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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).”

BUY PRINT
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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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23.04.10Robert Simeon1 Comment »

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Forget the spin and electoral rhetoric – Australia had just one quarter of negative growth yet in the wash – up many businesses did very well from the (apparently) worst global financial crisis (GFC) since the Great Depression. Danny John from the Sydney Morning Herald wrote “What crisis? Westpac gains ground from the GFC “A close study of Westpac’s annual financial result shows just how much the country’s second – biggest bank has benefited from the gains in revenue – and therefore market share – which all four of the majors have enjoyed in the wake of the global financial crisis.” No doubt shareholders will be happy with this most taxing banking stimulus!

That other stimulus paints an entirely new picture IMF praises handling of financial crisis when Peter Martin from the Sydney Morning Herald wrote “The International Monetary Fund has singled out Australia as one of the best managed economies, declaring that only Denmark, Korea, Norway, Australia and Sweden among advanced economies will require little or no medium – term adjustment to keep government debt at safe levels”. Now that may be fine however, Fort Fumble (Federal government) has some amazing housekeeping to balance both past and present where it will require some pretty amazing creative accountancy to balance its books. You can read Fort Fumble’s very own accountancy plan MYOB – (May You Obey Bureaucrats) here.

Tim Mooney Photography captures Cammeray, Tunks Park and Northbridge Golf Course

www.timmooneyphotography.com

Still on creative accounting, the award would have to go to our very own Nathan Rees who presides over Fort Crumble. This week he approved a three per cent pay rise for all NSW MP’s making himself the highest paid in Australia after The Emperor – Kevin Rudd. Now before we jump to conclusions both are battling enormous budget deficits so that in itself highlights the pressure they currently find themselves in.

The Sunday Telegraph revealed “Nathan Rees’ master plan to convince NSW to give him one more term. “Nathan Rees needs cash – and plenty of it – to convince fed – up voters to give Labor one more chance. Linda Silimalis reported “Embattled NSW Premier Nathan Rees is pleading with Kevin Rudd to help fund a $10 billion – plus pre – election spending spree to save his government.” Reads more like a last rites request although many would agree that from a business growth analogy, NSW passed away a few years ago and remains the highest taxing state with the least to show in terms of infrastructure.

As we all know, everything requires a plan although it would appear that a few requiring that stimulus are looking rather sick after construction on a Fort Fumble rail project was shut down in Sydney due to a financial blow–out, allegedly caused by poor planning. Our very own Minister for Infrastructure and Transport, Anthony Albanese, said earlier this year, that this project to take freight trains off the Sydney passenger rail network would be completed by early 2010 (now on hold indefinitely). Note this is a Fort Fumble initiative as against another Fort Crumble ongoing malfunction.

For me, another great read of the week was the transcript from Stateline NSW – when Quentin Dempster quizzed Kevin Rudd and Nathan Rees – Discredited

Later in the week, The Daily Telegraph ran the story – Developer lobbies for Della Bosca (Bonka) to become premier. The country’s biggest property developer Harry Triguboff is privately lobbying Labor Party officials to support John Della Bosca’s bid to become NSW premier. You can draw your own conclusions on that although it is interesting to see a property developer interested in re-building Fort Crumble – (I will get to that shortly) as trigger – happy. Makes plenty of sense when the NSW government has next to no idea about building infrastructure. After all it is actually broke!

The Melbourne Cup rate increase (whilst widely tipped) had little effect on the punters and a record $95.600 million was bet on race day. The Emperor keeps telling us that we need his stimulus yet Australia is the only country raising its cash rate so who is actually punting?

Macquarie Economics Research – How high will rates go? They lead the tipping competition on our interest rate predictions? “The similarity between the October and November statements suggests that the Reserve Bank of Australia (RBA) game plan remains unchanged. This means that the first stage of tightening will be out to get interest rates back towards a neutral level – which we think this is now 4 1/2 %“. That means another 100 basis point increases although it should be noted that the RBA has never before increased the cash rate three months in a row.

