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Although the same can’t be said for Julia Gillard’s Fort Fumble – Malaysia solution backfires for government that failed to do its homework. If Kevin Rudd “lost his way”, Julia Gillard’s reign as Australian Prime Minister has been nothing short of an abysmal failure. The Labor government is spiralling uncontrollably on a course of self destruction – déjà vu NSW Labor March election 2011. The stench of failure haunts the ALP where many believe that it will be open season for people smugglers after High Court scuttles Gillard government’s Malaysian Solution. The clock is ticking with a Labor stalwart predicting ten months and Labor’s gone: Richardson.

Julia Gillard not only unpopular, she also lacks authority – John Howard the Prime Minister will now struggle to remain at The Lodge post Christmas. Peter Costello entered the economic discussion this week when he wrote in The Sydney Morning Herald – Without a carbon tax, steel industry jobs might stand a chance. Looking forward, I believe that at this point in time a carbon tax will struggle to see the light of day. It is a case of simply joining the dots given Treasury warned in 2009 of higher Aussie dollars likely impact on manufacturing which in all probability would explain why the government rejects calls for manufacturing probe.

The greatest problem with the Gillard government is that it is politically deaf! To such an extent that Rudd last man standing in Labor rout: poll where Foreign Minister Kevin Rudd would be the only federal Labor MP left in Queensland if an election was held this week. Which got a bit more interesting given former Queensland Premier Peter Beattie will consider a run for Prime Minister. So, Beattie for PM? Gillard laughs it off.

BUY PRINT

Sydney housing property defies national downturn to record price increase RP Data Rismark Home Value Index found defies national downturn to where over the year to July, values in capital cities are down 2.9 per cent. Brisbane – 6.6 per cent, Perth – 6.3 per cent, Melbourne – 4.3 per cent, while Canberra + 1.9 per cent and Sydney + 0.5 per cent which explains why, home loans grow at slowest pace on record. In Sydney we are really witnessing fascinating market machinations where last weekend, Sydney had 362 auctions (down nearly twenty per cent on the same time last year).

Vendors aren’t selling which has led to rents increasing by up to eight per cent over the year an expected result with record low vacancy rates. Urban Taskforce CEO Aaron Gadiel estimates Sydney’s housing supply shortfall at 46,000 homes and predicts it will double within three years.  “We’ve seen three straight months where NSW private sector home approvals have trended down by more than 4 per cent a month.”

The slowing market convincing home owners to stay put which is actually a positive sign where Mosman has the lowest delinquency rate in NSW. Which takes me to a great debate over at Property Observer between Steve Keen and Christopher Joye, when Keen wrote, China our one saving grace as Australia’s debt- driven love affair with house prices faces the chopping block. Christopher Joye responded housing prices aren’t for the chopping block, despite the Steve Keen prophecy. As Christopher Joye points out – “Like most of Keen’s predictions, such as the “best – case scenario’’ during the GFC being 11 per cent unemployment and a recession “more severe than 1990 and lasting 1.5 times as long” (unemployment peaked at 5.8 per cent while there was no recession), his 2008 predictions proved way wide of the mark. For the record, Australian dwelling prices are today 13.3 per cent higher than the level at which Keen put his reputation on the chopping block, and 89 per cent higher than the level at which Keen expected them to be.

MOSMAN – 2088

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• Number of houses on the market last week – 105
• Number of houses on the market this week – 107
• Number of apartments on the market last week – 99
• Number of apartments on the market this week – 93

CREMORNE – 2090

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• Number of houses on the market last week – 13
• Number of houses on the market this week – 14
• Number of apartments on the market last week – 30
• Number of apartments on the market this week – 31

NEUTRAL BAY – 2089

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• Number of houses on the market last week – 7
• Number of houses on the market this week – 9
• Number of apartments on the market last week – 70
• Number of apartments on the market this week – 67

For this week’s sales in 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 It is interesting to note from the past week’s activity that we are starting to see activity above the $5,000,000 mark again.

I was amazed to read Federal MP Rob Oakeshott says Australia should consider a road congestion tax when the reason why we have congestion is because governments have failed to spend on road/transport infrastructure. Obviously, he did not read the article I filed this week on Property Observer – Stupid property taxes should not be a revenue stream for weak governments.

Source: The Australian

Cheers ^__^

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2.09.11Robert Simeon5 Comments »

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Welcome to your Virtual Realty News tenth Federal Budget edition – although yet again we were not invited to Canberra for the lock – down (funny that). The budget announcement conveniently blames the past and paints a rosy future. An abundance of spin on the positives, yet no mention of the negatives and sadly, there are plenty. Here is my reasoning which goes back to the election and the Rudd/Gillard government’s four budgets which get worse. The Government completely ignored Australia’s slowing growth, rising dollar to dominate budget preferring to take a totally opposite view.

The biggest problem facing the Rudd/Gillard Government is that it panicked during the global financial crisis, believing that the Australian economy was terminally ill. Less than twelve months later in 2009, Australia experienced just the one quarter of negative growth. The debt had to be paid back much sooner than expected so having a budget in surplus is not something that Labor has experienced. Simply put: the Government spent too much and is now hopelessly struggling to pay back its (our) debt.  Wayne Swan can’t say which year Labor achieved its last surplus. Wayne the answer is 1989 – 90. Of course the summer of disasters hit the budget, says PM although the Government failed to list the billions lost in waste schemes such as Pink Batts and BER blow outs in the budget.  Past – Treasurer Peter Costello wrote  An economy to die for – surely Swan could manage a better budget? “The budget has no coherence, no strategy, and no conviction.”

BUY PRINT

In his 2010 Federal Budget, Wayne Swan predicted a $40.8 billion deficit where in 2011 it came in at $49.4 billion. In 362 day’s time, Swan now has to deliver a budget deficit of $26.8 billion otherwise no chance of returning to a budget surplus in 2012/13. To achieve this Swan is banking on no more natural disasters here or abroad, the Australian dollar not getting any higher, a return of strong tax receipts by individuals and companies and a stronger real estate market. Also, reign in the out of control spending on asylum seekers and of course delivering that other debacle called a Carbon Tax.

