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

Yet again, year in, year out, the property market performs. Although, like most things, occasionally it stops for a breather. 2005 was another example of another strong market (we are talking about the Mosman and Eastern Suburbs markets) with the last few months exceeding all expectations. November transactions broke our all time record and December could very well surpass that new record. This week we have managed to exchange $24,905,000 in property.

Whilst on records, “Merdjayoun”, one of Mosman’s largest private estates sold this week for $11.8 million which is a new Australian record for an under the hammer sale. The previous under the hammer record was 38 Olola Avenue Vaucluse which sold in February 2004 for $9.500 million. “Seacliff” the Burran Avenue clifftop residence which sold in April 2002 for $8.800 million was Mosman’s previous under the hammer record holder.

The successful purchasers of “Merdjayoun” (an expat family) were introduced to the property by Michael Dunn from Richardson & Wrench Double Bay and our very own Stephen Patrick. They saw the property previously, through our marketing campaign and were nominated in writing prior to the auction on Tuesday evening, as per the vendor’s solicitor’s instructions. Maybe the fact that the person bidding on behalf of the purchasers was on Michael Dunn’s phone during the auction, might leave an even bigger clue and in fairness, we were the only ones with their phone number !!

It was interesting to read “Title Deeds, Top Sydney House Sales in 2005″, that appeared last week in The Sydney Morning Herald, Saturday Domain. For those who missed it, here it is again If you include this week’s sale of “Merdjayoun”, fifteen homes managed to join the double-digit club (which is down on the 21 recorded sales last year. Title Deeds reported that there were 10 in 2002 and 9 in 2001. Mosman, and Cremorne managed to post seven sales. The real shaker and mover is the Palm Beach and Whale Beach market, posting four sales. The highest recorded sale in Mosman in 2005 was the $14.75 million dollar sale in Hopetoun Avenue last month. There was a sale at 4 Burran Avenue in June for $14,000,000 with the adjoining property at 6 Burran Avenue for $6.5 million which (combined) totals $20,500,000. I am of the opinion that these are individual sales as they are on separate titles and as we hold the record of $15,500,000 we can afford to be biased on this matter. It was interesting to note that this year’s cut-off was $6.5 million which was up $400,000 from the previous year.

So, what will happen to the property market in 2006? Well, nobody knows and as in previous years, we just turn up and do our best. We believe that we will possibly see no movements in interest rates as next year the “Governor of Moolah” completes his “record equalling” term at The Reserve Bank. As in past years, we can expect a few ‘thrills and spills’ along the way and already we are reading some chilling reports. In last week’s report of the “Eureka Report” one particular article by Patrick O’Leary caught my eye, it was headed “Markets’ Wave of Fear”. Here is what he said, ” PORTFOLIO
POINT: The Elliott Wave is one of the most influential market theories among professional investors. It has ‘called’ some of the most important events in recent years, including the 1987 crash and the 2000 NASDAQ -led decline. Now it is predicting a very severe fall in the US equity market by March 2007. You don’t have to believe the Elliott Wave Theory, but you should know what it means to the investment market; if nothing else it reminds investors not to place too much emphasis on shares in any investment portfolio”. Source www.eurekareport.com.au
Sounds like a compelling reason to back ‘bricks and mortar’ again.

Our Internet sales jumped this year to $416,326,000 which further identifies how quickly the real estate market is moving to online. Next year, you can expect to see the IT savvy agencies experiment with new online marketing campaigns given the high costs of print media. Google will probably be a dark horse in property marketing as nobody outside its inner circle is aware what plans it has for 2006 and beyond.

No longer available on our property menu this week are 15 Rickard Avenue Mosman, 7 Glencarron Avenue Balmoral, 40 Wolseley Road Balmoral, 85 Belmont Road Mosman and 30 Victoria Road McMahons Point. As we predicted, it looks like the property market will continue trading all the way to Christmas.

This is our last edition for 2005 and we thank you for all the fun we have shared throughout the year. We will be back with our first edition in 2006 on January 27. So until then, have a wonderful and safe Christmas and one very big and happy New Year!! Cheers ^__^

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10.12.05Robert SimeonNo Comments »

Woo Hoo !! Looks like we’d better sit down and hang on if we want to believe the amazing predictions of The Organisation for Economic Cooperation and Development. Our subscribers never miss a thing and one very kindly brought to our attention an article that appeared yesterday in The Melbourne Age. “The Organisation for Economic Cooperation and Development (OECD) has forecast steady economic growth for 2006, with data from the September quarter showing a record 18 per cent rise in construction in the past year. Retail sales climbed 0.5 per cent in October after falling twice in the previous three months, while credit from financial institutions jumped 0.9 per cent. However, the OECD estimated that Australian house prices were overvalued by 52 per cent relative to rents, and warned that a correction in prices could trigger a recession.” Many would argue that 52 per cent is on the conservative side, although it does present a strong argument that alcohol should be banned from future meetings.

