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Twelve months ago all we were looking for were “green shoots”. Our economic gardeners are now embarking on a crash – course of selective pruning (and I’m not talking ‘whipper snippers’). Australia appears to have bloomed too early and the economic chainsaws are sharpening their jaws. Now it is not the “buck”, rather the bulbs, that are firmly placed in the economic gardening gloves of The Emperor (Kevin Rudd) – let’s hope he has a green thumb!

Yes, the last twelve months have been a roller coaster ride that continues to gain momentum and what remains to be seen is whether as an economy, we can stay on the tracks – the alternative is not pretty if one is reliant on the cash rate remaining low. Many borrowers will find out first hand, that fortune does not always favour the brave when it comes to bricks and mortar.

The Australian Bureau of Statistics (ABS) announced this week, that consumer prices increased by one per cent during the September quarter which was a direct result of higher prices from electricity, petrol and utility prices. Fort Fumble treasurer, Wayne Swan, was quick to emphasise that the economy was continuing to operate below capacity. Capacity is this week’s economic measure of confusion – too much stimulus, too much debt, too much immigration and possibly too much spin. Each and every cash rate increase by the Reserve Bank of Australia (RBA) is a further burden to consumers and property prices have eclipsed recent records (we all know this is defined by capacity).

Is this Sydney’s coldest beach? Competitors in the World Masters Games thought so as the water was too cold – now they are demanding a refund. Photo: Tim Mooney Photography

www.timmooneyphotography.com

So Wayne Swan thinks our economy is operating below capacity? Australian Property Monitors (APM) yesterday released its September House Price Series Report and here are the key statistics.

• Nationally, house prices jumped +3.7 per cent and unit prices + 3.4 per cent in September quarter
• Strongest quarterly growth in house prices since 2003
• National house prices up 7.1 per cent in 2009
• Melbourne experienced strongest house price growth, up 12.3 per cent in last six months
• House and unit prices rise in every capital city in September quarter

Wow – if this is an economy running under capacity, just imagine what happens when it grows with confidence. The Housing Industry Association (HIA) announced this week, that new home sales fell in September and nationwide sales dropped 4.5 per cent which is in direct contrast to a 11.4 per cent increase in August.

Source: Australian Property Monitors

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Source: Australian Property Monitors

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This week Taylor Fidan and I extrapolated all house, semi, apartment, and townhouse sales in Mosman from January 1, 2006 to October 19, 2009 – in total 3,054 sales. Here are our findings (houses this week and apartments next week). I wish the property data aggregators would offer this data as it is very time consuming to compile but, then again, such information has never before been presented on a public domain. We present another Richardson & Wrench Mosman & Neutral Bay (RWM) first.

Source: DomainPropertyData
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MOSMAN HOUSES/SEMIS SOLD – I JANUARY 2006 TO 31 DECEMBER 2006

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0 – $1,000,000

44 sales

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$1,000,000 – $2,000,000

177 sales

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$2,000,000 – $3,000,000

97 sales

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$3,000,000 – $4,000,000

49 sales

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$4,000,000 – $5,000,000

27 sales

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$5,000,000 – $6,000,000

9 sales

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$6,000,000 – $7,000,000

10 sales

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$7,000,000 – $8,000,000

3 sales

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$8,000,000 – $9,000,000

1 sale

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$9,000,000 – $10,000,000

1 sale

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Above $10,000,000

5 sales

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Total

423 sales

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Undisclosed

22 sales

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MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2007 TO 31 DECEMBER 2007

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0 – $1,000,000

30 sales

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$1,000,000 – $2,000,000

144

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$2,000,000 – $3,000,000

115 sales

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$3,000,000 – $4,000,000

53 sales

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$4,000,000 – $5,000,000

39 sales

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$5,000,000 – $6,000,000

13 sales

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$6,000,000 – $7,000,000

10 sales

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$7,000,000 – $8,000,000

9 sales

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$8,000,000 – $9,000,000

1 sale

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$9,000,000 – $10,000,000

2 sales

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Above $10,000,000

10 sales

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Total

426 sales

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Undisclosed

30 sales

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MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2008 TO 31 DECEMBER 2008

