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Another strange week where the policy makers in reality, would struggle to run a school fete. So step right up, it’s all about hoopla and hostilities. It started with the peculiar (rhymes with Julia) announcement that America was taking out marina space so that it can play battleships and soldiers in the Pacific. So it did not take long for announcements to take front and centre – Obama needs to confront Chinese rather than niggle from the sidelines.

Then surprise, surprise China issues economic warning over US ties in Asia where it became pretty obvious that cosying up to the US is fine, but our economic destiny lies with China. Indonesia was not that happy either with this announcement so as quick as a flash Hercules to the rescue as Gillard’s peace offering over US troop build up concerns four C – 130 Hercules worth an estimated $30,000,000 are donated to the Indonesian government as a softener. Australia will now have to replace them and it will cost a lot more than $30,000,000. Hey money’s no object!

BUY PRINT

Then we had to endure a messy mining tax deal sealed in the early hours when it became most apparent that the mining tax outcomes: everyone’s a loser. With many left shaking their heads in total disbelief, Alan Kohler wrote in Business Spectator – mourning Gillard’s mining disaster. “Australia’s effort to levy extra taxes on mining companies has been an unmitigated debacle, capped by the passage early this morning of the Minerals Resource Rent Tax with a further last – minute compromise. It is one of the great lose – lose outcomes. We can only hope the Senate knocks it back.”

Which then became personal NSW’s $900 million mine shaft – Julia Gillard punishes for Barry O’Farrell’s carbon tax offsets. So NSW now appears to be the only state set to be punished after Barry O’Farrell raised royalties by $900 million over three years to offset the cost of the carbon tax. The “world’s greatest treasurer “, Wayne Swan, wrote to Mike Baird warning that he will also be excluded from future infrastructure funding if he does not back down.

Little wonder consumer confidence is down and this resonates through the property markets.

No doubt the Reserve Bank of Australia (RBA) is monitoring this closely and my school of thought is that the cash rate will be further reduced by -0.25 per cent when it meets next month, with another drop in February 2012. This weekend will be the greatest Litmus Test with Melbourne and Sydney ready for spring’s only super Saturday. During the global financial crisis (GFC) Melbourne and Sydney still managed to present three or four super Saturday’s so it will be interesting to monitor the 1,000 auctions in Melbourne and 650 in Sydney this coming weekend. That four letter word SOLD (at best) may be heard 825 times.

Housing recovery to begin in first quarter of 2012, but headlines won’t tell us until later: Christopher Joye given first – home buyers to drive 2012 housing recovery: BIS Shrapnel’s Angie Zigomanis.

Why house prices should recover in 2012: Craig James which is a sound argument that I have been presenting all year. “The housing market is constantly in a tug – o – war between two factors – demand and supply. And really it doesn’t get simpler than that. If there is a limited number of properties for sale and plenty of keen, cashed – up buyers then prices are almost certainly going to be bid up. Similarly if there is an abundance of property on the market and buyers are cautious – preferring to take time to find the ‘right’ home – then prices are more likely to ease.”

We publish the Mosman housing barometer each week so, bearing in mind that Mosman has approximately 4,900 houses ,it is abundantly clear that prices are about to go up given that just 2.7 per cent of available Mosman houses are on the market today.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market last week – 136
• Number of houses on the market this week – 134
• Number of apartments on the market last week – 118
• Number of apartments on the market this week – 118

CREMORNE – 2090

• Number of houses on the market last week – 16
• Number of houses on the market this week – 15
• Number of apartments on the market last week – 34
• Number of apartments on the market this week – 31

NEUTRAL BAY – 2089

• Number of houses on the market last week – 15
• Number of houses on the market this week – 15
• Number of apartments on the market last week – 101
• Number of apartments on the market this week – 100

For this week’s sales in 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

For this week’s open for inspections – Click Here

I did chuckle this week when I read Europe’s $287bn carbon ‘waste’: UBS report “Swiss banking giant UBS says European Union’s emissions trading scheme has cost the continent’s consumers $287 billion for “almost zero impact” on cutting carbon emissions, and has warned that the EU’s carbon pricing is on the verge of a crash next year.” Shock horror – Labor dismisses UBS emissions report.

