A striptease for Mosman house prices?

A striptease for Mosman house prices?

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There is no doubt that a large proportion of our housing market is delicately poised and many are pointing to an overpriced top –end.  I don’t subscribe to that theory and believe it runs much deeper, to what is called ‘human sentiment’.   The global financial crisis (GFC) has led to a re – evaluation of our lifestyles, especially when it comes to property. The GFC brought about an immediate end to Australia’s unprecedented eighteen year run of economic growth which in real terms meant that a large proportion of workers and business owners experienced income declines not seen for nearly two decades.

When we analyse our property market, we need to apply the strongest rule– of–thumb which is the Household Estimates of 2007 – 2008. The next Census of Population and Housing will be conducted on August 9, 2011. The current Household Estimates tells us that in Australia, 2,399,900 (30 per cent) households rent property. Those that own without a mortgage make up 2,679,200 (34 per cent) which leaves us with the market that banks are now fighting for – the 2,835,200 (36 per cent) who own with a mortgage.

Rates may hold for year: Reserve chief so then we see NAB’s exit plan triggers fresh lender mortgage war with rivals so happy days as consumers to win as Big Four banks declare war. Credit is an economy’s rocket fuel which has now been superseded in Australia as household savings outgrow spending. We need to dig deeper to find what’s behind the credit drought? “Much of the world is currently suffering a nasty hangover from explosive credit growth. And while we’ve so far escaped any scorching pain in Australia, credit growth has throttled back to near 20 year lows. After a 12 year credit binge Australians are now carrying more debt than ever. The First Home Buyer Grant encouraged the take up of mortgages and cheap credit financed consumer spending, from credit cards to margin loans.”

BUY PRINT

“Since the financial crisis, our national savings rate has increased sharply. That’s what one would expect. Thrift usually follows excess, especially when a string of interest rate increases and higher food and energy prices reduce disposable income. A higher savings rate and the resulting lower credit growth are rational responses.”

Jonathan Chancellor from the Sydney Morning Herald wrote Sydney’s reality check – “there will be joy for some and tears for others in 2011.”  Mosman in 2011, has started off in lock–down mode with available properties well down on previous years. Records tumble but rise in listings will cool prices which is always an accurate assessment.

Our review of Richardson & Wrench Mosman & Neutral Bay’s (RWM) sales results for 2010, revealed   sixteen new street records in a challenging market. This week we set a new street record when contracts were exchanged for 42 Cowles Road Mosman.

Here at RWM we constantly challenge the markets with anecdotal evidence. For example, we combined sales data from Domain Property Data with the resources of RWM Property Research and listed below, are Mosman house sales from 1999 to 2005.  Footnote: pay particular attention to average and median growth as well as auction clearance rates.

1999 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 424
  • Total Value – $522,523,578
  • Median Price – $1,067,000
  • Average Price – $1,235,280
  • Highest Price – $6,400,000
  • Auction Clearance Rate – 45 per cent
  • House Sales to $999,999 – 185
  • House Sales above $1,000,000 – 189
  • House Sales above $2,000,000 – 39
  • House Sales above $3,000,000 – 9
  • House Sales above $4,000,000 – 2

RWM Research observations: Mosman has approximately 4,900 houses so 8.7% per cent of houses sold. House sales up to $999,999 were 374 which is approximately 88.5 per cent of total sales.

2000 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 332
  • Total Value – $441,452,395
  • Median Price – $1,155,000
  • Average Price – $1,329,677
  • Highest Price – $5,900,000
  • Auction Clearance Rate – 51 per cent
  • House Sales to $999,999 – 119
  • House Sales above $1,000,000 – 137
  • House Sales above $2,000,000 – 62
  • House Sales above $3,000,000 – 11
  • House Sales above $4,000,000 – 3

RWM Research observations: Mosman has approximately 4,900 houses so 6.6 per cent of houses sold. The auction clearance rate increased from 45 per cent to 51 per cent. House sales up to $999,999 were 256 which is approximately 77 per cent of total sales.

