.

The only consistent trend since the GFC of 2008 has been that neither agents, buyers, nor vendors, have any real confidence that the future of the financial world is set for a recovery in the foreseeable future.  This has culminated into a confused market perpetuated by misinformation and rumour, resulting in the proverbial fence sitting i.e. don’t sell or buy now. Despite this general sentiment my experience is slightly different.  I am dealing with some very discerning vendors and buyers who are making this market work for them by taking advantage of the current conditions to achieve their personal goals for their families.  Where for most others, ‘negative perception is reality,’ these vendors and buyers are dealing with the real facts and are turning them into opportunity.

I am not talking the market up today, I am just trying to shed light and clarity for those who now consider that the property market exists in a deep fog and cannot see a clear path from which to make an educated decision.

BUY PRINT

MISINFORMATION is everywhere so make sure you are informed and not misled. For example:

Media two weeks ago (14th May) The Mosman Daily published that there were 243 houses listed in the last 4 weeks in Mosman over $3m. The fact is that in Mosman, there were actually only 80 houses (in total) on the market, in all price ranges.

Most purchasers constantly search properties via the Internet by price range, to fine-tune their selection.  Recently, a senior banker sent me his property analyst’s residential property report for Mosman, which was sent to thousands of their clients. It claimed that there were over 50 properties for sale at $5M plus and 10 properties at $10M plus. The facts at the time were that there were 16 at $5M plus and 3 properties over $10M. His mistake is a common one. Any specified price range can include properties at any price. For example any agent with say, a $3m property, can include it in a price search for properties at $5m and so on.

Vendors­ in Mosman, are most often told that every property should be auctioned and that their agency clearance rates are 90%. In 2010, Australian Property Monitors recorded around 330 house sales in Mosman, of which 49 sold via Auction. If we all agree that around 75% of all houses are initially placed on the market via auction, then the real auction clearance rate in 2010 was only 20%. So why, do most real estate agents rush to recommend an auction for every property they represent? We agree that some properties are ideal for auction, but most are obviously not, so vendors must seriously consider other selling methods if they are going to get the results they hope for.

THE GRASS IS NOT ALWAYS GREENER

Most vendors believe that now is not the time to sell but most do not realise that although there are less buyers, there is much less choice and ultimately most buyers will buy within three months rather than wait for years. Honestly, my most frequent buyer complaint is that there is not enough choice in their price range and many have been searching for over 6 months. Vendors believe the market has dropped appreciably over the last 12 months. Technically, market reports confirmed recently, that top-end properties dropped by only 3% last year. This negative trend isn’t significant enough for vendors to delay their decision to sell, given that most accept that this property market may show no capital gain for years to come and the financial proceeds of their house sale can be used better elsewhere, or to fund their re-purchase.

Many purchasers still want to believe that the incredible deal is yet to come, when the best deal is right in front of them. They have the right to dream, but they are reading negative Sydney property headlines and incorrectly applying them to our local market. They will tell me that half of Mosman is for sale, prices will drop by another 30%, interest rates will go through the roof, yet when you present them with the facts, they prefer to find comfort in their fantasy. For those who follow the market closely, there have been some poor sale results.  Most typically, the properties were either grossly over quoted initially, or are actually B Grade properties compromised in some way, were sold by poor agents, or a combination of all three.  We have also seen many strong results for the $2m to $15m price range and in the apartment sector. Money is out there, particularly for good property.

Selling trends are not seasonal but are tending to run in six monthly spikes. In our experience since the GFC, March/April is the 1^st peak and August/September have been the strongest sale periods. Buyers are taking longer to purchase as there is less property to choose from and the market is flat. This Spring market will start slightly earlier than usual to allow enough time to complete campaigns prior to September school holidays. There will not be a huge influx of property which will advantage the vendors with well priced property, selling to realistic purchasers. Spring is shaping up to be a strong sales period.

