Yes – Fort Crumble (NSW government) is basically lost and now trying to turn back time. Today, it is stone motherless broke and with no idea how to turn the economy around, can conveniently lay the blame on the global financial crisis. The 2008/09 budget announcement re-winds the clock to 1996 (when NSW was last in deficit). With an estimated budget deficit of $1.3 billion for 2008/09 and net debt to rise to $12.9 billion by June 2010, it’s hard to believe that Fort Crumble can return a budget surplus again. (It could not manage NSW in economic growth – with record tax/GST receipts).

Last Sunday, editor of The Sunday Telegraph Neil Breen wrote “Labor bungling a total turn-off” where he too turned back time. Neil Breen wrote “On Tuesday, Treasurer Eric Roozendaal will deliver the 15th budget since Labor was returned to government in NSW at the 1995 election. They switched off. Long ago.”

What an amazing capture by Tim Mooney – my favourite photo so far and one that illustrates just what makes Mosman so special. A natural suburb with a striking seascape where nature is preserved over housing development – be the judge? Since Tim joined our online platform, Virtual Realty News, many subscribers have contacted him to purchase his photos for their enjoyment.

Website: www.timmooneyphotography.com

Email: info@timmooneyphotography.com

Back to Neil Breen, “You need only read the following excerpt to understand why. It’s from then Treasurer Michael Egan’s first budget speech 14 years ago.

Labor was back in power and was feisty.

“For too long, we have put up with long hospital waiting lists, an understaffed police service, inadequate child protection and lack of accommodation for the disabled.”Mr Egan thundered.

“This budget delivers major improvements in hospitals, schools, police and crime prevention and community services.” Sound familiar?

Fourteen years on, everything is broken and now, our Premier ‘Nathan Please’ has listed Mosman police station for sale – indeed a backward step. If he can’t manage a surplus, how can he manage debt – by living in the past?

Thank goodness the Reserve Bank of Australia (RBA) remains on the money. This week it released board minutes from its last meeting – keeping its powder dry. As our economy manoeuvres its way through a global crisis there are obvious and escalating concerns which were highlighted when the Commonwealth Bank raised its standard variable rate last Friday (still below competitors.)

As the retiring member for Higgins announced this week, the greatest challenge facing our economy in years to come will be interest rates and yet, leading economists still maintain that borrowers should remain on variable rates. I don’t agree.

The problem with interest rates, is lack of competition as identified this week in www.crikey.com.au “Since the financial crisis first became apparent, the Government has explicitly put competition second to the need for stability within the Australian financial sector, waving through the merger of two of the five largest banks in Westpac and St George and acquiescing in the Commonwealth’s (CBA) rescue – purchase of Bankwest. The consolidation has come at a time when non- bank mortgage lenders and regional banks have either been driven from the market or badly bruised by the financial crisis, magnifying the damaging anti-competitive effects of the dominance of the Big Four.

Once competition is lost in Australian markets, it is awfully hard to regain. The ACCC has no divestiture power, so even when we are over the impacts of the financial crisis, we will not be able to regain even the limited degree of competition that applied until 2008. The only sensible course of action for most consumers is to buy bank shares, and get at least some benefit from the gouging, exploitation and bastardry that our banks can get away with.

But that’s no help to small businesses that can’t get loans, or face usurious interest rates when they do, or exporters, who face a punishingly high Australian dollar courtesy of our interest rates. Or, for that matter, to the workers who depend on them.”

Much like Michael Egan’s prediction in 1995 (it never came to fruition – only his pension evolved) BIS Shrapnel’s Residential Property Prospects report announced that house prices will rise by nearly 20 per cent over the next three years. “Green – shoots” of recovery based on the first home buyers grant and low interest rates. Green shoots can quickly become red shoots should banks up interest rates – which explains why the RBA continues to keep their powder dry.

One day later, the following graph appeared online criticising BIS Shrapnel for its forward thinking because such forecasts do not consider the x-factor and three years on so much can change. There again, fourteen years on and nothing has changed for the NSW government (other than a huge deficit). With fewer banks today, this scenario is no different from the control that Woolworths and Coles have over food and petrol prices.

