Living in the past and struggling with the present.

Living in the past and struggling with the present.

We can be sure that in a recession, everybody looks to the future. A few years after the recession of the early nineties, we were introduced to the Internet. Today, governments across the planet – I could say world wide web (www), are introducing “stimulus packages” which simply highlight things they want to do now, that should have been done in the past. This confirms the fact – politicians are so far behind, the future has actually gone before they get there.

Our current recession is definitively not a case of better late than never – more a case of elected politicians who have stymied our very own economies through gross mismanagement of resources, education, health, transport, employment etc.

I openly use the word recession because that is where we find ourselves today. If you watched Laurie Oakes interview Prime Minister (Australia’s greatest ever) Kevin Rudd on Sunday Today, you would have heard our Prime Minister (for the first time) use the words “global economic recession, recession, global recession and current economic recession” a staggering sixteen times. One can then presume that it is now politically correct to mention the recession word in “Virtual Realty News” – phew! Just another example of moving from the past to the present – although it has been a struggle.

It was “Ruddy Fantastic” when United States Treasury Secretary, Timothy Geithner, endorsed Ruddy as being “A-plus” on his handling of the global recession. “If we did what he advised we’d all be in a better place” said Geithner. Ruddy Fantastic! I say we are now in recession so where is the better place? Obviously he means last one in is the first out – somehow I can’t agree.

A common theme we are seeing today is Australian businesses re-locating to employ overseas staff where labour markets are so much cheaper and Payroll Tax is significantly reduced. Imagine what would happen in Australia if State governments abolished Payroll Tax – there would be no need for businesses to move operations overseas . Unfortunately, it won’t happen as they all live in the past and such a move would be deemed politically incorrect. In economic downturns, government taxes clearly accelerate the severity of recessions.

Ruddy Fantastic and surprise, surprise, the Business Coalition for Tax Reform (BCTR) suggested that the Australian Taxation Office take over Payroll Tax and develop a uniform national system. An example of the most insidious business tax being addressed but falling on deaf ears, or living in the past and struggling with the present? The major problem being that all States, Territories and Ruddy Fantastic’s very own Federal government are now all in deficit – better known as err umm – broke.

Whilst on Ruddy Fantastic, one subscriber this week suggested another name – “Special K” – low fat economy with business weight loss which can also be described as a recession.

To make matters even worse, the dastardly timing of this thing-a-me-bob “recession” has left a huge hole in budget coffers (better known as tax receipts) because businesses are earning less and this equates to less tax, less profit and less incentive to employ – otherwise known as overheads.

Back to the future where Mosman house prices prefer the past rather than the present and our markets are a far cry from – hey presto! In 2007 Mosman, recorded 409 house sales, last year (2008) it recorded 261 house sales and in 2009, Mosman is currently recording just under 7 house sales per month. So under the current formula in 2009, we could be looking at somewhere in the vicinity of 90 to 125 house sales – despite all time record low interest rates. In the space of two years Mosman house sales could be down by seventy five per cent.

Sydney is presently drowning. The Daily Telegraph revealed this week that “an estimated 7,300 new dwellings will be built in Sydney this year, the lowest rate of growth in more than 50 years and roughly a third of homes built in 2003. The bleak projections are in stark contrast to Melbourne, where an estimated 23,000 new dwellings will be built this year.”

Not sure which part of these statistics, Premier Nathan Rees does not understand – aside from the reality that as he presides over Fort Crumble, he has absolutely no idea what he is doing. The most sobering point in the article “Rents to soar as housing crisis worsens” is that Sydney’s population is expected to rise by close to 23,000 this year and with rental vacancies already running at a mere 1.1 per cent, the situation is reaching crisis point.

If the global recession is not enough – businesses in NSW find themselves fighting a totally incompetent, broke and lost government before they have to then address a global recession. This week it was revealed that NSW will go to the polls in two year’s time – where will the NSW economy be at that time?

Recessions have strange effects on people. One local agent ran an advertising campaign this week with the headline who is he? Friends should call him and tell him that everything is fine and the real estate industry can lead to individuals questioning themselves.

As the Little River Band sang “Hang on help is on the way.”

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and , sales http://www.rwm.com.au/news/

15 Responses to “Living in the past and struggling with the present.”

  • Patricia says:

    Robert…Please clarify your reference to ‘Mosman house sales’. Does it exclude units & townhouses? Thanks.

  • Patricia,

    That is correct the data quoted does not include townhouses or apartments.

    Cheers

  • Harriet says:

    Someone please tell me why “Ruddy Fantastic” continues to climb in the opinion poles, considering the ruddy fantastic state of our economy? Surely the Australian population arent so stupid as to base their entire opinion on a stimulus package?

  • Tim Mooney says:

    Little River Band might supply the melody but what we really need is Men At Work !

  • Gordon Frend says:

    Harriet, you know that pop groups are always popular purveyors of unreality, and so it is with Little Kevvie and the Spinmeisters.

    Or perhaps it’s just that the price of the average swinging voter is a carefully calculated $900 of taxpayers’ money?

  • Brian says:

    Robert, you are becoming very boring and repetitive and read like an ad for the Liberal party. My old Dad told me never to mix politics with business, a lesson you are yet to learn.

    You should stop “living in the past” and accept that your mates lost the last election and are now out of office – and for very good reason – just get used to the idea and please, restrict your childish comments to the Real Estate market which you do know something about.

    You’re beginning to sound like your loser mate, your hero, the jerk with the smirk, Australia’s greatest Treasurer.