To help you in the coming period here are my top 10 tips for you to consider

• The only measure of a good result for those selling and re-buying in this market is the ‘change over cost’. So drop 10% of the sale price and try to buy even better.
• Since the GFC, sales levels may have halved but so have the buyers. Demand is still close to the level of supply, therefore prices will remain reasonably stable.
• The best agents all have the ‘gift of the gab’ but purchasers will remember 80% of what they read and 20% of what they hear.  Does your agent prepare quality written property documents, personalised to each buyer’s ‘property brief’ to close the sale?  If not and biased by misinformation, vendors are losing the best buyers.
• Currently, vendors can dominate by having a greater voice in this smaller property market.
• Vendors – not every house is best sold via auction, based on a real auction clearance rate of 20% in Mosman last year (Source APM). Quiz your agent’s rationale for the most effective method of sale for your property.
• Buyers – take a long term position in this market and look to get a good deal for an ‘A’ grade property rather than a better deal on a ‘B’ grade property, which will never have the same level of capital appreciation.
• The best agents should perform more as your informed ‘property advisor’ rather than just trying to make a sale at all costs. Working to place the right buyer in the right property, always achieves far more sales and at higher prices.
• Consider your agent’s track record closely since the GFC.  For example, 50% of our last 22 sales have been street records, so how does your preferred agent’s track record measure up in this market?
• Buyers – focus your property brief on measurable property credentials and not just emotion. Here’s a general list. Note, the best properties will have all or most of these credentials. Good views – desirable land size for your needs – ideal location – tranquil – privacy – best aspect – good potential: factor in any re-development costs, or totally finished, nothing to spend – strong capital appreciation
• The best Agency Internet platform will introduce the most qualified buyers to your property and many local agents only rely on domain.com.au or realestate.com.au. This is not good enough, as on the main real estate portals, your property competes with all properties. We measure all buyers 1^st point of inspection for each property and our own site at www.rwm.com.au commonly records nearly the same hits as realestate.com.au, with domain.com.au the strongest portal.

That’s enough from me and thankfully, my brother Robert will be returning to write next week’s edition. From our team, we wish you all good fortune in the property market. We look forward to meeting you and maybe we will sell you your ‘dream home’ this Spring.

For this week’s sales in 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

Richard Simeon

Director

29.07.11Richard Simeon3 Comments »

Today, I thought I would give you an insight into my overview of the last 2 years and hope the information assists you to move on to smarter property sales and purchases.

The world changed post March 2008, and so has the local real estate market. Today’s vendors and buyers remain totally confused and understandably so. As two years on, sales trends are still so erratic, if you look for security in each short spike continuing as a trend, most will get it wrong.  The last two plus years have seen the most dramatic swings of opinions and sales volumes since the early 1990’s. Long periods of minimal sales have been followed by bursts of sales, reminiscent of the golden years. At least back then vendors and purchasers  alike, could make a calculated decision based on predictable trends and sales evidence, as to the most likely sale price and plan their lives ahead accordingly. Back then, many properties sold at the top of the price range, buyers had more income security and were more inclined to compromise on the perfect property (there is no such thing) and were more inclined to put the family’s happiness first, rather than to negotiate to the final dollar.

For two years the only consistent property trend is inconsistency, so stop trying to pick the market and focus on how the quality and genuine appeal of each property meets the criteria and desires of your family or yourself. Yes, price is always important and the evidence is that property prices have lowered and represent great buying for genuine buyers. However, many buyers are living in a false world and dreaming of a ‘property collapse’ and consistently missing out on well priced properties, which would have been ideal for their own needs.

The reality is that stock levels are down, around 30% to approx 330 house sales in Mosman for the last two years and buyers are fewer too. Prices are down and many buyers have less money. Sellers will understandably take less as most will re-buy for less. Buyers are patient as they are more inclined to wait for “A” grade stock, of which nearly all is selling.  However the biggest fact is more buyers than ever are regretting missed opportunities.  Personally, I’ve been fortunate to have sold a house every 10 days on average for 18 months, representing around $180,000,000 worth of property over every price range.  I feel like a walking research library of consumer sentiment, both buyers and sellers alike, positive and negative. I’m spending on average one day per week with potential vendors and buyers discussing when and how they should move in the property market.  The truth? There are many buyers and sellers who have made the best property transaction of their lives over the past two years.

BUY PRINT

Here are a few of my tips for buying and selling in this post GFC market:

Generally speaking, your preferred and most trusted agent and agency, should almost act as your informal property advisor and not just jump in for the listing or quick sales commission. Use them to analyse your property needs. They should be capable of mapping a purchase or creating the best selling strategies, which maximise your position within the current market.  In any property market there are winners and losers, so make sure your advice is well supported by third party data and evidence and not baseless opinions.

