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Just two more sleeps, then Julia Gillard will reveal to all, her Top Secret Carbon Tax. So intricate and delicate is this most Secretive Weapon of Mass Taxation (SWMT) announcement, it demanded complete denial during the 2010 federal election. The complexities of this SWMT are so mentally demanding, that a collaboration of the finest minds was necessary to make this decision for and on our behalf: namely, the Multi–Party Climate Change Committee. An elite membership of minds requiring just the one common denominator, i.e.  absolutely no business experience.

Fading public support spells doom for carbon tax where it would be fair to suggest that the vast majority of Australians don’t like the manner in which the tax was introduced which then opens the debate on whether the government can be trusted.  If the polls are an indication, the answer is a clear ‘no’. Liberal states band together for carbon tax showdown with Julia Gillard by questioning warnings of heavy job losses and unprecedented power price rises. Throw in an industry push to wipe out carbon price where some of Australia’s biggest industry organisations plan to spend millions of dollars (of their own money) to fight the tax. The Gillard government will go toe-to-toe with its advertising campaign and will be using taxpayer monies.

Ita Buttrose blasts Prime Minister Julia Gillard when she ripped into Julia Gillard’s leadership (or lack thereof) – unleashing a harsh critique of the PM’s time in office and challenging her to call an election. Next a political bombshell! Rangas dump fellow redhead Julia Gillard when the Red And Nearly Ginger Association (RANGA), who claim to represent the nation’s redheads, said it was withdrawing its support because she is giving gingers a bad name. The RANGA group cited disloyalty, dishonesty and incompetence as the three contributing factors.

BUY PRINT

No rivers of gold in Canberra’s Gold Creek – which today resembles Fort Fumbles budget deficit. Get those rivers of gold flowing again so bring in a carbon tax we’ll call it Gillard’s Gold – The Eureka of Taxes.

Little wonder nervous Labor MPs quiz Julia Gillard in caucus over key issues given the SWMT has their political careers on life support. As Labor support plummets in Queensland: Newspoll where even Australia’s greatest ever Treasurer Wayne Swan could be voted out – ah it’s that SWMT again. So Professor Gillard reverted back to scientific debate renewing climate change warnings with doomsday – like comparisons although we all know that Australia’s SWMT reductions will play next to no role in global reductions. Alas! Constituents battle this mentally taxing issue: albeit without consultation and participation.

What a wonderful democratic society we now find ourselves in where the kryptonite for constituents to rely on is otherwise known as polls – Julia Gillard’s Fort Fumble has rapidly morphed itself into Kristina Keneally’s Fort Crumble Mk II. Can the carbon tax refloat the beached ALP ship? Graham Richardson has made up his mind. Labor is shot to bits and there is no way back for Julia Gillard or the party she leads. Put down the glasses and wait for 2013 to deliver the first Abbott administration.

The Australian – Order Bill Leak’s Print

Carbon scheme to hit state dividends the chief of NSW state-owned power provider Macquarie Generation, Russel Skelton said he expected additional costs of up to $700 million per year, which would lead to the elimination of all dividends his company would have paid to the state, The Australian reports. Just what NSW needs when Treasurer Mike Baird warns of NSW budget cuts with the state’s finances “utterly out of control” given the inherited $5.2 billion black hole, care of the previous Keneally government. NSW is broke, with the budget in complete disarray to the extent that the state is not funding its operating costs from current revenue models.

Reserve Bank of Australia holds interest rates as growth stalls given the RBA’s forecast of 4.25 per cent economic expansion in 2011 – 12 can’t be met (Treasury predicted 4.00 per cent). If you are in the mining industry you are doing brilliantly. For those not in mining, the future is looking bleak. The good news is that interest rates will not be rising this year given the RBA revised down growth predictions from 4.25 per cent to 2.5 per cent which sends a very strong indication that the Australian economy is going backwards. Unless of course you are in mining!

The Mosman, Cremorne and Neutral Bay property markets appear to be enjoying the annual winter hibernation given the unprecedented low levels of available properties. I’ve been writing Virtual Realty News for eleven years and can’t ever remember such low stock levels especially in house volumes.  No panic selling – more a sign of battening down the hatches.

MOSMAN – 2088

• Number of houses on the market last week – 87
• Number of houses on the market this week – 83
• Number of apartments on the market last week – 97
• Number of apartments on the market this week – 99

CREMORNE – 2090

• Number of houses on the market last week – 15
• Number of houses on the market this week –  16
• Number of apartments on the market last week – 33
• Number of apartments on the market this week – 34

NEUTRAL BAY – 2089

• Number of houses on the market last week – 9
• Number of houses on the market this week – 7
• Number of apartments on the market last week – 67
• Number of apartments on the market this week – 62

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

By sheer definition, a tax means that either directly, or indirectly, somebody must pay. Recently I wrote Nothing new about for NSW for Property Observer a carbon tax is the last thing the NSW Liberal government needs, considering that the previous NSW Labor government has all but bankrupted the state.

The prime minister keeps telling us that Australia is in a very strong economic position – obviously economics is not her strong point. Next Tuesday, the latest Newspoll will be released and her popularity will, in all probability, remain in freefall.

