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Stop for a moment and consider your weekly participation in online polls.   Do they give you a better understanding of the  impact  they may have on our  political decision-making process?  Annabel Crabb the ABC’s Online chief political writer, hit the nail on the head this week when she wrote – My name is Annabel. I’m a pollaholic. “And what could be more democratic than acquainting oneself regularly with the tabulated views of the community at large?” We participate in these polls out of curiosity and await the results in the hope that we remain in tune with our values and perceptions. Politicians react immediately when the general public judge them (and their perceptions) as deceitful or, these days, as being “out of touch with the electorate”.

Alas – the decision making process for 2011 and beyond.

Such is the impact of our brave new world – a classic example voters back Julia Gillard’s flood levy where the first federal Newspoll for 2011 revealed that 55 per cent of Australians support the new tax. Just as interesting are the 73 per cent of Labor voters in favour and the 62 per cent of Coalition supporters who are against it. The major problem with the Gillard/Swan levy is that already, so many have donated.  So it’s a double–dip, especially when it came to light that  Taxpayers foot the bill for Queensland’s incompetence.

BUY PRINT

When questioned about Anna Bligh’s failure to take out an insurance policy against natural disasters (which every other state and territory within Australia does)  Julia Gillard said Queensland’s lack of insurance for its assets was “a matter for Queensland”. DOH! Julia, if that is the case, why then impose a national levy for government incompetence? If the rest of Australia has to bail out the government, then Anna Bligh should resign on the grounds of total incompetence.

Obviously Julia Gillard is listening intently on her i Pod  to “Julie Julie Julie – do you love me” and those wretched polls are as appealling as her dulcet  tone.  No doubt Julia was glued to the ABC this week when Four Corners ran The Real Julia. “Tonight we’re going to focus on the leadership of Prime Minister Julia Gillard, with the year’s first poll reminding us again that Labor and its leader are struggling”. Q&A followed, with playwright David Williamson commenting “Well, she’s acting very badly. That’s all I’m saying. I said that what she comes across as is a headmistress talking to a very, very dull class.” Julia must have been listening intently because the next day when Parliament resumed tears flow as Julia gets real.The online blogs went off “no she didn’t, I just watched it. Dry tears and fake crying, it was pathetic!”

School building data will soon be known where the suggested $2.600 billion of taxpayer–funded waste would have removed the need for a temporary flood levy. Throw in the $2.500 billion lost on the doomed Home Insulation debacle and we have $5.000 billion down the gurgler. Looks like Fort Fumble is about to get a name change with the announcement no more bungles, the PM insists – enter Fort Bungle. KRudd/Gillard Labor will go down as in Australian history as the government that spent the most, borrowed the most and then back flipped on the greatest number of policies. Even Julia doesn’t trust herself with public money so in the hope of circumventing  further bungles Prime Minister Julia Gillard asks Liberal John Fahey to scrutinise natural disaster recovery spending.

Taxpayers lead the world in funding Labor broadband bill as our imposed NBN report: one – tenth the speed at 24 times the price. Not sure what you think: I would prefer to see Australia spend the $36 billion on building the world’s best hospitals  instead of  very average broadband network.

Our property markets have started the 2011 year slow and steady. Buyers and sellers test the breeze – buyers hope that  prices will drop and vendors hope that  the Mosman market will increase by ten per cent!   Whilst our markets appear somewhat polarised by the incompetent governments of the day, it will be interesting to watch the change in sentiment when Fort Crumble’s Premier “Bambi” Keneally is rolled in next month’s election.

Our blackouts are third world combined with lies, damned lies and electricity policy given we have a Keneally imposed new crisis in NSW housing. In 2000 – 01, Sydney produced 7,731 housing lots at an average cost of $263 per square metre. In 2007 – 08 the number of housing lots had dropped to just 1,723 – 22 per cent of the 2000 – 01 levels – at an average price of $483 per square metre. Up almost 100 per cent. The Planning Minister then was Kristina Keneally who held that portfolio for three years.

If our broadband is that sick, then why was the 11^th and 12^th of December 2010 the highest recorded online shopping day in Australia’s history. I bet Anna Bligh has home insurance, so why did she not insure Queensland against catastrophes?  Julia Gillard appoints a Liberal to administer the flood/cyclone rebuilding simply because nobody in her cabinet has the ability to be manage it responsibly.

In the real business world a CEO resigns or is sacked when a business model goes belly–up. When will  politicians  adopt this ethic?  Cyclone Larry cost Australia $500 million.  Kristina Keneally blew that with the CBD Metro debacle.