Buying – generally speaking this is the best market to purchase in if you are looking longer term. We have buyers that have been looking for the ‘impossible deal’ for years. Their families could have been settled in their dream house and financially better off years ago.

• Purchase “A” grade properties and not those compromised, as when the market strengthens the better properties will appreciate ahead of market. So, take a longer term perspective and don’t be swayed just by cosmetic beauty, as this is the easiest and the least costly attribute to rectify.
• Most fully-renovated properties represent better buying in this market than land value sales, as you cannot buy the land and rebuild for the same cost of a completed house
• Longer term settlements and special conditions such as ‘put and call’ purchase agreements  are becoming more typical , so don’t hesitate to present your terms and not simply disregard a property if the standard contract terms are not attractive to you.
• The selling agents must be capable to assist you to the most intimate level. If a property is not right then he/she should be able to source your preferred property. For example, our subscribers represent over 5,000 buyers in 53 countries worldwide and our subscriber sales drive our business. As at today we have sold $956,000,000 worth of property to our private clients.
• Don’t outsmart yourself and immediately discount a property falsely assuming that the price will drop. Recognise and accept that there is always sufficient demand for good properties and a fair price is reflective of a good property
• Be a smart and educated buyer so you can move quickly, which most often means using the agent to do your research and rationale for you. Understand what property credentials justify value and don’t simply group all properties as being much alike.

Selling – “Trust me, we’ll sell your home no worries”, doesn’t work these days. Reputations are being made and lost, with buyers finding many agents short on ‘detail’, as the verbal bluff is falling on deaf ears.  Does this mean that you shouldn’t sell? Well hell no! – you just need to ensure that you are driving the sales process and not taking any short cuts.

• The best agents act more as “property advisors” than hard selling agents, they work to appreciate your specific needs, and then deliver. 50% of my sales are to buyers who initially say no.  Once we analyse all the facts together via meetings and written documents, we realise that a particular property is more appealing than first thought, so keep an open mind.
• Some properties are perfect for auction, most are not. Prior to the GFC every buyer hated to compete at an auction, today most buyers relish the thought of going to an auction, so they can low bid it. Strategies that counter handing too much power to the buyers are the key.
• Purchasers will remember 80% of what they read and 20% of what they hear. The verbal pitch is critical but the best agents reinforce their sales pitches to good prequalified buyers as strategic emails.
• A post GFC successful track record is critical, as you know they are succeeding with sales in this market.  Some agents went on holidays last year for six months as they couldn’t sell, some spend all their time trying to co-list other agent’s properties. Most are complaining. This is a real market and the sales are being made, so look for the ‘real’ performers.
• Don’t co-list a property, as only one agent and agency can affectively represent your best interests. With a joint listing, buyers will contact both agents looking for the cheapest deal, so recognise that no agent owns a buyer and that buyers are not even loyal to an agent when buying. If they want a property they will deal with the selling agent.

I hope some or at least one of these points will assist you in this post GFC property market.  Stay tuned for an early Spring market with most properties launching mid-August. Stock levels won’t be huge, a fact that has been so for two years, but we expect many buyers will be looking to buy and secure their new homes and settle in for Christmas this year.

Richard.

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

30.07.10Richard Simeon6 Comments »

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While Robert takes a well earned Winter break, I’ll step into the chair this week and give you a break from the politics and the stats and talk directly about the market from the coal face.

In a year or two will you look back over the last 12 months and realise you’ve lost an opportunity? Only time will tell. Let’s reflect briefly on the facts and move forward, based on evidence and current trends. On reflection, over the last 12 months, buyers were initially and justifiably seeking their revenge against property prices that had become inflated. By mid 2008, they were trying to pick the bottom of the market and by the end of 2008, the vast majority of buyers had decided not to purchase, unsure of whether we were entering into a deep recession. Those that were not adversely affected by the GFC (Global Financial Crisis) sat back in the hope of further price drops and more choice as ‘distressed’ properties came onto the market.

Tim Mooney Photography

www.timmooneyphotography.com

The first quarter of 2009 was disappointing for longer term purchasers as they saw prices starting to stabilise, while low stock levels remained. By the second quarter, sentiment was starting to pick up and buyers revisited the stock that had not sold. This resulted in a doubling of weekly inspection numbers compared to previous months. In May–June we sold 80% of our entire stock – $61,000,000 worth of property and 90% of the prices achieved were in-line with, or above, vendor expectations. There were no ‘fire-sales’. These results speak for themselves and the property sales ranged from $2m re-builds to $8m residences.

