Julia Gillard not only unpopular, she also lacks authority – John Howard the Prime Minister will now struggle to remain at The Lodge post Christmas. Peter Costello entered the economic discussion this week when he wrote in The Sydney Morning Herald – Without a carbon tax, steel industry jobs might stand a chance. Looking forward, I believe that at this point in time a carbon tax will struggle to see the light of day. It is a case of simply joining the dots given Treasury warned in 2009 of higher Aussie dollars likely impact on manufacturing which in all probability would explain why the government rejects calls for manufacturing probe.

The greatest problem with the Gillard government is that it is politically deaf! To such an extent that Rudd last man standing in Labor rout: poll where Foreign Minister Kevin Rudd would be the only federal Labor MP left in Queensland if an election was held this week. Which got a bit more interesting given former Queensland Premier Peter Beattie will consider a run for Prime Minister. So, Beattie for PM? Gillard laughs it off.

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Sydney housing property defies national downturn to record price increase RP Data Rismark Home Value Index found defies national downturn to where over the year to July, values in capital cities are down 2.9 per cent. Brisbane – 6.6 per cent, Perth – 6.3 per cent, Melbourne – 4.3 per cent, while Canberra + 1.9 per cent and Sydney + 0.5 per cent which explains why, home loans grow at slowest pace on record. In Sydney we are really witnessing fascinating market machinations where last weekend, Sydney had 362 auctions (down nearly twenty per cent on the same time last year).

Vendors aren’t selling which has led to rents increasing by up to eight per cent over the year an expected result with record low vacancy rates. Urban Taskforce CEO Aaron Gadiel estimates Sydney’s housing supply shortfall at 46,000 homes and predicts it will double within three years.  “We’ve seen three straight months where NSW private sector home approvals have trended down by more than 4 per cent a month.”

The slowing market convincing home owners to stay put which is actually a positive sign where Mosman has the lowest delinquency rate in NSW. Which takes me to a great debate over at Property Observer between Steve Keen and Christopher Joye, when Keen wrote, China our one saving grace as Australia’s debt- driven love affair with house prices faces the chopping block. Christopher Joye responded housing prices aren’t for the chopping block, despite the Steve Keen prophecy. As Christopher Joye points out – “Like most of Keen’s predictions, such as the “best – case scenario’’ during the GFC being 11 per cent unemployment and a recession “more severe than 1990 and lasting 1.5 times as long” (unemployment peaked at 5.8 per cent while there was no recession), his 2008 predictions proved way wide of the mark. For the record, Australian dwelling prices are today 13.3 per cent higher than the level at which Keen put his reputation on the chopping block, and 89 per cent higher than the level at which Keen expected them to be.

MOSMAN – 2088

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• Number of houses on the market last week – 105
• Number of houses on the market this week – 107
• Number of apartments on the market last week – 99
• Number of apartments on the market this week – 93

CREMORNE – 2090

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• Number of houses on the market last week – 13
• Number of houses on the market this week – 14
• Number of apartments on the market last week – 30
• Number of apartments on the market this week – 31

NEUTRAL BAY – 2089

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• Number of houses on the market last week – 7
• Number of houses on the market this week – 9
• Number of apartments on the market last week – 70
• Number of apartments on the market this week – 67

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 It is interesting to note from the past week’s activity that we are starting to see activity above the $5,000,000 mark again.

I was amazed to read Federal MP Rob Oakeshott says Australia should consider a road congestion tax when the reason why we have congestion is because governments have failed to spend on road/transport infrastructure. Obviously, he did not read the article I filed this week on Property Observer – Stupid property taxes should not be a revenue stream for weak governments.

Source: The Australian

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“A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets. The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in 2008” – market crash ‘could hit within weeks’, warn bankers. This week ANZ chief executive warned World on edge of crisis where he labelled Europe “a mess” and warned that failure by political leaders to tackle economic problems could lead to a much greater global crisis.