So our Parliament in shock as Speaker resigns which did not come as a great surprise given Speaker deal boosts Labor’s position but tarnishes PM.

The problem for the Gillard government is that it can’t count – Govt’s budget surplus hope over: Deloitte. The reality being “in his latest Budget Monitor, Deloitte Access Economics director Chris Richardson said while that outcome would be politically “horrendous”, a surplus next year was a line drawn in the sand drawn by politicians not economists.” So it will be a case of no Labor surplus delivered since 1989/90 again.

Rest assured, Wayne Swan is the “world’s greatest Treasurer”. I will leave you with this:

If Australia is the lucky country, how come Spain, Italy and Greece are getting a new Prime Minister?

Cheers ^__^

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25.11.11Robert Simeon7 Comments »

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What we are seeing today is that a statement such as this,  generally refers to the cost of living which shows no signs of abating anytime soon. Solid economic growth still likely, index shows which is somewhat contradictory, because while  Australia can expect a solid growth rate in the first half of 2011,the annualised Westpac – Melbourne Institute growth rate is  already being revised down. With the leading index coming in at 4.6 per cent in September and remaining above the long term trend of 3.1 per cent, it should also be noted that it is well down from the 10.3 per cent index recorded in March this year.

Julia Gillard’s  Fort Fumble urgently needs an economic architect given Canberra’s delusion: the budget is the economy which now has our elected federal Government at scary cross roads – OECD takes aim at Labor policies. “Australia’s proposed mining tax is too low; the goods and services tax should be higher and extended to food, and the approach to the national broadband network conflicts with international studies.”  In a hung parliament, the words ‘looking – up’ should be  removed from political rhetoric  along with the hopeless policies that shadow the Gillard/Swan shaky leadership foundations. The problematic elephant (aside from the NBN) that constantly circles the ALP ring  of confidence is the time to clear the decks of the Rudd mistakes. This  is not likely anytime soon, as the polls are recording a revolt of disappointment which is hardly a policy affirmation for economic reforms. More voter angst!

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A stunning revelation when RBA expected higher rate rises by banks based on strengthening economic activity and rising inflation which makes for interesting times and it is more than likely, that the annualised Westpac – Melbourne Institute growth rate will continue its decline. Nobody would have been surprised to read that banks’ fattened margins exposed when figures released by the Prudential Regulation Authority revealed that the banks’ average cost of funding  loans, escalated by less than the RBA cash rate in the year to June. The figures revealed that the Reserve cash rate climbed 1.36 percentage points between June quarters 2009 and 2010. The average rate by the big banks to secure funding, climbed 0.88 points. Given the banks are well ahead of the official RBA cash rate it is highly unlikely that the RBA will raise the cash rate at its next meeting  in December (the next scheduled meeting is not until February 2011). Just as interesting Reserve Bank data unfairly abused in rates debate and a strange sequence of events as banks slower to lift deposit than interest rates which would not surprise anyone.

A great read Re – regulating the banks in public view by Dr. John Hewson “While legislation to give/increase the powers of the ACCC  in relation to “price signalling” etc and bans on mortgage exit fees etc are likely to be helpful, they are, in reality, unlikely to make much substantive or sustainable difference. Look at the way other “oligopolists” such as Woolworths and Coles consistently snub their noses at the ACCC, as do the oil companies. Of course, substantial penalties and making “cartel behaviour” a criminal offence, with the risk of jail for the senior executives involved, as in some countries in the airline industry, may give such processes real teeth, but none of our political leaders have yet been prepared to go that far.”  I always enjoy reading the blog comments “Margaret Thatcher’s often repeated line, “there is no such thing as a society. Just individuals and families.” Treasurer Wayne Swan is due to release Fort Fumble’s response to the “Bank Debate” next month probably sometime between Christmas and New Year.

