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I would say yes, given the global financial crisis (GFC) in the Australian vernacular was an “easy come – easy go” experience where we experienced just the one quarter of negative growth. If you remain somewhat confused as to where the property markets are headed, don’t be.  It appears that everyone else is too. International Monetary Fund sounds warning on property bubble in Asia – Pacific and it was reported that Australia is not immune from a potential property bubble. The report said “in Australia, a combination of rapid interest rate cuts and the extension of the first – home buyers grant ensured that property remained robust during the worst of the financial crisis. Most recently, there has been a 13 per cent jump in median home prices to the end of February.” Then “the IMF report comes amid evidence the resilience in house prices has caught the eye of the Reserve Bank (RBA) Minutes of the Reserve board’s April meeting, when it announced the fifth rate rise since October, showed members noticed the property market’s continued buoyancy despite new home loans falling”. Evident with Sydney auction clearance rates graph courtesy of Australian Property Monitors.

RBA eyes May rate rise which I believe is odds – on, having read the minutes of its April 6 board meeting where they will move the official cash rate from 4.25 per cent to 4.50 per cent. Home truths on the whys and wherefores of the property market which identifies the property conundrum: housing is the biggest market in Australia – yet there is no central database that records transactions and prices. “Housing markets in the United States and Britain lost 40 per cent of value from their 2007 peaks and are only tentatively recovering, that Australian market appears only to have dipped slightly in 2008 (the pain was contained to the top end) before shooting up in the past 12 months.” Now the biggest clue “banks have changed their attitude. Where they used to push 100 per cent loan – to – valuation ratios (LVRs) now they lend 80 per cent over the value of the asset before demanding a swag of fees (usually labelled lenders’ mortgage insurance).”

BUY PRINT
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I love challenging Tim, who called me this week and asked “what shot do we need?” I responded, “The Emperor (Kevin Rudd) got his Health Reform approved so we need a smiley face. Can you shoot Luna Park, Ripples restaurant, North Sydney swimming pool, and a ferry at Luna Park wharf?” The man is pure genius! Tim again, exceeded our expectations – his shots make for great Christmas cards too.

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Macquarie’s Robertson sees easing in house price gains where with his latest note to clients Mr Robertson said “anyone with their eyes open is aware that usually low funding costs over the past 12 – 18 months powered a good part of the double digit house – price gains that have excited so much comment and talk of “bubbles”. Economists baffled by robust property market given after five interest rate increases in seven months they wonder how auction clearance rates remained so high for so long, along with rising median house prices. “It’s a bit of a puzzle,” said Macquarie Bank’s senior economist, Brian Redican, who once worked at the Reserve Bank. “You wonder how auction clearance rates remain very high along with house prices themselves.” Which takes me to the real estate ring of confidence – remember Aussies would bet on two flies climbing a wall.

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Prestige home market lies becalmed, Median prices up in Sydney – but not as much as in Melbourne and Penthouse sales hit bargain basement had Sydney Morning Herald property editor Jonathan Chancellor a very busy journalist this week. “Sydney’s $5 million plus prestige residential market has stalled. The number of sales this year sits at slightly above the low levels recorded during the trough of the global financial crisis. There have been 45 sales higher than $5 million during the first quarter of the year, a small rise on the 44 sales in the March quarter last year. Volumes are well down on the 74 sales in the 2007 March quarter, and 63 in the 2008 March quarter.” Richardson & Wrench Mosman & Neutral Bay (RWM) recorded 5 of the recorded 63 sales. Subscriber sales jumped to $942,854,220 this week.

Australians’ insatiable appetite will continue although it must be noted that home loans, power and now gas – the family budget squeeze is on given NSW families will have to find an extra $3,000 in their annual budgets by the middle of next year as the soaring cost of living consumes an additional three weeks of the average worker’s wage. Even though land prices are growing at their fastest rate since 2004. No data: foreign buyer property puzzle which by coincidence identifies a twelve month anniversary since The Emperor abolished the acquisition by foreigners of Australian real estate. At 6:38 pm on April 21 I received this notice REA as well as a increased number of emails from Russian buyers agents looking to acquire residential properties.