Back home there have been some fascinating observations on the political consequences of Australia’s resources boom where the Gillard government is fast-learning that there is more to life than just mining. Labor turns the boom into a crisis a great insight by Paul Kelly, Editor – at – large The Australian. “The crisis now engulfing Australian manufacturing has been long predicted and much foreseen yet the inescapable impression is that our decision – makers have been taken by surprise and are scrambling to do something.”

The government has been caught out and the observers on the hill are not impressed.

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It would be fair to suggest that we are at critical crossroads although Australia’s public debt to GDP ratio is among the healthiest in the OECD at approximately 22 per cent. Sentiment has Fort Fumble not governing, drowning with Julia Gillard back to rock bottom: Newspoll. The ongoing Craig Thomson prostitution scandal further ignites: hard questions will not go away. I don’t believe it will bring the government down – see you Thomson, raise you Wilkie so Australia’s government now hangs on the actions of just two individuals. The flip side – Crean for PM? Why the bookies think it’s not so far fetched. Whatever the case Graham Richardson says the ‘awful smell’ of the Thomson affair won’t go away. Just over 365 days ago the ‘new paradigm’ is looking as vibrant as Australia’s manufacturing industry.

A minority government has proved to be an abysmal failure which has been reinforced in the polls and the reality that Australia’s Prime Minister has until Christmas to turn things around. If you look at Australia’s political history, John Howard lost the 2007 election when he ran Work Choices. Kevin Rudd was done and dusted on the hopeless handling of the mining tax and Julia Gillard will fall over her carbon pricing scheme.

Source: The Australian

Residential and commercial construction remains in the doldrums, according to the latest ABS statistics new home building slumps in June quarter. Obviously “building a better Australia” does not apply to residential and commercial construction? Three population bubbles will cause housing demand, not supply, to skyrocket even though it’s fascinating that rising inflation makes housing more affordable. Well we are not building, so I have to agree with Christopher Joye that house prices will be 55% higher in a decade.

Last week, we revealed the Mosman clearance rates for houses so this week we investigated the adjusted clearance rates for apartments and townhouses. Having looked at the data results from RWM Research Department, I wonder if Mosman has the lowest clearance rates in Sydney.

Here are the Mosman townhouse/apartment sales from 2001 to 2011 – just like the house statistics they failed to reach 50 per cent.

Source: Domain Property Data

• 2001 – 106 auctioned, 52 sold with an adjusted clearance rate of 44%
• 2002 – 114 auctioned, 66 sold with an adjusted clearance rate of 49%
• 2003 – 96 auctioned, 47 sold with an adjusted clearance rate of 42%
• 2004 – 66 auctioned, 25 sold with an adjusted clearance rate of 28%
• 2005 – 89 auctioned, 31 sold with an adjusted clearance rate of 29%
• 2006 – 74 auctioned, 31 sold with an adjusted clearance rate of 30%
• 2007 – 62 auctioned, 38 sold with an adjusted clearance rate of 47%
• 2008 – 95 auctioned, 43 sold with an adjusted clearance rate of 37%
• 2009 – 41 auctioned, 16 sold with an adjusted clearance rate of 27%
• 2010 – 77 auctioned, 38 sold with an adjusted clearance rate of 38%
• 2011 – 48 auctioned, 23 sold with an adjusted clearance rate of 33%

MOSMAN – 2088

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• Number of houses on the market last week – 103
• Number of houses on the market this week – 105
• Number of apartments on the market last week – 98
• Number of apartments on the market this week – 99

CREMORNE – 2090

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• Number of houses on the market last week – 17
• Number of houses on the market this week – 13
• Number of apartments on the market last week – 26
• Number of apartments on the market this week – 30

NEUTRAL BAY – 2089

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• Number of houses on the market last week– 9
• Number of houses on the market this week – 7
• Number of apartments on the market  – 70
• Number of apartments on the market this week – 70

Now this is where it gets interesting – if the Mosman housing market is as strong as we believe it to be the number of houses available should start reducing over the next month.

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

We have been asked to use our database to try and assist finding Daniel who went missing six weeks ago – so if you please see him follow the contact details on the Facebook page – Daniel O’Keeffe.

