It’s all about position, position, position and I’m not talking real estate!!

It’s all about position, position, position and I’m not talking real estate!!

Compared to what I read last Friday night when I opened my daily www.crikey.com.au electronic magazine, the new economic war is all about fighting growing global unemployment. Spare a thought.

“WASHINGTON: A record 32.2 million people – one in every 10 Americans — received food stamps at the latest count, the government said on Thursday, and a reflection of the recession now in its 16th month. Food stamps, the major U.S. anti-hunger program, help poor people buy groceries. The average benefit was $112.82 per person in January. The January figure marks the third time in five months that enrolment set a record.” Source:Reuters

Two editions ago, I wrote “Living in the past and struggling with the future”. Our current recession is definitely not a case of better late than never – more a case of elected politicians who have stymied our very own economies through gross mismanagement of resources, education, health, transport, employment etc.”

Last Saturday’s edition of “The Weekend Australian Financial Review” a brilliant article was filed by Damon Kitney and Annabel Hepworth titled “The man who must stop the gravy train”.
Sydney’s northern suburbs boast some of the best beaches in the world. But try venturing across the Spit Bridge on a clear Sydney day at any time of year and half your day will probably be gone before you arrive on the sand.

It’s the same at morning and evening peak hour, when the narrow four-lane bridge separating Mosman and the northern beaches regularly resembles a parking lot.

Yet when one building industry executive inquired last year of a current minister in the Rees Labor government about the chronic lack of infrastructure through the region all the way up to Palm Beach, the reply was simple: F—k ‘em, they get nothing up there, just f—k ‘em.” the minister reportedly said. These are the bad old days of NSW Labor.”

Enter Ruddy Fantastic’s Infrastructure Australia and not before time.

So the formula applied to NSW tax payers (Stamp Duty, Land Tax, Payroll Tax and GST allocation) doesn’t discriminate yet the allocation of infrastructure spending does? This simply explains why infrastructure in NSW is in a ‘state’ of chaos.

I am a strong supporter of Ruddy Fantastic’s Infrastructure Australia and a fan of appointed chairman Rod Eddington. With state and territory governments now (collectively) in budget deficit, the power of infrastructure spending has been removed from the states and territories to the new (independent) governing power – Infrastructure Australia.

With the federal government also staring down at a budget deficit, it too will have to find a way to climb back into budget surplus. In my humble opinion, the Global Financial Crisis will prove that Australia no longer requires state and territory governments and a smart vehicle like Infrastructure Australia, spells the demise of middle government and not before time.

The corruption and waste of taxpayer revenues is well documented where more than a penny drops into the federal government’s coffers. Infrastructure Australia will in all probability be Rudd’s check (cheque) – mate for turning a budget deficit around. GST has failed miserably and taxes went up (as against the promise of coming down) – so time to bring infrastructure and taxation under the one umbrella. If it comes off (and only incompetence would stop this coming to fruition) – a brilliant political power play.

The federal government urgently needs to beef – up the Australian economy. Now the independently operated Infrastructure Australia will be adding the much needed gravy to the beef.

So let’s look at the upward movement of Mosman house prices from 2000 to 2008 a tale of position, power, glory and not necessarily a bad story. Today, you hold not fold – major banks don’t have non-performing loans on their respective radars as against previous banking mandates of past recessions. Simply put: markets recover and the Mosman property currency remains one of the strongest in Australia as I will identify in coming editions.

Here is a quick brain teaser. How many $10,000,000 plus Mosman house sales were recorded from 2000 to 2008? Have a think and I will get to the answer later on.

