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The alarm bells became louder when it was announced last week that Australian GDP had contracted by 1.2 per cent – which quickly brought about the re-introduction of that R word – Recession. Blogs and newspaper reporting ran amok, with some suggesting that the East Coast of Australia was already in recession. This week the Reserve Bank of Australia (RBA) correctly decided to leave the cash rate steady at 4.75 per cent. I don’t believe we will find ourselves in a technical recession although I do concur with the economic analogies that the Australian economy is correcting.  However, I believe (and I’m sure the majority would agree) that the weakest link in the Australian economy is the Gillard government.

Natural disasters dominated our GDP results although it is becoming quite evident that many Australians think the Gillard government is the economic equivalent to Cyclone Yasi.

CEO Pulse: Confidence in Australian economy declines – the latest Business Spectator Accenture CEO Pulse survey shows that optimism in the domestic economy, has dropped 22 per cent, with surveyed chief executives running  companies with an Australian turnover of $100 million or more,– reporting a decline in optimism to 51 per cent, compared to 73 per cent in the first quarter of 2011. The CEO’s estimation of the government’s performance in managing the economy continues its downward trend, with an overall rating of 3.3 out of 10 – the lowest average score since the CEO Pulse survey was established in early 2010.

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Wategos Beach, Byron Bay – Tim Mooney’s aerial photo library would have to the most extensive in Australia. If you want a special photo click on the link and ask Tim as he probably has it.

Carbon price would not cut jobs, says Federal Treasurer Wayne Swan. One should not forget that when the GST came in, we were assured that it would reduce taxes, only to see the opposite.  Julia Gillard feels the heat over carbon tax backlash as voters call for new election given the carbon price will continue to be increased not decreased. It is an ongoing saga especially when you read Robert Gottliebsen’s piece in Business Spectator A resource tax by another name – “Let’s strip away all the carbon tax political rhetoric. It is becoming clear that the looming carbon tax is simply a disguised resources tax on gas and coal exports. It’s the Ken Henry – Wayne Swan first mining tax all over again but without iron ore and copper.” Wayne Swan is desperate to get the budget back in the black (his ego demands it) and the carbon tax is his secret weapon – it has nothing to do with the environment it’s just another tax. Ziggy Switkowski entered the debate by declaring Refuse the carbon tax’s junk mail.Would we have a carbon tax if the budget was not hopelessly in deficit?  Of course not!

We’re still on track for a ‘big Australia’ by 2050 and it is refreshing to see where our new immigrants are coming from, given the focus on asylum seekers. When immigration heads north of 180,000, Australia’s population will be on track to reach 36 million by 2050. This is scary, given our infrastructure struggles to cope with 22 million. I did notice a missing link in the Migration Roller – Coaster graph is the “other” which contributes nearly one – third at 94,178? “Australia’s national infrastructure policy should be managed in the same way as monetary policy – by an independent body removed from politics” wrote Alan Kohler – Infrastructure too important to be left to politics.

I totally agree and I can see the advertisement – Wanted: A government that can read an economy!

Jonathan Chancellor’s Property Observer launched this week to rave reviews. In terms of subscribers, it has taken Virtual Realty News eleven years! Property Observer has all but eclipsed our subscriber numbers in the space of days. For all the property voyeurs who can’t get enough of Australian real estate reporting, subscription is a must and it’s  free!

House prices can’t go up indefinitely although it should be noted that house values spend a significantly greater time in the black than in the red – just that we read more when it ventures into the red! The ongoing debate is that Australian house prices are over- valued – however when this happens we see panic-selling, where supply well and truly exceeds demand.

To put this into perspective, Christopher Joye wrote this week in Property Observer – Aussie housing stock is not too expensive. “One of the reasons banks have been prepared to lend so much for so long is the fact that borrowers have historically been vigilant in paying off these loans. Today there are slightly more than 30,000 borrowers who are more than three months behind on their home loan repayments, juxtaposed against a total pool of roughly 4 million to 5 million borrowers. That is, Australia’s “mortgage default rate” is a paltry 0.7%, despite our internationally high lending rates. This is less than one – 10^th and one – quarter the equivalent US and UK default rates respectfully.”

Our local real estate markets are definitely not panicking and volume is the key performance indicator.

