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We all love it when a plan comes together, so spare a thought for those at Fort Crumble (NSW government) who still fail to understand a plan that actually works. We all know what happens next (as you will see) and it does not look pretty for this once proud state. A decade later those horrific and planned bureaucratic bungles are now taking a major toll – (one Fort Crumble can’t collect either). Ongoing bungles at Fort Crumble are considered to be “having a real hard go”.

Just as ironic is that in NSW, infrastructure has moved into economic decline and as with all declines, they have a habit of gaining momentum that ends in a huge crash. On the other hand, when a government drives constituents to other states, it could be construed as its very own plan to fight housing affordability – better known as reducing demand. In a nutshell, no plan works when you apply the supply v demand economic theory, without applying the basic principles of meeting supply first. Housing in Australia is facing an interesting twist, because when the tools to meet supply are down, prices will keep rising – more a result of failed government forces.

Pulpit Point, Hunters Hill (a planned estate to meet supply) photographed by Tim Mooney. The vacant marina berths may well be a result of the global financial crisis. Or was this photo taken on a weekend when the residents were out relaxing on picturesque Sydney Harbour ? (Sounds like a smart plan).

www.timmooneyphotography.com

In past editions I have referred to the ‘thirty something factor’ in Australian housing – one third rent, the other third own with a mortgage and the final third own without a mortgage. RP Data published its Weekly Property Pulse. “Housing finance data released by the Australian Bureau of Statistics (ABS) this week showed that finance commitments surged during September. In particularly there was a strong bounce back in first home buyer loans which was not surprising given that it was the last month in which the First Home Buyers Grant Boost was available in full.” Bear in mind that interest rates are also increasing so here is Household Estimates 2007 – 2008 graph which makes one wonder what it will resemble after the impact of the first home buyers grants in 2009.

This is how it looked (prior to First Home Buyers Grant Boost) when the Reserve Bank of Australia (RBA) was sitting around 7.25 per cent (RBA rates) and in September the cash rate was at 3.00 per cent. Currently, the cash rate is 3.50 per cent. Are the property debutantes who grabbed the grant, aware that post – global financial crisis, we are headed back to the future market? In 2010 – 11 the economy will pick up by 2.75 per cent rather than the suggested 2.25 per cent.

Whilst yet to be evaluated, rental property vacancy rates remain at record lows which in all probability forced many in rental markets to purchase property – the Sydney vacancy rate in October remained at 1.3 per cent. It is supposed to be 2.50 per cent to 3.00 per cent. According to RP Data, over the twelve month period, the weekly rents for houses (nationally) increased by 3.4 per cent (that was in a downturn). So why is The Emperor (Kevin Rudd) wasting money on renovating school halls when there is an obvious need to increase housing? (I will get to that shortly). However, this rental graph is simply scary.

In pursuit of answers, I found that the culprit (surprise – surprise) was our very own Fort Crumble when I read in the Sydney Morning Herald – “NSW not a developer’s nirvana … it’s planning hell” by Aaron Gadiel. “if you were to accept everything that has been said about development in NSW, you might think it was open slather; a developer’s heaven – that planning was out of control or that, development was running rampant.”

“Nothing could be further from the truth.”

“It is time for a reality check.”

“Developers are not fond of NSW. Not at all.” Based on the graph above I would suggest that those in rental accommodation would feel the same, given that when it comes to ‘bricks and mortar’ Fort Crumble is ‘as thick as a brick’ with absolutely no intellectual mortar between the layers.

“In development terms, NSW is neither one, nor even number two. After decades of more building activity than any other state in Australia, we lost our first place ranking to Victoria in 2008. To compound the indignity, in the same year we also fell behind Queensland.” What a plan!

“Victoria and Queensland have stolen a disproportionate share of Australia’s building investment. In the financial year ending in June, NSW accounted for only 23 per cent of Australia’s building activity, while we made up 32 per cent of Australia’s population. The Australian Bureau of Statistics only records one other occasion where NSW was anything but first – and that was in 1977.”

So let’s look at our esteemed Premier Nathan Rees who (as he keeps telling us) is “having a real hard go.” Not sure exactly what is going in NSW aside from the government. “The economic damage to NSW from its poor performance is dramatic. The construction activity made possible by developers contributes $78 billion to the national economy each year. For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. When we lose development dollars to other states, we’re losing income and jobs that rightfully belong to NSW residents.”

I refer you again to the above graph, “Sydneysiders have already been feeling the pinch of housing shortage. Rents in outer suburban Sydney have gone up by more than 20 per cent in the past two years. In the middle ring suburbs rents have jumped near to 30 per cent “. What a business plan.

For our Mosman residents I jumped over to Australian Property Monitors to access the Mosman occupancy data.

Fort Crumble is in total decay and Fort Fumble has absolutely NFI (No Financial Idea) as to exactly what is happening in the Australian property demographic markets. And my mantra is not to castigate – abuse or criticise our elected politicians on the astounding execution of their Nation Building expertise.

Clip of the Week

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In search, I went to YouTube – where I discovered one of the most amazing clips that signifies achievement. Unlike elected politicians, he is a man of few words yet his actions speak much louder than his few words. Backed by Delta Goodrem singing “Together We Are One” this clip should be re-played at every household and sales meeting.

