A CHANGING LANDSCAPE WITH PLENTY OF HILLS TO CLIMB !!

A CHANGING LANDSCAPE WITH PLENTY OF HILLS TO CLIMB !!

With just five weeks remaining in the first selling window for the 2005 year, it is obvious to all who monitor the property markets that volume is well down on last year. Home Price Guide figures identified that last Saturday the total value of property sold at public auction was $14.9 million compared to the same time in 2004 when it was $40.1 million. It would be fair to suggest that this pattern will continue for the better part of 2005. When we look at our stock levels we are actually up on this time last year for houses, and we will be launching more properties in coming weeks. Our Home Unit Division is actually up thirty per cent on the same time last year also. We remain confident that both Divisions are on track to post record quarters. Unfortunately, the same can’t be said for some other agencies who are experiencing severe stock shortages and whose property portfolios are resembling “Mother Hubbard’s cupboard”. At the launch of Domain North I mentioned to Fairfax CEO Fred Hilmer that Domain North would send many agencies into financial difficulties, as the landscape of Saturday Domain had now changed, and many were unaware of the dangers ahead. With the transformation into big bold colour advertisements in Saturday Domain, the smaller linage advertisements are being lost, together with agency profile. So now we have an entirely different market domination and the battle for Mosman is a fierce one, that is forcing agencies to run much larger advertisements and given that Domain North next week has climbed to 120 something pages (a new record) it is forcing the agents in. Despite the differing opinions on what advertising dominates, a majority of agents believe that Saturday Domain is the key to their branding and this further explains the explosive launch of the Domain North brand. Despite the attractive deals being offered what is happening is that advertising overheads continue to climb, yet supply continues to diminish which is a recipe for disaster if businesses are not employing new and smart strategies for survival.

“Bobby Dazzler” and his “State of Decay” continues to cause major concerns with his non-performing taxes. With a few tweaks in mind to overcome the growing deficits it looks almost certain the 2.25 per cent vendor tax will be abolished. In the first six months since its farcical introduction, it delivered a pathetic $166 million compared to the anticipated $345 million. Now we have plenty of people up in arms over the latest Land Tax assessments, with approximately 60,000 new players copping their first fine for property ownership. I find it amusing that when you buy a home and take out a mortgage, a valuer inspects the property to prepare a formal valuation. For the purposes of administering Land Tax, the appointed valuer sits in front of a computer and looks at comparable sales that bear no resemblance to each property as they fail to identify the difference between renovated and un-renovated properties. The process of taking an average clearly identifies that the process is very average and fraudulent indeed. Those who received Land Tax assessments should write back and ask how that figure was calculated. This should keep valuers very busy for some considerable time.

Despite market whispers that buyers are missing in action we are finding that our niche markets are exceeding expectations. A home at 26 Richmond Avenue Cremorne, lasted for one inspection and sold for around $2,000,000, and an apartment at 7/98 Ben Boyd Road was purchased by a first home buyer for $375,000. We have a further eight properties awaiting exchange so read into the market what you want. We are seeing plenty of first time buyers and it should be remembered that since the introduction of the grant, 31,897,000 have participated in a property purchase.

With another twelve properties ready for launch next week, the next five weeks will be very interesting. The simple truth is that we have nowhere to hide by trying to talk up the market as the sales results are totally transparent. If properties don’t sell, you are entitled to draw your own conclusions about the state of play of our niche markets. The 2005 market has a much more positive spin than the 2004 market, and we look forward to the coming weeks. It will interesting to see the anecdotal sales evidence for the first quarter of 2005. Some will be drowning their sorrows and some will be celebrating. Let’s see what happens !! Cheers and clink ^__^

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