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The 2010 federal election is all about the polls (cometh the spin) then three years on, we have more broken promises than promises that actually came to fruition. Neither party has a single blueprint for the Australian economy, nor the nation as a whole and this was classically highlighted during the global financial crisis spend– a– thon which we are told constantly, saved the Australian economy from recession. Australia’s need to invest in infrastructure, is urgent – roads, rail and ports and this is why Fort Crumble faces election annihilation when NSW goes to the polls in March 2011.

Infrastructure in NSW ‘average to poor’ a scathing new report card from Engineers Australia where more than three quarters of the sectors require major or critical changes. This report highlights the point that industry can identify the problems, yet elected governments are incapable of preparing a work – in – progress strategy for Australia. Fix these problems because today our population is well ahead of infrastructure which was brilliantly explained in gotchanomics doesn’t bring home the real bacon.

Labor struggling in key states which led to rolling out the barrel – Labor denies pork – barrel suggestion. Andrew West from the Sydney Morning Herald wrote Back on track – and just the ticket for commuters “It is politically brave for a prime minister to appear publicly with a NSW premier these days. It is crazy brave to make a joint announcement about public transport. The NSW public is so cynical about public transport promises – after 15 years of projects being announced, postponed, shelved and re – announced – that voters no longer believe state Labor can deliver a crucial service.” The $2.100 billion rail link announcement for Parramatta and Epping will no doubt be shelved once Fort Crumble is removed permanently at the next state election – all aboard the PM’s Parramatta express. Who could forget reading How lazy Nathan Rees sold NSW short which explains why Gillard and Keneally fail on Sydney’s transport infrastructure funding. More than half the pledged monies promised in the current election will not be spent until after the next election in 2013 – pork rolled out on the never-never.

BUY PRINT

Surveys reveal that Australia is home to the world’s least – affordable property. Pundits are at odds over whether it might end in a bang or a whimper – a great read Forever blowing bubbles. The Real Estate Institute of Australia recently announced that a contributing factor to the increase in house prices and the decline in housing affordability, is the under-supply of housing. According to the National Housing Supply Council, the gap between the supply and demand for housing will increase in the next eight years and this will put further pressure on house prices.

Nothing new on offer since the houses that Kevin built – “It might be important to voters – but not the parties”, wrote Kevin Saulwick. “There may have been more pressing issues than housing affordability at the 2007 election, but not many. Which makes it all the more remarkable that three years later – and with the same level of community concern about the cost of living – there has been little focus on housing by Julia Gillard and Tony Abbott. When Kevin Rudd sailed into office, it was due to Labor’s success in putting itself on the side of the angels when it came to housing costs. Rudd’s message was simple: he sympathised with families bleeding ever – larger payments on mortgages and rent. And he came to office offering policies aimed at increasing the supply of affordable properties to help reduce the pressures.” The Emperor was de-throned by the Orange Roughie because he had lost his way, then poor polling saw a phoenix – like resurrection to lead Labor to better polling – hence the soap opera.

Housing affordability can come down only with much improved infrastructure policies – Capital city house prices up 18 per cent from last year – ABS even though home loans sink to nine – year low. When infrastructure is non–existent, this leads to construction slumps in July because there is no point building, where there is no demand (especially when NSW has no South West rail link, North West rail link, Parramatta to Epping rail, M4 East and M5 East duplication). If these facilities were in place as promised, NSW construction would be booming and housing affordability and rentals much more affordable. How can Australia “move forward” when infrastructure is moving backwards, compared to our population growth? Policy on the run again as NSW Labor in the dark over Gillard’s Parramatta – Epping rail link promise which has been revealed as the rail pledge a carrot in push for McKew win for the seat of Bennelong – Maxine who?

The last remaining economic data statistic before next Saturday’s election was released this week – shock jobless rise where the three states of major concern for federal Labor – NSW, Queensland and Western Australia all experienced unemployment increases.

Whilst home loans fall as interest rates bite the good news is that the Reserve Bank of Australia RBA statement suggests longer pause given RBA forecasts plenty of blue sky ahead. With the election ‘soap opera’ out of the way next Saturday, we can expect some normality back in our property markets. Electoral promises rarely come to fruition as The Emperor “Kevin 07” found, even though he has been brought back to life – with a faint pulse.

