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We are all well acquainted with the phrase ‘policy on the run’ and in 2011,we are already seeing politicians on the run! Has all this spin left our pollies dizzy?

Welcome to our first edition of Virtual Realty News for 2011 where we start the year with a levy, a tax or a necessary evil and what does this say for future natural disasters if this sets a precedent? Will Australians be as generous with their donations of money, clothes, furniture and time? Of course they will. It’s just that immediate fund raising efforts will be severely affected. Is this announcement a smart initiative or just plain dumb? The levy is expected to raise $1.8 billion, but in all probability, the fund raising events that are and have been organised across the country, would easily surpass this figure. Australians love to give – just not to incompetent governments. If there is a shortfall then bring in yet another tax (such an ugly word.)

Gillard’s spinning in a straightjacket – “to put the economic significance of the $1.8 billion that will be raised by the “one – off” levy in perspective, it represents less than 0.5 per cent of the government’s $362 billion of budgeted spending for this year.” Another public spending programme that goes pear shaped, with nobody in the government being held to account. Building projects are not exactly a strong point at Fort Fumble BER bungle is uncool for school. It has now been revealed that eight out of ten new classrooms (1284 out of 1639) built in NSW have no air-conditioning. A smart initiative or just plain dumb?

BUY PRINT

We celebrated Australia Day this week and surprise surprise, Tim Mooney coaxed the seaweed at Castle Rock, Clontarf to join in the celebrations.

Julia Gillard backs FOI exemption for taxpayer – funded NBN to avoid public scrutiny. I can think of 36 billion reasons why this roll out should not be exempt. A smart initiative or just plain dumb?

Moving on to Fort Crumble which is now on life support and given less than two months to live, the voter support system has been turned off. Not exactly a “say it loud, say it proud” endorsement Deputy Premier leaves ‘Labor’ off campaign leaflet given it is too late to sack Premier Kristina Keneally. The 7.30 Report this week ran its views on the Power struggle. “The NSW Labor Government’s fire sale of the state’s electricity assets may prove to be New South Wales Labor’s most diabolical scandal yet – just two months before it heads towards electoral abyss after 16 years in government.”

In a nutshell – Andrew Clennell, State Political Editor, Daily Telegraph, “It’s burning the villages on the way out. It’s a scorched earth policy. They didn’t want Barry O’Farrell to come in a position where he could sell the electricity assets for $15 billion; then have all that money to spend to keep himself in office for 12 years. They wanted to trash it. I mean, they deny it absolutely, but the NSW Labor right machine is the most ruthless political machine in the country without a doubt.” Now that is just plain dumb. This election can’t come soon enough and explains why the Deputy Premier (wife of federal infrastructure minister) left all mention of Labor off her pamphlets.

Now to property – interest rate hikes are on the way – it’s just a matter of when. The Reserve Bank of Australia (RBA) won’t do anything until the end of the June quarter at the very earliest, despite worsening business conditions.

Inflation outlook surges and it will only get worse given the flooding in Queensland where food prices will jump immediately inflation fears at highest level in 2.5 years. Petrol prices are already on the way up and predicted to climb above $100.00 a barrel in the first quarter of 2011 and $120.00 in the second quarter as millions fear cost of living increases.

Which is why I agree that property prices won’t be doing much in 2011 and this not really not a bad thing. Already in Mosman it appears that we will see modest offerings and that is unlikely to change throughout the year. It appears that households are consolidating and economy’s growth prospects dim. To put this into perspective Sydney prices higher than NY, London and more importantly Aussies turn their backs on credit cards where in the December quarter of 2010, credit card debt was slashed 14 per cent, from 2.1 per cent to 1.9 per cent.

Mosman house prices will be competitive given fewer offerings (at the start anyway). Here is our review of Mosman house/semi sales for 2008, 2009 and 2010.