As I talked with and gave advice to a continual line of vendors and purchasers, a few trends emerged. Discerning vendors, although not pressured to sell, had taken this as an opportunity to sell first, then re-buy in a softer market thus realising a greater financial upside than if they traded up in a ‘bull-market’. Those purchasers who were cashed-up and wanting to move forward with their lives have been able to secure an ideal property for a realistic price and with less competition than normal. Having said that, the relatively low stock levels meant that purchasers have had less choice and this has assisted in keeping prices stable.

Moving forward, I believe this is a good market for both vendors and purchasers. Australia seems to have weathered the financial turbulence relatively well and we are seeing slightly more desperate purchasers, who have been in the market for up to 12 months, keen to buy in the coming months. Property prices have stabilised and with purchasers wanting to proceed more quickly, the typical ‘days on market’ period for new listings should reduce dramatically.

As school holidays conclude, expect to see some new stock entering the market, but perhaps not at the same volume as in previous years. Vendors who do wish to sell should ideally be planning to sell early in Spring to give them as much time as possible to secure their new property this year, in the same property cycle. Although we are seeing a return of more positive sentiment, cash is still king, so take advantage and buy in the coming months (although we still predict stock levels will remain well under demand).

Many of our clients use us as “real estate advisors,” whether they are looking to sell or buy. As with any good investment advisor, our focus is to help you plan for your long term success, in line with your expectations and ideals. We assist, educate and empower every purchaser to proceed, and, at the same time, focus on exceeding the expectations of our vendors. This results in a win for both parties.

So whether you plan to sell, buy, or both, we wish you well in the coming months and hope to see many of you out there in the market. If you need a sounding board or constructive property advice, we would be delighted to contribute to your knowledge base, so don’t hesitate to pick up the phone.

Kind regards,

Richard Simeon
Director

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/

Here is a link to a property portal survey that only takes about thirty seconds to complete www.aussierealestateportals.questionpro.com Your participation would be very much appreciated.

24.07.09Richard SimeonNo Comments »

Bobby “Dazzler” Carr may no longer hold the political spotlight – however it is great to see that the W A Chamber of Commerce is still influenced by some of his economic hypotheses. In what can only be described as an extraordinary sequence of events, the “Governor of Moolah” was asked to lift interest rates this week because the WA economy is booming. Obviously, its request was denied although we would suggest to the W.A. Chamber of Commerce that next time it makes such an absurd request on behalf of fellow Australians, it annexes the latest wine review, especially those of the red variety. Our very own “Governor of Moolah” was observed last night spending considerable time at the Cremorne BSW (bottle shop) investigating the State’s appealing fermented juice of the red variety. From a distance, it appeared that the Margaret River was slightly ahead of the highly fancied Perth Hills.

The W.A. Chamber of Commerce has further contradicted itself, as dwelling approvals released this week, identified a fall in W.A. of 8.4 per cent in the month of May. South Australia posted a 34 per cent drop so we can expect its Chamber of Commerce to file for a decrease next month. Rises were recorded in Victoria, up 21.5 per cent, Queensland, up 8.5 per cent and New South Wales, up 6.1 per cent.

At the beginning of a new financial year, part of the Australian culture is to immediately take a vacation. This makes sense if you look at the latest figures from Home Price Guide which indicate that house property prices in the twelve months to July 1, 2006 in Mosman have shown a zero per cent movement. We would expect this to change soon as Mosman, in the month of June, posted an unprecedented volume of top-end sales. The average price for a Mosman house is $1,937,000 with the median price adjusted to $1,700,000. Apartments continue a slow climb, recording a four per cent increase with the average price now being $627,000 and an adjusted median price at $500,000. As we predicted (with some debate) we are of the belief that apartment prices in Mosman have bottomed.

Neutral Bay houses now have an average price of $1,030,000 and the adjusted median price is $995,000. Overall, this is a one per cent change over the twelve month period. Apartments in Neutral Bay fell three per cent with the average now at $520,000 and an adjusted median price of $496,000.

Cremorne appears to be a touch more volatile with the median price dropping eight per cent for the twelve months. The average price for a house in Cremorne is $1,299,000 with an adjusted median of $1,034,000. Apartments, in Cremorne increased by three per cent over the twelve month period with the average now coming in at $606,000 and the median at $509,000.