    No doubt once the economy stabilises, we’ll see Costello suddenly develop a desire to assume the leadership of his party, with help from Nick Minchin, Tony Abbott et.al. I expect this is likely immediately after the Libs lose the next election.

  • Michael says:

    Harriet,

    One of the key issues we face in Australia is the failure of successive governments to analyse where our competitive advantages are or should be and invest in them, so we can create jobs long term jobs. Additionally, the failure of a strategy to sort out our rail, road and port infrastructure. The governments are all focussed on too frequent federal elections and short term gimmicks that drive up their poll chances. Unfortunately the way we reward our elected officials at local, state and federal levels does not encourage the right calibre of people all of the time. We have too much government, we should remove a layer and save a fortune, like the State Governments.

  • Johnson says:

    Robert,

    I agree with Brian. If you want to be an economist, go right ahead, its a free world. But I really do not see the point of this repetitive dribble, week after week. let me spell out a few facts :

    1. Labour are in power. There is absolutely nothing you can do about it so why dont you expend your energy on the real estatejob you have

    2. Yes, agreed, we are in a recession

    3. It is going to get a lot worse, contrary to what many people seem to think

    4. Mosman property prices are going to go a lot lower. Why are you so delusional?

    Back to work. Stop the boring dribble. Please.

  • Brian,

    Don’t you love blogs – where one has the opportunity to express themselves 🙂 I am the first to admit that sometimes I can come on too strong and I take your point. Just that when I sit down to write the weekly editions often I am influenced by what is happening and I am guilty of firing up – believe me it is not an easy task to write 48 weekly editions and I have not missed a single edition in ten years (our tenth annivarsary) in September 2009.

    I don’t agree about your thoughts about mixing politics with business given the strong influence political decisions have had on our industry take the Vendor Exit Tax for example that played a huge role in today’s rental crisis.

    Brian – this week I will again have to mix politics with business given what I read on page 145 of last week’s edition of The Mosman Daily where an advetrtisement appeared on behalf of the Minister of Police. The NSW government is selling, leasing or exchanging the land known as Mosman Police Station (we are told a selling agent has been appointed) and the Highway Patrol Unit is being re-located to North Sydney.

    No doubt I like many others believe that this is a disgrace.

    Cheers

    Robert

  • Johnson,

    Thank you for your facts – although I feel compelled to correct you on the word “dribble” that you used twice. The word does not exist in the context that you applied rather the word you required was actually drivel.

    I don’t (at this point) subscribe to the theory that the economy will get worse and that property prices will fall further. I don’t believe prices in Mosman will fall below the 20 per cent mark which is the rate we are presently experiencing. I will write about the reasons why in this week’s edition.

    Cheers

    Robert

  • Brian says:

    Robert,

    Complaining, rightly, about the decision to close Mosman Police Station and sell off the land is NOT what I meant by mixing politics with business and you know it. Yes, it is a disgrace. The State Gov is a disgrace.

    And as a retired publisher, I do know how difficult it is to write 48 weekly editions and not miss a single edition in ten years. Quite an achievement and I congratulate you for it.

    But what gets up my nose, and I know the noses of other readers of your comments, is your constant and yes, I have to say it again, rather undergraduate type attacks on the Rudd Government. Not everyone in Mosman, not even every business person, thought the Howard Gov was the greatest or even that Costello was the world’s greatest treasurer and constantly knocking Rudd and his team does nothing for your image.

    Just look at the headlines in today’s SMH on the latest Poll result : Rudd’s approval rating 74% – Turnbull’s 43%

    Until the Libs face up to the fact that they lost – yes, lost the last election and rid themselves of the remaining right wing members of yesterday’s team, like Abbott, Costello et. al. they will not have a hope of winning the next election.

    And in these tough times, voters expect pollies to work together for the country – not indulge in childish point scoring.

    The present Liberal Party remains a disgrace even in opposition.

    PS Drivel can be dribbled can it not ?!! I thought you’d proved that Robeet.

  • Not exactly sure Brian what you did prove – maybe you should run over it again, as I somehow missed what you were driving at 🙂

  • Patricia says:

    Perhaps ‘Brian’ and ‘Johnson’ should cancel their subscriptions to ‘Virtual Realty News’, as they fail to see it for what it is…the musings and experiences of a local real estate agent. The Mosman market has come to a screeching halt and so you, Robert, are writing saliently about the political and economic influences on the property market at a macro level. You gotta write about something so therefore, not being a professional journalist, you are free to display bias and preference in your writing! In a few months, it’s likely you will be reporting on the micro forces (white-collar and executive job losses, mortgagee repossessions, business closures) that will be having an impact on the Mosman and Lower North Shore property market. You do a fine job writing a weekly column and delivering it without fail every Friday. Don’t let the cowardly critics (ho provide their scathing criticisms under the cover of pseudonyms) get you down!

  • Nick says:

    Good work Patricia,

    Could not have said it better

  • Thanks Patricia – your thoughts are exacting on just how difficult it is to write a newsletter week in and week out. For obvious reasons if it was so easy every agency would be posting where the simple reality is that none do – given the degree of difficulty. Our online business is our point of difference over our competitors where RWM continue to lead this market demographic and this simply won’t change under my watch. The critics are few and far between where it constantly reminds me of managing vendors and purchasers.

    With Virtual Reality News we adopt a thought process of using it over losing it  Nobody is perfect – and unsubscribing is a very easy option that we offer. The simple reality is that we (RWM) provide the largest subscriber weekly real estate newsletter in Australia. We are driven by eyeballs and results where – with good heath I can guarantee another ten years of weekly editions. This week VRN will address Mosman sales volumes for houses and apartments from 2000 to 2009 which I know(hope) you will find informative.

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