Inspiration personified – Gavin’s Bridge Climb

Cheers

^__^

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

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20.11.09Robert Simeon4 Comments »

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Twelve months ago all we were looking for were “green shoots”. Our economic gardeners are now embarking on a crash – course of selective pruning (and I’m not talking ‘whipper snippers’). Australia appears to have bloomed too early and the economic chainsaws are sharpening their jaws. Now it is not the “buck”, rather the bulbs, that are firmly placed in the economic gardening gloves of The Emperor (Kevin Rudd) – let’s hope he has a green thumb!

Yes, the last twelve months have been a roller coaster ride that continues to gain momentum and what remains to be seen is whether as an economy, we can stay on the tracks – the alternative is not pretty if one is reliant on the cash rate remaining low. Many borrowers will find out first hand, that fortune does not always favour the brave when it comes to bricks and mortar.

The Australian Bureau of Statistics (ABS) announced this week, that consumer prices increased by one per cent during the September quarter which was a direct result of higher prices from electricity, petrol and utility prices. Fort Fumble treasurer, Wayne Swan, was quick to emphasise that the economy was continuing to operate below capacity. Capacity is this week’s economic measure of confusion – too much stimulus, too much debt, too much immigration and possibly too much spin. Each and every cash rate increase by the Reserve Bank of Australia (RBA) is a further burden to consumers and property prices have eclipsed recent records (we all know this is defined by capacity).

Is this Sydney’s coldest beach? Competitors in the World Masters Games thought so as the water was too cold – now they are demanding a refund. Photo: Tim Mooney Photography

www.timmooneyphotography.com

So Wayne Swan thinks our economy is operating below capacity? Australian Property Monitors (APM) yesterday released its September House Price Series Report and here are the key statistics.

• Nationally, house prices jumped +3.7 per cent and unit prices + 3.4 per cent in September quarter
• Strongest quarterly growth in house prices since 2003
• National house prices up 7.1 per cent in 2009
• Melbourne experienced strongest house price growth, up 12.3 per cent in last six months
• House and unit prices rise in every capital city in September quarter

Wow – if this is an economy running under capacity, just imagine what happens when it grows with confidence. The Housing Industry Association (HIA) announced this week, that new home sales fell in September and nationwide sales dropped 4.5 per cent which is in direct contrast to a 11.4 per cent increase in August.

Source: Australian Property Monitors

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Source: Australian Property Monitors

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This week Taylor Fidan and I extrapolated all house, semi, apartment, and townhouse sales in Mosman from January 1, 2006 to October 19, 2009 – in total 3,054 sales. Here are our findings (houses this week and apartments next week). I wish the property data aggregators would offer this data as it is very time consuming to compile but, then again, such information has never before been presented on a public domain. We present another Richardson & Wrench Mosman & Neutral Bay (RWM) first.

Source: DomainPropertyData
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MOSMAN HOUSES/SEMIS SOLD – I JANUARY 2006 TO 31 DECEMBER 2006

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0 – $1,000,000

44 sales

.

$1,000,000 – $2,000,000

177 sales

.

$2,000,000 – $3,000,000

97 sales

.

$3,000,000 – $4,000,000

49 sales

.

$4,000,000 – $5,000,000

27 sales

.

$5,000,000 – $6,000,000

9 sales

.

$6,000,000 – $7,000,000

10 sales

.

$7,000,000 – $8,000,000

3 sales

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

1 sale

.

Above $10,000,000

5 sales

.

Total

423 sales

.

Undisclosed

22 sales

.

MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2007 TO 31 DECEMBER 2007

.

0 – $1,000,000

30 sales

.

$1,000,000 – $2,000,000

144

.

$2,000,000 – $3,000,000

115 sales

.

$3,000,000 – $4,000,000

53 sales

.

$4,000,000 – $5,000,000

39 sales

.

$5,000,000 – $6,000,000

13 sales

.

$6,000,000 – $7,000,000

10 sales

.

$7,000,000 – $8,000,000

9 sales

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

2 sales

.

Above $10,000,000

10 sales

.

Total

426 sales

.

Undisclosed

30 sales

.

MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2008 TO 31 DECEMBER 2008

.

0 – $1,000,000

26 sales

.

$1,000,000 – $2,000,000

110 sales

.

$2,000,000 – $3,000,000

78 sales

.

$3,000,000 – $4,000,000

37 sales

.

$4,000,000 – $5,000,000

27 sales

.

$5,000,000 – $6,000,000

14 sales

.

$6,000,000 – $7,000,000

2 sales

.

$7,000,000 – $8,000,000

5 sales

.

$8,000,000 – $9,000,000

3 sales

.

$9,000,000 – $10,000,000

3 sales

.

Above $10,000,000

3 sales

.

Total

308 sales

.

Undisclosed

52 sales

.

MOSMAN HOUSES/SEMIS SOLD – 1 JANUARY 2009 TO 19 OCTOBER 2009

.

0 – $1,000,000

19 sales

.

$1,000,000 – $2,000,000

77 sales

.

$2,000,000 – $3,000,000

38 sales

.

$3,000,000 – $4,000,000

20 sales

.

$4,000,000 – $5,000,000

9 sales

.

$5,000,000 – $6,000,000

2 sales

.

$6,000,000 – $7,000,000

1 sale

.

$7,000,000 – $8,000,000

1 sale

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

0 sales

.

Above $10,000

2 sales

.

Total

170 sales

.

Undisclosed

73 sales

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2009 is still a work in progress – however it should be noted that the volume of sales remains on the conservative side. We would be lying (not our style) to suggest that the Mosman market is also in boom with houses.