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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11.02.11Robert Simeon3 Comments »

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

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

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

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

BUY PRINT

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

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

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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5.11.10Robert Simeon6 Comments »

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It has now been revealed that the weakest link found by the key players two independents who delivered the government to Julia Gillard, preferred a leader who was more likely to run Parliament to its full three–year term. Tony Windsor believed that Tony Abbott was more likely to run a new election as soon as possible.  Asked why he thought so, Windsor replied: “Because I think they would be more likely to win.” So the Independents tear us to a new Paradigm as $10bn regional package seals Labor win. Who will forget that speech Oakeshott holds Australia hostage with self – indulgent theatrics better known as his 15 minutes of fame and his later admission he weighed up offers from Tony Abbott that got ‘bigger and bigger’.

Australia has a population of 22,454,686 and 14,030,528 voted according to the Electoral Commissioner where the breakdown is interesting. NSW – 4,591,748, Victoria – 3,547,403, QLD – 2,707,464, WA – 1,356,228, SA – 1,102,827, TAS – 357,873, ACT – 246,436 and NT – 120,489 which was a 385,455 increase from the 2007 election, when 13,645,073 were enrolled to vote.

BUY PRINT

No time for woulda coulda shoulda from Gillard as less than 24 hours following the announcement the insults start to fly from furious Coalition as Liberal Senator George Brandis told ABC Radio, the Labor government had “as much legitimacy as the Pakistani cricket team”. Then Fort Fumble (or should that now be Fort Eggshell) faced a landslide when Wayne Swan appears at odds with independent by excluding mining tax from summit which promptly saw Windsor at odds with Labor over mining tax review as miners take up fight against rent tax again.

Even more revealing, Swan let Rudd down on MRRT: WA premier when it became obvious that many missed reading perhaps now politicians will stop trashing their reputations. One thing we are already assured of will be many more back flips as Hockey warns of government instability where it would be irresponsible to rule out The Revenge of The Emperor – Kevin Rudd back in the spotlight after Julia Gillard wins government.

I can see the headlines now “Gillard fights testosterone”, although I prefer, ‘here-ego’ again, to the polls! You would have noted that the new buzz word from our esteemed leader is “regional” which never saw the light of day in the pre–election hysteria. In whichever direction you look, you will see  too many seasoned bulls in the one paddock with very little room to ‘moo-ve’ in the lush paddocks surrounding Fort Fumble.

Economy held up well post – GFC, says RBA “in that market, unlike a number of others, conditions have generally returned to those before 2007.” Interesting to see that the Australian dollar has become the fifth most traded currency, overtaking the Swiss franc, with the AUD/USD remaining the fourth most traded currency pair. The Reserve Bank of Australia left rates on hold when directors met this week for their monthly cucumber sandwiches – rates unchanged, statement lacks ‘meat’.

The main triggers that determine home values are recessions, unemployment and interest rates, so this week’s announcement jobs surge increases rates risk delivers a strong possibility that in November we will see interest rates increased. On a positive note, investors are jumping back into term deposits making a comeback which means that the banks don’t have to buy more expensive money on the wholesale market. A great barometer for the property markets is consumer confidence, which is headed to ten–year highs.

Don’t bet the house on a property price bubble bursting provides an excellent assessment of how our property market is so different to the US housing market – subprime 2.0 is on its way. Yes our construction activity remains weak given poor planning to blame for building slump where again the culprit is Fort Crumble, Australia’s worst performing state government. The number of new dwellings completed in 1999 – 2000 was 32,358 and in 2007 – 2008 it was 14,795. The value of residential homes built in NSW since the late 1990’s has fallen from 36 per cent of Australian output to just over 20 per cent. The report estimates that for Sydney to keep up with demand, we will require 25,000 – 50,000 new homes each year. The present government target is 25,000. Here is an interesting graph showing Lower North Shore house and apartment sales from April 2008 to August 2010.

Here are the Mosman sales which remain consistent and strong for both demographics.

Mosman home values are still a very strong currency as the graphs indicate although when one looks at last week’s sales it is most obvious that the 2010 Federal election has confused consumer confidence. Based on our analysis of all data available, we can advise that we won’t see a property boom for at least a few years and prices will gradually increase. This leads me to suggest that we may now find ourselves in an entirely new space, where our households have transgressed from previous debt collection, to fast track debt reduction.

We don’t expect to see a sudden influx of properties on the market anytime soon, so get used to a property market that remains in a holding pattern (much better than a market in a folding pattern). The Mosman graph above, clearly indicates this and is anecdotal market evidence.

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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10.09.10Robert Simeon7 Comments »

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Try telling that to Fort Crumble who are in a desperate wait for all the cows to come home where the fields are alive with the sound of Independents. The rural revolution is coming thanks to Election 2010 which now resembles a classic case of “foot and mouth” disease, prompting post – election behaviour that could even suggest the arrival of “mad cow” disease on Australian shores. The classic symptoms were noticeable well before Australia was herded to the polls last Saturday – erratic behaviour, aggressive demeanour, disorientated memory and agitated herd mentality. The paddocks now require new fences and boundaries – hay hay, Australia has been hung out to dry.