Total Value Sold

• 2008 – $774,865,612
• 2009 – $668,966,377
• 2010 – $777,865,158*

*Still being compiled

Total Number Sold

• 2008 – 360
• 2009 – 334
• 2010 – 334*

*Still being compiled

Median Mosman Price

• 2008 – $2,275,000
• 2009 – $2,000,000
• 2010 – $2,100,000*

*Still being compiled

Average Mosman Price

• 2008 – $2,738,041
• 2009 – $2,397,728
• 2010 – $2,483,864*

*Still being compiled

Source: Australian Property Monitors

Interesting to note the average price falling and I attribute this to the fewer numbers of merchant bankers in the market (especially at the top – end). More on this in future editions, when we break the markets down further.

Australia has the highest interest rates in the western world and now the highest levy (tax) ever imposed by a federal government in its history.

Ironic that our new big tax is heavily weighted at those who didn’t vote Labor! A smart initiative, or just plain dumb?

Labor’s big bill for poll research as the Gillard government increased spending on market research by 42 per cent to $31 million in the year preceding the election.

With the latest new tax/ levy, I believe that Julia Gillard has completely misread the Aussie ethos and should watch the NSW Labor right machine whose members are about to have plenty of time on their hands.

Ask one Kevin Rudd? I predict yet another PM spill in 2011.

Let’s finish the edition with a great story – the official launch of our Richardson & Wrench Mosman & Neutral Bay Corporate video for 2011.

Video by Visual Domain

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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28.01.11Robert Simeon6 Comments »

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There is no doubting the volatility of home prices and this became more evident when the Reserve Bank of Australia (RBA) decided not to increase the official cash rate. The new money in our property markets is under serious threat. So too, are the financial institutions which can ill afford a reverse in property prices. These very markets were in growth mode during the global financial crisis when the established (old money) property markets went into actual decline. The RBA is now faced with a real estate conundrum as is the Australian Bureau of Statistics (ABS) with reporting accuracy.

Christopher Joye wrote in Business Spectator this week “ABS overstates house price growth” – “the ABS’s median price numbers are being artificially inflated by the fading of first timers, who are being replaced by up graders buying more expensive homes.” Which is exactly what happened in Mosman last year as the market awoke from the GFC (from June onwards) as did the majority of top-end property markets. Joye wrote “While the ABS results will no doubt trigger the inevitable media excitement, the hard empirical fact is that Australian homes have been recording consistent capital growth of about 2 – 3 per cent per quarter since the start of 2009. It is comforting to note, however, that Australian house price growth has not outpaced the growth in household disposable incomes since around 2002.”

The building in the bottom left hand corner is the clue where Sydney Ports are located – a magnificent heritage building on Sydney Harbour identifying our rich history

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Tim Mooney Photography

Understandably the media ran amok (trying to get those rivers of gold running again) with the ABS figures – Australian house price index rose 5.6 per cent in the December quarter and the September quarter was upwardly revised to 4.4 per cent. ABS figures in the year to December identified that the house price index rose 13.6 per cent. The only problem is, that ABS figures are not considered as accurate as the other data aggregators.

So let’s take a look at Australian Property Monitors – Domain Property Data (our preferred data aggregator given that they list the actual property addresses for all the properties contained within this report) revealed for Mosman house sales in 2009 – 2008 – 2007 a comparative analysis where you can be the judge.

MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2009 to 1 DECEMBER 2009

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• Total number offered – 334
• Total number of sales recorded – 303. (31 still unrecorded)
• Total Value Sold – $668,966,377
• Public Auction – 62 properties to a value of $94,857,000
• Private Treaty – 241 properties to a value of $574,109,377
• Median Price – $2,000,000
• Average Price – $2,397,728
• Highest Sale $13,200,000 (RWM)

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MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2008 to 31 DECEMBER 2008

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• Total number offered – 360
• Total number of sales recorded – 287
• Total Value Sold – $774,865,612
• Public Auction – 65 properties to a value of $126,645,250
• Private Treaty – 222 properties to a value of $648,220,362
• Median Price – $2,275,000
• Average Price – $2,738,041
• Highest Sale $14,700,000 (RWM)

