Nothing wrong with the occasional lesson in history

Nothing wrong with the occasional lesson in history

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As widely expected the Reserve Bank of Australia (RBA) decided again to leave the cash rate in a holding pattern for the seventh straight meeting although somewhat surprising the rhetoric was considerably different this time around. Sydney is the elephant in the room with house prices jumping 15.6 per cent in the last year according to RP Data although I would add that this is a lazy way of explaining and defining the property markets across Sydney given they are all performing differently – some are hot and some are not.

Back to the RBA where in an extraordinary week we heard both Glenn Stevens and treasury secretary Martin Parkinson publicly declaring that Australia needs to be closely looking at and discussing taxes and government spending. Well not before time given we are fast drawing a conclusion that the elected ones in Canberra have absolutely no idea how to run a business – they appear to be the only ones who don’t believe that the rate of GST needs to be increased.

Reading between the lines there was a clear concern about what will be brought down in the May budget with a clear indication together with framed criticism by Glenn Stevens: “Put simply, there are things that we want to do as a society, and have voted for, that are not fully funded by taxes over the medium term, as is starting to become clear in the lead up to the May budget.”

Personally I think it is fabulous when the likes of Messrs Parkinson and Stevens have the fortitude to publicly speak their minds by firing shots at the government on the eve of the budget. Let’s fill in a few gaps – NDIS and paid parental leave are the main culprits to which they were referring.

Chatswood

SYDNEY AERIAL PHOTOGRAPHY

A perfect case in hand that should be at the forefront of the Abbott government is that $16.2 billion Building and Education Revolution, the master class of the Rudd and Gillard terms which has now been condemned as an international case study of legislative and bureaucratic failure. Reading between the lines again it would appear that Messrs Stevens and Parkinson are politely pointing out that the Australian economy can ill afford repeats of policy failures – which is now a history lesson.

When you’ve been selling real estate for nearly thirty years interest rates scare the living daylights out of you! and (as strange as it might sound) I’m looking forward to seeing the cash rate increases. Many economists are suggesting that this will happen in 2015 although I am of the opinion we will start seeing increases sooner rather than later with small increment increases.

27-03-2014 11-33-11 AM

20-03-2014 10-07-07 AM

Housing bubble fears: property prices could fall 10 to 20 per cent was an interesting piece by Christopher Joye although it lacks market definition. Yes, certain parts of the Australian real estate market are over inflated, those being the new suburbs crashing through the $1,000,000 mark for the very first time which will, as history has shown, be the hardest and fastest hit. By comparison the traditional markets such as Paddington, Mosman, Pymble and Bondi, for example, are tracking upwards although at nowhere near the pace of the hot – spot suburbs.

I can see the cash rate moving from its current rate of 2.50 per cent to 3.50 per cent next year which will in time place a number of households under increasing financial pressure, although we have seen this happen time and time again. Most notably in the early 2000’s the cash rate fell from 6.25 per cent in September 2000 to 4.25 per cent in December 2001. We then witnessed dramatic market corrections in south – west Sydney as the cash rate started climbing to 7.25 per cent in March 2008 where it then started being eased to where we find it today at 2.50 per cent.

So what amazes me more is that currently we are seeing record numbers of investors entering the market, which can be best described as panic buying – investors now make up 40 per cent of value of total housing loan approvals in NSW and Victoria. So when and where we do see property market corrections this is when we see the astute investors entering the market – the experienced ones are certainly keeping their powder dry.

What this does clearly identify is that politicians and investors pay very little attention to history where more often than not they become part of history.


Yet again we see the vendors winning the battle against purchasers where two weeks ago Mosman houses cracked 104 only to see this drop to 93 last week and this week the total number of houses sits on 84.

MOSMAN – 2088

• Number of houses on the market this time 2013 – 90
• Number of houses on the market last week – 93
• Number of houses on the market this week – 84
• Number of apartments on the market this time 2013 – 70
• Number of apartments on the market last week – 53
• Number of apartments on the market this week – 53

CREMORNE – 2090

• Number of houses on the market this time 2013 – 9
• Number of houses on the market last week – 11
• Number of houses on the market this week – 11
• Number of apartments on the market this time 2013 – 16
• Number of apartments on the market last week – 15
• Number of apartments on the market this week – 11
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NEUTRAL BAY – 2089

• Number of houses on the market this time 2013 – 7
• Number of houses on the market last week – 14
•Number of houses on the market this week – 9
• Number of apartments on the market this time 2013 – 38
• Number of apartments on the market last week – 44
• Number of apartments on the market this week – 38

Source: Australian Property Monitors

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate
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For this week’s opens for inspection

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Cheers ^__^

2 Responses to “Nothing wrong with the occasional lesson in history”

  • Rowan says:

    So given ” the property markets across Sydney are all performing differently – some are hot and some are not”, how about an analysis of price changes in the Mosman market in a coming issue?

  • rsimeon says:

    Rowan

    More than happy to provide a price analysis although Mosman (like all top – end suburbs) can often be skewed as $10,000,000 + sales distort average and median prices.

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