The post electoral shin dig over at the back paddock had to be cancelled, due to a lack of support which sparked headline act Midnight Soil to go batty as they were coming out of retirement after agreeing to make a one–off election appearance.

Like a bull at a gate, the Mad Monk waved his red robe Abbott attacks Labor’s ‘civil war’ and the mantra could he heard all over the paddock reject Labor: voters’ message to independent MP’s as the hollow men led Labor to disaster. Then the head heifer corralled one of her baby bulls when PM bans powerbroker Arbib from appearing on Q&A. Such was the Labor of Love given the odds shorten on next Labor leader where it keeps getting worse as Gillard in big trouble no what happens given we have a tortuous road to government.

BUY PRINT

Back at the barn, even the cats showed their respective claws as the meows fast turned into a hissy fit McKew a ‘Labor hero’: Keneally then axing Rudd a strategic blunder:McKew. Then Rudd’s fault for dismal result, says Keneally although the alley cats were purring at a sneak preview of a Keneally bloodbath when the cool cats over in NSW go to the polls next March. NSW Labor headed for wipe out which brought about a familiar change after Julia … it’s the real Kristina.

Over in the northern paddock, more cats were hysterically meowing (as against dogs barking) where there was plenty of crying over spilt milk. I won’t suffer Rudd’s fate, says Bligh then Keneally lashed out at Bligh’s ‘NSW disease’ jibe. The 2010 Federal Election today resembles Old MacDonald’s farm although at this point we don’t envisage that the war will be enough to see our soldiers brought back home to restore order given disparities in voters’ priorities are even more stark now. Plenty of cries to cut the crap as electorates keep asking where is the vision? Now we have fighting on two fronts Labor war hurting bid for power and now Coalition begins its own civil war.

What spring promises for the market as sales sizzle, auctions cool although for the time being our property markets wrestles with election uncertainty. Australia this time around won’t be paying that much attention to what is happening in America given Obama running out of time to fix economy. This was not helped when this week it was revealed that US existing home sales dive to 15 – year low which is otherwise known as tumbling houses. Quite the opposite here in Australia given the latest HIA – CBA Housing Affordability Report identifies that more than ever before our property markets are out of reach. We are seeing some areas where prices are dropping then on the other side of the coin the prices are now increasing. Household debt in Australia has risen dramatically over the past three decades, but the number of home repossessions in Victoria and NSW is on the decline because we are keeping up the payments.

Last week we brought you the Dyson Austen Top 10 Prestige Residential Survey for January – March 2010 so this week we continue with the April – June 2010 results.

Interesting to note that the Eastern Suburbs recorded eight of the sales and Mosman posted two sales with RWM recording one of these two transactions. There are two interesting conclusions that can be observed from this data. Firstly, the top–end sales appear to be rebounding with suggestions that the upcoming Spring/Summer markets may see increased competition for these trophy homes. This was always going to happen – just that nobody really knew when.

Secondly, we have a new record since the global financial crisis (GFC).

The Dyson Austen Report, Simon Feilich acknowledged “if we look at this result (above) and the highest transaction ever achieved in the survey history ($45 million – Q3 2008) both sales occurred at a time when the $AU/US has just been devalued by 12% and almost 10% respectively.”

“NOTE: The jumbo prestige residential market is directly linked to the performance of the equity market, with the only other main external factor being the $AU/US rate as seen in Q3 2008 and the latest released Q2 2010.”

Since the election debacle the $A has started to fall again, due largely to the uncertainties ahead. It appears the nobody can form a government and even if they do, it will be a s#*& fight with all the internal bickering.

So I predict we will all be headed back to the polls in October.

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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27.08.10Robert Simeon2 Comments »

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

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

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

BUY PRINT

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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20.08.10Robert Simeon8 Comments »

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Plenty of negative sentiment about the property markets at the minute – so try telling somebody who cares, given purchasers and vendors appear a thousand miles apart (for the moment anyway).

Last week, I wrote that July can be a lost property month as so many are away on holidays. This is echoed with website traffic where Unique Visitors are busily visiting other sites such as beach resorts and or snowfields. Sour outlook for house prices as investors are the only source of growth in market which is interesting given investors tend to only play when they identify a buyer’s market. Clearance rate slumps as supply surges where it was reported “Sydney’s auction clearance rate plummeted at the weekend with just 49 per cent of properties selling – the poorest result for 18 months.”

To confuse the issue further home loans up for first time in eight months which is a clear sign of market recovery. “The number of new owner – occupied home loans rose 1.9 per cent in May, the first increase in eight months. Lending to housing investors continued its recent surge, rising 2.6 per cent in value, and has now swelled by 35 per cent since early last year. No doubt investors are circling First Home Buyers who are feeling the strain of increased funding costs.