Robert Gottliebsen wrote on Business Spectator  Rate rises may backfire “Tomorrow’s Melbourne Cup deliberations by the Reserve Bank board present issues far more complex than most commentators are canvassing.” Enter Harry Triguboff again backed by the Macquarie Bank graph (above). “The Reserve Bank, its hidden agenda is that it is deeply concerned that the recent sharp rise in dwelling prices and the bank fears that a new bout of housing affordability issues and an eventual price bubble is looming as Australia’s housing prices move outside world trends. The rising prices move outside world trends. The rising dwelling prices are pushing the central bank towards lifting interest rates more sharply, despite Treasury caution.”

“Then enter Harry Triguboff – the largest owner and builder of apartments in Sydney and a major force in Queensland.”

“Understandably many discount Triguboff’s conclusions because he clearly has an axe to grind. But over the years I have found that the base trends that Triguboff isolates are right nine times out of 10, but his remedies are uncomfortable. When Sydney was booming he said the city was dying, but then declared it would not die because eventually the politicians and local councils would start making sensible decisions. It’s taken eight years but they are now listening to him.”

“Triguboff points out that for the last five years the construction of Australian housing has been half the demand created by rising population, so a huge backlog has developed.”

“Triguboff now says: “If the Reserve Bank insists on raising interest rates in the hope of suppressing prices then they must understand that they will in turn suppress construction.”

“Banks are still very cautious and will insist on decent margins of profit, otherwise they will not advance loans to developers. I know that the Reserve Bank does not want to do it, but they have to make up their minds. Interest rates should not rise until building activity increase significantly. That is the true reasons for raising interest rates – stop oversupply. But all the evidence and rents and prices point to undersupply for the foreseeable future.”

“What Triguboff is highlighting is that the dramatic rises in Australia’s population complicate the interest rate argument. The Reserve Bank will not halt interest rates because of the Triguboff warning, but they need to understand that their current decision making process may create the opposite of what they expect in long – term dwelling prices.”

This should be a cornerstone point with the Ken Henry Review into Australia’s taxation report which is due on Christmas Eve.

On a lighter note – towel surfing was introduced to Australia last Friday when over 200 people on Bondi Beach joined in a synchronous dance to the music of local resident Ben Lee. I wonder when it will come to Balmoral Beach or possibly an open for inspection. (Turn up the volume).

Our property markets need to start dancing to the right tune – the RBA is obviously playing the wrong music as the dance floor is empty.

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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6.11.09Robert Simeon2 Comments »

For many, the new economic lingo has become rather disheartening. GD2 means Great Depression 2 and this week technical recession raced to number one spot on the economic chart with a bullet. It can’t be dodged nor can we hide from it and no need to look for the “smoking gun”. All eyes will now be taking aim at Fort Fumble (Federal government). After all Kevin Rudd and Wayne Swan keep telling us that they will lead Australia out of ‘technical recession’.

Australia’s gross domestic product (GDP) fell 0.5 per cent in the December quarter so the term, technical recession, comes as no great surprise. We are already in “Club Recession” with record memberships. Australia’s first negative quarter in eight years so now we have to wait another three months to confirm what we already know – we are in a recession – technically speaking.

First, Fort Fumble delivered its December “cash splash” which most believe was designed to buy votes for an early election. The ugly side of all recessions is unemployment where again all eyes will be on Fort Fumble to see what business splash initiatives they employ (no pun intended). It is well documented that I believe Pay Roll tax consistently kills both business and employment growth.

Over to Fort Crumble (NSW government) where NSW opposition leader Barry O’Farrell called on a NSW business stimulus package where Pay Roll Tax should be cut by 15 per cent (it needs to be much greater than that Bazza.) Premier of Fort Fumble Nathan Rees responded “We’ll do it in a fiscally responsible way, not a lazy way, not in an ill-disciplined way.” WOW – Australia’s most incompetent government quotes the words “responsible”, “lazy” and “ill-disciplined” in the one sentence! Moral dilemma? Absolutely not – Fort Fumble has its finger prints all over this week’s GDP figures and although they dominate, they are not alone.

