IT ALL DEPENDS ON HOW CLOSE THE PIN IS TO THE TAIL!

IT ALL DEPENDS ON HOW CLOSE THE PIN IS TO THE TAIL!

Many are voicing their opinion on the real estate market at the moment, however does this give them the right to be wrong about the facts?? The Real Estate Institute of NSW came out this week with their quarterly report, which showed that in the March quarter 2003, NSW continued to show healthy price gains, although there was a decline in the volume of sales. The markets are evenly balanced at the moment, with demand marginally exceeding supply as whilst buyers are actively looking, a vast majority sit on the fence. Our auctions this week produced a fifty per cent clearance, and whilst 27 Cowles Road and 11 Wolger Road posted new street record prices, this is certainly not a market where we will see sharp capital appreciation. Already we are seeing some agencies recording less than twenty five per cent clearance rates and in the vast majority of cases it is the agent, not the market that is to blame.

So long as the agents adopt some intelligent propriety and accept greater responsibility with the opinions of value, property will continue to remain on the positive side of the ledger and it is the house market that will cause the greatest concerns. Sydney median house prices have increased by 11.1% per annum since the March quarter of 1995. Overall the price of a home in NSW has increased 9.4%. This has been the sixth consecutive quarter where house prices have increased. The top-end of the market will be of enormous concern, with some agents blowing out values as they play their modern day mockery of ‘pin the tail’ on the vendor. We are starting to see a pattern evolving at the moment with fewer properties being offered to the market place. The March quarter recorded a 26.6 % fall in the number of house sales in Sydney with just 7,751 going to the market. We should also mention that this figure is a bit light on, as it does not record off market sales. Home unit sales fell by 35 % to 6,971. Once again a high proportion of home units sold are never advertised. As they say, “statistics are like witnesses – they will testify for either side”.

Clearance rates will also play a vital role. The auction clearance rates in the March quarter posted a respectable 64.5%. This is an excellent result when one takes into account the fact that there was also a war running and Australia was a participant. When the property market is peaking, the clearance rates run at plus seventy per cent. As long as the media contains itself and desists from running ‘AOMD’, that being Articles of Mass Destruction, there is no reason to suggest that the June quarter will not be a spitting image of the March quarter. However one must not rule out supply V demand. Once upon a time it was purchaser V vendor, but with stock levels reducing at the moment, it is agent V agent and we all know from past experience what happens next. Clearance rates drop well below 30%!! And some thought insider trading only happened in the share market!!

This week we posted our 100th Internet sale, which is a remarkable feat. The Internet ledger now shows 100 sales totalling $161,902,000. I just love it when a plan comes together!! With the Cowles Road and Wolger Road properties, both the vendors and purchasers are VRN subscribers. We had nine contracts issued on Cowles and of these buyers seven were subscribers and on Wolger two contracts were issued with both buyers being VRN subscribers. At the moment on average we are adding between fifty and seventy-five new subscribers a week, which is exactly where we want our business plan to be. It costs vendors no more to use our technology and I have a strong argument that it actually can cost them more, if they don’t use it.

With the month of May all but finished it has been another great month with $25 million in sales. Whilst we fell $10 million short of our March record-breaking month, the signs are there for some, that the market still remains strong and we have a sales team of just four!! Oops, just dropped another clue, cheers and clink!! ^__^

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