UPDATE

– last week we reported 2009 Mosman house/semi sales were at 243 sales with a value of $483,925,627. We can advise that this week, sales increased to 258 with a value of $512,781,127 (still $321,596,485 in deficit from last year’s total house/semi sales). The 73 undisclosed sales (thus far) may reveal a few secrets.

Which leads me back to capacity – where it is abundantly clear that the cost of living is on the rise and it would come as little surprise to see the inflation genie touch five per cent again.

The capacity to understand as against the capacity to compete beyond ones means is clearly evidenced by sales volume in Mosman – arguably the strongest property municipality market in Australia.

In summation – I draw your attention to this recent commentary by Alan Jones at radio 2GB.
“… a note that was sent to me which explains to me that six leading members of the Government from Mr. Rudd down, the top six have a collective work experience of 181 years, but only 13 in the private sector.

If you take out those 13 years the number that were spent as trade union lawyers that total 11, of the 181 years only two years were spent in the private sector.

So the people, who will rack up a net Federal debt of a minimum of $188 billion, the highest in our history, have virtually no experience in business.

So out of the 181 years:

- No years spent running their own business – no years spent starting their own business – no years spent as a director of a family business or company – no years as a director of a public company – no years in a senior position in a public company – no years in a senior company in a private company – no years working in corporate finance – no years in corporate or business restructuring – no years in or with a bank – no years of experience in capital markets – no years in a stock – broking firm – no years in negotiating debt facilities with banks – no years running a small business – no years at the World Bank or IMF or OECD – no years in Treasury or Finance.”

Not sure if the Opposition could improve much on these statistics either.

The Emperor promised at the last election campaign, that he would personally deliver one million computers to all year 9 to 12 students within Australia. Currently, just 150,000 computers have been delivered – must be another capacity problem with too much |Ctrl – Alt – Delete|. Maybe he should have focussed on the school band – if bulls@&% was music, you would be a brass band. Alas, I guess The Emperor is too busy taking over our health system – oops! that also appears to be on |Ctrl – Alt – Delete| too.

Cheers and best of luck at the Melbourne Cup – although the odds are stronger on another RBA rate increase. Plenty of capacity growth there – although if the RBA has rates at emergency levels, when does it then become a capacity emergency for borrowers? That would be found on the perceived green (and greener) grass of home. A home is not exactly sweet as it could be gone tomorrow for some. That too, is known in modern media as |Ctrl – Alt – Delete |.

In times of “green shoots” for new housing opportunities, does fortune favour the brave? After all, it was a first, when elected governments started teasing first home buyers with cash hand – outs.

^__^

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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30.10.09Robert Simeon1 Comment »

So let’s clarify a few points from an insider’s perspective. Property data is in all probability, ages away from being conclusive (after the result) and why, today does it still remains a dog’s breakfast?

Collectively none of these data collection institutions get it – they spread it and sell misinformation that is simply incomplete and many months away from accuracy.

The dilemma is quite simple. The property aggregators sell the information gathered from the agent, then continue to charge agencies to access its data … which is actually, the intellectual property of the agent. Until they get it right there is a very strong argument as to why agents should cease providing such data.

There are no better examples of such anomalies, when this week, the Australian Bureau of Statistics (ABS) announced that house prices fell by minus 2.2 per cent in the March quarter 2009. Australian Property Monitors (Domain Property Data) reported that its research identified that house prices increased by 0.1 per cent in the March quarter 2009. Australian Property Monitors works from exchanged property information and it is no secret that in the current market condition, many vendors instruct agents that the sale price is confidential and not for publication.

Therefore, it can take months (depending on settlement terms) to collect an exacting position which I will identify with the data I have collected. For the record, RP Data – Rismark reported that house prices were up 0.1 per cent in the March quarter 2009. I remain unaware that we supply any data to RP Data – Rismark. I would also add that RWM receives no payment for supplying any property data.

Mosman House Sales – 1 January 2007 to 30 April 2007

• Total sales – 139
• Total value – $350,165,720
• Median price – $2,200,000
• Average price – $2,632,824
• Highest price – $10,200,000

Mosman House Sales – 1 January 2008 to 30 April 2008

• Total sales – 119
• Total value – $309,519,612
• Median price – $2,700,000
• Average price – $2,919,000
• Highest price – $8,500,000

Mosman House Sales – 1 January 2009 to 30 April 2009

• Total sales – 62
• Total value – $86,621,000
• Median price – $1,525,000
• Average price – $2,221,051
• Highest Price – $8,500,000

Source: Australian Property Monitors (Domain Property Data) owned by Fairfax Media

I would suggest that property voyeurs are much more interested in niche markets , for example, Mosman, as against “stew” markets where all the data ingredients are fed into the one murky pot.

As you would have noticed the Mosman House Sales – 1 January 2009 to 30 April 2009 look a tad sick when compared to 2008 and 2007. So when I add our confidential house sales to the data the Total Sales move up from 62 to 71, Total Value from $86,621,000 up to $126,026.000. For the record, RWM has sold the greatest volume in terms of number of sales and total value over this period. The Highest Price also changes where the first number starts with a one (in excess of $10,000,000). This additional $39,405,000 in house sales makes a noticeable change to the current figures. It’s just that now you are the first to know and the aggregators are left shaking their respective heads. This is further complicated by the fact that the vast majority of sales data provided today leaves out the sale price.

I had trouble containing my excitement this week when an old favourite, Bobby Dazzler Carr, made an unexpected appearance, spruiking further debate about the condition of his once beloved Fort Crumble. Obviously, his work time sheets must now be down after he moved from Fort Crumble over to the Millionaires Factory.

