.

Forget the last federal election that resulted in a hopeless hung parliament – the new rule is incarcerated in people speak – hallelujah as “united we stand – divided we fall.” Despite what politicians may say with bated breath – polls threaten their very own livelihoods as much as they threaten our right to agree or disagree. Left field policy announcements within the Rudd/Gillard regime has been met with aggression that resurrected – if you don’t like it run an advertising campaign first initiated by the mining companies.

Politicians want to be in the limelight – not a back drop hidden within a party struggling for that voter point of difference whilst in Opposition. It is interesting to note that parties in Opposition burn leaders with regularity given when Bob Hawke was Prime Minister (1983 – 1991) the Liberal Party went through four Opposition leaders, Andrew Peacock (1983 – 1985), John Howard (1985 – 1989), Andrew Peacock (1989 – 1990) and John Hewson (1990 – 1994). When Paul Keating was elected Prime Minister (1991 – 1996) he saw off John Hewson (1990 – 1994), Alexander Downer (1994 – 1995) then lost the 1996 Federal election to John Howard (1995 – 2007). Federal Labor then waved good bye to Kim Beazley (1996 – 2001), Simon Crean (2001 – 2003), Mark Latham (2003 – 2005) and Kim Beazley (2005 – 2006). Enter Kevin Rudd (2006 – 2010), Brendan Nelson (2007 – 2008), Malcolm Turnbull (2008 – 2009) then Tony Abbott (2009 – present).

Julia Gillard removed Kevin Rudd on (24 June 2010 – present) which is the first example of an elected Government burning a Prime Minister. Now we see (Labor worries as PM struggles) and even stranger Labor hits a 15 – year low but Rudd wins where the HeraldNielsen poll now has Kevin Rudd and Malcolm Turnbull as the preferred party leaders! Since 1983, Australia has had five Prime Ministers and twelve Opposition leaders with Kevin Rudd becoming just the second Prime Minister to serve just the one term and Julia Gillard fast tracking becoming the third. Federal Labor has now had two Prime Ministers in four years and NSW Labor had four Premiers in four years – a pattern forming?

BUY PRINT

Let’s face it the Carbon Tax is a monumental debacle of mammoth proportion with many questions being asked – well Prime Minister, let’s see if you can hold your nerve. As key union puts Julia Gillard on notice over carbon tax which means that Julia Gillard’s carbon hopes up in smoke. Resembling an all in – brawl as food giants join war on carbon tax a great read on Carbon Tax is learning the hard way: Australia’s policies to reduce emissions – Grattan Institute. Throw in another major problem in that the Gillard Government is now fighting a bewildering array of battles, as it fashions a budget bound to open more fronts – budget blues.

Chris Richardson, Deloitte Access Economics: “The Global Financial Crisis was not a drama for our economy. It was and is still a drama for the Budget.”

Chris Uhlmann: The last forecast said this year’s deficit would land at $41 billion in the red. Next year the projected budget is 412 billion. But slowing growth and falling company and income tax receipts now mean those numbers are too rosy. With the Budget just weeks away, this year’s deficit will be worse.”

Chris Richardson: “Looking at the budget as a rolling 12 – month total, at its worst, it was a little bit over $60 billion in deficit. But that’s more or less where it still is.”

Which would then explain why Wayne Swan leaked figures showing $13bn slump in growth: Hockey. Back to that white board and “Building a better Australia.” As Julia told us!

Source: The Australian

Which brings us to the NBN Co debacle given Fort Fumble has temporarily terminated connections as business chief slams NBN rollout describing it as a squandered opportunity and one of the worst examples of pork – barrelling.  This should not come as any great surprise given Fort Fumble spent $2.5 billion on roof batts, $16 billion on the overpriced BER and spending $50 billion on the NBN Co – without a cost benefit study. Given it has now been halted due to blow – outs Fort Fumble is now considering a … wait for it…. NBN may accept greater risk which translates into greater debt and yet another debacle which would explain why it is currently suspended.

RBA minutes point to rates staying put which means that reading between the lines the cash rate won’t be moved until sometime within the December Quarter 2011. The months of October, November and December will see some upward movement(s) of the official cash rate. With the Federal fudge (oops I meant to say budget) to be released early next month it appears that Wayne Swan is about to announce that forecast growth will drop significantly from the earlier projected figure of 3.25 per cent to 2.25 per cent. That then would equate to a one per cent drop in Australia’s $1.3 trillion economy so the black hole is then $13 billion. Yes the Federal budget will be ugly but not as ugly as the manner in which Fort Fumble has handled Australia’s finances.

NSW ranks bottom in economic momentum as costs eat into savings, and sense of security which means that Barry O’Farrell has plenty of work ahead to rejuvenate and renovate the previous number one economy in Australia. A huge announcement this week: Barry O’Farrell’s pledge to put lid on power which is in stark contrast to the now collapsed Fort Crumble who pinched $15 billion in dividends and put nothing back into electricity – dividend freeze a crucial step.