Let’s hope that next week, the discussion is about economics and not a politician’s callisthenics with prostitutes.  Or should that be a wandering wallet!!

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Forget the last federal election that resulted in a hopeless hung parliament – the new rule is incarcerated in people speak – hallelujah as “united we stand – divided we fall.” Despite what politicians may say with bated breath – polls threaten their very own livelihoods as much as they threaten our right to agree or disagree. Left field policy announcements within the Rudd/Gillard regime has been met with aggression that resurrected – if you don’t like it run an advertising campaign first initiated by the mining companies.

Politicians want to be in the limelight – not a back drop hidden within a party struggling for that voter point of difference whilst in Opposition. It is interesting to note that parties in Opposition burn leaders with regularity given when Bob Hawke was Prime Minister (1983 – 1991) the Liberal Party went through four Opposition leaders, Andrew Peacock (1983 – 1985), John Howard (1985 – 1989), Andrew Peacock (1989 – 1990) and John Hewson (1990 – 1994). When Paul Keating was elected Prime Minister (1991 – 1996) he saw off John Hewson (1990 – 1994), Alexander Downer (1994 – 1995) then lost the 1996 Federal election to John Howard (1995 – 2007). Federal Labor then waved good bye to Kim Beazley (1996 – 2001), Simon Crean (2001 – 2003), Mark Latham (2003 – 2005) and Kim Beazley (2005 – 2006). Enter Kevin Rudd (2006 – 2010), Brendan Nelson (2007 – 2008), Malcolm Turnbull (2008 – 2009) then Tony Abbott (2009 – present).

Julia Gillard removed Kevin Rudd on (24 June 2010 – present) which is the first example of an elected Government burning a Prime Minister. Now we see (Labor worries as PM struggles) and even stranger Labor hits a 15 – year low but Rudd wins where the HeraldNielsen poll now has Kevin Rudd and Malcolm Turnbull as the preferred party leaders! Since 1983, Australia has had five Prime Ministers and twelve Opposition leaders with Kevin Rudd becoming just the second Prime Minister to serve just the one term and Julia Gillard fast tracking becoming the third. Federal Labor has now had two Prime Ministers in four years and NSW Labor had four Premiers in four years – a pattern forming?

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Let’s face it the Carbon Tax is a monumental debacle of mammoth proportion with many questions being asked – well Prime Minister, let’s see if you can hold your nerve. As key union puts Julia Gillard on notice over carbon tax which means that Julia Gillard’s carbon hopes up in smoke. Resembling an all in – brawl as food giants join war on carbon tax a great read on Carbon Tax is learning the hard way: Australia’s policies to reduce emissions – Grattan Institute. Throw in another major problem in that the Gillard Government is now fighting a bewildering array of battles, as it fashions a budget bound to open more fronts – budget blues.

Chris Richardson, Deloitte Access Economics: “The Global Financial Crisis was not a drama for our economy. It was and is still a drama for the Budget.”

Chris Uhlmann: The last forecast said this year’s deficit would land at $41 billion in the red. Next year the projected budget is 412 billion. But slowing growth and falling company and income tax receipts now mean those numbers are too rosy. With the Budget just weeks away, this year’s deficit will be worse.”

Chris Richardson: “Looking at the budget as a rolling 12 – month total, at its worst, it was a little bit over $60 billion in deficit. But that’s more or less where it still is.”

Which would then explain why Wayne Swan leaked figures showing $13bn slump in growth: Hockey. Back to that white board and “Building a better Australia.” As Julia told us!

Source: The Australian

Which brings us to the NBN Co debacle given Fort Fumble has temporarily terminated connections as business chief slams NBN rollout describing it as a squandered opportunity and one of the worst examples of pork – barrelling.  This should not come as any great surprise given Fort Fumble spent $2.5 billion on roof batts, $16 billion on the overpriced BER and spending $50 billion on the NBN Co – without a cost benefit study. Given it has now been halted due to blow – outs Fort Fumble is now considering a … wait for it…. NBN may accept greater risk which translates into greater debt and yet another debacle which would explain why it is currently suspended.