The audacity of the argument that the Dazzler was the architect (or should that be builder) whilst presiding over the State of Decay. Whilst stopping short of revealing just exactly where all those “rivers of gold”, disappeared to, on the back of the financial floods from GST, stamp duty and poker machines taxes proved to be of little consequence. It was the system, not, the government the Dazzler declared (to those that listened – not many I think).

Of course it was , how silly of us to assume anything else as Fort Crumble now stumbles down an estimated $2 billion budget deficit by June 30. Just as interesting, south of the border, Victoria’s Fort Fabulous is in surplus and offering tax cuts because Jeff Kennett did what our very own Dazzler couldn’t deliver, while Kennett financially and politically, renovated his Fortress.

Tensions between Ruddy Fantastic and the latest landlord over at Fort Crumble are not that good to say the least. Ruddy Fantastic is presently conducting a three day jobs summit in Western Sydney, and no members from Fort Crumble were asked to attend – another clue?

As quick as a flash, Fort Crumble jumped the land tax rate for property valued above $2.250 million from 1.6 per cent to 2 per cent. The irony is that these properties are already (after tax) in negative rental return, so the landlords then increase their negative gearing tax deductions, which Ruddy Fantastic then picks up.

Will negative gearing be abolished in next week’s Fudge-it?

One should also not forget, that Fort Crumble is reportedly crunching the numbers to introduce its latest annual land tax grab which apparently applies to every property owner within the State of Decay. If true, this would be political suicide – but then again, when you have a $2 billion budget deficit Fort Crumble is now in critical decision or, should that be condition? Ruddy Fantastic would be thankful he resides north of Fort Crumble’s moat.

Next week’s Federal “Fudge It “ will be riveting, more particularly if the budget deficit blows in (or should that read out) around $70 billion as quite a few are predicting.

With elected politicians in overdrive on their Twitter accounts all will be revealed on next week’s Tweet’s – if you are not on Twitter, you don’t know what you are missing out on. Have a look http://twitter.com/ Compelling viewing indeed – love Twitter.

We are very happy to announce that each week we will showcase one of Tim Mooney’s aerial masterpieces in Virtual Realty News. Tim has been a subscriber for many years. After prolonged negotiations – we now can bring you these amazing shots exclusively. Tim has actually spent more time in the air than Superman – if you click on this week’s aerial photograph you will be taken to Tim’s website.

Cheers and Tweet’s ^__^

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

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8.05.09Robert Simeon7 Comments »

Without doubt the Global Financial Recession (GFR) will re-define outlooks and perceptions and see a vast array of business models challenged as we enter the brave new world. Testing times, but also exciting times which can be lost in a ground swell of confusion. However, despite all the doom and gloom, online technologies continue to add the zoom to our markets.

Such revelations have not been popular with some real estate agencies who will now have to invest (their cash) in costly online upgrades and blogs (we believe we were the first ) to allow subscribers to voice their opinions.

Time heals all markets and this time around (with the benefit of hindsight) on an economies of scale basis, the future looks very bright indeed. One only needs to look at mobile phone technologies to see where we are headed. The race is on to provide consumers with interactive property alerts and I’m not talking SMS either – which failed the consumer test of functionality and appreciation for that matter. Hosting individual media website platforms will be the next initiative for our industry which is fast becoming much more interactive. In time, print expenditure will be reduced with vendors moving to hi-tech video broadcasting that is already much more affordable.

We certainly don’t speak for other businesses, that currently challenge the good, bad and ugly side of the GFR and I believe that the March quarter 2009 will be the worst on our constantly monitored business dashboard. There are signs that real estate markets are getting stronger due to the fact that available stock levels remain tight. Currently, all the buyer action is in the lower price ranges but this action will eventually move to the middle and eventually the top-end markets. Having said that, we believe the top-end properties will identify a capped reduction from fifteen (15) to twenty-five (25) per cent based on 2007 valuations. (It will be interesting to read subscribers’ thoughts on this week’s blog).

Australian Property Monitors (owned by Fairfax Media) revealed that in the March quarter 2009, the number of properties sold in Sydney at auction, fell dramatically. The average price for properties sold at auction in Sydney during the March quarter was $616,237. In the 2008 quarter, it was $786,682. Sales in 2009 were 1,742 compared to 2,230 in 2008.

All things considered, this is not a bad result given that the Westpac Bank – Melbourne Institute leading index of economic activity fell -5.1 per cent in February. A further decline from January which recorded -4.8 per cent, the weakest outcome since 1982. This index has been in negative mode since October 2008 and in all probability, a turnaround could be just months away.

To put this into greater perspective, figures compiled by Treasury identified that the average Australian lost $25,000 in wealth in the past year. Australian residential real estate fell just three (3) per cent in 2008 compared to the United States and United Kingdom where prices fell by as much as twenty (20) per cent. The reason why Australia fared so much better was again, a lack of supply.

Aside from escalating unemployment, a key performance indicator for global recovery, is a strong banking sector and it is well documented that our very own Australian banks are currently positioned as the strongest in the global economy – so why are they delaying our economic recovery?

An analysis by Fujitsu Consulting identified that our banks have increased profit margin on home loans over the past two years. Fujitsu Consulting identified that the major banks are now making at least $450.00 a year more on the average mortgage. Two years ago, which just happened to be the peak of the economic boom – the cash rate was 7.25 per cent. Today it is 3.00 per cent and last week’s Reserve Bank of Australia (RBA) cash rate reductions identified ANZ, Commonwealth and Westpac, cut mortgage rates by 0.1 per cent and the NAB refused to pass on any reduction.