Whilst on Sydney rents, which still remain at “sixes and sevens” these are not to be confused with the increase in the September quarter of approximately 3.6 per cent. These figures came from the NSW government so we can only assume that they are incorrect. Overall, we have been applying increases from five to ten per cent depending on the property. Although man of the moment, Louis Christopher from Australian Property Monitors said “We think many buyers have been waiting on the sidelines and renting instead of buying”. Not so Louis. When ”Bobby Dazzler” Carr introduced his Vendor Tax, which in turn led to Morrie “I’m sorry” dispatching this tax into his ‘no-brainer’ division, investors had long since left the building. Although it needs to be acknowledged that the ‘State of Decay’ continues to lead the way in tax deformity (not to be confused with reform) and obviously, still has matters well in-hand !! With tax being such an integral part of a democratic government, it is justifiable to increase the number of tax collectors from 734 to 1371 in two years, as was pointed out in The Daily Telegraph. If we put matters into perspective (which more often than not takes the fun out of the equation), we realise that without investors, rents would be higher. Sadly for those in the rental market, the investors continue to abstain from market participation.

It is not that they don’t find the markets attractive – their primary concern is that they don’t trust the government. As we all know, institutions that are facing (possible) bankruptcy, can often do foolish things !!

John “Simple” Symond predicted (in an interview on the Sunday Program November 2005) a further fall in property prices on the eastern seaboard on top of the ten per cent correction in Sydney, the biggest market since the height of the boom. He told Sunday reporter Graham Davis: “Anyone who thinks this softening of the real estate market is about to turn around quickly is in for a shock because this gradual decline, I believe, will go on for several years.” Mr Symond urges those with investment properties especially to bail out as soon as they can: “I would be putting it on the market, because by my reckoning, the price you get today will be higher than that of tomorrow”.

Rental returns on investment properties today, are at the highest level in years. Vacancy levels continue to remain in reduction mode, with weekly rentals on the increase which explains why investors should sell. Obviously, we must be missing some key ingredient that would support this “sell” recommendation.

As we continue with the fight against adversity, we can confirm reports that last week we posted the highest ever sale price for a home in Cremorne. The previous record was $7.35 million and we can assure you that we gave that a good nudge north. As we are under a confidentiality agreement and the vendor(s) are subscribers, we won’t be publishing the price for obvious reasons. What this does identify is that the market at the top end remains strong as long as you get the price right. Agents can often forget that purchasers in the end, value the properties and many of the properties that are currently available were valued incorrectly (and yes, we get them wrong too). Just that some seem to get more wrong than others!!

Exchanges keep rolling through with 61 Raglan Street, Mosman, 115 Deepwater Road Castle Cove, 69 Middle Head Road Mosman and 6/82 Raglan Street Mosman departing our well consumed property menu. With just one more edition left for 2005 the pressure is on to get more exchanges. Unfortunately, The Mosman Daily Christmas parties always have a habit of slowing agent responses for a few days. If you listen to some agents on the night, Mosman has recorded well over 500 house sales this year and many suggested that they posted a good number of quiet sales(maybe it was the beer talking)? Cheers ^__^

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3.12.05Robert SimeonNo Comments »

Aside from proving the obvious, it is amazing how much attention was given to the property market for the September quarter, especially just one month away from Christmas Day. If you have been observing the market, you would have realised that gradually, the property choir would start singing in tune and that is exactly what happened. Yes, the highest number of house sales were recorded since the previous peak in September 2003 and a 25 per cent increase on the same quarter in 2004.

The fact is, that for our markets, the December quarter will prove to be even stronger than the September quarter. The problem is, that you won’t be told officially until early next year, by which time most will say “who cares”!

This week we exchanged $22,240,000 worth of property and we have quite a few more pending, which is proof that the market is back trading with serious attitude. No longer available, a mystery property in Seaforth, Lavoni Street Balmoral, Armstrong Street Cammeray, Plunkett Road Balmoral, Glenferrie Avenue Cremorne Point, Lodge Road Cremorne, 6/82 Avenue Road Mosman and 7/45 Wolseley Road Balmoral.

It is not a matter of whether or not the property markets have bottomed out, it is more about adjusting the values to suit current market conditions which are based on buyer demand. Fortunately, we can rely on our market telltales such as Internet traffic, telephone enquiries, inspection numbers and market intelligence, to assist us. While many blame the market performance on a lack of sales, the one common denominator that often goes unchecked is simply that of price. Presently we are seeing across the market, price reductions as great as $500,000 as vendors try to meet the market in a last ditch effort to secure a sale before market closure in 2005. While most would say that $500,000 is a significant reduction, if the truth be known it was overpriced by $500,000 in the first place. Next year when 2005 homes that failed to sell are re-branded and back in the market place, we can expect the same old adjudication system, when the previous asking price will be compared to the sale price. Then we hear, “my goodness, that is a thirty per cent price fall when compared to what they wanted in 2005″. It isn’t difficult to make a mountain out of a molehill – just add dirt !!

