It’s out with the old, and in with the new, although at this point in time we are not exactly sure what will be new (although a pattern is forming). The entire property industry today, is undergoing a forced make over with the electricity component (otherwise referred to as e-business), fast transforming what is otherwise regarded as an off-line industry. The past halcyon days, will be a reflection of the past (for many agencies), as today the property industry is facing serious electronic (and costly) adjustments. The once dynamic property niche markets have changed, given the large transaction costs when purchasing a property. Today, the volume of available homes will continue to decline. The new regime of vendors is looking more at online capabilities of agencies moreso than ever seen before. For real estate agencies to be competitive in these new markets, innovative strategies will need to be implemented. The next six months could in all probability identify an ‘industry use-by date’. Whilst some might disagree, the simple fact that our business posted a 25.7 per cent increase over the last twelve months (as compared to the previous twelve months). This certainly leaves a clue that our e-business is striking a new chord.

The news coming out of NSW is getting worse with the release of May housing approvals which identified that our “State of Decay”is gradually grinding to a hault. With just 1207 construction approvals in May ( which is half the number approved in Melbourne) Brisbane managed 1903 and Perth 1586. Simply, the high standard of living and excessive taxes are now identifying mass evacuations of skilled labour to other states. In the long term this will see building costs sky-rocket as a shortage of trades people (who are selling up and moving interstate) is now imminent.

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.)

The Aussie sharemarket is recording its second consecutive year of double-digit growth. In the past, these profits were then transferred to the property market which is no longer the case. The epicentre of advice these days is recommending that investors remain in the sharemarket and this is more bad news for the property market.

It will be a long Winter for the property industry as volume levels continue to decline. Whilst many businesses continue to post healthy profits the previous nine years of the housing run is tiring, as many have predicted. The anecdotal evidence that fewer and fewer vendors are selling will bring about the largest shake-out our industry has seen in over a decade. The position is not helped by unfriendly taxes and a government that is not in touch with its constituents. The next election is in March 2007 and it will be fought on tax reforms (not before time), although some have a valid argument that receivers will be appointed before that. Cheers ^__^

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