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Australia finds itself at a precipice (especially if you reside in Sydney) – sea – level rise to hit Sydney worst, warns climate report. In my humble opinion Julia Gillard’s Fort Fumble would struggle to negotiate a pedestrian crossing so I would pay little attention to the findings of the Climate Change Department – otherwise known as the (cash for comment) Carbon Tax Sales Department. Time to end climate denialism, says Gillard government scientific adviser which I agree is a modern day fact of life that needs addressing – just not by a government that is best recognised for bungles (not miracles) of economic management. Australia produces between just one and two per cent of global  emissions, so let’s explore why the emitters of that other ninety eight to ninety nine per cent have decided to do nothing (at this point in time).

That Australia has to wait until July before Fort Fumble announces the actual content of a new tax announced in February, defies common sense. Alas, Julia Gillard tells Labor MPs she’s playing ‘the long game’ and that Abbott’s popularity will fade which is just like saying that I don’t pay attention to the polls. As Alan Kohler wrote this week, Climate change action: make policy not war – “UBS analyst David Leitch has calculated that to achieve (the required emissions reductions) that with a carbon price alone would require a price of $80 per tonne, which is four times the planned starting point for the Labor Government’s carbon tax.” This would explain why the other ninety eight and ninety nine per cent emitters are not addressing the carbon problem.

BUY PRINT

Fort Fumble is now at war with the Western Australia government as Colin Barnett blows a $2bn hole in Wayne Swan’s budget target. Another public relations disaster for Julia Gillard where the threats should have been kept in–house, not broadcast all over the country. Although it later became apparent that the Government knew about WA mining royalties which is now a fine mess to a political brawl between Wayne Swan and Troy Buswell over mining tax. WA facts and figures reveals that Western Australia has been the highest–earning Australian state per capita. The GSP (gross state product) is very impressive and clearly evident.

Prime Minister Julia Gillard is experiencing popularity declines Labor powerbrokers back Julia Gillard despite lowest ever polling and the polls will only get lower. In Queensland the LNP makes more ground in opinion poll and it is very clear that the Rudd state voters can’t wait to dump Gillard. A Galaxy Poll in this week’s Courier – Mail had Liberal National Party further in front with 61 points to Anna Bligh on 39 so another change of government is underway in Queensland. Fort Fumble has brought this discontent upon themselves so no need to feel sorry that nobody is listening which was evident at last week’s Victorian Labor Conference which experienced the lowest turnout.

Source: The Australian- order Bill Leak’s print

Arrears on mortgage repayments spiked to a record high in the first three months of 2011 as Low – doc mortgage arrears top GFC peak. If you look at the Housing Equity Injection, a major player in the determination is credit growth, aggregate demand and employment which then lead to spending sapped by stagnant house prices.

In another interesting first we now see RBA warns many first home buyers who used government grants may now be vulnerable which is somewhat contradictory to an earlier statement that RBA says mortgage stress not a problem – for now. A key indicator is always employment and growth in this sector is weakening which all but guarantees no rate hikes when the RBA next meets, in June.

Consumer spending is another thing to watch closely as that too is getting weaker and weaker. Now, economic data that shows employment, retail sales and housing market activity all declining. One should also take into consideration that all this data coincides with the time of year and we expect sentiment to improve greatly as we get closer to Spring and Summer (always the case).

Here are this week’s property statistics, downloaded for our property markets from – Domain

MOSMAN – 2088

• Number of houses on the market last week – 120
• Number of houses on the market this week – 118
• Number of apartments on the market last week – 101
• Number of apartments on the market this week – 96

CREMORNE – 2090

• Number of houses on the market last week – 21
• Number of houses on the market this week – 18
• Number of apartments on the market last week – 35
• Number of apartments on the market this week – 36

NEUTRAL BAY – 2089

• Number of houses on the market last week – 13
• Number of houses on the market this week – 12
• Number of apartments on the market last week – 60
• Number of apartments on the market this week – 58

So it would be fair to suggest that our property markets are somewhat ‘nonplussed’ which is exactly where we expect our demographic markets to sit for the next few months.

It was with great sadness that we lost one of our original subscribers to Virtual Realty News this week, with the passing of Dr. Bill Bramwell Roberts. “Billy Boy” would often grace our blog as TMW: The Mosman Wordsmith. A great mate of ours and a fantastic husband to Pat and father to Sophie and Victoria. Bill was Mr. Nice Guy to everyone who had the pleasure of sharing his company.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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26.05.11Robert Simeon5 Comments »

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Fascinating times for property voyeurs across Australia where many once upon a time boom markets, have fast become gloom markets with property prices in free–fall.  Earlier this week, I attended the Richardson & Wrench 2011 Conference in Surfers Paradise which is today in a scary market collapse as investors bail out from a once thriving economy. Property portals in Surfers Paradise show approximately 5,000 apartments for sale although a local agent told me that the correct figure would be closer to 10,000. Gold Coast ‘dead’, says developer as projects and properties are now falling into the hands of receivers.

Prior to the Global Financial Crisis (GFC), Perth was on track to surpass Sydney as Australia’s most expensive real estate market.  How quickly things can change. WA’s property slump is now the worst in 20 years the latest government figures reveal. Activity in the housing market has fallen 15 per cent in just twelve months and more than one third since the height of the boom in 2005 – 06. North of Sydney we are seeing a low tide for prices where hundreds of thousands of dollars are being wiped off Central Coast properties. Sydney’s most indulgent holiday markets, the hallowed addresses of Palm Beach and Whale Beach, whilst they may decline in value, appear to be holding up.  Although sales are down massively, on previous years.

BUY PRINT

Just like the stock (shock) market when investors are spooked, the very same rationale applies to the property markets. Investors are bailing due to a personal over-commitment which in turn, relates to their respective outlook on the Australian economy, combined with their own financial positioning. The trend we are witnessing at the moment is investors selling investment properties, not to be confused with the family home.  Hence my suggestion, that the holiday is over!

Here are statistics I downloaded this week from our most popular real estate portal – Domain

MOSMAN – 2088

• Number of houses currently on the market: 120
• Number of apartments currently on the market: 101

CREMORNE – 2090

• Number of houses currently on the market: 21
• Number of apartments currently on the market: 35

NEUTRAL BAY – 2089

• Number of houses currently on the market: 13
• Number of apartments currently on the market: 60

Now that data confirms a solid market with no panic selling, we will continue to monitor this data on  weekly basis in Virtual Realty News. One thing for sure is that the investors who sell (at a loss) will try to recover significant amounts of their losses via their tax returns. I wonder if Wayne Swan factored this into his return to a budget surplus.  I doubt it. The Budget is a triumph of hope over experience where a Galaxy poll revealed just 28 per cent of voters believe it will be good for the economy. I always enjoy my weekly Alan Kohler read No surplus of ambition: Swan’s biggest plus although the polls keep telling us unpopular government, unpopular budget.

Source: The Australian- order Bill Leak’s print

Everybody (well most anyway) have a theory as to why so many indulgence markets are collapsing across Australia. I classify indulgence markets as properties purchased outside the family residence which takes us to Australia’s miracle economy: fact or fiction? For me it is quite simple. Under the Howard Government, Australia frolicked as it celebrated an unprecedented seventeen years of economic growth. Money was not the object – lifestyle was.  This is evidenced by the Australian GDP Annual Growth Rate from the early 1990’s to 2008 where today we are witnessing the clean up after Australia’s longest economic party – evidenced by this graph from Trading Economics.

Post GFC, what we are now seeing is human behaviour nearly identical to what we witnessed in the recession of the early 1990’s. This is evidenced in this graph as borrowings (leveraged debt) became an obsessive disorder. Fort Fumble did the same during the GFC which explains why it too, is having difficulty returning a once healthy budget back to surplus. Look at this graph.

I am dumbfounded as to why Julia Gillard’s Fort Fumble is spending $36 Billion (+ blow outs) on a NBN Co investment strategy so that Australian’s can have faster access to read how core markets are going broke. The decision to embark on Australia’s most expensive taxpayer investment (the NBN) was made before the GFC, yet Fort Fumble believes nothing has changed since then?