Last but not least, Cammeray recorded an average house price of $955,000 with an adjusted median of $878,000 which is up three per cent over the twelve month period. Apartments now average $546,000 and the median price is $494,000 which also represents a three per cent gain. These results are pleasing and all but confirm that prices are in a holding pattern and a rise in interest rates would have little to no effect on our property markets. Rather, our markets are more sensitive to merchant bank bonuses which are what prompted the bullish run last month. The key to our market will forever be based on market supply and in Mosman, sales are rapidly declining (compared to activity in previous years). Mosman prices are much like a fine red wine. They get better with age !! Cheers ^__^

7.07.06Richard SimeonNo Comments »

It’s no secret that Robert Simeon has enjoyed commenting on the government in this column, so you can imagine how incensed he was to hear that Bob Carr has quit while he is on holiday and he isn’t here to make light of the occasion.

As a tribute to Rob (not Bob) I have compiled some recent VRN gems that bear repeating. Hardly a week goes by without some colourful comment from Robert but I believe this is not so much the end of the Bobby Dazzler era, as the start of a whole new episode for VRN!

9 July 05
While Bobby ‘Dazzler’ and Andy (Re-assure me) claim that they are in discussions with Canberra about reducing taxes so they can get a larger chunk of the GST hand-outs, word is that they were going to abolish the vendor duty anyway. The property industry is the largest employer in the country and introducing taxes that restrict natural growth, makes little sense at all. The most interesting point is that with Western Australia now announcing this week a wide range of tax reviews, NSW remains the only state that has refused to implement tax relief. The property markets seriously need the investors back, otherwise the rents will continue to escalate. (This is the case at the moment.)

2 July 05
Our close mate Bobby ‘Dazzler’ was at it again today with a massive 450 state taxes getting a touch-up. You name it and it is up, and if you are in for a spot of recreational fishing this week end your licence too, went from $25.00 to $30.00 a year. Andy Re-assure me (Dazzler’s treasurer) said this week that the biggest factor affecting the property market was the increase in interest rates and further speculation of future rises. Most are of the opinion that given the cost of petrol, interest rates will remain untouched for the next twelve months !! Nice one Andy, obviously he still subscribes to No Idea !!

25 June 2005
Finally, there is some method to the madness in the way Bobby Dazzler runs his ‘State of Decay’ with his decision that NSW is to remain Australia’s most heavily taxed state. By adopting an economic strategy that is forcing more companies to re-locate to other states, the ‘Dazzler’ obviously believes this could be the very answer to solving the problem of falling water levels. By severely reducing the population of NSW, water consumption levels will not reduce as rapidly which, in turn, puts a positive spin on our water supply problems. Whilst standing on a platform (where the train is also running late) the NSW government still believes that stimulating the economy with tax-reform, is not the way of the future. One can only guess that other states, where investment and economic growth is encouraged, are becoming too much of a magnet for many companies.

18 June 2005
Whilst most would agree that we are in a slow-down mode, one needs to look at the major cause for the slow-down. Does the name ‘Bobby Dazzler’ sound familiar ? Transaction costs otherwise known as NSW Government fines for property participation are the major cause for the decline in available property in Mosman. Given that the formula applied to determine the duty payable, turns twenty next year (property prices are much higher in 2006, than 1986) most would agree that the time has arrived to set a Stamp Duty that encourages and not discourages purchasers. I guess the ‘Governor of Moolah’ has to remain politically correct by not commenting on the effect that this duty has on the property market.

11 June 2005

Memo: Bobby Dazzler
Subject: Tax Reforms

Ten years ago, on average, a Mosman house sold every seven years. Today, we are seeing anecdotal evidence that these houses sell every twelve to fourteen years due to the high costs of acquisition taxes (Stamp Duty over $3,000,000 is now seven per cent of the purchase price). The Australian Bureau of Statistics has identified that house sales in Mosman are on a rapid decline.

4 June 2005
The property market always leaves clues and if you look hard enough, the clues lead to answers. ‘Bobby Dazzler’ has created a major problem for the rental markets as rents are now going in the opposite direction to our evaporating water supply. We have reached 98.88 per cent occupancy with our rent roll, and that is scary, if you are currently looking to rent, but very encouraging if you are an investor looking to enter the market again! The future for tenants who are endeavouring to save a deposit is bleak, as the rents are now being increased to pay for Land Tax, and demand far exceeds supply. It is too early to calculate what the new rental increases will be, however a ten per cent hike is a very strong possibility. This rental position is a direct response to government policy, and once again identifies just how far out of touch ‘Bobby Dazzler’ is, with the ‘State of Decay’.