Foreign men of property move in which demands an answer as to exactly why The Emperor approved this policy change – without consultation. Given home – ownership dream dims for Gen – Y where NSW ‘s dire housing shortage has been exposed by figures revealing that the State needs an extra 120 homes every week to keep up with population growth. To make matters worse, the average rental  of a Sydney house  is approximately $110 more a week than it was five years ago. So Fort Fumble wastes billions on pink batts and the building education revolution – and now it is taking on health? Back to Luna Park and that “Big Dipper” which resonates with Kevin 07. Although not alone – NSW still nation’s basket case, say analysts – the NSW economy continues to be the worst  in the nation and  analysts say, the government must urgently introduce initiatives to stimulate growth in housing construction, business investment and jobs.

As quick as a flash, The Emperor hightailed it to Tasmania rifts open in Kevin Rudd’s health plan given the rethink on insulation scheme over safety fears which then transformed into a junior minister Greg Combet announcing troubled insulation grants get the chop resulting in another taxpayer initiative $2.450 billion down the gurgler. Interesting that The Emperor was all over the stage announcing this – then hides when it is cancelled.

Bob Hawke and John Howard debate our future where the combined consensus was to remove states/territories from all forms of government.

Congratulations to Jacqui and Mike Rowland – Smith who this week delivered a brother for young Will – mother and baby are both healthy and happy.

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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23.04.10Robert Simeon1 Comment »

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Big statement you may say – well we didn’t say it RP Data’s Property Pulse revealed “Premium properties provide higher returns but volumes have remained relatively low in 2009”. It then went on to say “for cashed – up buyers the premium housing market could be poised to deliver excellent returns in the future.” A comprehensive property report that tracks Australian municipality machinations from 1999 through to 2009. What is interesting to observe, is exactly how the global financial crisis impacted property markets. We have published all the graphs in this week’s edition.

Property Pulse Highlights

• Sydney’s Mosman leads the nation with the highest number of house sales priced at $1 m or higher.
• Sydney and Melbourne featured equally in the top 20 suburbs for $1 m plus house sales in 2009.
• The Western Suburbs of Perth holds two of the top performing suburbs in the analysis.
• For units, the Sydney suburb of Pyrmont led the charge with 95 unit sales priced at $1 m or higher (that’s only 22 per cent of all Pyrmont sales in 2009,highlighting the wide variety of unit product in this inner city suburb).

BUY PRINT

The Sydney Morning Herald’s property editor Jonathan Chancellor wrote last Saturday, “Mosman turns up auction heat”. “Mosman has led the resurgence in auction activity with 100 listings in the first quarter, up from 43 during the same period last year. The pricey suburb’s 67 per cent success rate bettered the dismal 37 per cent clearance rate during the eye of the global financial storm.”

Each week we publish the weekly sales results and I would add that (some) agents have been doctoring the results of auctions which were passed in then, hey presto, two to four weeks later the very same properties reappear as ‘Sold – Auction’ (never let the facts get in the way of a good story).

Across Sydney, agents conducted 4560 auctions in the first quarter of 2010, compared to 2960 over the same period in 2009 (according to Australian Property Monitors). The previous record was 4330 in 2008 so by all accounts Mosman again, is up and up and we can predict with confidence, that despite interest rate increases, consumer sentiment should not wane despite rate pain.

Source: RP Data

These are telling graphs that (historically) identify 2007 as being the all time peak property performance year. Take the 4330 auction record quarter in 2008. You will note that there was hardly any impact on the 2008 sales results simply because just a minority found new owners. The majority recorded a zero sales result. In 2010 we have seen new Sydney record auction volumes and this time around , agents are matching vendors with purchasers. That said, in 2010 there is a distinct possibility that the previous record sales results posted in 2007 will be surpassed, because top – end property markets are now re-activating. This explains the lengths we (RWM) go to on a weekly basis, to accurately cover our demographic property market. It also endorses the fact that we have the number one online Mosman newsletter and are positioned as the number one Mosman agency with Australia’s greatest number of database real estate subscriber sales $943,479,220.

Source: RP Data

Source: RP Data

10% rates on the way proved to be a interesting headline last Sunday. The only problem is, that consumers get it and Fort Fumble (Federal Government) doesn’t. Suffice to say: when in an election year, keep buying votes. Rory Robertson, Macquarie’s interest rate strategist, says a booming labour market could force the RBA’s hand. “If the economy keeps on growing like this, we will hit the previous highs in the cash rate.” Mr Robertson went on to say, “we already have a template of what happens when the economy grows strongly – we saw it before the Lehman Brothers collapse in 2008 – so we know how the Reserve Bank responds to the threat of inflation. It hiked aggressively back then, and it is doing the same now.”