Budget, interest rate rise worries dent consumer confidence in May which is placing enormous pressure on Australian small businesses facing ‘uphill battle’ amid rents, dollar, internet competition. From an economic perspective, the demise of the ‘holiday’ property markets is driving the negativity in our property markets generally, given the real estate slump will leave banks in pain, too. This then resonates through property markets where there is no better example than – home loans drop to 10 – year low. On top of that is the reality that Reserve rate rise a question of when, not if which takes us to the inevitable as households on edge over interest rates. This roll on effect saw Moody’s downgrades ratings for big four banks to Aa2 from Aa1.

Now to the Gillard Carbon Tax debacle – electricity sector faces $6.5 billion debt refinancing “the debt challenge facing the electricity sector came as a report compiled for the federal government warned that uncertainty over the price of carbon in Australia posed a significant threat to investment in the sector. “ So we have a market capitalisation of $30 billion for the electricity sector in Australia yet $240 billion will have to be spent by 2030 and that is without a Carbon Tax.

The Deputy Prime Minister of Australia (Bobby Brown) has spoken – Greens leader Bob Brown vows to take on the media to shore up carbon tax push. Obviously an advocate of free speech, hugging trees and with a knowledge of economics that could only  be understood in a Parliamentary Economic Play School, Brownie, has decided to attack the media.

Senator Bobby Brown described newspapers’ front pages as unbalanced, opinionated and “not news in terms of having both sides.”  I believe he just described Virtual Realty News.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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20.05.11Robert Simeon8 Comments »

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Welcome to your Virtual Realty News tenth Federal Budget edition – although yet again we were not invited to Canberra for the lock – down (funny that). The budget announcement conveniently blames the past and paints a rosy future. An abundance of spin on the positives, yet no mention of the negatives and sadly, there are plenty. Here is my reasoning which goes back to the election and the Rudd/Gillard government’s four budgets which get worse. The Government completely ignored Australia’s slowing growth, rising dollar to dominate budget preferring to take a totally opposite view.

The biggest problem facing the Rudd/Gillard Government is that it panicked during the global financial crisis, believing that the Australian economy was terminally ill. Less than twelve months later in 2009, Australia experienced just the one quarter of negative growth. The debt had to be paid back much sooner than expected so having a budget in surplus is not something that Labor has experienced. Simply put: the Government spent too much and is now hopelessly struggling to pay back its (our) debt.  Wayne Swan can’t say which year Labor achieved its last surplus. Wayne the answer is 1989 – 90. Of course the summer of disasters hit the budget, says PM although the Government failed to list the billions lost in waste schemes such as Pink Batts and BER blow outs in the budget.  Past – Treasurer Peter Costello wrote  An economy to die for – surely Swan could manage a better budget? “The budget has no coherence, no strategy, and no conviction.”

BUY PRINT

In his 2010 Federal Budget, Wayne Swan predicted a $40.8 billion deficit where in 2011 it came in at $49.4 billion. In 362 day’s time, Swan now has to deliver a budget deficit of $26.8 billion otherwise no chance of returning to a budget surplus in 2012/13. To achieve this Swan is banking on no more natural disasters here or abroad, the Australian dollar not getting any higher, a return of strong tax receipts by individuals and companies and a stronger real estate market. Also, reign in the out of control spending on asylum seekers and of course delivering that other debacle called a Carbon Tax.

As Alan Kohler wrote Budget 2011: Australia on a wing and a prayer “In other words, it’s a wing and a prayer budget – keep spending, let the deficit blow out, and predict with a straight face that the commodities boom will bail us out eventually.” Aside from that blunt assessment interest rates will have to rise, warns Reserve Bank of Australia as confidence in economy falling as Wayne Swan claims Government can make ‘substantial savings’. Although already, we are seeing Australian’s struggling to save due to the daily increase in cost of living.

Source: The Australian- order Bill Leak’s print

Let’s have a peek at the Sydney property market to see what’s happening and why it is being echoed across Australia. Budget and rates rise flagged to pinch households although we should be thankful that Wayne Swan’s budget left Negative Gearing alone. The latest house price data from the Australian Bureau of Statistics confirms that most city markets slowed in the March quarter. Prices are falling – some suburbs still hot where Sydney house prices fell by 1.8 per cent during the quarter and the annual increase now sits at 0.8 per cent. It is most obvious that the Gillard Government simply does not understand housing affordability which is why it was completely ignored in the Federal Budget.

Forget the Gillard Government’s obsession with mining tax revenues, the largest employer in Australia remains the real estate industry. When the property markets are moving forward so is the economy so the Auction action graph clearly indicates just how much the property markets are contracting (not a bad thing for property prices). Nevertheless, a terminally ill indication for the economy given tax revenues for the State Government are collapsing.  Total value revenue was $430.9 million same time last year and $162.4 million last week.

Australia has waved goodbye to the Global Financial Crisis yet the latest data from Australian Property Monitors (APM) indicates that property prices are in decline across Australia.

SYDNEY MARCH QUARTER RESULTS

Source: Domain Property Monitors

• House prices fell in the March quarter by -0.4 per cent after recording growth of +1.1 per cent in the December quarter.
• Unit prices fell by -0.7 per cent over the quarter following a flat result in December.
• Sydney median house price is now $643,713 and the median price is $448,585
• Annual house price growth sits at +2.0 per cent and unit price growth is at +2.1 per cent, both trending downwards.

BUDGET OVERVIEW

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Wayne Swan admits China is key to returning to surplus a disgraceful summation directed at the ability of Australian business that is not mining reliant. Granted, a record $76 billion worth of spending in the booming resources sector where these decisions have absolutely no calibration with Wayne Swan policy. Wayne Swan is hedged into the Australian dollar remaining steady although Aussie dollar could hit $US1.70 by 2014, predicts money guru Savvas Savouri.

Households are being hit and when the Aussie dollar climbs they will all go to online shopping where they don’t have to pay GST on their overseas purchases.  Our retail market will then collapse Myer, DJ’s see glimmer of hope in retail sales. The Government failed to address in the Federal Budget – tax online shoppers, save jobs. Those with mortgages should be budgeting for a rate rise or two, three and four. Directors cool on carbon price and broadband which are neck and neck in the dumber and dumber policy announcements in Australia’s political history.

Finally, electricians fear set-box installation flop think Pink Batts. When it was announced that Australia was moving to digital, the Aussie dollar was at $0.68 cents.  It is now coasting near US$1.08 cents. Television prices have halved and Julia Gillard just acquired $300 million plus of useless set – top boxes that could never be sold given the Aussie dollar’s rise and rise.

Can Wayne Swan reduce the deficit to $26.8 billion by the next Federal Budget?  Of course he can (as sure as deposed Premier of NSW, Kristina Keneally, will be the next NSW Premier!!!   Work experience does not always apply to elected politicians, especially when it comes to understanding economics.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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13.05.11Robert Simeon7 Comments »

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Actually not that different with the three P’s that pertain to property – position, position and position. Throw in politicians and bankers and what we have is the 2010 equivalent of economic soup that is murky and far from palatable. During the global financial crisis (GFC) Westpac and the Commonwealth banks wrote approximately eighty (80) per cent of all mortgages which explains why today, collectively, they own the largest mortgage books. Alan Kohler wrote on The Drum that banks only have themselves to blame which has caused a stir given many consumers are losing faith in our pillars of society. Of course, there has been plenty of gratuitous PR advice for our friends in banking although the politics of banking was intelligently addressed when Janet Albrechtsen wrote in The Australian – Let’s hear the positive story from the banks.

Plenty of rhetoric this week as home owners angered by increases in interest rates then news broke that the Big Four banks to dump exit fees as backlash grows against lenders. Then late this week ANZ raises rates, scraps exit fees at or about the same time as ASIC bans banks from double – dip mortgage exit fees which means banks that charge customers to establish a mortgage, will no longer be able to apply contentious exit fees. Too early to say who will get the last laugh with this announcement – possibly bank establishment fees will rise? Certainly the four new P’s won’t change.