MOSMAN – 2088

• Number of houses on the market last week – 118
• Number of houses on the market this week – 107
• Number of apartments on the market last week – 96
• Number of apartments on the market this week – 97

CREMORNE – 2090

• Number of houses on the market last week – 17
• Number of houses on the market this week –  17
• Number of apartments on the market last week – 37
• Number of apartments on the market this week – 42

NEUTRAL BAY – 2089

• Number of houses on the market last week – 13
• Number of houses on the market this week – 11
• Number of apartments on the market last week – 66
• Number of apartments on the market this week – 63

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

Property above all things is my passion, so I found it very difficult to resist Jonathan Chancellor’s invitation to become an Observer, by regularly contributing articles to Property Observer.

Jonathan did express some concerns about my writing style (I believe he was politely referring to my political attacks). I referred him to this month’s Real Estate Institute of NSW Journal that ran the story “In blog we trust”, which was a critique of Virtual Realty News.

“The online revolution has changed the way real estate agencies do business. And you can be even more effective and successful by creating a specialised blog.” I did, however highlight “A mixture of local real estate news, statistics and astutely directed political comment. Virtual Realty News has generated not only a solid fan base, but has also brought the agency some very tangible benefits.”

Subscribe to Property Observer and read it for yourself next week. I’m still deliberating – should I go hard or adopt a ‘softly softly’ approach?

I will note your advice on our blog.

Cheers  ^__^

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10.06.11Robert Simeon10 Comments »

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The carbon tax debacle went toxic for Labor this week when Newspoll announced its fortnightly report card – record Labor low on carbon fury. In just two weeks, Julia Gillard’s personal support has gone from its highest since becoming Prime Minister in June last year, to her worst. The Party’s credibility is now in free fall. In an astonishing revelation, Julia Gillard announced “I will continue to press to price carbon and we will get this done from 1 July, 2012”- despite anecdotal evidence that most voters believe PM broke carbon tax promise. The present carbon tax model is doomed for failure although Julia Gillard told carbon tax debate will be easy to win once the public is informed.  This is too funny for words given that due diligence thus far, is zero.

High price of short – term tactics which begs the question, will this be a short term government when it is abundantly clear that an early election is the only way out when Australia is virtually ungovernable. “Julia Gillard has learnt this week that politicians who ignore the lessons of history find themselves with historically low popularity ratings. Instead of taking a leaf out of John Howard’s script on the GST, the Prime Minister has dug a hole for Labor by trying to fast track a carbon – cum – emissions trading scheme. It is yet another sign of failure of the Gillard and Rudd governments to put long – term strategic goals ahead of short – term political tactics.”

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Australia ducked the Global Financial Crisis (GFC) and it now it is faced with the Gillard Financial Crisis – Gillard is now Prime Minister in name only. Plans for a carbon tax appear to have shaken consumer confidence as carbon tax blamed for contributing to slump in consumer confidence. “Pessimists now outnumber optimists in their outlook on family finances over the next 12 months for the first time since March 2009, when Australia risked falling into recession. Westpac chief economist Bill Evans said the key factors behind the unexpectedly large fall in the index – down 2.4 per cent in March from a month earlier – seemed to be concerns over budget and tax issues, and petrol prices. While there is no specific evidence – we expect that the key negative for households … relates to the government’s commitment to price on carbon by July next year.” The Greens are killing Labor as the PM sees green and her MPs see red.

The carbon tax announcement is arguably the dumbest announcement ever made within the foundations of Australia’s political history. “Operation Abort” is already being announced – Windsor savages carbon tax strategy with the accusation of “putting the cart before the horse” because of “pressure from the Greens.” Ironic that Julia Gillard became Prime Minister with blood on her hands and months later she is haemorrhaging profusely with short – term policies that threaten the profitability of households – carbon tax is a dog ready to bite Labor.

Ziggy Switkowski wrote an interesting piece on Business Spectator Only carbon fools rush in despite industry recommending that Fort Fumble hold – off with the carbon tax until details have been formulated.  Combet: An early announcement was appropriate despite a carbon tax framework with no details to negotiate with industry. Despite business pressure for a delay, Deputy Prime Minister Wayne Swan rejects calls to delay carbon tax. This will get ugly and eventually end up with another meteoric back – flip where Caucus will take Gillard and Swan as the carcass. Keep watching the polls which will get worse for Fort Fumble especially when Kristina Keneally gets whipped at the election in two week’s time.

