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Actually not that different with the three P’s that pertain to property – position, position and position. Throw in politicians and bankers and what we have is the 2010 equivalent of economic soup that is murky and far from palatable. During the global financial crisis (GFC) Westpac and the Commonwealth banks wrote approximately eighty (80) per cent of all mortgages which explains why today, collectively, they own the largest mortgage books. Alan Kohler wrote on The Drum that banks only have themselves to blame which has caused a stir given many consumers are losing faith in our pillars of society. Of course, there has been plenty of gratuitous PR advice for our friends in banking although the politics of banking was intelligently addressed when Janet Albrechtsen wrote in The Australian – Let’s hear the positive story from the banks.

Plenty of rhetoric this week as home owners angered by increases in interest rates then news broke that the Big Four banks to dump exit fees as backlash grows against lenders. Then late this week ANZ raises rates, scraps exit fees at or about the same time as ASIC bans banks from double – dip mortgage exit fees which means banks that charge customers to establish a mortgage, will no longer be able to apply contentious exit fees. Too early to say who will get the last laugh with this announcement – possibly bank establishment fees will rise? Certainly the four new P’s won’t change.

BUY PRINT

Is the landscape at Circular Quay about to change? Special deal on city skyscraper as a giant residential tower, double the size of any other building in Circular Quay, is expected to be approved soon. The site Gold Fields House is set to become a luxury apartment block that will tower 191 m above Circular Quay making it Sydney’s eighth tallest building. Sydney has only one of the top 10 tallest buildings in Australia – which prompts the discussion for progress of our capital city.

Australian Property Monitors released its House Price Report for September 2010 and here are the key findings:

• National median house prices remain effectively unchanged at +0.1 per cent for the quarter with annual house price growth slowing to +11.5%
• Most capital cities experienced falls in prices over the quarter; however the major markets of Melbourne and Sydney bucked the trend recording positive quarterly house price growth
• National price units (excluding Tasmania) have fallen slightly, down -0.4% for the quarter, with annual growth falling sharply to +6.5%
• Unit prices have fallen in all cities except Melbourne, with Brisbane experiencing the largest price decline, falling -2.8% for the quarter

Source: Australian Property Monitors

SYDNEY

• House prices increased slightly by +0.7% in the September quarter, which is the third consecutive quarter of slowing growth.
• Unit prices have started falling for the first time since 2008, recording -0.1% for the quarter.
• Sydney’s median house price is now $634,346 and the median unit price has fallen slightly to $436,714.
• Annual house price growth sits at +11.3% and unit price growth is at +7.3%, both trending downwards.

Weak demand made for rate surprise all things considered the clearance rates are positive, although the most important conclusion would be that prices are flat lining. It is only natural that auction clearance rates fall on rate rise and we are seeing anecdotal sales evidence. One interesting observation in Mosman at present, is that private treaty sales are producing the highest volume.

Here is the comparative analysis for Mosman houses:

Mosman Houses 2009 – 1 January 2009 to 31 December 2009

• Total sold – 322
• Private Treaty – 281
• Public Auction – 41
• Total Value Sold – $815,649,751
• Median price – $2,094,000
• Average price – $2,564,936
• Highest price – $13,200,000 (RWM)

Mosman Houses 2010 – 1 January 2010 to 10 November 2010

• Total sold – 292
• Private Treaty – 219
• Public Auction – 73
• Total Value Sold – $639,048,555
• Median price – $2,100,000
• Average price – $2,468,570
• Highest price – $12,600,000 (RWM)

It should be noted that with the 2010 house sales, that the vast majority of sale prices are yet to be recorded, so we expect this year’s total value for houses sold, to be considerably higher $750,000,000 approximately. For example, this week, RWM recorded the second highest house sale for Mosman in 2010 which is yet to be recorded. Here is the Macquarie Research Economics Forecast where it should be noted that the banks have already moved the cash rate to the Reserve Bank of Australia (RBA) Macquarie Research Forecast for Quarter 1 – 2011. So what we now have is an official cash rate and a real cash rate, which I will call the “real, official cash rate” – ROCR!