MOSMAN HOUSE SALES FROM 2000 – 2008 IN EXCESS OF $5,000,000

2000

  • Total Sales – 4
  • Total Value – $22,500,000
  • Average Sale Price – $5,637,500
  • Lowest Sale Price – $5,150,000
  • Highest Sale Price – $5,900,000

    2001

  • Total Sales – 12
  • Total Value – $77,385,000
  • Average Sale Price – $6,448,750
  • Lowest Sale Price – $5,400,000
  • Highest Sale Price – $15.500,000 (Mosman’s first $10,000,000+ sale)

    2002

  • Total Sales – 9
  • Total Value – $54,650,000
  • Average Sale Price – $6,072,222
  • Lowest Sale Price – $5,400,000
  • Highest Sale Price – $9,400,000

    2003

  • Total Sales – 19
  • Total Value – $120,518,250
  • Average Sale Price – $6,343,065
  • Lowest Sale Price – $5,000,000
  • Highest Sale Price – $11,000,000

    2004

  • Total Sales – 16
  • Total Value – $112,151,000
  • Average Sale Price – $7,009,437
  • Lowest Sale Price – $5,000,000
  • Highest Sale Price – $11,000,000

    2005

  • Total sales – 16
  • Total Value – $137,720,000
  • Average Sale Price – $8,607,500
  • Lowest Sale Price – $5,100,000
  • Highest Sale Price – $14,800,000

    2006

  • Total Sales – 31
  • Total Value – $231,285,000
  • Average Sale Price – $7,460,806
  • Lowest Sale Price – $5,000,000
  • Highest Sale Price – $15,000,000

    2007

  • Total Sales – 44
  • Total Value – $349,650,000
  • Average Sales Price – $7,946,590
  • Lowest Sale Price – $5,050,000
  • Highest Sale Price – $22,500,000 (new Mosman record)

    2008 – Enter Global Financial Crisis

  • Total Sales – 25
  • Total Value – $170,050,000
  • Average Sale Price – $6,802,000
  • Lowest Sale Price – $5,000,000
  • Highest Sale Price – $14,700,000

    Source: Australian Property Monitors

    There have actually been 30 recorded sales in excess of $10,000,000 from 2000 – 2008. The agents I spoke with guessed between 12 and 18 sales – I will reveal more data in next week’s edition which will identify the excellent opportunities on offer in this price demographic.

    This week, The Reserve Bank of Australia (RBA) cut interest rates by 0.25 per cent which now takes the cash rate (3.00 per cent) to the lowest level in forty nine years. An anti – climax because the major banks decided to either not pass on and/or minimise reductions to borrowers. With the benefit of hindsight the RBA would acknowledge that the latest rate reduction amounts to very little.

    Makes one wonder exactly who is running our country – the banks or the federal government?

    Obviously the bank deposit guarantee and the ban on short selling financials means next to nothing to them. How would they react if they were lifted? The federal government came to the party and now the banks must dance to that tune – or else.

    Better still why are the major banks charging credit cards at 600 per cent over the present cash rate of 3.00 per cent? Credit card debt should be a government priority in a recession that forces the banks to tow the line with credit card interest rates. Such a move would assist struggling families – and identify that they (banks) are no longer a law unto themselves. Messrs Kevin Rudd, Wayne Swan and Lindsay Tanner, need to decisively act and Messrs Malcolm Turnbull and Joe Hockey need to keep them honest.

    Our blog awaits your thoughtful insights.

    Have a fantastic and safe Easter.

    Cheers with chocolate on top ^__^

    For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales http://www.rwm.com.au/news/

    3 Responses to “It’s all about position, position, position and I’m not talking real estate!!”

    • Adam says:

      Thanks.
      How many $5m plus sales hve been recorded in 2009.

      Adam – Australian Property Monitors have recorded two (2) sales in Mosman in 2009. We do however know of another six that have been exchanged and have not been published yet.

    • For those interested last week’s blog is still alive with some great posts.

      http://www.rwm.com.au/2009/04/in-the-business-world-transactions-speak-louder-than-words/

    • Sheelagh Wannop says:

      Well said, Robert; I so enjoy your comments and how accurate they are!
      I was, only the other day, asking the same question re, exorbitant credit card finance charges, and why haven’t they been addressed, along with all the other outrageous charges and taxes, we the people, have to stomach, from banks and other institutions and most of all, the Federal and State Governments.
      The recent erudite comments from the Labour minister re the Spit Bridge problem just about sums up everything crass about this wonderful land and the gutterminded attitude of lets bring everything we can’t aspire to back down to the gutter and destroy it.
      Whatever happened to rejoicing in the beauty of our land and all pulling together to keep it that way?
      Ever Hopeful.

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