APARTMENTS SHAKEN, HOUSES STIRRED!!

APARTMENTS SHAKEN, HOUSES STIRRED!!

Welcome to our final edition for 2006 – and what a year it has been! We had to contend with a property market inflicted with three interest rate increases. Many share the opinion that this was excessive given that we had just the one in 2005, none in 2004, two in 2003 and two in 2002 (these were all +0.25 per cent increases). In 2001 the Reserve Bank of Australia delivered six decreases totaling a -2.00 per cent reduction in rates where they finished at a record low of 4.25 per cent. There are many expectations that interest rates in the year 2007, “007” could possibly be a license to thrill. We are of the opinion that interest rates will remain unchanged as long as inflation runs at or about the three per cent level.

Without a shadow of a doubt, the housing market in Mosman well and truly out-performed the apartment market for 2006. Last week we reported that house sales in Mosman for the year were currently sitting on 275 and this week we can advise you that now they sit on 296 which is an increase on the 289 sales in 2005. As predicted, the 2006 selling year for houses should also eclipse the 309 recorded sales of 2004. This turnaround ends a five year cycle of reductions in annual volume and 2006 will, I predict, deliver the highest average median sale price ever recorded in Mosman. The Mosman currency has over-performed in 2006, and I am pleased to say that yes, we called it here. We believe that 2007 will be equal to 2006, although I have a feeling that it may even be better. I also predict that the highest price ever paid for a single house in Mosman (currently $15.500 million) will be eclipsed.

It is interesting to note that houses in Cremorne and Neutral Bay have also performed well with Cremorne thus far, posting 73 sales which also beats the 2005 sales of 66 (again a break in the cycle). Neutral Bay has to date, recorded 62 sales, again up from 2005, when 55 sales were recorded.

Unfortunately apartments have not performed as well as houses with turnover down on 2005 sales volume.

Apartments – Mosman
2001 679 sales Median sale price $410,000
2002 725 sales Median sale price $452,000
2003 569 sales Median sale price $475,000
2004 474 sales Median sale price $473,000
2005 480 sales Median sale price $521,000
2006 378 sales Median sale price $493,500

Apartments – Cremorne
2001 307 sales Median sale price $432,000
2002 380 sales Median sale price $485,000
2003 342 sales Median sale price $510,000
2004 330 sales Median sale price $500,000
2005 306 sales Median sale price $490,000
2006 267 sales Median sale price $530,000

Apartments – Neutral Bay
2001 443 sales Median sale price $405,000
2002 406 sales Median sale price $442,500
2003 384 sales Median sale price $510,000
2004 330 sales Median sale price $495,000
2005 277 sales Median sale price $505,000
2006 246 sales Median sale price $485,000

When you consider that the vast majority of rentals are for apartments, this highlights the rental squeeze given that in 2004 the investors started departing the markets. Also, at the time, the Comedy Company otherwise known as the NSW state government started tinkering with a Vendor Exit Tax and Land Tax which later turned out to be embarrassing stuff – ups. These markets have not recovered since then, despite rapid increases in weekly rents and predictions of annual ten per cent increases in weekly rents to 2010. The future indeed looks very bleak for those in the rental market as wages will not keep up with escalating rents.

It would not be an edition if we were not to have a dig at our infamous state government and “Michael Cost – ya Plenty” who must have been on the eggnog this week. Firstly, he suggested that Peter Costello should intervene if he was not happy with the direction in which the Reserve Bank was heading. “Going forward, he has an opportunity to stop another interest rate increase if it’s proposed.” A great clue on how he runs the NSW economy !! Mr “Costa – ya Plenty“ then said, “ interest rate rises had hurt the property sector (I think he means state revenue is down) and the national economy, and even resource – rich states like Western Australia were beginning to hurt.” Last but not least his clanger for 2006, “Peter Costello can’t run the line that NSW is the problem.” Well “Cost – ya Plenty” you could start by lowering Stamp Duty and Land Tax if you want to re-ignite the NSW economy !!

From each and every one of us here we wish you a Merry Christmas, (go easy on the eggnog as you have just seen what it can do). Thank you, for your continued support and a record year in subscriber sales. At the beginning of the year I would have not have predicted that we would be at $535,204,100.00

Have a fantastic break and we will return with our next edition on January 25, 007 hopefully “shaken not stirred” Merry Christmas with plenty of cheers !! ^__^

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