The property market has always been fickle because it can change overnight. This more often than not can be confusing as it allows a short term market perspective to cloud a long term view. As long as businesses continue to post profits, the property future looks bright, although yet again we need to come to terms with the reality that at the top-end we will continue to experience volume declines. These days, many take a view that these properties are their superannuation policy given that they are tax free investments. This has been clearly identified over recent years when you look at who has been buying the top-end properties. Another clue is that if you take a look at a few recent sales at the top end, some had been on the market for a considerable time. This then could cause one to draw a conclusion that prices are set to re-ignite in 2006, although we are suggesting a flame, not an inferno. The property flame has continued to burn despite a serious number of attempts to blow it out. Next year will also see a continuation of the greatest run we have ever witnessed with our property market celebrating ten great years. Who would have ever thought!! With good news there also comes bad news. We will continue to see the volumes decline given that most who have purchased have no intention of selling for quite some time. Given that Mosman has just 4,900 homes to trade with, we can expect the number of sales next year to hit (maybe) 275, if we are lucky. That is down 200 on what we had ten years before when the market posted 495 sales.

With decreasing volume we can be assured that property values will increase marginally in the first quarter of 2006. When home owners go to bed at night, they are not thinking, what is my property worth today? What it was worth in a quarter that finished a couple of months ago has little or no bearing on what is happening in the property market this weekend. Cheers ^__^

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26.11.05Robert SimeonNo Comments »

The dysfunctional process applied to monitor the Sydney property market, continues to resemble that great comedy act by Abbott and Costello, “Who’s on first”. This week Residex, BIS Shrapnel and Australian Property Monitors all had different views, although the consensus was, that prices had levelled and a slight incline was now emerging. At the end of the day, most wouldn’t care, given that the vast majority of participants were home owners, not investors. The investors still remain on the cautious side of the property market so the home buyers who purchased in recent months would share a “long time hold” view. Most people we speak with, monitor web site movements of property in the market and pay little or no attention to this data that continues to fail in a flawed system. If you want to provide an accurate assessment of the property market, it must be done on exchanged properties and sadly, at this point in time, it is not possible.

The BP Award for 2005 easily goes to Google for continuing its merry path as “the quiet achiever”. Although now, a large audience is gathering as it keeps unearthing (not to be confused with GoogleEarth) new clues in its pursuit of on-line domination. “Classified Intelligence”, an advertising industry consultancy, discovered that Google has been busy applying for advertisement service patents. “It’s crystal clear that Google is planning an all-out move into classified advertising” said Peter Zollman, founder of Classified Intelligence. The listing service will be called Google Automat, which is just one of a series of new brand names it has been testing. It is now clear that Google is setting up an on-line payment service called Google Wallet, which will take on the likes of eBay and PayPal. We have been monitoring its progress for months now and it will only be a matter of time before it becomes a serious (some argue that it is now) property portal in Australia. Many of the free property portals may as well close up shop as there is no way known, they will be able to compete. It wont just be the property in its sights, you can add boats, employment and cars. Actually, just add the entire gambit. Maybe the likes of domain.com.au and realestate.com.au will rethink the approach to allow Google access to their templates. Whilst they may argue that in return they gain traffic, more importantly they are allowing them brand awareness. Google continues to bake cakes in its ovens, while developing a perfect recipe to become Australia’s number one property portal.

Whilst on great Internet businesses, this week we did what no other real estate agency in Australia could manage (well, not that we are aware of) when we posted our 222nd subscriber sale to a value of $400,746,000!! Our Internet sales are up 42% on the previous year, which continues to leave vital clues. Cheers ^__^

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19.11.05Robert SimeonNo Comments »

Veer Sharma wrote that FEAR can often be best described as F = False E = Evidence A = Appearing R = Real. Many would argue that John Symond’s comments this week, that the real estate market will continue to fall, adds truth to Veer Sharma’s description of FEAR. My first reaction to his commentary was WTF !! W = Where’s T = The F = Facts. Mr Symond could not offer any facts as to why he thought all investors should abandon the property market. One could imagine that if investors followed his advice the rental markets would be in further turmoil. New research by Australia’s Peak Building Industry Group, HIA, revealed on October 12, 2005 that “within the next eighteen months, Sydney will quite literally run out of vacant rental stock”. We are already witnessing this today with available rental properties at the tightest levels in living memory, together with investor returns increasing as a result of demand. The property market today is in desperate need of investors, with rents very much on the increase. This further contradicts Mr Symond’s take on the property market. We can only assume that he is very much out of touch. Everybody (well most, anyway) is aware that investment property should always be viewed as a long term investment, not as a way to make a ‘quick buck’. The Real Estate Institute of NSW announced this week that in October, residential vacancy rates continued to fall. The city’s rate was 2.4 per cent last month, down from 2.8 per cent in September. It will be lower again in November and again in December.