New home loan numbers plunge: John Symond as residential property prices peaked in 2010 and will continue cooling in the next six months as big mortgage brokers report a 20 per cent drop in loan numbers. It’s too early to extrapolate the January – March 2010 figures against the January – March 2011 sales results – we will do that in a few week’s time as they are still being processed.

In the meantime here are the Mosman house sales and total value for the last ten years from 2000 – 2010 which is a Mosman first and Virtual Realty News exclusive.

Source: Domain Property Data

MOSMAN HOUSE SALES AND TOTAL VALUE – 2000 TO 2010

• 2000 – House Sales: 336 Total Value Of All House Sales: $464,002,395
• 2001 – House Sales: 413 Total Value Of All House Sales: $709,864,118
• 2002 – House Sales: 358 Total Value Of All House Sales: $723,591,555
• 2003 – House Sales: 359 Total Value Of All House Sales: $829,527,432
• 2004 – House Sales: 300 Total Value Of All House Sales: $677,939,257
• 2005 – House Sales: 293 Total Value Of All House Sales: $692,071,000
• 2006 – House Sales: 380 Total Value Of All House Sales: $947,918,130
• 2007 – House Sales: 395 Total Value Of All House Sales: $1,153,099,720
• 2008 – House Sales: 255 Total Value Of All House Sales: $867,925,612
• 2009 – House Sales: 299 Total Value Of All House Sales: $789,424,751
• 2010 – House Sales: 333 Total Value Of All House Sales: $870,181,155

RWM Research: In 2007 Mosman broke the $1 Billion mark for the total value of houses sold in a calendar year with 395 houses selling – also the record.

Next week, we will look at the average and median prices for Mosman houses from 2000 – 2010. As well as scrutinise the upcoming Federal Budget. ‘Wayne’s World’ is suffering as he has lost those ‘rivers of gold’ where many point a finger at his self-created ‘rivers of waste’.

Have a fantastic and safe Easter – savour and share our ANZAC spirit.

“Lest We Forget”

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

Follow Me on Twitter

21.04.11Robert Simeon2 Comments »

.

Last Saturday’s NSW election delivered a cataclysmic demolition leaving Australia’s oldest party cracked at foundation with damage – so severe it may never recover. A political party with an insatiable self interest and indulgence whose  ethos became – “Bugger you Jack – I’m all right.” Sixteen years in power and nobody has anything nice thing to say about them. What a legacy!

The Estate of the Late Fort Crumble remains a rotting carcass with plenty of family members driving more nails into an already splintered coffin. NSW Labor has lost its base, and the plot to such an extent that NSW a drag on Julia Gillard: Paul Keating who once coined the phrase “where goes NSW Labor, goes federal Labor” as this stinging loss sends federal message although Fed govt downplays NSW Labor defeat.

Paul Keating has certainly not been silent no room for ‘sicko populism’ as Keating unloads on Labor where a herculean effort needed if Labor is to rebound. Even though likely NSW Labor leader is the worst choice possible as even Bob Hawke calls for ALP makeover given the Labor ‘disease’ will prove hard to heal and it is abundantly clear that they are ignoring their very own medical advice. No time for fighting, fix the factions and let the learning begin where only now we can read Paul Keating’s Dear John letter.

BUY PRINT

A new political dawn for NSW and everyone is hoping for a new beginning as business leaders’ call on new NSW government for quick action. Barry O’Farrell deserves credit where it’s due – they just didn’t see him coming as well as the three biggest myths of the NSW election result.

We still have Julia Gillard’s Fort Fumble which suddenly, is starting to resemble the Estate of the Late Fort Crumble with battles breaking out on all fronts. Bob Brown says Greens won’t rubber – stamp Labor’s mining tax as Resources Minister Martin Ferguson calls Greens basket – weavers and labels leader ‘soapbox’ Bob which left observers declaring – “them’s  fightin’ words”. The NBN then turned ugly as Fort Fumble refused to rule out using federal laws against states that oppose its plans to connect with Labor ready to use law to force NBN link – up – that would be the democracy prayer.

No hope for PM’s East Timor solution – Now up a creek without a paddle. As experts undermine government’s climate policy as that NSW word appears again – carbon is poison to tax reform. Even the Productivity Commission chief turns up heat on carbon tax debate although the knockout blow came as Andrew Wilkie sets deadline for pokie plan so Fort Fumble has just over six weeks to introduce this reform that will attack every pub and club across Australia or lose its balance of power. “Where goes NSW Labor, goes federal Labor” Hi Ho – Hi Ho – it’s off to the polls we go!