RBA minutes point to rates staying put which means that reading between the lines the cash rate won’t be moved until sometime within the December Quarter 2011. The months of October, November and December will see some upward movement(s) of the official cash rate. With the Federal fudge (oops I meant to say budget) to be released early next month it appears that Wayne Swan is about to announce that forecast growth will drop significantly from the earlier projected figure of 3.25 per cent to 2.25 per cent. That then would equate to a one per cent drop in Australia’s $1.3 trillion economy so the black hole is then $13 billion. Yes the Federal budget will be ugly but not as ugly as the manner in which Fort Fumble has handled Australia’s finances.

NSW ranks bottom in economic momentum as costs eat into savings, and sense of security which means that Barry O’Farrell has plenty of work ahead to rejuvenate and renovate the previous number one economy in Australia. A huge announcement this week: Barry O’Farrell’s pledge to put lid on power which is in stark contrast to the now collapsed Fort Crumble who pinched $15 billion in dividends and put nothing back into electricity – dividend freeze a crucial step.

New home loan numbers plunge: John Symond as residential property prices peaked in 2010 and will continue cooling in the next six months as big mortgage brokers report a 20 per cent drop in loan numbers. It’s too early to extrapolate the January – March 2010 figures against the January – March 2011 sales results – we will do that in a few week’s time as they are still being processed.

In the meantime here are the Mosman house sales and total value for the last ten years from 2000 – 2010 which is a Mosman first and Virtual Realty News exclusive.

Source: Domain Property Data

MOSMAN HOUSE SALES AND TOTAL VALUE – 2000 TO 2010

• 2000 – House Sales: 336 Total Value Of All House Sales: $464,002,395
• 2001 – House Sales: 413 Total Value Of All House Sales: $709,864,118
• 2002 – House Sales: 358 Total Value Of All House Sales: $723,591,555
• 2003 – House Sales: 359 Total Value Of All House Sales: $829,527,432
• 2004 – House Sales: 300 Total Value Of All House Sales: $677,939,257
• 2005 – House Sales: 293 Total Value Of All House Sales: $692,071,000
• 2006 – House Sales: 380 Total Value Of All House Sales: $947,918,130
• 2007 – House Sales: 395 Total Value Of All House Sales: $1,153,099,720
• 2008 – House Sales: 255 Total Value Of All House Sales: $867,925,612
• 2009 – House Sales: 299 Total Value Of All House Sales: $789,424,751
• 2010 – House Sales: 333 Total Value Of All House Sales: $870,181,155

RWM Research: In 2007 Mosman broke the $1 Billion mark for the total value of houses sold in a calendar year with 395 houses selling – also the record.

Next week, we will look at the average and median prices for Mosman houses from 2000 – 2010. As well as scrutinise the upcoming Federal Budget. ‘Wayne’s World’ is suffering as he has lost those ‘rivers of gold’ where many point a finger at his self-created ‘rivers of waste’.

Have a fantastic and safe Easter – savour and share our ANZAC spirit.

“Lest We Forget”

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

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

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

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

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

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

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

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

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

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

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

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I would say yes, given the global financial crisis (GFC) in the Australian vernacular was an “easy come – easy go” experience where we experienced just the one quarter of negative growth. If you remain somewhat confused as to where the property markets are headed, don’t be.  It appears that everyone else is too. International Monetary Fund sounds warning on property bubble in Asia – Pacific and it was reported that Australia is not immune from a potential property bubble. The report said “in Australia, a combination of rapid interest rate cuts and the extension of the first – home buyers grant ensured that property remained robust during the worst of the financial crisis. Most recently, there has been a 13 per cent jump in median home prices to the end of February.” Then “the IMF report comes amid evidence the resilience in house prices has caught the eye of the Reserve Bank (RBA) Minutes of the Reserve board’s April meeting, when it announced the fifth rate rise since October, showed members noticed the property market’s continued buoyancy despite new home loans falling”. Evident with Sydney auction clearance rates graph courtesy of Australian Property Monitors.