So to the four new P’s – polls, populism, performance and of course profits which continue to stymie our Forts Fumble and Crumble. The politician who should have been Premier of NSW, Blacktown MP Paul Gibson ‘Fed up’ NSW Labor MP quits so now thirteen (13) Labor MP’s have announced their retirement in the past two months. Paul Gibson “we’ve moved from platform and policy and pursued a poll driven agenda.” Fort Crumble is shambolic and an embarrassment where Transport Minister John Robertson has already called his transport removalists to grab the now vacated seat. Thirteen, with more to come as powerbroker Joe Tripodi quits. Premier Kristina “Bambi” Keneally has (unofficially now) been placed on the endangered species list due to a lack of interest – polls, populism, performance and no profit.

A perfect dismount from the strangest election ever – You can say that again! The four new P’s continue to dominate as Julia Gillard losing ground to Tony Abbott, News poll shows given the continuance of Labor’s policy woes pile up. No doubt we will be hearing and reading plenty more about this in the months to come. Fort Crumble continues to disintegrate – polls and populism shape public perceptions. Fort Fumble relies on the hope factor – Swan’s numbers looking rubbery when more ‘courage’ needed in spending cuts, says Access Economics. Polls, populism, performance and of course profits continue to threaten the capability of Fort Fumble.

Back in 2000, Virtual Realty News subscriber sales sat at zero when we launched our online platform. Today, they sit at $998,770,220 so we are now $1,229,780 from breaking the $1,000,000,000 mark.

Unfortunately, this week’s $10.000 million plus Balmoral sale did not qualify – another big week of local sales which suggests a strong run of property transactions through to Christmas.

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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12.11.10Robert Simeon5 Comments »

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Next week the nation stops for the running of the Melbourne Cup, so out comes the form guide. Nothing unusual one might say, as it is well documented that Aussies would have a bet on two flies climbing up a wall. I’m not sure if any punters will have a wager as to whether or not the Reserve Bank of Australia (RBA) will hike up the cash rate when they gather to assess the track condition of the Australian economy. On Melbourne Cup day last year, the RBA broke tradition when it reached for the whip and increased the cash rate target by +0.25 percentage points to 3.50 per cent.  When the RBA meets on Melbourne Cup Day we don’t believe the cash rate will move from the current level of 4.50 per cent.

The Australian Bureau of Statistics (ABS) released some interesting data this week that identified how the GFC pushed businesses to the wall – in the two years from June 2007 – encompassing the boom and subsequent bust – more than half a million Australian businesses shut up shop. Nationwide, there was a 73.6 per cent survival in that two years, with the number of businesses falling from 2.07 million to 1.52 million. The number of small businesses (up to 20 employees) fell 24,931 nationally in the period, with more than 80 per cent of the fall occurring during the worst of the financial crisis, in 2008 – 09. It was interesting to note that the majority of failed businesses  employed between one and four people and this is the number where the vast majority of businesses open their respective doors. What you won’t read is why these businesses actually failed which makes one wonder exactly what the Minister for Small Business actually does during the week. Obviously, not very much at all which hardly comes as any great surprise.

BUY PRINT

All eyes were this week on the Consumer Price Index (CPI) figures which came in at 0.7 per cent for the three months to September 30 – slightly up from the June 30 figure of 0.6 per cent according to the ABS. What is clear is that inflation is being driven by rising government charges and not increased domestic demand. As Macquarie Economics Research intelligently pointed out “Indeed, business surveys point to a very subdued inflation in the retail sector, partly due to cautious consumer behaviour. This has also been complemented by Australia’s major supermarket chains, which last week reported flat to negative price growth in the food segment. The point is, if all households are facing rising electricity and gas costs, then this in itself will be a dampener on discretionary consumer spending. And this should lessen – rather than boost – the case for further monetary policy tightening.”