BUY PRINT

Is the landscape at Circular Quay about to change? Special deal on city skyscraper as a giant residential tower, double the size of any other building in Circular Quay, is expected to be approved soon. The site Gold Fields House is set to become a luxury apartment block that will tower 191 m above Circular Quay making it Sydney’s eighth tallest building. Sydney has only one of the top 10 tallest buildings in Australia – which prompts the discussion for progress of our capital city.

Australian Property Monitors released its House Price Report for September 2010 and here are the key findings:

• National median house prices remain effectively unchanged at +0.1 per cent for the quarter with annual house price growth slowing to +11.5%
• Most capital cities experienced falls in prices over the quarter; however the major markets of Melbourne and Sydney bucked the trend recording positive quarterly house price growth
• National price units (excluding Tasmania) have fallen slightly, down -0.4% for the quarter, with annual growth falling sharply to +6.5%
• Unit prices have fallen in all cities except Melbourne, with Brisbane experiencing the largest price decline, falling -2.8% for the quarter

Source: Australian Property Monitors

SYDNEY

• House prices increased slightly by +0.7% in the September quarter, which is the third consecutive quarter of slowing growth.
• Unit prices have started falling for the first time since 2008, recording -0.1% for the quarter.
• Sydney’s median house price is now $634,346 and the median unit price has fallen slightly to $436,714.
• Annual house price growth sits at +11.3% and unit price growth is at +7.3%, both trending downwards.

Weak demand made for rate surprise all things considered the clearance rates are positive, although the most important conclusion would be that prices are flat lining. It is only natural that auction clearance rates fall on rate rise and we are seeing anecdotal sales evidence. One interesting observation in Mosman at present, is that private treaty sales are producing the highest volume.

Here is the comparative analysis for Mosman houses:

Mosman Houses 2009 – 1 January 2009 to 31 December 2009

• Total sold – 322
• Private Treaty – 281
• Public Auction – 41
• Total Value Sold – $815,649,751
• Median price – $2,094,000
• Average price – $2,564,936
• Highest price – $13,200,000 (RWM)

Mosman Houses 2010 – 1 January 2010 to 10 November 2010

• Total sold – 292
• Private Treaty – 219
• Public Auction – 73
• Total Value Sold – $639,048,555
• Median price – $2,100,000
• Average price – $2,468,570
• Highest price – $12,600,000 (RWM)

It should be noted that with the 2010 house sales, that the vast majority of sale prices are yet to be recorded, so we expect this year’s total value for houses sold, to be considerably higher $750,000,000 approximately. For example, this week, RWM recorded the second highest house sale for Mosman in 2010 which is yet to be recorded. Here is the Macquarie Research Economics Forecast where it should be noted that the banks have already moved the cash rate to the Reserve Bank of Australia (RBA) Macquarie Research Forecast for Quarter 1 – 2011. So what we now have is an official cash rate and a real cash rate, which I will call the “real, official cash rate” – ROCR!

So to the four new P’s – polls, populism, performance and of course profits which continue to stymie our Forts Fumble and Crumble. The politician who should have been Premier of NSW, Blacktown MP Paul Gibson ‘Fed up’ NSW Labor MP quits so now thirteen (13) Labor MP’s have announced their retirement in the past two months. Paul Gibson “we’ve moved from platform and policy and pursued a poll driven agenda.” Fort Crumble is shambolic and an embarrassment where Transport Minister John Robertson has already called his transport removalists to grab the now vacated seat. Thirteen, with more to come as powerbroker Joe Tripodi quits. Premier Kristina “Bambi” Keneally has (unofficially now) been placed on the endangered species list due to a lack of interest – polls, populism, performance and no profit.

A perfect dismount from the strangest election ever – You can say that again! The four new P’s continue to dominate as Julia Gillard losing ground to Tony Abbott, News poll shows given the continuance of Labor’s policy woes pile up. No doubt we will be hearing and reading plenty more about this in the months to come. Fort Crumble continues to disintegrate – polls and populism shape public perceptions. Fort Fumble relies on the hope factor – Swan’s numbers looking rubbery when more ‘courage’ needed in spending cuts, says Access Economics. Polls, populism, performance and of course profits continue to threaten the capability of Fort Fumble.

Back in 2000, Virtual Realty News subscriber sales sat at zero when we launched our online platform. Today, they sit at $998,770,220 so we are now $1,229,780 from breaking the $1,000,000,000 mark.

Unfortunately, this week’s $10.000 million plus Balmoral sale did not qualify – another big week of local sales which suggests a strong run of property transactions through to Christmas.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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12.11.10Robert Simeon5 Comments »

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With the benefit of hindsight, we ask, did the powers that be in Canberra get the stimulus spending right whilst addressing the global financial crisis? If not, what have they learned from it (if anything)? The answer would be absolutely nothing, given nothing has, or is, being done about housing. Construction activity falls in June which is a clue dropping 6.8 points in June to a 10 – month low. More construction equates to more homes which in turn, reduces house prices. The construction industry ‘is’ the third biggest employer in Australia (or  should that be ‘was’?)

The major problems attributed to Forts Fumble and Crumble is that economically, they confuse usage with wastage (otherwise known as “reckless and wasteful spending”). After all, Fort Fumble is still borrowing almost $100 million a day which is in direct competition with home borrowers and small business as Joe Hockey tells govt to cool spending.

The Reserve Bank of Australia (RBA) met this week and decided to keep rates on hold despite solid numbers. Of course the announcement was met with the usual rhetoric Wayne Swan welcomes interest rate decision citing “while we’ve fought off the recession and kept unemployment low, we know that a lot of people are still doing it tough and recent rate rises have stretched family budgets.” More Treasurer speak “we’re focussed on reforming and strengthening our economy with investments to harness mining boom mark 11 where the Liberals failed in mining boom mark 1.” Wayne is almost Shakespearean with his economic recitals and enactments although the RBA keeps saying Government must rein in demand growth: McKibbin.

Thought we would head south this week for a change of Sydney scenery

BUY PRINT

Let’s take a closer look at Fort Fumble’s mark 11 harnessing – mining tax changes had one purpose which was taking pressure off key marginal seats. Since the new deal was announced last Friday, it has been described as a compromise, a back flip and a monumental cave–in MRRT revenue loss to be double government estimate: Goldman.

The tax was reduced from 40 to 22.5 per cent a hard tax to swallow as Alan Kohler wrote on Business Spectator.”More than double the profit threshold above which it cuts in and reduce the number of companies being taxed from 2,500 to 320, and lose only one – eighth of the money. Julia Gillard is a prime minister who Gets Things Done – the Mary Poppins of tax policy.”

No regrets over mining tax – Treasury Secretary Ken Henry whilst Martin Ferguson concedes: ‘We got super – profits tax wrong’ I can’t wait to see what happens with mark 111 as government ‘dishonest’ on revised super profits tax revenue as government sacrificed $35 bn in tax deal with big miners.

Time to move above ground where caution is being thrown to the wind (again) – which I might add is not a bad thing. Of course it would have been much better had Fort Fumble got their stimulus issues right which unfortunately was not the case as I have long argued – roads, infrastructure, housing subdivisions, hospitals – a long term future model. Fort Crumble was at it again also with another painful snub of Sydney transport, M5 set to be delayed and doodling as Metro plan burns $500m. Then on Thursday we had 50,000 Sydney homes without power again broken infrastructure in NSW.

Not one Sydney transport project has been listed as a priority for the federal Government’s (Fort Fumble) latest infrastructure funding targets. “Blasting the NSW Government’s failure to properly plan billion – dollar road and transport projects, Infrastructure Australia has instead selected a $4.9 billion Melbourne metro train project, an Adelaide freight rail line and a Federal Highway road upgrade in the ACT as priorities.” Work this out – the Pacific Highway gets an upgrade and Sydney gets absolutely nothing – Sydney has been placed in the too hard basket along with our politicians. No strings attached with Sydney anymore.

