.Rather a parting of ways as Australia’s most unpopular prime minister is challenged by Australia’s second most unpopular prime minister. It’s more than obvious that the government has absolutely lost the plot to such an extent that like NSW Labor, the Australian Labor Party (ALP) has lost relevance and this is resonating in the polls. It will be most interesting to see the Newspoll polling that is due for release on Monday, I expect Julia Gillard to receive a massive backlash. The ALP simply don’t get it. The polls are all about policies and the relevant politicians.

Will Rudd sacrifice Labor? Whatever the outcome of next Monday’s ballot where I expect that Kevin Rudd will be soundly defeated because he just does not have the numbers. He will simply head to the back benches to plot his next challenge given party polling will only get worse. No chance of an election anytime soon although it must be noted that this is all about out of control, egotistical, political party annihilation. Never before in Australia’s political history have we seen such a hostile and hardcore attack on members and it will only get worse.

The hatred between Julia Gillard and Kevin Rudd is unprecedented to such an extent that I predict both will end up on the backbench – fast tracking their political oblivion. In a perfect Australia I would love nothing more than to see Malcolm Turnbull as Australia’s next prime minister although to Abbott, the spoils of the spill may well see him as Australia’s next prime minister. If a federal election was held next month it would be a landslide Liberal victory where the ALP would be decimated much like the March 2011 NSW election. The name of the NSW Opposition leader is? Next month’s Queensland election will leave an enormous clue.

BUY PRINT

Brighten up Aussies, Treasury chief says which is no doubt an intervention prompted by the Prime Minister’s office (PMO). I’m not sure how the Australian Bureau of Statistics (ABS) announced that Australia’s unemployment rate had actually decreased by 0.1 points in January to 5.1 percent. Roy Morgan had earlier announced that unemployment spiked 1.7 percent in January to 10.3 percent.

Roy Morgan was quick to fire off a press release comparing the two contradictory sets of figures – Roy Morgan Unemployment Figures (10.3% in January) show situation “on the ground” while ABS unemployment figures (5.1%) defy belief as job losses mount around Australia.) In a nutshell, the ABS data is based on those looking for work in the four weeks prior to the survey. Roy Morgan bases its survey on those unemployed – looking for work seeking employment. Should Roy Morgan be proved correct this will damage the “World’s Greatest Treasurer’s” credibility. This data is now being closely scrutinised.

I had to laugh when I read RBA warns banks to maintain lending standards so that a US – housing style collapse does not happen in Australia. Let me tell you that never before have I seen such hard bank valuations where the banks are valuing twenty percent below the negotiated sale price. The more one borrows the less chance of the valuation meeting the negotiated sale price – which is happening prior to the exchange of contracts.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market last week– 129
• Number of houses on the market this week – 137
• Number of apartments on the market last week – 118
• Number of apartments on the market this week – 128

CREMORNE – 2090

• Number of houses on the market last week– 16
• Number of houses on the market this week – 13
• Number of apartments on the market last week – 18
• Number of apartments on the market this week – 21

NEUTRAL BAY – 2089

• Number of houses on the market last week – 17
• Number of houses on the market this week – 21
• Number of apartments on the market last week – 71
• Number of apartments on the market this week – 92

A significant increase in Mosman house listings this week, although well below the spring 2011 peak of 168 house offerings. We may now hit 140 houses on the run up to Easter. Interesting to note that this week, we saw the first sales of Mosman houses for 2012.

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate – Click Here

For this week’s open for inspections – Click Here

Fairfax profit ‘disappointing’ Well, it could be about to get a whole lot worse given plenty of consumers and agents are questioning just why the Saturday Domain format has been changed. Purchasers looking for Mosman houses now have to look in two different sections which is an absolute no brainer given it is set on suburb alpha sort. To make matters even worse, I’m told that this weekend, will see the merging of houses and apartments as one to create a monumental “dogs breakfast”. Considering that I played an instrumental part in the previous design of Saturday Domain, I predict that Fairfax will lose business with this management planning disaster.