….and all this in the last few weeks, no wonder Bob’s doing a runner!

Property Council NSW executive director Ken Morrison must read this column too, as the Australian Financial Review reports he has called for a complete review of the tax burden on NSW businesses, particularly the removal of the “inefficient and investment-sapping vendor tax”.

The same paper also points out that “surging Sydney house prices helped cut economic growth in recent years by encouraging a greater exodus of residents to cheaper states” which Robert brought to our attention years ago.

Further, the latest Business Outlook from Access Economics states NSW “is on the wrong side of a housing bubble, the wrong side of an over-valued Australian dollar and an historic swing in the nation’s comparative advantage”. Clearly, over the past decade, the NSW people have been getting on with things despite the government rather than because of it. So with nowhere else to go but further down, it’s little wonder Bob has decided to call it a day.

Of course Bob has his own ideas about the legacy he has left us all, best summed up in his resignation press conference when he said “I find it hard to believe in heaven because Australia in 2005 is so near perfect.”

Don’t worry though, Robert will be back next week and I have a feeling he just won’t be able to stop himself from having the last word (or three).

So take time to enjoy Bob’s weather (“there’s a lot of life to be lived”) and I will see you at one of my open homes this weekend!

30.07.05Richard SimeonNo Comments »

Archicentre, the architects’ building advisory service has reported its finding this week that the costs of renovation have jumped up in the last 12 months by 10%. According to Archicentre, the costs are related to the lack of apprentices in the building industry, which means we are paying more for fully qualified builders to knock up a side gate because there is no cheaper help around.

It’s easy to see that anything we do to make our homes more comfortable will cost us money, which we expect to get back when we sell it. We invest in the property now, for a better return later. When we renovate extensively, we expect a premium price when we sell down the track. As more Australians buy expensive houses, the simple result is, “more expensive houses”.

The rapid rise in residential property prices over the past few years is the result of many factors including the ability of more households to borrow more money. The rate of growth in housing supply is relative to the growth in the number of households. Right now, prices are holding, so don’t expect much growth this year. If you are planning a major renovation then you are probably planning to stay in the house for at least another couple of years.

Yesterday, the Bureau of Statistics announced that the cost of building a new house rose 5.3% in the past year whilst the cost of non-essential luxury goods has dropped. Whilst it will cost us more to have the builders convert the spare room into a media room, the cost of fitting the plasma TV and entertainment system has dropped by about 20% since last year. That new garage will be 10% more than last year but the new car to go in it, is down nearly 3% – so what are you waiting for!

Even in a flat market, the number one topic of the Mosman Café scene is still real estate and the number one sport is now speculating on what other people’s property might be worth. Yesterday, the Treasurer predicted that inflation will remain in the Reserve’s target range, suggesting no interest rate rises. Many economists however, are backing a rate rise late this year!

Whilst the figures released yesterday show a decrease in the cost of domestic travel and accommodation meaning we can take cheaper holidays in Australia, they also report a rise in the cost of beer and takeaway food when we get there.

Like other markets, the Sydney real estate market travels in cycles, is subject to highs and lows and is naturally influenced by a variety of factors. The key economic factors of historically low interest rates, strong levels of migration, high employment rates and solid economic growth, all point to positive influences in the property market for the next financial year.

Importantly, the Sydney market is made up of many niche property markets and Mosman has micro niches of its own so changes across Greater Sydney will have less pronounced effect in our micro climate than might be reported in the general press.

Certainly our outlook for the next few months is for more of the same, although we have already noticed increased interest from buyers and we anticipate an even stronger market activity following the election.

If you are thinking of selling, and you are realistic, you will find buyers still keen to compete for good properties. Robert will be back from Bali in time for VRN next week so thanks for listening, hope to see you at an Open House soon.

31.07.04Richard SimeonNo Comments »

Whilst Robert is relaxing in Bali and annoying the locals with talk of real estate in his beloved Mosman-Neutral Bay area, I will be the resident journalist at RWM. I hope you enjoy my column until he is back.

