Huffing and puffing won’t blow your house away!
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However, (for some) there will be strong consequences along the way – which is always the case when governments artificially inseminate markets in an attempt to prop them up in uncertain financial times. One only has to look closely at the cash rate movements at the Reserve Bank of Australia (RBA) to see the storm clouds on the horizon after the RBA slashed the cash rate to 3.00 per cent in April 2009. And bear in mind that it was 7.25 per cent in March 2008. At or about the same time, Governments at both state and federal levels were promoting the First Home Buyers Grant (FHBG). First time purchasers locked in a fixed rate as shelter from the ongoing rental increases under cover of Stamp Duty inducements in the form of grants. One does not need to be Einstein to calculate that the cash rate will be significantly higher when the fixed loan agreement expires. Yet for some strange reason, the banks are blamed.
The “Big Four” banks have recently announced the removal of the much despised exit fees so now customers have freedom of choice to shop around. Maybe Fort Fumble’s treasurer Wayne Swan would like to explain why he approved Westpac’s acquisition of St George Bank and the CBA’s acquisition of Bank West? Instead we read Treasurer Wayne Swan flags change to four – pillars policy “the government is determined to see a new pillar in the banking system, particularly based on our mutual sector.”
If St George and Bank West were still individual entities they would be pillars five and six and the building societies and credit unions would fill positions seven, eight, nine, ten etc. Instead we see Independents back Greens’ bank bill which is nothing more than a misguided attempt to overhaul banks. The bill follows weeks of debate over the size of bank chiefs’ pay packets, interest rate hikes, high fees and the power of the big four banks. Here we go again, with more political posturing and a memory vacuum, when we consider that these very same bank chiefs positioned their respective pillars to be world’s best, during the global financial crisis. Unlike other countries, Fort Fumble was not required to bail them out and ironically today, they are bailing out on them!
The double exit strategy – excuse me for laughing as I have just read The best price signaller in the land by Peter Costello.
One thing for sure with property prices, is that there will always be waves of hysteria coupled with those who like to make waves. If you can’t ride it stay on the sand – Virtual Realty News
“Now that both sides of politics have decided to crack down on the evil practice of price signalling we might as well ask who does it and why. Because some people may not be aware that the biggest price signaller is not the Commonwealth Bank or Westpac or any of the other “evil” commercial banks. The biggest price signaller in the interest rate market is the Reserve Bank, the one the government owns.” Said Peter Costello. Of course the banks need more consistency given banks slower to lift deposit than interest rates where the more money they hold as deposits, the greater the control they have over the costs of funding. Hardly an instrument to entice depositors!
Rising wages ‘outpace growth’ the warning comes as new figures show wages are increasing at their quickest rate in two years. Business groups highlighted the potential for the $43 billion National Broadband Network to “exacerbate skill shortages and drive up wages”. Personally, I am yet to meet a supporter of this broadband ‘white elephant’. I’m definitely not a supporter and believe the money could be much better spent on hospitals, rail and roads. When I look at our Google Analytics for our website which includes Virtual Realty News it reveals the Connection Speeds – 39.97 per cent use DSL, 26.16 per cent are on Cable, 24.5 per cent are Unknown, 5.92 per cent use T1 and 1.72 per cent are on Dialup (once upon a time we were all on Dialup). For the NBN project to provide a return on capital, Fort Fumble requires over 8,000,000 million Australian to sign up. Talk about ‘the impossible dream’!
Here is why Australia can ill afford another “white elephant” as Kevin Rudd shared the blame for Labor’s errors. Addressing a business function earlier this week Mine boom biggest shock, says Treasury Ken Henry. Dr Henry said the current mining boom was between three and four times bigger than the last big boom in the 1970’s, which pushed inflation up to 17.5 per cent. Inflation is currently running at 2.80 per cent. Reserve Bank of Australia says the boom to run for 20 years as the tally of resource projects with mining firms’ commitments, soars to $133bn. At your service, our economy’s a work in progress by Ross Gittins from the Sydney Morning Herald “The structure of our economy is set to change over the 2010s, creating winners and losers and plenty of complaints. So it’s worth remembering the economy’s structure has been changing continuously since the gold rush”. Which brings us to The boom is back, and this time we may avoid the bust or will we? If we do survive we are going to need plenty of help from those banking “four pillars”.
Treasury’s move from mining to real estate during the week, was more a case of undermining the Department of Bricks and Mortar – Treasury sounds the alarm on ‘property bubble. Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the USA. Maybe they should read RBA intervened to avert housing slump given Aust mortgage market seen stable in third quarter. Total construction work done in Australia, fell 2.1 per cent in the September quarter. Our population is growing and building is declining!
So let’s see what is happening to Mosman prices for houses and units.
Source: Australian Property Monitors
Source: Australian Property Monitors
The Dyson Austen Top Ten Prestige Residential Survey 2010 Q3 July – September prepared for the Real Estate Institute of NSW, will be released this weekend – so here is a sneak preview for our Virtual Realty News subscribers. We thank Simon Feilich from Dyson Austen for the early scoop (being a subscriber has advantages).
The total value of the survey has increased forty two (42) per cent from the previous quarter thanks to the record breaking $52 million sale at 100 Wolseley Road Point Piper. The Eastern Suburbs dominate the results, recording ninety per cent of the recorded sales – a phenomenal effort. The graph that I always look forward to viewing is the highest value and total value of Top Ten transactions per quarter from 2004 to 2010 to see how our markets are aiming up. “Quarter 3 2010 recorded the fourth highest quarter on record – the main driver in this quarter is the almost ten (10) per cent increase in the equity market in July 2010” said Simon Feilich. All in all a very strong message for our top-end property markets.
So for those who are huffing and puffing about property prices, don’t forget that in every back garden you will always find swings and roundabouts.
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