There is no denying that Barry O’Farrell has a huge job ahead and none is greater than taming the volatility of our property markets. Crisis looms as first – home buyers priced out of market and rents are expected to now grow faster than inflation. The Real Estate Institute of New South Wales (REINSW) issued a statement last week that State’s next Premier faces immediate housing supply and affordability crisis as the overall rental vacancy rate in Sydney fell 0.4 per cent to 1.1 per cent in February and the vacancy rate for Sydney’s ‘inner’ suburbs (0 – 10km from the CBD remained unchanged at 1.2 per cent).  In a perfect city (if that exists anymore) the vacancy rate should sit somewhere from 2.5 per cent to 3.5 per cent – Bazza you have a big problem! The REINSW cited “the rental crisis is a direct result of an inadequate, expensive and complex planning system and an inequitable property tax regime including high stamp duty rates, the raft of other imposts including land tax and the recently introduced ‘ad valorem’ tax.”

Well for starters, with the removal of Australia’s most incompetent, corrupt and inept government last Saturday – Big Bazza promised to abolish the ‘ad valorem’ tax if he was elected Premier. The NSW ALP (now known as the NSW Australian Lost Party) was responsible for we’re out of here, say hordes hankering for state satisfaction as people are now fleeing NSW at a rate of 50 packed cars each day and the NSW population is growing at the third – slowest rate in the nation. The picture that emerges from the Bureau of Statistics figures is of a state Australians move to and leave. About 19,000 Australians moved to NSW between the June and September quarters, and 21,000 left. In contrast, Queensland also had 19,000 arrivals, and only 9000 departures.

Western Australia is the fastest growing state, boosting its population at an annual rate of 2.2 per cent, followed by Queensland (1.6 per cent) and Victoria (1.5 per cent) NSW is fourth at (1.2 per cent), ahead of South Australia and Tasmania. Once upon a time NSW used to be number one, but this changed when the Australian Lost Party took over.

How to slash out– of–control house prices – cap city populations which would have catastrophic consequences with predictions that in Sydney alone, house prices would fall by more than 18 per cent over the next ten years. No need to sugar coat the real estate market as home prices flat line in difficult market.

It is quite simple to explain the problems that caused our real estate markets to flat line because the stressed don’t spend. Suncorp revealed its analysis of what causes Australians the most stress and here are the seven most stressful events.

1. Having your home and belongings destroyed by a natural disaster
2. Serious illness or injury
3. Losing your job
4. Getting divorced
5. Having a child
6. Moving house
7. Getting married

Australians are more concerned about losing their jobs – which explains why that ring of confidence is presently missing in our property markets. Also, we need better taxes, not bigger taxes so in another amazing announcement by Julia Gillard PM orders GST review to punish states that let economies stagnate. So a Carbon Tax won’t impact productivity? We have been warned this week that we can expect to be paying $2.00 a litre for petrol!

Robbie Mac was right (he predicted on the blog this week that I would run out of room to announce the $5.000 + Mosman house sales from 2005 – 2010).  Next week hopefully, as I have compiled all the results.

John Robertson was elected as Opposition leader for the Estate of the Late Fort Crumble to which the general public responded – try telling somebody who actually cares!

As Paul Keating once said – “where goes NSW Labor, goes federal Labor!

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

Follow Me on Twitter

1.04.11Robert Simeon12 Comments »

.

A warning for Gillard and Labor that the main reason for the shock loss in last weekend’s Victorian election was overwhelmingly the cost of living which then transformed to the cost of politics when  you do nothing – sound familiar? It happens in businesses everywhere although for some strange reason politicians thought that they were on a protected species list. True in the sense that more than a few have now become extinct Labor facing disaster in three states as support for Tasmania government collapses. Less than one hundred days until NSW heads to the voting booths and Fort Crumble is already resigned to the fact that they too will follow Labor Victoria. When Queensland goes to the polls in 2012 Labor has been in power for 21 out of the last 23 years and they too  look a very strong possibility of being deposed as their satisfaction levels continue to plummet. It was not that long ago that Labor held office federally and in every state and territory across Australia.

Will 2011 be another year of the political back – flip? Gillard goes for it, declaring 2011 her year of action promising to implement health reforms, roll out the broadband network, reach a decision on climate change, and lure more people into the workforce. Health reform is now looking terminally ill and on life support given Western Australia, Victoria and the soon – to – be elected Liberal NSW government declaring that they won’t support it. Broadband will go ahead – although there remain strong concerns that it is still to be properly costed and highly unlikely that it will hit the break even cost target of 8,000,000 Australian subscribers. Climate change will be interesting given ALP, Greens split on carbon which will seriously threaten September’s power alliance. The government’s target is a cut of 5 per cent below 2000 levels by 2020 and the Greens want carbon cuts of 25 – 40 per cent below 2000 levels by 2020 – good luck. As for getting more people into the workforce even better luck. Rumours remain rife Chris Bowen rejects Mark Latham column on NSW Right ‘plot’ to dumb Julia Gillard we all know that back – flips can quickly shorten political careers.