It should not be about bowing to pressure from a few franchisors, but rather, accommodating each and every vendor’s decision as to who they decide will represent them in the sale of their property. It is the vendors who pay for the advertisement, not the franchisors.

Our advertisements appear under “M” for Mosman which should not be confused as “M” for manipulation. I’ll bet chief executive Greg Hywood is not aware of such a decision and let me say the “dogs are barking” loudly too.

The modern era has taught consumers how to quick search, not long search! Those are the “fair facts”.

Not a case of alpha search rather testosterone with alpha male.

Cheers ^__^

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24.02.12Robert Simeon4 Comments »

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The global financial crisis (GFC) for most of us has been a frustrating and fascinating exercise in understanding human behaviour. We now know that when the property market is booming, buyers are more than happy to pay well above the market value simply because consumer sentiment is strong. So when consumer sentiment is down, the market won’t engage, even though prices have been heavily discounted. Whilst the discount theory works very effectively in retail, it is abundantly clear that it definitely does not work in the acquisition of real estate. The reason why is quite simple. The mentality engages in short–term, but when the market is booming, the train of thought is long term because life is rosy and the bread winners are exceeding budget expectations. Doom and gloom? Things aren’t nearly as bad as you think Ross Gittins wrote in the Sydney Morning Herald “Economists don’t have a good record on forecasting what will happen to the economy, but here’s a prediction I make with great confidence: whatever happens, it won’t be as bad as you think. That applies particularly to the jobs market.”

Alan Kohler wrote on Business Spectator – Debt’s pall over lucky country “Can there ever have been a country in such good shape as ours that’s as miserable as Australia is? The government is in disarray: unpopular, turning on itself, throwing good sense out of the coach as if pursued by a pack of wolves. Businesses are laying off staff and whingeing about everything. Consumers are stressed, not spending, turning on government and banks. Yet unemployment is low, the currency is strong, interest rates are coming down, national savings are bulging, economic growth is solid and there’s a mining boom on. What’s going on? Why is Australia in such a wretched state of mind despite being in such good physical shape?”

BUY PRINT

Trying to understand consumer sentiment is like being blind folded while trying to assemble a giant jig-saw puzzle. No real estate agency in Mosman spends as much time dissecting these trends than the team at Richardson & Wrench Mosman & Neutral Bay Research (RWM Research). Surprise jump in consumer confidence where we were not surprised to see that the survey by Westpac and the Melbourne Institute showed its index of consumer sentiment climbed 4.2 percent in February to 101.1, showing optimists finally outnumbered pessimists.

Times are different and this was highlighted with ANZ’s cautious pioneering rate hike which then prompted a banks break link to Reserve. There will be winners and losers and I see two big winners – Mortgage wars Groundhog Day: Mark Boris and John Symonds turn back the clock as they take on the banks. I see Aussie Home Loans and Yellow Brick Road grabbing significant market share from the “Big Four” simply because they have positioned themselves as being consumer friendly and much more compassionate. In total fairness RBA backs banks over higher borrowing costs which opens the lending market to those whom don’t have the “Big Four” funding exposure.

Source: Property Observer

Unemployment figures make Aussie economy doomsayers humiliated again: Christopher Joye for years I have argued in Virtual Realty News that a majority of real estate commentators can “talk the talk – but can’t walk the walk.” I rest my case – Mosman heads top 100 list, with Kew, Paddington and Castle Hill climbing the ranks and Hope Island and Vaucluse tumbling – the Mosman real estate market has been the number one performing real estate market for over a decade. Why? That’s simple – it is without a doubt Australia’s most incestuous market that constantly trades within. Families move within the 2088 postcode, they don’t move out.

