Well it will be all eyes and ears on the newly formed Productivity Commission, as the Federal Government tries in vain to turn the beat down on the rhythm of property prices. Already the State and Federal Ministers have started the mud-slinging and so far neither has proved that they have one iota about the cause. That fellow Costello, took aim with his property stun gun and suggested that states should lower stamp duty on new housing thus removing the pressures on housing affordability. Well ‘Peter Perfect’ that will ignite it further!! Then in perfect unity, the states responded by blaming the $7000 first home owner’s grant.

The truth of the matter is that it is the top-end of the market which is driving the market, not the bottom-end. As each day passes, the property market is playing the perfect game and the participants have the perfect match plan. The ultimate cause as to why the property market has escalated to all time record highs is because the blue-chip areas have out-performed and will continue to do so for quite some time to come. I mentioned a few weeks back, that Mosman has just 5860 homes, and on average since 1996 some 3500 have changed hands. In simple terms (just so that the Productivity Committee can fathom this) property numbers being offered for sale are diminishing. Just in the last three months we have posted the all time second and third highest home sales in Mosman. Then if you look at some recent home sales, we have just posted five new street records with the sale of homes. This then drives up the prices of semis which are now jumping over the magic million mark, so no wonder the prices of home units are showing an all time average high of $595,857.

We have prima-facie evidence, and the motive is supplied by a definite amount of money. With the Governor of Moolah once again refusing to make a rate adjustment, for the 14th consecutive month, it could be argued that Souths will win a premiership before we see a rate adjustment. The standing record is 19 months which was set from December 1994 to July 1996. My tip is July 2004 before the next adjustment. So it will be quite some time before we see any changes on the earth’s surface with regard to bricks and mortar.

The Productivity Commission needs to consider the movement of property prices, by taking into account the volume of future production, combined with anticipated market conditions. Or can one be so bold as to suggest an equilibrium of supply and demand, which can’t possibly eventuate due to the current character of the property market. If there was a World Cup in property in a few month’s time, Australia would be the odds on favourites to win. The fact that interest rates appear to be set for a considerable time to come, identifies that the current market will show no sign of change and if anything, prices will grow further, due to limited properties becoming available for sale. We have no property market complexities that can illustrate any projected disturbances, so prices will continue to remain consistent with further capital growth. After all, Mosman is an island surrounded by waterways, so for that very reason, it is a unique municipality, which further explains why it remains Australia’s most expensive postcode.

It will be very interesting to see if the Productivity Commission releases any findings on the way, or will we have to wait until they furnish their findings on March 31 next year. I think possibly the latter, as after all, life is very simple. We ourselves create the circumstances that complicate it. What remains to be seen is who will say I am sorry!! We just need to be confident that those presiding on the Commission are not relying on the ‘hope factor’. Cheers ^__^

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