BUY PRINT

Industry wants fast moves from Baillieu and no surprises to see what they want actioned: infrastructure, stamp duty and planning. Mirror that for  NSW and Queensland. This was echoed by Wayne Swan “what people want the Government to be doing is to be focusing very much on their living standards and the opportunities for their families into the future.” NSW and Victoria just completed expensive desalination plants and the NBN could also end up on the useless pieces of infrastructure list as Labor downplays critical NBN report.

Paul Keating warns Labor has forgotten lessons of ‘recession we had to have’ – low inflation and wages restraint – could be lost given that inflation genie is starting to grow. No better example than Under pressure: RBA casts doubt over federal finance “In an extraordinary brave testimony to the House of Representatives’ Economics Committee last Friday, Australia’s most respected and independent economist, the Governor of the Reserve Bank of Australia (RBA) Glenn Stevens, has cast doubt over the Gillard Government’s economic credentials.” If you have not read this – I suggest you do – in summary:

• There is no place for a National Broadband Network (NBN) in his summary of national infrastructure priorities;
• If taxpayers are to be forced to underwrite 100 per cent of the $27 billion of equity risk capital associated with the NBN, then “of course, a proper cost – benefit analysis” should be carried out before committing to such an extraordinarily large investment;
• Had the Rudd/Gillard Government’s fiscal stimulus, which was the third highest in the OECD, been substantially smaller the RBA would have cut interest rates and lifted them back to normal levels more slowly. As a consequence, businesses and household would likely be paying lower interest rates today while taxpayers would have substantially less government debt to service;
• The RBA’s liaison with industry has revealed mounting concerns about the effects of the new labour market rigidities introduced by the Rudd – Gillard Government’s workplace relations laws, which risk stimulating inflation pressures and thus higher interest rates;
• As Joe Hockey has argued, there are “huge moral hazards” in Australia’s financial systems that need to be addressed, and which have been created by the unprecedented application of taxpayer guarantees;
• Banks are not like normal private sector businesses, and even smaller banks are likely going to be ‘too big to fail’;
• The circa $1 trillion worth of taxpayer guarantees have created a ‘contingent liability’ that exposes taxpayers to risk, despite the asinine arguments by banking lobbyists to the contrary;
• As leading economists like Christopher Joye have posited, the RBA has evolved the way it sets monetary policy and become increasingly forward – looking in its approach.

OUCH! The NBN will make the brand new desalination plants in NSW and Victoria look like a stroke of genius by simple comparison. The NBN, health reform and climate change were all Kevin Rudd’s reforms and he was sacked because federal Labor believed he had “lost his way” – go figure?

Just not sure which part we all missed in that political rhetoric spin? Weak data puts negative growth on the agenda with our September quarter recording just 0.2 per cent growth. Wayne Swan activated his usual robotic rhetoric response “in a sea of global uncertainty the Australian economy remains resilient.” “Australia has lost its mantle as a world – beating economy after a sharp drop in economic growth returned us to the middle of the international pack, cast doubt on the Reserve Bank’s decision to lift interest rates, and raised questions about our reluctance to spend as economy moves into slow lane given consumers save as economy stumbles.

All year I have raised concerns that our residential building industry remains on a sharp decline due mainly to our builders spending too much time playing in the sand pits created by the Building Education Revolution. With interest I read this week a report compiled by Macquarie Research.

• Residential building approvals rose by 9.3% MoM in October. While obviously a positive outcome, it was underpinned by the volatile medium – density component, which is likely to reverse next month. And of course, it does not reflect the impact of the November interest rate rise.
• At the same time, non – residential building approvals continue to weaken. They fell a further 3.8% MoM in October. And as builders steadily work through the pipeline of education projects, it seems inevitable that non – residential building activity will fall sharply in 2011.
• Now, in recent years, we have seen how a lack of government investment in infrastructure resulted in bottlenecks and large price rises for utilities. But the same logic should apply to private investment as well. Thus we should expect to see large rental price increases in some of these sectors down the track, as supply fails to keep pace with demand. Of course, that too will be inflationary. This reflects another cost of the RBA’s current policy of squeezing the domestic economy to make room for the mining investment boom.

Swan plans to create a ‘fifth bank’ which staggers believe given previously he merged the previous fifth and sixth banks.

I can see it now Bank Rupt!

Next week will be our final edition for 2010 where we will review the year that was and the year that lies ahead. Also, a Tim Mooney Christmas edition photo and….. (drum roll)…. our RWM Christmas video which is currently being edited. I will leave a clue: we sent one staff member to a recording studio to sing a Christmas carol and let me add that he is in fine voice!

Many thanks to the brilliant team at Visual Domain who shot and produced the video – we won’t be giving up our day jobs either as you will see next week.

Until then – 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

Follow Me on Twitter

3.12.10Robert SimeonNo Comments »

.
First of all read the following transcripts which clearly identify why our presiding Government, Fort Crumble, is not only up the proverbial creek without a paddle, but in five months time, will finally be laid to rest. Never before in the rich political history of NSW, have so many elected sitting members opted to stand down (thus far) prior to an election. No new stars can shine in ALP’s black hole summed it up pretty well – “It will be fascinating to see how NSW Labor rebuilds itself after the election. One thing is certain, though, anyone lining up as a star recruit this time around needs a mental health check.”

