ARE WE INDEBTED TO PROPERTY ?

ARE WE INDEBTED TO PROPERTY ?

It’s official – the municipality of Mosman with approximately 4,900 houses has topped the list of Australia’s highest income areas with an average wage of $88,656 for both full and part time workers. This is more than double than the NSW average of $41,407. No wonder that the Mosman real estate currency remains the most expensive in the country. The figures were released by The Bureau of Statistics using the Tax Office salary comparisons for 2003 -2004. Given that many major banks posted record profits in 2004 – 2005, 2005 – 2006 and 2006 – 2007, this figure would be much higher today if statistics were not three/four years behind. Yet another glaring example of statisticians rolling out information after the “use – by “date.

What we are currently seeing is that not all money is being directed back into Peter “Perfect Super” Costello’s plan – which has hit a speed bump due entirely to the current rental crisis. Parents are now assisting siblings to buy apartments which are selling nearly as fast as garments at Stella McCartney’s sale. Of the twenty apartments we have on the market, we have offer and acceptance on four (about to go to six), and an additional five are under negotiation. Whilst this is a great sign for the market, it offers no rental relief as all are designated “owner occupier”. Are parents simply moving their children out of home and threatening them with rental increases should they not “toe the line?”. What the children don’t know is that the respective properties are actually in their names, so that the first home buyer grant gets a solid workout.

Even those renting, are exploring every possible avenue to get a foothold into the property market as annual rental increases cause great concerns. Rents will definitely have annual increases of between five and ten per cent over the next five years. This then makes the occasional interest rate increase look attractive and most share the opinion that rates will head south. The national debt has actually doubled in the last five years. Today it is $960 billion and of that figure, household debt makes up 85 per cent.

The Housing Industry Association announced this week that population growth in regional areas was equal to, or faster than capital growth in Australia’s three biggest states last year (clues are being left everywhere). Although our states “dumber and dumber” politicians have yet to come to grips with their monetary policies, this adds further light to the ongoing exodus from NSW.

Alan Jones pointed out this week “someone buying a $500,000 home will pay over $5,000 in developer stamp duty, over $1,000 in stamp duty on the mortgage, a State infrastructure of over $17,000 and a local government infrastructure levy of about $26,000. So basically on a $500,000 home you are paying up to $150,000 in state government charges and taxes.” As Morrie “I’m sorry” – keeps telling us “more to do but we’re heading in the right direction.”

I was more than interested to read a media release this week by News Limited and www.realestate.com.au “Australia’s biggest online property portal realestate.com.au will be significantly expanded as a national brand when the residential property sections of News Limited newspapers are rebranded under its banner.” My first thought was that the “powers that be”, must have been attending marriage guidance counseling. Another suggested a shot – gun wedding !! All in all a very smart move as competition is heating up and Fairfax (prior to this announcement) was the only stand alone business that owned both print and online businesses. It will be interesting to see is which businesses takes the new media initiatives and maximises these relationships with consumers. Given that there is absolutely no love lost between the two – one can expect plenty of “argy bargy “in coming months as the battle for supremacy continues. No doubt the ongoing threat of Google entering the online Australian markets has played a major role in the unification of brands.

The property landscapes these days change on a weekly basis. We can add some light on how those who decided to leave the state. They have decided to fly, given that trains don’t work and the roads are too dangerous to navigate. Many would argue that they are the ones who are actually heading in the right direction !! Cheers ^__^

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