Great news for property owners who sit within a 5 – 10 – 15 kilometre radius of our CBD as evidenced when Jonathan Chancellor published this week in the Sydney Morning Herald – Top 20 Sydney house sales just the one recorded sale outside the radius – clue!

Mosman posted five of the top 20 sales.  Our very own Stephen Patrick had the highest sale and Richard Simeon had another in Warringah Road. This saw  Richardson & Wrench Mosman & Neutral Bay (RWM) record two of the five, which this week, took our Internet subscriber sales to $956,784,220.

So how is our Spring/Summer property market looking? Year ahead good, not great where Australia’s market economists declare there will be no double– dip recession here. Buyers expected to favour private sales over auctions as growth slows. We predict the Mosman market to shift (initially) in the upcoming market to online advertising – stage one as property markets stabilise. Why? It’s all about our real estate ring of confidence.

As Macquarie Economics Research explained:

• With more volatility in global financial markets, an increasing number of analysts are betting that this will force the RBA to leave rates unchanged over the next year. Certainly, if the credit markets dry up the RBA will not hesitate to cut interest rates. But with the Government’s deal with major mining companies over taxation, removing one of the clouds over investment, the RBA might actually have become more confident in the growth outlook.

Don’t forget rise in inflation to irk RBA where the annual reading of 3.6 per cent rate of inflation rose for the eighth straight month. This is well outside the RBA’s target of between 2 and 3 per cent. Rents will continue to drive inflation up given a six year wait to save deposit for first home in Sydney which is quite ironic given Infrastructure Australia is not investing in Sydney. IMF sees strong growth in Australia, but risks grow although I would add that government economic policy is an even greater risk on our shores.

Sydney needs a plan and it is obvious that  Forts Fumble and Crumble have absolutely no idea on how to address such complex issues. Sydney commuters can expect to see new signs on all transport systems – Turn around You Are Going the Wrong Way – no infrastructure ahead. When Fort Crumble has difficulty filling out Infrastructure Australia forms it’s no wonder NSW is a basket case. More back flips from Fort Fumble where Gillard eats her words over refugees as her options dwindle to six countries for east Timor alternative.

The Emperor may have gone however the art of the back flip remains the preferred exercise for a government that just two weeks ago, had lost its way. So what would one call the MRRT and East Timor? Must be a phase they are going through although we need more than promises to judge Julia. Maybe she has short term memory loss?

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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9.07.10Robert Simeon5 Comments »

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It started as a two horse race then a last minute scratching but were they polls apart? A ruthless party room coup that saw The Emperor now destined for the Ministry of Where Are They Now – this was described by some as a professional hit by a broken party feeding on its own the execution of Kevin Rudd. On a sadder note we lost an interesting character here at Virtual Realty News – bugger! Gillard becomes Australia’s first female prime minister as a tearful Rudd stands aside – Operation Ranga which left The Emperor’s curriculum vitae resembling a post – it note.

Giddy Up Gillard announced the cull – a good government was losing its way and straight into a gallop, cancelled  the tax – payer funded mining advertising campaign. Ironic  that this was strongly supported by the newly anointed deputy prime minister Wayne “Left – Right” Swan. During Question Time they kept exiting Finance Minister Lindsay Tanner won’t contest seat so the “Big Four” – Rudd, Swan, Gillard and Tanner  has been reduced to the “odd couple”. The Emperor has become the first Labor prime minister to be removed from office in his first term. Giddy Up Gillard will be hoping in a short space of time, that  they become polls apart. Fort Fumble is today looking more like Fort Chaos  - all over the place with no compass in sight.  Will it sink as it takes  in water?

BUY PRINT

Another major stoush earlier in the week caught my attention and what a beauty this one is shaping up to be , with only Wayne “Left – Right” Swan left in the ring.   Watch this space.

It has been suggested over time in the media that Treasury and the Reserve Bank of Australia (RBA) don’t always see eye to eye insofar as economic policy is concerned and  here is the proof. Stephen Bartholomeusz from Business Spectator filed Warwick the wise “Reserve Bank board member and leading economist Warwick McKibbin has shown some courage in making an explosive contribution to the debate about the Rudd government’s management of the economy and the quality of the design of its proposed resource super profits tax.” He “accused the government of panicking in response to the crisis and ramming through decisions “fraught with risk”. It had over spent in its stimulus package (and, indeed, is still stimulating even as the RBA raises official interest rates to control growth) and then they come up with the RSPT to try to compensate.“

“So, the government panicked in response to the GFC, committed too much spending that couldn’t be reversed and, for   political reasons – the perceived need to claim a  fiscal surplus – for which he said there was no economic basis – it had came up with the idea of raising the profits of the resource sector. McKibbin also accused Federal Treasury of becoming an arm of political policy and Treasury officials of producing “what I consider to be fairly politically – based evidence in support of a political policy, not economic policy” and criticised Treasury secretary Ken Henry for not only failing to consult experts on economic issues but also trying to silence them.”

In only what can be described as an extraordinary outburst Henry tells economists “to put down their weapons” and get behind proposals such as the resources super profits tax. What we are seeing is simply unprecedented within Australia’s political history – guns at twenty paces. Just like the execution of The Emperor a public stoush between the RBA and Treasury will add more pressure  at Fort Chaos.

But wait,  there’s more!   Former federal Liberal treasurer Peter Costello jumped into the ring declaring If its tax reform you want, try GST as next week marks the tenth anniversary of the GST. So it was only to be expected when we  read Ken Henry should get a new career – as a pollie and  it is hard to remember a time when such differences of opinion dominated Australia’s political landscape. Rudd under fire from Labor MPs over mining tax ads the rest is history when Rudd’s golden honeymoon ends in a bitter divorce.

We will be reading about this coup for weeks as there are some who believe Labor wastes a perfectly good PM although it has been conceded that Gillard’s Labor must now change policy tack which I assume means more back – flips.

Most embarrassing for the government is that Australia’s housing stock is currently short 178,400 dwellings and this number is growing not reducing. This is certainly not helped with now the sad news: higher rates a certainty as the gap closes on fixed, variable rates which further explains why the RBA is at odds with Treasury. Perish the thought that Giddy Up and Left – Right may be forced to curb their ongoing stimulus spending.

A newly elected prime minister and deputy, the RBA and Treasury bluing over economic policy and  the inflation genie now up and away. Throw in a federal election then a back – flip with the RSPT and the budget will have an almighty big hole in it. Alan Kohler wrote today on Business Spectator Gillard must mop up Swan’s mess “Julia Gillard’s biggest and most immediate problem is her deputy, Wayne Swan, and specifically the budget he brought down six week’s ago.

“Wayne Swan must bring down a mini budget that fixes his and Ken Henry’s catastrophic mess of May 11, so the RSPT can be removed as an election issue before the Prime Minister asks “the Governor – General to call an election so that Australian people can exercise their birthright and choose their prime minister”, as she put it yesterday.”

Gillard admits that her government was losing its way, but who was the navigator ? The Governor – General should cancel any plans for a holiday in the near future.

Taking a bullet for the party just took a whole new meaning.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

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25.06.10Robert Simeon6 Comments »

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It’s the state Fudge–it week and Fort Crumble was on a roll. We’re not talking about polls either, thanks to asset sales and a property recovery leads surge into surplus. Our economy expanded by 4.4 per cent which is the fastest growth since 2007 – 08. So why was the Fudge–it not constructive, given housing all over Australia is showing alarming structural problems? Whilst construction has expanded in March, April and May it has been modest according to a recent survey conducted by the Australian Industry Group and the Housing Industry Association. Then the Real Estate Institute of Australia – dropped the bomb lowest level of housing commitments since 2001.