2001 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 399
  • Total Value – $618,004,118
  • Median Price – $1,300,000
  • Average Price – $1,548,882
  • Highest Price – $15,500,000 (RWM)
  • Auction Clearance Rate – 54 per cent
  • House Sales to $999,999 – 122
  • House Sales above $1,000,000 – 161
  • House Sales above $2,000,000 – 73
  • House sales above $3,000,000 – 32
  • House Sales above $4,000,000 – 11

RWM Research observations: Mosman has approximately 4,900 houses so 8.1 per cent of houses sold. House sales up to $999,999 were 283 which is approximately 71 per cent of total sales The auction clearance rate increased from 51 per cent to 54 per cent.

2002 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 346
  • Total Value – $644,541,555
  • Median Price – $1,652,500
  • Average Price – $1,862,836
  • Highest Price – $4,855,000
  • Auction Clearance Rate – 54 per cent
  • House Sales to $999,999 – 70
  • House Sales above $1,000,000 – 127
  • House Sales above $2,000,000 – 96
  • House Sales above $3,000,000 – 36
  • House Sales above $4,000,000 – 17

RWM Research observations: Mosman has approximately 4,900 houses so 7.00 per cent of houses sold. House sales up to $999,999 were 197 which is approximately 57 per cent of total sales. This figure was down from 71 per cent the previous year which is evidenced by increases in the median and average prices. Auction clearance rates remained at 54 per cent.

2003 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 334
  • Total Value – $671,627,182
  • Median Price – $1,699,500
  • Average Price – $2,010,859
  • Highest Price – $11,000,000
  • Auction Clearance Rate – 40 per cent
  • House Sales to $999,999 – 47
  • House Sales above $1,000,000 – 139
  • House Sales above $2,000,000 – 89
  • House Sales above $3,000,000 – 44
  • House Sales above $4,000,000 – 15

RWM Research observations: Mosman has approximately 4,900 houses so 6.8 per cent of houses sold. House sales up to $999,999 were 186 which is approximately 55 per cent of total sales. For the first time ever the average price broke $2,000,000. Auction clearance rates dropped from 54 per cent to 40 per cent.

2004 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 282
  • Total Value – $522,988,257
  • Median Price – $1,632,500
  • Average Price – $1,854,568
  • Highest Price – $11,000,000
  • Auction Clearance Rate – 26 per cent
  • House Sales to $999,999 – 42
  • House Sales above $1,000,000 – 127
  • House Sales above $2,000,000 – 68
  • House Sales above $3,000,000 – 39
  • House Sales above $4,000,000 – 6

RWM Research observations: Mosman has approximately 4,900 houses so 5.7 per cent of houses sold. House sales up to $999,999 were 169 which is approximately 60 per cent of total sales. The average price dropped below $2,000,000 and auction clearance rates dropped from 40 per cent to 26 per cent.

2005 – Mosman House Sales to $5,000,000

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  • Number of houses sold – 278
  • Total Value – $560,951,000
  • Median Price – $1,842,500
  • Average Price – $2,017,809
  • Highest Price – $14,800,000
  • Auction Clearance Rate – 36 per cent
  • House Sales to $999,999 – 38
  • House Sales above $1,000,000 – 115
  • House Sales above $2,000,000 – 60
  • House Sales above $3,000,000 – 52
  • House Sales above $4,000,000 – 13

RWM Research observations: Mosman has approximately 4,900 houses so 5.6 per cent of houses sold. House sales to $999,999 were 153 which is approximately 60 per cent of sales. The average price was back up again over $2,000,000. Auction clearance rates increased from 26 per cent to 36 per cent.

In next week’s edition we will complete the house sales up to $5,000,000 and reveal the market movements from 2006 to 2010. Watch for the impact the GFC had on our markets. In 1999, sales up to $999,999 made up 88.5 per cent of total sales.  In 2005, they only made up 60 per cent of total sales and by 2010 had dropped to 28 per cent.

I will leave Forts Fumble and Crumble alone this week as the above cartoon says it all – Fort Crumble has had 16 years in the palace. It is not looking pretty for Premier Bambi – even the Nationals will outpoll Labor in the March election. Current polls have the Coalition holding 73 of the 93 seats, Nationals with 19 seats and Labor holding (at best) 14 seats. In all probability it will get worse between now and Execution Day. Oops! I mean Election Day.

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

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