The Australian Bureau of Statistics (ABS) released its lending finance approval data this week – lending remains subdued, easing bubble fears. The average in 2009 was $53.14 billion per month, compared to $65.67 billion per month in the pre – crisis year of 2007, meaning $12.53 billion less coming into the economy per month via lending institutions. At the current growth rate, total lending, at $51.58 billion in May, would take another six years to regain the high point of $70.63 billion reached at the end of 2007. I am not sure that we need to reach the high point anytime soon as borrowers told to pay down debt given the cash rate overtime will go up not down. In 2007 we saw borrowers lock and load debt where today, it is the complete opposite of lock and unload debt.

BUY PRINT

Business conditions hold steady given interest rates remain attractive as well as strong job growth, this identifies that Australia has solid business fundamentals. It should be noted that I am referring to businesses not governments. One of the biggest global bond managers Pimco rated Australia as a top investment destination so the outlook from a business perspective looks sound. Although that scenario could quickly change as banks face pressure over cost of lending and look likely to raise rates. Contrary to what the Reserve Bank of Australia (RBA) suggests, the banks are becoming increasingly triggered happy to reprice their mortgages – banks to cool on rate rises until after poll.

As a business we rely strongly on the Macquarie Economics Research data as an economic compass for our advice to purchasers, vendors and subscribers to Virtual Realty News. So let’s look at its economic forecasts, where the key issue is how long will rates remain on hold? Throw in a likelihood that banks could increase rates independently and the heat comes back into the market again.

The Macquarie Economics Research – Outlook for the September quarter 2010 identifies both calm and choppy waters ahead. The common denominator is quite simple (for me anyway) based on the above forecast, simply put: excessive debt is dangerous. This would explain why in our real estate market demographic we see bonuses being paid directly back into reducing debt levels. Leveraged lending on speculative investments is today a thing of the past, as households have all but ruled out those global financial crises – margin calls. A clear message: to borrow within not without.

Sydneysiders have always been proud that collectively our property markets are the benchmark for the Australian property industry, however for the very first time this is about to change. Our state Government – Fort Crumble (the most incompetent in Australia’s history) will show you why with the following graph.

Source: Australian Property Monitors

Senior Labor figures face annihilation – “Secret polling shows state Labor is facing a near wipe – out at the next election, with seven ministers and former Premier Nathan Rees among 28 MPs likely to lose seats. Polls by Labor and unions showed a 15 per cent swing against the Keneally Government statewide.” Fort Fumble due to their inability to provide infrastructure have driven residents to other States and Territories – Melbourne close to overtaking Sydney in price stakes. With annual population growth in Victoria running at 2.2 per cent, compared to NSW at 1.7 per cent, driving demand, it’s not hard to imagine Melbourne seriously challenging for the crown of Australia’s most expensive median priced city in the near future.

It will be a fascinating run into Christmas for both political and property voyeurs. The Colmar Brunton survey is always an interesting read Bubble – burst fears rise where investors are expecting house prices to remain flat or possibly fall. A very interesting read as well is show us your ticker, Gillard, before you force us to vote. Then our non – elect Prime Minister has to hose down the stoush where Paul Keating unleashes on Bob Hawke: I carried you through years of ‘Malaise’.

Julia Gillard announced that if elected the failed Emperor Kevin Rudd will sit on the front bench – I doubt she will hand him the Insulation Portfolio.

Steve and Richard have returned back from holidays so over to them.

I’m looking forward to road testing my iPad under my umbrella on the beach in Thailand as well as reading RISE OF THE RUDDBOT. Given what transpired at the Press Club yesterday PM Julia Gillard accused of double deal where it very much looks like the Labor Party is witnessing the Revenge of The Emperor – and it’s looking ugly.

Back in three weeks to cover the federal election which is taking more turns than a Winter Olympics.

Why is Mosman the strongest real estate market in Australia? Mosman is way out in front which, explains ladies and gentlemen, why, Mosman is Australia’s ‘numero uno’ municipality.

Just announced Federal Election – August 21.

Got a plane to catch,

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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16.07.10Robert Simeon7 Comments »

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

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

BUY PRINT

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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25.06.10Robert Simeon6 Comments »

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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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With my iPad still on order – my attention this week was on the release of ‘Betrayal’ – The Underbelly of Australian Labor by Simon Benson, senior political journalist at The Daily Telegraph. Like many Aussies who are in absolute dismay at what is currently unravelling within the seams of our ailing economy, here is a book with more twists than a Rubik’s cube. Rudd broke secret pact with Iemma so as quick as a flash The Emperor denied such a thing.