On the one hand we have the Reserve Bank of Australia telling us to curb spending while Fort Fumble keeps spending at record rates. In search of an answer I went School building program won’t stop: govt Federal Education Minister Julia Gillard says the $16 billion school building programme won’t be suspended, pending an investigation, because it would mean job losses?

Don’t waste the boom, Mr Rudd where Alan Kohler wrote on his Business Spectator “In Australia, according to the ABS, there is now $133 billion worth of construction in the pipeline – the greatest investment boom in history.” Looks like our Education Minister needs educating on exactly what is happening in Australia.

Oh dear! Miss Prissy Julia Gillard hires a banker to unearth schools stimulus. A Mosman banker too! Undoubtedly, the findings will make for great reading. Personally, I don’t blame the builders given they were asked to quote for the building works and Miss Prissy approved the quotes.

What annoys, is that yet another $14 million has to be spent to correct political incompetence – on top of insulation, schools and border protection. The list goes on and today, Australian taxpayers are fast becoming a modern day version of a human ATM.

House prices plateau as buyers flee in droves – buyers are deserting the Sydney property market at the rate of 1000 a month, causing real estate professionals to predict an “exhausted market” where prices plateau for the rest of the year. This will definitely happen in many areas although it won’t happen in Mosman. Official figures show the number of loans to buy houses in NSW slipped from in September to just 14,300 in February after sliding in each of the past five months. The Australian Bureau of Statistics figures identify February as the worst month for home loans since 2001. Nationwide, just 2174 people borrowed to buy new homes, a figure that also reflects the low number of new homes on offer. School canteens override Construction slides as affordability worsens.

Alan Kohler from Business Spectator has a great ability to simplifying things and again, he brilliantly achieved this, when he wrote this week Deflating the credit bubble myth. “That’s why everyone keeps getting the property market wrong even the bulls have been surprised at its strength.”

“Anyway, a plateau this year would hardly be surprising, in fact another 12 per cent rise in the national median house price in 2010 would be staggering, and would see the RBA cash rate closer to 6 per cent than 5 per cent by early 2011.” My prediction is a cash rate closer to 6 per cent by Christmas given clearance rates in Sydney last week hit 70.7 to 73 per cent. Melbourne recorded 75.5 to 85 per cent – clearance rates above 80 per cent are considered a boom market.

Something I been saying for years!

Rising support to abolish state governments no doubt when the respective premiers read this the fear factor of incompetence overrode hospitals takeover on critical list. Four in ten voters favour abolishing state governments, seeing them as the least – effective level of government and increasingly looking to Federal Government to fix health and other problems. Fort Crumble had yet another outstanding week for leadership Blame game begins on F3 traffic chaos and Losing bidder won ferry contract. All part of The Emperor’s (Kevin Rudd) daily growing pains trouble Rudd in Big Australia.

Back to Mosman – our cutest and newest resident celebrated his one month birthday this week.

Happy Birthday “Pathi Harn” (Miracle) – The Emperor is praying for one too, because he knows that voters have memories like elephants!

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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16.04.10Robert Simeon4 Comments »

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The Australian economy is booming with the good news this week from the Australian Bureau of Statistics (ABS) that our gross domestic product (GDP) grew by 0.6 per cent (seasonally adjusted). There were no downward GDP revisions for the March quarter which remained at 0.4 per cent and I fail to understand why the global financial crisis (GFC) is still being compared to the worst global economic downturn since the Great Depression. The recession of the early nineties plays it off a break, but the early nineties could hardly be described as global either. Unemployment this time didn’t climb to eleven plus per cent (5.8 per cent as at July) and interest rates today remain at 49 year lows.

‘The Punch’ (another great online read) – Clive Mathieson wrote, What Recession? “What a lovely recession we’re having. Or not having”. I do agree however, with the school of thought that we will see some economic tremors along the way and this is inevitable given the sudden impact of the GFC.

Just like the Y2K computer scare – remember that? A global electronic meltdown was predicted when we moved from 31 December 1999 to 1 January 2000, over concerns that (to save computer disk and memory space), computer softwares were using two digits to represent a year (98 instead of 1998). For example the difference between 1 January 2000 and 31 December 1999 could be calculated as -100 years as against one day. On the stroke of midnight on 31 December 1999 it was predicted that this computer bug would see businesses and industry decimated and we would see planes falling from the sky. On the stroke of midnight, planes flew, fireworks went off over Sydney Harbour and computers worked fine.

