MORE THAN PAPER MONEY!

MORE THAN PAPER MONEY!

On many occasions this year, we have reported on the decline in the number of houses that have sold each year in Mosman and whether this would continue in 2006. As we predicted it now looks almost certain that the pattern has finally changed and 2006 has recorded (or will record) more than in 2005.

2001 445 house sales Median sale price $1,250,000
2002 391 house sales Median sale price $1,700,000
2003 376 house sales Median sale price $1,699,500
2004 309 house sales Median sale price $1,640,000
2005 289 house sales Median sale price $1,850,000
2006 275 house sales Median sale price $1,800,000

Source: www.realtor.com.au

Given that in recent weeks there have been a significant number of off market sales, I would suggest that Mosman has already eclipsed last year’s number of 289 house sales. One of the most frustrating breakdowns in real estate today is the “hopeless” way that property sales are recorded. NSW falls well behind Victoria in sales data because in Victoria the real estate agents provide property data as, “shock horror”, it helps them too!! I think that presently, Mosman would be ahead of the 2005 and 2006 sales volume and the median price for 2006 will be the highest ever recorded. I have no doubt that eventually, an organisation will finally produce sales evidence that is just one month old and yes, it will be data based on sales evidence compiled on exchanges not settlements.

The property market (well ours anyway) continues to drive well into December and it is currently showing no signs of pulling up stumps for Christmas. Even better news is our prediction of a strong start to the market in 2007. Already we have signed a number of properties to hit the market straight after the Australia Day long weekend. This week we managed to negotiate offers on five apartments and two of the purchasers are investors. Although with the recent changes to superannuation regulations, many investors are opting to sell and then invest the proceeds into their personal superannuation funds.

More headaches for the rental market in 2007 as both governments need to address the rental crisis which was brought about by their respective policies. Wait for the pathetic excuses in 2007 when they each start pointing the fingers and the blame game commences. It can’t be remedied overnight and it is pretty obvious that with our immigration (the silly ones coming in), you have enormous pressures on rental properties that continue to decrease in numbers, across Sydney. Obviously, both governments don’t see an increasing population as any great concern – well not at this stage anyway.

www.domain.com.au keeps rolling out new and innovative concepts and this week announced that it will commence trialing a new 1300 telephone number for agents from their property portal to enable them to measure the leads. This really is a fantastic concept! Our business now spends well over a million dollars each year in newspaper advertising, with 2006 being our highest-ever spend on record and we believe that our newspaper spend will be up in 2007. The reason I say this, is that our market share continues to increase and reflects in that thing called “profit”.

Whilst it is fast becoming obvious that the cheaper items (being rentals and the like) have better economies of scale online, the same can’t be said for sales. Yes, marketing strategies continue to produce great results when you combine both online and newspaper campaigns. Imagine for one moment that you are looking at a property online, with the print function removed. It would be nowhere near as popular. I would actually suggest that traffic would decline as old habits die hard and people still like “the paper”. In my opinion, this won’t change for quite some time. The domain.com.au initiative is a first and we will watch with great interest to see the results. What we do know is that an interested party can see a signboard and then go online to look at the pretty pictures. At the end of the day I still do not change my opinion that our electronic business is database driven which is all about bringing together the right people, to the right properties at the right time. Some properties sell very fast with Internet marketing only, whilst others need newspaper advertising to generate interest.

Over time we have learnt that real estate is a long way from being an exact science !! Cheers ^__^

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