive houses”.

The rapid rise in residential property prices over the past few years is the result of many factors including the ability of more households to borrow more money. The rate of growth in housing supply is relative to the growth in the number of households. Right now, prices are holding, so don’t expect much growth this year. If you are planning a major renovation then you are probably planning to stay in the house for at least another couple of years.

Yesterday, the Bureau of Statistics announced that the cost of building a new house rose 5.3% in the past year whilst the cost of non-essential luxury goods has dropped. Whilst it will cost us more to have the builders convert the spare room into a media room, the cost of fitting the plasma TV and entertainment system has dropped by about 20% since last year. That new garage will be 10% more than last year but the new car to go in it, is down nearly 3% – so what are you waiting for!

Even in a flat market, the number one topic of the Mosman Café scene is still real estate and the number one sport is now speculating on what other people’s property might be worth. Yesterday, the Treasurer predicted that inflation will remain in the Reserve’s target range, suggesting no interest rate rises. Many economists however, are backing a rate rise late this year!

Whilst the figures released yesterday show a decrease in the cost of domestic travel and accommodation meaning we can take cheaper holidays in Australia, they also report a rise in the cost of beer and takeaway food when we get there.

Like other markets, the Sydney real estate market travels in cycles, is subject to highs and lows and is naturally influenced by a variety of factors. The key economic factors of historically low interest rates, strong levels of migration, high employment rates and solid economic growth, all point to positive influences in the property market for the next financial year.

Importantly, the Sydney market is made up of many niche property markets and Mosman has micro niches of its own so changes across Greater Sydney will have less pronounced effect in our micro climate than might be reported in the general press.

Certainly our outlook for the next few months is for more of the same, although we have already noticed increased interest from buyers and we anticipate an even stronger market activity following the election.

If you are thinking of selling, and you are realistic, you will find buyers still keen to compete for good properties. Robert will be back from Bali in time for VRN next week so thanks for listening, hope to see you at an Open House soon.

31.07.04Richard SimeonNo Comments »

Whilst Robert is relaxing in Bali and annoying the locals with talk of real estate in his beloved Mosman-Neutral Bay area, I will be the resident journalist at RWM. I hope you enjoy my column until he is back.

Home owners shouldn’t be too worried about the paper value of their home, after all most people live in a house on average for eight years and as long as you are living in your home, you can’t realise any profit you might have made.

At the same time, if you buy a home today, there’s a better than even chance that your property will be worth more in eight year’s time. That’s the simple logic that is keeping our office busy with plenty of new listings and plenty of buyers putting their hands in their pockets to buy good properties at a fair market price.

Let’s be realistic, if you bought your current home just a couple of years ago, you have benefited from the heady price rises we all now take for granted. There is no doubt that the overall market has changed, but it’s business as usual here at RWM.

Listen to this……….
It doesn’t happen every day but a case in point is 6 Prior Avenue Cremorne. The property was listed with us on Wednesday last week. We sent out an email alert to our VRN subscribers and placed an advertisement in the Sydney Morning Herald for an Open House on Saturday morning. Two genuine buyers immediately emerged and the property was exchanged two days ago, before the Mosman Daily even hit the streets. Both the buyer and the vendor are VRN subscribers, which is a great example of how (as they say in the TV ads), …it pays to belong.

Whilst we know that every property is different and the market changes all the time, nothing will alter the fact that people buy and sell property regardless of what the media tells them. We all know the reporting methods for the data are so much in conflict with one another, that they can’t be taken seriously. There are at least four different reporting indicators confounded by issues of poor timing, the type and mix of housing included or excluded (houses comes in all different shapes and sizes and locations) and importantly, the quality of the actual properties on offer. Those TV renovation shows really do have a lot to answer for!

The next question that will be asked, is what effect will the election have on real estate? Our experience over the past thirty years, has shown that many people sit on the fence until the election is over. This will lessen the competition from buyers in the market, and also restrict stock. So the balance is usually even. What normally happens is that those who buy now and before an election, do better than the fence-sitters who procrastinate and are overly cautious!

Our tip……….
If the property is right, buy it! More than likely you’ll be there for more than eight to ten years and you can’t go wrong anyway. And remember, “Fortune Favours the Bold!” Make the most of a good opportunity.

Regardless of what the media reports, we prefer to listen to our buyers and sellers on a daily basis and get on with the business of real estate rather than worry about a “bad news” headline that is written to sell papers. That’s it from me, I have to go and spend some quality time with my kids watching The Block!

24.07.04Richard SimeonNo Comments »