FOR AGENTS – A YEAR OF FEAR!!

FOR AGENTS – A YEAR OF FEAR!!

Here we go again in what many believe will be a year for living dangerously. Not so if you are a vendor living in Mosman and surrounding suburbs, even more if you are an agent, for a number of reasons. As each year unfolds the number of houses sold in Mosman (in particular) diminishes which leads us to question whether or not, total house sales will fall under 200 in 2006. If you look at sales evidence in previous years, the odds are pretty strong given that we are now a far cry from the 495 house sales in 1995. At this stage the number of house sales (recorded) in Mosman in 2005 was 240, down on 2004 which posted 292, with 2003 recording 354. Transaction costs keep escalating and if you purchase a home over $3,000,000 in NSW, you’ll be fined an additional two per cent in Stamp Duty. This explains why volume keeps diminishing as will a number of agencies and agents for that matter, as property sales are fewer.

As we look back at the December quarter in 2005, the one thing that many may miss is that for some agencies it turned out to be a record quarter, as was the case with us. If we compare it to the December quarter in 2004 we were up in sales volume by 69 per cent with house sales ranging from $11.800 million to $1.200 million. In that quarter we also posted the highest sale recorded in Cremorne with the sale of 10 Lodge Road. So it is quite laughable that some who reflect on that quarter are tentatively spruiking in 2006, that the property markets could well have bottomed out. It would be fairer to suggest that in some niche areas, confidence levels are strong and markets are active (not be confused with agents who still stumble with their valuations and in every instance for some reason, the figures are unrealistic). When this happens and vendors realise that the price is unattainable, they simply change agencies!!

It is interesting to observe that Cremorne and Neutral Bay houses are not following the volume pattern of their neighbours in Mosman. Cremorne in 2003 sold 85 homes, in 2004 posted 74 house sales and in 2005 it climbed to 80, with RWM selling 13 houses in 2005 which equates to a 16.25 per cent market share. Neutral Bay in 2003 posted 65 home sales; it was slightly down in 2004 with 57 sales and improved in 2005 with 62 sales. In 2005 we sold 68 houses in Mosman which on the 240 recorded sales represents a 28.33 per cent market share.

With our last exchange for 2005 taking place on December 21, it was encouraging to see that the property market traded well into Christmas (as we predicted). Our Internet sales to subscribers have jumped in 2006 to $420,096,000 so we are closing in on the $500,000,000 (now that will be a party). Since our last edition we have sold 15 Rickard Avenue Mosman, 52 Prince Street Mosman, 1/96 Spit Road Mosman, 34 Rangers Avenue Mosman, 33 Shadforth Street Mosman, 26/102 Spit Road Mosman, and 18 Pindari Avenue Mosman. It also appears that the wounds inflicted by Bobby ‘Dazzler’ Carr on the investment market are well on the road to recovery. Thus far in 2006, numbers in attendance at the open for inspections have been very strong, in comparison to 2005. Presently we have five apartments awaiting exchange and we can report that investors are now participating in the market. This will no doubt bring a smile to those battling out the rental market which still remains ferocious. With the reintroduction of the threshold on land tax we can expect to see investors back in the market as rents continue to climb.

So which way will the Mosman and surrounding markets go in 2006? Well, if the volume patterns remain the same, prices will continue on a gradual climb. Residex has just declared in the current edition of BRW that Mosman in the next five years will be the third fastest growing suburb in the ‘Prestigious Stakes’. With the 2005 median price sitting on $1,970,650 they are predicting that in 2010 for the same property you will be paying $3,482,755. This then equates to an average annual growth of 12.06 per cent which will bring a smile to many. They predict Kirribilli to have the highest annual growth in Sydney with 12.20 per cent. So all we can say is that we will watch this with interest, albeit we can usually monitor the market’s activity on a weekly basis which allows us to offer a correct positioning.

It will be a very interesting market to call in 2006, and we certainly look forward to delivering you our weekly reviews all through the year to December 15, 2006. We are also happy to advise that the cost of subscription to ‘Virtual Realty News’ will remain the same. Actually we have not increased it since our first edition way back in September 2000. Watch for some very strong property results in the market run through to Easter, which will bring about a call from the ‘peanut gallery’ that this is justification for an interest rate increase. Other than that just expect the same!! Cheers ^ __ ^

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