As Alan Kohler wrote Budget 2011: Australia on a wing and a prayer “In other words, it’s a wing and a prayer budget – keep spending, let the deficit blow out, and predict with a straight face that the commodities boom will bail us out eventually.” Aside from that blunt assessment interest rates will have to rise, warns Reserve Bank of Australia as confidence in economy falling as Wayne Swan claims Government can make ‘substantial savings’. Although already, we are seeing Australian’s struggling to save due to the daily increase in cost of living.

Source: The Australian- order Bill Leak’s print

Let’s have a peek at the Sydney property market to see what’s happening and why it is being echoed across Australia. Budget and rates rise flagged to pinch households although we should be thankful that Wayne Swan’s budget left Negative Gearing alone. The latest house price data from the Australian Bureau of Statistics confirms that most city markets slowed in the March quarter. Prices are falling – some suburbs still hot where Sydney house prices fell by 1.8 per cent during the quarter and the annual increase now sits at 0.8 per cent. It is most obvious that the Gillard Government simply does not understand housing affordability which is why it was completely ignored in the Federal Budget.

Forget the Gillard Government’s obsession with mining tax revenues, the largest employer in Australia remains the real estate industry. When the property markets are moving forward so is the economy so the Auction action graph clearly indicates just how much the property markets are contracting (not a bad thing for property prices). Nevertheless, a terminally ill indication for the economy given tax revenues for the State Government are collapsing.  Total value revenue was $430.9 million same time last year and $162.4 million last week.

Australia has waved goodbye to the Global Financial Crisis yet the latest data from Australian Property Monitors (APM) indicates that property prices are in decline across Australia.

SYDNEY MARCH QUARTER RESULTS

Source: Domain Property Monitors

• House prices fell in the March quarter by -0.4 per cent after recording growth of +1.1 per cent in the December quarter.
• Unit prices fell by -0.7 per cent over the quarter following a flat result in December.
• Sydney median house price is now $643,713 and the median price is $448,585
• Annual house price growth sits at +2.0 per cent and unit price growth is at +2.1 per cent, both trending downwards.

BUDGET OVERVIEW

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Wayne Swan admits China is key to returning to surplus a disgraceful summation directed at the ability of Australian business that is not mining reliant. Granted, a record $76 billion worth of spending in the booming resources sector where these decisions have absolutely no calibration with Wayne Swan policy. Wayne Swan is hedged into the Australian dollar remaining steady although Aussie dollar could hit $US1.70 by 2014, predicts money guru Savvas Savouri.

Households are being hit and when the Aussie dollar climbs they will all go to online shopping where they don’t have to pay GST on their overseas purchases.  Our retail market will then collapse Myer, DJ’s see glimmer of hope in retail sales. The Government failed to address in the Federal Budget – tax online shoppers, save jobs. Those with mortgages should be budgeting for a rate rise or two, three and four. Directors cool on carbon price and broadband which are neck and neck in the dumber and dumber policy announcements in Australia’s political history.

Finally, electricians fear set-box installation flop think Pink Batts. When it was announced that Australia was moving to digital, the Aussie dollar was at $0.68 cents.  It is now coasting near US$1.08 cents. Television prices have halved and Julia Gillard just acquired $300 million plus of useless set – top boxes that could never be sold given the Aussie dollar’s rise and rise.

Can Wayne Swan reduce the deficit to $26.8 billion by the next Federal Budget?  Of course he can (as sure as deposed Premier of NSW, Kristina Keneally, will be the next NSW Premier!!!   Work experience does not always apply to elected politicians, especially when it comes to understanding economics.

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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13.05.11Robert Simeon7 Comments »

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Julia Gillard has a “vision for Australia”  delivering a good plan will be the test and if we were to judge her attempts at an education revolution, we could be excused for being sceptical and concerned. The cost of rebuilding Queensland following the floods and cyclone Yasi will be enormous, especially as we now find out that state goes it alone in shunning insurance. Yes, the Queensland government, in its wisdom, declined the opportunity to take out catastrophe insurance on the private market, believing  it was not “value for money”.

Unlike NSW, Victoria, South Australia and Western Australia where governments pay millions of dollars in premiums each year to international insurance companies to protect  infrastructure, Queensland relies on a deal struck with the commonwealth to pick up 75 per cent of the recovery costs after a catastrophe. Australia ‘more risky’ said the world’s biggest reinsurance company Swiss Re considering the string of natural disasters over the past few years. So Fort Fumble will now have to pick up 75 per cent of the bill to re – build Queensland.   Obviously, the Queensland government never bothered to have a look at cyclones to have impacted on Queensland, Australia from 1864 – of course we had global warming in 1864 too!

BUY PRINT

Little wonder Labor aims to save its bacon, not the planet although Julia Gillard battling flood levy backlash or, as Peter Costello wrote this week in the Sydney Morning Herald – Flood tax a slap in the face for those who dug deep. Given the odd billion dollars  that taxpayers contribute annually in GST, one would expect a state government to  have the nouse to insure against catastrophes.

Is a Flood Levy on Australians viable, considering  the Bligh government’s decision?  I don’t think so! Julia Gillard should have advised Australians that the Queensland government had no catastrophe insurance.

Gillard’s “vision for Australia” is broadband which comes with a $36 billion blister. It will deliver super  fast internet speeds of 100 megabits per second as against 12 Mbps delivered by wireless. America recently decided to pursue wireless and at 100 Mbps you can download a movie in 3 seconds as against 3 minutes with wireless.  Obviously, downloading movies takes precedence over admission to hospital! Townsville is part of the NBN roll out test city’s switch – on due, but re-build may be needed given NBN Co opted to deploy fibre cables from power poles to reduce costs because they had not secured the rights to use Telstra’s underground ducts. Cyclone Yasi smashed and destroyed all those overhead cables – so back to the drawing board for NBN Co.