Last week, I mentioned that banks still charge interest rates on credit cards at eighteen (18) to nineteen (19) per cent. This week, the RBA announced that outstanding balances on Australian credit cards presently sit at an all time Australian record of $45.4 billion (multiply that by 18.5 per cent).

Ruddy Fantastic and his government remain tight lipped on this statistic which is understandable given he no doubt read the article published this week by the Member for Higgins – Peter Costello on www.smh.com.au

How immoral, to hold wrong views.

“ I’ve been feeling sorry for Belinda Neal, you will recall, is the Labor MP who let fly at a waiter when asked to move tables at Iguana Joe’s a restaurant/night spot on the NSW Central Coast. “Don’t you know who I am?” she demanded.

Soon all of Australia knew who she was. Kevin Rudd stepped in, reprimanded her and ordered her to undergo anger management consulting.

I’ve never been to this sort of counselling, but I can imagine how it operates. A therapist gives you a tricky case and questions you on how to respond. The idea is to keep your anger under control.

Here’s a case study for Neal. You are flying on your private jet when the flight attendant brings you the wrong meal. Do you (a) eat it anyway; (b) point out you ordered something else and ask for an alternative; or (c) shout at the flight attendant and reduce her to tears?”

Our banks are reducing many to tears and I don’t hear Ruddy Fantastic shouting at them. Obviously they are not on his economic menu. As our headline states, businesses want answers not questions and you can bank on that.

Cheers ^_-^

See you on our blogs – our most popular this week.

1. http://www.rwm.com.au/2009/04/the-power-of-social-networking-on-the-internet/

2. http://www.rwm.com.au/2009/04/it%e2%80%99s-all-about-position-position-position-and-i%e2%80%99m-not-talking-real-estate/

3. http://www.rwm.com.au/2009/04/in-the-business-world-transactions-speak-louder-than-words/

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

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17.04.09Robert Simeon2 Comments »

Compared to what I read last Friday night when I opened my daily www.crikey.com.au electronic magazine, the new economic war is all about fighting growing global unemployment. Spare a thought.

“WASHINGTON: A record 32.2 million people – one in every 10 Americans — received food stamps at the latest count, the government said on Thursday, and a reflection of the recession now in its 16th month. Food stamps, the major U.S. anti-hunger program, help poor people buy groceries. The average benefit was $112.82 per person in January. The January figure marks the third time in five months that enrolment set a record.” Source:Reuters

Two editions ago, I wrote “Living in the past and struggling with the future”. Our current recession is definitely not a case of better late than never – more a case of elected politicians who have stymied our very own economies through gross mismanagement of resources, education, health, transport, employment etc.”

Last Saturday’s edition of “The Weekend Australian Financial Review” a brilliant article was filed by Damon Kitney and Annabel Hepworth titled “The man who must stop the gravy train”.
Sydney’s northern suburbs boast some of the best beaches in the world. But try venturing across the Spit Bridge on a clear Sydney day at any time of year and half your day will probably be gone before you arrive on the sand.

It’s the same at morning and evening peak hour, when the narrow four-lane bridge separating Mosman and the northern beaches regularly resembles a parking lot.

Yet when one building industry executive inquired last year of a current minister in the Rees Labor government about the chronic lack of infrastructure through the region all the way up to Palm Beach, the reply was simple: F—k ‘em, they get nothing up there, just f—k ‘em.” the minister reportedly said. These are the bad old days of NSW Labor.”

Enter Ruddy Fantastic’s Infrastructure Australia and not before time.

So the formula applied to NSW tax payers (Stamp Duty, Land Tax, Payroll Tax and GST allocation) doesn’t discriminate yet the allocation of infrastructure spending does? This simply explains why infrastructure in NSW is in a ‘state’ of chaos.

I am a strong supporter of Ruddy Fantastic’s Infrastructure Australia and a fan of appointed chairman Rod Eddington. With state and territory governments now (collectively) in budget deficit, the power of infrastructure spending has been removed from the states and territories to the new (independent) governing power – Infrastructure Australia.

With the federal government also staring down at a budget deficit, it too will have to find a way to climb back into budget surplus. In my humble opinion, the Global Financial Crisis will prove that Australia no longer requires state and territory governments and a smart vehicle like Infrastructure Australia, spells the demise of middle government and not before time.

The corruption and waste of taxpayer revenues is well documented where more than a penny drops into the federal government’s coffers. Infrastructure Australia will in all probability be Rudd’s check (cheque) – mate for turning a budget deficit around. GST has failed miserably and taxes went up (as against the promise of coming down) – so time to bring infrastructure and taxation under the one umbrella. If it comes off (and only incompetence would stop this coming to fruition) – a brilliant political power play.

The federal government urgently needs to beef – up the Australian economy. Now the independently operated Infrastructure Australia will be adding the much needed gravy to the beef.

So let’s look at the upward movement of Mosman house prices from 2000 to 2008 a tale of position, power, glory and not necessarily a bad story. Today, you hold not fold – major banks don’t have non-performing loans on their respective radars as against previous banking mandates of past recessions. Simply put: markets recover and the Mosman property currency remains one of the strongest in Australia as I will identify in coming editions.