Property sales reach 10 – year low and the Gillard Financial Crisis is not helping matters. We note that Sydney rental market to tighten as lease is more in the new Australian dream. This does not help Australian construction contracted for the ninth consecutive month in February as the tools go down slow – down in construction activity . What we are witnessing now could be described as what the hell? Nation in regional retreat as consumers continue to tighten the belt as purses remain shut tight.

“In a grim picture revealing many families are doing it tough, about 700,000 taxpayers entered into special repayments with the Tax Office in 2009/10 – an increase of 32 per cent in four years” as Australians crippled by tax burden. The number of Australians failing to lodge a tax return has blown out to about 4 million and small businesses have racked up a crippling $9.4 billion in Tax Office debts. Households in retreat increase pressure on carbon tax with the inevitable outcome that rising bills cause consumer blues.

Every week we post on our website the weekly recorded sales activity for our demographic , so it came as little surprise when I read auction rates fudged by failed campaigns. Mosman in all probability (based on my observations) has the lowest auction clearance rate in Australia, based on results of the number of properties submitted. Yes, each week we see auction properties that are passed in and the results conveniently buried.  Some week’s/months later, when sold, they are recorded as auction sales. The last time we extrapolated the data, the auction clearance rate in Mosman was just under twenty (20) per cent. So yes, the current system is rorted. In fairness, we are really a private treaty business (maybe in 2009. we auctioned five or seven properties in total).

We intend to publish the Mosman sales results for the “above $5.000 million house market” for the past ten years, in next week’s edition.

As you will be aware, I have a bee in my bonnet over the carbon tax which every day is fast-tracking the Home Insulation Scheme. Our economy is struggling and Julia Gillard has her foot firmly on the accelerator of destruction. Alas, the Gillard Financial Crisis!

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

Cheers ^__^

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11.03.11Robert Simeon8 Comments »

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ABC Online’s chief political writer Annabel Crabb described it as the greatest oral challenge of our generation given The Emperor’s “greatest moral challenge” no longer exists, or does it? On the menu we were forced to consume Gillard’s pork pies hard to resist then we had the hidden truth behind the PM’s ‘impromptu’ speech. The 2010 federal election spending spree based on a rigour in funding promises doesn’t count for much given we have all heard the term ‘the cheque’s in the mail’ although this Sunday, the elected party will have to face the morning after … where Treasury will start costing those policies on the run, Sydney’s Parramatta to Epping rail line will come under much greater scrutiny and the inevitable financial quarantine until the next federal election.

The most frightening policy is, without a doubt, the $43 billion (43 thousand million dollars) national broadband network which stands to become the greatest white elephant in Australian political history and the biggest financial commitment for an Australian government. Interest payments for this scheme presently stand at $4.500 million per week which prompted Malcolm Turnbull to write on Business Spectator Why the NBN will fail which prompted one comment on the blog: Thank you Malcolm. I think blind Freddy could see that can you publish it in Braille as well? The leading question: is Stephen Conroy conning us on the NBN?

Classic Tim Mooney this shot was captured last Friday when the big Southerly bringing about the cancellation of the Manly Ferries

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Someone should tell Julia Gillard that the fastest growing network in Australia is wireless – tailor made for Blackberry, iPhone, iPad and laptops, none of which require cable. Latest data reveals Internet searches are the most popular online activity on mobile phones. Some 73 per cent of users conduct online searches by mobile phone now, compared with 30 per cent a year ago. This explains why we launched our mobile property website last week, a first in Mosman. (This is designed to be viewed through your mobile phone)

Gillard & Co have used the white technical elephant as the NBN ‘sandbags’ for marginal seats – we should all be very concerned about this roll- out, especially as the private sector wanted no financial involvement. In economic jargon, this equates to ‘no return on investment’.

The 2010 federal election has completely ignored housing policy initiatives, because they are too hard to fathom and here is why. Rents leap as race to find home intensifies “Forget population growth, we’re not even seeing the housing needed for existing people. There’s an extremely severe housing shortage unique to Sydney.”

Housing affordability nears record low the HIA – CBA Housing Affordability Index fell 9.1 per cent in the June quarter to be 32 per cent compared to the same period last year. HIA chief economist, Harley Dale, said ‘there has been a lack of commitment during the recent federal election campaign to address the substantial hurdles aspiring home owners face.” Then “key federal policy priorities need to include a program to reduce new housing costs such as inequitable taxes and charges, better planning approvals systems, and a dedicated federal housing and development ministry to coordinate policy across all sectors and levels of government,” Mr Dale said.

