NO CLARITY IN CLEARANCE RATES

NO CLARITY IN CLEARANCE RATES

When it comes to the property market the one thing that the critics have in common is indigestion as they constantly have to eat their own words. Many believe it is the clearance rates that are the determining factor to best monitor the state of play within our real estate industry. Those who use this archaic measure are not responsible enough to comment on the market, given that their consistent attacks have never been followed up with a search warrant. Auction clearance rates are compiled from Penrith to Palm Beach, and as most know they are entirely different markets and bear not the slightest resemblance. One must not forget also that the property market has private treaty and expressions of interest sales, although for some absurd reason, they are not included in the overall picture. In the vast majority of cases, auctions that are passed in, generally sell within the preceeding week. Sadly however those who compile the information do not believe in follow-up. So backward is the method to monitor the auctions that even in 2003 they do it all by telephone and this speaks volumes for their systematic correlation of data. Who knows, in 2004 they may even discover the merits of e-mail. Maybe I should write them a software program and sell it to them as their collection of data is actually an embarrassing measure of the overall property market.

There are many idiosyncrasies that those who care to offer their often misdirected opinions on the real estate market, fail to understand. In years gone by, the general rule of thumb was to sell first, then buy. Well that phenomena has changed (believe it or not) due to market capital appreciation. With the real estate market appreciating at an average of fifteen per cent per annum, the vast majority simply refuse to be out of the market until such time as they have identified a suitable property. What we are seeing now is those buyers withdrawing from the market due entirely to the Christmas and New Year holidays, as they are faced with the reality of bridging finance over this period. So the mere suggestion that the market has finally met its Armageddon, makes as much sense as Michael Egan being awarded ‘Treasurer of the Year’. Those buyers will return in 2004 and the market will retain the current status quo, as there is definitely no anecdotal evidence to suggest any change to market dynamics. The ‘Governor of Moolah’ remains tight-lipped about his intentions and many economists are wearing a shade of crimson. In 2003 interest rates have not had a single alteration, despite many joining the chorus by suggesting that we will see an interest rate increase this year. For the record, our clearance rate this week was 100%, (we had just the one auction).

Not a week goes by that our remarkable Premier Bob ‘State of Tax’ Carr, and his merry men do not make a human headline. Not content with the current level of taxes in our ‘State of Poverty’, they are back at it again. As quick as they launched their Wealth Water Tax, now they are back on the waterfronts looking to raise the taxes now on jetties. The reason being is that they have “forgotten” (I mean not implemented) a rate rise in fifteen years, despite their website saying that” rents are reviewed and reassessed at regular intervals”. Transport Minister, Michael (I know boats) Costa has joined hands with Lands Minister Tony Kelly to review this horrendous error I guess someone at the Waterways has been on a great liquid lunch. Given that they see an opportunity to assess the 1400 private jetties, boatsheds, harbour pools, ramps and pontoons all for the sake of another quick buck, it appears once again, that the Members of the Nonsensical Fanatical Illocutionary Club, alternatively referred to as NFI club, have simply missed the boat. Mr Costa and Mr Kelly believe that these rentals are well below market rental given that they significantly add to the value of the property, so it is off to the Independent Pricing and Regulatory Tribunal they go. It seems to me that they have forgotton Mr Carr’s favourite tax being Land Tax and the Premium Property Tax which are specifically directed at these land owners. Well if they are looking to assess a market rental, that will be amusing, as those who lease the waterfront improvements, have a monopoly. They have exclusive use, as it is attached to their property. If all those being assessed, band together and send a cheque in for $1,000 they will have in excess of $500,000 to fight it should IPART believe they have a case. The Government would have no chance of winning that one. What is confusing is that when you sell a waterfront now, Costa’s Waterways Department will provide no undertaking that they will renew the leases, as Waterways is on a mission of reducing pontoons and jetties. They believe that waterfront owners should share facilities and now they are pressing for demolition with a shared pontoon (one hopes that the neighbours get on). So Mr Costa is in the process of reducing the number of improvements which in turn will reduce the revenue received.

Interesting that the NSW Government is upset that they have not reviewed the rents since 1990. While they are at it, they should review Stamp Duty which has not been reviewed since December 1986. Back in those days we had “Bob a Job”, I guess some things never change. We still Dib Dib Dib and Dob Dob Dob!! Cheers and clink ^__^

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