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MOSMAN PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2007 to 31 DECEMBER 2007

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• Total number offered – 456
• Total number of sales recorded – 412
• Total Value Sold – $1,182,372,720
• Public Auction – 132 properties to a value of $292,042,000
• Private Treaty – 280 properties to a value of $890,330,720
• Median Price – $2,300,000
• Average Price – $2,869,836
• Highest Sale $22,500,000 (new record price)

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Next week Cremorne House and Semi sales

SUMMARY MOSMAN HOUSE PRICES FROM 2007 to 2009

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It is interesting to extrapolate data post GFC. In 2007 the number of houses offered to the marketplace was 456 and in 2008 the number offered, fell -21 per cent to 360. In 2009, we witnessed market consolidation when 334 houses were offered at a – 7 per cent decline. One must not forget that in 2008 and 2009, scuttlebutt had property voyeurs believing that more than half the houses in Mosman were available for sale (this would equate to approximately 2,500 homes as against the recorded 360 and 334 respectively). Thank goodness one Mosman agency has the technology and desire to set the record straight.

Sold properties in 2007 came in at 412 and dropped -30 per cent in 2008 to 287 then in latter 2009 we saw an interesting turnaround where sales increased to 303 – a +5.5 per cent increase. The same patterns can be observed in ‘total value sold’ statistics when the total in 2007 was $1,182,372,720. This fell -34.5 per cent in 2008 to record $774,865,612. In 2009 we started to see the recovery when total sales were $668,966,377 (this represents a -14 per cent decline). We expect these figures to move back into the black in 2010.

THE AUCTION v PRIVATE TREATY DEBATE IN MOSMAN

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This is amazing data and before we move further, I must advise that every suburb reports different rates of success. The Eastern Suburbs have very strong auction markets and Mosman is one of the worst performing auction markets in Sydney.

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Mosman – 2007

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• Total sales – 412
• Auction – 132 (32 per cent)
• Private Treaty – 280 (68 per cent)

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Mosman – 2008

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• Total sales – 287
• Auction – 65 (23 per cent)
• Private Treaty – 222 (77 per cent)

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Mosman – 2009

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• Total sales – 303
• Auction – 62 (20 per cent)
• Private Treaty – 241 (80 per cent)

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Makes you wonder why so many Mosman agents keep recommending auction? I know that regular blogger Patricia will find these statistics of great interest.

So where to in 2010 and what will happen to Mosman house prices? I asked Steve Patrick, one of the most respected agents in Mosman what would happen and here is his response. “After a twenty (20) per cent fall in our market from the highs of 2007 to the end of 2009 (actual registered sales on several properties substantiate this figure), I believe the market bounced back somewhat in the order of five (5) to ten (10) per cent.) The last few months of 2009 confirmed this trend where house prices have now stabilised.

There is renewed confidence in the local property markets from buyers, albeit with caution, where I see our market moving steadily over the next six months with small (but more importantly), steady upward growth. Supply and demand will be the key factor going forward as it always has been. Rarely in my past twenty plus years working in Mosman, have I seen an over -supply, even when the GFC was at its historic peak.”

So there you have it! The Mosman online real estate bible has spoken. This weekend marks our first 2010 experience of buyer reaction/response at our upcoming open houses.

We trust that the data contained within this edition of Virtual Realty News will greatly assist you with your market determination. Rest assured, you will read it first with only one Mosman Agency!

See you on our blog where the Mosman debate continues.

Cheers ^__^

For this week’s recorded Balmoral real estate, 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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5.02.10Robert Simeon14 Comments »

We can be sure that in a recession, everybody looks to the future. A few years after the recession of the early nineties, we were introduced to the Internet. Today, governments across the planet – I could say world wide web (www), are introducing “stimulus packages” which simply highlight things they want to do now, that should have been done in the past. This confirms the fact – politicians are so far behind, the future has actually gone before they get there.