More importantly, past Prime Minister Paul Keating commented in Betrayal – “When the motivation of the machinery of the Party is unfurnished as to policy purpose, it has nothing to offer than to focus on marketing and polls. After a while the public becomes aware of this and they realise that marketing and spin have no basis … That is more the rule these days than the exception.” Again another week of prolific marketing spin from both Fort Fumble and Fort Crumble – our esteemed federal and state Governments collaboratively spinning this most uncomfortable electoral seat of bad poll therapy. So here I go again, to ‘spin’ this week’s edition of Virtual Realty News.

Heaven forbid – How Sydney’s iconic Opera House is at risk of ‘financial tragedy’ a damning internal report has revealed , that unless urgent action is taken, the Opera House will have to close. “In April last year Prime Minister Kevin Rudd hit the roof after The Daily Telegraph revealed former Premier Nathan Rees planned a $900 million rebuild.” Sydney Opera House has been lobbying Fort Crumble for ten years so in next week’s State Budget $130m to save Sydney Opera House from closure. Maybe our mining companies can save our Opera House. After all, they are expected to save everything else in Australia. As for the State, it is stone motherless broke – absolutely devoid of imagination and concept. Marketing and polls won’t save it.

BUY PRINT

Frustrating when you see that Fort Crumble wasted $500 million when it axed the failed CBD Metro proposal and it’s all about to get worse. Second harbour crossing – or chaos where a team headed by the state’s former rail and roads chief, Ron Christie, identified that without a second rail link across the harbour, the CityRail system will face paralysis by 2022. I thought we were already there which may explain why Fort Crumble is using marketing and polls in an effort to change its identity.

Fort Crumble is fast becoming Fort Chaos – mates race: $45 m deal snares MP as the V8 Supercars race will now cost taxpayers at least $10 million more over the next five years – the budget was $35 million. So when all else fails what does the government do? Labor shuts off access to secrets the Ombudsman, Bruce Barbour, is seeking to change a nine-word loophole where access to documents has previously, been refused. The cost of hosting World Youth Day came in $64 million over budget yet, $50 million was pledged this week, to keep the rugby league grand final in Sydney. This was $20 million more than Queensland was prepared to pay. Little wonder senior Fort Crumble ministers joke that Labor should re-name itself “the Keneally Party”, as it is now politics without a whiff of Labor just another example of marketing and polls.

The Reserve Bank of Australia (RBA) met this week to spin the cash rate where house prices ‘out of whack, set for slump’. A comment from abroad where the International Monetary Fund voiced its concerns on house price values compared to average incomes. Possibly too much time was spent reading two American dreams shatter although Australian property markets are witnessing households pull back spending as rates rise. Yes – a chill wind through house prices which prompted the RBA to place rates on hold.

Interesting to note that when property markets are booming, buyers adopt an aggressive pattern of behaviour and yet when property markets cool, become passive. I’ve been doing this gig for twenty five years now – currently I am selling the first home I ever sold in 1986 for $285,000. 43 Rangers Road Cremorne can now be purchased for around $2,250,000. So are you better off buying in an aggressive or a passive market? I suggest the latter. Here is an interesting graph courtesy of RP Data that I found this week. It amazed me, considering we are more a private treaty real estate model compared to public auction. In 2010 – 80.4 per cent of public auctions were conducted in Victoria and NSW. This will become an interesting topic in weeks to come.

For the month of June, the RBA left rates on hold prompting Treasurer Wayne Swan to make this comment: “This news will be a welcome relief for many Australian families and businesses around the country, who are of course doing it tough.” Again, this would be marketing and polls.

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Wayne Swan again “Tomorrow we have the national accounts, and I have every confidence that with the right policies in place, our economy can continue to be one of the best in the world over coming years… From our perspective on this side of the house, we will do everything to reform our economy, to build economic capacity, to keep pressure off inflation so we can grow sustainably.” Wayne, please allow me to explain a few basic economic fundamentals that escape you.

When Swan released his Budget 2010/11 – he announced that it was hedged on a consumer price inflation of 2.5 per cent, even though the RBA recorded a March 2009/10 rate of 2.9 per cent. In Virtual Realty News I suggested that inflation would be at 4.5 per cent by June 2010 and your 25 per cent increase for cigarettes tax slug would further ignite inflation. So what happened? Cigarette tax sparks inflation jump where prices increased by 3.7 per cent in the year to May, up from the 2.9 per cent annual pace in April according to the TD Securities – Melbourne Institute Monthly Inflation gauge. Given the RBA has an inflation comfort zone between 2.00 – 3.00 per cent, let me adjust my inflation prediction to 5.00 per cent by June (this month). Petrol prices up, rents up, vegetables and electricity always increase over winter – spin, marketing and polls.

