Gossip Column

Gossip Column

I once read a quote “Many people are gossips; however, some of us are merely being informative”. This is so true, and predictions should not be construed as facts. Personally, I follow the ‘sold by’ signs when I am assessing the market, as each sale provides the actual evidence as to the state of the property market. As for predictions, like many others, I prefer to simply stick with the facts, and go with the flow.

So let’s take a peek at some more facts that emerged during the course of “The Week That Was”.

The Bureau of Statistics announced their new “experimental estimates” survey, which revealed that the wealth of the average household rose 45 per cent from 1994 to 2000 as the property market and sharemarket boomed. NSW was the richest state, which was helped by the fact that it had the most expensive real estate. This simply confirms why so many play the property market, as building wealth is what it is all about. After all, the gains derived from property trading with the family home, are tax-free.

Building approval figures released this week revealed that for the month of August, they were up an impressive 23 per cent. Retail spending on the other hand, could only achieve an increase of 0.2 per cent. While total private sector building approvals rose 26 per cent to 17,350, private house approvals increased by 8.7 per cent to 11,000 , which is still the highest level in 18 months. These statistics send out a clear message that just like the “experimental estimates”, Australians are still focused on building wealth. It could be argued however that they are not focusing on “the bubble”, preferring to read the market.

Let’s take a closer look at these intriguing facts. What caused this up, up and away statistic? Look no further than the units and townhouse market. This increase represents a staggering 73 per cent, which is the highest, reported since 1994. What will bring it back to earth is that these figures, for the moment, are based on paper approvals opposed to physical building work commencements. In all fairness, this has nothing to do with our property market, as we have very few new developments under way.

It does paint an interesting scenario. However, an investor in the market today would be prudent to conduct a thorough due diligence on the specific area of interest. If the particular area is over reliant on new developments, it could be seen as a volatile market where significant capital depreciation could be experienced.

Our market is not as complicated or delicate. I pondered the Mosman market this week and asked why Mosman is the star pupil in bricks and mortar. The answer is simple, we have the largest waiting list!! So many purchasers are on the waiting list for a home and this simple fact is what keeps turning the properties over. The higher the turnover, the larger the waiting list.

What remains to be seen is how the market conducts itself over the next sixty or so days, with the waiting list stretched to its limit as we embark on our busiest selling period. To further put this into perspective, we have ‘been there and done that’. It happens at this time every year. Once the signs emerge that the waiting list is all but exhausted, the market closes up the shop and starts again the next year, after the Australia Day long week end. By that time the waiting list has grown to vast proportions and it is on again for a new year.

Whilst we don’t believe that it will be a ‘get in, sit down and hold on’ market, it will be a profitable market, and in the end that is what it is all about. Slow and steady wins the race, and this is the longest race that any of the agents have participated in before. We are somewhat fortunate that Mosman is considered the ‘smart choice’ suburb, which reciprocates by presenting those who participate, with the greatest capital gains. Much to be said for being healthy, wealthy and wise!! Cheers and clink… ^__^

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