A few clowns short of a circus!

A few clowns short of a circus!

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The circuses at Forts Fumble and Crumble are folding their tents because, with below par performances, the crowds are disgruntled.  Angry voters ready to give Rudd the red card an amazing turnaround where this fairy–floss policy is being eaten away and RSPT now means ‘Return Sender Priority Termination’.  Having said that, under the big tent in Canberra, The Emperor (Kevin Rudd) is the  star performer of his pet event – the back flip, which he performs with ease.  It would be much easier to call an election and put the RSPT to a referendum.

Can the tax be fixed when Rudd says it’s not broken? The Emperor appears to be a broken man bearing no resemblance to Broken Hill. Kevin Rudd fights dissent in ALP ranks yet the Ring Master PM Kevin Rudd holds line on mining tax reform. The trampoline at Fort Fumble is losing its bounce, as Peter van Onselen declared this week in The Australian novices at the wheel of state. It was revealed that two thirty year olds and a thirty one year old, with no experience in the labour movement and next to none in industry or business, are coaching The Emperor with his back – flips. “However, now that Rudd appears out of his depth, caught up in poorly constructed defences of policy positions and back downs over challenges he had previously described as too important to walk away from (think emissions trading), the trio is being blamed for bad advice that could culminate in Rudd becoming the first Prime Minister in nearly 80 years to lose office after one term.”

The show must go on…..

circus

Bugger – I thought I had Tim with this week’s request. Thinking North Pole next week!

BUY PRINT

Having read the Minutes of the Monetary Policy Meeting of the Reserve Bank Board and feeling somewhat comfortable that one institution has its act together, out came Australian housing market ‘a time bomb’.

Humming “send in the clowns” and in they came. “The Australian and British housing markets are the last two bubbles left in the wake of the financial crisis, and it is only a matter of time before they crash, warns legendary US investor and co – founder of global investment firm GMO, Jeremy Grantham. Mr Grantham famously reported a year before the global financial crisis: “In five years, I expect that at least one major bank (broadly defined will have failed and that up to half the hedge funds and a substantial percentage of the private equity firms in existence today will have simply ceased to exist”. The Australian reported yesterday that he said “ Australia had an unmistakable housing bubble and that prices would need to come down by 42 per cent to return to the long – term trend”.  “You cannot possibly miss it,” he said.

Reserve Bank waters down fears of real estate housing bubble and consumer sentiment is holding up. The Real Estate Institute of Australia weighed in No housing bubble in Australia citing over the period December 1996 – December 2009, median house prices increased from around $160k to around $500k; a trebling in thirteen years. Within this period there were four phases:

  • From December 1996 to September 2000, median house prices in Australia showed a moderate average growth of 2.1 per cent per quarter.
  • From December 2000 to December 2003, house prices appreciated at a greater rate of 3.9 per cent per quarter on average.
  • From March 2004 to December 2008, house price growth moderated to an average growth of 0.8 per cent per quarter.
  • During 2009, growth of median house prices again accelerated to 2.9 per cent per quarter.

16-06-2010 4-50-00 PM

Time to take a Mosman tent snapshot to see where we are today, compared to this time last year. The messages are mixed as the results show. We collated the data from Domainpropertydata and it should be noted, that a significant number of sales in 2010 are yet to record a sale price because of confidentiality agreements. It will take a few more months before we have an exact position, so these figures will be higher, rather than lower.

Mosman house and semi sales 1 January 2009 – 15 June 2009

  • Total number offered – 148 @ $329,394,627
  • Total number sold – 132 @ $305,159,627
  • Private Treaty – 120 @ $280,714,627
  • Auction – 12 @ $24,445,000
  • Total Combined Median – $1,815,500
  • Total Combined Average – $2,347,381
  • Highest Price – $13,200,000
  • Lowest Price – $975,000

Mosman house and semi sales 1 January 2010 – 15 June 2010

  • Total number offered – 171 @ $276,487,629 (2009 – $329,394,627)
  • Total number sold – 147 @ $276,487,629 (2009 – $305,159,627)
  • Private Treaty – 91 @ $206,089,629 (2009 – $280,714,627)
  • Auction – 56 @ $70,398,000 (2009 – $24,445,000)
  • Total Combined Median $2,105,000 (2009 – $1,815,500)
  • Total Combined Average $2,425,330 (2009 – $2,347,381)
  • Highest Price – $11,000,000 (2009 – $13,200,000)