Taxpayers fund Swan’s ad blitz where the mining tax sets nerves on edge as the big miners gave Rudd the fight he was looking for just that taxpayers never expected another back flip where they foot the bill on a tax that is yet to be passed,despite a $40 million advertising campaign approval. Although Rudd treats us like mugs with latest backslide on government ads. On The 7.30 Report Swan defends mining tax ads and the smaller miners reject Kev’s idea of help. Head of Infrastructure Australia offered this advice restart tax plan: Kevin Rudd’s man Rod Eddington as too did Alan Kohler The government’s RSPT spin is a disgrace. Then the first of many announcements as the tools go down Xstrata suspends development spending two projects over super tax and that, as The Emperor described earlier , is neither “bunkum” nor “balderdash”.

My iPad is yet to arrive so I keep reading Betrayal, so can marketing save PM? Absolutely no chance as the Mad Monk enunciates from his soap – box keep fighting Rudd and super – profits tax. Don’t pay too much attention to the March GPD figures. The June GDP will paint an entirely different position. Europe debt situation serious – Treasury which is a burning issue as too – home insulation inspections yet to begin. Kurraba Point declared a new suburb and ASIC give up on the Offset Alpine mystery.

The stand–off between The Emperor and Australia’s mining companies is a compelling visual. My tip: the mining companies will smash Fort Fumble. Why? Simply because nobody at Fort Fumble has ever run a business before. So how does one turn a big business into a small business? That would come down to marketing and polls. Australia would be better off if it had invested our $38.500 million in BHP and Rio Tinto shares.

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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4.06.10Robert Simeon11 Comments »

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That is what The Emperor (Kevin Rudd) thought and now they are fighting words where Fort Fumble (Federal Government) will be forced to perform yet another monumental back – flip on policy. Back to that over-worked drawing board where a 2010 federal budget is on the political rack.  The gloves are off as government and miners trade blows over tax as Wayne’s world comes unstuck which should not come as a great surprise when one looks at a government built around crumbling policy failures.

Ross Gittins in the Sydney Morning Herald wrote this  interesting story “Shonky advisers have led Rudd badly astray” It’s not just The Emperor’s reputation on the line, the Australian economy is on the nose too. The Minister for Mining, Ken Henry, who these days is wearing many hats, has a different interpretation.

Rudd’s dollar delusion – Since the end of April, the Australian dollar has been hit much harder than the euro, so for our decline to be entirely linked to the global crisis, Australia would need to be on its knees with a huge debt problem. But, of course, as Kevin Rudd correctly points out, the Australian government is in a strong borrowing position.  Leaving aside what was apparent in the marketplace, logic dictates that the mining tax had to be part of the slump.  A cavalier effort last Friday when dollar rout ‘stemmed by Reserve Bank’.

Let’s look back at The Emperor’s blackboard of back – flips: save the whales, fuelwatch, grocerywatch, kids laptops, takeover of hospitals by mid 2009, hospital reform, schools stimulus infrastructure programme, 2020 Summit (where he met Kate Blanchet), insulation program, refugees,  insulation industry, foreign investment review board removal, mining tax, childcare centre building program, carbon emissions programme and of course his “greatest moral challenge of our time” the list goes on. Is this the worst CV in Australia’s political history? In search of a photographic capture that best describes Fort Fumble’s business and economic outlook?

BUY PRINT

On Q&A this week, former Australian Prime Minister Malcolm Fraser (stole the show for mine) when he took this question from the audience and what a wordsmith he  is (and resigned from the Liberal party).

Paul Sherrington: “Controversial Melbourne columnists like Andrew Bolt and others have declared the Rudd Government to be the worst and most wasteful government in living memory, perhaps unfairly. Given a choice between the Whitlam Government, as you intimately know it, Mr Fraser, and the Rudd Government so far, which do you think is better?”

Malcolm Fraser: “Oh, you’ve got to say – I’d use different terms; “least worst”. The Rudd Government so far, but you didn’t take a very good – I don’t want to criticise journalists, because you know, some journalists have very extreme views and generally only report one side of a question, as we’ve heard, perhaps. The administrative failures of the current government, whether it’s in delivering houses to indigenous people, or whether it’s in putting insulation in roofs or building classrooms for schools with government schools costing several times what it costs private schools, or what other things they have sought to administer? They’re going to muck up the hospitals next. The administrative failures are gross and half of them aren’t pursued by the opposition and the administrative  failures are as great, if not greater, than the administrative failures in Gough Whitlam’s government. But Gough’s failures were of a different kind, of a different quality, and I don’t want to go into those now. It wasn’t straight out of administering what should have been a plain, straightforward programme, which for some reason this government seems totally incapable of doing.”

Now to those other deposits – not mineral but banking.  This week, we saw the “Big Four” banks  realise, given the current economic movements, (downwards) that they now ant your hard earned monies trapped away in their vaults – the banking oxygen of the future. Global Financial Crisis II looms if debt woes grow so it is reasonable to assume that our banks urgently require a topping up of liquid funds. Lending ratios have fallen from 100 per cent to 60 per cent in a matter of months for residential properties. The current offers are 6.00 + which is much higher than the current cash rate of 4.50 per cent. I would not lock and load in yet as it will get higher given the global demand for money. Throw in the fact that the Reserve Bank of Australia announced this week that credit card purchases rose 12.2 per cent over the year to March 2010. The value of purchases made in March was $19.9 billion, up by $2.1 billion from the previous year.