Home owners shouldn’t be too worried about the paper value of their home, after all most people live in a house on average for eight years and as long as you are living in your home, you can’t realise any profit you might have made.

At the same time, if you buy a home today, there’s a better than even chance that your property will be worth more in eight year’s time. That’s the simple logic that is keeping our office busy with plenty of new listings and plenty of buyers putting their hands in their pockets to buy good properties at a fair market price.

Let’s be realistic, if you bought your current home just a couple of years ago, you have benefited from the heady price rises we all now take for granted. There is no doubt that the overall market has changed, but it’s business as usual here at RWM.

Listen to this……….
It doesn’t happen every day but a case in point is 6 Prior Avenue Cremorne. The property was listed with us on Wednesday last week. We sent out an email alert to our VRN subscribers and placed an advertisement in the Sydney Morning Herald for an Open House on Saturday morning. Two genuine buyers immediately emerged and the property was exchanged two days ago, before the Mosman Daily even hit the streets. Both the buyer and the vendor are VRN subscribers, which is a great example of how (as they say in the TV ads), …it pays to belong.

Whilst we know that every property is different and the market changes all the time, nothing will alter the fact that people buy and sell property regardless of what the media tells them. We all know the reporting methods for the data are so much in conflict with one another, that they can’t be taken seriously. There are at least four different reporting indicators confounded by issues of poor timing, the type and mix of housing included or excluded (houses comes in all different shapes and sizes and locations) and importantly, the quality of the actual properties on offer. Those TV renovation shows really do have a lot to answer for!

The next question that will be asked, is what effect will the election have on real estate? Our experience over the past thirty years, has shown that many people sit on the fence until the election is over. This will lessen the competition from buyers in the market, and also restrict stock. So the balance is usually even. What normally happens is that those who buy now and before an election, do better than the fence-sitters who procrastinate and are overly cautious!

Our tip……….
If the property is right, buy it! More than likely you’ll be there for more than eight to ten years and you can’t go wrong anyway. And remember, “Fortune Favours the Bold!” Make the most of a good opportunity.

Regardless of what the media reports, we prefer to listen to our buyers and sellers on a daily basis and get on with the business of real estate rather than worry about a “bad news” headline that is written to sell papers. That’s it from me, I have to go and spend some quality time with my kids watching The Block!

24.07.04Richard SimeonNo Comments »

The week that was saw my triplets celebrating their first birthday, whilst their 3 year old big brother conducted calculated acts of terrorism to steal the limelight. Much-the-same can be said of the USA where any brief celebration related to a rise in the stock market, turned into another swan-dive, as corporate terrorists brought another major institution to its knees. Just as I cannot predict the plotting mind of my little boy, nobody can predict the USA’s next external or internal terrorist events. Over the last two years, $12 trillion AUD have come off the value of the US stock market. So when will it find a bottom? Even “El Presidente”, the Texan cowboy, is now seen pleading for a return of investment.

So what does all this mean in down town Mosman? Growth during June was just 0.7% adjusted annually to a figure of 2.8%, which is well below the government’s desired 3 to 4% target. As correctly predicted in past weeks, it’s almost certain that interest rates will not rise now. So, the really good news here is that Sydney’s journos will stop publishing the ‘rise then fall, fall, fall’ of Sydney’s property market.

At the moment Mosman’s property market is quiet, due to an absence of stock and some overly nervous purchasers. For example, have a quick look at property for sale in the Mosman Daily, at the normally popular price range of $2.5 to $3m. There appears to be only four or five properties, of which we have three (6 Major Street, 102 Prince Albert Street and 2 Milner Street). In two months time you can expect comfortably triple that amount, as the Spring market takes off. So what will happen to prices, I hear you ask? Well, that has to remain as your gamble, I’m sorry to say. At the moment the market is flat and extremely well priced, but if any positive news out of the USA can be added to build on the low interest rate story, then prices will rise as an excess of buyers compete for property in the open market. If we receive more bad news out of the US then I anticipate the market will remain stable but not drop. Premium value property will always demand a top price, however, comparatively less attractive property will rely on the negotiating strengths of the real estate agent to achieve better than the vendor’s ‘most realistic’ price expectations.