Tim Mooney Photography

www.timmooneyphotography.com

Alan Kohler wrote another wonderful article “Bulls at the Gate” on his Business Spectator website. “But Australia’s June quarter GDP is important for two reasons: it confirms that Australia has not had a recession at all, and indeed the economy has now expanded for 18 consecutive years; and secondly it will help ensure that business and consumer confidence remains strong.”

As quick as a flash Wayne Swan announced that our economic growth (Australia has been the best performing advanced economy over the past year) was a result of the stimulus. Earlier in the week he said that opposition treasury spokesman, Joe Hockey, must be “deaf, dumb and blind – if he thinks the Government’s economic stimulus is not working.”

I did like this comment “There are tradies all over the country who are working on stimulus projects. It’s adding to confidence in a way that we don’t see anywhere else in the world.” True Wayne – but other countries are actually in recession – we’re not! Then we had some economic speak from the King of Spin, Ruddy Fantastic, who said “The figures (GDP) that have been released today indicate that we’ve got a long way to go when it comes to economic recovery.” Translated, that means we have a long way to go to get his budget into surplus again.

Leo Shanahan penned this beauty in The Punch “Rudd’s secret spending freeze: no soup for you”

Whilst on long roads, spare a thought for the Y2K equivalent of Australian economics Steve Keen who, in my opinion, irresponsibly predicted on nearly every available media outlet, that Australian house prices would fall by 40 per cent and unemployment would shoot through the roof to “depressionary” levels. This prompted Rory Robertson (interest rate strategist) to jump from the factory floor at Macquarie Bank to bet Steve Keen that if his predictions proved correct he would walk from Canberra to Mount Kosciusko. To read about the bet, Business Spectator filed this story by economist Christopher Joye – “Let the Kosciusko march begin” For the record, Rory Robertson was spot – on with his GFC commentaries.

This takes me to the cash rate which remained on hold when the Reserve Bank of Australia (RBA), met this week and decided to leave it at 3.00 per cent. The cash rate has remained at 3.00 per cent for five consecutive months and next month, I predict it will move to 3.25 per cent – the cost of bank funding is going up not down.

Rory Robertson has also predicted a 25bp increase on October 6 based on the latest data identifying a strong rise in house prices. He wrote “With the RBA reportedly keen to start tightening its loosest – ever policy stance at the earliest – available opportunity, the combination of (a) rising GDP (b) a brighter investment picture and, now (c) stronger growth in house prices, might well prove irresistible. The “economic emergency” clearly is over, “nipped in the bud” by early timely and forceful monetary – and fiscal – policy action.”

I believe he may have been referring to the July RP Data – Rismark Hedonic Index results that revealed Australian home values are now 1.8 per cent above their previous peak in February 2008. The intrigue is building for our Mosman markets given we have record high rents and record low levels of stock – better known as a heated market. Stay tuned.

Quite amazing that should the RBA increase the cash rate next month, it would be moving in a totally different direction to Fort Fumble – Ruddy Fantastic’s empire! That’s it! Ruddy Fantastic is out and now he will be called The Emperor – given his ‘sweet and sour’ patterns of behaviour.

Spare a thought for ‘big’ Johnny Della Bonka at Fort Crumble, where we saw the battered draw bridge rise (figuratively speaking). This prompted a vote of no confidence by the opposition in parliament this week – which failed. Our elected NSW government failed to produce yet another leadership challenge by the Bonka. Watch Frank “cranky” Sartor exercise his recently acquired power- play: the funnier side of politics where the patients challenge the asylum. The Emperor is far from impressed.

This week, Richardson & Wrench Mosman & Neutral Bay (RWM) released another great online application for our clients – ‘Mohbe’ – mobile phone real estate. Mohbe allows real estate agencies to have their own agency branded mobile phone website for their property listings. The mobile phone websites are viewable through any mobile phone which has an Internet browser and access to the Internet. RWM is Mohbe’s first client in NSW to offer this application. Take a test drive www.mohbe.com/124232

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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4.09.09Robert SimeonNo Comments »

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The Australian real estate market is an amazing landscape of media commentaries that although initially, in the limelight, have now been be deemed unreliable. Of course the manipulation of the Global Financial Crisis (GFC) has led to a media storm where hired guns are in retreat – and licking (terminal) media wounds. So I could not resist the temptation to re-visit the human headlines relating to our real estate industry since the onset of the GFC.

As Alan Kay once said “The best way to predict the future is to invent it.”