Julia’s “vision for Australia’ includes a “re – build” for the flood victims in Queensland, but I draw your attention to a comment posted on our blog last week. “During these last floods, Wivenhoe was exposed to 2.5 million mega litres of flood water, against a design capacity of 1.450 mega litres. Of course we now know that Anna Bligh shied away from insuring her state – so what is being done to prevent another catastrophe? Not a single mention of another dam which is the obvious conclusion.

Fort Fumble has been treading water of late so it comes as no surprise that Treasury mulling tax on bank profits – new taxes are contagious with governments devoid of intelligent economic management. Even though – banks to face surge in bad debts after floods.

The Reserve Bank of Australia (RBA) left the cash rate at 4.75 per cent when it met this week for its monthly serve of cucumber sandwiches. Governor Glenn Stevens’ statement which signalled that interest rates remain in a holding pattern for a few months to come despite borrowing costs continue to weigh on rates.

We are constantly reminded by Fort Fumble of the necessity to re-instate the budget back to surplus, but a tag of woeful economic managers is damaging its “vision of Australia’ and its pursuit of economic excellence. My favourite RBA member ,Warwick McKibbin, appears to be “up the creek” without the proverbial paddle, following his scrap the surplus fetish: McKibbin. Wayne Swan looks as confident about economics, as a re – insurance salesperson selling catastrophe insurance to Anna Bligh. Reserve Bank maverick Warwick McKibbin in challenge to Swan as one of Australia’s leading economic minds appears to be ‘culled’ by our Treasurer given his outspoken views.

Another “great vision for Australia’ (although nothing beats the Queensland government’s decision to remain uninsured) was the flood levy imposed prior to Cyclone Yasi. With the benefit of hindsight, all states and territories should cease paying policies and work on Fort Fumble’s seventy five per cent catastrophe cover.

“Beautiful one day – perfect the next.” Just pack an umbrella and flippers (and travel insurance).

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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4.02.11Robert Simeon15 Comments »

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However, (for some) there will be strong consequences along the way – which is always the case when governments artificially inseminate markets in an attempt to prop them up in uncertain financial times. One only has to look closely at the cash rate movements at the Reserve Bank of Australia (RBA) to see the storm clouds on the horizon after the RBA slashed the cash rate to 3.00 per cent in April 2009. And bear in mind that it was 7.25 per cent in March 2008. At or about the same time, Governments at both state and federal levels were promoting the First Home Buyers Grant (FHBG). First time purchasers locked in a fixed rate as shelter from the ongoing rental increases under cover of Stamp Duty inducements in the form of grants. One does not need to be Einstein to calculate that the cash rate will be significantly higher when the fixed loan agreement expires. Yet for some strange reason, the banks are blamed.

The “Big Four” banks have recently announced the removal of the much despised exit fees so now customers have freedom of choice to shop around. Maybe Fort Fumble’s treasurer Wayne Swan would like to explain why he approved Westpac’s acquisition of St George Bank and the CBA’s acquisition of Bank West? Instead we read Treasurer Wayne Swan flags change to four – pillars policy “the government is determined to see a new pillar in the banking system, particularly based on our mutual sector.”

If St George and Bank West were still individual entities they would be pillars five and six and the building societies and credit unions would fill positions seven, eight, nine, ten etc. Instead we see Independents back Greens’ bank bill which is nothing more than a misguided attempt to overhaul banks. The bill follows weeks of debate over the size of bank chiefs’ pay packets, interest rate hikes, high fees and the power of the big four banks. Here we go again, with more political posturing and a memory vacuum, when we consider that these very same bank chiefs positioned their respective pillars to be world’s best, during the global financial crisis. Unlike other countries, Fort Fumble was not required to bail them out and ironically today, they are bailing out on them!

The double exit strategy – excuse me for laughing as I have just read The best price signaller in the land by Peter Costello.

BUY PRINT

One thing for sure with property prices, is that there will always be waves of hysteria coupled with those who like to make waves. If you can’t ride it stay on the sand – Virtual Realty News

“Now that both sides of politics have decided to crack down on the evil practice of price signalling we might as well ask who does it and why. Because some people may not be aware that the biggest price signaller is not the Commonwealth Bank or Westpac or any of the other “evil” commercial banks. The biggest price signaller in the interest rate market is the Reserve Bank, the one the government owns.” Said Peter Costello. Of course the banks need more consistency given banks slower to lift deposit than interest rates where the more money they hold as deposits, the greater the control they have over the costs of funding. Hardly an instrument to entice depositors!

Rising wages ‘outpace growth’ the warning comes as new figures show wages are increasing at their quickest rate in two years. Business groups highlighted the potential for the $43 billion National Broadband Network to “exacerbate skill shortages and drive up wages”. Personally, I am yet to meet a supporter of this broadband ‘white elephant’. I’m definitely not a supporter and believe the money could be much better spent on hospitals, rail and roads. When I look at our Google Analytics for our website which includes Virtual Realty News it reveals the Connection Speeds – 39.97 per cent use DSL, 26.16 per cent are on Cable, 24.5 per cent are Unknown, 5.92 per cent use T1 and 1.72 per cent are on Dialup (once upon a time we were all on Dialup). For the NBN project to provide a return on capital, Fort Fumble requires over 8,000,000 million Australian to sign up. Talk about ‘the impossible dream’!

Here is why Australia can ill afford another “white elephant” as Kevin Rudd shared the blame for Labor’s errors. Addressing a business function earlier this week Mine boom biggest shock, says Treasury Ken Henry. Dr Henry said the current mining boom was between three and four times bigger than the last big boom in the 1970’s, which pushed inflation up to 17.5 per cent. Inflation is currently running at 2.80 per cent. Reserve Bank of Australia says the boom to run for 20 years as the tally of resource projects with mining firms’ commitments, soars to $133bn. At your service, our economy’s a work in progress by Ross Gittins from the Sydney Morning Herald “The structure of our economy is set to change over the 2010s, creating winners and losers and plenty of complaints. So it’s worth remembering the economy’s structure has been changing continuously since the gold rush”. Which brings us to The boom is back, and this time we may avoid the bust or will we? If we do survive we are going to need plenty of help from those banking “four pillars”.