The O’Farrell NSW government is concentrating on infrastructure. It would appease Australians if the Gillard government followed suit. Construction shrinks for 13^th month the Australian Industry Group/ Housing Industry Association performance of construction index fell by 3.8 points to 35.8 in June. The benchmark is 50 – anything above represents expansion and below, identifies contraction.

“Building a better Australia” – Ms Julia Gillard.

It’s not just the carbon tax causing truth or scare for  Australians!

Cheers ^__^

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8.07.11Robert Simeon6 Comments »

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The same can be said for many commentators who continue to argue that our macro property markets are, by world standards, massively overpriced. In Australia, overpriced does not equate to  over-populated, with Australia’s population very shortly to reach 22,500,000 population clock ABS with approximately 6,000,000 homes being the macro picture. Tick – tock goes the housing time bomb – “a confluence of building approvals, housing price and population figures are likely to all point in one direction: the failure of housing policy in key markets to keep pace with the nations needs.” So what happened a few days later?

• New home sales fall 4 months in a row where the number of new homes fell by 2.6 per cent to 6,887 in August, the Housing Industry Association (HIA) said in a statement on Wednesday. The fall followed a 7.1 per cent drop in July and brought about the decline since April to 19.7 per cent. Sales in August were 20.5 per cent below the level recorded a year earlier in August 2009 and at their lowest point since 2008. This data reveals that new home commencements would have risen in only two years out of ten – those being 2002 and 2010. Politicians in Canberra offered no comment – no idea.
• Immigration plunges – without politics which signals that Australia’s net migration rate has started to nosedive where births comfortably outnumbered net migration over the year – 303,500 babies versus 241,400 migrants. Migration levels in sharp drop as Australia’s population growth has fallen to its slowest rate since 2007. Politicians in Canberra again offered no comment – no idea.

BUY PRINT

Only when commentators start looking closely at the machinations that drive property markets, will they even begin to understand what drives property prices. Only when one starts to piece the puzzle, does the picture become clearer. In the Sun Herald last Sunday, Louis Christopher from SQM Research wrote “SQM’s vacancy rate series also reveals a tight rental market with only some slack at the very affluent end of the market place. Vacancy rates are at 1.3 per cent and even tighter in Sydney’s west at a dire 0.7 per cent. And from what I can see there are no significant increases in new housing developments in the next two years for the local market.” Christopher went on to say “this is scary stuff and means only one thing for rents. Our forecast is for a Sydney – wide average rise of 5 – 7 per cent a year for at least the next two years. The west could record an even higher growth rate of 8 per cent – plus.” When rents climb, the rental community buy and this coincides with government policy on house construction which, as we all know is dead policy!

House prices do not inexorably rise another great article by Christopher Joye on Business Spectator “If the Reserve Bank of Australia (RBA) ‘central case’ comes to pass, which would involve a surge in resources investment on the back of China and India’s industrialisation, notwithstanding weak US and European growth, we can expect to see it raise the target cash rate at least four times to 5.5 per cent with an upper bound of 6 per cent. Note that this is an exclusive of any ‘top – ups’ delivered via the banks. When the RBA speaks, listen up as bad news looms for debt – laden households. The share of debt–free households in Australia has plunged to a nine year low, amid signs that people are borrowing heavily to keep pace with rapid growth in house prices forcing more people closer to the edge.

Barring catastrophe, interest rates likely to be high for many years to come where it will be a safe bet that the official interest rate will rise in 2010 and even more to be expected in 2011. It’s in your own best interest to save before the Reserve forces you because the cost of owning a home (with a mortgage) will go up, given the inflationary impact of the mining boom as RBA’s stride quickens. The mining boom is reflected with labour supply – Western Australia recorded the nation’s highest growth of 2.3 per cent, Queensland 2.2 per cent, Victoria 2 per cent, Northern Territory 1.9 per cent, ACT 1.6 per cent, NSW 1.6 per cent, South Australia 1.3 per cent and Tasmania 0.9 per cent.

Economy on solid foundations, Wayne Swan despite Labor’s growing labour crisis Fort Fumble keeps addressing international politics whilst ignoring local concerns as ALP urged to embrace growth. Budget deficit of $54.8 billion for 2009/10 is smaller than expected then Access Economics declared Swan’s budget an ‘accident waiting to happen’ given budget surplus in 2012 ‘may be short – lived’. Naturally, Wayne Swan responded Access Economics Budget forecast is pessimistic although he failed to respond to Chris Richardson’s concerns that “Treasury may be right that there is a permanent boom in mining but it would be the first ever recorded in any market.”Australia still the great performer, buoyed by the resources boom although Fort Fumble must cut spending to boost competitiveness given Labor facing storm clouds: International Monetary Fund.

Next entry on the whiteboard will no doubt be the “Great White Elephant” – Gillard’s NBN. Mexican telco billionaire’s claim that NBN is too expensive backs our case: Tony Abbott then Conroy hits back at Slim: you don’t know what you’re on about. My prediction: Conroy will be smashed over the untried and costed Gillard NBN roll-out – Advantage Turnbull given, Telstra nonchalant on NBN.