We are finding today that vacant properties are finding new tenants within days. Rents in nearly all cases are higher which is pleasing for the owners. This week we leased a home in Vista Street after just forty eight hours on the market, the weekly rental jumping from $850.00 per week to $900.00 per week. In real terms, that is actually an increase of $100.00 per week, as the rent is “after tax” money. So why would an investor want to sell in a market where vacancy levels are at historic lows? Investors need to thank the now departed Bobby ‘Dazzler’ Carr for the current scenario given that on May 13, 2004 the Vendor Exit tax was passed and came in on 1 June , 2004. Many investors bailed out leaving the tenants with fewer properties to choose from. The hangover of this tax to the rental market of NSW, is set to get worse and worse. The Premier ‘Morrie I’m sorry’ Iemma suggested last week, that the vendor tax was a huge mistake, “it was introduced at the wrong time and he had never seen such an issue cause such public consternation”. Well, that was from the investors. Very little is being said today about those who now have to compete in a rental market which is very much depicted as ‘revenge of the landlord’. All thanks to a government that got another tax terribly wrong.

So when the markets start looking a tad too comfortable, the economists jump to their well worn spruik to signal that interest rates could be increased. Home borrowings had the fastest increase in three years for the month of September (Bureau of Statistics). Home loans were up by 4.6 per cent in September compared to August, with the average home loan now recording a new high of $218,300. NSW led the way by recording a 7.6 per cent increase which is the largest in just over four years. Even more interesting was the Reserve Bank’s Monetary Policy for November 2005. “The global economic situation is continuing to provide a favourable environment for the Australian economy”. It does not matter what people read into the economy, we gauge the market by our day to day relationships and we like what we see. The simple fact is that when businesses continue to post profits, it reflects in the wellbeing of a community. Mosman has done very well in recent years with values remaining consistent and are more than holding their own.

Another positive week of sales. No longer available 2/5 Redan Street Balmoral, 15B/2 Brady Street Mosman, 39 Avenue Road Mosman, 25 Bray Street Mosman and 77 Bay Street Mosman. The Bay Street sale was interesting given that the purchasers picked the property up on www.domain.com.au in London. They are not subscribers to “VRN”. They exchanged contracts at $3.300m and are yet to inspect the home (physically). Oh! the powers of the Internet. Whilst on the Internet, subscriber sales finished the week on $395,886,000 with the magical $400,000,000 getting closer and closer. Not sure how John Symond prefers his eggs. If his prediction is correct he should be the next Reserve Bank Governor. If incorrect, looks like sunny side up!! Cheers ^__^

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12.11.05Robert SimeonNo Comments »

It may have taken ten months for property owners to come to the realisation that all is well in the land of letter boxes and we are now trading in a market that’s making up for lost time. Timing is always the key ingredient in property transactions and some take more time than others.

A Balmoral residence reportedly sold this week for $14.800M, (land value only) having been in the one family since 1951 (if every owner took this long to sell, real estate agents wouldn’t be the only ones to suffer). However, once this 1785 square metre waterfront was presented to the market, it sold just days after advertising commenced. This sale highlights the strength at the top end of the market given that (for some) such acquisitions are nothing more than an indulgence with the new owners looking for another fifty years of ownership. The sale falls just short of the all time Mosman record posted in 2001, when we sold the neighbouring property for $15.500M. See ‘house of the week’.

Whilst on the waterfront theme, word is out that a Shellbank Avenue Mosman waterfront has just exchanged for $10m. Whilst some have remained tight lipped on the transaction, the fact that the home was previously on multiple websites and now removed, leaves a vital clue. The new owners are not moving far, given their passion for watery boundaries.

Not as fortunate this week was the departure from the Mosman market of Bradley Cooper who is off on a ‘see change’, ‘Bwad’ will feature in our Christmas edition. Most noticeable this week, was the removal of his gold chains for a ‘second hand’ lacklustre bracelet.

Just when you thought ‘Just Missed-it’ had left the offline market, this week they made a very brief comeback in print, with a letter stating that they were collecting their stands. Yes, the stands have been confiscated with ‘justlisted’ stating “the stand is now required for other uses”. Wonder what a second hand stand sells for?

News Ltd upped its ante in realestate.com.au this week to a 51.52 per cent ownership. If it continues at this rate, most of us will be retired before it has complete ownership. What so many fail to realise is that the online operations available today, are far from a fait accompli. Just that many have stalled their respective thought processes, and imagination is a far cry from delivery. The question that I keep asking is that if the offline businesses ie The Mosman Daily or Domain North are so successful, why have they not been taken to the next dimension by delivering online. The pages are already templated and all that is necessary is a street search function, together with a list of the agencies that have advertised in that particular edition. As we say ‘Rome was not built in a day’.