Surprise, surprise, as Fort Crumble – NSW government, has moved to rein in surging electricity prices in a bid to put brakes on runaway electricity prices. Household power prices have already risen by up to 13 per cent this year and within three years, could go up by 42 per cent under power company increments approved by federal and state governments. One of my favourite graphs shows the price changes – so here it is for the year to September where I draw your attention to electricity, health and housing which just so happen to come under the jurisdiction of our elected politicians.

For the year to March 2010

BER projects fail to boost construction which comes as little surprise because construction in schools, bears absolutely no resemblance to housing. Chronic rental shortage a fact of life, says new study as metro areas in NSW face a permanent, chronic shortage of available rental homes. The Real Estate Institute of NSW revealed that the residential vacancy rate fell to its lowest level over the past twelve months, falling to 1.2 per cent. Bear in mind that one third rent, one third own with a mortgage and the final third own without a mortgage. The general rule of thumb a few years back, was 2.5 per cent (that was without population increases) so today it should be over 3.00 per cent. It won’t be that far off when the Sydney vacancy rate falls below 1.00 per cent and that will deliver catastrophic  results. Sydney take note – infrastructure is not a dirty word “The irony will not be lost on anyone who lives here. Because when it comes to infrastructure, Sydney is a town that nodded off for a rest on its laurels and ended up in a 30 – year coma.”

“The nation’s biggest town is spending less on infrastructure than any other Australian capital except Darwin. Compared with major cities in Europe, Sydneysiders know they have been left behind in public transport, high – density residential planning and urban development”. Hence, the funniest story of the week harbour underwater rail option to combat gridlock which is nothing more than an election gimmick given Fort Crumble is paranoid about losing its  AAA credit rating. The last time Fort Crumble honestly embarked on genuine infrastructure was back in 1995 when it won the bid to host the Sydney Olympic Games in 2000. “NSW governments have lost their appetite for major infrastructure construction. The result for Sydney in 2020 is a sub – par rail system, gridlocked weekday traffic, a CBD that struggles to stay relevant at weekends and one of the worst rates of housing affordability in the OECD. Quite simply, Sydney is a city that has lost its ambition. Like a naturally gifted athlete who cannot be bothered to train hard, Sydney runs the risk of being left behind by hungry competitors who enjoy none of its inherent advantages.”

Bugger! Reserve Bank earnings slump to 30 – year low – wow an Australian bank not making billions. The bank blamed the loss of earnings on a slump in foreign interest rates and the surging Australian dollar. Its annual statement, shows underlying earnings last financial year were $866 million which were that low back in 1983. So this year, Fort Fumble won’t be receiving a dividend which is bummer, as  last year it collected a respectable $6 billion windfall.

This week we released our iPad website so whether you are using your mobile phone, iPad or computer, when you type in rwm.com.au you will automatically be directed to your preferred application of use. Another real estate first, thanks to our developers Agentpoint. Infrastructure in real estate is imperative also and no other Mosman real estate agency offers its clients this unique online option of communication and information.

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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29.10.10Robert Simeon7 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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With the benefit of hindsight, we ask, did the powers that be in Canberra get the stimulus spending right whilst addressing the global financial crisis? If not, what have they learned from it (if anything)? The answer would be absolutely nothing, given nothing has, or is, being done about housing. Construction activity falls in June which is a clue dropping 6.8 points in June to a 10 – month low. More construction equates to more homes which in turn, reduces house prices. The construction industry ‘is’ the third biggest employer in Australia (or  should that be ‘was’?)

The major problems attributed to Forts Fumble and Crumble is that economically, they confuse usage with wastage (otherwise known as “reckless and wasteful spending”). After all, Fort Fumble is still borrowing almost $100 million a day which is in direct competition with home borrowers and small business as Joe Hockey tells govt to cool spending.

The Reserve Bank of Australia (RBA) met this week and decided to keep rates on hold despite solid numbers. Of course the announcement was met with the usual rhetoric Wayne Swan welcomes interest rate decision citing “while we’ve fought off the recession and kept unemployment low, we know that a lot of people are still doing it tough and recent rate rises have stretched family budgets.” More Treasurer speak “we’re focussed on reforming and strengthening our economy with investments to harness mining boom mark 11 where the Liberals failed in mining boom mark 1.” Wayne is almost Shakespearean with his economic recitals and enactments although the RBA keeps saying Government must rein in demand growth: McKibbin.

