When asked this week how I saw the March Quarter, it was a quarter pounder with cheese! Some vendors were on the pounding end, as were quite a few purchasers, and many ended up with a cheesy grin. It was by all accounts an experimental three months, as the sudden impact of the two rate increases were met largely by trial and error. However, given the strength of March sales it would be safe to say that the remainder of the 2004 market will be positive, with restricted supply. Mosman in the last week has posted two $6,000,000 plus sales, both in Balmoral, this can only reinforce the market confidence as our property market starts at the top-end. For the record, the average price for a home in Mosman climbed to $1,950,043 for the twelve months to 29 February 2004 and that is a record.

Not a week goes by that I don’t get the opportunity to review a property story, and I loved the one by Daniel Dasey, in The Sun Herald last Sunday, titled ‘Home sellers count high cost of greed’. Dasey said ” Home sellers who turned down hefty auction bids for their properties last year in the hope of snaring a higher price have been stung for tens of thousands of dollars by the slowing property market”. Well I am sure that there would certainly be a few in that category, however our research shows that they were not auction bids, but vendor bids. Vendors were simply guilty and greedy, of allowing agents to inflate the home value to award the business. We are seeing plenty of this still as this edition goes out, where agents applied ridiculous values to get the business and the failed properties then paint a perspective suggesting that the market is weak. The reality of the matter is, the agents inflated the value, and many problems associated with the property market are a direct result of the agent’s own greed and stupidity.

This further explains why the ACCC and Department of Fair Trading are circling the property market, and word is, that already a few agents have made the infamous “Hall of Shame”. I guess we will read more about them as the penalties are handed out, and I am reliably informed that we will be hearing plenty more in the not too distant future. With a slow-down in property transactions in 2004 it is no wonder why Bob Carr is looking so remorseful, his Stamp Duty coffers are well and truly under-budget. Watch him, call the ‘Property Police’ at the Department of Fair Trading and to start convicting agents and agencies for breaching the Act, as with each conviction it is a double whammy as both cop a fine. This new legislation on ”under and over-quoting” could be a huge money spinner for the ‘State of Decay’.

Now whilst we are on the misfortunes of Bob, where these days, nothing is going well for his ailing bank balance, it came as no surprise that not even Centre Bet would give him odds on winning his public whine about the Commonwealth Grants Commission. The Commission was established in 1933 to assess claims made by States for financial assistance (special grants) under section 96 of the Constitution. The Commission then applies a formula called “Principle of Fiscal Equalisation” which is based on, ” The Commission’s advice is based on the principle of fiscal equalisation which states that: each state should be given the capacity to provide the average standard of State-type public services, assuming it does at an average level of operational efficiency and makes an average effort to raise revenue from its own sources”. The writing was on the wall (for most anyway) when on March 3, 2004 the Chairman Alan G Morris issued a press release titled “Report On State Revenue Sharing Relativities Review 2004″, and they then discussed each State’s main influence on the per capita relativity. They acknowledged that NSW, ” Our assessment that New South Wales has above average relative financial capacity to provide services . Its above average revenue raising is reinforced by below average relative costs of providing services”. It observed that NSW was ” well above average per capita values of land (especially commercial and industrial land), implying that above average revenues can be collected from stamp duties on conveyances, land taxes and insurance taxes. Above average per capita pay rolls, above average volumes of financial transactions, above average household disposable income, which is linked to above average revenues from gambling taxes.” I guess Bob did not realise that NSW is the most heavily taxed State in the country, hence it derives the greatest income from revenue collection. Yet another simple over sight !!

No doubt the Grants Commission thoroughly enjoyed their eye-walk over the 2002-2003 Annual Report from the Office of State Revenue, which identified a surplus collection in revenue of $12,626 billion. So why waste $800,000 of tax payers money on a battle that could never be won, even more ironic is that Bob, was a strong advocate against the introduction of GST in the first place. No other NSW Premier in history has collected as much revenue over the last eight years than Carr (no other Premier has introduced as many taxes either), and don’t forget we had a few other little gigs like a World Rugby Cup, and that little international shindig in 2000 called an Olympics. So why in 2004 was this the first time during his eight years that we have seen him mount such a futile challenge for money? I hope that he is not trying to tell us that emotionally and mentally the State is bankrupt!! Then his Treasurer, little Mikey Egan, when told that his boss’s plea for the 376 big bucks was unsuccessful, then announced “he felt like slitting his wrists”. What a fine example from public office given the ever increasing numbers of youth suicides!!

All eyes will be on the ‘Governor of Moolah’ next week, when he sits down for his monthly cucumber sandwich gathering with his head tellers to discuss the cash rate target. My tip is that it will remain on 5.25%. No wonder the property market is climbing back up, at least the news on the home front is becoming increasingly more positive. I am tipping the June Quarter to be up modestly on the March Quarter, with very little happening during April, which is the month of school and public holidays. The simple truth about property is that too many have a vested interest in it !! Cheers and clink ^__^

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