Cable equates to “why more” and wireless equates to “why not less”?

Someone should ask Wayne Swan why we are doing plenty of digging, yet no building? The sooner someone explains to him that Australia is not about digging a nation, but rather building a nation,  will we see greater housing affordability – and  that won’t be happening anytime soon.

We need direction to build on – not tax on!

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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1.10.10Robert Simeon1 Comment »

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It’s the state Fudge–it week and Fort Crumble was on a roll. We’re not talking about polls either, thanks to asset sales and a property recovery leads surge into surplus. Our economy expanded by 4.4 per cent which is the fastest growth since 2007 – 08. So why was the Fudge–it not constructive, given housing all over Australia is showing alarming structural problems? Whilst construction has expanded in March, April and May it has been modest according to a recent survey conducted by the Australian Industry Group and the Housing Industry Association. Then the Real Estate Institute of Australia – dropped the bomb lowest level of housing commitments since 2001.

Construction activity expands at slower pace where the overall construction index fell 2.6 points in May to 53.2, but remained above the 50.0 threshold between growth and contraction  a strong probability that it will fall below the 50.0 threshold in June. Fort Crumble treasurer announced “the Keneally government is taking NSW forward into an era of economic growth, building a better future for families and businesses of NSW.” Australia is marinated in (hurtful hikes) where on an annual basis the number of new loans is actually down 25 per cent. The Australian Bureau of Statistics released this week that Australia will be home to 11.8m households by 2031 which is up from 7.8 million in 2006 – so why have the ladders disappeared?

Whilst new home buyers big winners on the Fudge–it, I’m not sure that the NSW Home Builders Bonus is the answer. Morphing First Home Buyers into ‘Residents Over 65 Buyers’ (as long as the acquisition is off the plan) is intriguing as seniors’ duty cut lacks stamp of approval. The former proposal was to entice people into the market and the latter, directed to people already in the market. These new subdivisions are well west of Sydney and plagued with massive transport infrastructure neglect. In May, apartment construction fell 16.8 to see the index now at 42.0 and house construction at 57.7 which is a direct result of a lack of available credit within the Australian economy. This statistic won’t be changing anytime soon.

BUY PRINT

Each week, I challenge Tim Mooney with a photo request and it is plain to see that he has on file, Australia’s largest aerial photographic library.

What Keneally and co achieved … and what they didn’t where simply put: “Kristina Keneally and her Treasurer did little or nothing to bring this revival about. It came thanks to national and international forces beyond their control.” I would call that constructive criticism because one major element that NSW keeps missing are those builders’ ladders. It is all very well to roll – out Stamp Duty relief announced for some buyers however let’s not forget that in May 2010 Fort Crumble introduced its Ad Valorem tax increase of 0.2 per cent for properties between $500,000 and $1,000,000, and 0.25 per cent for properties above $1 million – on top of the usual Stamp Duty fines that were not reduced in the Fudge–it.

Here we have construction being dominated by the public sector over the private sector – so on with my missing ladder concerns. Alan Kohler on his Inside Business programme spoke with Nicholas Collishaw, Mirvac managing director. A great interview Nicholas Collishaw on encouraging development. Alan Kohler, “Australia is experiencing a dire shortage of houses – 40 – , 50,000 completions short of what the actually needs.” Nick Collishaw “Well, I certainly agree with that statistic. We expect a shortfall of 45,000 dwellings for the 2009 year and, as we see 2010 unfold and ’11 ahead of us, that gag increasing.” A must read, as too on Inside Business Christopher Joye discusses lower house prices given the headline mortgage rate has moved from 5.75 per cent to 7.4 per cent. Ironic, that property developers are finding it increasingly difficult to draw credit given no access to the housing emergency chest of funds. Conflicting in that The Emperor PM to pour $5.6 bn into poll fight a decision that shattered faith in PM.

Melbourne close to overtaking Sydney so up the ladder Melbourne goes and down the ladder Sydney goes because of its property structural problems. “With annual population in Victoria running at 2.2 per cent and driving demand in Melbourne, when compared with New South Wales 1.7 per cent growth, it is not hard to imagine Melbourne soon seriously challenging for the crown of Australia’s most expensive median priced city.” Whilst Sydney has a greater proportion of apartments (26.5 per cent compared to 16.7 per cent for Melbourne), Melbourne actually has more houses than any other city in Australia. Although it should be noted that infrastructure determines property values – position, position, position. So why do respective governments find themselves in opposition as against market directing? That would be political bias coupled with ignorance and an extension ladder aimed at re-election. Propping up marginal seats is not the answer given the vast majority of those constituents have re-located elsewhere across Australia.

A reason why the electorates are at loggerheads with The Emperor and his ailing Fort Fumble is exemplified, as he presides over a government that knows best. Trust the government? Not now whilst the result is clear: voters are fed up. Rudd set to lose election on mining tax Australia needs to get back to basics – why is our building demographic market contracting? It certainly does not help when lenders say no to loans as buyers knocked back as consumer sentiment drops in June. There is no doubt that Aussies are cautious after rate rises: RBA which was reinforced this week when RBA governor announced cut debt, save more: Stevens.