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0 – $1,000,000

26 sales

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$1,000,000 – $2,000,000

110 sales

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$2,000,000 – $3,000,000

78 sales

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$3,000,000 – $4,000,000

37 sales

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$4,000,000 – $5,000,000

27 sales

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$5,000,000 – $6,000,000

14 sales

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$6,000,000 – $7,000,000

2 sales

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$7,000,000 – $8,000,000

5 sales

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$8,000,000 – $9,000,000

3 sales

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$9,000,000 – $10,000,000

3 sales

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Above $10,000,000

3 sales

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Total

308 sales

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Undisclosed

52 sales

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MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2009 TO 19 OCTOBER 2009

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0 – $1,000,000

19 sales

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$1,000,000 – $2,000,000

77 sales

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$2,000,000 – $3,000,000

38 sales

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$3,000,000 – $4,000,000

20 sales

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$4,000,000 – $5,000,000

9 sales

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$5,000,000 – $6,000,000

2 sales

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$6,000,000 – $7,000,000

1 sale

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$7,000,000 – $8,000,000

1 sale

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$8,000,000 – $9,000,000

1 sale

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$9,000,000 – $10,000,000

0 sales

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Above $10,000

2 sales

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Total

170 sales

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Undisclosed

73 sales

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2009 is still a work in progress – however it should be noted that the volume of sales remains on the conservative side. We would be lying (not our style) to suggest that the Mosman market is also in boom with houses.

UPDATE

– last week we reported 2009 Mosman house/semi sales were at 243 sales with a value of $483,925,627. We can advise that this week, sales increased to 258 with a value of $512,781,127 (still $321,596,485 in deficit from last year’s total house/semi sales). The 73 undisclosed sales (thus far) may reveal a few secrets.

Which leads me back to capacity – where it is abundantly clear that the cost of living is on the rise and it would come as little surprise to see the inflation genie touch five per cent again.

The capacity to understand as against the capacity to compete beyond ones means is clearly evidenced by sales volume in Mosman – arguably the strongest property municipality market in Australia.

In summation – I draw your attention to this recent commentary by Alan Jones at radio 2GB.
“… a note that was sent to me which explains to me that six leading members of the Government from Mr. Rudd down, the top six have a collective work experience of 181 years, but only 13 in the private sector.

If you take out those 13 years the number that were spent as trade union lawyers that total 11, of the 181 years only two years were spent in the private sector.

So the people, who will rack up a net Federal debt of a minimum of $188 billion, the highest in our history, have virtually no experience in business.

So out of the 181 years:

- No years spent running their own business – no years spent starting their own business – no years spent as a director of a family business or company – no years as a director of a public company – no years in a senior position in a public company – no years in a senior company in a private company – no years working in corporate finance – no years in corporate or business restructuring – no years in or with a bank – no years of experience in capital markets – no years in a stock – broking firm – no years in negotiating debt facilities with banks – no years running a small business – no years at the World Bank or IMF or OECD – no years in Treasury or Finance.”

Not sure if the Opposition could improve much on these statistics either.

The Emperor promised at the last election campaign, that he would personally deliver one million computers to all year 9 to 12 students within Australia. Currently, just 150,000 computers have been delivered – must be another capacity problem with too much |Ctrl – Alt – Delete|. Maybe he should have focussed on the school band – if bulls@&% was music, you would be a brass band. Alas, I guess The Emperor is too busy taking over our health system – oops! that also appears to be on |Ctrl – Alt – Delete| too.

Cheers and best of luck at the Melbourne Cup – although the odds are stronger on another RBA rate increase. Plenty of capacity growth there – although if the RBA has rates at emergency levels, when does it then become a capacity emergency for borrowers? That would be found on the perceived green (and greener) grass of home. A home is not exactly sweet as it could be gone tomorrow for some. That too, is known in modern media as |Ctrl – Alt – Delete |.

