“Bobby Dazzler” and his “State of Decay” had better take stock of the investor exits from the property market, as it is starting to resemble a huge disaster. Currently we have twenty seven apartments on the market and seventeen of those properties are owned by investors departing the property markets as they are despondent at the continuing penalties for owning property. If this pattern continues and there is nothing to suggest that it won’t, rents will skyrocket and those renting are the ones who will then be worse off. The system has to change as basic economics identify that we are facing a crisis, because the property market needs investors !! Even the recently released Municipal breakdown for Mosman and North Sydney from State Treasury, clearly illustrates this for the year 2003. Also, bear in mind that was when owners were protected by the Land Tax threshold. With plenty of skilled workers packing their utes and heading off to Queensland in search of a better and more affordable lifestyle, the “State of Decay” is living up to its name. In a few year’s time, when rents start going up by another twenty five per cent, (which will happen) more will follow.

The ongoing Land Tax debacle continues and it looks as though plenty will be appealing to the Valuer General with a ‘please explain’. The recent valuations are as at 1 July 2004 and it seems that the Valuer General overlooked the fact that the property markets started declining after the first Tuesday in November 2003 and then the first Tuesday in December 2003 when we had consecutive rate increases. How you can value to a date is interesting, as information on sales is not available for many months after the event, and one must remember that none of the properties were physically inspected. You only get valuers to physically inspect a home when you take out a mortgage. It is too much work for the Valuer General to carry out inspections. All they do is average out your home by using comparable sales (how can they look for comparables when they have no idea what they look like ?) Take a block of eight apartments on the water, the four on the front have dynamic water views and the four at the back don’t. The problem is that all pay identical Land Tax!

So here is a “Virtual Realty News” exclusive !! Investment properties should be assessed by their weekly rental !! Makes sense and it is accurate. As the markets change so does your fine for owning property.

As predicted in last week’s edition the “Governor of Moolah” bumped the cash rate target up a 0.25 percentage point, then all we hear is that the zoom in the economy has gone to doom. What remains to be seen, is whether the Governor will double-dip again, as he did in May and June 2002 and again, in November and December 2003. If you want to see the rates for the last fifteen years click here We are of the opinion that the increase will have little to no effect on our property niche markets, and homes will continue to identify somewhere around ten per cent capital appreciation each year. We have quite a few properties awaiting exchange and nobody has withdrawn, based on this week’s announcement. We also sold an apartment in Holbrook Avenue Kirribilli for $985,000 and an apartment in Moruben Road for $625,000. Both went to owner occupiers.

Domain North came out this week in two books, and if this continues, The Sydney Morning Herald could be the first ever newspaper to come with an attached handle. We have no complaints about the current status of the property market. It’s just the fines being handed out for those who decided to participate, that causes concerns. The system is badly broken and it needs a major overhaul, as many argue that we are sailing into dire straits. What remains to be seen is whether or not those who are in charge have the grey matter to fix it – as they were the ones who broke it in the first place. When the investors start deserting the ship – there has to be a ‘Titanic’ problem !! Cheers and clink ^__^

Leave a Reply

Your email address will not be published. Required fields are marked *