It is possible that never before, has Australia vented such anger at Fort Fumble and Fort Crumble – watch the Penrith by-election next week which will identify a record swing against the Premier Pristine government. Sovereign debt capitulations resonate through markets evidenced home loans drop to 9 – year low which represents the fewest number of new loans for owner–occupiers since 2001 and the seventh straight fall in housing finance commitments.

I’m sure that everyone was amazed to read this week lawyers consulted on sacking NSW government, says Governor whilst (not surprisingly) it does identify just how bad our governments are at present. I leave you with this comment from Alan Kohler on Inside Business Talking Point which says all about the RSPT. As Clint Eastwood once said “Do you feel lucky punk?”

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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11.06.10Robert Simeon11 Comments »

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I did a Google (Australia’s most visited website) key word search on Global Financial Crisis (GFC) this week and found 33,400,000 results that identify just how popular this acronym has become since its creation in late 2007. Australian Policy Online this week published an interesting report The economic vitality report: the impact of the GFC on Australians. This report draws some interesting conclusions namely:

• The GFC proved to be more a slowdown than a recession in Australia.
• In early 2009, there was a high level of concern regarding the economy. This was short lived, owing to effective fiscal and monetary policy measures, and by the end of 2009 the economy gained momentum (recently confirmed by economic growth data).
• The GFC had a different impact on different age groups.
• Indicative of the success of economic policy, spending across the board increased and spiked, following government cash handouts and tax cuts. There was no evidence of consumers having a frugal Christmas in 2009.
• Even though the economy improved throughout 2009, more consumers felt their personal circumstances had declined.

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With one hundred percent confidence we can advise that this week’s picture is of Garden Island – just don’t ask where the garden or island is?

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Tim Mooney Photography

Whilst in Australia economic growth is expected to continue the latest Westpac – Melbourne Institute leading index indicated that the likely pace of activity three to nine months into 2010 posted an annualised growth rate of 6.3 per cent. This is well above the previous predicted growth rate of 2.7 per cent.

Encouraging – although what we do know is that whilst temporarily marinated in the GFC, Australia has a systemic infrastructure epidemic emerging (actually it has been there for years). Lack of housing will challenge recovery – Reserve Bank of Australia (RBA) assistant governor (economics) Philip Lowe said “the rate of increase in homes has been below the average of the past fifty years, while population has increased at its fastest pace over the same period.”

Stockland managing director Matthew Quinn was much more succinct, declaring that Australia faces a housing affordability “time bomb”. “Australia’s current shortage of 200,000 homes and an annual shortfall of 60,000, would balloon to 800,000 by 2020, if no reforms were undertaken.” This is what I have been saying for ages. The hopeless and misguided Nation Building expend – a – thon is nothing more than an economic embarrassment where housing not schools, should be the priority.

Housing shortage to quadruple Australia’s shortage of available homes will more than quadruple to almost half a million by 2020 if the nation doesn’t increase the pace of construction. The Housing Industry Association (HIA) identified a need for 466,000 new homes to be built by 2020 (currently down by 109,000).

We need a population strategy although Fort Fumble (Federal Government) would point to this week’s announcement by the Australian Bureau of Statistics that new home starts rose by 15.1 per cent (40,022 commencements) in the December quarter of 2009. This is the biggest quarterly increase since 2001 (an 11 per cent increase from the September quarter).
Hold off the celebrations. The real Litmus Test will be revealed with the March quarter results when we see the effect on the real market after the First Home Buyers Grant was removed. More on struggle street as prices, rate rises, the average size of a home loan has risen by forty per cent since 2005. More than half a million Australians are now struggling to meet their repayments according to Fujitsu’s Mortgage Stress survey and rates are heading up not down.

Throw in this week’s announcement from Fort Crumble (NSW Government) that electricity bills will raise by a cumulative total of 64 per cent by 2013. The Australian Chamber of Commerce and Industry advised the RBA this week to hold fire on interest rate hikes until they have a better understanding of the Australian economy. I predict a March quarter decline from the December quarter results for home prices in some areas – given March is the first quarter minus the First Home Buyer Grants.

Our top – end markets will continue to do well because being close to the Central Business District, infrastructure is already in place. However, for those heading west, things can only get worse as all infrastructure initiatives have now been curtailed. Fort Crumble is a classic example as it has absolutely no infrastructure policies on its respective radar. The Australian published this week a very interesting graph that identifies how well our top – end markets are progressing following the GFC Wealthy buyers push prestige prices up.

What can’t be ignored is our congestion problem. Fort Crumble has canned all transport infrastructure initiatives because it is broke. The State of Australian Cities Report identified that productivity growth in Australia’s seventeen capital cities (populations greater than 100,000) was critical to our economy. Australia faces a $20b congestion problem where road congestion, estimated at $9.4 billion in 2005, was likely to rise to $20 billion by 2020. Population boom means double trouble for the west with Sydney’s population due to balloon 40 per cent in 30 years. New forecasts reveal the number of people in the south – west will more than double while those in the city centre will leap 60 per cent. Not a fantastic outlook given Road congestion tax mooted is congestion the toll for a free road? As there will be no need for listening to radio as consumers will be listening to electronic government toll contribution sounds as they drive around Sydney.