Treasury’s move from mining to real estate during the week, was more a case of undermining the Department of Bricks and Mortar – Treasury sounds the alarm on ‘property bubble. Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the USA. Maybe they should read RBA intervened to avert housing slump given Aust mortgage market seen stable in third quarter. Total construction work done in Australia, fell 2.1 per cent in the September quarter. Our population is growing and building is declining!

So let’s see what is happening to Mosman prices for houses and units.

Source: Australian Property Monitors

Source: Australian Property Monitors

The Dyson Austen Top Ten Prestige Residential Survey 2010 Q3 July – September prepared for the Real Estate Institute of NSW, will be released this weekend – so here is a sneak preview for our Virtual Realty News subscribers. We thank Simon Feilich from Dyson Austen for the early scoop (being a subscriber has advantages).

The total value of the survey has increased forty two (42) per cent from the previous quarter thanks to the record breaking $52 million sale at 100 Wolseley Road Point Piper. The Eastern Suburbs dominate the results, recording ninety per cent of the recorded sales – a phenomenal effort. The graph that I always look forward to viewing is the highest value and total value of Top Ten transactions per quarter from 2004 to 2010 to see how our markets are aiming up. “Quarter 3 2010 recorded the fourth highest quarter on record – the main driver in this quarter is the almost ten (10) per cent increase in the equity market in July 2010” said Simon Feilich. All in all a very strong message for our top-end property markets.

So for those who are huffing and puffing about property prices, don’t forget that in every back garden you will always find swings and roundabouts.

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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26.11.10Robert Simeon7 Comments »

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It started as a two horse race then a last minute scratching but were they polls apart? A ruthless party room coup that saw The Emperor now destined for the Ministry of Where Are They Now – this was described by some as a professional hit by a broken party feeding on its own the execution of Kevin Rudd. On a sadder note we lost an interesting character here at Virtual Realty News – bugger! Gillard becomes Australia’s first female prime minister as a tearful Rudd stands aside – Operation Ranga which left The Emperor’s curriculum vitae resembling a post – it note.

Giddy Up Gillard announced the cull – a good government was losing its way and straight into a gallop, cancelled  the tax – payer funded mining advertising campaign. Ironic  that this was strongly supported by the newly anointed deputy prime minister Wayne “Left – Right” Swan. During Question Time they kept exiting Finance Minister Lindsay Tanner won’t contest seat so the “Big Four” – Rudd, Swan, Gillard and Tanner  has been reduced to the “odd couple”. The Emperor has become the first Labor prime minister to be removed from office in his first term. Giddy Up Gillard will be hoping in a short space of time, that  they become polls apart. Fort Fumble is today looking more like Fort Chaos  - all over the place with no compass in sight.  Will it sink as it takes  in water?

BUY PRINT

Another major stoush earlier in the week caught my attention and what a beauty this one is shaping up to be , with only Wayne “Left – Right” Swan left in the ring.   Watch this space.

It has been suggested over time in the media that Treasury and the Reserve Bank of Australia (RBA) don’t always see eye to eye insofar as economic policy is concerned and  here is the proof. Stephen Bartholomeusz from Business Spectator filed Warwick the wise “Reserve Bank board member and leading economist Warwick McKibbin has shown some courage in making an explosive contribution to the debate about the Rudd government’s management of the economy and the quality of the design of its proposed resource super profits tax.” He “accused the government of panicking in response to the crisis and ramming through decisions “fraught with risk”. It had over spent in its stimulus package (and, indeed, is still stimulating even as the RBA raises official interest rates to control growth) and then they come up with the RSPT to try to compensate.“

“So, the government panicked in response to the GFC, committed too much spending that couldn’t be reversed and, for   political reasons – the perceived need to claim a  fiscal surplus – for which he said there was no economic basis – it had came up with the idea of raising the profits of the resource sector. McKibbin also accused Federal Treasury of becoming an arm of political policy and Treasury officials of producing “what I consider to be fairly politically – based evidence in support of a political policy, not economic policy” and criticised Treasury secretary Ken Henry for not only failing to consult experts on economic issues but also trying to silence them.”

In only what can be described as an extraordinary outburst Henry tells economists “to put down their weapons” and get behind proposals such as the resources super profits tax. What we are seeing is simply unprecedented within Australia’s political history – guns at twenty paces. Just like the execution of The Emperor a public stoush between the RBA and Treasury will add more pressure  at Fort Chaos.

But wait,  there’s more!   Former federal Liberal treasurer Peter Costello jumped into the ring declaring If its tax reform you want, try GST as next week marks the tenth anniversary of the GST. So it was only to be expected when we  read Ken Henry should get a new career – as a pollie and  it is hard to remember a time when such differences of opinion dominated Australia’s political landscape. Rudd under fire from Labor MPs over mining tax ads the rest is history when Rudd’s golden honeymoon ends in a bitter divorce.

We will be reading about this coup for weeks as there are some who believe Labor wastes a perfectly good PM although it has been conceded that Gillard’s Labor must now change policy tack which I assume means more back – flips.

Most embarrassing for the government is that Australia’s housing stock is currently short 178,400 dwellings and this number is growing not reducing. This is certainly not helped with now the sad news: higher rates a certainty as the gap closes on fixed, variable rates which further explains why the RBA is at odds with Treasury. Perish the thought that Giddy Up and Left – Right may be forced to curb their ongoing stimulus spending.

A newly elected prime minister and deputy, the RBA and Treasury bluing over economic policy and  the inflation genie now up and away. Throw in a federal election then a back – flip with the RSPT and the budget will have an almighty big hole in it. Alan Kohler wrote today on Business Spectator Gillard must mop up Swan’s mess “Julia Gillard’s biggest and most immediate problem is her deputy, Wayne Swan, and specifically the budget he brought down six week’s ago.

“Wayne Swan must bring down a mini budget that fixes his and Ken Henry’s catastrophic mess of May 11, so the RSPT can be removed as an election issue before the Prime Minister asks “the Governor – General to call an election so that Australian people can exercise their birthright and choose their prime minister”, as she put it yesterday.”