I read this week “Wall Street Banking Explained”.

“Young Chuck moved to Texas and bought a donkey from a farmer for $100.00 and the farmer agreed to deliver the donkey the next day. The next day the farmer drove up and said, ‘Sorry Chuck, but I have some bad news, the donkey died.’

Chuck replied, “Well, then give me my money back.” The farmer said, ‘Can’t do that. I went and spent it already.’ Chuck said, ‘OK then just bring me the dead donkey.’ The farmer asked, ‘What ya gonna do with a dead donkey? Chuck said, ‘I’m going to raffle him off.’ The farmer said, ‘You can’t raffle a dead donkey!’

Chuck said, ‘Sure I can. Watch me. I just won’t tell anybody that he’s dead.’
A month later, the farmer met up with Chuck and asked. ‘What happened with the dead donkey?’ Chuck said, ‘I raffled him off. I sold 500 tickets at $2.00 each and made a profit of $898.00.’ The farmer said, ‘Didn’t anyone complain?’

Chuck said, ‘Just the guy who won. So I gave him his two dollars back.’

Michael West wrote this week on www.smh.com.au an article titled “Vultures go hungry” (think of the donkey).

“Pacific Brands is a classic of the golden era of private equity.

Bought out of the floundering conglomerate Pacific Dunlop for $730 million in 2001, its new private equity owner ripped out $100 million in cash, geared it up with mountains of debt and sold it back to the stock market in early 2004. They banked $1 billion from the public float.

It was a slick operation all round. The privateers from CVC Asia Pacific and Catalyst Investment Managers, and their investment bankers from Macquarie Bank, who teed – up the float, slapped together an impressive board of directors. Fat with other peoples’ money to spend, the big super funds bought it with ears pinned back, even though it was loaded with debt to the tune of 3.5 times its earnings (before interest, tax and so on).

The success of the deal was not down to paper shuffling alone. The privateers had turned the manufacturer around. They fixed the supply side. They breathed new life into the brands. Blue collar marquees such as Chesty Bonds and King Gee turned bogan to chic.” The article goes on and well worth reading on the SMH website so search Vultures go hungry www.smh.com.au

To the Mosman real estate market where we are happy to report that over the last five (very difficult) months Richardson & Wrench Mosman & Neutral Bay (RWM) has successfully sold just over $80,000,000 worth of houses (that’s one house sold every seven days). A clue is that our subscriber sales to ‘Virtual Realty News’ have jumped to $827,158,019. According to Domain Property Data this is the highest recorded volume of sales recorded by any Mosman agency.

Congratulations to Mosman’s most popular property portal www.domain.com.au that this week released a very savvy new look with a much more advanced search criteria. A brilliant new interface – combined with excellent search functionality. Great to see an online business actually investing in and developing greater client online experiences for property market voyeurs. This week we acquired from Fairfax Digital the property gallery for Balmoral so we now exclusively own Mosman and Balmoral property galleries – for the benefit of our vendors.

Today, websites are graded. Go to http://website.grader.com to see how they are graded on marketing effectiveness. The score incorporates website traffic, search engine optimisation, social popularity and other technical factors. Compare websites – I have and the only website that beat us was www.domain.com.au (that being in the real estate category).

Judge yourself – RWM scored 87/100 which has a lot to do with our recession sales results.

Oops – I’m being technical again! However we are in a technical recession! A technicality that will identify Kevin Rudd, Wayne Swan and Julia Gillard as fake or famous. Now they will have to ‘walk the walk’ not talk the talk’. At the last Federal election they boasted best practice abilities so after this week’s announcements they now have to prove it – Australia is now in recession!