MOSMAN HOUSE & SEMI SALES SAME PERIOD 2009 – 2010

1 JANUARY 2009 TO 18 MARCH 2009 – 1 JANUARY 2010 TO 18 MARCH 2010

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• 2009 – Total properties offered 50
• 2010 – Total properties offered 62
• 2009 – Total properties sold 40
• 2010 – Total properties sold 53
• 2009 – Auction 3 sales
• 2009 – Private Treaty 37 sales
• 2010 – Auction 33 sales
• 2010 – Private Treaty 20 sales

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Note: When we publish the weekly sales each week (Click Here). The previous week’s ‘withdrawn’ or ‘passed in’ auction properties (strangely some week’s later) now appear as Sold Auction results.

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• 2009 – Total Value Sold $110,025,000
• 2010 – Total Value Sold $83,754,000
• 2009 – Average Price $2,821,153
• 2010 – Average Price $2,263,621

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We will be updating these sales results every few weeks for your observation.

Figures provided from Domain Property Data

Household finances worsen as rates rise and Wayne Swan has advised that business will be consulted on tax review which will be released before the May 11 budget – so work on May 10 – Fort Fumble refuse to release this working paper (due in March). Even better, the Fort Crumble Fudge-it which is close to being declared as insolvent. Watch this Saturday’s state elections in Tasmania and South Australia with interest.

Kevin Rudd hits new low with voters –  The Emperor can ill afford any huge swings from the Labor faithful given that he is next up on the election front.

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, Balmoral real estate, Neutral Bay real estate, Cammeray real estate Click Here

This week’s RWM open for inspections Click Here

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19.03.10Robert Simeon9 Comments »

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It was more like an episode from Yes Minister, where both Fort Fumble (Federal Government) and Fort Crumble (NSW Government) tried to outdo one another at the Ministries for Incompetence and Implosion (what an art form they made of it). Fort Crumble is hardly flush with cash as it languishes in deficit yet it still manages to masticate on its scrapped CBD Metro for a north – west rail link which is now its tenth transport cancellation.

The Ministry for Incompetence and Implosion then asked voters to “take it on trust, because work would not begin until 2014 at the earliest”. Obviously nobody at Fort Crumble knows how to read a poll Confirmed: scrapped Metro cost $271 million because this would have to be close to the greatest stuff – up in NSW’s parliamentary history. To reassure voters, it then introduced a $30 – a – year – levy on motor vehicle registrations which is estimated to deliver $500 million over 10 years.Would it be improper to suggest that liquidators will be called in well before 2014? Yes Minister!

The Premier, Kristina Keneally was on a roll when endorsing a plan to build one of Sydney’s biggest hotels which just happens to be 100 metres out over Sydney Harbour. Harbour high – rise breaks all the rules but she insisted that this decision would not create a precedent that other developers would seek to follow? Well Sarah, (I mean Kristina) a precedent is defined as: any act, decision, or case that serves as a guide or justification for subsequent situations. Yes Minister!

Tim Mooney flew to Melbourne this week and why not? A fantastic shot of Melbourne CBD and the Yarra River.

Tim Mooney Photography

The other Ministry for Incompetence and Implosion – Fort Fumble had The Emperor (Kevin Rudd) going somewhat batty when his rock star minister somehow lost his voice Peter Garrett dumps dodgy home insulation scheme. Call me a cynic, but I observed that the announcement was scheduled for 1.45 pm last Friday. Torah Bright won gold at the Winter Olympics in Vancouver at 1.00 pm in the half pipe – must have been either a coincidence or political spin. Yes Minister!

Whilst The Emperor accepts ultimate responsibility for his insulation debacle which has been linked to four deaths and 93 house fires, with another 80,000 houses at risk, this scheme cost taxpayers $2.500 billion and thousands will be out of work after insulation back flip. The Emperor was quick to appease a voter backlash so (he pledged another $42 million) to the (approximately) 7,500 businesses installing installation and 180,000 houses that have to be re-checked. The Emperor’s rock star minister declared that he can read music but not commissioned reports. When the Minter Ellison Report was handed to his stage hands in April 2009, it took ten months to arrive in the rock star’s recording studio – Yes Minister!

The Emperor had to move fast as Torah Bright had concluded her Olympic event – so out came the announcement $69 million for biometric checks in counter – terrorism. It was suggested that some are: Going batty over blah – blah. Paul Sheehan from the Sydney Morning Herald had a different spin: How Rudd the dud dropped Australia in alphabet soup. A horrific week for Fort Fumble: Collins subs top $7 billion of dud projects submarines don’t require Pink Batts). It was just not cricket when it was announced that the Victorian gocernment was flying 25 Indian journalists to Australia at a cost of $250,000 – business class flights, tours of the Melbourne Cricket Ground (our cricketers are in New Zealand), concert tickets and accommodation at top hotels – to show that everything is hunky dory Down Under. Despite some saying Indian money ‘could be better spent’ one would think that given the intoxication and obsession with governments to spend money that we are actually in surplus – (obviously they believe that we are).

