Faster and steadier in 2010 – but watch out for those banana peels!

Faster and steadier in 2010 – but watch out for those banana peels!

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Twelve months ago in our final edition of Virtual Realty News for 2008 I wrote – “The first six months of 2009 will be hard (not necessarily harder) and I believe the next six months will see a mild rebound leading to much stronger property markets!” As it turned out this prediction was one hundred per cent correct and in June 2009 we posted $63,000,000 in sales – the rest (just like that edition) is now history. Despite an avalanche of doomsday prophecies (and there were plenty) the missing link for the prophets was that they simply underestimated the power of the Internet and smart business models.

Every day, we spend an intoxicating amount of time in front of a computer – reading, writing and communicating. Just weeks prior to our final edition in 2008 I wrote – “I have said it before and I stand by my previous comments that in the recession of the early 1990’s there was no Internet and no electronic information highway that today, has played a dominant role in the recovery process.” Once informed, the decision making process is activated – the dominance of online during the global financial crisis is now a legacy that will continue to grow and dominate.

Some would suggest that it was a stimulus package but I would argue that those prophets would not know the difference between ‘Word’ and ‘Outlook’. Politicians make a habit of wording their outlook differently, based (more often) on spamming the minds of the electorate with nonsense.

rushcuttersbay

The hive of activity as the Boxing Day – Sydney to Hobart race is fast approaching

www.timmooneyphotography.com

So what are our predictions for the Mosman property market in 2010? Don’t worry if you blink, as it won’t be moving that fast although we see strong signs of renewed confidence. Housing prices will increase but we see no need to panic because we see upward growth in property values – that is growth (not boom). The Australian Bureau of Statistics (ABS) announced this week that lending for the construction of new homes rose dramatically in October increasing by 5.7 per cent. New home loans have now officially increased in 13 of the last 14 months – population explosion?

Certainly this argument is greatly assisted by the sale of a Perth mansion this week for a new Australian record of $57.500 million dollars. RP Data wrote on its blog this week – “The improvement in equities markets and business conditions has prompted many top end buyers to venture back into the market. For a while there were many bargains to be had – premium housing markets took the biggest value dive of any sector around the country in 2008 and now seeing the biggest jump. Values in the top end are now once again at record levels, having risen 2.4 per cent higher than the previous peak recorded back in February 2008. On an annual basis many of these premium suburbs have recorded some of the largest falls in median house prices however, it is clear with confidence returning many areas are set to bounce back or already doing so.”

Politicians and banks will provide great fodder for Virtual Realty News in 2010.

It has already started with this week’s Westpac “banana debacle” when it stupidly sent customers an email justifying its recent interest rate hike. Its rationale was to compare Westpac as the business selling banana smoothies – too much egg nog I thought, so have a look.

Maybe this graph presents a more accurate positioning from the “Bananas in Pyjamas” who must think all their customers are in a slumber with no Internet access.

953218-nab-westpac-rates

Fort Fumble – Federal Government

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Fascinated by spending other people’s money (tax payers) whilst consumed with the belief that Australia still requires its stimulus package, The Emperor (Kevin Rudd) is currently holidaying in northern Europe. His preferred mode of transport has been letting him down – given Air Force One has ongoing mechanical problems – much like our economy.

Co-pilot Wayne Swan needs to masticate more, because his ears keep popping. As was pointed out in Letters to the Editor, this week in The Daily Telegraph. “Treasurer Wayne Swan fools no one with his ongoing bleating about banks raising interest rates much more than the Reserve Bank. What’s he doing to restore the competitive pressures that have collapsed in the financial services sector under his brief watch? While the Government discriminates against smaller financial institutions in its guarantees for wholesale funding, his utterances are simply deceptive posturing.” The co-pilot did approve the acquisition of St George bank to Westpac so have a banana smoothie on the house.

The Mad Monk is waiting in the wings although that too, may be an aborted takeoff with plenty of Liberals in the hanger. Malcolm Turnbull will probably head back to merchant banking where approval ratings will improve considerably.

Fort Crumble – NSW Government

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Where does one start – the most incompetent governing body in Australia’s history – the ‘violent crumble’ of all governments?

Robert Gottliebsen recently wrote on Business SpectatorWe’re scaring off housing investors. Governments, whether they be in Canberra or in the states, often pass legislation without ever understanding its consequences.” He is referring to our housing crisis and talking about property investor taxes. “This means that if you hold an average investment property in Sydney and this pushes you over the $376,000 land tax limit, it makes no sense to invest in another. The annual holding cost figures look roughly like this: land tax 1.6 per cent; rates/water 1.0 per cent; mortgage interest 7.00 per cent plus; and maintenance/agent 1.0 per cent. That’s represents total costs of 10.6 per cent of your investment.” Rents will go through the roof over the next twenty four months.

Thoroughly enjoyed reading an article this week in The Daily TelegraphNSW leads economic rebound. “NSW is leading the national economic recovery with forecasts of a miraculous turnaround in growth figures in the coming year. The State’s Budget is also expected to return to surplus a year earlier than expected, with a $872 million surplus expected in 2010 – 2011.” Technically it was broke well before the global financial crisis although this did not restrict the excitement of newly elected Premier Kristina “doodle dandy” Keneally “who has absolutely no tertiary qualifications” from shrieking (with accent) that the NSW Budget was “back in the black”. Oh dear!

No doubt “doodle dandy” would have been suitably impressed to learn that Nathan “no strings attached” Rees, brilliantly negotiated the sale of our three Manly JetCats that cost NSW taxpayers $3 million – with the purchaser flogging them off shore for more millions. Nathan “no strings” out, and Kristina “doodle dandy” in – so much to look forward to next year.