Gillard admits that her government was losing its way, but who was the navigator ? The Governor – General should cancel any plans for a holiday in the near future.

Taking a bullet for the party just took a whole new meaning.

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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25.06.10Robert Simeon6 Comments »

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

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

Mosman’s maritime marina captured by Tim Mooney Photography

www.timmooneyphotography.com

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

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

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

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

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

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

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

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

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

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Cheers ^__^

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

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16.10.09Robert Simeon3 Comments »

Google in Australia is the online monster, better known as Australia’s online library with approximately ten million visitors logging on each month. Last Saturday, in The Sydney Morning Herald, Julian Lee wrote a fascinating article about the “Google Monster” which I recommend you read (if you haven’t already). Nine out of every ten searches on the Internet are made through the Google Monster – which has catapulted this business to Australia’s number one media company. As Julian Lee wrote “Google’s revenue is estimated to be $700 million and fast heading towards $1 billion as more advertisers divert their budgets into a medium that delivers them measurability and sales leads.”

Last month the Google Monster entered the Australian property market when it released its real estate directory Google Maps. What this illustrated to me is just how little Mosman real estate agents know and understand about online given that Google measures all websites based on algorithms – whereby the greater the individual pages from a website, the higher the Google ranking on search enquiries. We try to add around 50 to 100 pages on Google each and every week and real estate agencies with an online plan, are doing very well in the current conditions.

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Tim Mooney Photography

www.timmooneyphotography.com

This week, we ventured into left field (no pun intended) as one expat subscriber was explaining to his son, the importance of Australia winning The Ashes at The Oval. As quick as a flash we sent Tim to capture a photograph of The Sydney Cricket Ground – where we all share so many childhood memories. So if you want a particular photo from Tim, send your request via our blog and if he does not have it, we will pay him to take it and this will appear in future editions –must be Eastern seaboard* (*everything has conditions).

Back to that Google Monster where I remain amazed that Richardson & Wrench Mosman & Neutral Bay (RWM) is the only Mosman agency that directs Google Maps enquiries back to its own website. This explains why our agency is positioned at number one for all search enquiries on Google (Mosman real estate) searches. We have a few thousand pages already on Google which is why we appear at the top of all searches relevant to our market demographic.

Someone is telling “porky pies”. The Weekend Australian ran a story last Saturday saying that Ruddy Fantastic is reportedly planning an absurd tax on family homes valued at over $2,000,000. Political ventriloquist, Wayne Swan, was quick to deny this. Whatever the case, a concerning leak, given that Federal government has to fast track its pay back of the stimulus packages – interest payments alone are estimated at $10 billion a year. In this comprehensive Australian tax review (currently under way by Treasury) it appears that the two worst taxes affecting our property markets – Stamp Duty and Land Tax (both State taxes) would be unlikely to change given that State governments are broke. The only alternate increase would be GST and such a decision would not be popular. With the benefit of hindsight, the stimulus packages were excessive and even though our economy has recovered, Federal and State governments are steeped in their own recessions.

Obviously, Kevin Rudd did not read the Sinclair Davidson (Professor at the School of Economics, Finance and Marketing and a senior fellow at the Institute of Public Affairs.) “Rudd’s stimulus has nothing to do with the economy” which appeared on www.crikey.com.au

Sinclair Davidson wrote “Pessimistic bias is the tendency to over-estimate the economic severity of economic problems. The idea that the Global Financial Crisis is similar to the Great Depression is simply nonsense (I said this a month ago). Australian unemployment in the 1930’s peaked at over 25%. Unemployment is now seen at levels not seen since the early 2000s. The “collapse” in forecast revenue that so spooked the government, returned us to levels not seen since 2006.” Sinclair Davidson then wrote “The government argued that the stimulus package was intended to save jobs. That may well be an admirable goal. But why then stimulate the construction industry? Were the unemployed bankers and brokers and lawyers expected to get jobs building school halls?” Interesting points which no doubt will be debated on our blog (each comment generates another RWM page on Google.)

Before Ruddy Fantastic starts increasing taxes he should read this report compiled by the Australian Housing and Research Institute (AHURI) – Does Higher Housing Wealth Increase Consumer Spending? The key point from its findings was that – A $100,000 increase in housing wealth is associated with an increase in consumption expenditure of approximately $1,000 to $1,500 per annum in Australia. The Federal government can ill afford to infect the property markets with badly thought out tax. Instead, it should look at the tax debacle created by Fort Crumble (NSW government) when it introduced (then embarrassingly dismissed) Vendor Exit Tax!

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But then again I keep revisiting Peter Costello’s musings which appeared in The Sydney Morning Herald on April 29,2009 ” Buy now and pay much more later” . A compelling argument where the stimulus payback may well be worse for Australia than our very quick time in recession.

So let me turn your attention back to the Google Monster – which was not even a concept back in the recession of the early nineties. The Internet has played an enormous part as an accelerated driving force to economic recovery.A majority of decision makers simply don’t understand it and we now find ourselves indebted to their lack of understanding and knowledge for that matter.

In their defence – businesses and governments are now just starting to understand the powers of this monster, and it is not just Google that is reaping the benefits.

Cheers ^_-^

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

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21.08.09Robert Simeon10 Comments »

In years gone by, on Budget night the government (of the day) would broadcast in the first sentence the surplus (this last happened in 2008). This time around, there was absolutely no mention of the exact deficit figure which is quite unbelievable to say the least. Should one then assume that the hiding of the deficit beast within the Australian economy is part of the spin, better known today, as political whispering?

One can then assume that transparency is not exactly of paramount importance, given that the previous largest Budget deficit was $18 billion back in 1992 -93 and 1993 – 94. The Budget Speech 2009/10 took most by surprise as it was pure political spin, better known as being politically correct – a A$57.6 billion was obviously deemed “Not For Publication”.