Subscriber sales at ‘RWM’ jumped to $389,785,000 this week so we are not far from hitting the magical $400,000,000, which will be an industry first for this form of marketing. No longer on our property menu are 24 Bapaume Road Mosman, 31 Brightmore Street Cremorne, 5/90 Cremorne Road Cremorne and 22A Grasmere Road Cremorne (all subscribers).

Whilst we have been somewhat silent of late on the ‘State of Decay’, you have to hand it to ‘Morrie I’m- sorry’ and his government for finding a novel new way for investors to sell ‘For Sale’ This could only (well it did) happen in NSW. Cheers… ^__^

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5.11.05Robert SimeonNo Comments »

Those who monitor the property market are usually opinionated and more often than not, most continue to get it wrong. However, the one thing about Mosman participants is that they continue to get it right, with prices more than holding their own.

Most observers would have noticed recently that the Mosman housing market has been enjoying a run with many properties selling within days to a few weeks on the market. Cast your mind back a few months when the average (market time) was as high as ninety days. The question that begs as the property market enters its final stage for 2005 is, will it continue?

Given that the market has recently been artificially inseminated by ‘bankers’ bonuses’ it is impossible to say, however the recent run has injected confidence back into the house market. The apartment market is also enjoying the return of investors, although they still remain somewhat relaxed and content to gather information.

The most interesting alignment that we noticed with the recent housing run was that in most instances (with our sales) the purchasers all enjoyed employment within the banking industry. This is nothing new as bankers have always enjoyed the Mosman lifestyle, however it was more than a coincidence that most worked for the same institution and subscribe to ‘Virtual Realty News’. Also, they don’t have “which bank” stickers on their cars.

Given that many have generously provided themselves with an early Christmas present, many are now asking will this run continue, considering that today we are witnessing the largest property numbers on the market this year. One thing we do know is that the next five weeks will be fierce and the most obvious clue to assess the strength of the market will be evidenced by quick sales (otherwise known as ‘Sold Prior’).

Earlier this week there was much speculation that the Reserve Bank could or should or would raise interest rates. Later on in the week it was a case of don’t and won’t. It would be safe to suggest that the rates will remain the same for the remainder of 2005 with the central bank watching the property market’s performance very closely. It comes as little surprise that the economists predicted a rise in interest rates as they have been wrong with their spins on the state of the property market all year.

Who could forget the best prediction in 2005 (thus far) by BIS Shrapnel chief economist Frank Gebler (not to be confused with Frank Drebin of The Naked Gun) that rates in Australia would be peaking around 8 per cent by mid – 2006. With those predictions, their is a similarity between the two. Frank Drebin: “No…you’re right, Ed. A parachute not opening…that’s a way to die. Getting caught in the gears of a combine…having your nuts bit off by a Laplander, that’s the way I wanna go.”

Realestate.com.au launched their Northern Edition (offline) in partnership with The Mosman Daily this week and it will be interesting to monitor the response they receive online, obviously a sharp increase in traffic. Again this clearly identifies that online businesses still (and for quite sometime will) rely heavily on the offline publications to attract greater traffic.

Just as interesting will be where News Ltd venture with their intention to acquire this portal which remains unsuccessful to date. Their positioning could become stronger if it was to enter the Eastern Suburbs and Inner West property markets next year, simply by following the Fairfax blueprint. We have said time and time again that only two external portals can dominate the market and from what we are monitoring with regard to traffic at other portals nothing has changed our opinion.

Even incoming Fairfax chief executive David ‘Captain’ Kirk said this week in an interview in The Financial Review, that Fairfax can create new print and online revenue streams. “I’m an optimist about newspapers,” he says. “They are a great vehicle for advertisers. I think there are ways we can drive new revenue across our newspapers. Our online positions are growing very rapidly and we need to continue that”.

No doubt he would find this week’s release by domain.com.au, that in September 2005 was a record with 1,188,742 unique browsers viewing over 63.3 million pages of property information.* (* Nielsen/Net Ratings, Market Intelligence (total), September 2005). Also a record number of email leads were sent to clients. An increase of 15.7 per cent to over 120,000 email leads. This figure will decline in coming years given that savvy IT agencies rely on their own alerts. These portals will experience declines with email alerts given that real estate agencies that can’t provide this technology will cease to exist in coming years. We only send out alerts through our database, and have never relied on external sources.

As I have mentioned previously, Fairfax remains in the box seat as they have ownership of the offline publications Saturday Domain, Domain North, Domain East, Domain Inner West and Domain Rentals (clue, they keep using the word record),which combined, continue to act as the perfect driver for its successful online business Domain.com.au.

2006 will be a very interesting year for the property portals – my tip is that News Ltd will eventually acquire realestate.com.au, (this acquisition should be viewed long term not short term), as they need a greater balance of online to offline ownership ratios. Maybe The Cumberland Newspaper Group will be paying a harbour bridge toll, should it too, decide to enter the new markets as Fairfax has done.