In times of “green shoots” for new housing opportunities, does fortune favour the brave? After all, it was a first, when elected governments started teasing first home buyers with cash hand – outs.

^__^

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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30.10.09Robert Simeon1 Comment »

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Conspiracy theories, myths and madness where property markets were maligned and/or aligned to the meltdown from global financial crisis (GFC) – so where to now? From an agency perspective, it became patently obvious that in the modern era (new media) a very strong online platform is essential and this is why Richardson & Wrench Mosman & Neutral Bay (RWM) has been the Mosman market sales leader in 2009. Our marketing and technology strategies are different to other agencies – our point of difference.

Each week we monitor our online positioning on Google where we have organically positioned our business to be number one on its keyword search criteria for our demographic market such as Mosman real estate. For example, last week’s Google Analytics for RWM identified that direct traffic to RWM is 40.80 per cent, traffic from search engines is 39.91 per cent and referring sites is 19.30 per cent – so our very own website is beating the search engines (just) which is exactly how an online business should operate.

This week we have extrapolated the house and apartment sales data from www.domainpropertydata.com.au for all Mosman real estate sales from 1 January 2006 to 19 October 2009 – which we believe endorses our ‘buy’ recommendation. If you don’t agree, our blog is there for your opinion – otherwise known as freedom of speech.

Photo – Tim Mooney Photography

www.timmooneyphotography.com

No houseboat sales from the GFC either – Mosman battened down the hatches.

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MOSMAN HOUSE & SEMI SALES 1 JANUARY 2009 – 19 OCTOBER 2009

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Part Year
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Total Sales – 243*
Total Value Sold – $483,925,627
Median Price – $1,950,000
Average Price – $2,372,184
Highest Price – $13,200,000 (RWM)
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*This figure is incomplete as some completed sales are yet to be recorded so factor in an additional 10 – 20 % sales growth.
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MOSMAN HOUSE & SEMI SALES 1 JANUARY 2008 – 31 DECEMBER 2008

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Full Year – all sales completed and recorded
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Total Sales – 360
Total Value Sold – $834,377,612
Median Price – $2,220,000
Average Price – $2,709,018
Highest Price – $14,700,000 (RWM)
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MOSMAN HOUSE & SEMI SALES 1 JANUARY 2007 – 31 DECEMBER 2007

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Total Sales – 456
Total Value Sold – $1,230,497,720
Median Price – $2,305,000
Average Price – $2,874,994
Highest Price – $22,500,000
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MOSMAN HOUSE & SEMI SALES 1 JANUARY 2006 – 31 DECEMBER 2006

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Total Sales – 445
Total Value Sold – $1,037,244,630
Median Price – $1,971,000
Average Price – $2,469,630
Highest Price – $15,000,000
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HOUSING MARKET SUMMARY

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Minimal risk – to any outside economic factors which was evidenced by volume contractions over the GFC (manic panic) yet negligible forced sales. Expats have been busy selling currencies where despite the rise in the Australian dollar they still remain well positioned.House sales peaked in 2007 with 456 transactions and dropped in 2008 to 360 sales (96 homes). The value sold, tells an interesting story where in 2007 transactions totalled $1,230,497,720 and fell to $834,337,612 in 2008 (a direct result of a significant slowing of the multi – million dollar properties which we will address next week). The first six months of 2009 were very slow (total sales) but sales quickly escalated when RWM posted $63,000,000 in June (the Mosman recovery?)It will be interesting to see if 2009 house sales (currently $483,925,627) can match the 2008 sales of $834,377,612 and we will update weekly throughout the remainder of 2009. Such are the benefits of subscribing to Mosman’s only online real estate E-Zine.
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MOSMAN APARTMENT & TOWNHOUSE SALES 1 JANUARY 2009 – 19 OCTOBER 2009

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Total Sales – 383*
Total Value Sold – $262,101,227
Median Price – $510,000
Average Price – $722,041
Highest Price – $5,200,000
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*Incomplete data
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MOSMAN APARTMENT & TOWNHOUSE SALES 1 JANUARY 2008 – 31 DECEMBER 2008