Richardson & Wrench Mosman & Neutral Bay (RWM) has been busy working on our infrastructure and this week, we released our RWM mobile website. Previously with your mobile phone you could view our website with your phone which was a navigation nightmare because it is impossible to view a macro site on a micro application and do justice to our properties. Agentpoint our developers this week launched our mobile micro site for mobile phones users.

Open a browser on your mobile phone and type in www.m.rwm.com.au. Our research and development team are currently testing new technologies, all to improve your RWM real estate experience..
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Online is our real estate industry point of difference, because we are the only agency that gets it – so now you get it. Our clients can now sit outside one of our properties and view it on their mobile phone (outside set inspection times) from our mobile RWM website.

Thanks to Steve and Richard for filling in whilst I was relaxing in our Thailand branch office which is better known (by me) as the Tipsy Prawn.

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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13.08.10Robert Simeon5 Comments »

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Twelve months ago in our final edition of Virtual Realty News for 2008 I wrote – “The first six months of 2009 will be hard (not necessarily harder) and I believe the next six months will see a mild rebound leading to much stronger property markets!” As it turned out this prediction was one hundred per cent correct and in June 2009 we posted $63,000,000 in sales – the rest (just like that edition) is now history. Despite an avalanche of doomsday prophecies (and there were plenty) the missing link for the prophets was that they simply underestimated the power of the Internet and smart business models.

Every day, we spend an intoxicating amount of time in front of a computer – reading, writing and communicating. Just weeks prior to our final edition in 2008 I wrote – “I have said it before and I stand by my previous comments that in the recession of the early 1990’s there was no Internet and no electronic information highway that today, has played a dominant role in the recovery process.” Once informed, the decision making process is activated – the dominance of online during the global financial crisis is now a legacy that will continue to grow and dominate.

Some would suggest that it was a stimulus package but I would argue that those prophets would not know the difference between ‘Word’ and ‘Outlook’. Politicians make a habit of wording their outlook differently, based (more often) on spamming the minds of the electorate with nonsense.

The hive of activity as the Boxing Day – Sydney to Hobart race is fast approaching

www.timmooneyphotography.com

So what are our predictions for the Mosman property market in 2010? Don’t worry if you blink, as it won’t be moving that fast although we see strong signs of renewed confidence. Housing prices will increase but we see no need to panic because we see upward growth in property values – that is growth (not boom). The Australian Bureau of Statistics (ABS) announced this week that lending for the construction of new homes rose dramatically in October increasing by 5.7 per cent. New home loans have now officially increased in 13 of the last 14 months – population explosion?

Certainly this argument is greatly assisted by the sale of a Perth mansion this week for a new Australian record of $57.500 million dollars. RP Data wrote on its blog this week – “The improvement in equities markets and business conditions has prompted many top end buyers to venture back into the market. For a while there were many bargains to be had – premium housing markets took the biggest value dive of any sector around the country in 2008 and now seeing the biggest jump. Values in the top end are now once again at record levels, having risen 2.4 per cent higher than the previous peak recorded back in February 2008. On an annual basis many of these premium suburbs have recorded some of the largest falls in median house prices however, it is clear with confidence returning many areas are set to bounce back or already doing so.”

Politicians and banks will provide great fodder for Virtual Realty News in 2010.

It has already started with this week’s Westpac “banana debacle” when it stupidly sent customers an email justifying its recent interest rate hike. Its rationale was to compare Westpac as the business selling banana smoothies – too much egg nog I thought, so have a look.

Maybe this graph presents a more accurate positioning from the “Bananas in Pyjamas” who must think all their customers are in a slumber with no Internet access.

Fort Fumble – Federal Government

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Fascinated by spending other people’s money (tax payers) whilst consumed with the belief that Australia still requires its stimulus package, The Emperor (Kevin Rudd) is currently holidaying in northern Europe. His preferred mode of transport has been letting him down – given Air Force One has ongoing mechanical problems – much like our economy.

