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With Robert still sunning himself in Thailand, I will make today’s report brief, as I know I cannot compete with the master!

I think Richard Simeon’s column last week sums up my opinion of the market as well. For the first time in 12 months, we are getting some positive reports from economic advisors.

I, like many I am sure, get up every morning and switch on to the international business channels on Foxtel. It gives a reading or a ‘pulse’ of what is happening around the USA, Europe and the UK. For the past nine months, it has been depressing to hear the daily doom and gloom. Lately however, although the news has been cautious, it has been more up-beat and positive. The stock market seems to have bounced back of the bottom and stabilized and this is what I believe has also happened to our market.

Tim Mooney Photography

www.timmooneyphotography.com

As you know, our recent spate of sales in May-June saw us selling lots of houses and units…….a pleasant change, I must say!

Because the market has bounced back and stabilized, the bargain hunters will struggle to find a bargain and will have to pay a fair market price – I repeat ‘fair’, not bullish.

I feel people who bought in the past six months, may have bought at the bottom, although not all were at bargain prices. Some prices were very strong, because they were prime properties in prominent positions.

I had a meeting with an old real estate colleague this morning, who has been in the game for 25 years. He is marketing a project at ‘Top Ryde City apartments’ which is a huge retail, commercial and residential development in Top Ryde. It is apparently the biggest development of its type in Australia.

Tony tells me that last week end, they sold 47 units off the plan – not to first home buyers, as they are too dear for that market. All the buyers are local families and investors. This shows that the tide has turned and people are confidently getting back into real estate. Tony’s comments were ‘we are coming out of this downturn much faster than the early 90’s, which dragged on for three years”.

The local market is short on stock not short on buyers, so this in itself, will keep prices steady. So I think it may be time for the ‘fence sitters’ to make a decision and get back into the market before they miss ‘the best home for them’ by being too price sensitive and not practical.

I hope everyone has enjoyed a great school holiday break and look forward to seeing you at the ‘opens’.

Cheers,

Steve

P.S. For all those interested rugby followers, the Mosman U12’s Cuda’s tour of N.Z. was a 3-0 white wash for our local team – winning all three games in Queenstown. Luckily, Robbie Deans who lives in Mosman now, can run his eye over some future Wallabies!!

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

31.07.09Stephen Patrick2 Comments »

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While Robert takes a well earned Winter break, I’ll step into the chair this week and give you a break from the politics and the stats and talk directly about the market from the coal face.

In a year or two will you look back over the last 12 months and realise you’ve lost an opportunity? Only time will tell. Let’s reflect briefly on the facts and move forward, based on evidence and current trends. On reflection, over the last 12 months, buyers were initially and justifiably seeking their revenge against property prices that had become inflated. By mid 2008, they were trying to pick the bottom of the market and by the end of 2008, the vast majority of buyers had decided not to purchase, unsure of whether we were entering into a deep recession. Those that were not adversely affected by the GFC (Global Financial Crisis) sat back in the hope of further price drops and more choice as ‘distressed’ properties came onto the market.

Tim Mooney Photography

www.timmooneyphotography.com

The first quarter of 2009 was disappointing for longer term purchasers as they saw prices starting to stabilise, while low stock levels remained. By the second quarter, sentiment was starting to pick up and buyers revisited the stock that had not sold. This resulted in a doubling of weekly inspection numbers compared to previous months. In May–June we sold 80% of our entire stock – $61,000,000 worth of property and 90% of the prices achieved were in-line with, or above, vendor expectations. There were no ‘fire-sales’. These results speak for themselves and the property sales ranged from $2m re-builds to $8m residences.

As I talked with and gave advice to a continual line of vendors and purchasers, a few trends emerged. Discerning vendors, although not pressured to sell, had taken this as an opportunity to sell first, then re-buy in a softer market thus realising a greater financial upside than if they traded up in a ‘bull-market’. Those purchasers who were cashed-up and wanting to move forward with their lives have been able to secure an ideal property for a realistic price and with less competition than normal. Having said that, the relatively low stock levels meant that purchasers have had less choice and this has assisted in keeping prices stable.