I don’t share the belief by some that housing bear warns again of bubble waiting to burst as investors who are claiming losses may leave the rental markets. According to Tax Office figures, the proportion of taxpayers who own rental property has risen from 6.5 per cent in 1989 to 13.5 per cent in 2009, two thirds of whom claim a loss on investments. The rental markets are problematic, which is why we sold our property management portfolio earlier this year, to focus on our core business which is, of course, selling properties.

Always a brilliant barometer for the Sydney top end property market is the prestige property market report by Dyson Austen Top 10 for the 2010 January – March quarter.  Our very own Steve Patrick posted the fourth biggest sale with 19 Morella Road Clifton Gardens. Seven sales were recorded in the Eastern Suburbs, two to Mosman and one to Manly – overall a positive result for the prestige property markets.

The comparative analysis from 2004 to 2010 is always fascinating where you will see that the top end is holding its own and we predict a conservative improvement in the quarters ahead. One should remember that when this end of the market starts registering anecdotal sales results, the rest of the market follows suit. We don’t foresee a boom market in the immediate future, but we do see renewed market confidence and sentiment.

Next week, we will publish the Dyson Austen Top 10 sales for the 2010 April – June quarter.

So off to the polls we go tomorrow to elect a federal government for the next three years and by all accounts, it will be close. My prediction is a narrow Tony Abbott victory simply because NSW is vehemently opposed to anything Labor – Why Labor is losing the west. NSW will only start to see rapid improvement with infrastructure when they have a Liberal prime minister and a Liberal premier which will happen in March 2011. The day Gillard stopped spinning: NSW indefensible where I’m sure she regrets her policy on the run announcement about the Parramatta to Epping rail spin which will never happen under the current regime.

Who would have thought that not since 1931, we could witness just the second incumbent government removed after just the one elected term?  Who would have thought we may witness history where two prime ministers were removed in the one term?

Maybe Australia is moving forward!  Voters in Queensland and NSW will determine the outcome.

Cheers ^__^

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

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20.08.10Robert Simeon8 Comments »

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

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

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

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

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

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

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

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

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

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

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

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

As Macquarie Economics Research explained:

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

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

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

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

Cheers ^__^

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

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9.07.10Robert Simeon5 Comments »

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

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

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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25.06.10Robert Simeon6 Comments »

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Property markets too have been in the spotlight this week.

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

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

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

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

Cheers ^__^

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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7.05.10Robert Simeon8 Comments »

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

Property Pulse Highlights

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

BUY PRINT

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

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

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

Source: RP Data

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

Source: RP Data

Source: RP Data

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

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

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

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

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

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

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

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

Something I been saying for years!

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

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

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

Cheers ^__^

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

This week’s Open for Inspections Click Here

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16.04.10Robert Simeon4 Comments »

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There is no doubting the volatility of home prices and this became more evident when the Reserve Bank of Australia (RBA) decided not to increase the official cash rate. The new money in our property markets is under serious threat. So too, are the financial institutions which can ill afford a reverse in property prices. These very markets were in growth mode during the global financial crisis when the established (old money) property markets went into actual decline. The RBA is now faced with a real estate conundrum as is the Australian Bureau of Statistics (ABS) with reporting accuracy.

Christopher Joye wrote in Business Spectator this week “ABS overstates house price growth” – “the ABS’s median price numbers are being artificially inflated by the fading of first timers, who are being replaced by up graders buying more expensive homes.” Which is exactly what happened in Mosman last year as the market awoke from the GFC (from June onwards) as did the majority of top-end property markets. Joye wrote “While the ABS results will no doubt trigger the inevitable media excitement, the hard empirical fact is that Australian homes have been recording consistent capital growth of about 2 – 3 per cent per quarter since the start of 2009. It is comforting to note, however, that Australian house price growth has not outpaced the growth in household disposable incomes since around 2002.”

The building in the bottom left hand corner is the clue where Sydney Ports are located – a magnificent heritage building on Sydney Harbour identifying our rich history

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Tim Mooney Photography

Understandably the media ran amok (trying to get those rivers of gold running again) with the ABS figures – Australian house price index rose 5.6 per cent in the December quarter and the September quarter was upwardly revised to 4.4 per cent. ABS figures in the year to December identified that the house price index rose 13.6 per cent. The only problem is, that ABS figures are not considered as accurate as the other data aggregators.

So let’s take a look at Australian Property Monitors – Domain Property Data (our preferred data aggregator given that they list the actual property addresses for all the properties contained within this report) revealed for Mosman house sales in 2009 – 2008 – 2007 a comparative analysis where you can be the judge.

MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2009 to 1 DECEMBER 2009

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• Total number offered – 334
• Total number of sales recorded – 303. (31 still unrecorded)
• Total Value Sold – $668,966,377
• Public Auction – 62 properties to a value of $94,857,000
• Private Treaty – 241 properties to a value of $574,109,377
• Median Price – $2,000,000
• Average Price – $2,397,728
• Highest Sale $13,200,000 (RWM)

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MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2008 to 31 DECEMBER 2008

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• Total number offered – 360
• Total number of sales recorded – 287
• Total Value Sold – $774,865,612
• Public Auction – 65 properties to a value of $126,645,250
• Private Treaty – 222 properties to a value of $648,220,362
• Median Price – $2,275,000
• Average Price – $2,738,041
• Highest Sale $14,700,000 (RWM)

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MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2007 to 31 DECEMBER 2007

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• Total number offered – 456
• Total number of sales recorded – 412
• Total Value Sold – $1,182,372,720
• Public Auction – 132 properties to a value of $292,042,000
• Private Treaty – 280 properties to a value of $890,330,720
• Median Price – $2,300,000
• Average Price – $2,869,836
• Highest Sale $22,500,000 (new record price)

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Next week Cremorne House and Semi sales

SUMMARY MOSMAN HOUSE PRICES FROM 2007 to 2009

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It is interesting to extrapolate data post GFC. In 2007 the number of houses offered to the marketplace was 456 and in 2008 the number offered, fell -21 per cent to 360. In 2009, we witnessed market consolidation when 334 houses were offered at a – 7 per cent decline. One must not forget that in 2008 and 2009, scuttlebutt had property voyeurs believing that more than half the houses in Mosman were available for sale (this would equate to approximately 2,500 homes as against the recorded 360 and 334 respectively). Thank goodness one Mosman agency has the technology and desire to set the record straight.

Sold properties in 2007 came in at 412 and dropped -30 per cent in 2008 to 287 then in latter 2009 we saw an interesting turnaround where sales increased to 303 – a +5.5 per cent increase. The same patterns can be observed in ‘total value sold’ statistics when the total in 2007 was $1,182,372,720. This fell -34.5 per cent in 2008 to record $774,865,612. In 2009 we started to see the recovery when total sales were $668,966,377 (this represents a -14 per cent decline). We expect these figures to move back into the black in 2010.

THE AUCTION v PRIVATE TREATY DEBATE IN MOSMAN

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This is amazing data and before we move further, I must advise that every suburb reports different rates of success. The Eastern Suburbs have very strong auction markets and Mosman is one of the worst performing auction markets in Sydney.

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Mosman – 2007

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• Total sales – 412
• Auction – 132 (32 per cent)
• Private Treaty – 280 (68 per cent)

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Mosman – 2008

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• Total sales – 287
• Auction – 65 (23 per cent)
• Private Treaty – 222 (77 per cent)

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Mosman – 2009

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• Total sales – 303
• Auction – 62 (20 per cent)
• Private Treaty – 241 (80 per cent)

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Makes you wonder why so many Mosman agents keep recommending auction? I know that regular blogger Patricia will find these statistics of great interest.

So where to in 2010 and what will happen to Mosman house prices? I asked Steve Patrick, one of the most respected agents in Mosman what would happen and here is his response. “After a twenty (20) per cent fall in our market from the highs of 2007 to the end of 2009 (actual registered sales on several properties substantiate this figure), I believe the market bounced back somewhat in the order of five (5) to ten (10) per cent.) The last few months of 2009 confirmed this trend where house prices have now stabilised.

There is renewed confidence in the local property markets from buyers, albeit with caution, where I see our market moving steadily over the next six months with small (but more importantly), steady upward growth. Supply and demand will be the key factor going forward as it always has been. Rarely in my past twenty plus years working in Mosman, have I seen an over -supply, even when the GFC was at its historic peak.”

So there you have it! The Mosman online real estate bible has spoken. This weekend marks our first 2010 experience of buyer reaction/response at our upcoming open houses.

We trust that the data contained within this edition of Virtual Realty News will greatly assist you with your market determination. Rest assured, you will read it first with only one Mosman Agency!

See you on our blog where the Mosman debate continues.

