IT’S NOT THAT SIMPLE SYMOND!

IT’S NOT THAT SIMPLE SYMOND!

Veer Sharma wrote that FEAR can often be best described as F = False E = Evidence A = Appearing R = Real. Many would argue that John Symond’s comments this week, that the real estate market will continue to fall, adds truth to Veer Sharma’s description of FEAR. My first reaction to his commentary was WTF !! W = Where’s T = The F = Facts. Mr Symond could not offer any facts as to why he thought all investors should abandon the property market. One could imagine that if investors followed his advice the rental markets would be in further turmoil. New research by Australia’s Peak Building Industry Group, HIA, revealed on October 12, 2005 that “within the next eighteen months, Sydney will quite literally run out of vacant rental stock”. We are already witnessing this today with available rental properties at the tightest levels in living memory, together with investor returns increasing as a result of demand. The property market today is in desperate need of investors, with rents very much on the increase. This further contradicts Mr Symond’s take on the property market. We can only assume that he is very much out of touch. Everybody (well most, anyway) is aware that investment property should always be viewed as a long term investment, not as a way to make a ‘quick buck’. The Real Estate Institute of NSW announced this week that in October, residential vacancy rates continued to fall. The city’s rate was 2.4 per cent last month, down from 2.8 per cent in September. It will be lower again in November and again in December.

We are finding today that vacant properties are finding new tenants within days. Rents in nearly all cases are higher which is pleasing for the owners. This week we leased a home in Vista Street after just forty eight hours on the market, the weekly rental jumping from $850.00 per week to $900.00 per week. In real terms, that is actually an increase of $100.00 per week, as the rent is “after tax” money. So why would an investor want to sell in a market where vacancy levels are at historic lows? Investors need to thank the now departed Bobby ‘Dazzler’ Carr for the current scenario given that on May 13, 2004 the Vendor Exit tax was passed and came in on 1 June , 2004. Many investors bailed out leaving the tenants with fewer properties to choose from. The hangover of this tax to the rental market of NSW, is set to get worse and worse. The Premier ‘Morrie I’m sorry’ Iemma suggested last week, that the vendor tax was a huge mistake, “it was introduced at the wrong time and he had never seen such an issue cause such public consternation”. Well, that was from the investors. Very little is being said today about those who now have to compete in a rental market which is very much depicted as ‘revenge of the landlord’. All thanks to a government that got another tax terribly wrong.

So when the markets start looking a tad too comfortable, the economists jump to their well worn spruik to signal that interest rates could be increased. Home borrowings had the fastest increase in three years for the month of September (Bureau of Statistics). Home loans were up by 4.6 per cent in September compared to August, with the average home loan now recording a new high of $218,300. NSW led the way by recording a 7.6 per cent increase which is the largest in just over four years. Even more interesting was the Reserve Bank’s Monetary Policy for November 2005. “The global economic situation is continuing to provide a favourable environment for the Australian economy”. It does not matter what people read into the economy, we gauge the market by our day to day relationships and we like what we see. The simple fact is that when businesses continue to post profits, it reflects in the wellbeing of a community. Mosman has done very well in recent years with values remaining consistent and are more than holding their own.

Another positive week of sales. No longer available 2/5 Redan Street Balmoral, 15B/2 Brady Street Mosman, 39 Avenue Road Mosman, 25 Bray Street Mosman and 77 Bay Street Mosman. The Bay Street sale was interesting given that the purchasers picked the property up on www.domain.com.au in London. They are not subscribers to “VRN”. They exchanged contracts at $3.300m and are yet to inspect the home (physically). Oh! the powers of the Internet. Whilst on the Internet, subscriber sales finished the week on $395,886,000 with the magical $400,000,000 getting closer and closer. Not sure how John Symond prefers his eggs. If his prediction is correct he should be the next Reserve Bank Governor. If incorrect, looks like sunny side up!! Cheers ^__^

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