.

Ask any business owner what the key to business longevity is and nine times out of ten the answer will always be – customer service. It all started just before the running of the 150^th Melbourne Cup when the Reserve Bank of Australia (RBA) announced its Statement by Glenn Stevens, Governor: Monetary Policy decision.  The punters were shocked with this rate rise shock – the fourth increase in 2010. The cash rate increase was later to be described as the RBA makes pre-emptive strike, economists say. Then as quick as Americain down the Flemington track the Commonwealth Bank adds 45bp to home loan rate effective from today, citing “overall wholesale funding costs continue to increase as cheaper funding expires and is replaced with more expensive funding”. The banking stewards (otherwise known as politicians) were quick to saddle – up although opposition Treasurer Joe Hockey was already in a somewhat awkward and lonely canter.

A graph that has figured prominently in Virtual Realty News is the Household Estimates of 2007 – 08 which is the last Australian Bureau of Statistics (ABS) measure of Australian households that rent, own with a mortgage and own without a mortgage – which I call The Big Third Theory.

• The number that rent – 2,399,900 which equates to thirty (30) per cent.
• The number that own with a mortgage – 2,835,200 which equates to thirty six (36) per cent.
• The number that own without a mortgage – 2,679,200 which equates to thirty four (34) per cent.

Based on this anecdotal data where with each and every cash rate increase the impact affects sixty six (66) per cent or 5,079,100 Australian households. Politicians need to cease being statues.

BUY PRINT

Another Tim Mooney brilliant capture that would make a great front cover for Eastern Suburbs real estate agents’ Christmas cards – nothing beats a sensational aerial shot.

Credit card debt more common than mortgage debt and we all know that the Big Gang Theory of increased funding does not apply when they are already charging consumers around twenty (20) per cent. When the Melbourne Institute revealed their June quarter 2010 results they announced that for the first time since November 2006, credit card debt is the most common form of debt among Australian households, rather than mortgage debt. The number of households with credit card debt was 36.6 per cent, while 33.9 per cent had mortgage debt. Credit card rates should be at the very same rate as home mortgage rates.

Customer service is all about meaning business not being a mean business – The Big Gang Theory.

Joe Hockey has good idea, no – one takes notice given banks showing no rates restraint, despite massive profits so out came Joe Hockey’s Nine – Point Plan when he addressed the AIG Annual National Forum in Canberra on October 25 in Canberra – “It’s time to talk banking.” Banks, rates and regulations: who’s in charge here? As Westpac chief Gail Kelly calls for calm as anger builds over bank rate rises given the banks are wary of Hockey bandwagon. The irony being that just only last week it was Hockey who was copping the bashing when he suggested that he’d re – regulate interest rates. As Dennis Shanahan wrote in The Australian – It’s Hockey’s turn to bash Swan. “In just a few moments yesterday, Joe Hockey and the Coalition went from being buffoons to heroes. And Wayne Swan went from being economically and politically superior to being populist, ineffective and trailing the opposition Treasury spokesman on banking policy.” Out from the gates then jumped Wayne Swan flags banking reforms declaring the federal government would now announce banking reforms next month prompting Hockey “The Jockey” to demand release reform plan now – the “Big Fella” was now on a roll dining out on roasted swan.

There was still plenty happening within Fort Fumble’s home economics kitchen when Phillip Coorey from the Sydney Morning Herald revealed – Out in the cold: Rudd held fake budget meetings to stop leaks not to be confused with steamed leeks. “Kevin Rudd and his senior ministers were so suspicious of Lindsay Tanner that they used to hold fake pre – budget meetings to ensure their plans did not leak. According to accounts of meetings of the now abandoned Strategic Priorities and Budget Committee, nicknamed the gang of four, some meetings with Mr Tanner would deliberately be light on detail. After the meeting concluded and the then finance minister had left, the other three members of the committee – Mr Rudd, Julia Gillard and Wayne Swan – would reconvene and discuss their budget plans in detail.”