Cheers ^__^

For this week’s recorded Balmoral real estate, 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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5.02.10Robert Simeon14 Comments »

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Twelve months ago in our final edition of Virtual Realty News for 2008 I wrote – “The first six months of 2009 will be hard (not necessarily harder) and I believe the next six months will see a mild rebound leading to much stronger property markets!” As it turned out this prediction was one hundred per cent correct and in June 2009 we posted $63,000,000 in sales – the rest (just like that edition) is now history. Despite an avalanche of doomsday prophecies (and there were plenty) the missing link for the prophets was that they simply underestimated the power of the Internet and smart business models.

Every day, we spend an intoxicating amount of time in front of a computer – reading, writing and communicating. Just weeks prior to our final edition in 2008 I wrote – “I have said it before and I stand by my previous comments that in the recession of the early 1990’s there was no Internet and no electronic information highway that today, has played a dominant role in the recovery process.” Once informed, the decision making process is activated – the dominance of online during the global financial crisis is now a legacy that will continue to grow and dominate.

Some would suggest that it was a stimulus package but I would argue that those prophets would not know the difference between ‘Word’ and ‘Outlook’. Politicians make a habit of wording their outlook differently, based (more often) on spamming the minds of the electorate with nonsense.

The hive of activity as the Boxing Day – Sydney to Hobart race is fast approaching

www.timmooneyphotography.com

So what are our predictions for the Mosman property market in 2010? Don’t worry if you blink, as it won’t be moving that fast although we see strong signs of renewed confidence. Housing prices will increase but we see no need to panic because we see upward growth in property values – that is growth (not boom). The Australian Bureau of Statistics (ABS) announced this week that lending for the construction of new homes rose dramatically in October increasing by 5.7 per cent. New home loans have now officially increased in 13 of the last 14 months – population explosion?

Certainly this argument is greatly assisted by the sale of a Perth mansion this week for a new Australian record of $57.500 million dollars. RP Data wrote on its blog this week – “The improvement in equities markets and business conditions has prompted many top end buyers to venture back into the market. For a while there were many bargains to be had – premium housing markets took the biggest value dive of any sector around the country in 2008 and now seeing the biggest jump. Values in the top end are now once again at record levels, having risen 2.4 per cent higher than the previous peak recorded back in February 2008. On an annual basis many of these premium suburbs have recorded some of the largest falls in median house prices however, it is clear with confidence returning many areas are set to bounce back or already doing so.”

Politicians and banks will provide great fodder for Virtual Realty News in 2010.

It has already started with this week’s Westpac “banana debacle” when it stupidly sent customers an email justifying its recent interest rate hike. Its rationale was to compare Westpac as the business selling banana smoothies – too much egg nog I thought, so have a look.

Maybe this graph presents a more accurate positioning from the “Bananas in Pyjamas” who must think all their customers are in a slumber with no Internet access.

Fort Fumble – Federal Government

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Fascinated by spending other people’s money (tax payers) whilst consumed with the belief that Australia still requires its stimulus package, The Emperor (Kevin Rudd) is currently holidaying in northern Europe. His preferred mode of transport has been letting him down – given Air Force One has ongoing mechanical problems – much like our economy.

Co-pilot Wayne Swan needs to masticate more, because his ears keep popping. As was pointed out in Letters to the Editor, this week in The Daily Telegraph. “Treasurer Wayne Swan fools no one with his ongoing bleating about banks raising interest rates much more than the Reserve Bank. What’s he doing to restore the competitive pressures that have collapsed in the financial services sector under his brief watch? While the Government discriminates against smaller financial institutions in its guarantees for wholesale funding, his utterances are simply deceptive posturing.” The co-pilot did approve the acquisition of St George bank to Westpac so have a banana smoothie on the house.

The Mad Monk is waiting in the wings although that too, may be an aborted takeoff with plenty of Liberals in the hanger. Malcolm Turnbull will probably head back to merchant banking where approval ratings will improve considerably.

Fort Crumble – NSW Government

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Where does one start – the most incompetent governing body in Australia’s history – the ‘violent crumble’ of all governments?

Robert Gottliebsen recently wrote on Business Spectator “We’re scaring off housing investors. Governments, whether they be in Canberra or in the states, often pass legislation without ever understanding its consequences.” He is referring to our housing crisis and talking about property investor taxes. “This means that if you hold an average investment property in Sydney and this pushes you over the $376,000 land tax limit, it makes no sense to invest in another. The annual holding cost figures look roughly like this: land tax 1.6 per cent; rates/water 1.0 per cent; mortgage interest 7.00 per cent plus; and maintenance/agent 1.0 per cent. That’s represents total costs of 10.6 per cent of your investment.” Rents will go through the roof over the next twenty four months.