Transcript number one: ABC News Stateline New South Wales when Quentin Dempster interviewed former Head of the Premier’s Department, Gerry Gleeson who spoke out against the NSW Government saying public confidence is gone, access and influence are being peddled through political donations and incompetence is apparent – Gleeson criticises NSW Government. Without a doubt one of the most insightful interviews pertaining to the inner workings and failures that continue to plague Fort Crumble – no prisoners taken.

Transcript number two: Gerry Gleeson addressing the Institute Of Public Administration Australia – NSW Spann Oration 2010 – If I was Premier of NSW in 2011.

In his interview with Quentin Dempster on the Epping to Parramatta railway Gerry Gleeson said “Well look I think when the Prime Minister Gillard when she announced the Epping to Parramatta railway line the audience laughed. Now there can be nothing worse for a minister or a prime minister for derision like that, because that audience had heard this so often before, and that’s what, it’s this continual changing of plans. Bob Carr had promised a railway line to the north west sector, it is the top of state priorities, yet here we have a federal, the Prime Minister of the country announcing, what after 24 hours notice to the New South Wales Government that, I’m going to build this railway line, I’m going to give you the money for this railway line.”

In his NSW Spann Oration, Mr. Gleeson said “The Yes Minister television series was close to capturing the culture of the times; a culture that is not entirely buried. The failure of Ministers to give any rational reason for the Metro to Rozelle reminds me of Sir Humphrey Appleby saying “in the great restaurant of government, civil servants are the cooks and politicians are the waiters. We prepare all the dishes and they serve them up to the customers.”

BUY PRINT

Having read Mr. Gleeson’s interviews, we sent Australia’s finest aerial photographer, Tim Mooney, to capture Barangaroo given former foreshore authority head takes a shot at Keating. Of greater concern is the new management as Premier lashes lord mayor over Barangaroo.

Coincidentally, this week I received this PDF – Time To Go FINAL Another must read as the theme continues.

Under Labor, NSW has grown slower than any other Australian state or territory. GSP is Gross State Product and since June 1995, Queensland and Western Australia have recorded GSP growth of 90 per cent and 80 per cent respectively. NSW has recorded 46 per cent growth and if NSW had managed to match Victoria’s growth of 65 per cent, our economy would now be $50 billion larger, equivalent to the turnover of BHP. That additional economic growth would have meant another $2.4 billion in state tax revenues this year.

NSW debt has climbed from $15 billion in 2003 to a projected $55 billion by 2014. This explains why infrastructure is on hold despite a surging population growth. The reason why? A spokesperson for Infrastructure Australia revealed one of the reasons NSW missed out on Federal funding was the inadequacy of the State Labor Government’s submission. The spokesperson indicated there was a lack of detail on the benefits and costing for the State’s key projects, saying, “There’s a lack of integrated planning in the NSW submission.” So here is the funding graph for the States and Territories that could fill out a form intelligently.

A horrific graph that would leave even Sir Humphrey Appleby lost for words. NSW is the largest contributor to GST payments. Even taking into account the incompetence of Fort Crumble, surely Fort Fumble would recognise that NSW deserves a greater apportionment of funds – Victoria won’t overtake NSW: Keneally. When you look at Infrastructure Australia’s funding allocations, Victoria is a work in progress model and NSW has completely stalled. Developers warn homes too big to build on time is another classic example where NSW has a massive crisis in housing availability. Australian Bureau of Statistics data revealed Sydney dwelling construction continues to slide with just 14,400 houses built in the year to June last year.

Aaron Gadiel, chief executive of Urban Taskforce, said that at June 2010, data showed just 13,400 of the 21,000 new Sydney houses that the state government had predicted. The Metropolitan Development Program report released by the premier, Kristina Keneally, in April said Sydney housing construction rates were “well placed to re – bound strongly” and forecast to exceed 27,000 houses by 2012. Mr Gadiel said the new data “has blown the government’s predictions out of the water”. “The government’s own experts have found that targets for an extra 25,000 homes or more,will not be achieved without major policy changes by government”.

Matthew Quinn, the managing director of Stockland, told the Urban Development Institute conference this week that Australia had a shortage of 200,000 houses that would grow to 800,000 by 2020 and 1.4 million a decade later, unless major policy changes were implemented.

I have never been a supporter of First Home Buyer Grants which (previously) I declared was like throwing lollies onto a highway without supervision. So, little surprise to see first – home buyers loans share shrinks to six year low as outer suburbs struggle most with mortgages. NSW has 44 per cent of the nation’s mortgage delinquencies which comes as no surprise when one looks at this article that appeared in the Sydney Morning Herald on April 27, 2009 first – homes rush creates boom suburbs in west. The boom generated by the Federal Government’s decision to dramatically increase first – home – buyer grants has been confined to Sydney’s west, NSW Government figures reveal. They show first home buyers in the inner city, lower North Shore and eastern suburbs have failed to cash in on the grants. The artificial government stimulation of the western Sydney markets will see a crash ‘n burn outcome as interest rates rise.

