July (for some) can be a lost property month!

July (for some) can be a lost property month!

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Australians love acronyms although one that never applies to the real estate industry is POETS day – Pi$$ Off Early Tomorrow’s Saturday! However, for the month of July, it applies simply because (traditionally) it is seen as the month for ‘resting’ properties. Then when August arrives and the weather starts to warm, it is Game On again, for the final run through to Christmas. In July, Aussies chase the ‘S’ word – Sun, Snow and school holidays. Of course, property deals are still transacted thanks to the availability of excellent technologies.

We are at the start of a new financial year and by all accounts it will be another interesting one the fizz has gone, but it will be a wild year. ‘The past financial year has been one of contrasts. It began with such vigour and such optimism. By Christmas almost every major commentator was predicting that not only were we out of the mire, but that we were witnessing the dawn of the greatest bull run of all time. That rocky period between late 2007 and early 2009.Hah! That was merely a hiccup.”

monavale

BUY PRINT

Clear waters ahead; keep swimming between the flags or stay in the pool?

Greece and Europe face another 48 hours while the world worries about recovery as fears grow over health of the global economy. Quite fascinating given that house prices up but buyers wary of interest rates going the same way although many believe that the economy faces long grind out of crisis.

At this juncture, property markets can easily be confused with what is occurring in the share market, as was the case with red lights are flashing in fragile economy where “the end – of – quarter window dressing held the Australian stock market together yesterday but there are red lights all over the place. The market recorded its worst result for the financial year, an 11.8 per cent fall for the three months. The problems in short, are no signs of a domestic– led bounce with an election due to be called any day, weak US economic numbers, European sovereign debt and a slowing China.” So why then do property buyers wait for a booming market to pay over and above in what is otherwise known as a vendors’ market? When they find themselves in what is considered a buyers’ market, they freeze, which is probably more a casualty of economic data overload. Unless you are a property developer, the purchase of a home is considered an emotional acquisition and we all know that sometimes, our emotions can get in the way with our feelings.

Given IMF chief rules out double – dip recession one of the greatest concerns facing the Australian economy is that the Reserve Bank of Australia (RBA) is at odds with Treasury and Fort Fumble which keeps spending. Some believe that the RBA raised rates too far while others believe (with a federal election pending) the Gillard Gauntlet is borrowing and spending too much in an attempt to buy the upcoming election. Retail sales rose by a modest 0.2 per cent in May while residential building approvals fell 6.6 per cent.

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Housing starts set to stall: HIA which is a leading indicator that construction is expected to jump in 2010 but drop to just 3 per cent growth in 2011. Currently Australia has a 200,000 house shortage despite an underlying growth in our population. This, of course, places enormous pressure on rental markets and yet the federal government has no strategy in place to address these concerns. Makes one question just what exactly the Housing Minister does, aside from a failing to understand basic construction economics. The combined real estate industry is the largest employer in Australia and yet, we are being told that Australia is adopting a ‘tool down’ policy. So what we are witnessing is a government attempting to stimulate votes and ignoring basic economics.

Julia Gillard insists on building classrooms (with plaques) and nobody is building Australia. The BER (Building Education Revolution) with the benefit of hindsight, should have been BAR – Building Australia Revolution. After all, who lives in a classroom?

Someone should have told them you can’t sell a classroom but you can sell a house – even in July!

Her first back-flip with the RSPT announcement today, is somewhat confusing given the tax rate dropped from forty to thirty per cent. A lot of argy bargy for just a ten per cent compromise. Either the miners are poor negotiators or Fort Fumble’s revenue estimates are incorrect – no surprise for guessing the answer.

Miners: 1 Fort Fumble: 0

Fort Fumble will call it an own goal thinking they scored too!

Cheers ^__^

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3 Responses to “July (for some) can be a lost property month!”

  • Ann says:

    Intersting that they mentioned BHP, Rio and Xtrata (only one of which is an Australian miner). I wonder what the smaller AUSTRALIAN miners have to say?

    Looking at the lacklustre ASX this morning, I guess not everyone is happy, least of all the mug investor.

    So the company tax reduction is halved and will be 29%, but small business still have to pay the extra 3% super.

  • I have been watching the ASX also and it is very quiet although there are plenty of Out of Office emails received here so plenty of people are on holidays.

    The RSPT debate is impossible to justify the blatant waste of millions of dollars in advertising monies. Looks like the federal election will be called over this weekend 🙂

  • Ann says:

    Yes a yawn on the ASX today after 7 – 8 down days. Hardly a hip hip horray for Gillard

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