Strange The Key Number For Mosman Is Not Up

Strange The Key Number For Mosman Is Not Up

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Welcome back to the thirteenth year of Virtual Realty News where for the first time in five years we are somewhat upbeat about what lies ahead despite it being an election year. With the election date being announced – September 14 – this is good news for the property markets as it removes uncertainty and speculation.

Already we are starting to see a more positive approach CEO confidence in global economy returning: PWC with a major survey pointing to stronger confidence which is critical given confidence has been the missing ingredient within our economy. Aust stocks gain 12.74% over 2012 which is important given investors abandoned our financial markets which was a direct result from the global financial crisis (GFC). With interest I read a eureka report article by Alan Kohler – Five reasons why I’m bullish in 2013. He points out “All of which means the returns from cash are miserable and falling. Time to invest then, which means taking more risk, but not too much risk – thus, bank shares returned 25 percent in the second half of 2012.

In my view this trend has just begun. For five years investors everywhere have been more concerned with not losing their capital than with making a return and gradually this is changing; they are moving out along the risk curve.” Property markets and financial markets run in parallel lines, then throw in an all time record low cash rate of 3.00 per cent and the evidence is overwhelming that our property markets are at a precipice.

HappyHappyNewYear

BUY PRINT

Welcome back Tim Mooney – this shot says it all with the Chinese economy continuing to smile.

Back to the cash rate which I don’t believe will go any lower Steve Keen and Macquarie Group tip cash rate of 2% by year end. Should that be the case this prediction means that the Australian economy is cactus. I’m with HSBC’s Paul Bloxham the lone rider tipping interest rates to rise in 2013. No doubt each and every one of you has your own thoughts on which direction the cash rate is headed.

It’s difficult to allow the facts to get in the way of a good story – Australian Property Monitors this week published their December Quarter 2012 findings –

KEY POINTS

• The national median house price rose by +1.9% over the December quarter and is +2.1% higher than at the end of 2011.
• Sydney house and unit prices are now at record levels.
• All capitals recorded house prices over the quarter for the first time since March 2010.

Bear in mind also many of the top – end sales are still to filter through for example this week we had a Beauty Point residence settle for $12.800 million which is the new record for a non – waterfront.

31-01-2013 10-19-19 AM

We can also expect fierce rivalry in the home loan market where the Big Four banks would have been horrified to read A third of borrowers would ditch the Big Four banks for 50 basis point discount: CUA. Just as fascinating Banks laughing all the way to the …bank “In a confidential note to its institutional clients, Westpac describes the fall in wholesale funding costs as ‘extraordinary’ “. The days of blaming “high funding costs” are now it would appear irrelevant.

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It is all about confidence.

This takes me to the most remarkable property data I have ever seen before!

For some strange reason vendors in Mosman, Cremorne and Neutral Bay appear to be not even remotely interested in selling in 2013. We have never before seen such a tight market with available properties for sale the lowest we have ever seen – otherwise known as a Vendors’ Market. So why would the Reserve Bank of Australia (RBA) even consider lowering the cash rate?

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market this time 2012– 98
• Number of houses on the market last week – 62
Number of houses on the market this week – 75
• Number of apartments on the market this time 2012 –129
• Number of apartments on the market last week – 65
Number of apartments on the market this week – 79

CREMORNE – 2090

• Number of houses on the market this time 2012– 21
• Number of houses on the market last week – 6
Number of houses on the market this week – 7
• Number of apartments on the market this time 2012– 26
• Number of apartments on the market last week – 18
Number of apartments on the market this week – 19

NEUTRAL BAY – 2089

• Number of houses on the market this time 2012 – 18
• Number of houses on the market last week – 9
Number of houses on the market this week – 12
• Number of apartments on the market this time 2012 – 66
• Number of apartments on the market last week – 30
Number of apartments on the market this week – 31

For this week’s sales inat Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.

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For this week’s open for inspections.
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Of course it just won’t be the property markets that will absorb our fascinations in 2013. The federal election will be a star performer with one federal politician charged with 150 fraud allegations and then we have the NSW ICAC enquiry which flabbergasts anyone following it. The federal election will be decided by Sydney’s west and corruption is treated by electorates with total disdain. The Gillard government is in all sorts of trouble and it will be interesting to see how this resonates through the polls.

You also have that little thing called debt! When the Rudd government was elected they delivered a budget deficit of $27 billion, a $54.5 billion deficit in 2009/10, and a $47.5 billion deficit in 2010-11. The Gillard government delivered a $43.4 billion deficit in 2011-12. Then you have national credit card which the Rudd government raised to $75 billion, only to then increase to $200 billion the following year. The Gillard government then increased the credit limit to $250 billion and then touched it up again last year to $300 billion.

It will be a fascinating election albeit a long one too!

Cheers ^__^

5 Responses to “Strange The Key Number For Mosman Is Not Up”

  • Mark says:

    Welcome Back Robert

    Yes business and consumer sentiment must rebound with the election months away and the result so certain

  • Rob Wilkie says:

    Good overview Robert, I am pleased the Christmas holidays are over and business is back to work again and we are receiving your positive comments again. Queensland will have plenty of work ahead for them with the destruction this last week from record floods again this must put money back into the economy one would think?

  • Gordon says:

    Great to have you back, Robert!

    Perhaps the property market is quiet because people are waiting for the lift that will come after the election?

    Though some economic activity will pick up before then – baseball bat makers can expect bigger sales just before election day…

  • Mark says:

    Hi Gordon

    Think of the poor baseballers off to buy baseball bats next season and the shelves are bare…..they will have to buy second ones covered in blood.

    I think real estate and consumer sentiment will rise when the election result is seem to be certain. If Gillard looks like winning, sentiment will collapse.

  • G’day Mark, Rob and Gordon,

    The one thing that the media is missing is that the government is on a hiding to nothing on social media (Twitter, blogs and Facebook) which was not as prevalent at the last election. You can put this down to the amazing launch of the iPad, tablets and smartphones. For example, millions are glued to Twitter watching the #ICAC inquiry developments which as one journalist wrote, “the next leader of the NSW ALP is in all probability still at school.”

    I don’t see the election playing that great role in property prices given it would appear that broader Australia has made its mind up already. Plus you have the ongoing legal cases of ICAC, Slipper, Thomson and Williamson which will in all probability further diminish the Labor vote.

    It should also be noted that Australian property markets perform much better under Liberal governments so why, wait? Just look at the Australian share market the All Ordinaries currently sits at 4,930 – history shows that when at 5,000 and above our markets are in boom mode (although this time around I predict modest growth) with the cash rate at record lows. This is why, I predict that the cash rate will go up in 2013 not down.

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