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Total Sales – 477
Total Value Sold – $340,078,676
Median Price – $525,000
Average Price – $750,725
Highest Price – $7,500,000
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MOSMAN APARTMENT & TOWNHOUSE SALES 1 JANUARY 2007 – 31 DECEMBER 2007

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Total Sales – 500
Total Value Sold – $389,450,862
Median Price – $530,000
Average Price – $807,989
Highest Price – $4,750,000
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MOSMAN APARTMENT & TOWNHOUSE SALES 1 JANUARY 2006 – 31 DECEMBER 2006

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Total sales – 482
Total Value Sold – $320,918,542
Median Price – $500,000
Average Price – $703,768
Highest Price – $4,000,000
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APARTMENT MARKET SUMMARY

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The figures clearly identify no upward swing as a direct result of the First Home Buyers Grant – so minimal risk to values here also, once the cash rate starts moving upwards. Supply is the key with 482 sales in 2006, 500 sales in 2007, 477 sales in 2008 and 383 (and growing) in 2009. Mosman is a controlled market where it is interesting to observe the annual house and apartment patterns.
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2009 House and Apartment Total Sales

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Houses – 243
Apartments – 383
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2008 House and Apartment Sales

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Houses – 360
Apartments – 482
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2007 House and Apartment Sales

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Houses – 456
Apartments – 500
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2006 House and Apartment Sales

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Houses – 445
Apartments – 482
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Last week, I wrote about the movement of the Global Financial Crisis to a Government Financial Crisis so I thought you would enjoy this article by Peter Spearritt, Trouble in the City, which went online this week. “Australia’s big cities are in trouble. It’s true that they’ve survived the threatened recession courtesy of a vast amount of infrastructure spending, especially on roads, bridges, tunnels and continuing house and apartment construction. Booming real estate markets have hardly eased up, much to the regret of sensible economists.”

“Despite, or perhaps because of, all this growth, big – city dwellers are unhappy. Peak – hour traffic gets worse and worse; the cost of water and electricity keeps going up; and local councils provide fewer and fewer services – yet the rates still rise – and have outsourced almost all new building and renovation approvals, so ratepayers have to cough up for those as well. Some state governments seem so incompetent – New South Wales heads the list – that Armageddon appears nigh.” Yes – that would be our very own Fort Crumble – although I promised myself this week to give our politicians a rest as it appears they have gone to water.

A reason why RWM performs so strongly online was revealed recently when HubSpot (a leading American technology business) revealed that “from 1,531 HubSpot customers (mostly small – and medium – sized businesses) 795 of the businesses blogged and 736 didn’t.

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The data was crystal clear: Companies that blog have far better marketing results (RWM, is the only Mosman real estate agency that actually blogs).
55 per cent more visitors – providing more potential leads and sales
97 per cent more inbound links – increasing search engine rankings
434 per cent more indexed pages – creating a better chance of being found on search engines

Time and time again it has been said that – success leaves clues!

Congratulations to Peter FitzSimons and the over – 45’s Mosman rugby side who won their tournament. Not only were they undefeated, but kept all opposition sides scoreless in the World Masters Games.

The open water swim was a different story. It was called off because the water was too cold when it was measured at 13C (International swimming body’s open swim regulation level is 18C). Fort Crumble pocketed the $220 entrance fees (no refunds) when it was called off at Chowder Bay, Clifton Gardens (Mosman) last Saturday.

It has been brought to my attention that a very well known, respected and highly competitive Balmoral property developer was seen removing a thermometer from his personal esky and observed (reportedly by Brendan Warner from Raine & Horne Mosman) substituting it with the official thermometer. I am not one to start rumours – I write about them.