Co-pilot Wayne Swan needs to masticate more, because his ears keep popping. As was pointed out in Letters to the Editor, this week in The Daily Telegraph. “Treasurer Wayne Swan fools no one with his ongoing bleating about banks raising interest rates much more than the Reserve Bank. What’s he doing to restore the competitive pressures that have collapsed in the financial services sector under his brief watch? While the Government discriminates against smaller financial institutions in its guarantees for wholesale funding, his utterances are simply deceptive posturing.” The co-pilot did approve the acquisition of St George bank to Westpac so have a banana smoothie on the house.

The Mad Monk is waiting in the wings although that too, may be an aborted takeoff with plenty of Liberals in the hanger. Malcolm Turnbull will probably head back to merchant banking where approval ratings will improve considerably.

Fort Crumble – NSW Government

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Where does one start – the most incompetent governing body in Australia’s history – the ‘violent crumble’ of all governments?

Robert Gottliebsen recently wrote on Business Spectator “We’re scaring off housing investors. Governments, whether they be in Canberra or in the states, often pass legislation without ever understanding its consequences.” He is referring to our housing crisis and talking about property investor taxes. “This means that if you hold an average investment property in Sydney and this pushes you over the $376,000 land tax limit, it makes no sense to invest in another. The annual holding cost figures look roughly like this: land tax 1.6 per cent; rates/water 1.0 per cent; mortgage interest 7.00 per cent plus; and maintenance/agent 1.0 per cent. That’s represents total costs of 10.6 per cent of your investment.” Rents will go through the roof over the next twenty four months.

Thoroughly enjoyed reading an article this week in The Daily Telegraph – NSW leads economic rebound. “NSW is leading the national economic recovery with forecasts of a miraculous turnaround in growth figures in the coming year. The State’s Budget is also expected to return to surplus a year earlier than expected, with a $872 million surplus expected in 2010 – 2011.” Technically it was broke well before the global financial crisis although this did not restrict the excitement of newly elected Premier Kristina “doodle dandy” Keneally “who has absolutely no tertiary qualifications” from shrieking (with accent) that the NSW Budget was “back in the black”. Oh dear!

No doubt “doodle dandy” would have been suitably impressed to learn that Nathan “no strings attached” Rees, brilliantly negotiated the sale of our three Manly JetCats that cost NSW taxpayers $3 million – with the purchaser flogging them off shore for more millions. Nathan “no strings” out, and Kristina “doodle dandy” in – so much to look forward to next year.

It has been our absolute pleasure delivering Virtual Realty News to your inbox each week and we are now into our tenth year (never missed an edition). I remain very confident that in 2010 we will be the very first Australian real estate agency to break the magic $1 billion in subscriber sales – currently at $887,154,220.

Special thanks to the aerial photographic gymnast of the sky Tim Mooney for his amazing photographs – a weekly highlight (for us) to explore his vast library of photography.

We thank you for your patronage. Defamation suits have been interesting and engaging (it’s just that I am an advocate for freedom of speech). The audit of our books by The Office of State Revenue was a highlight which re-inforced the fact that Virtual Realty News keeps annoying Forts Fumble and Crumble.

We will return to your inbox in late – January 2010 and go (weekly) all the way through to December 2010. It’s a tough job – but somebody has to do it!

Merry Christmas and have a brilliant, happy and prosperous New Year.

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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11.12.09Robert Simeon10 Comments »

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The Emperor (Kevin Rudd) was back at it again recently when he commented on Australia’s skyrocketing population and quipped “I actually believe in a big Australia. I make no apology for that.” Well, Australia actually does need apologies, because critical infrastructure advice continues to fall on the deaf ears of our elected politicians.

After all, there must be something seriously amiss when past King of Spin, “Bobby Dazzler” Carr starts penning and pontificating on population policies in the Sydney Morning Herald. “Perish the thought that we can handle a bigger population” wrote the Dazzler “Some Australians must have felt similar estrangement when they read federal Finance Minister Lindsay Tanner’s defence of Australia’s runaway immigration targets, playfully comparing our population densities with those of Bangladesh.”

