RENTALS GET A TOUCH UP – THE MOSMAN MARKET REJECTS A TOUCH DOWN !!

RENTALS GET A TOUCH UP – THE MOSMAN MARKET REJECTS A TOUCH DOWN !!

The property market always leaves clues and if you look hard enough, the clues lead to answers. ‘Bobby Dazzler’ has created a major problem for the rental markets as rents are now going in the opposite direction to our evaporating water supply. We have reached 98.88 per cent occupancy with our rent roll, and that is scary, if you are currently looking to rent, but very encouraging if you are an investor looking to enter the market again! The future for tenants who are endeavouring to save a deposit is bleak, as the rents are now being increased to pay for Land Tax, and demand far exceeds supply. It is too early to calculate what the new rental increases will be, however a ten per cent hike is a very strong possibility. This rental position is a direct response to government policy, and once again identifies just how far out of touch ‘Bobby Dazzler’ is, with the ‘State of Decay’.

This is despite the rhetoric that Sydney house prices ‘could’ fall by up to seven per cent over the next three years because of higher interest rates (BIS Shrapnel). The ‘pin the rate on the donkey’ obsession must be wavering due to the fact that the leaves in ‘Governor of Moolah’s’ tea cup are falling differently, when he meets each month to set the cash rate target. This revised practice is actually based on a thirty-six month prediction, which greatly improves one’s odds of getting a prediction correct. So over to the housing market which continues to reject (in our case anyway) modern day sentiment that the market is cactus. With just one month to go before our year-end, May produced $29,997,000 in sales of houses and apartments which was a great effort, all things considered. We made our 175th Internet sale this week taking the running total to $309,322,500 in subscriber sales (another clue) which in itself, is a remarkable feat. With regard to online traffic, we delivered our second highest ever month, so from that perspective (April 2005 was our highest) we remain positive about the short-term market activity. Today with the Internet, we have tell-tale signs that enable us to constantly trim the sails of our business to get greater speed and momentum. If you look hard enough, it can also tell you when to change course. When the market changes, so should agency strategies. The only problem is that the vast majority of agencies keep following the market leaders whilst remaining unaware that the leaders are (internally) applying smarter technology and electronic strategies.

The ‘Beaten Suburbs’, oops I mean Eastern Suburbs have in 2005 dominated the top-end sales. There is a very good reason for this, as Mosman has a much greater open space, public reserve ratio on Sydney Harbour and Middle Harbour. Mosman has Taylors Bay Reserve, Middle Head, Taronga Zoo and Ashton Park, which are striking seascapes and could certainly convert to prime residential real estate. The Dyson Austen top 10 prestige residential survey from January to March 2005 had just one Mosman sale in the Top 10. 110 Wolseley Road Point Piper was first at $20-$21,000,000, 42 Billyard Avenue Elizabeth Bay $20-$21,000,000, 22-24 Drumalbyn Road Bellevue Hill $16,500,000, 44-46 Iluka Road Mosman $12-$14,000,000, 84 Victoria Road Bellevue Hill $10,500,000 approx, 1/6 Wentworth Avenue Street Point Piper $9,550,000, 5-7 Cranbrook Lane Bellevue Hill $$9-$9,500,000, 21 Kambala Road Bellevue Hill $8,750,000, 57 Bulkara Road $8,400,000 and 49 Kambala Road Bellevue Hill $8-$8,500,000.

Even more confusing. The Real Estate Institute of NSW announced the Top 20, median house price March 2005, by local government area and Mosman came in again in first place with $1,788,000 which is a ten per cent increase on last year’s figure. The North Shore councils took seven of the top 10, Eastern Suburbs filled two places and Strathfield came in at tenth. Just five councils could post a median over $1,000,000 after Mosman, Woollahra $1,531,000, Lane Cove $1,185,000, Willoughby $1,012,000 and Hunters Hill $1,006,000.

Cumberland Newspaper Group announced this week, its new pricing structures and by all accounts they mean business. The new business strategies are very impressive (more about that in next week’s edition). It will be interesting to gauge the Fairfax response in coming weeks, as in Mosman the battle of Domain North and The Mosman Daily is intriguing. At the end of the day the property owners benefit and a twenty four per cent reduction in the cost of a whole page in The Mosman Daily will no doubt appeal to many vendors. Casts one’s mind back twenty or so editions, and yes, the cost of a whole page has come down !! On that note, cheers ^__^

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