Wayne Swan criticises the CBA for “selfish acts” and its rate increase of 0.10 per cent that “threatens recovery” of Australia’s economy (still the lowest). It is somehow puzzling that Ruddy Fantastic then shakes his sauce bottle to all and sundry in an effort to stimulate our economy. Not in agreement, Westpac and St George then increased fixed mortgage rates by 0.5 per cent, citing higher wholesale funding costs. Quite the opposite when the Reserve Bank of Australia (RBA) announced that our Big Four banks are currently enjoying healthier net interest margins (NIM) than before the global financial crisis. “The major banks ‘ NIM currently averages 2.27 per cent, which is a little above the level before the onset of the financial market turbulence in mid 2007.” Nation Building or Bank Gilding?

Back to the NSW budget – with a brilliant spin to kick start the housing sector. A short lived spin – where just one day later the Australian Bureau of Statistics (ABS) announced that (in the first quarter of 2009) home building fell to its lowest level in eight years. Economists then predicted that this sector would increase significantly in the second half of 2009 – this won’t happen as the banks are no longer lending to developers – fact. Re – affirmed by the latest ABS release which (alarmingly) identifies that our NSW government policy (rhetoric) is definitely not in sync with banking policy.

ABS data for the three months to March, identifies that the number of new housing starts has fallen to 5,400, down from 7,500 compared to March 2008. In the March quarter 2004, new starts were 11,000 (a fifty per cent decline). This is what then happens – the following data shows that Sydney clearance rates are now at 71 per cent and above 80 per cent, is considered a boom market.

Subscriber sales jumped this week to $892,096,219. Over the last 18 days, we have sold 16 properties to the value of $47,000,000. I might add that RWM is the only local agency reporting such great sales. As I wrote last week “better to be in the market than on it”, and that means growing your online market, not reducing it. The leaders in real estate today, are those who invested and developed successful online media platforms (years ago). Times have changed. We have and as our sales results prove, businesses need to move with the times. http://www.rwm.com.au/sales-list/sold_listing/

RIP – Paul Eastaway, a Mosman identity who will be greatly missed. A very funny and caring man who brought a smile to everyone’s dial – so many wonderful memories.

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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19.06.09Robert Simeon3 Comments »

Or, should that read the light at the end of your tunnel?

Many are reporting light and others fright. I for one, support the light given that the Mosman property market remains controlled and given the current stock levels, the message is clear – Mosman houses are closed for business!

Should the current pattern continue, there remains a strong possibility that available properties will reach the lowest level in decades. Simply put: the fright no longer remains a concern and for the first time, real estate agents and vendors are not starting to see the light, but are now seeing a brighter turnaround, although it should be noted that longevity is not guaranteed.

Tim Mooney Photography

www.timmooneyphotography.com

It would then be somewhat reasonable to suggest that given the circumstances in our inherited global financial crisis, businesses today, require vision, strategy and greater acknowledgement of evolving technologies. For the first time, property market interaction has seen online take the lead over the previously preferred print campaigns which are no longer the dominant force. Print will still play a part just that from an economies of scale basis, it will require a re-definition so that it can remain competitive. The leading real estate agencies are now driving and presenting smart online marketing alternatives. For a real estate agency that does not host its very own website, the future is bleak to say the least – simply because all their competitors do.

Markets today are judged from online results, because they are readily available, subscriber driven, easily accessible (except property data) and allow individuals to draw compelling conclusions. The inbox today is what activates consumer interest first, simply because it now is the first point of contact and first impressions count. With the benefit of hindsight it is much easier to track our current recession simply because in our last recession (early nineties) the Internet was still in creation mode. Today, we extrapolate (and then pontificate) data and depending again on your point of view, some believe we have seen the worst and others predict that the worst is still to come.

The ongoing, frustrating debate continues but I believe we have turned the corner and slowly but surely, we are on the long road to economic recovery. When businesses move from economic growth to economic recession – you don’t lose intelligence, you learn and grow from the experience. Unfortunately, the reality of the current economic crisis can be attributed to one word – greed.