I suspect we had an Internet first this week, when we successfully launched a website within a website (who said it could not be done). We are now offering premium website pages for our top – end residences so please take a minute to view Glen Osmond – 23 Prince Albert Street Mosman where we have definitely raised the bar with online property presentation.

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

Follow Me on Twitter

15.10.10Robert Simeon1 Comment »

.
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

Follow Me on Twitter

16.07.10Robert Simeon7 Comments »

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

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

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

BUY PRINT

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

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

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

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

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

.

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

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

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

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

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

Cheers ^__^

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

Follow Me on Twitter

4.06.10Robert Simeon11 Comments »

.
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

.

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.”

.

.

.

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/

Follow Me on Twitter

4.12.09Robert Simeon1 Comment »

.
Coincidentally, Sydney this week experienced a once in a lifetime (so they say) dust – up which as it turns out was both physical and personal. One was delivered by Mother Nature and the other is the mother of all property taxes and by all reports (leaked thus far) it will take some time for the dust to settle. Since GST was introduced in 2000 on an electoral platform that taxes would come down (only to see them increased) – nine years on, Fort Fumble (Federal government) and every state and territory government is now drowning in budget deficits.

Briefly, there was a ‘red’ lining to the clouds when former US president Bill Clinton (give the man a cigar) said Kevin Rudd (The Emperor) was one of the world’s smartest leaders. Clinton said “his friend was well – read, well – informed and an expert on China.” Well Slick Willy that’s why we call him The Emperor, because just like China everything is now in the red!

.

Tim Mooney Photography

www.timmooneyphotography.com

My tax rules: the Ken Henry way by Peter Martin from The Sydney Morning Herald was certainly an eye opener or as Ken Henry puts it “a-once-in-a-generation game changer.” We have heard that before (twice this week too).
.

NO RELIEF FOR HOMEBUYERS

.
“But the Henry review has come to the conclusion that other state taxes, much complained about, aren’t actually that bad. Stamp duties on conveyancing and land transactions are changed at a time when people are already borrowing and can afford to pay them. “(Yes every Australian loves making a Stamp duty donation for nothing because in the backyard of the property they are purchasing money actually grows on trees they are purchasing.) “They don’t seem to be much slowing our relentless desire to trade up and they help claw back the untaxed profits we make from capital gains tax exemption for the family home. The review won’t recommend an end to real estate stamp duties for as long as the capital gains tax exemption remains, and even it is unlikely to have courage to recommend an end to the exemption.” You call that a once-in-a-generation game changer?

The Henry Report should be called the Titanic as there are leaks everywhere and unlike ‘leeks’, I see no green-shoots.

PAYROLL TAX TO STAY

.
“Payroll tax is also widely abhorred but from the review’s standpoint is pretty harmless.” Brilliant this comes from a person who has never paid it! “Not only will it stay in defiance of the bulk of submissions on the topic but the review will recommend it be extended by withdrawing a range of exemptions. There are taxes that genuinely hurt employment, the review believes – those that discourage foreign firms from setting up shop and staying here.”

A tarot card economic review (in my opinion) where an “abhorred tax that is pretty harmless despite bulk submissions against this” for simply employing people – now what point is he missing? The Australian Bureau of Statistics (ABS) labour figures for August identified that Australia’s unemployment rate remained at 5.8 per cent; however the economy shed 27,100 jobs which was more than expected. How many would have been saved if we did not have Payroll Tax? We will never know! But we do know that Ken Henry predicted that Australia’s unemployment would peak at 8.5 per cent.

Now I am getting confused, so allow me to elaborate. This week, Treasury Secretary Ken Henry advised the Australian Institute of Company Directors that the Australian economy would have contracted during the global financial crisis if the government (on his recommendation) had not introduced its stimulus measures. What a no brainer, when his report promotes Fort Crumble wastage disguised as a stimulus (tax payer expense) yet rejects on the other hand, individual and business stimulus that otherwise generates and absorbs unemployment.

The Henry Report is a no -no- no report where the stimulus packages only resulted in credit card debt reductions which now brings me to our banks. Well two of them anyway. Where once upon a time (you know the fairy tale) our four banking institutions Westpac, NAB, ANZ and CBA were known as the Four Pillars. Have a look at this to see how the World banking pecking order has changed from 1999 to 2009 (move your mouse at the bottom of the page on each year from 1999 to 2009 and watch the appearances and disappearances.)This is a fascinating report where Westpac and the CBA debut in 2009.