Here is a quick brain teaser. How many $10,000,000 plus Mosman house sales were recorded from 2000 to 2008? Have a think and I will get to the answer later on.

MOSMAN HOUSE SALES FROM 2000 – 2008 IN EXCESS OF $5,000,000

2000

• Total Sales – 4
• Total Value – $22,500,000
• Average Sale Price – $5,637,500
• Lowest Sale Price – $5,150,000
• Highest Sale Price – $5,900,000
  

  2001

• Total Sales – 12
• Total Value – $77,385,000
• Average Sale Price – $6,448,750
• Lowest Sale Price – $5,400,000
• Highest Sale Price – $15.500,000 (Mosman’s first $10,000,000+ sale)
  

  2002

• Total Sales – 9
• Total Value – $54,650,000
• Average Sale Price – $6,072,222
• Lowest Sale Price – $5,400,000
• Highest Sale Price – $9,400,000
  

  2003

• Total Sales – 19
• Total Value – $120,518,250
• Average Sale Price – $6,343,065
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $11,000,000
  

  2004

• Total Sales – 16
• Total Value – $112,151,000
• Average Sale Price – $7,009,437
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $11,000,000
  

  2005

• Total sales – 16
• Total Value – $137,720,000
• Average Sale Price – $8,607,500
• Lowest Sale Price – $5,100,000
• Highest Sale Price – $14,800,000
  

  2006

• Total Sales – 31
• Total Value – $231,285,000
• Average Sale Price – $7,460,806
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $15,000,000
  

  2007

• Total Sales – 44
• Total Value – $349,650,000
• Average Sales Price – $7,946,590
• Lowest Sale Price – $5,050,000
• Highest Sale Price – $22,500,000 (new Mosman record)
  

  2008 – Enter Global Financial Crisis

• Total Sales – 25
• Total Value – $170,050,000
• Average Sale Price – $6,802,000
• Lowest Sale Price – $5,000,000
• Highest Sale Price – $14,700,000

  Source: Australian Property Monitors

  There have actually been 30 recorded sales in excess of $10,000,000 from 2000 – 2008. The agents I spoke with guessed between 12 and 18 sales – I will reveal more data in next week’s edition which will identify the excellent opportunities on offer in this price demographic.

  This week, The Reserve Bank of Australia (RBA) cut interest rates by 0.25 per cent which now takes the cash rate (3.00 per cent) to the lowest level in forty nine years. An anti – climax because the major banks decided to either not pass on and/or minimise reductions to borrowers. With the benefit of hindsight the RBA would acknowledge that the latest rate reduction amounts to very little.

  Makes one wonder exactly who is running our country – the banks or the federal government?

  Obviously the bank deposit guarantee and the ban on short selling financials means next to nothing to them. How would they react if they were lifted? The federal government came to the party and now the banks must dance to that tune – or else.

  Better still why are the major banks charging credit cards at 600 per cent over the present cash rate of 3.00 per cent? Credit card debt should be a government priority in a recession that forces the banks to tow the line with credit card interest rates. Such a move would assist struggling families – and identify that they (banks) are no longer a law unto themselves. Messrs Kevin Rudd, Wayne Swan and Lindsay Tanner, need to decisively act and Messrs Malcolm Turnbull and Joe Hockey need to keep them honest.

  Our blog awaits your thoughtful insights.

  Have a fantastic and safe Easter.

  Cheers with chocolate on top ^__^

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

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  9.04.09Robert Simeon3 Comments »

Our Foreign Investment Review Board (FIRB) appears to be much busier of late with early indications pointing to the Mosman house market as now in active engagement. What a difference a week can make and we are certainly not talking apparitions – rather anecdotal sales evidence. Expats have suddenly upgraded their position to buy recommendations and the 2008 house rules of engagement no longer appear to bear any resemblance.

On our blog last week, Patricia requested “Robert … An acknowledgement and analysis of the factors surrounding the high inventory of upper – end homes ($3,000,000+) that have been on the market for 6+ months (some almost a year) would be illuminating.” I love blogs as they get to the coal face of our property markets. Watch for more agencies offering this facility (highly unlikely).

In our first edition this year we highlighted the fact that (according to Australian Property Monitors) Mosman in 2008 transacted just 219 sales which is the lowest volume in decades. The hangover of the Global Financial Crisis (GFC). In 2007, Mosman, recorded 384 house transactions and in 2006 the volume was 440. Back to 2008 where the last six months was an absolute disaster evidenced by the following data.

January 2008 – 8 house sales

February 2008 – 24 house sales

March 2008 – 24 house sales

April 2008 – 25 house sales

May 2008 – 30 house sales

June 2008 – 20 house sales

The GFC decline

July 2008 – 17 house sales

August 2008 – 22 house sales

September 2008 – 13 house sales

October 2008 – 14 house sales

November 2008 – 12 house sales

December 2008 – 9 house sales

Many owners who might otherwise be selling, have to decided to hold their market position. After the Stock Market crash of 1987 where the economy came to a complete halt many forget that our property markets were in full boom just six months later in June 1988.

The buyers are calling for blood and vendors are blowing raspberries!

When I look at www.domain.com.au (the number one Mosman property portal) there are 147 houses listed – then when I remove co-agents and apartments that sneak in, it actually comes to 127. The greatest myth in Mosman is that half the market is for sale. This would equate to 2,450 houses which is a complete nonsense. Currently just 2.5 to 3 per cent are on the market. A far cry from our previous house volume trades of 6 to 8 per cent which we put down to the raspberry factor.