Another masterstroke to further improve our blog rankings as I’m sure the “Eskimo Pete” will have plenty to say on that! Happy tenth birthday www.domain.com.au

RIP – Don Lane

 

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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23.10.09Robert Simeon5 Comments »

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Much has been written and spoken about the Global Financial Crisis (GFC) where it now appears that the ‘Global’ has been superseded by Governments in crisis. In Australia it is a calamity at both Federal and State levels – (all will be explained later). In modern day speak, our elected governments are now on margin calls where debt ratios have fast exceeded income streams – political policies without pertinent planning? Rolling back budget deficits will inevitably lead to increased new taxes – but then again The Emperor (Kevin Rudd) told us that after all, he is an “economic conservative”.

At the very heart, we have the much publicised economic stoush between the Reserve Bank of Australia (RBA) and Treasury. It should also be noted that the major banks will now override RBA economic policy and collectively set their cash rates. This fundamentally diminishes the once integral role of our central bank. Watch the argy bargy in coming months although it has become blatantly obvious that the banks will outpace RBA cash rate increases – our political piggies will go screaming all the way to the (electoral) markets.

Mosman’s maritime marina captured by Tim Mooney Photography

www.timmooneyphotography.com

The Emperor – our economic Master Chef was at odds with his Apprentice Chef (Wayne Swan) – not to be confused with The Apprentice (different television stations). The Apprentice Chef was busily watering down suggestions that the RBA was at odds with Treasury over the correct economic recipe for Australia. Highlighting a nutritious recipe of economic ingredients, the Apprentice Chef described the tensions as “healthy debate”. The Emperor weighed in and advised that his fiscal stimulus was actually on Auto Chef, as it has an in-built accelerator and a decelerator to cope with shifts in the economy. Whilst nobody on the planet has ever heard of such ingenious economic rationale – one can only hope that this is not a recipe for disaster – as we all know who then foots the bill!

Our real estate markets are now Fort Fumble’s (Federal Government) other recipe for disaster as the 7.30 Report pointed out this week “Australia’s population rising steeply”. Australia’s population is up 2.1 per cent in the year to March, the greatest growth in almost 40 years. To meet demand, we have to build a minimum of 200,000 houses by Christmas next year – and that won’t happen (especially if Fort Fumble increases taxes). Although I did have a chuckle when I read yesterday that Treasury Secretary, Ken Henry, said that reduced budget surpluses due to the global financial crisis could limit the implementation of some reforms to the tax structure. No doubt the growing interest payments on his stimulus (now deficit) are now a major concern. So the Head Teller at the RBA is at loggerheads with the Head Spender over at Treasury. This was always going to happen with the stimulus progressively moving into an upwardly spiralling budget deficit.

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Macquarie Economics Research market notes this week “Understating undersupply” breaks down the mechanics of our housing market. “To understand why there is such a chronic undersupply of housing, we first consider the market for homes from the perspective of first – home buyers. As shown in the chart above, in the short term, the supply of homes is fixed. Thus, when interest rates fall and affordability improves, the demand curve shifts to the right. In our terminology, the level of actual demand rises to the level of underlying demand. In fact, as pent-up demand is unleashed, the actual demand may considerably exceed the underlying demand for a period. But with the supply fixed, in the short term, this would simply be reflected in higher house prices.”

Australia was indeed a different participant in the GFC simply because, unlike other advanced economies, we continued to ‘under – supply’ housing while other comparable countries were in over supply mode.

No better example than this week, when rental prices recorded their slowest growth rate in four years. No reason why, was offered. I believe the reason was the First Home Buyers Grant (money for honey) – now the participants face the banks and probable increased taxes to wind back Fort Fumble’s budget deficit.

 

These are the graphs that explain it all, and forecast double digit house price growth from June 2009 to June 2012. Sydney with 21 per cent growth, according to mortgage insurer QBE’s Housing Outlook.
If you are hoping for a NSW recovery (Fort Crumble) think again. Fort Crumble remains the worst performing state or territory in Australia. The rankings are – Tasmania, South Australia, Western Australia, Queensland, ACT, Northern Territory and then NSW. Surprise, surprise! In NSW in 2008 – 2009, dwelling starts collapsed to the lowest level in 56 years and the total was 43 per cent lower than the average for the last decade.