The debate then moved to Australia’s mortgage debt blow – out when Chris Zappone wrote in the Sydney Morning Herald “The federal government relaxed its foreign investment rules for residential property early last year. Whilst the controlling body, the Foreign Investment Review Board, does not disclose the exact number of sales to overseas investors, anecdotal reports from would – be local buyers and real estate agents across the country point to a surge in spending from Asia – particularly mainland China. Agents are also setting up offices in China and arranging “property tourism” to tap the demand.” I am a strong believer that our real estate market needs to be local not international and it would be very interesting to see why The Emperor changed these qualification rules? Are they considering returning to the previous status quo?

Furthermore, under his regime will it remain in place given the economic recovery in Australia? The Housing Industry Association (HIA) noted that (home ownership was even more out of reach) when housing affordability tanked 18.4 per cent in the December quarter and was 22.3 per cent lower than twelve months earlier. The HIA is predicting a modest housing recovery in 2010 with about 152,000 dwelling starts and we need international competition?

Housing debt is in overdrive where the latest Reserve Bank of Australia (RBA) figures identify that housing debt hit $910.1 billion in December, which is up 17 per cent over the twelve months and up 92 per cent since December 2004. Total housing debt is set to reach $1 trillion within the next twelve months and rest assured, interest rates will be heading up not down.

The Emperor has plenty on his plate all in an election year Rudd, Gillard fight over who foots the bill for $1,800 canapés and champagne wow – when it rains it pours.

This week we broke a new Australian record when subscriber sales hit $904,079,220 and real estate agencies are just starting to know what a database can do! From the good, to the bad and ugly Estate agent Shannon Daniels made a real killing I can’t believe that somebody would be dumb enough to run his “Deceased Estate (Vendors Dying To Sell)” campaign given the vendors are very much alive and well.

Given the lodged complaints Shannon Daniels won’t be hearing – thank you, Mr Hooker!

Cheers ^__^

This week’s sales Mosman real estate, Cremorne real estate, Cremorne Point real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate Click Here – the auctioneers hammer was silent in Mosman

This open for inspections – here

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26.02.10Robert Simeon9 Comments »

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

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

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

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

www.timmooneyphotography.com

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

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

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

Source: Australian Property Monitors

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Source: Australian Property Monitors

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

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

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0 – $1,000,000

44 sales

.

$1,000,000 – $2,000,000

177 sales

.

$2,000,000 – $3,000,000

97 sales

.

$3,000,000 – $4,000,000

49 sales

.

$4,000,000 – $5,000,000

27 sales

.

$5,000,000 – $6,000,000

9 sales

.

$6,000,000 – $7,000,000

10 sales

.

$7,000,000 – $8,000,000

3 sales

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

1 sale

.

Above $10,000,000

5 sales

.

Total

423 sales

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Undisclosed

22 sales

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

.

0 – $1,000,000

30 sales

.

$1,000,000 – $2,000,000

144

.

$2,000,000 – $3,000,000

115 sales

.

$3,000,000 – $4,000,000

53 sales

.

$4,000,000 – $5,000,000

39 sales

.

$5,000,000 – $6,000,000

13 sales

.

$6,000,000 – $7,000,000

10 sales

.

$7,000,000 – $8,000,000

9 sales

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

2 sales

.

Above $10,000,000

10 sales

.

Total

426 sales

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Undisclosed

30 sales

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

.

0 – $1,000,000

26 sales

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$1,000,000 – $2,000,000

110 sales

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$2,000,000 – $3,000,000

78 sales

.

$3,000,000 – $4,000,000

37 sales

.

$4,000,000 – $5,000,000

27 sales

.

$5,000,000 – $6,000,000

14 sales

.

$6,000,000 – $7,000,000

2 sales

.

$7,000,000 – $8,000,000

5 sales

.

$8,000,000 – $9,000,000

3 sales

.

$9,000,000 – $10,000,000

3 sales

.

Above $10,000,000

3 sales

.

Total

308 sales

.

Undisclosed

52 sales

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

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0 – $1,000,000

19 sales

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$1,000,000 – $2,000,000

77 sales

.

$2,000,000 – $3,000,000

38 sales

.

$3,000,000 – $4,000,000

20 sales

.

$4,000,000 – $5,000,000

9 sales

.

$5,000,000 – $6,000,000

2 sales

.

$6,000,000 – $7,000,000

1 sale

.

$7,000,000 – $8,000,000

1 sale

.

$8,000,000 – $9,000,000

1 sale

.

$9,000,000 – $10,000,000

0 sales

.

Above $10,000

2 sales

.

Total

170 sales

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Undisclosed

73 sales

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

UPDATE

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

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

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

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

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

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

So out of the 181 years:

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

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

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

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

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

^__^

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

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30.10.09Robert Simeon1 Comment »

My curiosity was stirred last week by M Jackson, who said that, (subject to approval) the Australian Securities and Investment Commission (ASIC) may allow you to have a punt on our property markets. Described as a world first, ASX punters can take out a derivative contract based on Rismark/RP Data market indices which are in turn quoted daily to the share market. I did laugh when I read ‘daily’ – try months after the event if real estate agents decide to block data sales access.

