Ho Ho Ho – Spend Slow Slow Slow!!

Ho Ho Ho – Spend Slow Slow Slow!!

No doubting the news has travelled fast to the North Pole, where Santa would have been told that Prancer, Blitzen, Dancer and Cupid will not be required for the trek to Australia this year – as the ‘Governor of Moolah’ has spoken. With calls for ‘lighter Christmas stockings’, this amazing turnaround has seen the cash rate target have two upward adjustments in the space of twenty nine days. What is somewhat confusing is that we had none over the prior five hundred and eighteen days!! In jargon, he tried to explain why it is necessary (given that he believes we are in a strong growth period)! On the contrary – what we are seeing now, is an interest rate binge, which could see many areas of Sydney forced into a property market evacuation!!

Even the newly elected Member of Werriwa, failed to acknowledge the hardships that faced the 85,000 or so enrolled in his electorate, which has a reputation for being one of the youngest demographic areas for a fast growing populace. I guess he is still basking in the sun following his defeat of Kim ‘Green Peace’ Beazley, who has a habit of beaching himself at different times in the calendar year for reasons unknown. Then his loyal supporters sponge him down and usher him back-out to sea. As he submerges, the words amongst the bubbles are heard, “I am one hundred per cent behind the ALP”.

If you have a closer look at the property market, it is the Member for Werriwa, whose electorate is the highest performing in Sydney and these rate movements in all probability will not produce a gold star. Over the last twelve months, Green Valley homes have had capital appreciation in the vicinity of 24%, and apartments 27%. Hoxton Park has identified appreciation of houses at 22% and apartments at 27%, whilst Liverpool has eased a bit with houses showing 18% and apartments at 25%. From my investigations this week, these areas usually have mortgages of seventy-five per cent of the property’s value, so it will be absolutely crucial, that this market can hold its composure in the January 2004 quarter, as against the worse case scenario of a property evacuation out in the wild wild west. It would be fair to suggest that the vast majority participating in this market, were not property owners in the 1991 – 1993 market.

On the other side of the property spectrum we see that Sydney Harbour property markets will hold their own, with supply well and truly being reduced. Our research revealed that the general mortgage borrowings here are around thirty-five to forty-five per cent of the property’s value, so that alone, will see the market trade well within itself. One other interesting observation, is that these days, when a property sells, within forty-eight hours we have a property valuer on the phone wanting to arrange an inspection for finance purposes. Quite frequently we will sell a property and no inspections are requested as the purchase has been made in cash.

Following the collapse of property spruiker Henry ‘decay’ Kaye, the inner city apartment market will need some time to readjust its composure, as lending institutions will be monitoring this market very closely and not offering any financial assistance. What this market needs to identify is that it is capable of withstanding the ‘Governor of Moolah’s’ recent rate binge. What we are seeing now is a probable changing of the guard in the entire property market. I would suggest by the recent announcements, that the property market will now adopt a much more cautious approach, and marketing trends could very well be altered at the beginning of the 2004 market. Next year, the market could very well start with a walk, as compared to the energetic pace of recent years. This could see a positive move back to the more economical forms of marketing such as Internet marketing where the database is already established. This enables the vendors to test the temperature of the market with a minimal capital outlay.

Whilst on the subject of Internet marketing, following the successful results of last year’s Expat Christmas House Hunt, once again we will be running this over the Christmas vacation. So if you are wanting to sell or buy, click on the link and we will hopefully weave a little magic again.

Given the recent Reserve Bank somersaults, (the verdict is still out with the jury), we are now in strategy planning mode for the likely marketing scenarios that could present themselves for our market in 2004. It will be very interesting to watch the buyer registrations over the next forty to fifty days as that is one of our most accurate barometers. Whilst some may say the Mosman market looks positive again, spare a thought for those who just received a Christmas Card from Bob ‘State of Taxes’ Carr. Yes, it is Land Tax time, and for those lucky property owners it is also Premium Property Tax for those who have a land value exceeding $1.68 million. I hope they invest it very wisely as Stamp Duty in 2004, may follow in the same direction as property prices in some areas!! Perish the thought, then the boys on Macquarie Street would have to think of something else to put in their stockings!!! Final edition for 2004 next week, cheers and clink ^__^

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