Thought we would head south this week for a change of Sydney scenery

BUY PRINT

Let’s take a closer look at Fort Fumble’s mark 11 harnessing – mining tax changes had one purpose which was taking pressure off key marginal seats. Since the new deal was announced last Friday, it has been described as a compromise, a back flip and a monumental cave–in MRRT revenue loss to be double government estimate: Goldman.

The tax was reduced from 40 to 22.5 per cent a hard tax to swallow as Alan Kohler wrote on Business Spectator.”More than double the profit threshold above which it cuts in and reduce the number of companies being taxed from 2,500 to 320, and lose only one – eighth of the money. Julia Gillard is a prime minister who Gets Things Done – the Mary Poppins of tax policy.”

No regrets over mining tax – Treasury Secretary Ken Henry whilst Martin Ferguson concedes: ‘We got super – profits tax wrong’ I can’t wait to see what happens with mark 111 as government ‘dishonest’ on revised super profits tax revenue as government sacrificed $35 bn in tax deal with big miners.

Time to move above ground where caution is being thrown to the wind (again) – which I might add is not a bad thing. Of course it would have been much better had Fort Fumble got their stimulus issues right which unfortunately was not the case as I have long argued – roads, infrastructure, housing subdivisions, hospitals – a long term future model. Fort Crumble was at it again also with another painful snub of Sydney transport, M5 set to be delayed and doodling as Metro plan burns $500m. Then on Thursday we had 50,000 Sydney homes without power again broken infrastructure in NSW.

Not one Sydney transport project has been listed as a priority for the federal Government’s (Fort Fumble) latest infrastructure funding targets. “Blasting the NSW Government’s failure to properly plan billion – dollar road and transport projects, Infrastructure Australia has instead selected a $4.9 billion Melbourne metro train project, an Adelaide freight rail line and a Federal Highway road upgrade in the ACT as priorities.” Work this out – the Pacific Highway gets an upgrade and Sydney gets absolutely nothing – Sydney has been placed in the too hard basket along with our politicians. No strings attached with Sydney anymore.

Great news for property owners who sit within a 5 – 10 – 15 kilometre radius of our CBD as evidenced when Jonathan Chancellor published this week in the Sydney Morning Herald – Top 20 Sydney house sales just the one recorded sale outside the radius – clue!

Mosman posted five of the top 20 sales.  Our very own Stephen Patrick had the highest sale and Richard Simeon had another in Warringah Road. This saw  Richardson & Wrench Mosman & Neutral Bay (RWM) record two of the five, which this week, took our Internet subscriber sales to $956,784,220.

So how is our Spring/Summer property market looking? Year ahead good, not great where Australia’s market economists declare there will be no double– dip recession here. Buyers expected to favour private sales over auctions as growth slows. We predict the Mosman market to shift (initially) in the upcoming market to online advertising – stage one as property markets stabilise. Why? It’s all about our real estate ring of confidence.

As Macquarie Economics Research explained:

• With more volatility in global financial markets, an increasing number of analysts are betting that this will force the RBA to leave rates unchanged over the next year. Certainly, if the credit markets dry up the RBA will not hesitate to cut interest rates. But with the Government’s deal with major mining companies over taxation, removing one of the clouds over investment, the RBA might actually have become more confident in the growth outlook.

Don’t forget rise in inflation to irk RBA where the annual reading of 3.6 per cent rate of inflation rose for the eighth straight month. This is well outside the RBA’s target of between 2 and 3 per cent. Rents will continue to drive inflation up given a six year wait to save deposit for first home in Sydney which is quite ironic given Infrastructure Australia is not investing in Sydney. IMF sees strong growth in Australia, but risks grow although I would add that government economic policy is an even greater risk on our shores.