Back to M Jackson’s comment on last week’s blog – “Contrary to popular myth, the water in Australian plugholes goes down the same way as everywhere else. So, too, the housing market. Figures from the Bureau of Statistics (ABS) on Monday showed that prices in eight capital cities were down by a record 2.2 per cent between December and March. The fourth quarterly fall in a row brought the year – on – year rate of decline to almost 7 per cent.”

Rismark/RP Data reported national dwelling values increased by 1.52 per cent for March 2009. Then the ABS reports a 2.2 per cent decline. Somebody got it wrong – but hey, take a punt?

Tim Mooney Photography

www.timmooneyphotography.com

Back to M Jackson’s comment – “Gross rentals yields of about 3 per cent, meanwhile, are near all – time lows; if houses were stocks, they’d be trading on wobbly price/earnings multiples of more than 30 times. Unemployment data, to be released on Thursday, may show a rise to almost 6 per cent, the highest level in six years. Job ads fell again in April. Mortgage flows are sputtering. The props are falling away. Currently the SFE is constructing a tradeable index on Australian housing, which should be completed by and ready by August 2009. I can’t wait to go short. If there was one specific to the Lower North Shore in Sydney. I would have double the size positions.”

I thank M Jackson for his input and look forward to reading more responses to our blogs.

The Global Financial Crisis was brought about by global banking institutions investing in (probable and possible) markets based on high debt ratios – otherwise known as gambling. The process for aggregating property data has always been flawed – highlighted by the simple fact that the ABS and Rismark/RP Data constantly report conflicting property data positions. Definitely not an each – way bet!

Consider the property market reality, if ASIC approves the trade derivative contracts and the Australian real estate agencies automatically cease providing all sales data to all the aggregators? It would then be one, two, three, four, five and six months until such data became available. Just who would punt on such irregularities? The data aggregators don’t act in harmony with real estate agencies in Australia where there is not the slightest possibility of any change – anytime soon. I would predict (and support) a total real estate data black–out.

After all, we act for our vendors (first and foremost) and are under absolutely no obligation to report sales data that aggregator’s then on-sell to institutions. One only has to look at the banning of shorting banking stocks to observe that this is conducive to assisting economic growth in a recession. The real estate industry is the largest employer in Australia where our economy is only in a sound position because our banking system is world’s best practise and world’s best profits too.

Simply put: real estate agencies would cease reporting sales and rental data and agents would then lengthen the odds quite considerably. If such a market was created where (just say) you could bet on the Mosman market – I would hope that collectively, Mosman agencies would turn such a proposal into a blank canvas with data support.

From “bricks and mortar” to “punt and hunt” derivative markets! The only people that I can see making money from these proposed markets are actually the real estate agents. Is this Australia’s financial version of subprime – a buy position without actually owning a house? Short on being exact and very long on accuracy.

I thought Malcolm Turnbull’s Budget response to be lame (to say the least). However, with the possibility of a double dissolution around the corner, it makes sense to keep ones “powder dry”. As one subscriber said this week, “depending upon the government for your future financial security, is like hiring an accountant who is a compulsive gambler!”

Ruddy Fantastic and Wayne Swans’ missing word disorder’ may have been cured this week when it was revealed on www.smh.com.au “It’s been suggested that Kevin Rudd would not utter the phrase “$300 billion” for fears his words will be used in coalition advertisements during the next election campaign.” So much for “sticks and stones may break my bones but words will never hurt me.” Then “Mr Rudd said Australia’s debt would peak at “around 200, or gross debt at about 300” in 2013 – 14. Now journalists are on to this political spin game and will play this to their hearts’ content. Very petty, although Australia’s deficit needs much more than petty cash as we will continually be reminded for many years to come.

Australia’s housing prices are at their most affordable level in seven years and in the March quarter the Housing Industry Association – Commonwealth Bank First Home Buyer Affordability Index recorded a 14.6 per cent increase. The average home loan fell by 11 per cent from $2056 a month to $1831 last year.

Despite confidence levels still being down, car sales in April were up on the March figures. Just as interesting is that in Mosman on www.domain.com.au there are only 118 houses/semis (I removed double entries, apartments, and out of area listings from the listed 135) available for sale which is an all time low in available stock levels. This will only get tighter over winter given that purchasers are now engaging with vendors.

This week’s video is a brilliant story about the annual Balmoral Burn Race Day which happens next Sunday on May 31. The Balmoral Burn Sponsors’ Dinner takes place on Friday May 29, 2009 so watch the video for more details. Keeping in the theme, this week’s aerial photograph by Tim Mooney Photography, highlights the best beach on our planet and in the background Awaba Street – the Balmoral Burn tread mill. Congratulations to Phil and Julie Kearns who started this brilliant fundraising event back in 2001. Given that I have won the race three times now, I am no longer eligible to compete.

Cheers ^__^

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

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22.05.09Robert Simeon8 Comments »

Sounds like the latest “add” word in political speak today, is temporary. If this week’s media spin from Ruddy Fantastic is anything to go by – where how temporary is temporary, one might ask?