Construction activity expands at slower pace where the overall construction index fell 2.6 points in May to 53.2, but remained above the 50.0 threshold between growth and contraction  a strong probability that it will fall below the 50.0 threshold in June. Fort Crumble treasurer announced “the Keneally government is taking NSW forward into an era of economic growth, building a better future for families and businesses of NSW.” Australia is marinated in (hurtful hikes) where on an annual basis the number of new loans is actually down 25 per cent. The Australian Bureau of Statistics released this week that Australia will be home to 11.8m households by 2031 which is up from 7.8 million in 2006 – so why have the ladders disappeared?

Whilst new home buyers big winners on the Fudge–it, I’m not sure that the NSW Home Builders Bonus is the answer. Morphing First Home Buyers into ‘Residents Over 65 Buyers’ (as long as the acquisition is off the plan) is intriguing as seniors’ duty cut lacks stamp of approval. The former proposal was to entice people into the market and the latter, directed to people already in the market. These new subdivisions are well west of Sydney and plagued with massive transport infrastructure neglect. In May, apartment construction fell 16.8 to see the index now at 42.0 and house construction at 57.7 which is a direct result of a lack of available credit within the Australian economy. This statistic won’t be changing anytime soon.

BUY PRINT

Each week, I challenge Tim Mooney with a photo request and it is plain to see that he has on file, Australia’s largest aerial photographic library.

What Keneally and co achieved … and what they didn’t where simply put: “Kristina Keneally and her Treasurer did little or nothing to bring this revival about. It came thanks to national and international forces beyond their control.” I would call that constructive criticism because one major element that NSW keeps missing are those builders’ ladders. It is all very well to roll – out Stamp Duty relief announced for some buyers however let’s not forget that in May 2010 Fort Crumble introduced its Ad Valorem tax increase of 0.2 per cent for properties between $500,000 and $1,000,000, and 0.25 per cent for properties above $1 million – on top of the usual Stamp Duty fines that were not reduced in the Fudge–it.

Here we have construction being dominated by the public sector over the private sector – so on with my missing ladder concerns. Alan Kohler on his Inside Business programme spoke with Nicholas Collishaw, Mirvac managing director. A great interview Nicholas Collishaw on encouraging development. Alan Kohler, “Australia is experiencing a dire shortage of houses – 40 – , 50,000 completions short of what the actually needs.” Nick Collishaw “Well, I certainly agree with that statistic. We expect a shortfall of 45,000 dwellings for the 2009 year and, as we see 2010 unfold and ’11 ahead of us, that gag increasing.” A must read, as too on Inside Business Christopher Joye discusses lower house prices given the headline mortgage rate has moved from 5.75 per cent to 7.4 per cent. Ironic, that property developers are finding it increasingly difficult to draw credit given no access to the housing emergency chest of funds. Conflicting in that The Emperor PM to pour $5.6 bn into poll fight a decision that shattered faith in PM.

Melbourne close to overtaking Sydney so up the ladder Melbourne goes and down the ladder Sydney goes because of its property structural problems. “With annual population in Victoria running at 2.2 per cent and driving demand in Melbourne, when compared with New South Wales 1.7 per cent growth, it is not hard to imagine Melbourne soon seriously challenging for the crown of Australia’s most expensive median priced city.” Whilst Sydney has a greater proportion of apartments (26.5 per cent compared to 16.7 per cent for Melbourne), Melbourne actually has more houses than any other city in Australia. Although it should be noted that infrastructure determines property values – position, position, position. So why do respective governments find themselves in opposition as against market directing? That would be political bias coupled with ignorance and an extension ladder aimed at re-election. Propping up marginal seats is not the answer given the vast majority of those constituents have re-located elsewhere across Australia.

A reason why the electorates are at loggerheads with The Emperor and his ailing Fort Fumble is exemplified, as he presides over a government that knows best. Trust the government? Not now whilst the result is clear: voters are fed up. Rudd set to lose election on mining tax Australia needs to get back to basics – why is our building demographic market contracting? It certainly does not help when lenders say no to loans as buyers knocked back as consumer sentiment drops in June. There is no doubt that Aussies are cautious after rate rises: RBA which was reinforced this week when RBA governor announced cut debt, save more: Stevens.

It is possible that never before, has Australia vented such anger at Fort Fumble and Fort Crumble – watch the Penrith by-election next week which will identify a record swing against the Premier Pristine government. Sovereign debt capitulations resonate through markets evidenced home loans drop to 9 – year low which represents the fewest number of new loans for owner–occupiers since 2001 and the seventh straight fall in housing finance commitments.

I’m sure that everyone was amazed to read this week lawyers consulted on sacking NSW government, says Governor whilst (not surprisingly) it does identify just how bad our governments are at present. I leave you with this comment from Alan Kohler on Inside Business Talking Point which says all about the RSPT. As Clint Eastwood once said “Do you feel lucky punk?”

Cheers ^__^

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11.06.10Robert Simeon11 Comments »

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With my iPad still on order – my attention this week was on the release of ‘Betrayal’ – The Underbelly of Australian Labor by Simon Benson, senior political journalist at The Daily Telegraph. Like many Aussies who are in absolute dismay at what is currently unravelling within the seams of our ailing economy, here is a book with more twists than a Rubik’s cube. Rudd broke secret pact with Iemma so as quick as a flash The Emperor denied such a thing.

More importantly, past Prime Minister Paul Keating commented in Betrayal – “When the motivation of the machinery of the Party is unfurnished as to policy purpose, it has nothing to offer than to focus on marketing and polls. After a while the public becomes aware of this and they realise that marketing and spin have no basis … That is more the rule these days than the exception.” Again another week of prolific marketing spin from both Fort Fumble and Fort Crumble – our esteemed federal and state Governments collaboratively spinning this most uncomfortable electoral seat of bad poll therapy. So here I go again, to ‘spin’ this week’s edition of Virtual Realty News.

Heaven forbid – How Sydney’s iconic Opera House is at risk of ‘financial tragedy’ a damning internal report has revealed , that unless urgent action is taken, the Opera House will have to close. “In April last year Prime Minister Kevin Rudd hit the roof after The Daily Telegraph revealed former Premier Nathan Rees planned a $900 million rebuild.” Sydney Opera House has been lobbying Fort Crumble for ten years so in next week’s State Budget $130m to save Sydney Opera House from closure. Maybe our mining companies can save our Opera House. After all, they are expected to save everything else in Australia. As for the State, it is stone motherless broke – absolutely devoid of imagination and concept. Marketing and polls won’t save it.

BUY PRINT

Frustrating when you see that Fort Crumble wasted $500 million when it axed the failed CBD Metro proposal and it’s all about to get worse. Second harbour crossing – or chaos where a team headed by the state’s former rail and roads chief, Ron Christie, identified that without a second rail link across the harbour, the CityRail system will face paralysis by 2022. I thought we were already there which may explain why Fort Crumble is using marketing and polls in an effort to change its identity.

Fort Crumble is fast becoming Fort Chaos – mates race: $45 m deal snares MP as the V8 Supercars race will now cost taxpayers at least $10 million more over the next five years – the budget was $35 million. So when all else fails what does the government do? Labor shuts off access to secrets the Ombudsman, Bruce Barbour, is seeking to change a nine-word loophole where access to documents has previously, been refused. The cost of hosting World Youth Day came in $64 million over budget yet, $50 million was pledged this week, to keep the rugby league grand final in Sydney. This was $20 million more than Queensland was prepared to pay. Little wonder senior Fort Crumble ministers joke that Labor should re-name itself “the Keneally Party”, as it is now politics without a whiff of Labor just another example of marketing and polls.

The Reserve Bank of Australia (RBA) met this week to spin the cash rate where house prices ‘out of whack, set for slump’. A comment from abroad where the International Monetary Fund voiced its concerns on house price values compared to average incomes. Possibly too much time was spent reading two American dreams shatter although Australian property markets are witnessing households pull back spending as rates rise. Yes – a chill wind through house prices which prompted the RBA to place rates on hold.

