OUT OF LEFT FIELD – OR NOT ?

OUT OF LEFT FIELD – OR NOT ?

Well, well, well ….. we have been reporting recently that the top-end Mosman market has been very strong with many record prices being achieved in the June quarter 2006. An article that appeared in The Australian Financial Review on July 13, 2006 titled “ Super-rich enjoy private property boom” by Mark Phillips, said “Many agents dealing in top-shelf properties have just completed record financial years thanks to high-quality offerings and competition for scarce multimillion-dollar stock.” The major players in the recent Mosman frenzy were merchant bankers, expats and a few others whose businesses over recent times have built great wealth. This is why we sometimes require a reality check, as what we are seeing in Mosman, is not necessarily being mirrored across Sydney. This yet again highlights the fact that all too often, our property markets are misrepresented, as they are a volatile mix of niche markets. You will read over the next weeks about what happened in the June quarter in property and all I will say at this juncture, is that many will be left shaking their heads in disbelief. Even more amazing is that a vast majority were cash transactions.

On the other side of the property spectrum, the Australian Bureau of Statistics announced this week that home loans in May increased five per cent, prompting interest rate speculators to suggest that we are about to get another rate increase. This will have little effect on our market, as we pointed out earlier, many transactions for properties are cash. Across the board Victoria posted the highest result with 7.9 per cent, South Australia 6.1 per cent, Queensland 4.4 per cent, the ACT 4.2 per cent, NSW just 2 per cent and Western Australia (remember last week they were asking for a rate increase to slow their economy down) 0.8 per cent. The question is, they must be on something? The Northern Territory could only manage a negative result down 5.2 per cent and Tasmania reported a 1.1 per cent decline.

Plenty of argy bargy this week, with John Howard and Peter Costello locking horns and then out came the quote of the week by Bobby ‘Dazzler’ Carr who just had to wade in with another classic comment. This is what the “Dazzler” had to offer, “The Australian economy is performing very, very, strongly because of external circumstances and a record of good management from both sides of Australian politics.” Surely, he is not implying that NSW has been performing well economically? I guess he forgot that NSW is currently in budget deficit (just a small oversight).

Still on argy bargy, there has been much discussion this week about Fairfax which came out with huge advertisements accusing FPC (who publish the Wentworth Courier, Inner-West Courier and the Sydney Weekly Courier) of anti-competitive behaviour. I can inform you that we are under no such contracts and would never ever enter into such an agreement, as in my opinion, it does not allow an agent to offer a balanced perspective on advertising options. In coming years, it will become blatantly obvious to newspaper groups, that they will need the support of agents more than ever before, as property levels will continue to decline. From 2001, Mosman house transactions are down by more than fifty per cent, which points to vendors having to spend less in advertising than in previous years. The June quarter just passed had record sales, with many recording zero advertising expenditure. Let’s hope that all can resolve this matter amicably which will be a great result for all concerned.

Well, it is that time of the year, when I am off for a few weeks to check out property prices in Thailand. This year we are introducing a new format whereby a subscriber will be writing the editions and we are pleased to announce that the next two editions will be written by well known and respected architect, Peter Tout. It will be very interesting to read his perspective on what ever he wants to write about, as the topic of discussion is entirely up to him (no anti-competitive behaviour here) 😉 I am sure that this change will be refreshing for subscribers and you will thoroughly enjoy his thoughts and predictions. Cheers ^__^

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