Lindsay Tanner is writing a book and I can’t wait to read that given the revelations say very little for Kevin Rudd’s schoolyard games amid financial crisis. I can’t ever remember reading a more damaging report about an elected Australian government’s economic credibility. I must admit that I have always been a Lindsay Tanner admirer – he was smart, to the point and definitely not a populist policy proponent.  Kevin Rudd denies holding fake budget meetings … why am I not the least surprised.

In the meantime, Australia is bathing in a budget surplus (not) as Labor racks up $25.2 billion deficit in just three months shadow minister for finance and debt reduction Andrew Robb reported. The latest government financial statement reveals a staggering budget deficit of $25.2 billion for the first three months of the financial year. “The government is banking on improvements in revenue to bring the budget back to surplus, yet this statement shows no signs of the level of improvement that will be required and therefore spending must be cut.” CommSec chief economist Craig James estimates that the underlying budget deficit in the year to September was a record $63.3 billion. “The main concern is that revenues are still tending sideways rather than showing signs of repair. Meanwhile, government spending is at record highs and showing no signs of stabilising.”

Without a doubt one of the smartest economic reports that I have read is Economic reform will curb pressure on rates which lays much of the blame for increased interest rates on inept government policies. “But while rate rises are a blunt instrument, they are just about the only way the RBA can suppress demand. With a rising dollar, which will depress exports other than minerals and energy production, it is an automatic stabiliser that will slow the economy. A far better solution would be for government to have invested in infrastructure – railways and ports – to increase the efficiency of exports and to have improved productivity in southeast Australia, which is not benefiting directly from the boom. But the Howard government spent the taxes raised by energy exports on its watch on welfare payments and Kevin Rudd threw money at unproductive job programs, as Julia Gillard is still doing.”

“In the current circumstances, the price of stalling economic reform will be more painful than interest rate rises”. Hence, building approvals slide more than expected in September with a 6.6 per cent fall – in the year to September building approvals were down 11.6 per cent.

So figures confirm building weak which is understandable given the Gillard government still has more than $6 billion to be spent with her Building Education Revolution. Don’t blame the Big Gang Theory entirely as we all know they suffer on compassionate grounds. The answer should not be directed to angry customers should switch banks: Gillard rather economic reform, and we all know what happened to the Henry Tax Review.

No wonder Australians want an election – now given both forms of government continue to ignore economic reform. It is becoming increasingly obvious that economics is not a strong point for either party of choice – hence the ongoing and growing budget deficit.

When it comes to Nation Building – Fort Fumble (Gillard) has lost the plot!

Subscriber sales jumped to $986,510,220 so we are closing in on the magic $1 billion in subscriber sales.

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

Follow Me on Twitter

5.11.10Robert Simeon6 Comments »

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

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

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

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

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

BUY PRINT

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

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

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

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

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

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

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

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

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

Property markets too have been in the spotlight this week.

Housing market will implode warns Edward Chancellor Edward is no relation to the Sydney Morning Herald property editor Jonathan Chancellor. Australia is in the midst of an unsustainable housing bubble that could burst at any time, warns the man who predicted the global credit bust of 2007. We will see busts in the First Home Buyers Grant (otherwise known as the First Home Sellers Grant) as they buy back when mortgage defaults escalate due to rising cash rates. Another rate rise, another blow for PM and economists warn that more pain is on the way – the raw nerve being rate rise to crush 90,000 families.
.

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!

We welcome mortgageport to our online media platform to brand their home loan products on our website – and the official sponsor of Virtual Realty News – Mosman’s most accessed real estate website. Compare your rates and give them a call on 02 9466 8200

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

Follow Me on Twitter

7.05.10Robert Simeon8 Comments »

.
Political correctness is out the window too. With more back flips than a Russian gymnast, degrees of difficulty can escalate in an election year (if off balance) and coupled with poor execution, can result in a lack of balance. It’s all very well to talk-up the routine before the execution, but we all know that Fort Fumble (Federal Government) resembles a modern day pin ball machine that constantly hits  tilt and freezes as a result of overzealous activities. In a nutshell:  You pour money in, only to see the machine (otherwise known as an economy) correct your aggressive behaviour!