RBA eyes May rate rise which I believe is odds – on, having read the minutes of its April 6 board meeting where they will move the official cash rate from 4.25 per cent to 4.50 per cent. Home truths on the whys and wherefores of the property market which identifies the property conundrum: housing is the biggest market in Australia – yet there is no central database that records transactions and prices. “Housing markets in the United States and Britain lost 40 per cent of value from their 2007 peaks and are only tentatively recovering, that Australian market appears only to have dipped slightly in 2008 (the pain was contained to the top end) before shooting up in the past 12 months.” Now the biggest clue “banks have changed their attitude. Where they used to push 100 per cent loan – to – valuation ratios (LVRs) now they lend 80 per cent over the value of the asset before demanding a swag of fees (usually labelled lenders’ mortgage insurance).”

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I love challenging Tim, who called me this week and asked “what shot do we need?” I responded, “The Emperor (Kevin Rudd) got his Health Reform approved so we need a smiley face. Can you shoot Luna Park, Ripples restaurant, North Sydney swimming pool, and a ferry at Luna Park wharf?” The man is pure genius! Tim again, exceeded our expectations – his shots make for great Christmas cards too.

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Macquarie’s Robertson sees easing in house price gains where with his latest note to clients Mr Robertson said “anyone with their eyes open is aware that usually low funding costs over the past 12 – 18 months powered a good part of the double digit house – price gains that have excited so much comment and talk of “bubbles”. Economists baffled by robust property market given after five interest rate increases in seven months they wonder how auction clearance rates remained so high for so long, along with rising median house prices. “It’s a bit of a puzzle,” said Macquarie Bank’s senior economist, Brian Redican, who once worked at the Reserve Bank. “You wonder how auction clearance rates remain very high along with house prices themselves.” Which takes me to the real estate ring of confidence – remember Aussies would bet on two flies climbing a wall.

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Prestige home market lies becalmed, Median prices up in Sydney – but not as much as in Melbourne and Penthouse sales hit bargain basement had Sydney Morning Herald property editor Jonathan Chancellor a very busy journalist this week. “Sydney’s $5 million plus prestige residential market has stalled. The number of sales this year sits at slightly above the low levels recorded during the trough of the global financial crisis. There have been 45 sales higher than $5 million during the first quarter of the year, a small rise on the 44 sales in the March quarter last year. Volumes are well down on the 74 sales in the 2007 March quarter, and 63 in the 2008 March quarter.” Richardson & Wrench Mosman & Neutral Bay (RWM) recorded 5 of the recorded 63 sales. Subscriber sales jumped to $942,854,220 this week.

Australians’ insatiable appetite will continue although it must be noted that home loans, power and now gas – the family budget squeeze is on given NSW families will have to find an extra $3,000 in their annual budgets by the middle of next year as the soaring cost of living consumes an additional three weeks of the average worker’s wage. Even though land prices are growing at their fastest rate since 2004. No data: foreign buyer property puzzle which by coincidence identifies a twelve month anniversary since The Emperor abolished the acquisition by foreigners of Australian real estate. At 6:38 pm on April 21 I received this notice REA as well as a increased number of emails from Russian buyers agents looking to acquire residential properties.

Foreign men of property move in which demands an answer as to exactly why The Emperor approved this policy change – without consultation. Given home – ownership dream dims for Gen – Y where NSW ‘s dire housing shortage has been exposed by figures revealing that the State needs an extra 120 homes every week to keep up with population growth. To make matters worse, the average rental  of a Sydney house  is approximately $110 more a week than it was five years ago. So Fort Fumble wastes billions on pink batts and the building education revolution – and now it is taking on health? Back to Luna Park and that “Big Dipper” which resonates with Kevin 07. Although not alone – NSW still nation’s basket case, say analysts – the NSW economy continues to be the worst  in the nation and  analysts say, the government must urgently introduce initiatives to stimulate growth in housing construction, business investment and jobs.

As quick as a flash, The Emperor hightailed it to Tasmania rifts open in Kevin Rudd’s health plan given the rethink on insulation scheme over safety fears which then transformed into a junior minister Greg Combet announcing troubled insulation grants get the chop resulting in another taxpayer initiative $2.450 billion down the gurgler. Interesting that The Emperor was all over the stage announcing this – then hides when it is cancelled.

