Sensitive New Age Guy

Sensitive New Age Guy

The obvious thing that came out of this week’s announcement regarding interest rates is that Reserve Bank Governor, Ian Macfarlane, is a SNAG, yes a ‘Sensitive New Age Guy’ and I for one am very impressed with his style. What we are seeing is a completely different approach from what has been in the past. Today the Governor ‘prefers to fire a few shots over the bow’, pre-empting the market. I read with interest last week his statement to the House of Representatives .

This clearly identifies that the Australian economy continues to amaze as it defies economic trends. The best example being, that every country that has hosted an Olympic games has gone into recession immediately after the conclusion of the games. It could be argued that we have performed better after the Olympics, than we did before and during for that matter, which is why the Governor is trying to turn the volume down a bit. Yes, it will affect some markets, however I seriously doubt that it will cause a ripple on our market. Mosman is a niche market and it is a ‘protected species’. Many words have been written since the rate increases and that is all they are. I see it more as ‘squibble and squabble over a game called scrabble’. Many are trying to get points for their selection of words as they play clairvoyant with our economy. Personally I am of the opinion that we just get on with what we do best and let the Governor steer the good ship.

One thing that we anticipate is that agents hopefully, will be a little more conservative when offering opinions of value. The winter market is more than holding its own and prices have remained in line. The only statistics that can confuse the market are the ones where the agent has applied the wrong opinion of value! For some it appears to happen more often than for others, and I am sure that if there was no commission payable, they would be right on the money!!

One must give credit where it is due and congratulations to BIS Shrapnel. They continue to call the market with accuracy and have been correct with their forecasts. This week in light of the Governor’s announcement, they stated that the rise in rates will dampen but not stall price rises in Sydney’s booming real estate market. They also claimed that the gap between cities would continue to widen, with Sydney continuing to lead. One reason why we, at this stage, see very little change in the market is that purchasers factored in the rate increases ages ago, so an increase comes as no surprise. From a personal point of view I like this market much better as it is much more challenging, and clearly separates the leading agents from the pack. Negotiations require much more skill today, than in the past.

So where does the market go from here? Words that spring to mind are “opportunity land”!! Contrary to popular expectations “Why don’t we jump at opportunities, as quickly as we jump to conclusions?” You only have to look at those who purchased immediately after Sept 11. There was a window of opportunity then. Just a little bit over six months ago, we had a happy vendor who pocketed nearly $100,000 a month. It certainly is quite clear for all to see that history will certainly not repeat itself with the events of a decade ago, kindly brought to us by the Labour Government. And the chances of ever seeing that market again are, in all probability, as great as the Soccer Roos winning the current World Cup!!

Today, the Reserve Bank is busily running up and down the fore deck trimming and adjusting the sails, watching the wind shifts to make sure that we are sailing on an even keel. And they are not on their “Pat Malone”. All businesses are doing the same, and yes we are making adjustments each week with the market, which by all accounts are barely visible to the naked eye. Each week I receive my e-mail alerts from the Governor. If you want to receive the same go to www.rba.gov.au and subscribe to the email alerts.

And for the record, not one vendor has contacted us in fear of the rise in interest rates. We have nearly 2,500 registered buyers wanting to buy property in all price brackets, and with just the 32 houses advertised on Saturday it will be quite some time before we have placed them in homes. So for those who believe that we will see prices in property drop significantly, I can’t agree with you. The money market, oops, I meant property market may have peaked for the moment. Don’t hibernate for long because the Spring market, is just ninety days away and then I anticipate that once again our spinnaker will be hoisted. What we have now is just a little bit of the calm before the storm!!

Have a great weekend. On a few occasions we do get two days off in a row… ^__^

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