IT’S QUALITY NOT QUANTITY

IT’S QUALITY NOT QUANTITY

Just because the flowers are starting to blossom, there is no indication that they will be picked for the property funeral. Some would be better advised to stop and smell the roses, as I can tell you now that the market will be in full bloom again, although the property numbers will be down decidedly on previous years. Seven year property price spins went out with the Chicko Roll. Suburbs now stand alone as market entities in their own right, and the property casserole is simmering.

With the average price for a Mosman home climbing to a record high of $1,796,049 for the twelve months to June 30, 2003, one could hardly say that the market is ailing. The average unit price for the same period climbed to $595,857, which in all probability is also a gold medal. Once and for all I will dismiss the property pessimists and tell you why our market will continue to ‘shake rattle n roll’. You see the numbers stack up, and after all, property is a numbers game. Take a look at the Municipality of Mosman. My research identifies that give or take a few letter boxes, we have approximately 5860 houses in total. The general rule of thumb is that around 500 homes change hands every year, say eight per cent on average. Now given that we are in the seventh year of ‘property play’, this means that approximately 3500 houses have changed ownership since 1996. So it would be fair to say that now we will see the market continue with healthy appreciation, because supply simply can’t keep up with demand. We will possibly see the volume of houses sold, drop to around five per cent, as fewer and fewer houses will be available. Most will go into a ten year hold pattern. Hmm, bet I have you thinking now!!

The major decision that many households face at the moment is when to ‘lock and load’. With many surfing the variable interest rates (and it has been an awesome ride), lenders are now lifting the fixed rates for the first time since December 2001. Those who secured a 5.99 per cent fixed rate have done very well for the next five years anyway, as the banks start to move the fixed-rates back over the six per cent mark. So it is with anticipation that we yet again turn to the ‘Governor of Moolah’ who could massage the rates when they meet for croissants and cucumber sandwiches in two week’s time. Just a shame that I could not attend a dinner at Manly Golf Club last Wednesday night, where the Governor was guest speaker. His first comments were, “Greetings, I am not here to discuss Fiscal Policy”. Well anyone who saw him swing a golf club would have realised that they were not there to discuss how he reads the greens!! My moles in the bunkers were not prepared to ask the questions that I sent via SMS. Given that the Governor is probably eyeing a few gold watches as his term is up in two months time, there will be a status quo with interest rates.

As for the so called property bubble, there is no such thing!! What happens to investment units in Surry Hills (or Melbourne for that matter), has no bearing whatsoever on the Mosman market. They are riding different horses for different courses, although it could be argued that some are at the wrong track! There is something very special about Sydney, which would explain why once again it has been voted “world’s best city”. Sydney has won this award, presented by influential US magazine Travel and Leisure, six times in the last eight years. No wonder the property casserole is doing so well, it has all the right ingredients!! Cheers and clink… ^__^ P.S. Thanks Rich for the last two editions, great job!!

Leave a Reply

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