A SIGN OF THE TIMES !!

A SIGN OF THE TIMES !!

I guess one of the reasons for the contradiction surrounding the property markets, is that those who think they know, only pass judgement when they read something in a newspaper. The Prime Minister was to a degree, correct, when he recently told ABC radio, “people argue …. that housing is less affordable now than it was previously. Why ? It’s not because of interest rates . Interest rates are half what they were 20 years ago”. He then went on to say, “Now why is it less affordable ? Because the cost of land has gone up. Why has the cost of land gone up ? Because too little land is released”.

Well, I would argue that if we suddenly started releasing land, it would be catastrophic to an already weak market out West. Other areas of Sydney are also in recession, with property prices spiraling downwards. In an article in The Sun Herald last weekend “Homes lost as interest rates bite”. “Borrowers are losing their homes at a record rate, forced out by crippling re-payments, exhorbitant petrol prices and high personal debt. Latest NSW Supreme Court figures show re-possessions by financial institutions are approaching an annual total of 5000 – more than twice the number, three years ago.

In 2002 there were 2189 re-possessions in NSW following defaults by borrowers. That figure in the last 12 months to March, was 4873 – more than double the rate under Paul Keating’s 17 per cent interest rate regime in 1990”.

Let me suggest that back in the 90’s the banks were regulated and now, are de-regulated, so all you have to do today is fill out a form and you have money. The reality is that many people who are granted loans would not have had their application approved in 1990. Petrol prices have certainly proved in many cases to be “the straw that broke the camel’s back”.

We alluded last week to a new property portal on the horizon and the secret is now out. It is PBL! Does the property industry need another portal ? Probably not – although in fairness to PBL, I have not seen or heard anything to do with its launch. However, I do know that no other property portal that has launched (apart from domain.com.au and realestate.com.au) has been able to charge for its services. With property portals there is no third prize. So the PBL model will have to be something special given that www.domain.com.au and www.realestate.com.au do a very good job servicing our property markets. I see every online enquiry that comes in for sales and rentals so we keep a close eye on productivity.

I understand it launches in a few weeks, but will probably be overshadowed by the Fairfax launch on October 7 of its re-vamped Saturday Domain which potentially, has the ability to completely change real estate advertising. Now vendors can take 1/ 4 and 1/8 page advertisements at considerably reduced prices, so one can expect some suburbs to take up as much as four pages in advertisements. Yes – the good news is that advertising rates are on the way down which means that agents will certainly be fine tuning marketing campaigns.

As promised in last week’s edition, we launched our Google Earth http://www.rwm.com.au (please wait for page to load) to our website this week. This really is a sign of the times with feedback being that purchasers really enjoy this faster method of searching properties. See if I’m right by the number of real estate agencies that follow suit by adding this search facility to individual websites.

The landscape in real estate is constantly evolving, just that some are faster to pick up the changes! I guess better late than never – although some are fast realising that they are now too late !! Cheers ^__^

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