Interesting to note that when property markets are booming, buyers adopt an aggressive pattern of behaviour and yet when property markets cool, become passive. I’ve been doing this gig for twenty five years now – currently I am selling the first home I ever sold in 1986 for $285,000. 43 Rangers Road Cremorne can now be purchased for around $2,250,000. So are you better off buying in an aggressive or a passive market? I suggest the latter. Here is an interesting graph courtesy of RP Data that I found this week. It amazed me, considering we are more a private treaty real estate model compared to public auction. In 2010 – 80.4 per cent of public auctions were conducted in Victoria and NSW. This will become an interesting topic in weeks to come.

For the month of June, the RBA left rates on hold prompting Treasurer Wayne Swan to make this comment: “This news will be a welcome relief for many Australian families and businesses around the country, who are of course doing it tough.” Again, this would be marketing and polls.

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Wayne Swan again “Tomorrow we have the national accounts, and I have every confidence that with the right policies in place, our economy can continue to be one of the best in the world over coming years… From our perspective on this side of the house, we will do everything to reform our economy, to build economic capacity, to keep pressure off inflation so we can grow sustainably.” Wayne, please allow me to explain a few basic economic fundamentals that escape you.

When Swan released his Budget 2010/11 – he announced that it was hedged on a consumer price inflation of 2.5 per cent, even though the RBA recorded a March 2009/10 rate of 2.9 per cent. In Virtual Realty News I suggested that inflation would be at 4.5 per cent by June 2010 and your 25 per cent increase for cigarettes tax slug would further ignite inflation. So what happened? Cigarette tax sparks inflation jump where prices increased by 3.7 per cent in the year to May, up from the 2.9 per cent annual pace in April according to the TD Securities – Melbourne Institute Monthly Inflation gauge. Given the RBA has an inflation comfort zone between 2.00 – 3.00 per cent, let me adjust my inflation prediction to 5.00 per cent by June (this month). Petrol prices up, rents up, vegetables and electricity always increase over winter – spin, marketing and polls.

Taxpayers fund Swan’s ad blitz where the mining tax sets nerves on edge as the big miners gave Rudd the fight he was looking for just that taxpayers never expected another back flip where they foot the bill on a tax that is yet to be passed,despite a $40 million advertising campaign approval. Although Rudd treats us like mugs with latest backslide on government ads. On The 7.30 Report Swan defends mining tax ads and the smaller miners reject Kev’s idea of help. Head of Infrastructure Australia offered this advice restart tax plan: Kevin Rudd’s man Rod Eddington as too did Alan Kohler The government’s RSPT spin is a disgrace. Then the first of many announcements as the tools go down Xstrata suspends development spending two projects over super tax and that, as The Emperor described earlier , is neither “bunkum” nor “balderdash”.

My iPad is yet to arrive so I keep reading Betrayal, so can marketing save PM? Absolutely no chance as the Mad Monk enunciates from his soap – box keep fighting Rudd and super – profits tax. Don’t pay too much attention to the March GPD figures. The June GDP will paint an entirely different position. Europe debt situation serious – Treasury which is a burning issue as too – home insulation inspections yet to begin. Kurraba Point declared a new suburb and ASIC give up on the Offset Alpine mystery.

The stand–off between The Emperor and Australia’s mining companies is a compelling visual. My tip: the mining companies will smash Fort Fumble. Why? Simply because nobody at Fort Fumble has ever run a business before. So how does one turn a big business into a small business? That would come down to marketing and polls. Australia would be better off if it had invested our $38.500 million in BHP and Rio Tinto shares.

Cheers ^__^

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4.06.10Robert Simeon11 Comments »

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With interest, I noted that Fort Fumble (Federal Government) released its Henry Tax Review – Australia’s future tax system just hours before the Logies and just two days before Reserve Bank of Australia announced rates rise again. Here is what governor Glenn Stevens had to say Monetary Policy Decision.

Much like the decision to withdraw its disastrous and totally incompetent Home Insulation program which again, was conveniently announced just 30 minutes after Torah Bright won gold at the Vancouver Winter Olympics in the half pipe. As they say timing is everything! Tempers flare as Wayne Swan clashes with shock jock on air this was Gold. Then Rudd lied to us, say insulation installers in Parliament house protest. “In February the Prime Minister met a group of installers protesting outside Parliament House in Canberra and said he would restart the home insulation program by June 1.” Alas, “Courageous Kev” Rudd to defy Senate request to give evidence on home insulation program – snakes and ladders?

The Emperor (Kevin Rudd) is now running with just three policies Health, Henry and the Building Education Revolution (BER) as the rest have now (conveniently) been placed in his growing recycle bin. Both Health and Henry are less than one month old and the BER is copping plenty of flak audit slams Rudd’s primary school building program expect that to be binned also. These decisions are not just a case of ‘missing in action’, rather, policies with distractions which sends a clear message that our elected Federal Labor Government requires more stimulus to its own intelligece quotient. BER audit finds problem but ‘value for money’ of individual projects outside scope… surprise surprise. The Mad Monk (Tony Abbott) also marked the report BER delivers a fail mark.

Having been in receipt of the Henry Tax Review since late December 2009 (five months later) and Fort Fumble does it again – Did Kev and Wayne even read Ken’s Review? On Business Spectator Alan Kohler wrote It’s politics, not reform “It is a great document – probably the best tax review ever produced in this country. Amazingly, the government has almost ignored it. After five months of leaking and spinning since the report was handed to him. The Treasurer has picked up exactly 1.75 of its 138 recommendations, or a bit over 1 per cent.” Total: 1.75 accepted; 136.25 rejected or put off without any transparency. Why, am I not surprised? Rudd’s election rebate where the Henry Review brings higher superannuation, small business changes but no tax fit. Henry tax review dumped into the dustbin then Terry McCann’s explanation “Kevin Rudd is running scared – clammy palms, hair bristling on the back of his neck, whole body shivering: scared, scared, scared.”

Now it gets even more interesting – “rather than release flagged changes on savings tax and simplifying tax returns, the Government has saved those changes to release later in the year, most likely to use in the run – up to this year’s federal election.” Wayne Swan leaves door open to more tax hits from Henry tax review – From the mines to the banks, The Emperor’s ‘fat tax’ grab goes on.

BUY PRINT

Charlie Aitken wrote on Under the Southern Cross “Robin Rudd and his merry men; banks will be next; switch to the USA. I just believe Australian banks have a giant target painted on them and as we get closer to an Australian Federal election later this year that Robin Rudd and his merry men will announce some sort of super tax on bank profits. I am very, very suspicious that the bank sector avoided any sort of punishment in the Henry Review. Ask yourself what the biggest vote winner in Australia is? Yep, you guessed it taxing banks.” Such a move to tax would remove bonuses which in turn would decimate top – end property markets. Australia is now entering the Rudd Financial Crisis – nothing achieved when policies deceive.

On Business Spectator Alan Kohler wrote Rudd’s mask is off “Kevin Rudd has done something unforgiveable in politics, and he will not be forgiven either by his party or the electorate. He has allowed the disguise to fall.” Then “the latest effort is the Resources Super Profits Tax – a national embarrassment. Those who don’t even understand why it’s a bad tax are asking: why do we need the money? We understand the need for the community to get a fair share etc, but Australia is the best performing economy in the world, so what have you guys done with all the money that you jeopardise our most successful industry to raise more?”  And “there will now be an early election – probably July. What does Kevin Rudd stand for? He is becoming an opposition leader in government, simply opposing the other side and engaged in nothing but marketing.”

The Emperor should be cleaning up his own backyard first – Kevin Rudd’s Department of Hot Air costing taxpayers $90 million. Hi – ho, hi – ho it’s off to health he goes! Australia went into euphoric celebration mode when Julia Gillard announced: Rudd will lead Labor to election. Making unpopular decisions part of my job: Rudd obviously The Emperor has policies confused with performance. In time we get the nasties – but not just yet so have a listen to what John Stone had to say to Alan Jones on 2GB about the Henry Tax Review.