As Alan Kohler wrote on www.businessspectator.com.au The best kind of recession – “This is turning out to be quite a nice recession for Australia.

Aussie GDP has fallen just 0.5 per cent, compared to nearly 10 per cent in Japan, 4.6 per cent in Europe and 2.6 per cent in the US. Unemployment has actually decreased according to the latest data and is now at 4.5 per cent – at least two percentage points below other western countries, where unemployment is rising quickly.

With tax cuts and a drop in both mortgage interest rates and petrol prices, the after-tax disposable income of the average wage earner has actually increased by 19 per cent, according to calculations by CommSec’s Craig James.”

Furthermore, one in five international business people (in a survey of 7,500 across twenty four nations) named Australia as the country best surviving the recession. Australia first, China second and India and Singapore equal third.

Toxic debt within our banks has been a very well kept secret but in 2009, banks have certainly been responsible by opting to wait for property markets to stabilise instead of fuelling the problem as they did previously. Nobody can win the argument that property markets don’t recover as we all know that with time, all wounds heal. The Mosman market is not only healing, its appeal is greatly assisted by a cash rate of 3.00 per cent.

Without a doubt the media microscope of opinion has manipulated as well as injected fright into market perceptions. After an unprecedented period of economic growth in Australia, it was hoped that we would bask in economic consolidation before we found ourselves in economic recession. The decline from consolidation to recession surprised everyone. What remains to be seen is how quickly GDP recovers so we then climb back to economic consolidation. Whilst economic growth is still a way off, every Australian business has a strategy to climb back up. The test of time can only be measured by what you are actually testing and discovering.

We have to move with the times.

This time around the businesses with strong online content (in real estate) have done much better than those businesses that wait for it to happen. Watch the movement of property between now and June 30, which I believe will be a defining property market moment. RWM Internet sales jumped to $848,794,019 this week. Our point of difference over other real estate agencies is our online factor which is exactly where we have your eyeballs at this very point in time. You will also notice with this week’s recorded sales a substantial upward spike in sales volumes (see below).

Once upon a time it was a window card placed in the shop front, then an advertisement in a newspaper. Today, consumers judge real estate agencies by their online content. After all, we are in an economic recession where it is all about money. In economic growth they show the money and in economic recession they slow the money.

The real fright at the end of the tunnel is actually shared by the real estate agencies that ignored the move into technologies– just like every other economic recession money is slower. In a recession one has to put the faith in themselves, not others.

Chk – Chk – 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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29.05.09Robert Simeon14 Comments »

The property market once again is poised to finish the year on a positive note, as the market rallied in light of this week’s decision by the Reserve Bank of Australia, to leave the cash rate target at 4.75 per cent. This certainly leaves the door open for future rate reductions, which in all probability will be a New Year’s present to the Sydney 2003 property market. Next year, the market will embark on its seventh year of unprecedented trading, and the powers that be will be mindful that the only ‘itch’ they anticipate will be that of buyer impatience, given the Christmas and New Year break. No doubt all eyes will be on the US economy after the US Federal Reserve slashed interest rates by half a percentage point to 1.25 per cent. This represents a new four-decade low. Whilst some may argue that there is anecdotal evidence that all the property markets have eased, what needs to be identified is that the markets have been guaranteed longevity. The present property market poses the question… where can you do better with your money?

Weak share markets, combined with investor nervousness has seen investors concentrate on the merits of retail investment. With figures released from Australian Property Monitors showing that more than $220 million worth of retail property traded hands across Australia during the month of September, it would be fair to assume that this figure will increase as the current yields are at present returning around seven to eight per cent. Australian Property Monitors also revealed that the average median price for a Sydney home in June to August 2001 was $332,000. For June to August 2002 homes had jumped 20.5 per cent to $400,000. Home units were not as bullish, however they also finished in the black with a 13.8 per cent gain over the same period. In June to August 2001 the average price was $290, 000 and for the same period in 2002 it was $330,000. I just love this quote I read, ” Always pay a good price, as history shows that money is more often made at the purchase than at the sale”.