Should one simply apply economic hindsight as against economic incompetence. If you own property in NSW you will prosper, as long as you reside within 12.5 kilometres of the Sydney CBD. Beyond that point, the planning for infrastructure is archaic.

Rest assured – The Master – Chef is cooking up a storm, even though the retiring Member for Higgins, Peter Costello, announced this week that he saved Australia from global financial crisis. The Emperor (fortunately) inherited all his successful economic recipes. It will be interesting to see how The Emperor decelerates the budget deficit – which will take some cooking of the recipe books.

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Congratulations to our undefeated over – 45 Mosman rugby team, competing in the World Masters Games. The Daily Telegraph captured Peter FitzSimons in the midst of yet another of his brilliant team motivational speeches. I am not sure about the team mascot though – must have been a ring in from the Eastern Suburbs.

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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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16.10.09Robert Simeon3 Comments »

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Please tell the Australian voting public that we made the correct call. The Emperor (Kevin Rudd) is a worried man, given that when interest rates start rising the Government of the day (historically) receives all the blame. Monash University political analyst Nick Economou was more succinct “The Reserve Bank of Australia (RBA) is a game – changer” (where this time around nobody will be able to keep them low). “With the indicators being that the bank is starting to ratchet up the rates, the Labor Party would be thinking ‘we ought to go to a poll sooner rather than later, because if we go as scheduled in November next year, there might be three or four interest rises by then’,” Mr Economou said.

It needs to be immediately recognised that the Global Financial Crisis (GFC) was a direct result of failed business/consumer transactions that occurred outside of Australia which furthermore, explains why Australia was first country out of the crisis. Other than Australia, ( thus far) no other Central bank has raised its cash rate – which begs the question, just what makes Australia different from the rest of the world? Is it a direct result of the Federal and State/Territories artificial insemination of our property markets when they introduced the (combined) First Home Buyers Grant Scheme (FHBGS)?

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Were the property debutantes advised that there remains a strong possibility that the RBA cash rate will move from 3.00 per cent to 5.00 per cent over the course of the next two years? The RBA described last week’s cash rate of 3.00 per cent as its “emergency rate” so what then becomes the first home buyers’ emergency exit rate? Were they simply pawns to keep property transactions ticking over during the GFC? Fort Fumble (federal government) did extend the FHBGS . It has happened before – and it is set to happen again, although this time around the consequences will be dire especially for those debutantes now caught in an interest rate upward spiral.

Cast you mind back to when the cash rate hit 4.25 per cent on December 5, 2001 where South/West Sydney went into a property boom. Then the unimaginable happened two +0.25 per cent rate increases in 2002, another two +0.25 per cent rate increases in 2003 (a property boom year), no increases in 2004, one +0.25 per cent increase in 2005, three + 0.25 per cent increases in 2006 and another two +0.25 increases in 2007. In 2007 South/West Sydney property prices fell by as much as 40 per cent, otherwise known as bank sales (10 +0.25 per cent rate increases). Here are the interest rate movements from July 31, 1996 – October 7, 2009 Cash Rate Target.

 

Macquarie Economics Research went a step further by predicting (and they are usually spot – on with interest rate predictions) that it expects the cash rate to rise by a further 25bp (basis points) before the end of the year, and to reach 4.00 per cent by 2010. In this week’s edition of Australian Economics Interest Rate Outlook “The RBA decided to raise rates sooner rather than later, and the 25bp increase in October was the first step “towards more normal levels.” With the economic data consistently stronger than expected and downside risks dissipating, the RBA now expects growth to be at trend levels in 2010. Consequently, the “basis for such a low interest rate setting has now passed.” No doubt Australia’s weekly clearance rates are being closely monitored on the RBA radar where our recession if you want to call it that was mild when compared to other advanced economies. From September 3, 2008 to April 8, 2009 (seven months) the RBA slashed the cash rate target by 4.25 per cent which still remained the highest when compared to other advanced economies – hardly a Great Depression.

