Our property markets useless bits of information abound – but wait?

Our property markets useless bits of information abound – but wait?

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With great interest I have been following the latest run of property propaganda in the media where the only part (which by coincidence) that remains missing is that the markets are in fact cooling. The reality is that despite being an agent (the majority miss this point) this is a positive sign although it should be noted that the Reserve Bank of Australia (RBA) have already made this observation some time ago. What, no bubble? Well that was property propaganda, also, given that some are simply hell – bent on misrepresenting the market analysis statistics that are quite simply totally irrelevant to the argument. No, let’s be polite and call it a discussion – albeit biased for personal gain.

Australian Property Monitors (which is owned by Fairfax Media) was quick to release its September quarter results noting that the national median house price was up 1.2 per cent in the last quarter. Like whoopee do – who cares what the national median does as it’s totally irrelevant. If a vendor asked a real estate agent to appraise their property and they started quoting the national median price then the Sydney median price they would be laughed out of the home.

The national result was the lowest since March quarter 2013 and wait for it – house prices were down in Brisbane (-1.3%), Adelaide, Perth (-1.5%), Canberra (-1.7%) and Hobart. Darwin prices were up (2.9%), Melbourne struggled with just 1.0% and Sydney was up 3.8%.

ClearSailingAHEAD

SYDNEY AERIAL PHOTOGRAPHY

Based on this data I’ll make three quick observations – Melbourne will in all probability be in negative growth territory by the end of the December quarter, Sydney will stagnate as investors are pumping this statistic, and the next RBA rate move (sometime in 2015) will be down. So let’s stop for a moment and give credit where it’s due – the RBA have read the Australian domestic market perfectly.

Contrary to what property propaganda bashers would have you believe this is a very soft landing with absolutely no pop – bubble, followed by a monumental crash of epic proportions. I’ve argued long and hard for years it is only when you analyse the housing market statistics by a ‘single’ municipality only that you will get an accurate assessment. When you do critique the performances of say the 38 Sydney municipalities there is nothing to write home about which explains why these statistics are not freely available. Not all Sydney areas are booming: The city’s three worst performing regions – Yes! Breaking data down by region, which by the way is not politically but rather media incorrect, is not how they want demographic property markets displayed for human consumption.

The preferred media Modus Operandi is obviously to bundle market data given the media organisations (News Limited and Fairfax Media) rely heavily on newspaper advertising revenues.


Unfortunately these statistics (median price growth) don’t include how much of this growth was attributed to the investor splurge (local and overseas) – although there are some important observations to be made from the following graphs.

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Now it’s no coincidence that we see an almighty upward swing (above) from September 2012 in the % Borrowing Households Negatively Geared. Only when you cross reference this graph to the RBA Cash Rate Target data do you see that on August 7, 2013 the cash rate dropped to the current position of 2.50 per cent. Investor returns were being decimated in the financial markets so a property investor assault was inevitable and continues to this very day.

Now we read that negative gearing needs to be abolished despite recent revelations that Sydney for the first time in decades is seeing rents declining – which again is a positive sign. It is inevitable that one day the government of the day (just don’t hold your breath) will critique negative gearing.

As strange as this may sound given Australia’s mining industry continues to decline and the real estate and associated industries remain the largest employer within Australia. Where would the Australian economy be today without negative gearing?

Negative by name, whilst positive by result!

For the fourth time this year Mosman has broken the 100 houses on the market weekly statistic. The previous 2014 occasions were on 20 March, 104, 15 May, 102, 22 May, 101 and this week 106 – so what we are seeing is the highest volume of houses on the market for 2014. Before purchasers start celebrating back on 10 November 2011 Mosman was offering 168 houses for sale.

MOSMAN – 2088

• Number of houses on the market this time 2013 – 88

• Number of houses on the market last week – 97

• Number of houses on the market this week – 106

• Number of apartments on the market this time 2013 – 57

• Number of apartments on the market last week – 59

• Number of apartments on the market this week – 65

CREMORNE – 2090

• Number of houses on the market this time 2013 – 11

• Number of houses on the market last week – 21

• Number of houses on the market this week – 19

• Number of apartments on the market this time 2013 – 14

• Number of apartments on the market last week – 29

• Number of apartments on the market this week – 32

NEUTRAL BAY – 2089

• Number of houses on the market this time 2013 – 10

• Number of houses on the market last week – 8

•Number of houses on the market this week – 7

• Number of apartments on the market this time 2013 – 32

• Number of apartments on the market last week – 54

• Number of apartments on the market this week – 51

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 open for inspections

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Source: Australian Property Monitors

Cheers ^__^

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