2008 – Same same (maybe) little difference !!

2008 – Same same (maybe) little difference !!

We predicted at the beginning of 2007, that this year would deliver high yields for property owners and it would be fair to say that in review, prices exceeded all expectations. First hand, we witnessed a change in Federal government and a “first ever” interest rate increase during a Federal election. Just as important, a new Reserve Bank governor declared that this previously tight – lipped institution is now transparent in its concerns and findings which will now be delivered in an open forum. No doubt this new public forum will place the government of the day under increasing pressure given that real estate rental properties continue to drive the Consumer Price Index and this will continue throughout 2008.

2008 – will be a year of spills and thrills. The Mosman market is closely aligned to the share market. So much so, that market analysts consider these property markets to be Siamese twins – what remains to be seen is how “hip” this relationship is. Expectations that property prices will climb higher in 2008 are realistic and this unique real estate market will remain an “exceeding expectations” mantra. Forever a market of intrigue that keeps climbing, where in 2007 street record prices were not just eclipsed but smashed. The home we were marketing in Morella Road Clifton Gardens set a new double digit record when it exchanged this week.

For the very first time, Mosman house sales broke the $1 billion sales mark which clearly identifies the strength in our market. As we stated previously, we believe the house sales figure for 2007 will come in at around $1.250 billion. In 2007 it has not been just houses that have been star performers. For the first time in years, apartments have come back into vogue with strong competition witnessed at all price points. Next year when the dust settles the market will also find that we smashed the Mosman record for an apartment sale so there has been plenty happening in front as well as behind the scenes. The Mosman real estate may not be an exact science, however I’m sure most would agree that it continues to remain a fascinating obsession.

There is now cause for concern as the central banks overseas are reducing cash rates and the Reserve Bank of Australia (RBA) continues to increase rates. Globally, the central banks are all over the shop. We expect interest rates to climb higher in 2008 – not reduce, as is the case with other central banks.

Last month (November) the US Federal Reserve pumped $41 billion (quickly followed up with another $47 billion) into the banking system, which is the most significant prop-up since September 11. Just as interesting, is that the RBA felt generous when they transferred $1.44 billion into our financial markets, its eighth deposit that month. However, you can relax over the Christmas period as the newly elected treasurer, Wayne Swan, would like community input (otherwise known as knowledge) into next year’s federal budget. Wayne Swan commented, “ That is why I am seeking public submissions regarding priorities for the 2008-09 budget.” A presumption of stupidity ? No a reflection of innocence where submissions must be launched by January 18, 2008.

No doubt these thought patterns by Mr Swan were attributed to the findings of a study by Fitch Ratings, identifying the top 10 home repossession electorates recording an average swing to the ALP of 6.7 per cent in the last election, compared to the average NSW swing of 5.4 per cent. Today, we see that the average Australian home loan has risen above $240,000. In Mosman many purchasers pay this in Stamp Duty.

Across the board in Australia today, we see housing affordability at an all-time low and in 2008 the blame will be laid squarely on previous government policy. Quite correct ! Housing affordability was obviously too hard to fix given that parliamentarians were faced with the arduous responsibility of reforming taxation policies.

Many thanks to all those who supported our business in 2007. Subscriber sales commenced in 2007 at $535,204,100 and finished at $687,216,000 with plenty more still to come as we see the market trading all the way up to next Friday. We expect that the Mosman market sales will continue until Christmas Eve.

Apologies for our first ever missed publication last week (once in seven years). The writer was consumed by the Christmas “spirit” – a time to be merry.

On behalf of the entire RWM team we wish you a safe, merry and fantastic Christmas with a brilliant and successful 2008. We now broadcast weekly to (in excess of) 9,000 people in 54 countries. We thank you for your continued support.

Next edition straight after the Australia Day 2008 weekend – cheers ^__^

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