Probably, it will  coincide with Australia’s broadband release as Conroy defies pressure to release NBN report which (conveniently) just so happens to occur after Parliament has risen for the summer break. In a perfect Parliament, politicians who approve taxpayer funded policy initiatives that turn out to be costly “white elephants”, should immediately resign – as is generally the case in big business.  Rest easy as Prime Minister Julia Gillard vows to put fine tooth coomb through NBN on behalf of Fort Fumble, which is getting very interesting given bid to gag minister in Senate.

For example: NSW could have been $4.6b ahead if the state government (Fort Crumble) had borrowed to fund the building of all tollways built in the city. The NSW state election is due in March 2011 – Keneally welcomes Labor exodus which is actually more like a mass evacuation.  Unfortunately premier “Bambi” has resisted the lead of her fellow politicians.

Things are looking up: rents to rise as home building lags as economic forecaster BIS Shrapnel predicts renters (one third of our market) will have to get used to annual increases of between 5 to 7 per cent in Perth, Brisbane and Sydney and 3 to 5 per cent in Melbourne, Hobart and Adelaide over the next 24 to 36 months. Data from the Australian Bureau of Statistics (ABS) identifies that building approvals fell to a 15 month low in September. Throw in Melbourne, Sydney and Brisbane which are in the top 10 most expensive markets in the world and you can draw two conclusions. Tax receipts from small businesses to Fort Fumble will continue to decline and the budget deficit will continue to grow as Sydney No. 2 in prime rents.

Yes, the cost of living is certainly looking up!

“There is no such thing as a society. Just individuals and families – Margaret Thatcher”

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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19.11.10Robert Simeon13 Comments »

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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.

Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”

Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.

www.timmooneyphotography.com

Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”

“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.

Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

• “The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”

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Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.

RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.

The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).

Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)

Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.

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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4.12.09Robert Simeon1 Comment »

Yes – Fort Crumble (NSW government) is basically lost and now trying to turn back time. Today, it is stone motherless broke and with no idea how to turn the economy around, can conveniently lay the blame on the global financial crisis. The 2008/09 budget announcement re-winds the clock to 1996 (when NSW was last in deficit). With an estimated budget deficit of $1.3 billion for 2008/09 and net debt to rise to $12.9 billion by June 2010, it’s hard to believe that Fort Crumble can return a budget surplus again. (It could not manage NSW in economic growth – with record tax/GST receipts).

Last Sunday, editor of The Sunday Telegraph Neil Breen wrote “Labor bungling a total turn-off” where he too turned back time. Neil Breen wrote “On Tuesday, Treasurer Eric Roozendaal will deliver the 15th budget since Labor was returned to government in NSW at the 1995 election. They switched off. Long ago.”

What an amazing capture by Tim Mooney – my favourite photo so far and one that illustrates just what makes Mosman so special. A natural suburb with a striking seascape where nature is preserved over housing development – be the judge? Since Tim joined our online platform, Virtual Realty News, many subscribers have contacted him to purchase his photos for their enjoyment.

Website: www.timmooneyphotography.com

Email: info@timmooneyphotography.com

Back to Neil Breen, “You need only read the following excerpt to understand why. It’s from then Treasurer Michael Egan’s first budget speech 14 years ago.

Labor was back in power and was feisty.

“For too long, we have put up with long hospital waiting lists, an understaffed police service, inadequate child protection and lack of accommodation for the disabled.”Mr Egan thundered.

“This budget delivers major improvements in hospitals, schools, police and crime prevention and community services.” Sound familiar?

Fourteen years on, everything is broken and now, our Premier ‘Nathan Please’ has listed Mosman police station for sale – indeed a backward step. If he can’t manage a surplus, how can he manage debt – by living in the past?