Speaking at a lunch in Perth this Wednesday, Prime Minister Kevin Rudd said” this global economic recession has also dragged Australia into recession and has also produced the single biggest collapse in tax revenues in post – war Australia.” What Ruddy Fantastic failed to take into consideration was that tax revenues are down because we are all earning less, so it is not just the Federal Government feeling the pinch.

Kevin Rudd said, (here we go) a temporary budget deficit was inevitable given the current economic crisis. “In the current unprecedented global conditions a temporary deficit is not an option it is inevitable.” And, “that is why temporary deficits are necessary and temporary government borrowings are necessary as well, necessary to support businesses and support jobs until the private sector recovers.” Meaning when the private sector recovers government tax receipts then increase – however historically budget deficits in Australia have never before been temporary.

Treasurer Wayne Swan was busy spruiking that the Australia economy will rebound faster than international forecasts predict. Alas, the meaning of temporary. He said “the consequence of that is a higher temporary deficit.” All eyes are now fixed on the May 12; budget to:

A) See just how large our temporary budget deficit is.

B) How many times the word temporary will be used in the explanation of the budget deficit.

On budget night we will also find out how temporary is the First Home Buyers Grant (FHBG) which from a real estate agency perspective has resulted in a surge of lower price range property transactions. The 7.30 Report on March 9, 2009, revealed “Encouraged by the lowest interest rates in decades and the Rudd Government’s decision to double the first home buyers grant, nearly 30,000 people have entered the property market since October. However, at the top end of the market it is a different story, an oversupply of properties for sale is driving down prices.” I would suggest that Mosman does not offer an oversupply of top end properties rather an undersupply, given the anticipated bloodbath of mortgagee sales, simply did not eventuate.

The Housing Industry Association (HIA) is proposing that the First Home Buyers Grant Boost (FHBG Boost) be increased from the current $21,000 to $30,000 for the purchase of a new home and decreased from $14,000 to $7,000 for existing homes. I would be most surprised if such a proposal came to fruition. No doubt the “Boost Package” is driven by the news that new home sales rose to their highest level in 13 months in March thanks to the FHBG (without Boost). Total new home sales rose by 4.2 per cent in March where 8,210 sales were recorded, accelerating the 3.9 per cent growth pace set in February, 2009.

A few months ago, I likened the FHBG as Australia’s mini sub-prime given that again we see identical DNA in that; too many are borrowing too much – too fast! Already in our agency, we are witnessing tenants giving notice to take up the FHBG because that it will be (possibly) removed after June 30. The irony is that before we had tenants competing against one another because of the record low vacancy rates. Now they are competing again against each other to secure a property, because of the FHBG – a legacy of record interest low rates and high rents. What they don’t take into consideration is that interest rates rise much faster than rents which raises the potential of negative equity in years to come. Why?

Access Economics published a report this week which identified that by the time the next election is due there will be close to one million unemployed. While Australia’s recession is unlikely to be as deep as those in comparable countries, the unemployment rate is set to hit 8.5 per cent late next year as the economy reels from the steep collapse in commodity prices. At no stage did Access Economics use the word temporary.

With interest this week, I read an article in The Sydney Morning Herald by Jessica Irvine titled, “It’s bricks and slaughter out there.” A brilliant article in which Irvine wrote, “But it’s not just parents egging young buyers on, it’s politicians. As preparations for this year’s budget enter their final stages, the Rudd Government must decide whether it will extend the deadline for the increased first-home owners grant past June 30. I don’t think they should, but suspect they will.

Labor has undergone an about-face on housing policy. The contrast between pre-election posturing and the reality in government is stark.

On July 27, 2007, the Labor opposition hosted a “housing affordability summit” in the main committee room in Parliament House. About 150 housing experts from all over the country braved Canberra’s winter chill to discuss solutions to the housing affordability crisis.

I was there, there was little agreement on what needed to be done, but summiteers were unanimous in what shouldn’t be done. Everyone agreed that increasing the first-home owners grant would simply result in higher house prices.

Labor seemed convinced and produced a discussion paper quoting the chief economist at ANZ, Saul Eslake, saying: “Anything which puts additional cash in the hands of buyers …results merely in more expensive houses.”

This is certainly the case today, based on the latest figures released by the HIA. The decision by Ruddy Fantastic to increase the FHBG will be judged in history as a brilliant economic decision or, a monumental massacre of young Australians where bankruptcy remains a strong possibility.

Maybe, they should learn from Nathan Rees over at Fort Crumble who recently decided to withdraw financial backing for the AFL’s plans to locate a second team in Western Sydney. The reason why Fort Crumble withdrew? They reportedly decided pumping big money into the AFL’s expansion- right in the heartland of rugby league – would risk a voter backlash. The politics of the decision making process.

I then assume that this explains the sudden surge by politicians to use the word temporary given that if their respective economic policies go pear shaped – in return they can then become the temporary government. Bankruptcy is definitely not temporary – not in Australia anyway.

Let’s hope Ruddy Fantastic changes the word temporary to exemplary. Sugar coating is not the answer in a Global Financial Crisis where unemployment and budget deficits won’t be temporary either.

Cheers ^__^

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

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1.05.09Robert Simeon4 Comments »