The best bonus without a shadow of a doubt, was the awesome news that Phil and Julie Kearns daughter Andie, is making a recovery from last Saturday’s driveway accident. The Mosman community has really rallied behind Phil and Julie, which just goes to show why this little community is so special. I guess when you place this accident in perspective it clearly shows what life is really all about. Cheers to Andie … one very brave and special young lady. ^__^

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29.10.05Robert SimeonNo Comments »

As businesses today seek to find the answers to where they will be in coming years, the common factor is a strong Internet infrastructure. As John Schaar once wrote “The future is not a result of choices among alternative paths offered by the present, but a place that is created. Created first in mind and will, created next in activity. The future is not some place we are going to, but one we are creating. The paths are not to be found, but made, and the activity of making them, changes both the maker and the destination”. The real estate industry today is a classic example of participants who clamour in an effort to gain a greater understanding and dominate the battle of electricity. Agents and agencies today, are warned of a bleak existence and are now being told that in order to survive and become a major force they will need to have a sales team of between six and ten agents. This is further complicated by the franchise system where some agents have just a single suburb to prospect with stock on the decline. That is why we acquired Cremorne and Neutral Bay two years ago as we identified a changing landscape. Never before have we seen such a rapid surge of agencies transforming their core business into electronic driven systems. In simple, what we are now really seeing is ‘follow the leaders’.

Just as interesting was the announcement by News Ltd this week that it has increased its offer on property portal realestate.com.au. In order to protect its newspaper groups it is imperative that it gets ownership of this portal however, it still remains highly unlikely. Fairfax is in a much stronger position given its ownership of domain.com.au which provides them with the luxury of off and on-line domination. What we will (or should) see now is further tweaking of the online strategies that will enable these portals to progress. ‘Just Listed’ (or as we called them twelve months ago when they launched ‘Just Missed-it’),depositing their property publication in the bin this week, it came as no surprise that they are now focusing on their online business. They too are now pursuing potential partnerships and acquisitions. It should be noted that the serious contenders in the battle of those ‘rivers of gold’ need an on-line and off-line business that develop together in harmony.

Today we advertise properties on seven on-line portals including our own and only three return anecdotal consumer results. With the modern day obsession of posting traffic information, it is abundantly clear that whilst you may have traffic it is not stopping on the properties. Each week we receive around sixty on-line enquiries coming from RWM, domain and realestate, with rentals attracting the most responses, identifying that the future is on-line – these being the ‘generation X’ consumers. In the case of the other four, we have never received one enquiry which identifies (in our case) that the free portals fail to attract serious consumers. This further explains why they remain free to agents because if they started to charge, their reactions would then resemble those of the cross city tunnel. What we are seeing again is a classic example of ‘follow the leader’. It is time for the pay portals to take their businesses to another level.

On to that other online phenomenon – this week we posted our 212th subscriber sale with the total hitting $381,040,000. RWM Results No longer available are 1 Reginald Street Mosman, 7A Inkerman Street Mosman and 14 Cabramatta Road Mosman. Increasingly, consumers will find agents asking for email addresses, although studies show that the majority will only subscribe to just three agency newsletters alerts. It will always come back to a point of difference. With our industry moving faster than ever to electronic infrastructures, the agents who just get a phone number without an email address, will definitely become extinct. Whilst we did not write the book, we are the leader within the industry in this arena. Just as John Schaar wrote “The future is not some place we are going to, but one we are creating”. On that thought … cheers ^__^

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22.10.05Robert SimeonNo Comments »

At the end of each quarter, we compare it with the same quarter last year, to see how we are tracking. Given the reduced volumes of properties (more particularly houses) and the pending closures of real estate agencies, it is truth serum time. For the September quarter 2004 in houses, the number sold by RWM compared to September quarter 2005, identified a 70.00 per cent increase, with the total value of houses sold increasing by 93.921 per cent, and sales staff numbers remaining the same. In the September 2004 quarter, our average sale price for a home was $2,374,000 compared to September quarter 2005 when it jumped to $2,708,000. What this clearly proves is that the average price in Mosman for a house is much higher than most are led to believe. For apartments, the number sold dropped by 5.55 per cent, with the total value of sold apartments increasing by 22.454 per cent. In the September quarter 2004 our average price for an apartment was $619,777 compared to September quarter 2005 where it jumped to $803,558. When we reported back for duty in January 2005 our subscriber sales were $277,065,000 and this week they climbed to $372,285,000 which clearly identifies that the electronic side of the business continues to out perform other agencies. This week we sold eight properties to a value of $16,475,000, with eight of our last ten sales going to subscribers.