Thank goodness the Reserve Bank of Australia (RBA) remains on the money. This week it released board minutes from its last meeting – keeping its powder dry. As our economy manoeuvres its way through a global crisis there are obvious and escalating concerns which were highlighted when the Commonwealth Bank raised its standard variable rate last Friday (still below competitors.)

As the retiring member for Higgins announced this week, the greatest challenge facing our economy in years to come will be interest rates and yet, leading economists still maintain that borrowers should remain on variable rates. I don’t agree.

The problem with interest rates, is lack of competition as identified this week in www.crikey.com.au “Since the financial crisis first became apparent, the Government has explicitly put competition second to the need for stability within the Australian financial sector, waving through the merger of two of the five largest banks in Westpac and St George and acquiescing in the Commonwealth’s (CBA) rescue – purchase of Bankwest. The consolidation has come at a time when non- bank mortgage lenders and regional banks have either been driven from the market or badly bruised by the financial crisis, magnifying the damaging anti-competitive effects of the dominance of the Big Four.

Once competition is lost in Australian markets, it is awfully hard to regain. The ACCC has no divestiture power, so even when we are over the impacts of the financial crisis, we will not be able to regain even the limited degree of competition that applied until 2008. The only sensible course of action for most consumers is to buy bank shares, and get at least some benefit from the gouging, exploitation and bastardry that our banks can get away with.

But that’s no help to small businesses that can’t get loans, or face usurious interest rates when they do, or exporters, who face a punishingly high Australian dollar courtesy of our interest rates. Or, for that matter, to the workers who depend on them.”

Much like Michael Egan’s prediction in 1995 (it never came to fruition – only his pension evolved) BIS Shrapnel’s Residential Property Prospects report announced that house prices will rise by nearly 20 per cent over the next three years. “Green – shoots” of recovery based on the first home buyers grant and low interest rates. Green shoots can quickly become red shoots should banks up interest rates – which explains why the RBA continues to keep their powder dry.

One day later, the following graph appeared online criticising BIS Shrapnel for its forward thinking because such forecasts do not consider the x-factor and three years on so much can change. There again, fourteen years on and nothing has changed for the NSW government (other than a huge deficit). With fewer banks today, this scenario is no different from the control that Woolworths and Coles have over food and petrol prices.

Wayne Swan criticises the CBA for “selfish acts” and its rate increase of 0.10 per cent that “threatens recovery” of Australia’s economy (still the lowest). It is somehow puzzling that Ruddy Fantastic then shakes his sauce bottle to all and sundry in an effort to stimulate our economy. Not in agreement, Westpac and St George then increased fixed mortgage rates by 0.5 per cent, citing higher wholesale funding costs. Quite the opposite when the Reserve Bank of Australia (RBA) announced that our Big Four banks are currently enjoying healthier net interest margins (NIM) than before the global financial crisis. “The major banks ‘ NIM currently averages 2.27 per cent, which is a little above the level before the onset of the financial market turbulence in mid 2007.” Nation Building or Bank Gilding?

Back to the NSW budget – with a brilliant spin to kick start the housing sector. A short lived spin – where just one day later the Australian Bureau of Statistics (ABS) announced that (in the first quarter of 2009) home building fell to its lowest level in eight years. Economists then predicted that this sector would increase significantly in the second half of 2009 – this won’t happen as the banks are no longer lending to developers – fact. Re – affirmed by the latest ABS release which (alarmingly) identifies that our NSW government policy (rhetoric) is definitely not in sync with banking policy.

ABS data for the three months to March, identifies that the number of new housing starts has fallen to 5,400, down from 7,500 compared to March 2008. In the March quarter 2004, new starts were 11,000 (a fifty per cent decline). This is what then happens – the following data shows that Sydney clearance rates are now at 71 per cent and above 80 per cent, is considered a boom market.