 

If you look at Sydney’s clearance rate (74.2 per cent) this is a very strong result. There were 811 public auctions conducted and many more would have subsequently sold after auction. A combination of record low interest rates, our fastest growing population explosion in forty years and grants to first home buyers – what a cocktail! A report compiled by Access Economics found that Australia’s population grew by 1.9 per cent in the past year, helped by the highest birth rate since 1971. But let’s not forget one other major initiative (if I can call it that) that was introduced by The Emperor in December 2008.

Adam Schwab wrote in Crikey Foreign buyers blow out the housing bubble “ The causes of Australia’s ever-inflating housing bubble are many – artificially low interest rates, government stimulus and a real estate industry devoted to an ever – increasing house price to name a few. However, a less well – publicised factor may also be at play, that is the influence of foreign buyers.”

“In December 2008, the federal government, whose primary goal appears to be maintaining property prices at unsustainably high levels, introduced legislation relaxing rules for foreign buyers of Australian property. The rules were especially helpful for property developers, who coincidently happen to be large donors to the Labor party.”

In search of anecdotal sales evidence I went ran an article on News ”Million – dollar sales force up property prices” Forget the “for sale” sign, the new catch – cry in Melbourne’s leafy suburbs is “duoshao qian”. Victoria’s top real estate agents have begun hiring Mandarin – speaking salesmen to cash in on the property boom. Translated, “duoshao qian” means “how much” And it’s a question being asked more than ever before, The Herald Sun reports. Leading agents say more than 30 per cent of their stock is bought by families from mainland China.

Back to Adam Schwab in “Such is the federal government’s fear that a residential property slump will be a negative at the polls, they have introduced a policy that exacerbates Australia’s housing shortage and prolongs an asset bubble. According to Foreign Investment Review Board (FIRB) data released last month, foreign investment in Australian real estate shot up by more than 30 per cent this year to $20.4 billion.” Wonder when the mirror on the wall will speak about or even repeal this legislation – especially when you look at this.

 

Again, on Crikey, NSW the epicentre of our housing crisis Bernard Keane wrote “NSW is the epicentre of a long – term public policy disaster in housing that will have a major impact on Australia’s recovery from recession.” Technically Fort Crumble (NSW government) has been going backwards for years technically known as government economic retreat. “This graph shows housing and other dwelling commencements in NSW over the past thirty years. Despite wide variations, in the ‘80s and ‘90s housing commencements essentially moved around a band of 6 – 7,000 a quarter. The GST caused a spike and then a sudden drop across the country, and NSW recovered like other states, but then, inexorably, began to decline. Non – house dwellings, which had been growing as a proportion of the total NSW housing stock, similarly peaked and then began falling with housing commencements. The problem lies in the lack of land released by the NSW Government and NSW’s disastrous planning regulatory system, which makes life immensely difficult for developers.”

The Emperor has much to answer – however he has not been sighted since the RBA upped the cash rate this week. I wonder what he proposes with his very own legislation that sent out a universal invitation to buy up Australia. Mirror, mirror on the wall……. our real estate markets have much reflecting ahead.

Tim Mooney will be back with his weekly photograph next week – I forgot he was on assignment this week.

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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9.10.09Robert Simeon2 Comments »

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The Emperor (Kevin Rudd) flew in this week with his economic warriors fresh from the Gala – Yours ‘n Plenty Spend To No End festivities, where our very own MasterChef of economic stardom was quick to see how production of his “Bronzed Aussie” school plaques were progressing. Almost immediately, The Emperor and his trusted Treasurer Wayne (“Sum Ting Wong”) Swan, were perplexed! This nearly resulted in the spilling of their traditional Chinese herbal tea (daily ceremony) when the Opening Statement to Senate Economics Reference Committee by Glenn Stevens was read then (later) explained to them.

First to spruik the findings of this report was Financial Services Minister Chris “Noh Nut Hing” Bowen who must have thought all of his Chinese fortune cookies (better known as Treasury forecasts) had come at once. Breathing fire, much like his favourite red silk Chinese dragon pyjamas, Noh Nut Hing declared “Glenn Stevens today gave a very good endorsement of the government’s actions so far.”