Back to Patricia and our blog “Hello again … Another disquieting aspect of the current Mosman market is the high volume of single –family homes available for lease for $1,000+ /wk.

In a normal market, www.domain.com.au ordinarily lists 40 – 45 Mosman houses for lease. Currently there are over 90 available with the majority over $1,000/wk. MANY of these have been available for several months. It appears that the corporate leasing markets have all but disappeared.
Thanks for any thoughts on this leasing segment.”

The leasing market for houses is actually on par with normal market demand and when one removes the double-dipping, Mosman has actually just 66 houses for lease. Although Domain lists this week’s volume as being 77 houses. It needs to be noted that more than a few properties are multi listed. The top-end of the market is somewhat weak – a result of the GFC. It should be noted that a few vendors who have sold have gone into rental properties.

Back to bottoms – up! When you look at this week’s sales activity (remember where you read it first), RWM sold two properties for $3.025 million and $3.500 million, a home in Waitovu Street was sold for $3.800 million, Prince Albert Street $6.000 million, Hopetoun Avenue $7.000 million and the big double digit Clifton Garden’s sale. RWM posted the highest recorded sale for 2008 with the sale of a Raglan Street waterfront for $14.700 million and last week’s sale is not far behind it. Congratulations to Richard Simeon who negotiated both these sales. All the sales recorded over the last week were Internet based advertising campaigns. I am of the opinion that our Mosman property market has now bottomed (given the current anecdotal sales evidence) when compared to the 2008 sales volumes.

I will address the stimulus package next week. What I find interesting is that Kevin Rudd is allocating taxpayer funds that our hopeless and useless State Governments were supposed to expend, based on tax receipts. Much like Mum and Dad bailing out a sibling on a margin call. Kevin Rudd is attempting to buy another term in government at taxpayer expense. Double dipping in taxation is simply not acceptable. State wastage is of greater concern. On the 7.30 Report this week host Kerry O’Brien asked Prime Minister Kevin Rudd if the NSW government would struggle to assemble a Lego set, let alone an infrastructure package. Rudd did not answer the question (for very obvious reasons).

State governments complained when Australia was in economic growth that they needed greater GST receipts and let’s be honest we are in mild recession. Just that it takes eight months to be told that we are in recession. The GST receipts will be down by forty per cent so Fort Crumble (NSW Government) is now bankrupt.

Bottoms – up and cheers to that and blog away ^__^

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6.02.09Robert Simeon10 Comments »

Already media outlet www.crikey.com.au is referring to newspaper reporting as “recession p-rn” (add an o in the missing space) as it is everywhere. It appears that every “recession p-rn” article appearing on Fairfax Media, News Ltd papers and websites, has resulted in prospective sellers cancelling their 2009 print marketing campaigns and opting for online marketing (the cheaper alternative).

Fairfax Media and News Ltd real estate print revenues will be smashed in 2009 when these (previously) “rivers of gold” will become dry creek beds. Smarter print initiatives need to evolve which, with respect, should have already been released for the 2009 real estate markets. This simply explains why vendors are presently reluctant to engage in costly campaigns – preferring to opt for the high tech online agencies. Our point of difference in this market is our online investment in technology.

Here are the exclusive facts based on sales evidence provided by Australian Property Monitors. The Mosman house market consisting of 4,900 houses would, in strong markets, trade at ten per cent of volume. 2008 was the worst ever recorded year in terms of Mosman house sales where just 219 sales were recorded as compared to 384 in 2007.

Mosman House Sales In 2008

Total sales – 219

Total Value Sold – $580,558,112.00

Private Treaty – 156

Auction – 63

Median Price – $2,376,000

Average Price – $2,870,373

Mosman House Sales in 2007

Total sales – 384

Total Value Sold – $1,153,329,720

Private Treaty – 270

Auction – 114

Median Price – $2,360,000

Average Price – $3,003,462

Mosman, for quite some time, has identified itself as a difficult auction market as anecdotal sales evidence proves.

If you look at the monthly Mosman house sales evidence, the story unfolds in 2008.

January 2008 – 8 home sales

February 2008 – 24 house sales

March 2008 – 24 house sales

April 2008 – 25 house sales

May 2008 – 30 house sales

June 2008 – 20 house sales

July 2008 – 17 house sales

August 2008 – 22 house sales

September 2008 – 13 house sales

October 2008 – 14 house sales

November 2008 – 12 house sales

December 2008 – 9 House sales

These figures will increase somewhat however it is clear that sales volume for Mosman houses in 2009 is obviously well down on previous years. The sales volume decrease in recorded Mosman house sales is 43 per cent down from 2007 to 2008 and 55 per cent down from recorded sales in 2006 compared to 2008. The percentage decreases over the same periods for average and median prices are nowhere as severe. What is blatantly obvious is the fact that Mosman is very much a private treaty suburb and not a public auction suburb which was further evidenced late last year when some clearance rates fell below ten per cent.

Again we are not valuing any mortgagee in possession properties for banking institutions so the ongoing rumours that half the suburb is on the market, is clearly incorrect. Yes – values are down by approximately ten to fifteen per cent however confidence levels are down by over 50 per cent which is an exact reflection of the market.

Another first in 2009 will in all probability see the tightest property volumes offered to the market place in years. What many fail to understand is that house volumes keep reducing not increasing and we know what that does to values. The tug – a – house battle in 2009 will be just as intriguing as probably every other thing that we will observe in the coming year.