The Auction Comparisons

  • 2009 Number Auctioned – 34 (2010 – 87)
  • 2009 Number Withdrawn – 27 (2010 – 10)
  • 2009 Number Sold – 12 (2010 – 56)
  • 2009 Clearance Rate – 35 % (2010 – 64 %)
  • 2009 Adjusted Clearance Rate – 20 % (2010 – 58 %)

The challenge ahead for real estate in 2010

This is not confined to the Mosman market. All real estate markets will face the challenge of matching and/or bettering the sales results recorded in the 1 July 2009 – 31 December 2009 market where results were significantly higher, compared to the previous six months.

Mosman house and semi sales 1 July 2009 – 31 December 2009

  • Total number offered – 192 @ $418,706,750
  • Total number sold – 174 @ $408,296,750
  • Private Treaty – 127 @ $340,354,750
  • Auction – 47 @ $67,942,000
  • Total Combined Median – $2,250,000
  • Total Combined Average – $2,617,286
  • Highest Price – $12,000,000
  • Lowest Price – $836,000

There is no way to avoid  the fact that our property markets have slowed since April economic recovery seen losing steam.  Events in Europe and of course the ongoing hangover of the RSPT debacle have  also been major contributors. So back to those green shoots we go – home building the biggest in nearly six years and investors ignore signs and pile into property.

Figures from the Australian Bureau of Statistics show that while home loans to owner/occupiers fell a seasonally adjusted ten per cent in the first four months of the year, lending to property investors rose eleven per cent. In the past year, lending to investors rose thirty per cent nationwide, and twenty per cent in NSW.

Our property markets (historically) tend to hibernate over winter so I wouldn’t read too much into present activity. It’s actually a good time to buy!  It does appear however, that the “fat lady” won’t be singing for some time to come, which shows just how hard it is to read property markets. Unlike the share markets, we don’t have buy and sell recommendations.  Investors are selling out of the stock market and moving their funds into the property markets – another clue?

Word from Sideshow Alley this week is that The Emperor is considering performing until April 2011 where he will call an election. Looks like his advisers consider it would be smart to go to the polls immediately following the Fort Crumble election in March 2011. I wonder if this weekends by – election in Penrith may change that decision?

Cheers ^__^

This week’s sales 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

2 Responses to “A few clowns short of a circus!”

  • Ann says:

    It would be hard for Rudd to defend delaying the election until April. The media would have a field day. I did some checking, I dont think any Federal Government in the modern era has delayed an election for more than a month beyond the 3 year due date?

  • Snow White says:

    An explanation of our Rudd Tax System, If someone has Rudd’s email can you forward this on.

    Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
    If they paid their bill the way we pay our taxes, it would go something like this;

    The first four men (the poorest) would pay nothing.
    The fifth would pay $1
    The sixth would pay $3
    The seventh would pay $7
    The eighth would pay $12
    The ninth would pay $18
    The tenth man (the richest) would pay $59.

    So, that’s what they decided to do..

    The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.
    “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten men would now cost just $80.

    The group still wanted to pay their bill the way we pay our taxes.
    So the first four men were unaffected.
    They would still drink for free. But what about the other six men – the paying customers?

    How could they divide the $20 windfall so that everyone would get his fair share? They realised that $20 divided by six is $3.33.
    But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

    So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

    And so the fifth man, like the first four, now paid nothing (100% saving).
    The sixth now paid $2 instead of $3 (33% saving).
    The seventh now paid $5 instead of $7 (28% saving).
    The eighth now paid $9 instead of $12 (25% saving).
    The ninth now paid $14 instead of $18 (22% saving).
    The tenth now paid $49 instead of $59 (16% saving).
    Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

    “I only got a dollar out of the $20 saving,” declared the sixth man.
    He pointed to the tenth man, “but he got $10!”
    “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”
    “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”
    “Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
    The nine men surrounded the tenth and beat him up.

    The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

    And that, boys and girls, journalists and government ministers, is how our tax system works.

    The people who already pay the highest taxes will naturally get the most benefit from a tax reduction..

    Tax them too much, attack them for being wealthy, and they just may not show up anymore.

    In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
    For those who understand, no explanation is needed.

    And For those who do not understand, no explanation is possible, and sadly, this will be nearly 50% of the Australian population!

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