Thoroughly enjoyed reading an article this week in The Daily Telegraph – NSW leads economic rebound. “NSW is leading the national economic recovery with forecasts of a miraculous turnaround in growth figures in the coming year. The State’s Budget is also expected to return to surplus a year earlier than expected, with a $872 million surplus expected in 2010 – 2011.” Technically it was broke well before the global financial crisis although this did not restrict the excitement of newly elected Premier Kristina “doodle dandy” Keneally “who has absolutely no tertiary qualifications” from shrieking (with accent) that the NSW Budget was “back in the black”. Oh dear!

No doubt “doodle dandy” would have been suitably impressed to learn that Nathan “no strings attached” Rees, brilliantly negotiated the sale of our three Manly JetCats that cost NSW taxpayers $3 million – with the purchaser flogging them off shore for more millions. Nathan “no strings” out, and Kristina “doodle dandy” in – so much to look forward to next year.

It has been our absolute pleasure delivering Virtual Realty News to your inbox each week and we are now into our tenth year (never missed an edition). I remain very confident that in 2010 we will be the very first Australian real estate agency to break the magic $1 billion in subscriber sales – currently at $887,154,220.

Special thanks to the aerial photographic gymnast of the sky Tim Mooney for his amazing photographs – a weekly highlight (for us) to explore his vast library of photography.

We thank you for your patronage. Defamation suits have been interesting and engaging (it’s just that I am an advocate for freedom of speech). The audit of our books by The Office of State Revenue was a highlight which re-inforced the fact that Virtual Realty News keeps annoying Forts Fumble and Crumble.

We will return to your inbox in late – January 2010 and go (weekly) all the way through to December 2010. It’s a tough job – but somebody has to do it!

Merry Christmas and have a brilliant, happy and prosperous New Year.

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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11.12.09Robert Simeon10 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 »

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Politicians are an interesting breed where on one side we have a government that finishes nothing and on the other side, an opposition that says nothing. Would it then be fair to assume that we are expected to know nothing as that way, when we see nothing, assume that something is actually happening?

These days, The Emperor (Kevin Rudd) is better credentialled to be sales manager of Flight Centre given his vastly accruing frequent flyer points.

With respect to The Emperor, we are spending billions on schools yet the last time I looked, nobody is living in them. So why renovate at this point? (plaques aside). It is very clear that as a matter of national urgency, Australia needs to be building housing accommodation to meet demand – our elected politicians (under the stress/threat of having to make a decision) forget that the property industry is the largest employer in Australia. Maybe they should read this article written by Stephen Lunn from The Australian – Housing stress getting worse – experts.

Tim Mooney Photography – Greenwich Point, Greenwich

www.timmooneyphotography.com

No better example when The Australian and the Melbourne Institute jointly hosted a Road to Recovery conference this week. Enter Wayne Swan who said, “We’ve got to really get going when it comes to building a supply of housing or we’ll hit capacity constraints that will hurt us in the very near future.”

Wayne, we are already there as Australian Council of Social Service chief executive officer Clare Martin pointed out. “Some 850,000 Australians are now in housing stress, with rental costs gobbling up a high proportion of their income.”

On top of that, the OECD announced this week that food prices in Australia have increased 41.3 per cent since the start of 2000, which then prompted a Government minister to call “for greater competition” (no solution offered) just a comment. For the record, Coles and Woolworths account for approximately 80 per cent of the Australian market.

Back to Clare Martin “A third are low – income households. Add to that the 105,000 Australians who are homeless and you start to get a real idea of how big the problem is.” Remember that Wayne told us “we’ve got to get going” Clare Martin announced the Government’s $6.4 billion commitment to social and community housing (recently wound back by $750 million). Wayne, that is actually going backwards, “Nation Building was going to build 20,000 new dwellings (but) the outstanding need right now is 250,000 affordable homes.” The Australian reported just 73 homes so far had been completed under the Government’s spending plan. This end of the property market needs to be wound up, not back, as the top end is doing very well (Lachlan and Sarah Murdoch purchased ‘Le Manoir’ for $23 million this week).