Before the swine flu, real estate markets were subjected to unrelenting forecasts that simply never came to fruition – enter Professor Steve Keen (no doubt humming the words of “Climb every Mountain”) the King of property forecast bloopers. On November 28, 2008 Keen predicted zero interest rates within two years and a forty (40) per cent drop in house prices within five years (double the drop in the United States). Macquarie Bank interest rate strategist, Rory Robertson, declared that “Dr Keen’s gloomy predictions of an Australian housing market plunge had a one per cent chance of being right.” This then prompted Robertson to challenge Keen that the loser would wear a T-shirt saying “I was hopelessly wrong on home prices! Ask me how.” And make a 200km trek from Canberra to Mt Kosciusko. For the record Rory Robertson thus far, has been spot – on with his market predictions.

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Tim Mooney Photography – Manly beach back to Sydney CBD

timmooneyphotography.com
www.sydneywaterfronts.com

When the Reserve Bank of Australia (RBA) met this week, it was prediction time. What would it do with the official cash rate? It didn’t go to zero but remained (for the third month in a row) at three (3) per cent. Whilst the RBA has strong concerns with unemployment, inflation is the growing concern (as I predicted in last week’s edition). RBA governor, Glenn Stevens, said, “The Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed.”

The TD – Securities/Melbourne Institute inflation gauge rose 0.4 per cent in June, following an 0.3 per cent fall in May and no change in April. Annual inflation (measured by the gauge) identified that the rate in May was 1.5 per cent. The RBA’s target range is to contain inflation between 2 to 3 per cent. The inflation accelerants to watch will be petrol, food and household rents which are repeat offenders in the Australian economy.

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Figures released this week by The Australian Bureau of Statistics (ABS) show that, for the eighth month in a row, real estate buyers took out 2.2 per cent more home loans in May (up again from the 0.9 per cent April figures). It should also be noted, that first – home buyers increased from 28.6 percent in April, to 29.5 per cent in May. The Federal Government’s first – home owner’s grant is a concern (another prediction, another story and another day).

The one thing missing from our markets (until June) has been confidence so it came as little surprise to see consumer confidence surging in July to its highest level in eighteen months. The Westpac – Melbourne Institute index of consumer sentiment rose in the month to 109.4 points, seasonally adjusted. The index in July was up 38.5 per cent from a year ago, prompting Westpac Banking chief economist to announce “This is unquestionably a stunning result.” On the back of our $61, 238,200 sales last month, it would be reasonable to suggest that we are not witnessing predictions, rather market affirmations – with no conspiracy theories.

Of greater concern is the continuing decline in construction where house building contracted for seventeen (17) consecutive months in June. Detached home sales decreased by 9.9 per cent in NSW which is based on delayed projects and difficult credit conditions. Too hard for our elected politicians to fathom – even though they launched ‘Nation Building’. Simply put, you can’t put a plaque on a house although you can on a school or a hospital. It is abundantly clear that Ruddy Fantastic has stuffed this up and many are calling Nation Building ‘Plaque Building’ – ah egos at work!

One prediction I did make some time ago was that Google (the online bible) would enter the Australian property market and take on www.domain.com.au and www.realestate.com.au with a free service. Google launched Google Maps at 3.00 pm on Monday this week and the exclusive announcement can be read at www.business2.com.au I have uploaded the video Google release for your perusal or you can see for yourself by clicking on http://maps.google.com.au/

Richardson & Wrench Mosman & Neutral Bay (RWM) is ranked at number one on Google for Mosman real estate searches. I just love it when a plan comes together!

Fort Crumble (NSW government) has been active in the real estate market busily selling our police stations to off-set mismanagement and dwindling coffers. Nine police stations (including Mosman) and another 200 buildings and parcels of land, including the Sydney Fish Market, are now being listed and sold by Fort Crumble’s real estate agent (not RWM). Obviously our inept premier expects our police officers to work from home to keep overheads down.

The unemployment rate was announced this week with a moderate rise, to see 0.1 ppt to 5.8 per cent (prediction 5.9 per cent) NSW (6.5%), Victoria (6.0%), Qld (5.4%), WA (5.1%), SA (5.4%)and Tasmania (4.7%).

A prediction on NSW labor being re-elected? No hindsight required however, there is always the Hope Factor. Many subscribers would have seen television advertorials boasting contributions to a building and jobs creation programme for the state of NSW (another huge tax payer cost). The alternative is to give away our state assets simply because those involved were not intelligent enough to manage our economy in the first place.

It’s no wonder NSW leads Australia in bankruptcy when our very own elected government is staring down the barrel of a Part X agreement.

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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10.07.09Robert Simeon4 Comments »