A busy few weeks for the Reserve Bank of Australia – who just released its Competition in the Deposit Market. See a pattern forming? For depositors, retribution, given term deposits are now challenging investment in the shock market, hedge funds can’t short you now and no more wild ride for Australian equities.
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We are definitely witnessing a shift where businesses and households are actively paying down debt as a direct result of the uncertain times ahead. Unsustainable home loans are of great concern where we now have a rise in middle – class bankrupts where even the Pope, ECB chief slam spendthrift governments. In Australia, we are already witnessing first hand interest rises kicking the stuffing out of auction clearance rates.

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This explains why deposit rates are suddenly attracting all the attention at the moment and in all probability will remain a major player for the foreseeable future. Work within the markets and not without them as this is not a viable time to pinch – hit profit taking models. Ever seen a correction before? Not sure if Hedge funds are actually not Dredge funds and it should also be noted that  Fort Crumble (NSW government) has successfully dredged NSW where in terms of infrastructure, it is now paralysed by parliamentary past performances. Prepare for 20 years of transport despair given it will be decades before any new roads are built.

Fort Crumble approves 4,500 new North shore houses where residents will now spend their annual leave on the Pacific Highway. Cashed – up foreigners snap up homes who spent $14.900 billion on houses and land last year. Once again The Emperor identified that he is an economic  illiterate and foreign investors selected Victoria and Queensland ahead of NSW. NSW once upon a time, like the fairytale, was the number one choice.

Sydney one of the world’s top 10 cities Australia’s other state capitals are out of the world’s top 20, but still in the top 40, with Perth ranked 21, Canberra 26, Adelaide 32 and Brisbane at 36.

• Vienna, Austria
• Zurich, Switzerland
• Geneva, Switzerland
• (tie) Auckland, New Zealand
• (tie) Vancouver, Canada
• Dusseldorf, Germany
• (tie) Frankfurt, Germany
• (tie) Munich, Germany
• Bern, Switzerland
• Sydney, Australia

As Malcolm Fraser once said “life was not meant to be easy” which he scripted from within his very own government. I wonder what it should be under the present Labor regime? A suggestion: hey “big spender” bankruptcy is our very own act of life!

The number of security clearances of asylum seekers by ASIO has risen tenfold in recent years. (Security clearances by asylum seekers up) in 2008/09 ASIO processed 207 irregular security assessments and in the period of July 2009 to March 2010 – 2028 assessments, which is attributed to KRudd border security – and guess who pays for that?

Our website sponsors announced this week - First Home Buyers offered a helping hand from Mortgageport which many subscribers to Virtual Realty News will find interesting. Also, the Balmoral Burn is on this Sunday and this event has become an iconic Sydney event.

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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28.05.10Robert Simeon9 Comments »

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Here we go again – Mad Monday wiped $40 billion from our shock – markets and once again, hedge funds ran amok with an  insatiable desire to short stocks. Throw in the calamities of Europe, a highly sensitive super tax on mining and  a federal election and we see emotions running high.  What is abundantly clear is, that financial markets now, more than ever before, will dictate property markets results for quite a few years to come.  As they say “money makes the world go around” and it would be fair to suggest that currently, it is spinning much slower.

With world economies delicately poised and many drowning with self induced sovereign debt,  parts of Europe are crawling on the banking bridge of bankruptcy. Greece laid low by its decadence it was quick to blame US banks for debt woes. Brace for China’s heavy breaking was concerning also given the revelation that Germany still fears a meltdown.

What we are presently seeing from China will play a dominant role on the Australian economy, since China is trimming its commodity shopping list – hence a weaning off Aussie minerals. This suggests that Fort Fumble’s (federal government) resources super profit tax will be revoked due to international circumstances. Not exactly a great week for The Emperor (Kevin Rudd) when shares hit a nine – month low then our Aussie dollar nosedives as Europe worries bite. It should be noted that plenty of investors are actively buying up US dollars (USD) – the CCC – Current Calamity Currency.

BUY PRINT

Not a great week for Fort Grumble (federal opposition) Abbott put to the sword over ‘gospel truth’ gaffe which I thought was best summed up with even the honest ones find it hard to lie straight in bed. Whichever way you look at it the next federal election will be a brutal contest, won or lost in Queensland which I don’t necessarily agree with as this election is about money – Rudd’s budget trick: pie in the sky when you die.