Mining tax like communist policy – Palmer on Australia’s greatest ever tax reform all 1.75 per cent. This comment on Crikey by Niall Clugston, grabbed my attention. “While the criticism of Kevin Rudd’s caution is fair, the contrast with the 1980(s) is exaggerated. The Hawke – Keating reforms were part of a global crusade of privatisation and deregulation spearheaded by the Iron Lady, Margaret Thatcher. Today there is no sweeping change of economic orthodoxy. Nor is the Pale Imitator who inhabits the Lodge likely to receive any international guidance from the incompetently honest Gordon Brown or the temporary messiah, Barack Obama.” Ouch!

Again on Business Spectator Robert Gottliebsen wrote A mammoth capital strike looms “At this stage it’s just private words to selected journalists and few decisions have been made, but Australia is on the brink of the greatest capital strike in its history and one of the largest ever seen in the world. In the vicinity of $100 billion of resource projects that were almost certain to go ahead are now headed for mothballing until the resources tax is either abandoned or severely modified. If the private words to me and other journalists are converted to action and a new mining capital strike is launched, then almost certainly Kevin Rudd will not win the next election. The economies of Queensland, WA and South Australia would be decimated.” And finally “and in the middle, we have a series of blunders led by insulation and education building and botched emissions trading scheme. Oppositions don’t win elections, governments lose them.”

Based on a capital strike trade deficit surges to more than $2bn where Australia’s trade balance remained in deficit for 11 straight months, a strike would be of catastrophic proportions.

Aussies go cold on Kevin Rudd with industry predictions that The Emperor’s resource tax will kill the golden goose prompting our miners fury at double tax burden. Coalition MPs will decide stance on mining tax next week which will be interesting given admirers suffer a Rudd awakening.

As quick as a flash first miner scraps project on tax concerns a fait accompli given logic and political reality collide. But, what about super idea, but hardly tax reform back to Business Spectator – Twiggy’s root and branch shakedown. “The sharemarket has delivered a brutal assessment of who it thinks were the winners and losers from the Henry tax review – and mining entrepreneurs are in the gun. A staggering $12 billion was wiped off the value of Australian mining shares.” Australia has moved from the global financial crisis to a Rudd financial crisis. You can trust politicians … to do exactly what’s best for them then “I’m going and now I’m back” Malcolm Turnbull wrote Memo to Sir Kevin: a brave decision, Prime Minister and where it hurts us all Super hit by resources sell – off and Rio Tinto shelves billions in projects. Common sense prevails Coalition to oppose mining profits tax.

Julia Gillard denies misleading parliament on BER cost blowout another $1.700 billion now needs to be found as it was underfunded based on the initial $12.400 billion allocation. Much of the work is yet to start – auditor rocks basis of BER stimulus boost. Obviously, a distraction as Gillard denies eyeing Rudd’s job. It just gets worse!

Property markets too have been in the spotlight this week.

Housing market will implode warns Edward Chancellor Edward is no relation to the Sydney Morning Herald property editor Jonathan Chancellor. Australia is in the midst of an unsustainable housing bubble that could burst at any time, warns the man who predicted the global credit bust of 2007. We will see busts in the First Home Buyers Grant (otherwise known as the First Home Sellers Grant) as they buy back when mortgage defaults escalate due to rising cash rates. Another rate rise, another blow for PM and economists warn that more pain is on the way – the raw nerve being rate rise to crush 90,000 families.
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Not wasting any time the big four banks match Reserve’s rate rise and the housing industry blast RBA rate rise obviously they are not observing Australia’s inflation genie. Then the obvious Rudd attacks interest rate hikes by ‘greedy’ banks –  of course he is not. Although, he is on the springboard about to attempt yet another back flip as he may capitulate to miners appropriate that he is digging Australia into an almighty hole.

The most naive commentary of the week banks safe from govt tax torch, Westpac: dumb and dumber. In just over twelve months, Kevin Rudd, Wayne Swan, Lindsay Tanner and Julia Gillard have transformed a A$19.700 billion surplus into a A$32.100 billion deficit and 2010 is an election year. The majority of policies are now languishing in their much owned, self – imposed recycle bin.

Incompetence personified – where the inheritance went down the gurgler in the blink of an eye!

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Next week, (unless Fort Fumble has another policy implosion) we will explain why the cash rate still has another 2.00 per cent of increases ahead. A clue: Fort Fumble and Fort Crumble contuinue to inflate that inflation genie. Tell us what you think on the blog – is The Emperor right with his Resources Super Profits Tax? Will he be re-elected or will he end up in his recycle bin too?

Cheers ^__^

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7.05.10Robert Simeon8 Comments »

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Big statement you may say – well we didn’t say it RP Data’s Property Pulse revealed “Premium properties provide higher returns but volumes have remained relatively low in 2009”. It then went on to say “for cashed – up buyers the premium housing market could be poised to deliver excellent returns in the future.” A comprehensive property report that tracks Australian municipality machinations from 1999 through to 2009. What is interesting to observe, is exactly how the global financial crisis impacted property markets. We have published all the graphs in this week’s edition.

Property Pulse Highlights

• Sydney’s Mosman leads the nation with the highest number of house sales priced at $1 m or higher.
• Sydney and Melbourne featured equally in the top 20 suburbs for $1 m plus house sales in 2009.
• The Western Suburbs of Perth holds two of the top performing suburbs in the analysis.
• For units, the Sydney suburb of Pyrmont led the charge with 95 unit sales priced at $1 m or higher (that’s only 22 per cent of all Pyrmont sales in 2009,highlighting the wide variety of unit product in this inner city suburb).

BUY PRINT

The Sydney Morning Herald’s property editor Jonathan Chancellor wrote last Saturday, “Mosman turns up auction heat”. “Mosman has led the resurgence in auction activity with 100 listings in the first quarter, up from 43 during the same period last year. The pricey suburb’s 67 per cent success rate bettered the dismal 37 per cent clearance rate during the eye of the global financial storm.”

Each week we publish the weekly sales results and I would add that (some) agents have been doctoring the results of auctions which were passed in then, hey presto, two to four weeks later the very same properties reappear as ‘Sold – Auction’ (never let the facts get in the way of a good story).

Across Sydney, agents conducted 4560 auctions in the first quarter of 2010, compared to 2960 over the same period in 2009 (according to Australian Property Monitors). The previous record was 4330 in 2008 so by all accounts Mosman again, is up and up and we can predict with confidence, that despite interest rate increases, consumer sentiment should not wane despite rate pain.

Source: RP Data

These are telling graphs that (historically) identify 2007 as being the all time peak property performance year. Take the 4330 auction record quarter in 2008. You will note that there was hardly any impact on the 2008 sales results simply because just a minority found new owners. The majority recorded a zero sales result. In 2010 we have seen new Sydney record auction volumes and this time around , agents are matching vendors with purchasers. That said, in 2010 there is a distinct possibility that the previous record sales results posted in 2007 will be surpassed, because top – end property markets are now re-activating. This explains the lengths we (RWM) go to on a weekly basis, to accurately cover our demographic property market. It also endorses the fact that we have the number one online Mosman newsletter and are positioned as the number one Mosman agency with Australia’s greatest number of database real estate subscriber sales $943,479,220.

Source: RP Data

Source: RP Data

10% rates on the way proved to be a interesting headline last Sunday. The only problem is, that consumers get it and Fort Fumble (Federal Government) doesn’t. Suffice to say: when in an election year, keep buying votes. Rory Robertson, Macquarie’s interest rate strategist, says a booming labour market could force the RBA’s hand. “If the economy keeps on growing like this, we will hit the previous highs in the cash rate.” Mr Robertson went on to say, “we already have a template of what happens when the economy grows strongly – we saw it before the Lehman Brothers collapse in 2008 – so we know how the Reserve Bank responds to the threat of inflation. It hiked aggressively back then, and it is doing the same now.”

On the one hand we have the Reserve Bank of Australia telling us to curb spending while Fort Fumble keeps spending at record rates. In search of an answer I went School building program won’t stop: govt Federal Education Minister Julia Gillard says the $16 billion school building programme won’t be suspended, pending an investigation, because it would mean job losses?