Yesterday’s release from the Australian Bureau of Statistics identified that in January, new building approvals fell 3.7 per cent – the Rudd/Swan cash stimulus (cash splash) failed.

Over to you Kevin – you told us that you are the man to lead this great country. History will now judge you and your elected government as being either fake or famous.

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

Cheers ^__^

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6.03.09Robert SimeonNo Comments »

Up, up and away!!! The Mosman market has proved yet again that it is not for the faint hearted. No other Sydney municipality came within an agent’s roar, with the latest figures revealing the median price of Mosman property soaring to $1.71 million. With our much loved Labradors, proving much more popular than the Poodles of the Eastern Suburbs. Next best was Woollahra with $1.01 million. It was not that long ago when only few dollars separated Woollahra and Mosman, now the difference is by a ‘Mosman Mile’ given that Mosman is the market barometer. Mosman property prices have jumped 33 per cent from the March quarter last year when $1.29 million was the recorded average. Now if this presents you with a conundrum as to how you are going to play the property market, here is a little gossip that I heard yesterday in light of the announcement of the latest figures. The banks, which for obvious reasons have remained ‘tight-lipped’ about how they see the market, are predicting it will run for at least another three years, and in that time we should see a thirty plus percentage growth in property. The banks believe that the property market would need to see a four per cent rate rise, or another fifteen rate increases based on the last rise before it will come to a ‘Keating halt’. I think we would see an impeachment before that would come to fruition!!

Aside from the obvious, why is Mosman at ‘Waterhouse odds’ to be knocked off the mantle as Sydney’s top suburb, actually Australia’s for that matter? Well, it is quite simple, ours is an intellectual market based solely on driving the individual wealth base. “Please explain?”

Well one of the major players, if not the major player, is ‘The Millionaires Bank’ – Macquarie Bank, I love that nickname. From back in the early nineties our market was driven by two phenomena. In March, Bankers Trust would hand out their bonus cheques, and in August, Macquarie Bank would follow suit. This was actually the saving grace for our ailing property market over that period. Today, BT is not as big a player and has been replaced by ‘da boys’ at Deutsche Bank, followed closely by PricewaterhouseCoopers and JBWere. The city lawyers have played and adopted a ‘the jury is out’ mindset, which explains why the Clifton Gardens market trades so infrequently. The ‘Cisco Kids’ rode into town, some stayed, and others left, as did the IT industry. Thankfully most of them were in rental properties, although a few landlords would argue differently.

Today, the property market is more dimensional. The Internet is a huge player and in the month of April alone, the three big property portals; domain.com, realestate.com and property.com shared nearly two million page views for the month. When looking at those statistics, it shows just how big rwm.com is, considering that we are just a single web site. Agents are changing their marketing philosophies and some have now even been seen getting out of their cars to take the pictures. Whatever the case, the consumer is offered a much better service today, compared to a few years ago.

As we enter the winter selling period you will notice a few new abbreviations being offered in the auction results, VB and W. Not Victoria Bitter, ‘vendor bid’ and ‘withdrawn’. This is more of the agent’s doing than the market, as vendors are holding them to the opinion of value that they suggested at the time of listing. It will be very interesting to observe what eventuates over time and what the property gets sold for. Some could be less than the VB, which may be when the vendors could be overheard saying “I’m in the mood for one now!!”

The breaking news of a home in Hopetoun Avenue selling this week for a reputed $9.5 million, only confirms that the market still has plenty of play in it. I must admit I expected the first number to be a one. Actually, I am now more determined to post the next double-digit sale. We have some fantastic properties to offer over June and July and yes, we want to see Mosman average hit $2 million, which could very well happen with stock levels dropping at such a fast rate. Whatever the case, the figures and statistics clearly identify that real estate is by far and away the leading investment opportunity. Where else can you pick up 33% in twelve months and not pay tax??… ^_^

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1.06.02Robert SimeonNo Comments »