A$57.6 billion Budget deficit is nothing more than a temporary phase that our economy currently is experiencing , so Wayne Swan keeps reminding us. This was brilliant sugar coating as the reality of a double dissolution election jumps to the fore, given that the Budget deficit will escalate alarmingly should Federal Labor serve a full term.

Piers Akerman wrote on his Daily Telegraph blog “Prime Minister Kevin Rudd and Treasurer Wayne Swan have lost a word. They can no longer bring themselves to utter “billion”. Asked yesterday on radio why he’d declined to mention the precise deficit amount in Tuesday’s Budget speech, Swan replied to a direct challenge with the answer “57”.Not 57 billion. Just 57. Then, in Question Time, Rudd responded to a similar challenge with his reply, “57.6.” Sounds like a clue to me.

I read with interest the Macquarie Research Economics Report – “It is important to note, however, that the vast majority of policy action was taken by the Government prior to the formation of the 2009-10 Budget. As a result, policy actions in this Budget appear to be more targeted towards achieving political objectives rather than undertaking any major spending reform.”

Prior to Budget night we heard a record twenty one Budget leaks. In the Budget speech there were ten references to the word recession and two to the words Great Depression. This was modern day political conditioning, where the implanted theme was to expect the worse and then be suitably impressed with the outcome … again – a brilliant spin.

No doubt Ruddy Fantastic was rejoicing when last week, when the Reserve Bank of Australia (RBA) announced that it believes the current recession will not be as severe as the recession of the early – 1990’s. What the RBA failed to identify was that back in the 1990’s the internet had not been invented.

Well that’s a relief, we are already noticing overdue confidence within the Mosman real estate market. We foresee a tight winter as the expected avalanche of distressed properties hitting our markets simply won’t happen. One does not have to be an economist to realise that if supply is constrained then demand increases. We anticipate very few new properties being offered to the market until September.

The waiting game, which is happening everywhere as Peter Costello wrote in the Sydney Morning Herald www.smh.com.au on April 29, 2009 “Buy now and pay much more later.” The member for Higgins wrote “I’ve often wondered about those advertisements that offer: “Buy now. No repayments for 24 months. You pay nothing until 2011.” Pre – empting the forthcoming Swan Budget Costello wrote “I wonder if people ask themselves whether it’s going to be easier to pay more, later than it is to pay less now? Or do they just take the benefit today and leave the worrying until tomorrow. “For mine, a smart analogy, given that Australians now have a A$57.6 billion Budget deficit and the interest meter is running.

Peter Costello went on to write – “And there’s no repayment? Actually, the Government borrowed this money, so it will have to pay interest to the lenders. And since it gets all its money from taxpayers, it’s the taxpayers who will foot the interest bill.” For those residing in Fort Crumble – in less than a month our NSW government will deliver its budget and it will get even uglier as it is in deficit, which equates to more increased taxes. This budget has the potential to be the hardest cash grab in history, which adds fuel to why Ruddy Fantastic sugar coated his Federal Fudge – it. Expect a shocker which is actually in line with the way Fort Crumble has administered NSW.

In summation Peter Costello wrote – “I recommend that families enjoy the Government’s “buy now, pay later” policy because a bill is coming. And it will be a big one. We don’t yet know how many years, or decades, of interest payments are in front of us.”

“Retailers would not get away with the kind of sales technique the Government has engaged in. Retailers have to detail the number of repayments, the interest rate and the all up cost before the sale. You get to choose whether to take the package. What’s more, if a retailer gives misleading information the interest payments are suspended. Try getting that from the Federal Government.”

This week’s brilliant aerial capture by Tim Mooney is of Balmoral Beach Club and its Nippers squad – points a poignant question, how old will these nippers be before they see a Federal budget in surplus?

Now for the steak knives … Mosman Council is installing parking meters along Balmoral Beach and other harbour side locations from July, 2009. Interesting debate brewing and here is a video of those against. Many of those whom appear are subscribers to Virtual Realty News.

Reece Coleman, Director – Real Estate Services at Fairfax Digital has responded to our queries about property data in last week’s edition. Here are Reece’s responses – http://www.rwm.com.au/2009/05/the-mumbo-jumbo-of-politics-and-property-data/

Editions of Virtual Realty News, thanks to Ruddy Fantastic have been extended another two years as a direct result of the retirement age extension. I’ll make a mental note to write an edition then, called , where are they now? Let’s hope it won’t be a case of still paying off Ruddy Fantastic’s temporary budget deficit.

We have expanded our RWM real estate media platform where aside from weekly, Tim Mooney photographic contributions we will also be adding weekly videos for your enjoyment of our weekly E-Zine. We are always re-shaping our online industry with new technology investments and setting new industry standards.

Next week – we assess Malcolm Turnbull’s Budget response and from what I observed he was smoking!

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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15.05.09Robert Simeon16 Comments »

Without doubt the Global Financial Recession (GFR) will re-define outlooks and perceptions and see a vast array of business models challenged as we enter the brave new world. Testing times, but also exciting times which can be lost in a ground swell of confusion. However, despite all the doom and gloom, online technologies continue to add the zoom to our markets.

Such revelations have not been popular with some real estate agencies who will now have to invest (their cash) in costly online upgrades and blogs (we believe we were the first ) to allow subscribers to voice their opinions.

Time heals all markets and this time around (with the benefit of hindsight) on an economies of scale basis, the future looks very bright indeed. One only needs to look at mobile phone technologies to see where we are headed. The race is on to provide consumers with interactive property alerts and I’m not talking SMS either – which failed the consumer test of functionality and appreciation for that matter. Hosting individual media website platforms will be the next initiative for our industry which is fast becoming much more interactive. In time, print expenditure will be reduced with vendors moving to hi-tech video broadcasting that is already much more affordable.

We certainly don’t speak for other businesses, that currently challenge the good, bad and ugly side of the GFR and I believe that the March quarter 2009 will be the worst on our constantly monitored business dashboard. There are signs that real estate markets are getting stronger due to the fact that available stock levels remain tight. Currently, all the buyer action is in the lower price ranges but this action will eventually move to the middle and eventually the top-end markets. Having said that, we believe the top-end properties will identify a capped reduction from fifteen (15) to twenty-five (25) per cent based on 2007 valuations. (It will be interesting to read subscribers’ thoughts on this week’s blog).