The Emperor’s (Kevin Rudd) Achilles heel today, amounts to nothing more than activity freeze. More concerning is that the back flips are not supported with answers pertaining to the original decision -making processes. The Emperor today, is taking plenty of steps back and very few steps forward. The wind has left his sails. Too much, too fast, results in chaos!

Somewhat ironic following the global financial crisis (GFC) that the government of the day keeps back flipping with an abundance of poor policy execution, that does not promote business confidence. Ironic, in the sense that these, either deferred or cancelled policies, now equate to increased unemployment.  It is said that “a picture is worth a thousand words” so this week’s picture is dedicated to the failed economic policies and chartered courses of Fort Fumble and Fort Crumble.

BUY PRINT

Our Virtual Realty News research department (me) is always looking to give subscribers relevant and interesting data and we found just the thing  – IOU AUSTRALIA. The website says “Dedicated to delivering accurate information based on Australia’s debt situation in a real time snapshot. Numbers are based on public information, and are adjusted to reflect the information given out by various organisations time to time. Figures represent our nation’s financial health, and the debt we may leave for our children and future generations.”

Again, Fort Fumble and Fort Crumble lead the way – this is scary, have a look at Debt Clock Australia. I will try to obtain the relevant data and what the figures resembled when The Emperor took over the throne. Tony Abbott’s razor plan to pay off our debts is a good start given spiralling government costs add to deficit pressure as MPs fear Kevin Rudd is losing control.

Not as bad as Greece which today, has an estimated $430 billion, Sea of Debt – although one must remember that once upon a time its debt too, was just a fraction of what it is today. Greece has a deadline of May 19 to pay down its debt and the odds of doing so are looking like 430 billion to one. Greek debt fears rock US, European stock markets and the banks must not let Greece fall.

Sydney, you are the weakest link: survey and the latest quarterly Access Economics business outlook report, tips NSW to underperform again, during this next mining boom as interest rates, push up the Australian dollar and harm manufacturers and tourism operators in NSW. State is paying double for land Fort Crumble is paying up to double for land as part of a $250 million property buy–up for public housing.

Premier Keneally less popular than Barry Unsworth identified that if an election had been held in NSW last weekend, the Labor government would have been slaughtered. Charlie Aitken wrote on his Under The Southern Cross this week, “I did a bit of driving over the Anzac Day long weekend and sometimes you just have to wonder where your tax dollars go. How, for example, can the F3 Freeway north of Sydney, that basically is the gateway to Australia’s fastest population growth corridor, end at a roundabout?” Hypothetically, if another election was run this weekend the results would have been worse Melbourne set to overtake as biggest metropolis a 10 – year fall in the percentage of migrants settling in NSW and the lowest rate of economic growth of all mainland states has Melbourne on track to overtake Sydney as Australia’s biggest city.

With the First Home Buyers Grant (FHBG) you can artificially stimulate property markets, but the same can’t be said for Australian financial cash markets. Recently, I have been speaking with some of Australia’s greatest financial minds and some are predicting inflation hitting north of 10 per cent. The Real Estate Institute of Australia (REIA) issued this week an alarming media release – Caution required on interest rates otherwise known as an economic storm warning.  The reason why?

Alcohol and cigarettes went up +3.5 per cent at midnight last night The Emperor added another 25 per cent increase to cigarettes that will drive interest rates up further– nice one Kev! An ongoing economic failed strategy that now has him called Captain Chaos or the Prime Minister for No Economic Idea! Frustrated that nobody has picked up on the fact that a 25 per cent increase on the price of cigarettes, will drive interest rates higher and higher – even if you don’t smoke!

