Driving your dollar further!

Driving your dollar further!

The fuel debate continues to raise many interesting forms of debate and a recent article that appeared in The Weekend Australian Financial Review on May 24 – 25 2008 by Deirdre Macken titled “HOW CARS DRIVE PROPERTY PRICES”, certainly raised more than a few eyebrows. “If the car were to encounter the perfect storm, it would be a confluence of record petrol prices, threats of oil shortages, congested roads, ageing infrastructure, and warnings about the link between car use and obesity.”

For some considerable time many have argued successfully, that a most poignant reason for property price declines around the Sydney South and South West regions has been a chronic decline in infrastructure. “Car use is becoming a class issue. A bus passenger is just as likely to be an executive as an office cleaner; the top suburbs have more pedestrians and bus passengers than the poorest of suburbs, and competition in the executive car park is now reserved for the bike rack. Many people talk of two cities when they describe urban transport trends. In the transport rich inner suburbs, less than 50 per cent of trips are done by car, whereas in the transport deprived suburbs on the fringe 80 per cent of travel is behind the wheel of a car. This urban divide is widening.”

Already these trends are now reflected in Sydney property prices.

Sydney

City and East Median Price $1,075,000. Twelve month change 12.0%

South – West Median Price $340,000. Twelve month change -0.6%

Never before in relation to property, has transport been such a key criteria for prospective purchasers and never before have the respective governments of the day been under such immense pressure to provide improved transport infrastructures. Watch for real estate agents to focus advertising campaigns much more on transport proximity – and maybe, just maybe, living on a busy road with reduced traffic, may not be that bad after all.

If you were aghast at $2.00 per litre, spare a thought for the report tabled by the Real Estate Institute of Australia (REIA) identifying families who are now spending close to 40 per cent of their income on home loan repayments. It said that housing affordability fell by 8.7 per cent in the year to March and this sadly will only continue to get worse. Nationally, average rents were swallowing up 24.7 per cent of family incomes in the March quarter. REIA president Noel Dyett said “There is little prospect that rental affordability will improve in the short-term, particularly noting the downward trend in investor finance in response to recent interest rate rises combined with extremely tight vacancy rates in all capital cities.”

It is the NSW Fudge-it next week and it will be most interesting to see what “Cost-ya” Plenty serves up to the “State of Disrepair”. He is already furious with the Rudd Government over its private health insurance reforms which potentially, could blow an almighty hole in the state’s health budget. Given that our state Fudge-it generally bears more bad news than good, “Cost-ya” is already pre-empting fiscal responsibility targets. “We will not meet many of these targets and we won’t meet them by a large amount. It’s better to be honest about it.” I guess he meant to say that this information would come out in the wash anyway when the papers are released and publicly scrutinised. I doubt that we will see any relief to the investor property markets already destroyed and it is interesting to see exactly the same thing happening to clubs and pubs with poker machine taxes. Although “Costa-ya” did advise the Rudd Government that he would not support any reductions on fuel GST excise unless he was compensated an estimated $400 million in lost GST revenue. This bloke should be doing stand-up!

Good news on the Mosman property front with Steve Patrick this week posting the highest house sale in Mosman for 2008 and yes it is very close to transport. Cheers ^__^

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