Subscriber sales jumped this week to $892,096,219. Over the last 18 days, we have sold 16 properties to the value of $47,000,000. I might add that RWM is the only local agency reporting such great sales. As I wrote last week “better to be in the market than on it”, and that means growing your online market, not reducing it. The leaders in real estate today, are those who invested and developed successful online media platforms (years ago). Times have changed. We have and as our sales results prove, businesses need to move with the times. http://www.rwm.com.au/sales-list/sold_listing/

RIP – Paul Eastaway, a Mosman identity who will be greatly missed. A very funny and caring man who brought a smile to everyone’s dial – so many wonderful memories.

Cheers ^__^

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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19.06.09Robert Simeon3 Comments »

Global economic machinations are well documented and not looking pretty despite plenty of spin. Many first home buyers will in time, face default and it will get ugly. It always does and this time around it is no different.

On December 5 2001 the Reserve Bank of Australia (RBA) applied a -0.25 cash rate reduction to take the official cash rate to 4.25 per cent. 2001 was the year when the RBA reduced the cash rate from 5.75 per cent to 4.25 per cent, the lowest recorded rate in decades. This ‘rate euphoria’ quickly turned to a rate of family attack. The RBA then applied (from May 2002 to March 2008) twelve 0.25 cash rate increases and in March 2008, the cash rate climbed to 7.25 per cent. In 2007/2008 South-West Sydney experienced the highest rate of mortgage defaults when property prices fell by as much as 45 per cent.

As the data now comes in, the Australian Bureau of Statistics (ABS) revealed this week that those on ‘first’ – being the first home buyers, made up 26.5 per cent of home loans approved in January 2009. The highest proportion since records started in 1991 – we all know that that in 1991 Australia entered Paul Keating’s “recession we had to have”.

The Rudd Government’s first home buyer’s grant which expires in June this year, will have dire consequences – our very own version of America’s subprime. Western Sydney property sales are in boom mode based on a cash rate of 3.25 per cent. Recorded sales for the three months to February soared by a staggering twenty per cent. One should also not rule out projections that unemployment rates will all but double over the next twelve months.

Yesterday, Australia’s unemployment rate soared to 5.2 per cent (the highest rate since 2005) and NSW leads the country’s unemployment queue – a clue for those on first. Who knows where petrol prices will go, and electricity prices will jump a staggering 21.5 per cent from July. For Lower and Upper North Shore residents you are now under notice that if you plan to stay at Royal North Shore hospital, bring your own cake of soap as Fort Crumble (NSW government) no longer offer this luxury due to budget constraints.

Businesses keep telling Kevin Rudd and Wayne Swan that if Payroll Tax was abolished the unemployment rate would settle not escalate. The reality is that if State governments tax businesses for employing people – less people result in less tax. Not sure what part of this Kevin Rudd and Wayne Swan fail to understand.

With the benefit of hindsight it is well documented that when interest rates are low, inflation skyrockets and when this happens the RBA bump up cash rates to curb spending. Figures released this week by BIS Shrapnel revealed that the number of townhouses and apartments abandoned/deferred in Sydney from January to July 2008 was 4,072. From August 2008 to January 2009 the abandoned/deferred numbers jumped to 5,326 where this total number now sits at 9,400. Such data suggests the ‘calm before the storm’. In the meantime the Rudd government keeps telling property punters to step right up – everyone’s a winner. Kevin is overlooking the fact that Australia is presently in tools-down mode with building companies closing down – an industry all but insolvent.

Just as interesting is that the first home buyers grant stimulus which is part of Kevin Rudd’s first stimulus package is unlikely to be extended – alarm bells ringing? A stimulus package that stimulates bankruptcy when one bears in mind that the RBA left the cash rate at 3.25 per cent this month despite reducing it by 4.00 per cent since December 2008.

This week’s announcement by the World Bank that the global economy is likely to reduce for the first time since World War II, would be reason for concern. There again Australia’s greatest ever Treasurer, Wayne Swan, remains nothing more than a blank canvas and the Rudd/Swan government has done absolutely nothing to address businesses – they actually employ people! The stimulus package is in favour with employees, but out of favour with employers.