Don’t waste the boom, Mr Rudd where Alan Kohler wrote on his Business Spectator “In Australia, according to the ABS, there is now $133 billion worth of construction in the pipeline – the greatest investment boom in history.” Looks like our Education Minister needs educating on exactly what is happening in Australia.

Oh dear! Miss Prissy Julia Gillard hires a banker to unearth schools stimulus. A Mosman banker too! Undoubtedly, the findings will make for great reading. Personally, I don’t blame the builders given they were asked to quote for the building works and Miss Prissy approved the quotes.

What annoys, is that yet another $14 million has to be spent to correct political incompetence – on top of insulation, schools and border protection. The list goes on and today, Australian taxpayers are fast becoming a modern day version of a human ATM.

House prices plateau as buyers flee in droves – buyers are deserting the Sydney property market at the rate of 1000 a month, causing real estate professionals to predict an “exhausted market” where prices plateau for the rest of the year. This will definitely happen in many areas although it won’t happen in Mosman. Official figures show the number of loans to buy houses in NSW slipped from in September to just 14,300 in February after sliding in each of the past five months. The Australian Bureau of Statistics figures identify February as the worst month for home loans since 2001. Nationwide, just 2174 people borrowed to buy new homes, a figure that also reflects the low number of new homes on offer. School canteens override Construction slides as affordability worsens.

Alan Kohler from Business Spectator has a great ability to simplifying things and again, he brilliantly achieved this, when he wrote this week Deflating the credit bubble myth. “That’s why everyone keeps getting the property market wrong even the bulls have been surprised at its strength.”

“Anyway, a plateau this year would hardly be surprising, in fact another 12 per cent rise in the national median house price in 2010 would be staggering, and would see the RBA cash rate closer to 6 per cent than 5 per cent by early 2011.” My prediction is a cash rate closer to 6 per cent by Christmas given clearance rates in Sydney last week hit 70.7 to 73 per cent. Melbourne recorded 75.5 to 85 per cent – clearance rates above 80 per cent are considered a boom market.

Something I been saying for years!

Rising support to abolish state governments no doubt when the respective premiers read this the fear factor of incompetence overrode hospitals takeover on critical list. Four in ten voters favour abolishing state governments, seeing them as the least – effective level of government and increasingly looking to Federal Government to fix health and other problems. Fort Crumble had yet another outstanding week for leadership Blame game begins on F3 traffic chaos and Losing bidder won ferry contract. All part of The Emperor’s (Kevin Rudd) daily growing pains trouble Rudd in Big Australia.

Back to Mosman – our cutest and newest resident celebrated his one month birthday this week.

Happy Birthday “Pathi Harn” (Miracle) – The Emperor is praying for one too, because he knows that voters have memories like elephants!

Cheers ^__^

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16.04.10Robert Simeon4 Comments »

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The Australian economy is booming with the good news this week from the Australian Bureau of Statistics (ABS) that our gross domestic product (GDP) grew by 0.6 per cent (seasonally adjusted). There were no downward GDP revisions for the March quarter which remained at 0.4 per cent and I fail to understand why the global financial crisis (GFC) is still being compared to the worst global economic downturn since the Great Depression. The recession of the early nineties plays it off a break, but the early nineties could hardly be described as global either. Unemployment this time didn’t climb to eleven plus per cent (5.8 per cent as at July) and interest rates today remain at 49 year lows.

‘The Punch’ (another great online read) – Clive Mathieson wrote, What Recession? “What a lovely recession we’re having. Or not having”. I do agree however, with the school of thought that we will see some economic tremors along the way and this is inevitable given the sudden impact of the GFC.

Just like the Y2K computer scare – remember that? A global electronic meltdown was predicted when we moved from 31 December 1999 to 1 January 2000, over concerns that (to save computer disk and memory space), computer softwares were using two digits to represent a year (98 instead of 1998). For example the difference between 1 January 2000 and 31 December 1999 could be calculated as -100 years as against one day. On the stroke of midnight on 31 December 1999 it was predicted that this computer bug would see businesses and industry decimated and we would see planes falling from the sky. On the stroke of midnight, planes flew, fireworks went off over Sydney Harbour and computers worked fine.

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Alan Kohler wrote another wonderful article “Bulls at the Gate” on his Business Spectator website. “But Australia’s June quarter GDP is important for two reasons: it confirms that Australia has not had a recession at all, and indeed the economy has now expanded for 18 consecutive years; and secondly it will help ensure that business and consumer confidence remains strong.”

As quick as a flash Wayne Swan announced that our economic growth (Australia has been the best performing advanced economy over the past year) was a result of the stimulus. Earlier in the week he said that opposition treasury spokesman, Joe Hockey, must be “deaf, dumb and blind – if he thinks the Government’s economic stimulus is not working.”

I did like this comment “There are tradies all over the country who are working on stimulus projects. It’s adding to confidence in a way that we don’t see anywhere else in the world.” True Wayne – but other countries are actually in recession – we’re not! Then we had some economic speak from the King of Spin, Ruddy Fantastic, who said “The figures (GDP) that have been released today indicate that we’ve got a long way to go when it comes to economic recovery.” Translated, that means we have a long way to go to get his budget into surplus again.

Leo Shanahan penned this beauty in The Punch “Rudd’s secret spending freeze: no soup for you”

Whilst on long roads, spare a thought for the Y2K equivalent of Australian economics Steve Keen who, in my opinion, irresponsibly predicted on nearly every available media outlet, that Australian house prices would fall by 40 per cent and unemployment would shoot through the roof to “depressionary” levels. This prompted Rory Robertson (interest rate strategist) to jump from the factory floor at Macquarie Bank to bet Steve Keen that if his predictions proved correct he would walk from Canberra to Mount Kosciusko. To read about the bet, Business Spectator filed this story by economist Christopher Joye – “Let the Kosciusko march begin” For the record, Rory Robertson was spot – on with his GFC commentaries.

This takes me to the cash rate which remained on hold when the Reserve Bank of Australia (RBA), met this week and decided to leave it at 3.00 per cent. The cash rate has remained at 3.00 per cent for five consecutive months and next month, I predict it will move to 3.25 per cent – the cost of bank funding is going up not down.

Rory Robertson has also predicted a 25bp increase on October 6 based on the latest data identifying a strong rise in house prices. He wrote “With the RBA reportedly keen to start tightening its loosest – ever policy stance at the earliest – available opportunity, the combination of (a) rising GDP (b) a brighter investment picture and, now (c) stronger growth in house prices, might well prove irresistible. The “economic emergency” clearly is over, “nipped in the bud” by early timely and forceful monetary – and fiscal – policy action.”

I believe he may have been referring to the July RP Data – Rismark Hedonic Index results that revealed Australian home values are now 1.8 per cent above their previous peak in February 2008. The intrigue is building for our Mosman markets given we have record high rents and record low levels of stock – better known as a heated market. Stay tuned.

Quite amazing that should the RBA increase the cash rate next month, it would be moving in a totally different direction to Fort Fumble – Ruddy Fantastic’s empire! That’s it! Ruddy Fantastic is out and now he will be called The Emperor – given his ‘sweet and sour’ patterns of behaviour.

Spare a thought for ‘big’ Johnny Della Bonka at Fort Crumble, where we saw the battered draw bridge rise (figuratively speaking). This prompted a vote of no confidence by the opposition in parliament this week – which failed. Our elected NSW government failed to produce yet another leadership challenge by the Bonka. Watch Frank “cranky” Sartor exercise his recently acquired power- play: the funnier side of politics where the patients challenge the asylum. The Emperor is far from impressed.

This week, Richardson & Wrench Mosman & Neutral Bay (RWM) released another great online application for our clients – ‘Mohbe’ – mobile phone real estate. Mohbe allows real estate agencies to have their own agency branded mobile phone website for their property listings. The mobile phone websites are viewable through any mobile phone which has an Internet browser and access to the Internet. RWM is Mohbe’s first client in NSW to offer this application. Take a test drive www.mohbe.com/124232

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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4.09.09Robert SimeonNo Comments »