Top 20 Financial Institutions by market capitalisation, $b, 1999 – 2009

Enter Paul Keating, past prime minister. Although I never liked the man, I must admit that he is making plenty of sense. Paul Keating joins the 7.30 Report

Kerry O’Brien “Former Labor prime minister Paul Keating is concerned that as the heat starts to come out of the global financial crisis, the big four banks have corned almost the entire market for new housing loans. Before the crisis, the Commonwealth, Westpac, NAB and the ANZ had just 60 per cent of that market. But new found dominance of the big four is now starting to be reflected in their margins on housing loans.”

Paul Keating “There’s a lot of clever things to do. I mean, here we haven superannuation the third largest pool of savings in the world. $1100 billion, growing at $100 billion a year. These funds could hold Australian AA-house mortgage bonds. No trouble at all. In fact we saw all these dreadful numbers for super, people losing money, but if they had had your or my mortgage they would be getting 6 per cent solid, or 5.5 or 6 per cent.”

Paul Keating “So therefore, we have to work out how much we can have the super funds take the mortgages up. And I think one of the ways that can happen is for the central bank, the Reserve Bank, to trade in housing bonds like it trades in treasury bonds. So it makes a liquid system, a liquid market.”

Paul Keating “And that way … you saw the super funds, they lost enormously on the real estate investment trusts, average losses of 70 per cent. So in property, their portfolios in super were too narrow. If they were widened to take into account the really good mortgages of most Australians – you know, the default rate is .00001 per cent, it’s nothing.”

No doubt Mr Keating read the Bank Mergers Report “The acquisitions of St George Bank by Westpac and Bankwest by the Commonwealth Bank in 2008 increased the market share of the ‘big four’ banks, raising concerns that increasing concentration from bank mergers may be significantly reducing competition in the Australian market for financial services.”

The Housing Industry Association (HIA) survey found that in August, new home sales posted the largest monthly increase in more than three years. Sales of houses were up 11.8 per cent and apartments jumped by 7.5 per cent. It is not just property that is on the run. David Jones this week posted its highest full year profit (on record) up 6.3 per cent.

Interest rates have now bottomed which was clearly identified when the Reserve Bank of Australia (RBA) released this week their Financial Stability Review . “In summary, global financial conditions remain challenging. But, while further setbacks cannot be ruled out, the severe downside risks that loomed six months ago have significantly abated.

Interest rates set to increase and Mosman has just 66 houses advertised on Domain down by approximately 300 per cent this time last year. So if interest rates increase why increase the stimulus further? Humming to the song “I see red, I see red, I see red.”

Whilst on red – have a look at this red hot exclusive release in the Mosman market ESCARPA

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/

Follow Me on Twitter

25.09.09Robert Simeon3 Comments »

As they say, “the easiest way to start an argument these days is to get two economists together”. ‘The Economist’ ran an interesting story last week predicting a global fall in property prices, based on the theory of “I know boats”!! Once again, we see the supposed property bubble being blown up or blown out of total proportion again. The simple truth is that nobody can predict the future, so I will offer this little one about the property market, ‘it has to rain, before we see another rainbow’.

The Sydney Morning Herald journalist Stephen Bartholomeusz, gets a gold star for his interpretation on this latest AOMD = Article of Mass Destruction. Mr Bartholomeusz correctly identified that many ingredients make up the property industry, and the only sector of the market that could cause concern is that of the investment market. Given that the ‘Governor of Moolah’ has decided to leave the cash rate target at the same level for twelve months, it appears that our economy is trading well au naturel!!

We have always grown up looking at statistics, personally when I was a kid I was only concerned about Racquel Welch and her vital statistics. If you look at the statistics published this the week, you will see that the average price for a home in Mosman for the twelve months to April was $1,776,001. This figure is down by a life threatening $9348 from the previous month where it peaked at $1,785,349. Does this mean that the value of a home is easing back? It certainly does not! It means that more, less expensive homes were sold during this period, and this does not include private treaty sales. On the other hand, The Mosman Daily excelled itself again this week, when they ran a story headed “Mosman Slips in Price”. One does not have be a brain surgeon, to identify that in 2003 the market has been tight with properties, hence 49 properties were sold in the Mosman area with an average price of $1.19 million. Now here is the funny part, they are comparing it to the December quarter, which recorded 56 homes sold for an average of $1.5 million. Nothing ever happens in January, and these figures do not include private treaty sales, nor those where the vendors place a confidentiality statement on the sale price. In this period we sold a home in Burran Avenue for $9.5 million, and another in Hopetoun for $6.00 million, neither were used in the calculation!! Also, that does not include another six homes we sold greater than $2m that escaped the system. Great to see the asylum is still running true to form. Even more amazing is that some agents believe these figures, and some are telling vendors to cash in now before it is too late.

