Buyers Aren’t Seasonal  – Vendors Are

Buyers Aren’t Seasonal – Vendors Are

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If the current federal election is anything to go by – a pivotal role that has emerged has been the aggression expressed on social media – yes our new digital economy. This in – turn has led to the most combative and often under – handed strategies ever seen before on the political arena. If this is what is now to be the new norm – the next three years will be very interesting.

In the run – up to this Saturday’s election the economy has rightfully taken front and centre where it should be noted that the Australian economy is performing very well when compared to other western economies. RBA leaves interest rates on hold which opens the question – has the cash rate bottomed? Certainly the job would be easier to scrutinise if economic and financial forecasting could suddenly turn – out to be more accurate for Australia’s $1.6 trillion economy. One thing you can be assured of is that if the LNP win the election this Saturday they won’t be sucker – punched into providing a date when the budget is likely to return to surplus.

Manufacturing declines for 26th month one can only expect to see a slight improvement with this sector given the Australian dollar has depreciated around 15 per cent from earlier this year. The Australian economy continues to grow at a sluggish pace with the Bureau of Statistics revealing this week the economy grew 0.6 per cent in the June quarter. The annual growth rate is now 2.6 per cent with the trend growth sitting at 3 per cent so we are growing at below trend growth. Whilst we remain at below trend one can rest assured that governments won’t be in a hurry to return the budget to surplus. Of particular interest when the GDP figures were announced was the household savings rate continues to remain high – economists predicted a savings ratio of 10.7 per cent to see it come in at an increased 10.8 per cent.

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BUY PRINT

I look forward to reading the June quarter Business Spectator CEO Pulse given the March quarter identified – “CEO’s scorecard for the government’s performance in managing the economy is down to 2.7 out of 10, which is the second lowest point it has been since we began the CEO Pulse in 2010. The other was 2.6 in 2011 Q3.”

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I am not of the school of thought that Abbott will trigger a housing boom “the looming Coalition landslide win on Saturday is now virtually certain to trigger a series of housing booms in Australia. In some areas the boom is not waiting for September 7.” I agree that some areas are certainly experiencing a mini – boom which we have seen plenty of times before. Presently within a 10 kilometre radius of the CBD we are seeing apartment markets posting very strong sales data although the same can’t be said for housing which remains slow and steady.


One of the problems is that Fairfax Media and News Limited online platforms and newspapers are talking it up in an attempt to get those advertising revenues up in their respective newspapers. Once again easily one of the biggest problems our real estate markets face is Australian stamp duties the fourth highest in the world for luxury purchases.

I read a report in this month’s REINSW Journal that “Stamp duty costs Australian property market 40,000 sales”. Just goes to show how state governments are so economically illiterate when a new study – How Do Stamp Duties Affect the Housing Market?, authored by Ian Davidoff and Andrew Leigh – has found a correlation between stamp duty and the stagnation of housing sales in Australia.

According to the study’s findings, an increase in stamp duty rates from 1993 to 2005 led to approximately 39,000 forgone sales in Australia. The study revealed that the short – term impact of a 10 per cent increase in stamp duty is to the lower house prices by three per cent.

If the property market is supposed to be booming this theory is certainly not reflective in the property volumes we are currently seeing in Mosman, Cremorne and Neutral Bay where yet again down this week. All three demographic markets are significantly down on the same time last year. To put this into perspective the Mosman housing market peaked at 168 last spring/summer yet this week it hovered around the high 70’s to finish at 80. Mosman apartments peaked at 112 this time last year and this week they sit at 61.

I would offer this interesting observation; buyers aren’t seasonal – vendors are!

MOSMAN – 2088

• Number of houses on the market this time 2012 – 115
• Number of houses on the market last week – 83
.Number of houses on the market this week – 80
• Number of apartments on the market this time 2012 – 91
• Number of apartments on the market last week – 58
Number of apartments on the market this week – 61

CREMORNE – 2090

• Number of houses on the market this time 2012 – 17
• Number of houses on the market last week – 8
.Number of houses on the market this week – 9
• Number of apartments on the market this time 2012 – 34
• Number of apartments on the market last week – 19
.Number of apartments on the market this week – 15

NEUTRAL BAY – 2089

• Number of houses on the market this time 2012 – 19
• Number of houses on the market last week – 12
.Number of houses on the market this week – 10
• Number of apartments on the market this time 2012 – 45
• Number of apartments on the market last week – 36
• Number of apartments on the market this week – 29•
. Number of apartments on the market this week – 36

Source: Australian Property Monitors

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.
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For this week’s opens for inspection
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To make the property markets more interesting following this weekend’s federal election the school holidays commence on September 20 and finish on October 8. We can expect this time around to see the vast majority of vendors marketing their properties over the school holiday period.

As for whether or not we are in a so – called boom only time will tell.

Finally, Australia’s longest ever election is coming to a close (220 days since Julia Gillard’s announcement) – my tip the Coalition in a landslide victory picking up 29 seats.

Cheers ^__^

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