Bob Hawke and John Howard debate our future where the combined consensus was to remove states/territories from all forms of government.

Congratulations to Jacqui and Mike Rowland – Smith who this week delivered a brother for young Will – mother and baby are both healthy and happy.

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

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

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

www.timmooneyphotography.com

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

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

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

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

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

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

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

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

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

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

Cheers ^__^

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

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First to spruik the findings of this report was Financial Services Minister Chris “Noh Nut Hing” Bowen who must have thought all of his Chinese fortune cookies (better known as Treasury forecasts) had come at once. Breathing fire, much like his favourite red silk Chinese dragon pyjamas, Noh Nut Hing declared “Glenn Stevens today gave a very good endorsement of the government’s actions so far.”

Sadly for Fort Fumble (Federal government) it was a peek –in and duck opening statement when it was revealed that very little had to do with Fort Fumble’s economic cooking techniques – the oil in the prized Fort Fumble economic wok was spitting and burning without the usual high – five spice powder. Puff, the magic economic dragon, was tempered with the consequences of economic chop suey – (lawyers on hold) much like each edition of Virtual Realty News.

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So off to the opening statement we go. Glenn Stevens “By the standards of past recessions, however, this was a mild downturn. Although the evidence is as yet incomplete, this episode has been much less serious than those in the mid 1970’s, the early 1990’s.” What, no mention of the Great Depression? Fort Fumble revealed this week that the final outcome for the 2008-09 year was a deficit of $27.1 billion – a $5 billion improvement on the fortune cookie (Treasury) predictions of $32.9 billion.

Head economic waiter of Yum Cha proceedings Wayne “Sum Ting Wong” Swan, announced from his economic kitchen “the stronger than expected final budget outcome does not substantially diminish the fiscal challenge imposed on the Australia by the global recession, which has resulted in the largest fall in budget revenues compared with its comparable budget year forecast since 1930-31.” Obviously Sum Ting Wong was acknowledging a point that the Reserve Bank governor missed?

Glenn Stevens “So I think that it is reasonable to conclude, against the benchmarks of historical and international experience, that Australia has done quite well on this occasion.”(No mention of stimulus.)

“Why was that so?” (A Cadbury chocolate moment?)

“First, our financial system was in better shape to begin with, being relatively free of serious problems the Americans, British and Europeans have encountered. “ Umm would that allude to the collapse of HIH when the then government introduced prudential authorities? Obviously a coincidence, learned consumers of fine economic dining may think!

“China will easily achieve her 8 per cent growth target this year, led by domestic demand.” No doubt The Emperor arranged for his school plaques to be made in China.

Last but not leek, “The Commonwealth budget was in surplus and there was no debt, which meant expansionary fiscal policy measures could be afforded.” Past Prime Minister John Howard was last seen doing the cha-cha on his daily morning Kirribilli walk and was observed looking at one particular signboard.

Last Saturday, 682 Sydney properties were offered to the market – eclipsing the previous record of 571 homes and apartments set back in March 2007. Many suggest that this is a direct result of the first – home buyer’s grant which was halved this week. From October 1, the First Home Buyers Boost was reduced to $10,500 for existing homes and $14,000 for new homes – both subsidies will be scaled back to $7,000 next year. What happens to property prices at the lower end is anyone’s guess although increases in interest rates must be factored in. Already there are strong suggestions that we will see the Reserve Bank of Australia (RBA) increase the cash rate in November and again in December. This is self explanatory when you look at the following graphs which provide a compelling reason as to why lower income households will definitely be vulnerable. Given it is a long weekend, here is the RBA Housing Market Developments Report (an interesting report).

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Quite amazing! We are presently experiencing record immigration growth and a major concern is that building approvals fell 0.1 per cent in August according to Australian Bureau of Statistics (ABS) figures. Maybe a clue for the Henry Tax Retort (oops I meant Report). The RBA estimates that the underlying demand for new houses annually, is around 180,000 to 200,000 and we are not even close to meeting these consumer demands which explains the current housing patterns.