Inflation jump drives rate rise prospect given inflation rose in the March quarter more than expected. Inflation rose 0.9 per cent which equates to a rise of 2.9 per cent in the year to March, according to the Australian Bureau of Statistics. Housing is the major culprit which increased by 6.1 per cent due to increases in electricity (+18.2 %), sewerage ( +14.0 %), rents (+4.6 %), house purchase ( +4.1 %) – the major DNA for these increases lies with state governments that keep driving  these utilities up and they (as well as inflation) won’t be going down!

Throw in housing shortfall locking out thousands where Australia has 178,000 more potential home buyers than available properties, with Queensland and Western Australia accounting for almost half the total shortfall over the past decade according to the National Housing Supply Council. On present trends, the total gap will reach 640,000 by 2029. Such shortfalls are a guarantee that home prices will continue to rise as too, will rents. Here is a crucial graph that will now feature prominently, in future editions of Virtual Realty News.

Pay particular attention to the quarters of March and June 2007/2008 and September 2008/2009 pre global financial crisis – the greatest clue as to where the cash rate is headed. It certainly does not help when Fort Fumble is considered to be in total chaos over policy. Only Health remains. Ironic that inflation looks like exploding and our Federal Government is showing signs of imploding despite an election looming.

To make matters worse Kevin Rudd’s great ETS fraud found out – Andrew Bolt and “the greatest moral challenge of our age” decision to put climate action on hold smacks of political cowardice.

For mine: Paul Kelly from The Australian filed the most compelling read Rudd’s dangerous climate retreat. “As retreats go, they come no bigger than Kevin Rudd’s delaying of his once cherished emissions trading scheme – one of the most spectacular backdowns by a prime minister in decades.” Not a case of stand and deliver, rather ‘The Emperor running to them hills’. Then we have this pearler Department of Hot Air costing $90 million where the 400 public servants employed in the Climate Change Department will remain employed despite no work until 2013.

Check roof insulation before buying a home: Archicentre the building advisory group advised that vendors are not legally required to reveal if the home they are selling has been part of the Federal government’s scrapped home insulation scheme. Fort Fumble’s $2.450 billion home insulation scheme has been linked to four deaths and more than 120 house fires.

The much awaited Henry Tax Review will be released this Sunday and one could not rule out yet another Fort Fumble back flip.

Also, next week we will be revealing a real estate individual website first when we announce which company will be advertising its product on our website – property pages and daily email alerts?

Clues will be left on our blog –  banking or media? Maybe a property portal, newspaper group, or search engine?

Whatever, the case they want the thousands and thousands of eyeballs that RWM attract each and every week. Clue one – their business model loves bricks and mortar?

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

Follow Me on Twitter

30.04.10Robert Simeon9 Comments »

.
The cocoon of life in Australia has never before been under greater scrutiny where many await the findings of the Henry Tax Review recommendations (reportedly 10 centimetres thick). Just what remains to be seen is, exactly what comes first? And just who will be indentified as swimming in those new “rivers of gold” that will allow The Emperor (Kevin Rudd) to stimulate his fast growing budget deficit. It would be difficult to imagine his “financial conservative” tag re-emerging!

The Late Kerry Packer once said “Now of course I am minimising my tax. And if anyone in this country doesn’t minimise their tax they want their heads read. Because as a government, I can tell you you’re not spending it so well that we should be donating extra.”

Welcome back to our first 2010 edition – where we celebrate our tenth year of Virtual Realty News (VRN) arriving weekly into your inboxes. Your scribe has somewhat mixed emotions relating to the year(s) ahead. Fort Fumble (Federal government) simply put; has a cash flow problem.

