AGAINST THE ODDS!!

AGAINST THE ODDS!!

It certainly is a “tale of two cities” as the economy continues to grow along with the affluent suburbs.

Almost the reverse in Sydney’s west and south/west where property prices continue to free fall. Whilst some are of the belief that interest rates are odds on to be increased on Melbourne Cup day when the Reserve Bank meets for cucumber sandwiches and lemonade, there is another school of thought that a further increase will cause carnage. In the case of the ANZ bank which just announced a record $3.690 billion profit, mortgage arrears among NSW customers were quadruple the bank’s national average. Another interest rate increase will certainly cause more hardship in the marketplace leading to additional mortgagee sales. Furthermore, it would almost certainly be the final nail in the coffin for the farming fraternity who continue to battle the drought.

With housing affordability now reaching a three year low, the prospects for new buyers trying to enter the market, is not looking good. Already, the current market is drawing parallels with the hardest market in living memory, that being in the early 1990’s when rates were at a crippling 17 per cent.

On the other hand, if property values continue their decline in the South and South/western markets, affordability for some, may become a possibility.

Certainly, the next six months will be challenging for all markets with mounting speculation of two, or possibly three, interest rises in the very near future. Interesting times ahead, especially with a new “Governor of Moolah” at the helm who can single handedly control market sensitivity.

The Housing Industry Association Executive Director Simon Tenant said “ First – home buyers entering the market would have to commit 29 per cent of their income towards mortgage payments, the highest ratio in nearly three years and a ratio knocking on the door of the ‘no-go zone’.”

The hot topic doing the rounds in Mosman at the moment is the threat by the NSW Maritime, that they could remove 5000 private jetties, boatsheds, pontoons, berthing and mooring pens around Sydney Harbour. Even more interesting is that this threat appears to apply only to Sydney Harbour and not Pittwater or Sylvania Waters.

When asked about the possibility of this happening it is difficult to keep a straight face. We all know that the NSW government is bankrupt so why would it remove any source of income(s)? And even if this did become a reality, all the waterfront owners would refuse to remove the facilities, given that they are not short of a buck – unlike the government! Cheers ^__^

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