Much is being said about what is happening in the Australian property markets so let’s attempt to clear the picture. The Reserve Bank of Australia (RBA) released Recent Developments in the Housing Market and its Financing by Luci Ellis Head of Financial Stability Department – now that would be one tough job. “Housing is a big deal. It’s the biggest purchase most of us will make. It’s an asset class worth almost $4 trillion, accounting for around 60 per cent of household assets in Australia. Loans to buy property account for nearly 90 per cent of all household debt and around 40 per cent of the assets of Australian banks and other deposit – takers.”

Now it gets interesting as “housing prices in Australia have more than recovered from their small decline in 2008. In the first three months of 2010, prices were growing quite smartly.”

Demand – side Drivers

Unprecedented low interest rates marinated with Government policies of First Home Buyer Grants where the RBA has raised the cash rate by +0.25 per cent from six of its last seven meetings. The HIA/Commonwealth Bank survey of first – home buyer affordability dropped four per cent in the March quarter to its lowest since the September quarter of 2008. HIA senior economist Ben Phillips predicted that the RBA’s  interest rate rises in April and May would probably see housing affordability sink to the record lows of 2007 when mortgage rates rose above 9 per cent.

The First Home Owners Grant was introduced in July 2000; the Australian quarterly weighted average median house price was $220,443. The Australian weighted average median house price in the most recent quarter for which data is available, December 2009, was $514,599.

With interest I read this week in the Macquarie Economics Research Report

• The RBA recently upgraded its medium – term inflation forecasts to three per cent, which suggests that there is certainly more work to do regarding the tightening of monetary policy in this cycle.
• As a result, we expect that the RBA will recommence tightening later in the year, taking the cash rate to 5.00 per cent by the end of 2010 and 6.00 per cent by the end of 2011.

That  said, I would  like to hear its views given that Wayne Swan predicted (in current budget papers) that it would remain around 2.5 per cent in 2011. I will make a prediction of 3.5 per cent for the June 2010 quarter, 4.2 per cent for the September quarter 2010 and 5.0 per cent for December quarter 2010. Who would have thought double – digit inflation a possibility?

The Role of the Supply Side

“Together with these demand – side drivers, the supply side is important. The supply of housing is always going to be quite sluggish: most of it is already there. The additional amount of new supply is inherently small relative to the stock.”

Bear in mind banks on global hunt for $ 125 billion where pre global financial crisis long – term funding used by the major banks to finance mortgages, personal loans and business credit will have to be replaced at much higher prices between now and September next year. This signals that the cost of money is getting more expensive, rents will go through the roof and we expect vacancy rates to hit all time lows. Brace yourself for some financial turbulence ahead.

Property market clues are RBA warns lenders and borrowers to be prudent combined with top homes take double time to sell a natural response given the economic environment. With the Aussie dollar in freefall as our share market smashed down to lowest in nine months which is certainly not helped as European and Japanese investors are selling down due to Fort Fumble’s new mining tax which is significantly affecting the sovereign risk of Australia – the huge bear raid on Australia.

Here is a classic example of why our property markets performed so differently during the global financial crisis. With subprime, the banks in America could not chase on default.  In Australia they can – with vigour and dire consequences, otherwise  known as bankruptcy.

The Financial Stability Perspective

“Even if household balance sheets were to become overstretched to some extent, historical experience suggests that this, on its own, is unlikely to pose significant risk to Australia’s financial system.

“If we focus on the group of households with debt that have higher repayment burdens and high loan – to – valuation ratios, we can see that their numbers have risen over time. But overall percentage has remained very low. This was true even in late 2008, the latest available data, when mortgage interest rates, and thus repayments, were at their peak.”

The Key Role of Lending Standards

“Only a minority of recent home loan borrowers started with a loan – to – valuation ratio above 90 per cent. First home buyers have long faced greater risk than more established home owners who have more equity in their home.” This was clearly evidenced in Mosman during the global financial crisis where ‘mortgagee in possession’ sales could be counted on just two hands (with spare fingers).

This is definitely not a time to be carrying high debt ratios given all that is happening globally and yes, the cost of money is going up due to unprecedented sovereign debt collapses.

Memo to: The Emperor

Subject: Resource Super Profit Tax (RSPT)

We are faced with market suicide – “mining tax ‘contagion’ set to spread globally your resources tax was not designed to frighten, but investors may be scared anyway.  Just take a look at what is happening to the Aussie dollar whacked as debt crisis bites. The global financial crisis not over yet, just delayed so stop upsetting the mining companies and let them – (not you) lead this great nation back down the road to recovery. We need them in Australia – not out of it!

Welcome home – Jessica Watson.  Can you tell The Emperor, that no other Prime Minister has ever sailed solo around the world (clue) and a Pink Lady awaits him for his voyage.

The Real Estate Institute of NSW has just announced that it has secured an undertaking from Barry O’Farrell that he will repeal the ad valorem tax should the NSW Liberals and Nationals be elected in the upcoming state election.

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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21.05.10Robert Simeon17 Comments »