2009 produced just one election – Queensland. 2010 however, offers four elections being three state; Tasmania and South Australia in March and Victoria in November. The Emperor will also contest his second term which no doubt will be the taxing election given he has now frozen his (failed) climate cap for an economic sombrero! Rubbing hard on that inflation genie (growing from within) no need for predictions as 2010 will be either The Emperor ruling the roost or morphing a feather duster. Interest rates, inflation and our banks to name just a few are threatening and indeed most inclement. For example, this week Westpac withdrew from the home loan market when RAMS (Australia’s largest mortgage broker) was reined in (no loans) until Westpac gets its funding issues in order – what a message that sends to our property markets (especially to first home buyers).

Tim Mooney Photography

.

Again, Australia’s finest aerial photographer Tim Mooney, will be showcasing his amazing captures with each and every edition of VRN. No wonder Prince William declared that he would like to buy a residence in Sydney – he spent plenty of time cruising Mosman foreshores and who could argue with this view. It is a fact that ‘Balmoral’ is very well known within the Royal family!

.
The global financial crisis (GFC) dealt the death knell for every state and territory in Australia – all of which are now trading in budget deficit. Only Western Australia and Queensland can return to the black due to mining royalties.

Without the benefit of hindsight it appears more than likely that in five years time, state and territory governments will simply be made redundant given their inability to manage infrastructures within their electorates (did Henry pick that?) Fort Crumble (NSW government) is Australia’s finest example of incompetence personified – it’s still going backwards and has been doing so for well over a decade. At least our property markets are back on the road to recovery having posted a most impressive December quarter report card adding to the intrigue for the March 2010 results.

As strange as it may seem, if you cast your mind back prior to the GFC where, for housing prices to shake and move it could only start at the top-end. Australian Property Monitors (APM) identified that this is exactly what happened over the December quarter where average prices nationwide, recorded an average 12.1 per cent increase. The Reserve Bank of Australia (RBA) raised the cash rate – an unprecedented three consecutive months to finish 2009 at 3.75 per cent. Next Tuesday, when the Board meets for cucumber sandwiches and English breakfast tea, the cash rate will move to 4.00 per cent in another effort to curb our exuberance for bricks and mortar (the result of cash splashes and government gifts for first home buyers) – a false economy!

The latest RBA figures identify that consumers spent more than $20 billion on credit and charge cards in November (December figures not in yet) so do the maths as the average Australian credit card debt now sits at $3,196.00. Consumer confidence that is currently at near record levels, is in for some shock treatment, thanks to irresponsible government intervention. The top – end was slow, contracted and non responsive to the GFC, because these home owners were smashed in the recession of the early nineties. Now those who were too young to remember will have their turn and this is highlighted by the Westpac retreat this week from the home loan market.

As a result of overcast economic conditions during the GFC, landlords were aware that a paying tenant was a viable business model where APM identified that houses increased 2.2 per cent and apartments 2.4 per cent in the December quarter. With the economic clouds now clearing (given that in 2007 and 2008 rents rose by an average 12 per cent) the rental amnesty is now over and they will again be up, up, and away in 2010. Don’t forget that Australia’s immigration intake (rightly or wrongly) is the highest of any other country on the planet. Despite new construction remaining in the doldrums as consumption/immigration grows, the “lucky country” is failing miserably in the accountability stakes.

I make no apologies for my dislike of politicians (generally) especially when during a worldwide economic downturn, they sugar coat the economy with taxpayer monies. The Westpac decision this week flew under the political radar – quite conveniently.

Although, I do love the irony! The Henry Tax Review will target high income earners and they in-turn will benefit financially from the government- promoted property debutants. Interest rates are heading north – government intervention and opportunity knocks.

A pleasure to welcome Andrew Blaxland to the RWM fold. We have been chasing him for years and he is a perfect mix for our culture. Subscriber sales have jumped to $892,854,220 and hopefully our business model will record the magic billion this year (Australian record). In 2009 we led the market and this won’t change in 2010.

Welcome back friends and foes, it will be action packed for property voyeurs!

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/

Follow Me on Twitter

29.01.10Robert Simeon6 Comments »