Australian Property Monitors (owned by Fairfax Media) revealed that in the March quarter 2009, the number of properties sold in Sydney at auction, fell dramatically. The average price for properties sold at auction in Sydney during the March quarter was $616,237. In the 2008 quarter, it was $786,682. Sales in 2009 were 1,742 compared to 2,230 in 2008.

All things considered, this is not a bad result given that the Westpac Bank – Melbourne Institute leading index of economic activity fell -5.1 per cent in February. A further decline from January which recorded -4.8 per cent, the weakest outcome since 1982. This index has been in negative mode since October 2008 and in all probability, a turnaround could be just months away.

To put this into greater perspective, figures compiled by Treasury identified that the average Australian lost $25,000 in wealth in the past year. Australian residential real estate fell just three (3) per cent in 2008 compared to the United States and United Kingdom where prices fell by as much as twenty (20) per cent. The reason why Australia fared so much better was again, a lack of supply.

Aside from escalating unemployment, a key performance indicator for global recovery, is a strong banking sector and it is well documented that our very own Australian banks are currently positioned as the strongest in the global economy – so why are they delaying our economic recovery?

An analysis by Fujitsu Consulting identified that our banks have increased profit margin on home loans over the past two years. Fujitsu Consulting identified that the major banks are now making at least $450.00 a year more on the average mortgage. Two years ago, which just happened to be the peak of the economic boom – the cash rate was 7.25 per cent. Today it is 3.00 per cent and last week’s Reserve Bank of Australia (RBA) cash rate reductions identified ANZ, Commonwealth and Westpac, cut mortgage rates by 0.1 per cent and the NAB refused to pass on any reduction.

Last week, I mentioned that banks still charge interest rates on credit cards at eighteen (18) to nineteen (19) per cent. This week, the RBA announced that outstanding balances on Australian credit cards presently sit at an all time Australian record of $45.4 billion (multiply that by 18.5 per cent).

Ruddy Fantastic and his government remain tight lipped on this statistic which is understandable given he no doubt read the article published this week by the Member for Higgins – Peter Costello on www.smh.com.au

How immoral, to hold wrong views.

“ I’ve been feeling sorry for Belinda Neal, you will recall, is the Labor MP who let fly at a waiter when asked to move tables at Iguana Joe’s a restaurant/night spot on the NSW Central Coast. “Don’t you know who I am?” she demanded.

Soon all of Australia knew who she was. Kevin Rudd stepped in, reprimanded her and ordered her to undergo anger management consulting.

I’ve never been to this sort of counselling, but I can imagine how it operates. A therapist gives you a tricky case and questions you on how to respond. The idea is to keep your anger under control.

Here’s a case study for Neal. You are flying on your private jet when the flight attendant brings you the wrong meal. Do you (a) eat it anyway; (b) point out you ordered something else and ask for an alternative; or (c) shout at the flight attendant and reduce her to tears?”

Our banks are reducing many to tears and I don’t hear Ruddy Fantastic shouting at them. Obviously they are not on his economic menu. As our headline states, businesses want answers not questions and you can bank on that.

Cheers ^_-^

See you on our blogs – our most popular this week.

1. http://www.rwm.com.au/2009/04/the-power-of-social-networking-on-the-internet/

2. http://www.rwm.com.au/2009/04/it%e2%80%99s-all-about-position-position-position-and-i%e2%80%99m-not-talking-real-estate/

3. http://www.rwm.com.au/2009/04/in-the-business-world-transactions-speak-louder-than-words/

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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17.04.09Robert Simeon2 Comments »

Kevin Rudd has the naming rights for Politics Parade where what remains to be seen is whether or not his stimulus package becomes a revolutionary highway or a dead-end? Credentials for his curriculum vitae have recently changed from ‘economic conservative’ (Kevin 07) to his latest self proclaimed identity of (wait for it) Australia’s leader of “social democracy”. Talk about a fair weather sailor – he linked the Liberal Party to the neo – liberalism that brought about the global financial disaster and yet on the other hand we hear that Australia is best placed to ride out the financial crisis.

As quick as a flash the Howard (neo –liberalism) financial pantry has been emptied and the heat in the kitchen is hotter and hotter. It has now been revealed that December economic growth contracted by 1.2 per cent (according to the Westpac/Melbourne Institute). These figures indicate that Australia too is at recession growth levels.

Wayne Swan (arguably Australia’s greatest ever Treasurer) wrote his blog in The Daily Telegraph yesterday “that’s why the Rudd Government has acted so decisively to support jobs and growth, and cushion Australia from the worst impacts of the global recession. Yesterday retail sales figures showed our Economic Security Strategy really helped to support the retail sector at the end of last year, at a time when retail was in plummeting in other countries.” Nomura economist Stephen Roberts said it was quite a soft result considering the amount of stimulus injected into the economy.

I have long argued that if Payroll Tax was abolished, job security would be strengthened so it came as little surprise when the Australian Chamber of Commerce and Industry (ACCI) took this tax to task this week. ACCI chief said “past recessions tell us that once unemployment goes up, it does not come back to pre-recession levels. Society pays an ongoing price.” We are a small business and are fined well over $100,000 each year simply for employing staff. No doubt Australia’s greatest ever Treasurer missed Payroll Tax in his “Nation Building and Jobs Plan” stimulus package – but there again he has never employed anyone. Payroll Tax delivers state and territory governments approximately $14 billion so how many jobs would $14 billion buy? Guess who doesn’t get it? That would be Fort Fumble (Federal government).

Would you be surprised to learn that Kevin Rudd secretly agreed to let his fellow state Labor counterparts off the hook over $3 billion a year in state taxes by secretly dropping their agreement for receiving GST? The new agreement allows states and territories to keep levying stamp duties on business real estate deals. Peter Costello said that the new deal was actually a Rudd Government tax increase. “Businesses will be paying twice and therefore the public will be paying for the higher taxes.” Do you call that responsible government?