Sydney needs a plan and it is obvious that  Forts Fumble and Crumble have absolutely no idea on how to address such complex issues. Sydney commuters can expect to see new signs on all transport systems – Turn around You Are Going the Wrong Way – no infrastructure ahead. When Fort Crumble has difficulty filling out Infrastructure Australia forms it’s no wonder NSW is a basket case. More back flips from Fort Fumble where Gillard eats her words over refugees as her options dwindle to six countries for east Timor alternative.

The Emperor may have gone however the art of the back flip remains the preferred exercise for a government that just two weeks ago, had lost its way. So what would one call the MRRT and East Timor? Must be a phase they are going through although we need more than promises to judge Julia. Maybe she has short term memory loss?

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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9.07.10Robert Simeon5 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 »

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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

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

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

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

www.timmooneyphotography.com

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

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

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

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

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

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

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

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

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

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

Cheers ^__^

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

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4.12.09Robert 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 »

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Much has been written and spoken about the Global Financial Crisis (GFC) where it now appears that the ‘Global’ has been superseded by Governments in crisis. In Australia it is a calamity at both Federal and State levels – (all will be explained later). In modern day speak, our elected governments are now on margin calls where debt ratios have fast exceeded income streams – political policies without pertinent planning? Rolling back budget deficits will inevitably lead to increased new taxes – but then again The Emperor (Kevin Rudd) told us that after all, he is an “economic conservative”.

At the very heart, we have the much publicised economic stoush between the Reserve Bank of Australia (RBA) and Treasury. It should also be noted that the major banks will now override RBA economic policy and collectively set their cash rates. This fundamentally diminishes the once integral role of our central bank. Watch the argy bargy in coming months although it has become blatantly obvious that the banks will outpace RBA cash rate increases – our political piggies will go screaming all the way to the (electoral) markets.

Mosman’s maritime marina captured by Tim Mooney Photography

www.timmooneyphotography.com

The Emperor – our economic Master Chef was at odds with his Apprentice Chef (Wayne Swan) – not to be confused with The Apprentice (different television stations). The Apprentice Chef was busily watering down suggestions that the RBA was at odds with Treasury over the correct economic recipe for Australia. Highlighting a nutritious recipe of economic ingredients, the Apprentice Chef described the tensions as “healthy debate”. The Emperor weighed in and advised that his fiscal stimulus was actually on Auto Chef, as it has an in-built accelerator and a decelerator to cope with shifts in the economy. Whilst nobody on the planet has ever heard of such ingenious economic rationale – one can only hope that this is not a recipe for disaster – as we all know who then foots the bill!

Our real estate markets are now Fort Fumble’s (Federal Government) other recipe for disaster as the 7.30 Report pointed out this week “Australia’s population rising steeply”. Australia’s population is up 2.1 per cent in the year to March, the greatest growth in almost 40 years. To meet demand, we have to build a minimum of 200,000 houses by Christmas next year – and that won’t happen (especially if Fort Fumble increases taxes). Although I did have a chuckle when I read yesterday that Treasury Secretary, Ken Henry, said that reduced budget surpluses due to the global financial crisis could limit the implementation of some reforms to the tax structure. No doubt the growing interest payments on his stimulus (now deficit) are now a major concern. So the Head Teller at the RBA is at loggerheads with the Head Spender over at Treasury. This was always going to happen with the stimulus progressively moving into an upwardly spiralling budget deficit.

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Macquarie Economics Research market notes this week “Understating undersupply” breaks down the mechanics of our housing market. “To understand why there is such a chronic undersupply of housing, we first consider the market for homes from the perspective of first – home buyers. As shown in the chart above, in the short term, the supply of homes is fixed. Thus, when interest rates fall and affordability improves, the demand curve shifts to the right. In our terminology, the level of actual demand rises to the level of underlying demand. In fact, as pent-up demand is unleashed, the actual demand may considerably exceed the underlying demand for a period. But with the supply fixed, in the short term, this would simply be reflected in higher house prices.”

Australia was indeed a different participant in the GFC simply because, unlike other advanced economies, we continued to ‘under – supply’ housing while other comparable countries were in over supply mode.