Moving forward, I believe this is a good market for both vendors and purchasers. Australia seems to have weathered the financial turbulence relatively well and we are seeing slightly more desperate purchasers, who have been in the market for up to 12 months, keen to buy in the coming months. Property prices have stabilised and with purchasers wanting to proceed more quickly, the typical ‘days on market’ period for new listings should reduce dramatically.

As school holidays conclude, expect to see some new stock entering the market, but perhaps not at the same volume as in previous years. Vendors who do wish to sell should ideally be planning to sell early in Spring to give them as much time as possible to secure their new property this year, in the same property cycle. Although we are seeing a return of more positive sentiment, cash is still king, so take advantage and buy in the coming months (although we still predict stock levels will remain well under demand).

Many of our clients use us as “real estate advisors,” whether they are looking to sell or buy. As with any good investment advisor, our focus is to help you plan for your long term success, in line with your expectations and ideals. We assist, educate and empower every purchaser to proceed, and, at the same time, focus on exceeding the expectations of our vendors. This results in a win for both parties.

So whether you plan to sell, buy, or both, we wish you well in the coming months and hope to see many of you out there in the market. If you need a sounding board or constructive property advice, we would be delighted to contribute to your knowledge base, so don’t hesitate to pick up the phone.

Kind regards,

Richard Simeon
Director

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

Here is a link to a property portal survey that only takes about thirty seconds to complete www.aussierealestateportals.questionpro.com Your participation would be very much appreciated.

24.07.09Richard SimeonNo Comments »

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First the global financial crisis (GFC), then Great Depression Two, then Google and now our economy, Graduating with flying colours. The Spring/Summer real estate market will bear no resemblance to the one we experienced twelve months ago. The GFC has brought about many market corrections in property prices, interest rates, wealth and public perceptions. Our share market has just posted three days of strong gains so it is “steady as she goes.”

I have said it before and I stand by my previous comments, that in the recession of the early 1990’s, there was no Internet and no electronic information highway that today, has played a dominant role in the recovery process. When we look at our print spends with Domain North/Saturday Domain and the Mosman Daily/Cumberland – 1 July 2007 to 30 June 2008 and 1 July 2008 to 30 June 2009 the expenditure was twelve per cent less in the last year. In the GFC, if we break this expenditure down from 1 July 2008 to 31 December 2008 and 1 January 2009 to 30 June 2009, the expenditure with Fairfax and Cumberland is down 39 per cent (approximately). This reflects vendor concerns with print which, when compared to online advertising, is much more expensive.

Tim Mooney Photography – Bungan Head

www.timmooneyphotography.com

2 – 4 – 6 – 8 dig in don’t wait! The online real estate market received a major wake–up call last week after Google entered the Australian online real estate market. The online manoeuvres have been most impressive as institutions (real estate agencies/ Head Offices) compete to grab and take advantage – only to learn that location, location, location is not that simple and can be short-lived. The Google Maps release (designed here in Australia) is strategically designed to keep real estate enquiries under the one Google consumer umbrella. We have attached a property portal survey that only takes about thirty seconds to complete http://aussierealestateportals.questionpro.com/ Your participation would be very much appreciated.

Having said that we have no plans to depart from www.domain.com.au and www.realestate.com.au However, like every business, we will continue to monitor online eyeball enquiries from these property portals. The Google Maps release is great for our industry as it challenges the Domain and REA business models – better known as ‘competition’. At this point in time, Domain and REA have refused to allow their respective pages to appear on Google Maps, although both remain huge advertisers on the Google pages with Google AdWords.

Whilst the announcement was hush–hush, the serious online real estate agencies were laughing as years and years of dedicated work were finally being acknowledged on Australia’s number one search engine. For example, when one is searching Google for Mosman real estate, the agency that appears on the first page has a definite advantage. Unless you are prepared to pay for Google AdWords which cost per enquiry, the other alternative is to grow your online business organically by feeding the search engine’s online content.

For example our website now, has approximately 1,800 pages (and growing) of content. Simply put: the smart online agencies have positioned themselves to capture these online markets (Google) for the benefit of the clients they represent – both rentals and sales. Type Mosman into a Google search and guess which agency appears first? And which agencies fail to appear!