Economic stimulus – not exactly. With tools down, Kevin Rudd hit the unemployed nail on the head. Kevin Rudd. “But had we waited and done nothing … these unemployment figures would have been much worse.”

Kevin – you actually did nothing and these unemployment figures will only get worse. The problem with government and treasury is that nobody is actually at the coal face. So what do they do? Throw money around as if it was confetti .

An economic saga in continuation – so abolish Pay Roll tax and see what happens. After all, a smart “cash splash” would be exactly what the Doctor ordered. Maybe then Kevin Rudd would be on first!

Cheers ^__^

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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13.03.09Robert Simeon9 Comments »

There is just one truism when it comes to property reporting in the media ‘the weaker the argument the stronger the words’. Just take this week for example. On Monday in The Sydney Morning Herald we were told “Homes bust ‘within three years’”, with BIS Shrapnel warning of sharp rises in home loan rates which would then bring about the bursting of the bubble. All I can agree with is the “shrapnel” part. The guys from ‘BIS Projectiles’ went on to say that the variable rate of interest would be 10.1 per cent in 2006, and even went on to predict a recession similar to the one that Paul Keating delivered back in 1990-1991. Given that currently the economic fundamentals for the Australian economy remain, in a word, “robust”, one would seriously need to look at their high-risk investment exposure, namely those get-rich quick property seminars. What happened in the past was the dreaded domino theory as investors quickly liquidate their exposure to that particular market. This should not be construed as being the same for our housing market. The two bear no similarities what soever. Even back in those ‘cask wine’ days, Mosman had fewer than 20 mortgagee sales over the entire three years. Now there is a clue!!

The very next day in The Sydney Morning Herald, Mr Alan Kohler (a man I really rate with respect) wrote an article with the headline “Property buyers have just been sensible”. Mr Kohler said, “Apart from the fact that there is not yet a real estate bubble in Australia, as opposed to a sustainable once-off shift up in property values due to lower interest rates, there is another factor that will keep prices where they are for a few years yet.” Mr Kohler then went on to say, “Actually there are two property markets: owner-occupied and investment. Each is dancing to a different drum but neither has gone crazy,” which is exactly what we have been saying all along. They are completely different and bear not the slightest similarity. It is just a few who appear to have confused the two, which in turn led to the creation of their fixation on the imaginary property bubble. It should be clear to all that such a bubble is merely a mirage.

No doubt the ‘Governor of Moolah’ will be happy when he observes that houses and apartments are still selling for higher prices across Australia however, they are now taking longer to sell, according to the “Home Price Guide”. In Sydney, the median price increased by eighteen per cent over the last twelve months, up from $550,000 to $650,000. It was interesting to note that average yields fell to 2.9 per cent, which overall was a drop of 3.3 per cent. The apartment market over the same period jumped from $385,000 to $419,000 , and it was claimed that the apartments are averaging 47 days on the market, as compared to our apartments at RWM, which average ten days. The average price for a Mosman home for the twelve months to 31 August 2003 sits at $1,785,979, and for a unit it currently is $603,179.

It is very interesting to look at the overall dynamics of the property market and what is evolving. We had quite a few e-mails last week regarding our Internet sales which currently stand at $204,438,000. The number one salesperson in our office is not actually a person, it is our database! The July – September quarter for us was an all time record. The month of September was a new monthly record with $42,685,000 in property sales. The simple answer to what, how and why, is that we are mastering the art of the Internet. We have invested hundreds of thousands of dollars in research and development. We, as an agency, would be in the top one per cent in Australia, when it comes to understanding and successfully implementing the Internet with our client base and properties. We will definitely be here in 2006 to see if BIS Projectiles long -term predictions are correct. Sadly for some, many agents won’t be joining us. Love it or hate it, the Internet is fast taking over our industry!! Clink and cheers…^__^

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4.10.03Robert SimeonNo Comments »

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

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

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

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

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

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

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

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

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8.06.02Robert SimeonNo Comments »