No better example than this week, when rental prices recorded their slowest growth rate in four years. No reason why, was offered. I believe the reason was the First Home Buyers Grant (money for honey) – now the participants face the banks and probable increased taxes to wind back Fort Fumble’s budget deficit.

These are the graphs that explain it all, and forecast double digit house price growth from June 2009 to June 2012. Sydney with 21 per cent growth, according to mortgage insurer QBE’s Housing Outlook.
If you are hoping for a NSW recovery (Fort Crumble) think again. Fort Crumble remains the worst performing state or territory in Australia. The rankings are – Tasmania, South Australia, Western Australia, Queensland, ACT, Northern Territory and then NSW. Surprise, surprise! In NSW in 2008 – 2009, dwelling starts collapsed to the lowest level in 56 years and the total was 43 per cent lower than the average for the last decade.

Should one simply apply economic hindsight as against economic incompetence. If you own property in NSW you will prosper, as long as you reside within 12.5 kilometres of the Sydney CBD. Beyond that point, the planning for infrastructure is archaic.

Rest assured – The Master – Chef is cooking up a storm, even though the retiring Member for Higgins, Peter Costello, announced this week that he saved Australia from global financial crisis. The Emperor (fortunately) inherited all his successful economic recipes. It will be interesting to see how The Emperor decelerates the budget deficit – which will take some cooking of the recipe books.

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Congratulations to our undefeated over – 45 Mosman rugby team, competing in the World Masters Games. The Daily Telegraph captured Peter FitzSimons in the midst of yet another of his brilliant team motivational speeches. I am not sure about the team mascot though – must have been a ring in from the Eastern Suburbs.

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Cheers ^__^

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

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16.10.09Robert Simeon3 Comments »

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Please tell the Australian voting public that we made the correct call. The Emperor (Kevin Rudd) is a worried man, given that when interest rates start rising the Government of the day (historically) receives all the blame. Monash University political analyst Nick Economou was more succinct “The Reserve Bank of Australia (RBA) is a game – changer” (where this time around nobody will be able to keep them low). “With the indicators being that the bank is starting to ratchet up the rates, the Labor Party would be thinking ‘we ought to go to a poll sooner rather than later, because if we go as scheduled in November next year, there might be three or four interest rises by then’,” Mr Economou said.

It needs to be immediately recognised that the Global Financial Crisis (GFC) was a direct result of failed business/consumer transactions that occurred outside of Australia which furthermore, explains why Australia was first country out of the crisis. Other than Australia, ( thus far) no other Central bank has raised its cash rate – which begs the question, just what makes Australia different from the rest of the world? Is it a direct result of the Federal and State/Territories artificial insemination of our property markets when they introduced the (combined) First Home Buyers Grant Scheme (FHBGS)?

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Were the property debutantes advised that there remains a strong possibility that the RBA cash rate will move from 3.00 per cent to 5.00 per cent over the course of the next two years? The RBA described last week’s cash rate of 3.00 per cent as its “emergency rate” so what then becomes the first home buyers’ emergency exit rate? Were they simply pawns to keep property transactions ticking over during the GFC? Fort Fumble (federal government) did extend the FHBGS . It has happened before – and it is set to happen again, although this time around the consequences will be dire especially for those debutantes now caught in an interest rate upward spiral.

Cast you mind back to when the cash rate hit 4.25 per cent on December 5, 2001 where South/West Sydney went into a property boom. Then the unimaginable happened two +0.25 per cent rate increases in 2002, another two +0.25 per cent rate increases in 2003 (a property boom year), no increases in 2004, one +0.25 per cent increase in 2005, three + 0.25 per cent increases in 2006 and another two +0.25 increases in 2007. In 2007 South/West Sydney property prices fell by as much as 40 per cent, otherwise known as bank sales (10 +0.25 per cent rate increases). Here are the interest rate movements from July 31, 1996 – October 7, 2009 Cash Rate Target.