No longer available are 29 Reginald Street (sold at auction), 42 Medusa Street (sold week one), 17 Illiliwa Street (sold week one), 24 Kardinia Road, 2/38 Botanic Road, 62/16 Bardwell Road, 1/38 Parriwi Road and 75 Hale Road. With more than a few noticing a very strong house market, this should not be confused with the apartment market. The apartment market is active and responding well, however it does not have as much sting as the house market demonstrates at the moment. Investors are back looking however, at this juncture, they are still evaluating their options. This could change very quickly as this week’s announcement by the Housing Industry Association is that “Sydney will run out of vacant rental property within eighteen months”. They attribute this prediction to the decline in investors and the slow approval processes of new developments. We have been calling this one for months now and we currently have just nine managements available for rental. Rents will jump dramatically, which explains why we placed a buy recommendation on apartments some months ago. It will only be a matter of time before the investor “pack mentality” rubs off and like the housing market the lower end of the market is set for a run similar to the current state of the house market. It will be just a matter of weeks, not months for our prediction to come to fruition. The rental market needs investors to relieve the pressure of restricted properties available. At the moment rental demand well and truly exceeds supply, and weekly rental prices are being increased.

For quite sometime, it has been argued that internet enquiries are stronger from www.domain.com.au over the www.realestate.com.au mainly due to the strong readership of The Sydney Morning Herald by Mosman residents. These two portals dominate the real estate industry, so it came as a surprise this week when realestate announced it is now pursuing the offline market by introducing a Northern Suburbs property guide launching on October 27 and November 24. With a 37,000 circulation delivered door to door on the Lower North Shore (22 suburbs in total), and it is free, which is something that we as a business do not come across very often. The powers that be at realestate claim that in similar campaigns around Sydney it led to approximately a thirty per cent increase for online traffic. Not sure what Cumberland Newspaper Group think of the move, however it just highlights that the Mosman market continues to remain in the spot light with the constant battle for those ‘rivers of gold’. The quite achiever at the moment is the move by www.google.com.au into our property market where it links properties direct from the domain and realestate portals – tsk tsk!! Whilst this adds traffic to those respective sites, it also is providing google with market awareness as it allows visitors a much quicker search time. It also means that if it gains greater momentum, it in turn will become a competitor. All realestate and domain need to do is provide a street search facility on their respective home pages and they have matched the google approach. With agents still unaware of optimizing methods, many properties fall off the radar with the google search method, so it will take time for the service to become a comprehensive search facility.

The property markets have eight weeks left in the tank before the market winds down for 2005. So from that perspective it is “make or break” time for many agencies given the reduced number of properties available for sale. We will witness intense marketing campaigns over the coming weeks so again it will be an intriguing market for the voyeurs. From mid December the markets move to 100% online marketing which could be a clue why realestate is so anxious to increase its market share. Whatever the outcome, the businesses that have strong online strategies will continue to out-perform which is exactly what is happening right now. Cheers ^_-^

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15.10.05Robert SimeonNo Comments »

You can always rely on the property industry to deliver interesting twists, and this week’s revelation that the application applied for assessing land values was badly broken, was just too funny for words. Like most things that relate to the government in the “State of Decay” nothing works, be it education, transport, hospitals, roads, the sorry list goes on. When the government puts the valuation process to tender, the big valuation companies walk away and the little guys jump in. The reasoning being – why value a home for $1.50 when they can get paid $2,000.00 to do a professional job. The general consensus is that the current mass-appraisal system simply can never work in Mosman, however it works fine in Campbelltown. It is easy for a computer to distinguish per square metre with a land subdivision out west where you don’t have to factor in a view or any other value distinctions. Also, if you look at most of the suburbs that are listed as being under valued, you will see that the vast majority listed all contain the blue factor, namely a water view. When building out west, the general rule of thumb is $1,500.00 per square metre, whereas in Mosman, it can range from $3,500.00 to $10,000.00 per square metre. Let’s face it, individual data is entered into a computer and that then determines what the square metre rate for a particular area is. One could suggest that in this day and age the current system is as accurate as licking your finger to determine the direction of the wind.

As quick as a flash, the Valuer-General came out and said that will carry out a re-evaluation of every property across the state. Well nothing will change if you still persist in charging out the rate of $1.50 per property, because they are 1,000 per cent off what should be the charge rate. This then identifies that they simply can’t afford to pay the market rate which causes a greater dilemma. It is not a matter of ‘hey presto’, and here is the revised process. What they really need to do is look at where the system is broken and move on from there,(which will never happen). All that will simply happen is that they will wait for the current exposure to die down and in another ten year’s time the NSW Ombudsman will come out with yet another finding. As one of Sydney’s leading top end valuers told me, “When we received the tender document we filed it in the bin. When the day comes to accepting this contract we will close the business and buy a lawn mowing business. Why get paid $1.50 to value a home? Then, if there is an objection you have to respond and you don’t get paid for addressing the issues contained in the objection, it then has to come out of my pocket.” This is just another example of a broken system.