It would be reasonable to assume that for the moment it is highly unlikely that our cash rate will fall below 3.00 per cent which is a positive. The United States, United Kingdom, Japanese and European economies are at zero or close to – which denies further interest rate stimulation to these central banks. The defining moment will happen when the June quarter national accounts are revealed in just a few week’s time (just before the Spring/Summer market sales). Whilst it is possible that the June quarter may return a negative result – it is highly unlikely. The overall consensus in the market is that property prices have bottomed but, (always a but) this will depend on the volume of property available for consumption.

The X factor will come down to the banks and the properties they have quarantined until the market recovers which is exactly where we find ourselves today. Factors beyond our control however, real estate has always embraced the X factor. Just as compelling is a real estate market barometer and last week’s auction clearance rates – Sydney 70.5 per cent, Melbourne 82.1 per cent, Adelaide 79.2 per cent. Very high, particularly in a school holiday period. Clearance rates are a fantastic Litmus test and we will be watching them closely through to Christmas.

Again the recovery compass is dependent on the June quarter figures that identify how simplistic economic measures are. After the negative December quarter figures, the March quarter which was expected to confirm a technical recession, saw that quarter return a positive result. Given the data we have been reviewing, it would be an amazing turnaround for the June and September quarters to produce consecutive negative results – alas a technical recession again. Highly and most unlikely, although some schools of thought are that our cash rate will hit zero and property prices will fall by forty per cent.

It is now time for me to take a short break, based on my belief that Virtual Realty News has saved our economy from recession. My equally responsible next task is to remove that much publicised bar mat from the Aussie Bar on Patong Beach, Phuket. A difficult and dangerous assignment, yet I am confident that I am up to it without damaging international relationships too much.

In my absence, editions will be brought to you by Steve and Richard who will no doubt express their views on the market with relish, sentiment and satire.

Tim Mooney is having a clearance sale for his brilliant collection of Sydney Waterfronts – from Bondi to the bridge. Can’t believe how cheap they are and that includes delivery in Sydney. Limited stock available swbook1.

Bon voyage ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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17.07.09Robert Simeon4 Comments »

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The Australian real estate market is an amazing landscape of media commentaries that although initially, in the limelight, have now been be deemed unreliable. Of course the manipulation of the Global Financial Crisis (GFC) has led to a media storm where hired guns are in retreat – and licking (terminal) media wounds. So I could not resist the temptation to re-visit the human headlines relating to our real estate industry since the onset of the GFC.

As Alan Kay once said “The best way to predict the future is to invent it.”

Before the swine flu, real estate markets were subjected to unrelenting forecasts that simply never came to fruition – enter Professor Steve Keen (no doubt humming the words of “Climb every Mountain”) the King of property forecast bloopers. On November 28, 2008 Keen predicted zero interest rates within two years and a forty (40) per cent drop in house prices within five years (double the drop in the United States). Macquarie Bank interest rate strategist, Rory Robertson, declared that “Dr Keen’s gloomy predictions of an Australian housing market plunge had a one per cent chance of being right.” This then prompted Robertson to challenge Keen that the loser would wear a T-shirt saying “I was hopelessly wrong on home prices! Ask me how.” And make a 200km trek from Canberra to Mt Kosciusko. For the record Rory Robertson thus far, has been spot – on with his market predictions.

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Tim Mooney Photography – Manly beach back to Sydney CBD

timmooneyphotography.com
www.sydneywaterfronts.com

When the Reserve Bank of Australia (RBA) met this week, it was prediction time. What would it do with the official cash rate? It didn’t go to zero but remained (for the third month in a row) at three (3) per cent. Whilst the RBA has strong concerns with unemployment, inflation is the growing concern (as I predicted in last week’s edition). RBA governor, Glenn Stevens, said, “The Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed.”

The TD – Securities/Melbourne Institute inflation gauge rose 0.4 per cent in June, following an 0.3 per cent fall in May and no change in April. Annual inflation (measured by the gauge) identified that the rate in May was 1.5 per cent. The RBA’s target range is to contain inflation between 2 to 3 per cent. The inflation accelerants to watch will be petrol, food and household rents which are repeat offenders in the Australian economy.

