LAST TO LEAVE, PLEASE TURN THE LIGHTS OFF!!

LAST TO LEAVE, PLEASE TURN THE LIGHTS OFF!!

Two topics will dominate property discussions in 2007 – interest rates and a rental crisis. Fortunately for our property market, the movement of rates has very little effect on prices or sentiments as overall, the Mosman property market is one of, if not the strongest, in Sydney. The same can’t be said for the rental market that goes from bad to worse. Today – we can just offer one per cent vacancy from our rent roll and yes, there will come a time when we will have nothing available. If the market continues on its present course, we could be faced with the possibility of zero availability by the end of 2007.

The Reserve Bank entered the rental debate when it raised the latest Bureau of Statistics figures which identified a 3.7 per cent increase in rents in 2006. This is the largest increase since 1991 – and still no bells are ringing !! The bank said “ While house prices have increased 175 per cent since the mid – 1990’s, rents have increased only 35 per cent on the Bureau of Statistics measure, or 60 per cent on the real estate industry count.” Then it threw in this economic beauty, “ the low vacancy rates are contributing to growth in rents and should boost dwelling construction over the medium term.” While the “medium term” is actually long term, building approvals will continue to decline. Again, nobody wishes to discuss that little issue called the short term.

In the short term we are observing investors cashing in on the generosity of the federal government as they direct up to $1,000,000 into their superannuation. Why, because the chaps in Canberra are getting somewhat concerned about the pending retirement of “baby boomers”.

Since June last year borrowings for negatively geared property investment have plunged a staggering 30 per cent and NSW still leads the evacuation. Many would argue that NSW is now the State of Evacuation !! Residential vacancy rates across Australia have fallen from the long term average of 2.9 per cent to 1.8 per cent. An ongoing increase in the cost of living, huge rent hikes and the reality that nothing will be available to rent – a very sad scenario indeed!

The fact that property investment in NSW is down 38.1 per cent since June 2006 is a clue that apparently all governments keep ignoring. A few years ago in NSW, the property investment market (with the introduction of the ill – fated “exit tax”) was an accident waiting to happen. Today we are on course and just a few bends away from a complete head – on collision. If people can’t live here what choice do they have ? We may have the lowest unemployment levels in thirty years – however if all governments had a boss, our unemployment levels would be seriously higher.

That other distraction to the property market is the stock market which is performing beyond belief. Yesterday it soared to an all time high when it hit the 6000 – point mark. A milestone for the investment markets – a tombstone for the property investment market. If governments can offer incentives for the likes of superannuation then it is high time they did the same with property investment.

We are happy to announce that this week we signed an exclusive contract with Fairfax Digital where we took up its kind offer for the “Don’t Miss” position. What this means is that in every price search for properties (both houses and apartments) in Mosman and Cremorne, our properties will appear at the top of the page in a green boarder. Click Here

Now we can offer vendors a guaranteed top of the page position and we intend holding on to this long term. Fairfax Digital also announced this week, its latest online innovation called Adore which is a site aimed at hosting property videos. It is very different which is why I like it, because “nothing ventured – nothing gained”. With the digital world moving so quickly many share the opinion that with property, videos are the future.

For those who want to see how “Struggle Streets” went in the last quarter of 2006. Here is the Dyson Austen Top 10 sales in Sydney

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