Our current recession is definitively not a case of better late than never – more a case of elected politicians who have stymied our very own economies through gross mismanagement of resources, education, health, transport, employment etc.

I openly use the word recession because that is where we find ourselves today. If you watched Laurie Oakes interview Prime Minister (Australia’s greatest ever) Kevin Rudd on Sunday Today, you would have heard our Prime Minister (for the first time) use the words “global economic recession, recession, global recession and current economic recession” a staggering sixteen times. One can then presume that it is now politically correct to mention the recession word in “Virtual Realty News” – phew! Just another example of moving from the past to the present – although it has been a struggle.

It was “Ruddy Fantastic” when United States Treasury Secretary, Timothy Geithner, endorsed Ruddy as being “A-plus” on his handling of the global recession. “If we did what he advised we’d all be in a better place” said Geithner. Ruddy Fantastic! I say we are now in recession so where is the better place? Obviously he means last one in is the first out – somehow I can’t agree.

A common theme we are seeing today is Australian businesses re-locating to employ overseas staff where labour markets are so much cheaper and Payroll Tax is significantly reduced. Imagine what would happen in Australia if State governments abolished Payroll Tax – there would be no need for businesses to move operations overseas . Unfortunately, it won’t happen as they all live in the past and such a move would be deemed politically incorrect. In economic downturns, government taxes clearly accelerate the severity of recessions.

Ruddy Fantastic and surprise, surprise, the Business Coalition for Tax Reform (BCTR) suggested that the Australian Taxation Office take over Payroll Tax and develop a uniform national system. An example of the most insidious business tax being addressed but falling on deaf ears, or living in the past and struggling with the present? The major problem being that all States, Territories and Ruddy Fantastic’s very own Federal government are now all in deficit – better known as err umm – broke.

Whilst on Ruddy Fantastic, one subscriber this week suggested another name – “Special K” – low fat economy with business weight loss which can also be described as a recession.

To make matters even worse, the dastardly timing of this thing-a-me-bob “recession” has left a huge hole in budget coffers (better known as tax receipts) because businesses are earning less and this equates to less tax, less profit and less incentive to employ – otherwise known as overheads.

Back to the future where Mosman house prices prefer the past rather than the present and our markets are a far cry from – hey presto! In 2007 Mosman, recorded 409 house sales, last year (2008) it recorded 261 house sales and in 2009, Mosman is currently recording just under 7 house sales per month. So under the current formula in 2009, we could be looking at somewhere in the vicinity of 90 to 125 house sales – despite all time record low interest rates. In the space of two years Mosman house sales could be down by seventy five per cent.

Sydney is presently drowning. The Daily Telegraph revealed this week that “an estimated 7,300 new dwellings will be built in Sydney this year, the lowest rate of growth in more than 50 years and roughly a third of homes built in 2003. The bleak projections are in stark contrast to Melbourne, where an estimated 23,000 new dwellings will be built this year.”

Not sure which part of these statistics, Premier Nathan Rees does not understand – aside from the reality that as he presides over Fort Crumble, he has absolutely no idea what he is doing. The most sobering point in the article “Rents to soar as housing crisis worsens” is that Sydney’s population is expected to rise by close to 23,000 this year and with rental vacancies already running at a mere 1.1 per cent, the situation is reaching crisis point.

If the global recession is not enough – businesses in NSW find themselves fighting a totally incompetent, broke and lost government before they have to then address a global recession. This week it was revealed that NSW will go to the polls in two year’s time – where will the NSW economy be at that time?

Recessions have strange effects on people. One local agent ran an advertising campaign this week with the headline who is he? Friends should call him and tell him that everything is fine and the real estate industry can lead to individuals questioning themselves.

As the Little River Band sang “Hang on help is on the way.”

Cheers ^__^

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

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27.03.09Robert Simeon15 Comments »