Then the Carr crash (with accompanying air – bag), “That Tanner is one of the best minds in federal politics will only deepen the rift between 90 per cent of Australians and their political and business leadership over population policy, or rather the absence of any policy except “more”.” It would now appear that “Bobby Dazzler” is over the selective hearing condition that plagued him in his reign of the Premier State from 1995 – 2005. The transformation went from Premier State to State of Decay to Fort Crumble and even though it did not happen overnight, it is now a nightmare.

Maybe this vacant plot of land might make a nice residential subdivision with very little chance of flooding?

www.timmooneyphotography.com

Sydney to squeeze in 640,000 new homes by Matthew Moore – Urban Affairs Editor the Sydney Morning Herald identified “A forty per cent increase in Sydney’s population over the next 20 years means the State Government has no option but to open up scores of suburbs for new developments, according to radical proposal for Sydney to build 640,000 new dwellings.”

For this to happen, Fort Crumble would need a plan so I went in search and found that it does not look pretty, as Andrew Clennell of the Sydney Morning Herald revealed. Rees desperate to stand for something “In this respect he hopes to get something on the radar at Macquarie Street that has been lacking for the past 12 months – POLICY.”

They obviously can’t hear but thankfully they can read. “Number one on his list is transport. The transport blueprint that Rees promises to hand down sometime over the next three weeks is likely to be treated with some scepticism.” I guess he means this is like a homeless person entering Star City and requesting a seat at the High Rollers Table – after all Fort Crumble is broke. Back to Andrew “This is because of the large number of projects that Labor has promised, and then not delivered, in 14 years in power.”

Oops “Bobby Dazzler” was at the helm for ten of those years – although Fort Crumble would win a wood chopping event as they sure know how to wield that political axe.

• North West Rail link (promised in 1998 and axed)
• North West Metro (announced and axed)
• Bondi Beach rail link (promised then axed)
• Parramatta to Epping rail link (halved to Epping to Chatswood rail link)
• CBD/second Harbour crossing rail link (promised and axed)
• F6 through southern Sydney, (on again, off again)
• M5 duplication (long delayed)
• M4 East extension (long delayed)

Last month’s parliamentary pay increases and the fact that our Fort Crumble premier should be (and is) the highest “paid premier” in Australia have been vindicated. Alex Gooding had this interesting analogy on transport in the Sydney Morning Herald – Three times denied: western Sydney misses out on transport, again (great read) which really adds a poignant perspective on the political decision making processes.
Ongoing calamities when “ Paid Premier” Nathan Rees overturned an earlier decision to contribute $45.000 million for the newly anointed AFL’s western Sydney franchise to build a new home ground – again out came that axe (perish the thought of constituents contemplating the axing our “Paid Premier”)

Macquarie Equities Research – this week released this compelling graph in its Australian economics report. Sketching the outlook for housing “this note examines the recent trends in the housing sector and looks ahead to key factors to watch in 2010.” Looks like a tsunami to me.

Macquarie Equities Research – “In our view, the key factors to consider are the favourable fundamental determinants – strong population growth and constrained supply – alongside the deteriorating level of affordability. With these factors working in opposite directions, it suggests that the more extreme forecasts of a house price bubble or a price collapse will continue to prove wide of the mark.” More of this report in next week’s edition.

Back to Andrew Clennell’s report “Sydney is experiencing transport gridlock. Public transport services in the CBD are overcrowded, even though train services are inadequate and in many suburbs non-existent. In response, transport plans are announced and then re-announced. New rail lines are proposed but then abandoned and governments blame increasing costs and global financial problems.” He did forget to mention that over the last fourteen years the NSW government also collected the highest amount of taxes in Australia’s history. In real estate terms it would be “dilapidated home – run down, neglected, yet with plenty of potential”.

So let’s look at what is happening locally. I went to Wayne Swan’s Nation Building website to see what is happening in Mosman and North Sydney municipalities. Indeed Nation Building personified – bicycle paths, perimeter fencing, a shade structure, and a few water bubblers -no wonder our economy has rebounded with such exhilarating speed. All that it takes is a plan!