The greatest uncertainty that clouds our property markets is why we can’t trust Gillard anymore only an ill- advised idiot would have appeared on the Four Corners program – Gillard showed flawed judgement by appearing on program. This would explain the public sentiment that PM’s steadily declining authority is all of her own making where the simple truth is that financial and property markets would jump with the announcement of her removal. She is an economic disaster.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market last week– 109
• Number of houses on the market this week – 129
• Number of apartments on the market last week – 111
• Number of apartments on the market this week – 116

CREMORNE – 2090

• Number of houses on the market last week– 17
• Number of houses on the market this week – 16
• Number of apartments on the market last week – 17
• Number of apartments on the market this week – 18

NEUTRAL BAY – 2089

• Number of houses on the market last week – 15
• Number of houses on the market this week – 17
• Number of apartments on the market last week – 67
• Number of apartments on the market this week – 71

A significant increase in the Mosman house listings this week although well below the spring peak of 168 house offerings. We may now hit 140 houses on the run up to Easter, but I don’t believe we will see more than 135 houses on the market before then.

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate – Click Here

For this week’s open for inspections – Click Here

Terry McCrann wrote this week in the Daily Telegraph “Gillard should gallop for glee on Port Henry” – “What on earth is the problem? Julia Gillard and Greg Combet should be over the moon, or at least, wildly ecstatic, at the possible closure of Alcoa’s aluminium smelter at Point Henry near Geelong.” “Even if such closure is not a direct consequence of the Gillard Government’s carbon tax, it is precisely what the carbon tax is intended to achieve.”

I did enjoy this piece “an alternative interpretation to all this, is just how hopeless, pathetic and utterly uncomprehendingly unknowing is the person that purports to be our prime minister.”

As seen on TV: the $700 set – top box from Labor – Hello you can buy a brand new television for $700 which is now double the figure when announced in the 2009 – 10 federal budget.

The elected government is following Basil Fawlty’s business model.

Cheers ^__^

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17.02.12Robert Simeon6 Comments »

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The Reserve Bank of Australia (RBA) releases today its Minutes explaining why it decided to keep the cash rate on hold. Here is the real reason why. The National Australia Bank (NAB) released its business survey yesterday for the December quarter 2011. “Business conditions strengthened in the December quarter, following a moderation in activity in the previous quarter, and were suggestive of an economy growing at around trend. The pickup in conditions in the quarter was attributable to broad – based improvements in profitability, employment and trading conditions. Forward indicators of near – term demand, including forward orders, stocks and capacity utilisation, all rose in the quarter, implying an expectation that domestic demand will strengthen a little in the first three months of 2012.”

With the benefit of hindsight the RBA erred with their December meeting when the cash rate was reduced from 4.50 percent to 4.25 percent. That being said I doubt it will be as trigger happy with the cash rate in the next four scheduled meetings (until June 30).

Last Monday, I filed the following article on Property Observer Australia is building momentum, and property markets will stay stable”The RBA is well aware that Australian banks funding is under great pressure as a result of the global financial crisis to the extent that our banks have already forewarned that if the cash rate is reduced it is highly unlikely they will pass on such cuts. I agree with former RBA board member Warwick McKibbin that the Board should wait until the European debt crisis is sorted out “its better you have your weapon loaded so when the crisis comes, you can hit it with full force.”

BUY PRINT

I keep harping on the fact that in Australia approximately one – third rent, the next third own with a mortgage and the final third own their home mortgage free. Those renting are much worse off Sydney rents set to rise as vacancy rates plummet given the vacancy rate remains unchanged at 1.4 percent as Melbourne surges to a six year high of 4.4 percent.

The above graph shows that if home owners with a mortgage want to shop their rate any decision by the RBA becomes superfluous. CUA cuts fixed – rate mortgage to undercut major banks although it should be noted that the “World’s Greatest Treasurer” Wayne Swan has no idea what is happening in the home loan markets. He said last week “the big banks can no longer assume that once a customer signs on the dotted line they’ll just stick with them.” Obviously Wayne was yet to investigate that ‘Hundreds not thousands’ switch mortgage banks. Interesting that 24 out of 27 economists got this week’s RBA decision wrong – so whilst I’m on a roll I predict that ANZ will increase its rate by 0.10 percent today.

