Once upon a time, you only read about the blue ribbon suburbs when the topic of conversation was capital appreciation. Today you need to be a modern day Matthew Flinders to follow the path of investment in real estate. No longer is it ‘us versus them’. These days it is the ‘penny dreadfuls’ that are stealing all the attention as investors ‘go west’ in the hunt for return on investment. Median home prices are returning enormous capital appreciation with figures just released last week. Those who discovered Saddington Street, St Marys identified a 68.8 % increase in capital appreciation in just twelve months. If you purchased a home in this street in 2001 you would more than likely have paid $93,000 and twelve months later it was valued at approximately $157,000. It should also be noted that television is greatly assisting our industry. The home improvement and property makeover shows are really causing a buzz, as they identify the easy ways to derive greater capital appreciation with only a small capital injection of funds. One day, just one day, those who are hell-bent on trying to destroy the property industry may care for one moment to look at the big picture. Even those who purchased a home in Bourke (struggle) Street, Redfern in 2001 for $360,000 could have sold it twelve months later for $465,000. There is plenty to be said for ‘Keeping up with the Jones’.

The really big news item was the Land Tax story of last week, with the High Court ruling of a flaw in the NSW Government system for collecting Land Tax. I loved this one, which is self explanatory. Information Technology Minister Kim Yeadon, whose portfolio oversees land valuations, denied that the case exposed the system as a ‘rip-off’. Yes Minister, more likely here we have a huge earner that provides the Government annually with $1 billion dollars, and the portfolio is handled by Information Technology!! The judges found that the applied method to derive a valuation was defective, unduly selective and based ‘effectively exclusively’ on four sales. There is still no mention of the fact that the property was never physically inspected. It will be very interesting to see how the Government will get out of this one. The application of value could be argued as fraudulent, and the Premier is seeking legal opinions, which no doubt will be delivered after March 22. What remains to be seen is exactly how much tax has been overcharged. The figure has been estimated at $350 million. The reality of the matter is that if you are going to apply a figure you need to physically inspect the property so that you can carry out due diligence. The way in which land tax is applied is definitely not, in my opinion, democratic, actually far from it. It has now been conclusively proved that an applied unimproved capital value, has no bearing on the actual value of a parcel of land. It is merely the vehicle that best demonstrates how a Government can attain a lucrative tax, the unimproved capital value is applied by a data entry clerk at a computer, wearing a blind fold.

Back to the local market, and I am totally amazed at the home unit market again, which in 2003 is breaking all time records. Here is another interesting bit of information, Marize just sold another unit in ‘Cienna’, which is a Harbour Street unit complex and a new record price has been set. These units were first marketed off the plan in 1998, and occupation took place two years later in 2000. When initially sold the one bedroom units were selling for around $288,000 or $5,760 per square metre. We just sold a one bedroom unit for $391,000 or $7,820 per square metre, and the rent had been averaged out at $350.00 per week. The purchaser is an owner-occupier. Just goes to show how wrong some journalists are when it comes to accurately reporting the market although I must admit that they can be good for our industry as they make us even more determined to prove them wrong, and we have been doing that successfully for the last seven years. Whilst we have quite a few irons in more than a few fires, with the assistance of Lady Luck, we could be posting some very impressive sales in the coming weeks.

While many are comparing clearance rates to this time last year, the sales evidence to date has been very positive, specially with what is happening in the Northern hemisphere. This is not a market where you wait for it to happen. What we have here is a market where you make it happen, and I can assure you that plenty is happening. ‘The optimist says his glass is half full; the pessimist says his glass is half empty. Cheers and clink…^__^

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