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Our councils are doing it tough mentally and physically although they are making plenty out of parking fines as Vikki Campion reported in The Daily Telegraph. Where you’ll cop a parking fine. North Sydney Council collected $7,000,000 which was up 48 per cent from $4,700,000 and Mosman Council $1,700,000 up 89 per cent from $910,000. It should also be noted that Mosman Council has been aggressively investing in new parking meters so one could expect a significant revenue increase with this return on investment.

In retrospect, if our population continues to explode it would then not be unreasonable to draw a conclusion that our water supplies face significant declines too (it did happen well before the proposed population explosion). Now when you renovate or build a new home, you must provide water tanks in accordance with local Council building regulations.

So why, in any Mosman or North Sydney parks, ovals or reserves, have the respective Councils not installed water tanks? After all they have only to connect to their very own street storm water. Look at the number of parks, ovals and reserves located below street level. Balmoral Oval, Rosherville Reserve, Forsyth Park, Tunks Park, Primrose Park, Cremorne Point Reserve, Sirius Cove Reserve, Allan Border Oval, Rawson Park, Spit Reserve and Reid Park. These are but a few that are all entirely dam- dependent and coincidentally, always have their sprinklers on when it is raining.

Warragamba Dam is presently at 55 per cent capacity and declining – although the Kurnell desalination plant is soon to be completed and that will supply up to 15 per cent of Sydney’s water. Of course we can’t leave out evaporation as this coincides with policy that has also evaporated.

Then again I have never been one to water down an edition.

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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27.11.09Robert Simeon1 Comment »

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We all love it when a plan comes together, so spare a thought for those at Fort Crumble (NSW government) who still fail to understand a plan that actually works. We all know what happens next (as you will see) and it does not look pretty for this once proud state. A decade later those horrific and planned bureaucratic bungles are now taking a major toll – (one Fort Crumble can’t collect either). Ongoing bungles at Fort Crumble are considered to be “having a real hard go”.

Just as ironic is that in NSW, infrastructure has moved into economic decline and as with all declines, they have a habit of gaining momentum that ends in a huge crash. On the other hand, when a government drives constituents to other states, it could be construed as its very own plan to fight housing affordability – better known as reducing demand. In a nutshell, no plan works when you apply the supply v demand economic theory, without applying the basic principles of meeting supply first. Housing in Australia is facing an interesting twist, because when the tools to meet supply are down, prices will keep rising – more a result of failed government forces.

Pulpit Point, Hunters Hill (a planned estate to meet supply) photographed by Tim Mooney. The vacant marina berths may well be a result of the global financial crisis. Or was this photo taken on a weekend when the residents were out relaxing on picturesque Sydney Harbour ? (Sounds like a smart plan).

www.timmooneyphotography.com

In past editions I have referred to the ‘thirty something factor’ in Australian housing – one third rent, the other third own with a mortgage and the final third own without a mortgage. RP Data published its Weekly Property Pulse. “Housing finance data released by the Australian Bureau of Statistics (ABS) this week showed that finance commitments surged during September. In particularly there was a strong bounce back in first home buyer loans which was not surprising given that it was the last month in which the First Home Buyers Grant Boost was available in full.” Bear in mind that interest rates are also increasing so here is Household Estimates 2007 – 2008 graph which makes one wonder what it will resemble after the impact of the first home buyers grants in 2009.

This is how it looked (prior to First Home Buyers Grant Boost) when the Reserve Bank of Australia (RBA) was sitting around 7.25 per cent (RBA rates) and in September the cash rate was at 3.00 per cent. Currently, the cash rate is 3.50 per cent. Are the property debutantes who grabbed the grant, aware that post – global financial crisis, we are headed back to the future market? In 2010 – 11 the economy will pick up by 2.75 per cent rather than the suggested 2.25 per cent.

Whilst yet to be evaluated, rental property vacancy rates remain at record lows which in all probability forced many in rental markets to purchase property – the Sydney vacancy rate in October remained at 1.3 per cent. It is supposed to be 2.50 per cent to 3.00 per cent. According to RP Data, over the twelve month period, the weekly rents for houses (nationally) increased by 3.4 per cent (that was in a downturn). So why is The Emperor (Kevin Rudd) wasting money on renovating school halls when there is an obvious need to increase housing? (I will get to that shortly). However, this rental graph is simply scary.

