FOR WHAT IT’S WORTH!

FOR WHAT IT’S WORTH!

With the interest rate debate all but buried for 2007, the same can’t be said for housing affordability which took a different twist this week. The question now, is just how under-valued is the top end property market given that in Mosman, the record price remains at $15.5 million yet today, we have successful bankers earning upwards of $30 million per annum. In Mosman recently, an unsolicited offer of $50 million was made on a property, only to be rejected and unconfirmed reports suggest that $75 million was also rejected. The same thing is also happening in the Eastern Suburbs, where trophy properties are attracting offers two or three times higher than previous record sale prices. We no longer refer to these areas as property markets, we now call them “indulgence markets”.

Today we have property markets where money is no longer an object. An insatiable appetite to acquire the most valuable real estate on Sydney Harbour, now has a business mentality and such property is regarded as “just an acquisition”. What remains to be seen is where and when will the first of these residential acquisitions take place and just what effect will this have on the overall market. Some refer to this as the new “housing obesity”.

From one extreme to another, a new national survey identified the majority of people blame the state governments for the affordability crisis. I guess many would agree that if you left the Iemma government in power for ten years, real estate would be affordable as there would be nobody living in the state of decay otherwise known as NSW. Up to 1500 people a week now head north to take up residence in Queensland and the vast majority is from NSW. Results from the Residential Development Council survey indicated that 39 per cent of those surveyed blamed the state governments, 19 per cent blamed the Federal Government and 14 per cent aimed the blame game at local councils.

The number of home re-possessions around Australia, is up to four times higher than reported figures, because lenders are disguising the nature of forced sales to prop up property prices. In NSW, 5363 writs of possession were issued last year – up ten per cent on 2005. For some, that great Australian dream of owning a home is turning out to be nothing more than a nightmare.

All is not lost in NSW, as we are getting closer to receiving market data actually based on exchanged data. Last week we reported that that RP Data had recorded 78 house sales in Mosman for 2007. Australian Property Monitors (APM) which is owned by Fairfax pointed out to me that they had 138 recorded sales which is 77 per cent more data. This week the Real Estate Institute of NSW (REINSW) advised that they had joined forces with the Estate Agents Cooperative (EAC) to set up www.realestateworld.com.au (no relation to Wally’s World). This initiative will see agents providing sales results so that the REINSW can now release exchanged data to the markets. This is a river of gold for the business that gets the model right as only agents will supply this information to the one source. I would say at this juncture that APM is well out in front and banks and businesses will pay a premium to access this valuable information. In the past, we have been forced to work on data that is months old – we can expect to get data now, that is just minutes old. Whoever wins this race will receive plenty of kudos as they will become the industry source and it is difficult to put a price on intellectual property! NSW unlike Victoria, has never been able to source this information so it will be exciting to finally get an exact positioning on our property market.

Now that is well worth a cheer! ^_-^

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