Ah –  predicting those real estate bloopers!

Ah – predicting those real estate bloopers!

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The Australian real estate market is an amazing landscape of media commentaries that although initially, in the limelight, have now been be deemed unreliable. Of course the manipulation of the Global Financial Crisis (GFC) has led to a media storm where hired guns are in retreat – and licking (terminal) media wounds. So I could not resist the temptation to re-visit the human headlines relating to our real estate industry since the onset of the GFC.

As Alan Kay once said “The best way to predict the future is to invent it.”

Before the swine flu, real estate markets were subjected to unrelenting forecasts that simply never came to fruition – enter Professor Steve Keen (no doubt humming the words of “Climb every Mountain”) the King of property forecast bloopers. On November 28, 2008 Keen predicted zero interest rates within two years and a forty (40) per cent drop in house prices within five years (double the drop in the United States). Macquarie Bank interest rate strategist, Rory Robertson, declared that “Dr Keen’s gloomy predictions of an Australian housing market plunge had a one per cent chance of being right.” This then prompted Robertson to challenge Keen that the loser would wear a T-shirt saying “I was hopelessly wrong on home prices! Ask me how.” And make a 200km trek from Canberra to Mt Kosciusko. For the record Rory Robertson thus far, has been spot – on with his market predictions.

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Tim Mooney Photography – Manly beach back to Sydney CBD

timmooneyphotography.com
www.sydneywaterfronts.com

When the Reserve Bank of Australia (RBA) met this week, it was prediction time. What would it do with the official cash rate? It didn’t go to zero but remained (for the third month in a row) at three (3) per cent. Whilst the RBA has strong concerns with unemployment, inflation is the growing concern (as I predicted in last week’s edition). RBA governor, Glenn Stevens, said, “The Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed.”

The TD – Securities/Melbourne Institute inflation gauge rose 0.4 per cent in June, following an 0.3 per cent fall in May and no change in April. Annual inflation (measured by the gauge) identified that the rate in May was 1.5 per cent. The RBA’s target range is to contain inflation between 2 to 3 per cent. The inflation accelerants to watch will be petrol, food and household rents which are repeat offenders in the Australian economy.

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Figures released this week by The Australian Bureau of Statistics (ABS) show that, for the eighth month in a row, real estate buyers took out 2.2 per cent more home loans in May (up again from the 0.9 per cent April figures). It should also be noted, that first – home buyers increased from 28.6 percent in April, to 29.5 per cent in May. The Federal Government’s first – home owner’s grant is a concern (another prediction, another story and another day).

The one thing missing from our markets (until June) has been confidence so it came as little surprise to see consumer confidence surging in July to its highest level in eighteen months. The Westpac – Melbourne Institute index of consumer sentiment rose in the month to 109.4 points, seasonally adjusted. The index in July was up 38.5 per cent from a year ago, prompting Westpac Banking chief economist to announce “This is unquestionably a stunning result.” On the back of our $61, 238,200 sales last month, it would be reasonable to suggest that we are not witnessing predictions, rather market affirmations – with no conspiracy theories.

Of greater concern is the continuing decline in construction where house building contracted for seventeen (17) consecutive months in June. Detached home sales decreased by 9.9 per cent in NSW which is based on delayed projects and difficult credit conditions. Too hard for our elected politicians to fathom – even though they launched ‘Nation Building’. Simply put, you can’t put a plaque on a house although you can on a school or a hospital. It is abundantly clear that Ruddy Fantastic has stuffed this up and many are calling Nation Building ‘Plaque Building’ – ah egos at work!

One prediction I did make some time ago was that Google (the online bible) would enter the Australian property market and take on www.domain.com.au and www.realestate.com.au with a free service. Google launched Google Maps at 3.00 pm on Monday this week and the exclusive announcement can be read at www.business2.com.au I have uploaded the video Google release for your perusal or you can see for yourself by clicking on http://maps.google.com.au/

Richardson & Wrench Mosman & Neutral Bay (RWM) is ranked at number one on Google for Mosman real estate searches. I just love it when a plan comes together!

Fort Crumble (NSW government) has been active in the real estate market busily selling our police stations to off-set mismanagement and dwindling coffers. Nine police stations (including Mosman) and another 200 buildings and parcels of land, including the Sydney Fish Market, are now being listed and sold by Fort Crumble’s real estate agent (not RWM). Obviously our inept premier expects our police officers to work from home to keep overheads down.

The unemployment rate was announced this week with a moderate rise, to see 0.1 ppt to 5.8 per cent (prediction 5.9 per cent) NSW (6.5%), Victoria (6.0%), Qld (5.4%), WA (5.1%), SA (5.4%)and Tasmania (4.7%).

A prediction on NSW labor being re-elected? No hindsight required however, there is always the Hope Factor. Many subscribers would have seen television advertorials boasting contributions to a building and jobs creation programme for the state of NSW (another huge tax payer cost). The alternative is to give away our state assets simply because those involved were not intelligent enough to manage our economy in the first place.

It’s no wonder NSW leads Australia in bankruptcy when our very own elected government is staring down the barrel of a Part X agreement.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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