For example, Mosman, where it was claimed that the valuations were out by more than 40 per cent on 21.3 per cent of sales. North Sydney was also said to be out by 40 per cent on 23.5 per cent and we all know that both these municipalities have Sydney and Middle Harbour views. How do you then differentiate between a home with a view as against one that does not have a view, given they use a mass-appraisal system. Then, if they decide to increase Land Tax, the investors walk with housing affordability for rental properties skyrocketing. Not to mention the significant reduction in property transactions which then will severely impact on the Stamp Duty coffers. All that will happen is that the wealthy will buy all the investment properties and milk the rental market for all that it is worth – another no brainer. One must ask the question, why, when the Ombudsman came out and criticised the system, the Valuer-General immediately came out and agreed and then went on to say “we will fix it in five years”. What they are really saying it will be forgotten in five years – nothing changes.

With the “shock” market raising a few eyebrows in the last 48 hours, more than a few eyebrows are being raised at Australia’s strongest currency, the ‘Mosman $’. The market has now made way for urgency with more quick exit sales than we have seen in years. Vendors are now receiving refunds on advertising dollars not spent which is a first in quite some considerable time. Domain North next week is an all time record edition with 152 pages so back to sections one and two. This is a great result for the property market and it will be riveting to see if the property market can maintain its composure or capitulate (I predict the market will hold firm).

The property market is stronger than the Land Tax argument. The only problem is that all associated with our industry were aware that the system was flawed, and congratulations to our State Government who thanked the Ombudsman for bringing this to its attention. Where would we be without them (not going there). Cheers ^__^

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8.10.05Robert SimeonNo Comments »

There is always something happening in Mosman which explains the eclectic mix, but somethings can never be explained, which further enhances the appeal. Take the serenity of our local government where this week it was alleged that the councillors are bringing back the biff. It may be Spring, however we are talking about and entirely different version of the ‘slip, slop and slap’, who would have thought!! Maybe just maybe, the fact that the ever popular cafe car wash (which felt a different kind of heat when it caught fire last week) was depriving the Mosman tractors of their weekly bath and not to mention their drivers of a caffeine hit. Whatever the case, things are heating up and it is just not the property market that is showing signs of vehemence.

The begging question at the moment is, what brought about the sudden change in attitudes to the property market, which is seeing some properties selling within a forty eight hour time frame? We launched a home at 14 Cabramatta Road this week, the first advertisement appeared in Domain North on Wednesday and we took upwards of forty telephone enquiries in the day. We then had an unofficial open for inspection on Thursday where eighteen couples arrived and five copies of the contract were issued. The home is being quoted at $2.250 million so we could see another record price tumble in that street. When we are asked what is prompting the market, we politely respond that “it is a combination of pin stripes and annual bonuses trading places”. The major concern at the moment, is that should homes continue to sell well before the completion of the marketing campaigns, we will surely see price explosions – not implosions, as many have suggested previously. It is well documented that housing volume is well down on past years – although wages for many who reside in Mosman are well up, which explains why all of a sudden the heat is on.

Touche to Alan Kohler who did not miss that BIS Shrapnel are now forecasting (which is another way of saying guessing) that interest rates will be 6.5 per cent next year. What most forgot was that earlier this year, they were forecasting (guessing) that interest rates would be 9 per cent next year. Maybe BIS Shrapnel may like to change its name to BS Shrapnel. In his article “Oil shock to housing shocker”? in The Sydney Morning Herald, Mr Kohler wrote ” This firm had previously forecast interest rates of 9 per cent next year, so it was interesting that the media reporting of its latest report did not say: “BIS Shrapnel cuts rates forecast”. Whilst on the same article it was interesting to read that “Sydney prices rose by about 175 per cent from 1994 to 2004 and have since fallen 10 per cent”. One must note that the 10 per cent figure was based on June figures provided by Australian Property Monitors. It should also be noted that in 1994/1995 Mosman had 495 house sales and this year it looks very much like being under the 200 mark. Alan Kohler also brings out a great e-zine a couple of times a week and it is great reading, if you want to read more simply click on the link www.eurekareport.com.au For the record I am a subscriber, and Alan is a subscriber to ‘Virtual Realty News’ also.

It appears that vendors and agents will now fast track marketing campaigns, given that current marketing campaigns and properties will run through the school holiday period. It should be pointed out that not all sections of our niche markets are consistent with other price demographics. It is still an “each to their own” market and some properties will do better than others which has always been the case. Those properties that have the ‘wow factor’ have always exceeded price expectations and will always continue to do so. Residential home negotiations are an emotional negotiation not a commercial negotiation process, with Mosman always being considered as an indulgent market.

Our Internet sales moved up to $359,825,700 and it will climb even higher next week. Those who are intending to inspect 4 Waitovu Street this week need not bother as it too has sold before the auction date. Congratulations to the vendors – who are also subscribers. If you are interested in a property and you have concerns that it may sell without you getting an opportunity to express your interest, make sure that you have advised the selling agents that you want to be kept in the loop. That way if they sell and you are not advised you have recourse. Have a great long weekend for those who get them, if you are going to the beach don’t forget to “slip, slop and slap” Cheers ^__^

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1.10.05Robert SimeonNo Comments »