Without a shadow of a doubt, the greatest modern day blunder is the reliance on clearance rates as a market indicator. Here is a classic example; one Sunday scribe wrote, ” Things weren’t going quite as well in the other areas of Sydney. At Richardson & Wrench Mosman’s prestige auction, four from four were passed in”. Well that is true, we did pass in four from four. What they failed to mention was that we offered seven properties last week, and three were sold beforehand. Of the seven properties, five have now been exchanged, and another is all but exchanged, whilst the seventh and final property is under negotiation. A week on and the result will in all probability read seven from seven!! I prefer a market that is all about the facts. I must admit that I have never really been into weekend fairy-tales.

You may have noticed that the Mosman home unit market has been a bit stagnant of late. Well the explanation for this is that Marize has been away on her honeymoon. So don’t be confused if you see “details, Marize Bellomo”. It is the same lady with a different surname. Welcome back Marize, and also a big welcome back to the ex-pats who are busy securing property for pre-Christmas Day settlements. I just love the International ring that our market has… cheers and clink… ^__^

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9.11.02Robert SimeonNo Comments »

As the property market waltzes out of winter, it was a most memorable quarter given that sales volume for units and houses was the highest since the September quarter last year. Quite an amazing statistic! We are now entering our strongest quarter statistically. By all accounts we can expect a Spring fever, although all the evidence before us is still very much circumstantial. Whilst nobody could disagree that the overall numbers at open for inspections have diminished as compared to previous months, this is not necessarily cause for immediate concern. What we are finding is that the people who attend an open are actually genuine buyers, which in turn allows the agents a greater opportunity for buyer identification. Many will agree that as each year passes, agents are interacting less with purchasers face to face, as our industry moves into what many people prefer, the privacy of e-property. Once upon a time an agent would telephone a purchaser when a suitable home was listed. Today the prospective buyer receives an e-mail alert.

Virtual inspections of homes are now increasing whereby it could be argued that purchasers prefer to inspect by stealth, as against the previous more open relationships. Here is an excellent example, 20 Morella Road, Clifton Gardens, appeared for the first time last Saturday, in The Sydney Morning Herald, contracts were exchanged at 9.30 am that morning. During the course of the week there were 195 Internet page views for that property of which one just so happened to be the actual buyer. Now if the property had been opened for inspection, current figures suggest that ten couples would inspect, although in the week preceeding, nearly twenty times that figure had a virtual inspection. It was a great milestone when the Internet side of our business broke the $100,000,000 mark in property sales. We have just celebrated the second birthday of ‘Virtual Realty News’, which explains why we are ahead of fellow agents, as we lead the way in this Internet development. I can assure you that this is just the beginning. Currently we have a team of five working on new software programmes that will take our industry to a level that it has never seen before. Given that we will own all the intellectual property, this new service will be exclusive to our thousands of subscribers. When it comes to technology, Richardson & Wrench Mosman puts its money where its mouth is!!

Not a week goes by where Marize does not weave her magical wand on the unit market. Here is another great story. We had listed an older style unit on Wolseley Road, Mosman and after the first two weeks nothing had happened, so I thought the price needed to be reduced from the $545,000 asking price. I telephoned the owner to suggest a reduction in price, however I was not able to speak with him as he is a busy barrister, so without his instructions (for obvious reasons) we went to the market again at the same price. On Monday this week we had three buyers on the property at the asking price, and after skillful negotiation, contracts were exchanged at $560,000. Who said the investment market for units in Mosman was suffering? As I have said for ages, our choice is to lead the market, not to blame it! Straight after this sale Marize received the following e-mail from another happy purchaser. Thanks Marize!

“I would like to let you know, and please pass this on to your manager, that you are the loveliest real estate agent I have ever had the pleasure to deal with.

My husband & I had some very unfortunate experiences with other agents before meeting you, one in particular was very unethical and difficult to get straight answers from, resulting in us losing a place to someone else the day we were meant to exchange.