Macquarie Economics Research went a step further by predicting (and they are usually spot – on with interest rate predictions) that it expects the cash rate to rise by a further 25bp (basis points) before the end of the year, and to reach 4.00 per cent by 2010. In this week’s edition of Australian Economics Interest Rate Outlook “The RBA decided to raise rates sooner rather than later, and the 25bp increase in October was the first step “towards more normal levels.” With the economic data consistently stronger than expected and downside risks dissipating, the RBA now expects growth to be at trend levels in 2010. Consequently, the “basis for such a low interest rate setting has now passed.” No doubt Australia’s weekly clearance rates are being closely monitored on the RBA radar where our recession if you want to call it that was mild when compared to other advanced economies. From September 3, 2008 to April 8, 2009 (seven months) the RBA slashed the cash rate target by 4.25 per cent which still remained the highest when compared to other advanced economies – hardly a Great Depression.

If you look at Sydney’s clearance rate (74.2 per cent) this is a very strong result. There were 811 public auctions conducted and many more would have subsequently sold after auction. A combination of record low interest rates, our fastest growing population explosion in forty years and grants to first home buyers – what a cocktail! A report compiled by Access Economics found that Australia’s population grew by 1.9 per cent in the past year, helped by the highest birth rate since 1971. But let’s not forget one other major initiative (if I can call it that) that was introduced by The Emperor in December 2008.

Adam Schwab wrote in Crikey Foreign buyers blow out the housing bubble “ The causes of Australia’s ever-inflating housing bubble are many – artificially low interest rates, government stimulus and a real estate industry devoted to an ever – increasing house price to name a few. However, a less well – publicised factor may also be at play, that is the influence of foreign buyers.”

“In December 2008, the federal government, whose primary goal appears to be maintaining property prices at unsustainably high levels, introduced legislation relaxing rules for foreign buyers of Australian property. The rules were especially helpful for property developers, who coincidently happen to be large donors to the Labor party.”

In search of anecdotal sales evidence I went ran an article on News ”Million – dollar sales force up property prices” Forget the “for sale” sign, the new catch – cry in Melbourne’s leafy suburbs is “duoshao qian”. Victoria’s top real estate agents have begun hiring Mandarin – speaking salesmen to cash in on the property boom. Translated, “duoshao qian” means “how much” And it’s a question being asked more than ever before, The Herald Sun reports. Leading agents say more than 30 per cent of their stock is bought by families from mainland China.

Back to Adam Schwab in “Such is the federal government’s fear that a residential property slump will be a negative at the polls, they have introduced a policy that exacerbates Australia’s housing shortage and prolongs an asset bubble. According to Foreign Investment Review Board (FIRB) data released last month, foreign investment in Australian real estate shot up by more than 30 per cent this year to $20.4 billion.” Wonder when the mirror on the wall will speak about or even repeal this legislation – especially when you look at this.

Again, on Crikey, NSW the epicentre of our housing crisis Bernard Keane wrote “NSW is the epicentre of a long – term public policy disaster in housing that will have a major impact on Australia’s recovery from recession.” Technically Fort Crumble (NSW government) has been going backwards for years technically known as government economic retreat. “This graph shows housing and other dwelling commencements in NSW over the past thirty years. Despite wide variations, in the ‘80s and ‘90s housing commencements essentially moved around a band of 6 – 7,000 a quarter. The GST caused a spike and then a sudden drop across the country, and NSW recovered like other states, but then, inexorably, began to decline. Non – house dwellings, which had been growing as a proportion of the total NSW housing stock, similarly peaked and then began falling with housing commencements. The problem lies in the lack of land released by the NSW Government and NSW’s disastrous planning regulatory system, which makes life immensely difficult for developers.”

The Emperor has much to answer – however he has not been sighted since the RBA upped the cash rate this week. I wonder what he proposes with his very own legislation that sent out a universal invitation to buy up Australia. Mirror, mirror on the wall……. our real estate markets have much reflecting ahead.

Tim Mooney will be back with his weekly photograph next week – I forgot he was on assignment this week.

Cheers ^__^

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

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9.10.09Robert Simeon2 Comments »