It is a very hard market to predict given the above data which identified national property values climbing by 2 per cent in August which is the highest monthly increase since RP Data – Rismark Home Value Indices began in January 2005.

Mosman is a much easier market to predict given that house volumes are at record lows and I’m not reading tea leaves either.

Richardson & Wrench Mosman & Neutral Bay was again awarded the number one sales agency in the Richardson & Wrench network last Saturday night. A fantastic team effort and special thanks to the nights major sponsor the REA Group.

Cheers ^__^

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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When we sent out our last edition in 2007 the buzz word was “sub-prime” and in 2008 it is “recession”. I have read with amazement, many articles that suggest enormous corrections in stocks, real estate, commodities, art etc. etc. As 2007 drew to an end, the Australian economy celebrated its 17th year of uninterrupted expansion and a change of Federal government. More importantly, were concerns on the outlook of global growth. This then led to several central banks easing growing monetary pressures by altering their previous positions and reducing interest rates. We expect the Reserve Bank of Australia (RBA) will fight inflation with yet another rate rise and probably another increase in August/September this year.

When Paul Keating delivered the “recession we had to have” back in the early nineties, one key ingredient that was missing then, yet prevails in our economy today, is the Internet. Depending on economic conditions, businesses today are now in a position (if they invested in the right technologies) to use this facility to communicate with markets.

Inflation rose by more than one per cent in the fourth quarter of 2007 (bankers prefer to call this period 2007Q4) where annual inflation sat at 3.6 per cent. It has been well documented that the RBA has a mandate to (preferably) keep inflation between two and three per cent.

Historically, we can expect a credit squeeze in 2008 and when this happens, lenders will change previous trains of thought. They will now insist that clients sell before they buy as against the previous trend, where home buyers purchased before they sold. When financial markets are volatile, lenders don’t like carrying debt – simple, but true. Initially, the proverbial property fence will require some reinforcement, although we expect the blue – ribbon property markets to continue where they left off in 2007. Mosman last year, broke all the records but that is another story which we will cover in next week’s edition. Our property market is very important to us and our subscribers and we will publish weekly editions all the way through to December 12, 2008. This probably explains why we have in excess of 9,500 subscribers.

So back to inflation – which (like in 2007), is fast proving to be the curse of many property markets. Again, when you look at this graph for the December quarter you will notice the same serial offenders appearing – housing and petrol. Inflation in Australia is indeed volatile!

Now enter Kevin Rudd who has transformed himself from “Kev – 07” to “Kev Fudd”, when he recently warned homeowners of “tough times ahead”. “Kev Fudd” announced last week, that “any interest rate rises in coming months would be a legacy of the Howard – Costello Government”. Not exactly true when you consider respective state Labor governments who, through greed and mismanagement, chased property investors out of the investment markets. It will be compelling viewing in coming months to see if mum and dad investors re-visit these markets again given the recent shock market events which have reduced their net wealth.

Cast your minds back to 2000 when the Howard Government introduced GST to the Australian economy under the guise of reduced state taxes. On the contrary – taxes have actually been increased! The “Dilemma Government” in NSW approved increases in land valuations for 2008 by an average of 4 per cent in Sydney and 5 per cent in regional NSW. It did however reduce its land tax rate from 1.7 per cent to 1.6 per cent (whoopee) then in the same breath, increased their non – taxable threshold to $359,000. In Sydney, you have a vacancy rate fast tracking one per cent when (in a perfect world) it should be close to three per cent.

Every quarter, the accelerants to inflation will be housing and petrol – what remains to be seen is how “Kev Fudd” addresses his political state bruvvers.

We predict that in 2008, 450 homes will be sold in Mosman and when you consider the number of prospective purchasers in this area, it is obvious that demand will always exceed supply. The wonderful thing about our property market is that the numbers have it. In the worst case scenario, we have the Internet and we just happen to have the greatest Internet business in Mosman. By the way subscriber sales have climbed to $709,646,000 – you can be the judge. Cheers ^_^

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