Our rental crisis continues and will only get worse with the global recession and last month recorded the highest increase since 1988. The latest figures from the Australian Bureau of Statistics show that the annual rate of growth across Australia surged 8.4 per cent. So in comes Fort Crumble (State government) where investors are now finding that their tax has jumped as a result of the new premium rate. Bear in mind if you own multiple properties the threshold can only be applied to one property and now should your individual/combined value exceed $2,250,000, your rate (fine) goes from 1.6 per cent to 2.00 per cent in 2009. This explains why rents keep escalating as investors are taxed out of the equation. Guess who doesn’t get it? That would be Fort Crumble!

They do however get some things at Fort Crumble and former union boss John Robertson, now Prisons Minister, awaits his $500,000 (tax payer funded) office fit – out. No doubt in his newly created position of Special Minister of State he can justify such expenditure. After all, our economy is booming and Fort Crumble has a massive budget surplus! The fact that it is stone motherless broke should not be construed as ‘reason for concern’.

Rest easy – Fort Fumble has ruled out tax increases with Australia’s greatest Finance Minister, Lindsay Tanner, assuring constituents that tax revenues will rise again automatically as growth returns. “Without having to change any tax rates they will rise again automatically.” Brilliant – just brilliant and thanks Lindsay for sharing Fort Fumble’s answer to its budget deficit recovery package. Pure genius!

Australia’s greatest ever Prime Minister Kevin Rudd won’t rule out a very early election and Anna Bligh who has to call an election before September 2009 had a bummer of a day when Chris Bombalas dropped a bomb – he won’t contest the next election! The “bomber” now joins eight other pollies who have left the Queensland Labor decks of the “Titanic”’.

Australia’s greatest ever “social democrat” Kevin Rudd would be concerned that Queensland and NSW Labor need more than botox to win the next elections. The Australian National University released its discussion paper “Are State Elections Affected by the National Economy? Evidence from Australia”. The discussion paper was written by Andrew Leigh and Mark McLeish.

They used data from 191 state elections. These are amazing statistics:-

“In the early – 1990’s, the Australian economy entered its deepest downturn in the post war era, with the national unemployment rate reaching nearly 12 per cent in early – 1993.

• During the period 1992 – 1995, six of Australia’s eight states and territories ousted their government.

• By contrast, the mid – 2000s saw the Australian economy enjoying strong growth and falling unemployment.

• During 2003 – 2006, Australia’s unemployment rate averaged 5 per cent. In these years, no state or territory government was ousted from power.

• Were the state leaders who lost office in the early 1990’s unfairly punished for the state of the national economy?

• And were some of those who kept office in the mid – 2000’s unfairly rewarded?

No wonder Australia’s greatest ever Prime Minister and Treasurer are fast tracking an early election.

Or maybe I spend too much time reading reports? No wonder Peter Costello is sitting tight and Malcolm Turnbull is struggling in Politics Parade.

I bet you get it!

Cheers ^__^

This week’s Mosman real estate, Cremorne real estate and Neutral Bay real estate sales

http://www.rwm.com.au/news/

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20.02.09Robert SimeonNo Comments »

Well it will be all eyes and ears on the newly formed Productivity Commission, as the Federal Government tries in vain to turn the beat down on the rhythm of property prices. Already the State and Federal Ministers have started the mud-slinging and so far neither has proved that they have one iota about the cause. That fellow Costello, took aim with his property stun gun and suggested that states should lower stamp duty on new housing thus removing the pressures on housing affordability. Well ‘Peter Perfect’ that will ignite it further!! Then in perfect unity, the states responded by blaming the $7000 first home owner’s grant.

The truth of the matter is that it is the top-end of the market which is driving the market, not the bottom-end. As each day passes, the property market is playing the perfect game and the participants have the perfect match plan. The ultimate cause as to why the property market has escalated to all time record highs is because the blue-chip areas have out-performed and will continue to do so for quite some time to come. I mentioned a few weeks back, that Mosman has just 5860 homes, and on average since 1996 some 3500 have changed hands. In simple terms (just so that the Productivity Committee can fathom this) property numbers being offered for sale are diminishing. Just in the last three months we have posted the all time second and third highest home sales in Mosman. Then if you look at some recent home sales, we have just posted five new street records with the sale of homes. This then drives up the prices of semis which are now jumping over the magic million mark, so no wonder the prices of home units are showing an all time average high of $595,857.

We have prima-facie evidence, and the motive is supplied by a definite amount of money. With the Governor of Moolah once again refusing to make a rate adjustment, for the 14th consecutive month, it could be argued that Souths will win a premiership before we see a rate adjustment. The standing record is 19 months which was set from December 1994 to July 1996. My tip is July 2004 before the next adjustment. So it will be quite some time before we see any changes on the earth’s surface with regard to bricks and mortar.

The Productivity Commission needs to consider the movement of property prices, by taking into account the volume of future production, combined with anticipated market conditions. Or can one be so bold as to suggest an equilibrium of supply and demand, which can’t possibly eventuate due to the current character of the property market. If there was a World Cup in property in a few month’s time, Australia would be the odds on favourites to win. The fact that interest rates appear to be set for a considerable time to come, identifies that the current market will show no sign of change and if anything, prices will grow further, due to limited properties becoming available for sale. We have no property market complexities that can illustrate any projected disturbances, so prices will continue to remain consistent with further capital growth. After all, Mosman is an island surrounded by waterways, so for that very reason, it is a unique municipality, which further explains why it remains Australia’s most expensive postcode.

It will be very interesting to see if the Productivity Commission releases any findings on the way, or will we have to wait until they furnish their findings on March 31 next year. I think possibly the latter, as after all, life is very simple. We ourselves create the circumstances that complicate it. What remains to be seen is who will say I am sorry!! We just need to be confident that those presiding on the Commission are not relying on the ‘hope factor’. Cheers ^__^

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9.08.03Robert SimeonNo Comments »