IT’S GOOD NEWS WEEK !!

IT’S GOOD NEWS WEEK !!

All in all most would agree that this week’s budget delivery was a positive spin for the economy, however it does send out a clear message that the tax cuts are simply band-aids that will absorb petrol price increases and any future interest rate increases. Bill Cosby once said “I don’t know the key to success, but the key to failure is trying to please everybody.” You can be sure that the upcoming Bobby Dazzler budget for the “State of Decay” will not share the same generosity and it appears highly unlikely that he will abolish the Vendor Duty or bring back the threshold on Land Tax. The Real Estate Institute, Property Council and Construction, Forestry and Mining Energy Union, have organised a funeral procession from St Mary’s Cathedral to State Parliament House on May 19 starting at 10.00 am to remind the Dazzler that the Vendor Tax is the final nail in the coffin. The irony is that we should have been paying our last respects to the NSW economy years before this, however better late than never. Even ‘Bomber’ Beazley has taken the rental option over buying in the ‘State of Decay’. In all probability, he will be moving back in three years and it would be highly unlikely that he could recoup his costs in that time.

The property markets are delivering plenty of bruised egos at the moment as many businesses struggle to find that elusive vantage point from where they can read it. This is without a doubt, a difficult market. However, this week we managed to exchange $14.560 million dollars worth of property which sends out a clue. Off the property menu goes an apartment on The Esplanade, a townhouse in Fifth Avenue, another apartment on Grasmere Road sold on day one, a home in Shellcove Road, a waterfront on Wonga Road (sold first inspection) and a big confidential sale also. When you look at the market, you can see sales at all market demographics. One of the biggest problems with the property market is when properties sit in the wrong demographic market.

If you look at our highly skilled and talented Apartment Division, you will note that on average, they run around forty apartments at any given time. This could not be achieved (not withstanding their ability) without a state of the art, online strategy. Over the years, agents have fought tooth and nail against change and now they don’t have to, as the new strategies that are presently taking over our industry are now replacing them (without their knowledge). In the last six months the landscape of the real estate industry has experienced radical changes and we are not talking rough seas, we are seeing a tsunami. I believe we will see the largest shake-out that our industry has ever seen, as today it is all about balancing changing market conditions and marinating them with the online and offline products. Last week we all but ran an entire page in Saturday’s Domain (and to the best of our knowledge this has never been done before) and yes, we are repeating it tomorrow as it gives us market domination. Some may argue that this can be achieved in Domain North or The Mosman Daily. We disagree! They are page flicks, whereas Saturday Domain is a page read.

Another change that we have observed (and further predict) is that house sales volume will further dwindle due to the high costs of buying into the market and then selling. Vendors are opting for the ‘stay put’ option. Given that Mosman over the last nine years, has experienced close to a ninety per cent trade, it had to happen. Apartment sales will remain strong and house sales will continue to decline in terms of volume. This means that it is not just the agents who need to change their outlooks. Advertisers need to change also and not focus on the big rocks as the preferred ‘rivers of gold’. There will be a much stronger income stream in the future by moving to the pebbles, which in recent years have been all but forgotten. I said in a meeting with Cumberland Newspaper Group this week that if you go to the most affordable medium for advertising (the Internet) look at agent websites then add up the pebbles (apartments and rentals), you can then work out your lost revenue. One of the strategic reasons we purchased Richardson & Wrench Neutral Bay, was because it had more pebbles than any other area in Sydney.

As Colonel Mustard said in “Clue”, “This is war, Peacock. Casualties are inevitable. You cannot make an omelette without breaking an egg. Every cook will tell you that.” Cheers ^__^

Leave a Reply

Your email address will not be published. Required fields are marked *