We are now into our ninth year of Virtual Realty News and this year will be compelling. Welcome back and cheers! Next week we will look at how Mosman apartments performed. ^__^

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23.01.09Robert Simeon5 Comments »

What we have observed in recent times is that the Reserve Bank of Australia (RBA) does not hold all the aces and therefore, it is highly unlikely that banks will pass on the full amount of next month’s rate cut. Since last August the RBA has moved the cash rate up one per cent. The banks added an additional 0.55 per cent given that the cost of funds to banks was actually much higher than the RBA official cash rate (hence the 0.55 per cent market fine). Continue reading »

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22.08.08Robert SimeonNo Comments »

In real estate, when one refers to a hedge, it usually refers to a murraya, viburnum or wisteria which defines boundaries and more often than not is a striking signature to “home sweet home”. The capitulations of the share market have become an unnecessary evil to property markets in 2008 where the actions of some have led to a false economies mentality with some believing that top – end property markets will follow suit. It should be noted that this is not the first time such rumours have been cast at the top – end markets and it won’t be the last either. Continue reading »

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20.03.08Robert SimeonNo Comments »

While it may sound easy to accomplish, this task is of gargantuan proportions that will cause havoc with many families who will have no alternative but to sell-up. The dilemma is, that property prices in heavily mortgaged markets are in rapid decline. On the other side of the property spectrum, those residing in the wealthy socio – economic markets are still bathing in ongoing capital growth markets where interest rates have little to no effect. These markets remain robust as a direct result of strong business performances which resonate in our property market. Continue reading »

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22.02.08Robert SimeonNo Comments »

I think the two greatest ‘bloops and blunders’ in 2003 were from those who doubted the ability of the Wallabies, and those who predicted a property market collapse. I, like many others, backed the property market and had no faith in the Wallabies. Now I am backing both and my apologies go to all those brilliant Wallabies for their sensational performances last week!! It takes courage to admit mistakes and make amends for them, so it was great to see all those who were doubters, stand up to be corrected. Shame the same can’t be said for those who have been niggling all year at the property market. They have been consistently one hundred per cent incorrect!! Some started as early as the first week in January this year. To make a mistake is only human-with the property market, the mistakes were well and truly overdone.

Great to see the Productivity Commission is alive and well. For the first time they came out snarling with their dentures locking-in to the property market. The problem as I see it, is that they have identified the investment market as a great place to start. I guess they share the same view as the ‘Governor of Moolah’ in that they identify three factors that drive the investors to the property market. One being the attraction of capital gain, second the availability of attractive finance rates, and third, tax minimisation. How convenient that they failed to identify the big ‘CC’, otherwise know as Corporate Collapses, that constantly appear in the newspapers with gloomy forecasts marinated with non-profit warnings and earnings downgrades. Maybe the Productivity Committee might wish to rinse their dentures as they contemplate these figures, which are compiled by the Australian Bureau of Statistics and researched by Australian Property Monitors.

Mosman property prices twelve months to 31 October, 2003. Average price for a home $1,795,129, median price $1,420,000 and the median price change over the last twelve months sits at 0 per cent. Average price for a unit $$596,253, median price $451,000 and the median price change over the last twelve months sits at – 1 per cent.

Cremorne property prices twelve months to 31 October, 2003. Average price for a home $1,281,046, median price $1,052,500 and the median price change over the last twelve months sits at – 4 per cent. Average price for a unit $572,243, median price $487,500 and the median price change over the last twelve months sits at 1 per cent.

Neutral Bay property prices twelve months to 31 October, 2003. Average price for a home $1,051,013, median price $884,250 and the median price change over the last twelve months sits at – 2 per cent. Average price for a unit $705,960, median price $506,500 and the median price change over the last twelve months sits at 13 per cent.

Since the last edition we have had four apartment sales fall over due directly to unobtainable finance. All four were first home buyers with approved finance. Well the approvals were “approved” until the ‘Governor of Moolah’ upped the rates on Melbourne Cup Day. Now the banks are reassessing the borrowings/equity ratios. This week we sold four apartments with a fifty/fifty split between home owners and investors. Even more confusing are the attempts by agents to explain why the auction clearance rates dropped to 56.5 per cent last weekend, and 51.5 per cent if withdrawn properties are included. Not one agent commented that the new legislation now stops them from dummy-bidding so at the risk of attracting a fine, together with adverse publicity properties are now withdrawn. The reality is that the numbers of prospective purchasers attending open for inspections have halved. Then, take into consideration the current stance taken by the banks, which is the ‘RRR’, reality realty rate!! This equates to applications for 2003 which are now denied the “please re-apply next year” response, when we can work out what is happening. Merry Christmas, your re-establishment fee has been waived as your business is important to us.

Sydney’s residential vacancy rate dropped to 3.4 per cent in October, which is a further improvement on the September 3.7 per cent figure. These figures from The Real Estate Institute identified that the reduction was greatest in the areas within a 10km radius of the city. Well, I guess that also confirms why our Property Management team is so busy.

Whilst on teams, our great team, The Wallabies will be the first ever nation to win back-to-back World Cups this Saturday night. Spare a thought for our English friends. I guess the words “age does not weary them” no longer applies, maybe a name change from the Barmy Army to Dad’s Army. Memo to: Sean Fitzpatrick picked his ANZAC team and not one Australian player made it. Don’t give up your day job mate, baaaaaaaa byeeeeeee!! Cheers and clink ^__

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22.11.03Robert SimeonNo Comments »