Sadly for Fort Fumble (Federal government) it was a peek –in and duck opening statement when it was revealed that very little had to do with Fort Fumble’s economic cooking techniques – the oil in the prized Fort Fumble economic wok was spitting and burning without the usual high – five spice powder. Puff, the magic economic dragon, was tempered with the consequences of economic chop suey – (lawyers on hold) much like each edition of Virtual Realty News.

Tim Mooney Photography

www.timmooneyphotography.com

So off to the opening statement we go. Glenn Stevens “By the standards of past recessions, however, this was a mild downturn. Although the evidence is as yet incomplete, this episode has been much less serious than those in the mid 1970’s, the early 1990’s.” What, no mention of the Great Depression? Fort Fumble revealed this week that the final outcome for the 2008-09 year was a deficit of $27.1 billion – a $5 billion improvement on the fortune cookie (Treasury) predictions of $32.9 billion.

Head economic waiter of Yum Cha proceedings Wayne “Sum Ting Wong” Swan, announced from his economic kitchen “the stronger than expected final budget outcome does not substantially diminish the fiscal challenge imposed on the Australia by the global recession, which has resulted in the largest fall in budget revenues compared with its comparable budget year forecast since 1930-31.” Obviously Sum Ting Wong was acknowledging a point that the Reserve Bank governor missed?

Glenn Stevens “So I think that it is reasonable to conclude, against the benchmarks of historical and international experience, that Australia has done quite well on this occasion.”(No mention of stimulus.)

“Why was that so?” (A Cadbury chocolate moment?)

“First, our financial system was in better shape to begin with, being relatively free of serious problems the Americans, British and Europeans have encountered. “ Umm would that allude to the collapse of HIH when the then government introduced prudential authorities? Obviously a coincidence, learned consumers of fine economic dining may think!

“China will easily achieve her 8 per cent growth target this year, led by domestic demand.” No doubt The Emperor arranged for his school plaques to be made in China.

Last but not leek, “The Commonwealth budget was in surplus and there was no debt, which meant expansionary fiscal policy measures could be afforded.” Past Prime Minister John Howard was last seen doing the cha-cha on his daily morning Kirribilli walk and was observed looking at one particular signboard.

Last Saturday, 682 Sydney properties were offered to the market – eclipsing the previous record of 571 homes and apartments set back in March 2007. Many suggest that this is a direct result of the first – home buyer’s grant which was halved this week. From October 1, the First Home Buyers Boost was reduced to $10,500 for existing homes and $14,000 for new homes – both subsidies will be scaled back to $7,000 next year. What happens to property prices at the lower end is anyone’s guess although increases in interest rates must be factored in. Already there are strong suggestions that we will see the Reserve Bank of Australia (RBA) increase the cash rate in November and again in December. This is self explanatory when you look at the following graphs which provide a compelling reason as to why lower income households will definitely be vulnerable. Given it is a long weekend, here is the RBA Housing Market Developments Report (an interesting report).

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Quite amazing! We are presently experiencing record immigration growth and a major concern is that building approvals fell 0.1 per cent in August according to Australian Bureau of Statistics (ABS) figures. Maybe a clue for the Henry Tax Retort (oops I meant Report). The RBA estimates that the underlying demand for new houses annually, is around 180,000 to 200,000 and we are not even close to meeting these consumer demands which explains the current housing patterns.

It is a very hard market to predict given the above data which identified national property values climbing by 2 per cent in August which is the highest monthly increase since RP Data – Rismark Home Value Indices began in January 2005.

Mosman is a much easier market to predict given that house volumes are at record lows and I’m not reading tea leaves either.

Richardson & Wrench Mosman & Neutral Bay was again awarded the number one sales agency in the Richardson & Wrench network last Saturday night. A fantastic team effort and special thanks to the nights major sponsor the REA Group.

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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2.10.09Robert Simeon12 Comments »