Time to critique the 2011 Mosman house market. Before you read further do you think it was up or down on 2010? If you thought down you were wrong – 2011 sales results surpassed 2010. The only statistic that went down was the auction clearance rate – Mosman is a private treaty/expressions of interest market which is clearly evidenced by the figures.

Source: Domain Property Monitors

• Total House Numbers Offered in 2010 – 289
• Total House Numbers Offered in 2011 – 324
• Total Houses Offered By Private Treaty in 2010 – 193
• Total Houses Offered By Private Treaty in 2011 – 226
• Total Houses Offered By Auction 2010 – 40
• Total Houses Offered By Auction 2011 – 115
• Adjusted Clearance Rate 2010 – 25 percent
• Adjusted Clearance Rate 2011 – 24 per cent
• Total Number Sold 2010 – 233
• Total Number Sold 2011 – 266
• Total Value Sold 2010 – $499,283,500
• Total Value Sold 2011 – $623,681,292
• 2010 Mosman Median Price – $2,250,000
• 2011 Mosman Median Price – $2,275,000
• 2010 Mosman Average Price – $2,684,319
• 2011 Mosman Average Price – $2,711,657

*Settlements still not completed

The standout statistics for Mosman houses is that sales numbers (recorded thus far) is that house sales increased from 233 to 266 and the Total Value Sold jumped from $499,283.500 in 2010 to $623,681,292 in 2011 it will finish at close to $700,000,000 when all sales are recorded. Bear in mind that at close to $1,000,000,000 our market is a boom level. This coincides with my previous thoughts that the Mosman market has bottomed.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market last week– 102
• Number of houses on the market this week – 109
• Number of apartments on the market last week – 112
• Number of apartments on the market this week – 111

CREMORNE – 2090

• Number of houses on the market last week– 18
• Number of houses on the market this week – 17
• Number of apartments on the market last week – 17
• Number of apartments on the market this week – 17

NEUTRAL BAY – 2089

• Number of houses on the market last week – 13
• Number of houses on the market this week – 15
• Number of apartments on the market last week – 66
• Number of apartments on the market this week – 67

A slight increase in the Mosman house listings, however well below the spring peak of 168 house offerings. Just two weeks to get on the market before Easter! I don’t believe we will see more than 125 houses on the market before Easter.

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate – Click Here

For this week’s open for inspections – Click Here

As for those economic, inept lunatics in Canberra why we can’t trust Gillard any more it’s a great start!

This was best summed up with – Business ‘fed up’ with politics in Canberra, says incoming RBA board member Heather Ridout (a Mosman resident I might add).

Speculation that the Australian dollar will climb to $1.20 over the $USD? Julia Gillard and her union (no pun intended) who have never owned or run a business before will be hammered, with our exclusive Carbon Tax just 141 days away.

Ironic in that the Gillard government is shaving overheads to get back to a ‘once in a lifetime’ Labor surplus and when businesses cut costs, they are to blame.

Go figure?

Cheers ^__^

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10.02.12Robert Simeon5 Comments »

Welcome back to Mosman’s number one real estate blog and it just happens to be our twelfth year of market critiquing and reporting!   It is imperative to note that as an agency we don’t deal the cards – we play the hands that we are dealt.

With so much happening, it is somewhat difficult to know where to start unpopularity contest has Abbott as winner with Julia Gillard and Tony Abbott neck- and–neck as Australia’s most unpopular leader. Will Julia Gillard survive the year? Unlikely !  My guess is that she’ll be out by June 30 which  mirrors the image of NSW Labor who played ‘pass the leader’ before the March 2011 annihilation.

Two economic lunatics unleashed their opinions Jordan Wirsz: Bloodbath to hit Australian real estate when he predicted Australian property could crash by more than 60 per cent. This was quickly followed up by perennial house cellar dweller property prices to fall 20% by 2013 year’s end: Steve Keen. I will get onto these two later: suffice to say they are not the only ones who have absolutely no idea.