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Figures released this week by The Australian Bureau of Statistics (ABS) show that, for the eighth month in a row, real estate buyers took out 2.2 per cent more home loans in May (up again from the 0.9 per cent April figures). It should also be noted, that first – home buyers increased from 28.6 percent in April, to 29.5 per cent in May. The Federal Government’s first – home owner’s grant is a concern (another prediction, another story and another day).

The one thing missing from our markets (until June) has been confidence so it came as little surprise to see consumer confidence surging in July to its highest level in eighteen months. The Westpac – Melbourne Institute index of consumer sentiment rose in the month to 109.4 points, seasonally adjusted. The index in July was up 38.5 per cent from a year ago, prompting Westpac Banking chief economist to announce “This is unquestionably a stunning result.” On the back of our $61, 238,200 sales last month, it would be reasonable to suggest that we are not witnessing predictions, rather market affirmations – with no conspiracy theories.

Of greater concern is the continuing decline in construction where house building contracted for seventeen (17) consecutive months in June. Detached home sales decreased by 9.9 per cent in NSW which is based on delayed projects and difficult credit conditions. Too hard for our elected politicians to fathom – even though they launched ‘Nation Building’. Simply put, you can’t put a plaque on a house although you can on a school or a hospital. It is abundantly clear that Ruddy Fantastic has stuffed this up and many are calling Nation Building ‘Plaque Building’ – ah egos at work!

One prediction I did make some time ago was that Google (the online bible) would enter the Australian property market and take on www.domain.com.au and www.realestate.com.au with a free service. Google launched Google Maps at 3.00 pm on Monday this week and the exclusive announcement can be read at www.business2.com.au I have uploaded the video Google release for your perusal or you can see for yourself by clicking on http://maps.google.com.au/

Richardson & Wrench Mosman & Neutral Bay (RWM) is ranked at number one on Google for Mosman real estate searches. I just love it when a plan comes together!

Fort Crumble (NSW government) has been active in the real estate market busily selling our police stations to off-set mismanagement and dwindling coffers. Nine police stations (including Mosman) and another 200 buildings and parcels of land, including the Sydney Fish Market, are now being listed and sold by Fort Crumble’s real estate agent (not RWM). Obviously our inept premier expects our police officers to work from home to keep overheads down.

The unemployment rate was announced this week with a moderate rise, to see 0.1 ppt to 5.8 per cent (prediction 5.9 per cent) NSW (6.5%), Victoria (6.0%), Qld (5.4%), WA (5.1%), SA (5.4%)and Tasmania (4.7%).

A prediction on NSW labor being re-elected? No hindsight required however, there is always the Hope Factor. Many subscribers would have seen television advertorials boasting contributions to a building and jobs creation programme for the state of NSW (another huge tax payer cost). The alternative is to give away our state assets simply because those involved were not intelligent enough to manage our economy in the first place.

It’s no wonder NSW leads Australia in bankruptcy when our very own elected government is staring down the barrel of a Part X agreement.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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10.07.09Robert Simeon4 Comments »

We transacted $61,238,200 in sales (houses and apartments) last month. Fantastic, but we are still aware of the caution that needs to be exercised in the current financial and property markets. Certainly a strong contributing factor was the announcement that in the March quarter 2009, the economy grew 0.4 per cent which saw Australia avoid a technical recession. Economic growth forecasts from the Reserve Bank of Australia (RBA) May Statement of Monetary Policy, predicted that the March quarter would contract by 0.4 per cent and this would then be mirrored in the June quarter 2009. Our subscriber sales broke a new barrier last week and now sit on $909,716,219.

All eyes will obviously be on the June quarter economic growth figures which (if positive) will lead to stronger market sentiment. The Irish economy shrank by 8.5 per cent in the March quarter 2009. The road to recovery will be re- built on small steps, not leaps and bounds.

South Head – Sydney Harbour www.timmooneyphotography.com

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Whilst property prices dropped, it was interesting to see vendors using the cheaper, electronic form of marketing. When this happens, the real estate agencies running hi-tech online models lead the markets simply because they have stronger lines of communication and larger audiences. Just as interesting, is the ever-increasing number of subscribers to Virtual Realty News. Of course this is no surprise, given the growth of social online networking and real estate has an enormous online audience of property voyeurs – a sign of the times.