We won’t see a market like 1991-1993. I well remember when I watched “60 Minutes” some years ago, a National Party Senator in Queensland said, the definition of recession is when your neighbour loses his job. The definition of depression is when you lose your job, and the definition of recovery is when Paul Keating loses his job. The property industry is so much smarter today, and the property dynamics are changing right before our eyes. What is evolving is that we are seeing certain months where campaigns will not be run, due to public holidays and school holidays. April was a classic example with Easter, Anzac and school holidays taking up most of the month. July has school holidays from the 5th to 20th, so that month would also not be recommended as a great month to run a campaign. What we will see is more private treaty and Internet marketing of properties, and again this week, we proved the power of our Internet business. We listed a property at 123 Middle Head Road, which was a failed auction with another agency and what they could not do in eight weeks, we managed to do it in 48 hours!! So you can guess how happy the vendors are.

We are more concerned about working the property market, as against those who are fraudulently using statistics to bring the market down. Afterall, “an economist is a man who figures out tomorrow why the things he predicted yesterday, didn’t happen today”. The property market today is transparent, however some never let the facts get in the way of a good story. Statisticians prefer to work with confusion, as against conclusion, and Raquel Welch never looked better!! Cheers and clink… ^__^

Follow Me on Twitter

7.06.03Robert SimeonNo Comments »

I was absolutely astounded when this week, one weekend journalist used the ‘f’ word to describe the weekend property market, after the interest rate rise last week. We all like a play on words but please, to describe it as a ‘frenzy’ is way off the mark! This would also, in all probability explain why clearance rates fell from the eighties to 76% last week. Maybe more appropriate ‘f’ words would be fraudulent (agents over-quoting), foolish (buyer not doing homework), feeble-minded (procrastinators), flippant (agents under quoting), frivolous (not servicing buyers), and last but not least… fatal! In my opinion all these comments serve to do is scare the market and make purchasers withdraw, adopting a more ‘wait and see’ approach. Yes, I have been in a frenzy market and that was in 1987/1988. We were selling homes in the first few minutes of the open for inspection! In those days when you arrived at the home for the first open, there were usually about thirty couples waiting just so that they could get through first.

It is a tough job but somebody has to do it! The market is showing initial signs of easing and this is also evident with the numbers attending the inspections. We are now really heading into Winter. Make no mistake, the market is still ‘there’ and by all accounts it is still very healthy and wealthy. It is just that we are not photocopying as many copies of contracts for sale as we were a month ago. The real estate market had many adjustments throughout the year and the severe lack of property is certainly not assisting. One thing that can be said about the market is that it is still full of surprises and yes, times are changing rapidly. I remember when we would advertise “been in the one family for over 42 years”. Today we try to hide the period of ownership so that the capital gain will not scare away the wary purchasers. For the record, we much prefer the current status quo. As I said to one couple the other day who have been in their home for over 40 years, “you’re not very good for our business”!

One sector of the market that astounds me is the home unit market. Marize, our very own “Queen of Units” is run off her feet meeting the demands and that side of the business is literally soaring. I have been looking for the reasons as to why, and it was only when I received one of my usual weekly e-mail alerts (don’t you love them) that the penny dropped. It was from a stock market e-zine titled, “How good are the analysts??” What they did was go back to late-March and check hundreds of ‘buy’ recommendations. It was a wide-ranging list of companies. On the basis of these results, they said that if one had invested $1000 in each of the companies, today one would be minus 23% in just 60 days. It is obvious to all that the real estate industry has received a massive injection of funds from investors who are much more relaxed about property than shares. Property, especially the family home, is the best after-tax investment by a country mile, and many are using the home as an excellent borrowing facility to buy investment properties. Many are concerned that their children will be priced out of the market, so they are buying now for their children. CGT (Capital Gains Tax) on investment property is charged at only half the marginal income tax rates and borrowing costs are deductible. This in turn encourages investment in property which many see as less volatile.

I must admit that I am a self-confessed addict of news… I love reading all the newspapers and in the The Weekend Australian I read an interesting article titled “This boom is a blast… as long as it lasts”. What really grabbed my attention was a graph, courtesy of BIS Shrapnel, which took my attention for a considerable time. Here it is.

Have a look at the steep rise from 1988 to 1990 (the frenzy market) then “the recession we had to have” which Steve and I disagree with. We personally saw the drop in prices that was much more severe. During that recession period I was appointed by the National Bank to sell off the Mosman mortgagee account for the then defunct Custom Credit. It had a book value of just over $15 million, and we gave them back just over $6 million in sales. One house in which we had interest in 1988 at around $3,500,000 sold in 1992 for $1,950,000. Today it is worth $5,000,000. Yes ‘the recession we had to have’ which probably explains why this week I went out and purchased “Recollections of a Bleeding Heart” A portrait of Paul Keating.Today many are still bleeding from the events that transpired over that period, and I am not exactly sure what prompted me to buy it? I daresay I will not be the only one to say that!

Now back to the graph! Given the current economic climate, can you see the graph changing direction, note the little dip for September 11. I can’t see anything changing except for the times. We are all entering new and interesting times, as for a property crash, yep those were the days !!….^_^

Follow Me on Twitter

18.05.02Robert SimeonNo Comments »