IT’S THE ‘GOVERNOR OF MOOLAH’, AT ANY RATE!!

IT’S THE ‘GOVERNOR OF MOOLAH’, AT ANY RATE!!

The ‘Ozzie Ollar’ went Oi Oi Oi!! Peter Perfect delivered “Fudget ’03”. His defining moment was to ring JH as he prefers to be called whilst oiling it up in Texas, to tell him about his tax cut incentives. Surely these tax cuts would be better directed towards our public education and hospitals. That way our state schools would have the facilities of the private schools and give all our kids a better standard of education. It would also take the pressure off the parents, who are faced with the dilemma of huge private school fees. The most important asset of this nation is our children. After all, they are the future of our country. Or, with your extra $5 to $10 a week, you can buy one or two steaks at Hotel Mosman! What Fudget ’03 clearly identifies is that the Ozzie economy is alive and well.

The big decisions about the property market still remain entirely with the ‘Governor of Moolah’ and how he rates our economy, and by all accounts he is not perplexed with what is going on. Since he took control of the throne in September 1996 he has been forced in to action just eighteen times with interest rate adjustments. The cash rate target was 6.5 percent when he grabbed the reigns and eleven of his rate adjustments have been reductions. At next month’s meeting the rate will have remained unchanged for twelve months. Given that Macca, is just the eleventh ‘Governor of Moolah’ since the throne was first occupied in June 1912, the clear pattern is that he prefers to leave the economy on auto-pilot.

The most interesting observations about the current markets and previous markets are that they were completely different. Given the boom markets of 1988 – 1990 we saw prices double in the space of twelve months to two years when the official interest rate in January 23 1990 was 17 to 17.5 per cent. This time around, the market has been much slower to react, with the property market taking anywhere up to six years to double in price. When Sydney was handed the Olympic Flag in Atlanta to host the 2000 Olympics, this triggered and ignited the dynamics of the property industry, at the very same time Macca, took up residence on the throne.

Whilst many still predict that interest rates will blow out, at this point I just can’t agree as it is supply and demand that best controls our property markets. Once again we will see a strong Winter market, as this is when demand always exceeds supply. It was this time last year when clearance rates peaked at eighty per cent. Last weekend they climbed back to seventy-four per cent which reinforces my prediction that we will see a very strong May and June market. At one inspection last weekend we had just over two hundred people inspect a home in just one hour!! The clearance rates this time will probably hit the magic eighty per cent again, and many will agree that this is the prime selling period on the calendar.

The participants in the property market are much smarter today, as they maximise their asset. Figures just released clearly identify this, as renovations of homes are now beating new home constructions. 2002 was a record year with $4.03 billion being spent on home renovations, according to figures released from the Housing Industry Association. With the latest figures revealing that in the March quarter alone, $1.08 billion was spent on homes. This is nearly twenty-five percent higher than the December quarter of 2002. Real estate today is an entirely different industry and will continue to remain the country’s number one employer.

Always happy to help a worthy cause, some of our subscribers (well four ladies to be exact) are embarking on a fundraising mission this Friday, straight after they read this week’s edition. How is this for dedication, it is a 100 kilometre walk through Aussie bush land and it has to be completed within forty-eight hours. The proceeds from their efforts are for a charity called OXfam, which assists impoverished countries. Our great ‘Ozzie Mossie’ team are trying to raise enough money to pay for a water pump to provide clean drinking water for up to fifty families in a Cambodian village, and technical training for the local water user group. They are only after donations between $10 and $20, so let us know if you would like to assist them with this worthy cause, after all you are $5 to $10 better off this week thanks to Peter Perfect!!

Cheers and have a great week… ^__^

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