Did you notice in the aerial photograph, that the Eastern Suburbs has a red tint in its foundations? Well actually, it’s not just the East, but all markets. Australian households have lost a staggering 36 per cent of their financial wealth since the impact of the global financial crisis (GFC). We can now expect the worm to turn, (although very cautiously) based on the report from the Australian Bureau of Statistics (ABS) that the combined wealth of households at the end of March 2009, was $787 billion. In September 2007, household wealth was $1.246 billion. What remains to be seen is when and where cash and bank deposits re-emerge in financial and property markets.

The general “rule of thumb” in property is that one third rent, the second third own with a mortgage and the final third own, without a mortgage. Now it gets interesting as we attempt to track these monetary circular flows of income.

Rent

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The most dangerous demographic, which in recent times has displayed multiple personalities – to rent or become a First Home Buyer. In May 2009 – 7,300 (double 2008 levels) took advantage of government grants in NSW. Australia wide, 19,607 jumped into property and the total thus far is just over 97,000 (anyone else thinking of the subprime model?).

This is a false economy for a number of reasons given that rents continue to climb. New home sales slumped nationwide last month and sales contracted by 5.7 per cent in May. Building approvals fell 12.5 per cent to 9,953 units in May, seasonally adjusted, from a downwardly revised 11,374 units according to the ABS. In the year to May, building approvals fell 22.4 per cent.

The Real Estate Institute of NSW reported this week, that the Sydney rental vacancy rate fell to just one per cent in May 2009 (the lowest recording in twelve months). In a healthy market, the rate should sit anywhere between 2.5 to 3.5 per cent. Alarm bells should be (but are not) ringing as those in rental accommodation are buying (97,000+) which takes us now to those with mortgages.

Home owners with mortgages

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Another tight-rope market given that property prices are recovering (the market has bottomed) and interest rates are at 49 year lows. The RBA is caught between a rock and hard place. It can lower the cash rate further however this decision is based on economic outlook and unemployment – which look on the positive side. The major banks are dealing the cards as they want to increase rates citing higher borrowing costs. The RBA cash rate currently sits on 3.00 per cent which remains unchanged for the last two months. The CPI Inflation Rate year to March 2009 presently is 2.5 per cent.



With Australia’s unemployment rate at 5.7 per cent in May it is highly unlikely that the RBA would drop the cash rate below 2.5 per cent. The lowest cash rate was recorded back in January 1960 at 2.89 per cent. Should the RBA drop the cash rate further, there is no guarantee that the major banks will follow suit.

Home owners without mortgages

These are the main game players given the importance of where they invest their monies. Many moved out of the property markets simply because the incompetent NSW government taxed them out of the financial equation. Despite attractive rental returns, their cash and bank deposits will in all probability head back to the share market. Boston Consulting Group recently announced that Australian companies are some of the world’s best in creating wealth value for shareholders. Their research identified that in the five years to the end of 2008, the Top 100 companies listed on the ASX generated shareholder returns of 6 per cent. Europe (0 per cent), United States (-2 per cent) and Japan (-3 per cent).

Now think of inflation and Ruddy Fantastic’s Fort Fumble (Federal government) where inflation was ballooning way beyond the RBA’s comfort zones due to the three inflation accelerants – rent, food and petrol.

Unlike our business (RWM) Kevin Rudd and Wayne Swan have an online problem and Fuel Watch and Grocery Watch (election promises) which have failed miserably, are nothing more than embarrassing failures.

So what we have now, are banks controlling interest rates, petrol companies running amok (again), and Coles and Woolworths setting food prices! Hardly Nation Building – yet Ruddy Fantastic flagged the possibility of taking ownership of state public hospitals. This week he stated “I was absolutely clear cut about that possibility at the last election.”

No doubt he has plans to implement a Hospital Watch website too!

Australian businesses are doing well, on the road to recovery. Fort Crumble (NSW government) conducted an internal poll and concluded that the majority of its members would not be returned at the next election – shock horror!

Keep an eye out for rental vacancies, interest rates, petrol and food prices and hope that the road to recovery does not become the long and winding road.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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3.07.09Robert Simeon5 Comments »