In pursuit of answers, I found that the culprit (surprise – surprise) was our very own Fort Crumble when I read in the Sydney Morning Herald – “NSW not a developer’s nirvana … it’s planning hell” by Aaron Gadiel. “if you were to accept everything that has been said about development in NSW, you might think it was open slather; a developer’s heaven – that planning was out of control or that, development was running rampant.”

“Nothing could be further from the truth.”

“It is time for a reality check.”

“Developers are not fond of NSW. Not at all.” Based on the graph above I would suggest that those in rental accommodation would feel the same, given that when it comes to ‘bricks and mortar’ Fort Crumble is ‘as thick as a brick’ with absolutely no intellectual mortar between the layers.

“In development terms, NSW is neither one, nor even number two. After decades of more building activity than any other state in Australia, we lost our first place ranking to Victoria in 2008. To compound the indignity, in the same year we also fell behind Queensland.” What a plan!

“Victoria and Queensland have stolen a disproportionate share of Australia’s building investment. In the financial year ending in June, NSW accounted for only 23 per cent of Australia’s building activity, while we made up 32 per cent of Australia’s population. The Australian Bureau of Statistics only records one other occasion where NSW was anything but first – and that was in 1977.”

So let’s look at our esteemed Premier Nathan Rees who (as he keeps telling us) is “having a real hard go.” Not sure exactly what is going in NSW aside from the government. “The economic damage to NSW from its poor performance is dramatic. The construction activity made possible by developers contributes $78 billion to the national economy each year. For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. When we lose development dollars to other states, we’re losing income and jobs that rightfully belong to NSW residents.”

I refer you again to the above graph, “Sydneysiders have already been feeling the pinch of housing shortage. Rents in outer suburban Sydney have gone up by more than 20 per cent in the past two years. In the middle ring suburbs rents have jumped near to 30 per cent “. What a business plan.

For our Mosman residents I jumped over to Australian Property Monitors to access the Mosman occupancy data.

Fort Crumble is in total decay and Fort Fumble has absolutely NFI (No Financial Idea) as to exactly what is happening in the Australian property demographic markets. And my mantra is not to castigate – abuse or criticise our elected politicians on the astounding execution of their Nation Building expertise.

Clip of the Week

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In search, I went to YouTube – where I discovered one of the most amazing clips that signifies achievement. Unlike elected politicians, he is a man of few words yet his actions speak much louder than his few words. Backed by Delta Goodrem singing “Together We Are One” this clip should be re-played at every household and sales meeting.

Inspiration personified – Gavin’s Bridge Climb

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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20.11.09Robert Simeon4 Comments »

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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 »

Consumer spending grew 0.6 per cent in the March quarter and the lucky country avoided technical recession. Depending on your political flavour, there was lots of political back slapping and back stabbing but more importantly, credit resonated through markets. The ASX 200 soared through 4,000 identifying five consecutive trading days above $5 billion (seven month high) – it was good news week for financial and property markets.

Fort Crumble (NSW government) had another negative quarter (0.2 per cent) and is technically in recession although ‘Premier Please’ remains in denial because the figure excluded exports. I am now focussing on ways to export a politician!

In business, you have to reach your Key Performance Indicators (KPI’s) or it’s simply time to go. Surely the same ethos must now apply to elected politicians. There is no better example than what is happening at Fort Crumble, as the Sydney Morning Herald reported earlier week – “NSW burden drags nation deeper into strife. Business is calling for radical intervention to stop the former premier state’s decline, reports Jessica Irvine, Economics Editor.

Tim Mooney Photography

www.timmooneyphotography.com

The decade-long slide by NSW into economic oblivion, if not arrested, may stymie the Rudd Government’s attempts to kick start the national economy out of recession.

The once “premier state” has been going backwards, compared to other states since the Sydney Olympics, on key indicators of economic health including growth, business investment, jobs, home building, wages a Herald analysis of official figures has found.” I have put the main points raised in the article in point form.