From our first meeting you have been friendly, helpful, honest and professional – thank you for making buying our first home such a wonderful experience.”

The above would explain why Marize sells more units than any other agent in the area.

So, we look forward to the Spring market as our early successes allow us to offer some fantastic properties over the next six weeks. I am sure of one thing however, no matter how many people attend the opens, the number of Internet visitors will far exceed those numbers. Today, real estate is a much bigger picture, it certainly helps when you know what you are looking for… cheers, and clink… ^__^

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7.09.02Robert SimeonNo Comments »

As they say,”markets move in mysterious ways”. What we are witnessing now is a combination of anomalies, that are thought-provoking yet, at this point, little more than “a storm in a tea cup”. The top-end of the market is as strong as the Australian swimming team, as long as the property is assessed on market value, as against an ‘ego’ value, which see agents buying listings continually, as they fight for survival. Like many businesses today, the death knell is loud and clear for those who failed to move with the times, and did not recognise the game plan that would see growth and prosperity. Presently, we are seeing that property markets are not moving as one, and in some instances the vendors are adopting a ‘batten down the hatches’ approach. This could be further argued with the interest rate reprieve, which again saw the Reserve Bank decide against a further increase in rates.

Whilst many are stating that investors are back into the property market, the rental vacancy factors are adding further confusion to this assumption. Last Saturday in The Sydney Morning Herald, I counted the number of units for lease in Mosman, the total being 177. In the price bracket, in excess of $1,000 per week, there were two properties advertised, the $500 to $1,000 category just the fifteen properties. In the up to $500 a week category, a massive one hundred and sixty units all searching for a tenant. For the first time in ages we are seeing rent free terms being offered, and rents being slashed to attract a tenant. So what will happen? Many are hoping that this will present an opportunity to buy well at the expense of another, and I can assure you that there are plenty who are cashed up and waiting to purchase. Once again the business plan comes into play, well at least for us it does because we have the only ‘apartment specialist’ in Mosman, and I can assure you that Marize is one very busy lady at the moment. Because of her knowledge of values, which is further assisted by her qualifications as a registered valuer, the opinion of value is precise and correct. Having the largest database of buyers in Mosman certainly benefits our clients at both ends of the spectrum. This is one of the better examples of the ongoing benefits the Internet offers, with enquiry levels at an all time high. It is amazing how a solid business plan can change a negative into a positive.

We are experiencing many idiosyncrasies on a daily basis, and for the first time in ages we are seeing different areas of the market changing direction. It is usual for the lower end to be strong then the market moves up from there. I anticipate a very strong top-end of the market, because confused and battered sharemarket investors will focus entirely on their principal place of residence. They will use their principal place of residence as the mother ship, and run their borrowings from there to develop their investment portfolio. In 2001, out of the ten highest sales in Mosman we negotiated six of them, so this really is the market that we know better than most, and I am more than happy to pass on what buyers are telling us. One would have to agree that it makes plenty of cents and sense for some!

The stage is set for a very interesting Spring market, and we already have some fantastic property awaiting release to the marketplace. As for it being a soft market, I can’t agree with that theory. One must remember that it takes just four weeks for the property market to boom, and eight months for it to plateau. The market has traded quite well through winter, mainly as a direct result of reduced volumes of property being offered. It would be a very brave person who would suggest that the market is finished. We see this market as the perfect opportunity to establish quite a few more records. Like most things in life it is mind over matter, plus a business plan. We can’t elaborate too much on that because too many agents subscribe; how else are they going to find out what is happening in the market. Other agencies followed our lead, by e-mailing the open for inspection lists each week, they learned it here first. Yes, we were the very first.

We have a simple philosophy here at Richardson & Wrench Mosman, “don’t blame the market, lead the market”, and it is most obvious that we are doing that. We focus harder than most on our reputation for being honest, making us the smarter choice of agent. An agency today needs to provide so much depth and sophistication of service, learning how the Internet works would be a great start for some of the other agents!! Cheers & clink ….^__^

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10.08.02Robert SimeonNo Comments »