TACT IS NOT SAYING WHAT EVERYBODY IS THINKING

TACT IS NOT SAYING WHAT EVERYBODY IS THINKING

All in the name of a good read, it seems that once again many are speculating on what the Reserve Bank and our very own ‘Governor of Moolah’ have in store for the economy. However once again it is the hands that are moving faster than the eyes. Yes, the ‘Magician of Money’ came out this week and released his “Statement on Monetary Policy” and the property market barely rated a mention. Whilst they did voice concerns about the rapid rise in household debt, the report certainly made no mention that this is being fuelled by runaway house prices. Personally, I think the reported journalism is running away at a much faster rate than the housing market. The latest Consumer Price Index figures showed that housing costs increased by just 1.8% from the June Quarter, and for the twelve months from September 2002 to September 2003, the overall increase was just 4.6%. There are strong similarities between the odds on the Wallabies retaining the Rugby World Cup and the housing market; they are both blowing out. The ‘Governor of Moolah’ did identify that all signs are pointing to strong economic growth ahead and in all probability that is the reason why he stopped short of discussing the property market because there is anecdotal evidence of a slight cooling in the key Melbourne and Sydney property markets. Much of the steam has evaporated out of the high-rise apartment sector and the September 2003 Bureau of Statistics’ figures revealed that first-home buyers accounted for just 13.3 per cent of all new loans. This certainly places The Reserve Bank in a quagmire with regard to further rate increases as this will only accentuate the problems with regard to easing the affordability crisis facing first home buyers and those on low incomes.

Still smarting at being overlooked for the “invitation only” Rugby World Cup cocktail party at the Mosman home of Australian Rugby Union boss John O’Neill, not even our very own Steve Patrick managed to crack an A-list invite. As many know, Steve is still acknowledged as the man who introduced “running rugby” to Australia, when he was the highly regarded fly-half for Gordon first grade, back in the late seventies. Steve, was also one of the first Australian players to venture overseas when he took up a contract playing for glamour club, Perugia University in Italy. Whilst discussing the chances of the Wallabies in this week’s up-coming game against the All Blacks, Steve served up his homemade Gamberi rossi conaglio e mollica, with a magnificent Don Pietro Rosso 1997. It should be noted that no team has ever won back to back World Cups (yet), which casts doubts as to why we were not using a youth policy in this World Cup? I had better not say too much as Mosman is now the retirement home for many past Wallabies.

Aside from the World Cup, many have been asking what effect the recent rate rise will have on our market. The simple answer is what rate increase? Our market was the very first to show significant capital appreciation, which in turn forced adjoining suburbs to follow suit. Over recent years our annual appreciation has been consistent around eight to twelve per cent capital appreciation, which is sustainable. What is interesting is that the surrounding areas of Liverpool and Campbelltown, have over the last few years, been recording capital appreciation of thirty-four to thirty-eight per cent. This would be very difficult to sustain, should there be a significant rate increase. These areas would then be referred to as “high-risk”.

With investors moving back to the established suburbs, the rental market here continues to surge ahead. The Corporate market is very strong with the new 2004 executives out here at present looking to lease properties for January occupation. We are experiencing strong enquiries from $300 a week to $4,000 per week, which also explains why one in three apartment sales are going to investors.

The rate-debate will not be on the vast majority of minds this week-end as all eyes, hearts and emotions will be on the World Cup semi-finals. My tips, the Wallabies by a leap and a bound, because how can the Kiwis know what they are up to, when we don’t even have an idea. The French over the Poms, by half a croissant!! This could see Fleet Street, re-named Struggle Street!! Go you Aussies!! Go you good things!! Cheers and clink…^__^

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