Well I know what my first impressions of the 2003 Mosman market were… ‘Haven’t I seen that letter box before’! Seventy-five per cent of the advertised homes last week were actually 2002 ‘failed auctions’! This is a highly unusual market strategy. By all accounts it could be a rewarding one, given that we have a much higher purchaser enquiry level than at the end of 2002, which was certainly due to the events in Bali and media exposure about a ‘market set for collapse’. 2003 is a much more positive story and the Mosman clearance rates will attest to this in coming weeks. The begining of the year has also seen expats circling a number of properties, so watch for some very interesting sales in the coming weeks.

It is not just the Australian property markets that are returning excellent results. The United States market soared to new heights in 2002, as battered shareholders sought shelter in investment properties and their principal place of residence. For the past two years real estate has remained one of the only bright spots in the U.S. economy showing a stronger and more balanced return on investment. With lowering interest rates, a 30 year home mortgage fell as low as 5.93% in 2002, which in turn saw home sales estimated at 6.5 million. This in turn shattered the previous record set in 2001 of 6.2 million in sales. This buyer activity saw home values rise by an average of 6.2% (in the year ended September 30). This is far better than the annual average of 4.6% since 1980. Back home, we have projections for 2003 of capital appreciation being around 18%. We need to bear in mind that they trade in millions of homes and we trade in just thousands. I think our numbers stack up much better, considering that we have a much better return on investment.

There is one fact that identifies why we have such a fantastic market here in Mosman. In 2002 I did not see one home owner incur a loss, despite some pretty frivolous attempts by a minority to talk the market down. Don’t you just love the ‘Mosman Dollar’!

We had many responses to our Land Tax information last week. All I can add, is that their delivery lacks total consistency. Some houses just made the cut of being valued under the threshold, despite being worth many millions of dollars, whilst others that are not worth nearly as much attracted a ‘please forward a donation’ letter.

With regard to Stamp Duty, I fired an email to them and they corrected me, the formula was applied in December 1986, and not 1982, as I was told. As for a response to a reduction, I was politely asked if I knew how to ‘Whistle Dixie’. Here is an extract from the officer who responded, “Unlike land tax, stamp duty is not an annual tax but is a “one-off” tax on individual transactions. It is therefore incorrect to refer to a “base date” (the current rates were introduced from 1 December 1986, not 1982), and it would be impractical to adjust rates on an annual basis when revenue depends on varying values and volumes of transactions. The rate of duty therefore bears no correlation to property values at any particular date. In fact, the rates have recently been increased in some other States and Territories.”

At its meeting on February 4, the RBA Board decided to leave the cash rate target unchanged at 4.75%. For those who are interested in following the statistics, click here. There is no way in the world that we were going to see a rate reduction in the near future. They are probably being saved for later, depending on what happens at that ‘big oil station in the desert’.

The one bit of useful information that we can share with you is that the property market is looking positive once again, and it is across the board. Marize sold three out of three apartments last weekend, to both investors and first home buyers. It is also interesting to note that the U.K. expats are by far and away the most vocal at the moment. Looks like all that happened with the recent Ashes tour is all but forgotten! Or maybe their new acquisitions have entitled them to barrack for the Aussies in the World Cup!!

As for what happens to the market next week, same place, same time and same URL… ^__^

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