• NSW now contributes less than 32 per cent of the country’s economic production, down from 34.5 per cent just after the Games. An exodus of people interstate has also led NSW’s population share to shrink by 1 percentage point to 32.5 per cent.
• Even more remarkable has been the slump in NSW’s share of new business investment and new home building activity. Of every dollar businesses spend investing in new equipment and buildings, NSW accounts for just 23 cents, down from 35 cents in late 2000.
• And despite being home to one-third of Australia’s population, only 15 per cent of all new home-building takes place in NSW. The state approved just 1558 new homes in March, behind Victoria (4023) and Queensland (2052).
• NSW’s jobless rate remains consistently one of the highest in the country and the traditional wage premium NSW workers enjoyed over other states has all but evaporated. In late 2005 NSW employees earned $3500 more a year than the national average. Now it is just $500.
• Of $8.5 billion in transport spending announced in the federal budget on May 12, Sydney received just $91 million for a study on the West Metro, compared to $3.2 billion for a Melbourne rail project”.

Ouch! Brilliant investigative reporting. Now imagine if employment contracts were based on KPI’s. The vast majority of those in NSW government would be unemployed. Simply put: no longer can they remain a protected species especially when the state’s Budget deficit is announced on June 16. Fort Crumble is suggesting $1 – $2 billion some economists are already suggesting a massive $6-$8 billion deficit.

Should this be the case, NSW has then moved from critical to life–support where again, the once “premier state” is trading insolvent with a business plan outlined on the back of a postage stamp.

With Fort Crumble in a “state of shock” following Ruddy Fantastic’s Nation Building snub – it was somewhat ironic that it leaked (prior to Budget night) its approval of major road projects totalling $4.4 billion. For obvious reasons the approvals only apply to Labor seats because, after all, it is all about re-election.

Key Performance Indicators in NSW have been replaced by Key Political Intervention where a politician earns more in government than in opposition. Cash for votes are alive and well in NSW politics – although around the corner where Struggle Street meets at the intersection of Rage Road, our esteemed Premier, ‘Nathan Please’ has a problem with his unions. A bummer for Treasury as the unions flatly rejected a suggested freeze of the state’s public sector wages – teachers, nurses and police – better known as a Key People Indicator.

The same can’t be said for Ruddy Fantastic’s first home buyers grant. High beaming himself in parliament this week, he announced that a record 18,736 punters took up Labor’s offer in April. In past editions I have previously likened this grant to throwing lollies onto a highway – there will be casualties. For example: back in economic growth times, south-west Sydney identified home price collapses of around forty per cent – yet in recession (until this week) these very same areas are now in (Chk Chk) boom mode.

Ruddy Fantastic advised parliament this week that 18,736 excited homeowners took up Labor’s cash for letterbox incentive in April. This is much like the Federal budget’s spend plan – spend now and pay later. After all it’s only money and the artificial insemination of property markets has subprime written all over it. Just that this time around, we have the Australian version.

The Reserve Bank of Australia (RBA) left the cash rate at 3.00 per cent this week where we remain at 1969 equivalents. Forget Struggle Street and Rage Road, when rates do go up (and in all probability this will happen around July/August next year). For many inductees into the property market, this will result in Road Kill (depending on respective loan agreements) as our economy moves from deflation to inflation mode.

What inflated this week were our subscriber sales which jumped last week from$848,794,010 to $859,094,019. In total, we exchanged $ 13,905,000 worth of properties. As I suggested over a month ago, the market has bottomed and purchasers and vendors are now engaging (we don’t make these figures up – they actually happen). The big online businesses are leading the way!

Another great (free) daily read launched on the Internet this week www.thepunch.com.au from the News Ltd online stable. This week’s YouTube is Rove’s explanation on how Australia avoided recession (turn your speakers up) – very funny.

Cheers ^__^

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/

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5.06.09Robert Simeon4 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 »

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 »

Like teenagers who just received their first credit cards, Kevin Rudd and Wayne Swan have collectively joined Australian state and territory governments with a deficit budget (once approved in the Senate). To put this into greater perspective, the NSW government (Fort Crumble) has been broke for years despite record tax receipts and yet infrastructure maintenance remained all but non – existent. With world leaders announcing stimulus packages (and I agree we need them) let’s not camouflage these massive fiscal announcements under the guise of combating the Global Financial Crisis (GFC). The problems in NSW (and the other states and territories for that matter) happened well before the GFC.