Enter the “World’s Greatest Treasurer”, Wayne Swan, who constantly contradicts economic common sense to the extent that he is embarrassing every time he adds a commentary.  Stephen Bartholomeusz summed it up quite eloquently when he wrote on Business Spectator – Swan’s blind bank bashing “already a chorus of like-minded bashers is forming behind him and taking pre – emptive pot shots at the banks even before there is a anything to shoot at.”

BUY PRINT

Welcome back -Mr Mooney at his brilliant best again – 2012 will be a cocktail of sunny skies and inclement business/consumer sentiment. I see more skies of blue for the Mosman markets and in our opinion prices have well and truly bottomed.

The Reserve Bank of Australia (RBA) is well aware that the funding by Australian banks is under great pressure as a result of the global financial crisis. Wayne Swan obviously believes that money grows on trees Bartholomeusz wrote “while the majority have, with the help of risk – averse depositors, done a very credible job since the onset of the global financial crisis of reducing their dependence on offshore sources of funds, and short term funding from offshore in particular, they still have an offshore term funding requirement of about $100 billion this year. About 20 per cent of their overall funding is sourced offshore.”

So how low will the RBA cash rate go in 2012? My tip? Three rate reductions that will see the cash rate sit at 3.25 per cent by the end of the year.  On April 9 2009, the RBA dropped the cash rate to 3.00 per cent so I can’t see it dropping below that. We need to remember that in Australia, approximately one third of households rent, the other third have a mortgage and the final third own without a mortgage.

So let’s look at what interest rates are doing in the USA and the United Kingdom – the answer is simple zero.

I laughed when I read Jordan Wirsz’ critique of the Australian real estate market which predicted a 60 per cent home value capitulation.  It just can’t happen (unless we have a nuclear war). Three years ago the American property market was so weak, the US Federal Reserve cut the official interest rate to zero. This week it announced that it plans to keep interest rates at near zero until the end of 2014.

Then we have the United Kingdom which will host the 2012 Olympics. It should be noted that every country that hosts an Olympics goes into recession. The exceptions to the rule have been Atlanta, USA, Sydney, Australia and Beijing, China.  I can’t see the United Kingdom joining this elite club when it too, has a zero interest rate and even more debt thanks to an Olympics. Barcelona, Spain and Greece have never recovered from when they hosted the Olympics.

At this juncture, I have Steve Keen and Jordan Wirsz leading the Australian real estate markets Dumb and Dumber Award and this is just our first edition for 2012. Nothing more than a cry for attention.

So how did the Mosman market fare in 2011? We will cover that in next week’s edition.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market December– 107
• Number of houses on the market this week – 102
• Number of apartments on the market December – 100
• Number of apartments on the market this week – 112

CREMORNE – 2090

• Number of houses on the market December – 15
• Number of houses on the market this week – 18
• Number of apartments on the market December – 20
• Number of apartments on the market this week – 17

NEUTRAL BAY – 2089

• Number of houses on the market December – 12
• Number of houses on the market this week – 13
• Number of apartments on the market December – 79
• Number of apartments on the market this week – 66

Over the break the number of Mosman houses on the market dropped to 83 and peaked on November 10 with 168. We don’t expect to see the number of houses on the market go much higher than 120 in February – it will be a very tight trading market in the first quarter of 2012.

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate – Click Here

For this week’s open for inspections – Click Here

Dysfunctional politicians will share the limelight in 2012.  As well, we have a Carbon and Mining Tax being introduced from July 1. The Poker Machine pre-commitment has been axed which should not come as any great surprise.  It was never going to see the light of day!

The polls will be fascinating, with many wondering just how low the Prime Minister’s approval rating can fall.   I’ll have a go and tip 24!

Great to be back and we’ll  go all the way to December 14.  Thanks for joining us again.

Cheers ^__^

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3.02.12Robert Simeon5 Comments »