La Manoir – Lachlan and Sarah Murdoch’s new Eastern Suburbs home

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Economist Saul Eslake told the Road to Recovery conference, “One lingering effect of the financial crisis which is likely to exacerbate the housing shortage for some time yet to come is the difficulty which proponents of multi – unit housing developments are continuing to encounter in gaining access to finance.” So the banks lend to purchasers, yet won’t lend to developers which explains why, in Australia, multi – unit housing developments remain at historically low levels.

Alas, a Road to Recovery where Fort Fumble (Federal government) has turned the vehicle around and is attempting to drive backwards along the recovery road (with hazard lights beaming).

The Future Fund has around $60 billion in funds so why should it not enter the Australian property markets given the major banks’ reluctance to fund this emergency infrastructure market. It was built on selling government assets (Commonwealth and Telstra) so about time these funds were injected back into Australia.

Why does The Emperor still allow the Foreign Investment Review Board (FIRB) to relax regulations so that foreigners can purchase “new properties”. When “Finish Nothing” government spokesman for Assistant Treasurer Nick Sherry (he must be away too) said, despite the rule changes, the FIRB rules were designed to spur the creation of additional housing supply rather than add to affordability problems. Remember “Hogan’s Heroes”, Sgt Schultz – I know nothing!

The Australian Bureau of Statistics (ABS) smashed this “dumber and dumber” market assessment when it revealed this week, that fewer Australians own their homes outright and a greater number now rent (official data reflects worsening housing affordability). The Sydney Morning Herald journalist Chris Zappone wrote Home ownership down, renting up: ABS

“The proportion of people who owned outright by their occupants has dropped from 42 per cent in 1994 – 95 to 33 per cent in 2007 – 08. Over this same period the proportion of households renting rose to 30 per cent in 2007 – 08, from 26 per cent in 1994 -95.” Bear in mind that these figures will change significantly because First Home Buyers accepted the governments (collective) bribes to enter the property markets (casualties are yet to be determined).

Fort Fumble has wound back its boost for new and established dwellings to $3,500 from $7,000 (established) and $7,000 from $14,000 for new. At Fort Crumble (NSW government) you can collect $10,500 until the end of the year for established which then drops to $7,000 in the first half of 2010 and (steak knives) new dwellings $17,000 till the end of the year dropping to $10,000 first half of 2010.

Over to Business Spectator (free subscription) – Housing hopes which is always a fantastic daily read.

• The number of Australian home loans rose by 5.1 per cent in September, after a downward revised fall in August of 1.9 per cent and July -1.6 per cent. Annually, loans are 8.1 per cent higher. This is the highest number of loans since January 2008.
• Growth was driven by loans for construction (+8.1 per cent) and loans for established dwellings (+5.0 per cent, 85 per cent of total loans). Loans for new construction are at their highest since December 1994.
• Loans were strong across states: NSW up 7 per cent, Victoria up 3.1 per cent, QLD up 1.2 per cent, SA up 1.1 per cent and WA up 14.4 per cent.
• First home-buyers accounted for 26.1 per cent of new loans from 24.7 per cent in but still down from the May peak of 28.5 per cent. The size of a first home-buyer loan rose to $274,600 from $270,800 in August and $260,900 in September last year.
• Loans to investors (by value) fell 0.1 per cent after an 8.3 per cent gain in August and are 18.4 per cent higher annually.

Source: Crikey – Lending figures vindicate RBA’s interest rate strategy.

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Interesting to note that the Reserve Bank of Australia (RBA) increased the cash rate in October +0.25 per cent and +0.25 per cent November 2009. Consumer sentiment dropped 2.5 per cent in November (Movember) following consecutive interest rate rises. The Westpac – Melbourne Institute consumer sentiment index eased to 118.3 in November, from 121.4 in October, although it remained 38.3 per cent higher than last year’s level. The October rate increase saw the mortgage market contract for the first time in nineteen months from $2.9 billion in September to $2.6 billion.

Banking prediction of the week?

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NAB’s chief economist Alan Oster said growing consumer confidence and an improvement in business conditions had increased the likelihood of another 25 basis point increase before Christmas.

Interesting comment. Never before has the RBA increased cash rates beyond two months in a row. Over to Big Al at the NAB “This is a pleasing result and as such, we expect there to be a 25 basis point increase in every RBA meeting till March.”

Clip of the week?

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That would be “see nothing” – when applied to border security, housing and our road to recovery at Fort Fumble. Happy 40th Sesame Street and yes, history does repeat itself as do political episodes.

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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14.11.09Robert Simeon4 Comments »