Last Friday, I read with interest an article on www.crikey.com.au by John Hewson – economist and former Liberal party leader titled “Hewson : we could see an election this year” where in part he made the following comment “At best, the Rudd Government’s second stimulatory package will just buy some time — simply delay the inevitable. As long as the global recession continues to deepen and, as a consequence, China’s growth continues to stall, the best Rudd can hope for is to hold up consumer spending by the cash handouts sufficient to avoid a technical recession — namely, two consecutive quarters of negative growth. “The plot this week began to thicken.

Ross Gittins from The Sydney Morning Herald www.smh.com.au filed this week an article titled “With best intent, politics intrudes” A great read so here are the first nine paragraphs “Kevin Rudd has long been afraid the downturn in the economy will cost him re-election, making his Government a one – term wonder. Malcolm Turnbull knows the downturn offers the best chance he’ll get to defy history and win the election, thus securing his own leadership.

These never – to – be admitted truths explain the political games both men are playing over last week’s budgetary stimulus package, even as the economy burns.

If you want to understand what’s happening in the economy and the rights and wrongs of economic policy you have to be able to distinguish between the politics and the economics. But that’s not easy because the pollies are always trying to disguise their political motives as economic.

Whatever successful politicians do or say, the political implications of what they do are never far from the front of their minds – even when they’re doing just what they should be doing in the nation’s interests.

As part of his long-running efforts to ensure he doesn’t get blamed for the recession. Rudd has repeatedly emphasised how bleak the news is from overseas and how badly it will affect us. It’s true, of course, but saying it is so often and so forcefully risks adding to the blow to business and consumer confidence.

Rudd hopes he can escape blame for the downturn provided he’s seen to have done his best to respond to it. That’s partly why he keeps popping up every few weeks with another measure to counter it.

Even so, mainstream economic gloom-from the International Monetary Fund to the Australian Treasury and most macro-economists – has been urging the Government to use the budget to stimulate demand, to make the stimulus big to get it happening as soon as possible.

It needs to be big because the global recession is expected to be so severe, it needs to start as soon as possible because getting in before the economy starts unravelling will be more effective.

Of course, the need for haste doesn’t justify Rudd’s attempt to push the legislation through Parliament in just a day or two.”

Back to the thickening plot of Rudd’s early election (alleged) plans. So this investigative agent went off to The Tally Room where he found that the Queensland Labor government must call a state election by September 2009. This is to win a fifth term where a loss would seriously impact what some media outlets are already calling the “Ruddslide”. A clue: infrastructure spending to improve state government perceptions for approval levels, maybe re-election?

Then the clanger in yesterday’s Daily Telegraph with the headline “Protect Rees, Rudd tells Labor MPs” I loved this – “Labor Party bosses have been ordered to protect Premier Nathan Rees from a leadership challenge and “calm down NSW” to allow Kevin Rudd to call a possible early election in the second half of this year.

Oh dear – what extent some individuals will go to, to preserve and stroke their suffering egos. A case of once bitten twice shy? Maybe a case of Sunrise to Sunset!

Next week, we address the amendment to Land Tax legislation where the Premier Nathan Rees introduced his premium rate and investment property owners had the current rate of 1.6 per cent increased to 2.00 per cent for investment properties valued over $2,250,000.

With GST receipts already down by approximately 40 per cent, the elected governments simply increase taxes which results in businesses reducing staff.

Nine years on – it is now revealed that GST has increased taxes NOT reduced them. The platform was fraudulently sold to the voting public.

The GFC did not help – however State governments are just as bad, even worse. They escalate the financial remorse for taxpayers and it will only get worse.

A hard week for all Australians, especially those involved in the tragedy of the bush fires in Victoria. We have placed a link on our homepage for those who wish to contribute.

http://www.rwm.com.au/2009/02/victorian-bushfire-appeal-2009/

Cheers ^__^

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13.02.09Robert Simeon3 Comments »