As buyers gamble this year on the selection of the best time to purchase, vendors will face a more challenging task. Who are the best agents to achieve the highest price for their property, amidst buyers with potentially increased purchasing power? More now than ever before, agents must develop informed selling strategies, prior to commencing the campaign by linking the property for sale to the local market as it is influenced by broader market conditions. Top negotiation skills are derived from knowledge, which creates the power to control proceedings. If your agent isn’t an active market analyst then your buyers will dictate proceedings. So here comes Spring, best of fortune for the vendors and good hunting for the purchasers.

Watch out next week, as brother Bob returns to the author’s chair, after two weeks in the Balinese sunshine. Will anyone be spared? We guess not.

27.07.02Richard SimeonNo Comments »

While our resident author, Robert, is away on holidays (no doubt ear bashing the locals about Mosman real estate!), it is left to us ‘mere mortals’ to carry on his illustrious column!!

It seems each week the real estate editorial debates get longer and longer, involving more and more analysts and self-appointed experts! We’ve never seen the market so confused, so we though we’d clear up the mess and give you a local perspective, but remember, we all know there are no guarantees.

We talk to hundreds of buyers/sellers in Mosman every week. The foremost questions at the moment are, “what’s happening to the market? Is the market really soft at the moment? Will prices rise in Spring? What will happen in the longer term? Will I receive a good price for my property?” They’re Mosman’s million dollar questions.

The short answers are: yes, the market is seasonally soft, coupled with confused buyers who are justifiably, yet unnecessarily nervous about buying property at the moment. It’s all an apparition, just as it was after Sept 11, when buyers picked up great deals for a couple of weeks only. Unlike the share market, which is still searching for its bottom, Mosman’s property market is set to keep rising in the short and longer term. Spring, which is only weeks away will see a ‘small avalanche’ of property hit the market, which will in turn, see prices strengthen as buyer confidence returns. Here’s why.

Interest rates will remain in check as the U.S. economy may remain sluggish for up to 3 years. As Morgan Stanley’s Stephen Roach warned, “the U.S. has better than a 50/50 chance of falling into ‘double-dip’ recession before it can make a meaningful recovery.” The Australian economy should remain strong and the government will do anything to keep growth between 3 to 4% coupled with falling unemployment. So you can expect maybe one ¼ % rate rise this year.

Mosman’s decreasing property supply versus increasing demand, will keep prices high. Mosman is a niche market, not reflective of Sydney’s bigger picture. Ten years ago, approximately 950 Mosman properties sold in the year. This year, the figure will drop to about half, or around 450 properties. It’s well documented that Mosman has captured more of Sydney’s prestige buyer market, than any other suburb. Just recently, Mosman’s average housing price skyrocketed to number one, well ahead of Woollahra in second place, which is reflective of future growth. And, if supply were to increase, the only drop in Mosman’s property will be in the waiting time for its buyers.

When the share markets rebound, Mosman’s property prices will follow suit. If Mosman has any residential bias at the ‘top end’ it would lean toward the finance, banking and asset management fraternity. When the share market starts to recover, watch-out! The prices for prestige property will rise. Yes, it may take a couple of years, so what, it’s a comforting growth factor that you can bank on.

Prestige buyer database has grown by 84% over the last 6 months. For the record, from our registered database of over 2,000 buyers, the $3,000,000 group is the fastest growing segment. So again, with limited supply it’s only a matter of time before demand and prices for prestige property receive a massive boost.

Push – Pull effect will drive property prices up in all price segments. As prices rise at the top end there is a follow-on effect, which lifts the value of all Mosman property. Just consider what you can buy for between $1,000,000 to $2,000,000 in Mosman these days? Only a couple of years ago $1,500,000 bought a generous Mosman property. Today the median sale price in an incredible $1,700,000. Upgrading your property now, may pay a significant ‘Mosman dollar’ dividend in the future.

Analysts predict 11 to 12% growth in property prices over the next 3 years, followed by a boom. So where’s the risk? Also, where else will you find these returns in any investment opportunity, and tax-free of course!

Now we’ve convinced you that the market is strong, don’t just ask your agent to anticipate the value of your property, ask him/her “what he/she will do that’s different and will result in achieving the highest price.” If you’re not satisfied with their answers, then you know what to do. RING RING

PS. For an update of last weeks auction, 24 Clanalpine St exchanged for a very healthy undisclosed figure. 2 The Grove is still in negotiation, with five potential buyers, and an exchange imminent. 12 Shellbank Parade exchanged for $4.7m yesterday – not bad for land value!

20.07.02Richard SimeonNo Comments »