PUT YOUR MONEY ON A BLUE VIEW !!

PUT YOUR MONEY ON A BLUE VIEW !!

Already in 2007 many are labelling the property market as “very confusing”, given that more than a few suburbs are soaring and others free – falling. On top of this, we have the employment rate at a thirty year low which makes it more and more difficult to identify why we have such price disparity across Sydney.

Mosman has started the year with news of an unsolicited offer on a home at $50,000,000 (more than three times the current record) and it appears that the owners are staying put.

I read this week that “North Mosman” better known as Noosa, is still attracting money from other states. Richardson & Wrench Noosa produced an extraordinary feat with over $52 million worth of property transactions for the month of January. That is a huge amount of holiday money!!

What we are clearly seeing is that the top end of town continues to aggressively pursue the indulgence property markets and it is showing no signs of stopping soon. Boral, which I believe is a great yardstick for the property market, warned this week that it could take until 2008 for the housing market in NSW to show signs of recovery. Chief executive Rod Pearse cited the lack of affordable housing in Sydney as the main problem. Mr Pearse said he did not expect the Australian housing market to peak again until 2010 and 2011.

On top of this, is speculation that “baby boomers” are anxious to move out of the real estate market and transfer their funds into superannuation. This will drive rents even higher and yes, prices will come down in some areas and continue to rise in others. Midnight on July 1 is the deadline to put a ceiling of $1,000,000 in to tax free super funds so it will be a very interesting property market in May, June and July.

Even more interesting, is that with a Federal election looming, what is Labor’s position on this should they win office? One thing that we are assured of is that rental markets will continue to climb which in turn will make housing less affordable. Whilst blatantly obvious that the property markets face serious issues, the governments of the day refuse to address the problems. An agent was interviewed on television this week with a large agency in western Sydney. He reported that “70 per cent of his current listings have distressed vendors.”

It may very well be politically correct at the minute to address water and global warming however more than a few politicians are turning a blind eye to their constituents. Many of these people (some suggest the vast majority) were working in the construction industry which we all know is declining. As a result, a large proportion sold up in 2003 and moved to the booming states of Western Australia and Queensland. Those who purchased after 2003 are the ones suffering the financial hardships where property values are now down forty per cent from 2003 and getting lower. Quite ironic that the Federal government is offering tax incentives to get money out of property and into superannuation before July 1. For many it will be a difficult Winter – for the others that is when they head to Noosa to get a tan !! Yes our property markets are now worlds apart!! Cheers ^__^

Leave a Reply

Your email address will not be published. Required fields are marked *