Our office will be closed from December 24 until January 4 2010. For any parties wanting to contact one of our sales agents to arrange an inspection during the period that we are closed here are the contact phone numbers.
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Stephen Patrick – 0413 834 848
Richard Simeon – 0411 499 906
Robert Simeon – 0411 856 969
Mark Manners – 0403 032 700
Jacqui Rowland -Smith – 0411 714 442
Marize Bellomo – 0414 972 203
Taylor Fidan – 0423506055
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We wish each and every one of you a very Merry Christmas, a prosperous New Year, health and wealth in 2010 and beyond.
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Twelve months ago in our final edition of Virtual Realty News for 2008 I wrote – “The first six months of 2009 will be hard (not necessarily harder) and I believe the next six months will see a mild rebound leading to much stronger property markets!” As it turned out this prediction was one hundred per cent correct and in June 2009 we posted $63,000,000 in sales – the rest (just like that edition) is now history. Despite an avalanche of doomsday prophecies (and there were plenty) the missing link for the prophets was that they simply underestimated the power of the Internet and smart business models.
Every day, we spend an intoxicating amount of time in front of a computer – reading, writing and communicating. Just weeks prior to our final edition in 2008 I wrote – “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.” Once informed, the decision making process is activated – the dominance of online during the global financial crisis is now a legacy that will continue to grow and dominate.
Some would suggest that it was a stimulus package but I would argue that those prophets would not know the difference between ‘Word’ and ‘Outlook’. Politicians make a habit of wording their outlook differently, based (more often) on spamming the minds of the electorate with nonsense.
The hive of activity as the Boxing Day – Sydney to Hobart race is fast approaching
So what are our predictions for the Mosman property market in 2010? Don’t worry if you blink, as it won’t be moving that fast although we see strong signs of renewed confidence. Housing prices will increase but we see no need to panic because we see upward growth in property values – that is growth (not boom). The Australian Bureau of Statistics (ABS) announced this week that lending for the construction of new homes rose dramatically in October increasing by 5.7 per cent. New home loans have now officially increased in 13 of the last 14 months – population explosion?
Certainly this argument is greatly assisted by the sale of a Perth mansion this week for a new Australian record of $57.500 million dollars. RP Datawrote on its blog this week – “The improvement in equities markets and business conditions has prompted many top end buyers to venture back into the market. For a while there were many bargains to be had – premium housing markets took the biggest value dive of any sector around the country in 2008 and now seeing the biggest jump. Values in the top end are now once again at record levels, having risen 2.4 per cent higher than the previous peak recorded back in February 2008. On an annual basis many of these premium suburbs have recorded some of the largest falls in median house prices however, it is clear with confidence returning many areas are set to bounce back or already doing so.”
Politicians and banks will provide great fodder for Virtual Realty News in 2010.
It has already started with this week’s Westpac “banana debacle” when it stupidly sent customers an email justifying its recent interest rate hike. Its rationale was to compare Westpac as the business selling banana smoothies – too much egg nog I thought, so have a look.
Maybe this graph presents a more accurate positioning from the “Bananas in Pyjamas” who must think all their customers are in a slumber with no Internet access.
Fort Fumble – Federal Government
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Fascinated by spending other people’s money (tax payers) whilst consumed with the belief that Australia still requires its stimulus package, The Emperor (Kevin Rudd) is currently holidaying in northern Europe. His preferred mode of transport has been letting him down – given Air Force One has ongoing mechanical problems – much like our economy.
Co-pilot Wayne Swan needs to masticate more, because his ears keep popping. As was pointed out in Letters to the Editor, this week in The Daily Telegraph. “Treasurer Wayne Swan fools no one with his ongoing bleating about banks raising interest rates much more than the Reserve Bank. What’s he doing to restore the competitive pressures that have collapsed in the financial services sector under his brief watch? While the Government discriminates against smaller financial institutions in its guarantees for wholesale funding, his utterances are simply deceptive posturing.” The co-pilot did approve the acquisition of St George bank to Westpac so have a banana smoothie on the house.
The Mad Monk is waiting in the wings although that too, may be an aborted takeoff with plenty of Liberals in the hanger. Malcolm Turnbull will probably head back to merchant banking where approval ratings will improve considerably.
Fort Crumble – NSW Government
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Where does one start – the most incompetent governing body in Australia’s history – the ‘violent crumble’ of all governments?
Robert Gottliebsen recently wrote on Business Spectator “We’re scaring off housing investors. Governments, whether they be in Canberra or in the states, often pass legislation without ever understanding its consequences.” He is referring to our housing crisis and talking about property investor taxes. “This means that if you hold an average investment property in Sydney and this pushes you over the $376,000 land tax limit, it makes no sense to invest in another. The annual holding cost figures look roughly like this: land tax 1.6 per cent; rates/water 1.0 per cent; mortgage interest 7.00 per cent plus; and maintenance/agent 1.0 per cent. That’s represents total costs of 10.6 per cent of your investment.” Rents will go through the roof over the next twenty four months.
Thoroughly enjoyed reading an article this week in The Daily Telegraph – NSW leads economic rebound. “NSW is leading the national economic recovery with forecasts of a miraculous turnaround in growth figures in the coming year. The State’s Budget is also expected to return to surplus a year earlier than expected, with a $872 million surplus expected in 2010 – 2011.” Technically it was broke well before the global financial crisis although this did not restrict the excitement of newly elected Premier Kristina “doodle dandy” Keneally “who has absolutely no tertiary qualifications” from shrieking (with accent) that the NSW Budget was “back in the black”. Oh dear!
No doubt “doodle dandy” would have been suitably impressed to learn that Nathan “no strings attached” Rees, brilliantly negotiated the sale of our three Manly JetCats that cost NSW taxpayers $3 million – with the purchaser flogging them off shore for more millions. Nathan “no strings” out, and Kristina “doodle dandy” in – so much to look forward to next year.
It has been our absolute pleasure delivering Virtual Realty News to your inbox each week and we are now into our tenth year (never missed an edition). I remain very confident that in 2010 we will be the very first Australian real estate agency to break the magic $1 billion in subscriber sales – currently at $887,154,220.
Special thanks to the aerial photographic gymnast of the sky Tim Mooney for his amazing photographs – a weekly highlight (for us) to explore his vast library of photography.
We thank you for your patronage. Defamation suits have been interesting and engaging (it’s just that I am an advocate for freedom of speech). The audit of our books by The Office of State Revenue was a highlight which re-inforced the fact that Virtual Realty News keeps annoying Forts Fumble and Crumble.
We will return to your inbox in late – January 2010 and go (weekly) all the way through to December 2010. It’s a tough job – but somebody has to do it!
Merry Christmas and have a brilliant, happy and prosperous New Year.
Cheers ^__^
For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/
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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!
The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.
Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”
Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.
Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”
“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.
Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian
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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker
“The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”
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Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.
RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.
The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).
Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)
Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.
Cheers ^__^
For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/