It has been our absolute pleasure delivering Virtual Realty News to your inbox each week and we are now into our tenth year (never missed an edition). I remain very confident that in 2010 we will be the very first Australian real estate agency to break the magic $1 billion in subscriber sales – currently at $887,154,220.

Special thanks to the aerial photographic gymnast of the sky Tim Mooney for his amazing photographs – a weekly highlight (for us) to explore his vast library of photography.

We thank you for your patronage. Defamation suits have been interesting and engaging (it’s just that I am an advocate for freedom of speech). The audit of our books by The Office of State Revenue was a highlight which re-inforced the fact that Virtual Realty News keeps annoying Forts Fumble and Crumble.

We will return to your inbox in late – January 2010 and go (weekly) all the way through to December 2010. It’s a tough job – but somebody has to do it!

Merry Christmas and have a brilliant, happy and prosperous New Year.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

10 Responses to “Faster and steadier in 2010 – but watch out for those banana peels!”

  • Greg Vincent says:

    Great article Robert. Westpac seem to have lost touch with their customers completely. Was that video developed to be shown in kindergarten. What an insult.

    I also thought your readers might be interested to know that Fort Crumble are at it again.

    There are some important changes taking place within the NSW Residential Tenancy Act & there are some grave concerns that some of these changes will have a similar effect to property investment in NSW that the ridiculous ‘Bob Carr’s Vendor Tax’ had back in April 2004. The same Vendor Tax that Premier Morris Iemma had to step in and immediately abolish back in August 2005.

    I think all Australian property investor’s will recall how stupid the NSW Government’s Vendor Tax decision was & how it drove investment into other states of Australia (even into New Zealand).

    It appears that the Draft Residential Tenancies Bill 2009 by Fair Trading will mostly impact the landlords & provide more power to the tenant which could scare off real estate investment again in NSW.

    After speaking with Sam Kremer, Legal Counsel with REINSW yesterday morning, Sam has pointed out that some of the major issues relating to this draft proposal have been featured within this document on the REINSW site.

    http://www.reinsw.com.au/default.aspx?ArticleID=5970

    Sam said that so far they’ve had over 100 submissions from Agents & Landlords. They’ll need a whole lot more submissions to have the required impact for the NSW Government to get their head out of the sand and sit up & take notice.

    He has asked if agents could help by putting forward their thoughts on this issue via their survey or directly to the Fair Trading site & ask that their existing landlords have their say too.

    Typically, the NSW Govt have only provided 1 months notice for submissions & unfortunately end of month communications went out last week which would’ve provided the perfect opportunity for Property Managers to alert their landlords en masse.

    Please Note: If your readers would like to have their say, or your landlords would like to pose their concerns, submissions close on the 18th Dec 2009.

    PS: All the best for Christmas Robert & thank you for all your informative insights throughout the year.

  • bob guth says:

    i enjoy your weekly newsletter. mine has been well rec’d too. remember 10% super from employees in the free world is a lotta $$$$ needing to be invested by a desk jockey each month. this shortens economic cycles too and is often overlooked.
    merry xmas and thanx

  • Patricia says:

    Robert…Thanks again for a year’s worth of entertaining and informative VRNs delivered without fail every Friday. You, your typing fingers and grey matter deserve a long break over the holidays!

    You successfuly tamed some ridiculous bloggings through the year…my favourite was a false claim by someone that half the homes in Clifton Gardens were on the market! You were spot-on with most of your predictions about the local property market.

    As for Fort Crumble, Kristina Keneally is our version of Sarah Palin. March 2011 seems very far away.

    Merry Christmas and best wishes for the New Year!

  • Mae says:

    Great wrap up for the year, always a great lunchtime read on a Friday.

  • Wishing you all a very Merry Christmas and Happy New Year. In what has been a tough year for many we hope you can relax and enjoy the break with your families and friends. Cheers

  • Gordon says:

    Ho, ho, ho (old fashioned kind) and best wishes to everybody, plus hearty thanks to you Robert for such a great sustained performance.

    Not sure whether to laugh or cry, but Forts Fumble and Crumbled will still still be carrying on as usual next year, and lucky us will probably get at least one more puppet Premier in that time. At least the real estate market looks as though it could be interesting!

  • Nicholas says:

    Well done Robert on a great synopsis of the Real Estate market and market forces in 2009. Merry Christmas and Happy New Year.

  • Michael says:

    Dear Robert & Team,

    Thanks read, for all your insights in 2009, enjoyed every one of them.

    Have a great holiday, Mr Mayor

  • Mark says:

    Dear Robert and Team,

    Well done in 2009, excellent reading each week.

    Have a great New Year!!

  • Robbie Mac says:

    And to 2010, when The Emporer takes on the Mad Monk. The battle of rhetoric versus rant, teflon coating versus mud slinging. Should be nothing if not great theatre. Let’s just hope somehow, most likely by chance, something comes out of it for the customer constituents.

    As to the Crumblers, how low can they go? The trend would suggest subterranean is not out of their reach. Which revives the faintest of hopes that they may do something so exceedingly silly that our favourite Mosman residing Governor has no alternative but to follow the state and federal precedent and dismiss the elected government. Oh that we should be so lucky! At that point, Billy Hayden’s drover’s dog would be looking good, which would suggest Fatty O’Barrell, even on his most invisible day, should be a shoo-in. Might have to ask Santa for some help on this one.

    Have a safe and happy season. Looking forward to 2010 being a lot less painful than a truly bizarre 2009.

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