Clearance rates determine market

Clearance rates determine market

With the principal place of residence, now more appropriately defined as the principal place of income, it is no wonder why we believe that the market has at least another eighteen months to run. The market is determined by clearance rates. This is the barometer we watch closely to monitor market activity each week. I do however have a serious concern that this could rapidly fall, and it will be the agent’s fault, not the market’s! With the market so competitive, there are far to many agencies and agents who have let their ethics go out the window and are buying the business. This is also seeing loyalties and friendships lost as vendors fall ‘hook line and sinker’ for unrealistic opinions of value.

I recently missed out listing a home that I sold to the vendors some years ago, because I was realistic and the agent who won the business was approximately $1,500,000 above my opinion of value. It will be interesting to see whether or not I was correct, time will tell shortly! Maybe the agents today should read an article published in The Sydney Morning Herald on February 1,1997 titled “Agents safe as houses”. In that article I was interviewed as a safe agent and I offered this quote, “Lack of integrity compromises the present and threatens the future”. Personally, I don’t blame the vendors. A promised extra million is a huge tax-free win. Millions play lotto each week, trying to win a million dollars. Now some of the agents have started a new ‘lotto property’ game, and unbeknown to many the odds still remain the same!!

Last week I mentioned the resurgence of the Aussie $. On Anzac Day the Aussie Dollar closed on US54.37, well up from the low on September 19 2001 of US49.05. On July 3 2000 it was at US60.13, on November 17 1997 it hit US70.21 and December 10 1996 it was at US80.28. Yes, it is hard to predict, even Gerry Harvey lost a lazy million dollars when he bet that it would hit US60 after it fell to US53 last year. The Aussie$ has climbed back ten per cent since the events of September 11. This means that we have cheaper overseas holidays and cheaper imported goods, I wonder what it will do to the property industry? As of now, the ex-pats have only been making a small impact on our markets despite what the agents tell you. I’ll bet you did not know that out of the Top 10 homes sold in Mosman last year, not one went to an ex-pat!! As you know we sold more than half of them. ‘Boomerang’ was recently sold to a local. The recent sale of ‘Altona’ went to another nearby resident, despite the constant innuendo that the ex-pats are the driving force behind the property market.

I just love it when I read that an agent is saying we are experiencing good interest from ex-pats in the UK and America. We have many ex-pat subscribers, even a few who are 10 million dollar + buyers who simply haven’t purchased yet, despite agent tales which in all probability, surface after too many ales. I had to laugh this week when I phoned an agent renowned for the ex-pat and Internet beat up. I asked him for his e-mail address. He responded um… ah… www. I said not your URL, the one with the @ in it. After what appeared to be an eternal silence, he said ‘at’ what?? With the Aussie $ firming, the ex-pats could play a much more dominant role in our property market. The reason being, since September 2000 those who purchased are ten per cent better off than those who believed that the Aussie $ would decline even further.

As they say, “Never let the facts get in the way of a good story”. Many unsuspecting vendors could in all probability be facing serious financial trouble, with strong similarities to the early nineties. Today vendors are not selling until they buy, and the purchase is based on the opinions of value provided by the agents. Now, if you are expecting $5,000,000 and you only get $3,750,000 it is not the agent who makes up the difference. It is the vendors future that is threatened, especially with a possible interest rate hike.

To whet your property appetites, we have some great new properties on offer this week… Make sure you take a look at the sensational contemporary home @ 78 Seaforth Crescent, Seaforth , the big traditional family home @ 49 Prince Albert, Mosman, the Balmoral Landmark Estate that has not been offered to market for nearly 50 years @ 33 Stanton Road, Balmoral, the classic Federation home @ 109 Shadforth Street, Mosman, and don’t forget the big, bright semi @ 31 Ourimbah Road, Mosman is now back on the market for Public Auction.

Oh well at least we can say… “We told you so”…!! Cheers ^_^

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