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The ‘shock’ market was at it again this week as default fears spark $45b sell – off which clearly identifies how spooked the global financial markets are and what lies ahead. Despite an abundance of warnings, such extreme volatility is now a sign of the times while global leaders struggle to find a satisfactory anecdote for Europe to finally face the music. For the moment, let’s just call this ongoing saga The Rock Opera of Europe. In Australia this supports the argument why shares aren’t as safe as houses.

On the home front this week, Australian’s awoke to the headline that ‘Tsunami’ to hit Australian real estate. Forget the headline, this was a comedy of errors. “Australia’s love affair with property is about to turn sour as an ‘economic tsunami’ looks set to hit world markets, American economic forecaster Harry Dent says.” Dirty Harry touched – down in Australia last Sunday to guess what? Promote his book,The Great Crash Ahead – How to Prosper in the Debt Crisis of 2010 – 2012, although no offers yet of free steak knives should you decide to purchase the book – destined for the ‘discount bin’.

Must have been a full moon when Jeremy Grantham from the The Economist suggested that Australian housing is a terrible bubble that will pop, with prices falling as much as fifty per cent – the Australian property bubble can withstand greater adversity. Let’s look at the facts Sydney’s housing shortfall to double by 2014: Urban Taskforce.

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This week stupidity was obviously contagious housing shortage a myth, bears claim “Australia, where home prices are falling at the fastest rate in more than two years has a glut of properties and is set for a US – style crash, some experts say.” What they didn’t say is just exactly what differentiates an expert from – an idiot? On the flip side in Property Observer this week, Christopher Joye wrote the worse the world gets the better housing will. Property Observerwas on fire this week with talk of a property crash is unfounded and sensationalist: HIA’s Harley Dale. “Australian dwelling prices have, generally speaking, demonstrated what could be most accurately described as a controlled moderation since the middle part of 2010. For example, according to RP Data – Rismark (the most closely watched dwelling price series), the seasonally adjusted hedonic price series for capital city house values declined by 2.6 % year on year as of June 2011. Similarly, national “rest of state” house values fell by 2.5% year on year.” Then Christopher Joye followed up with housing prices at a signal junction “it is plausible that Australia’s currently soft housing market will emerge as a relative winner from any global fall – out, much as it did in 2007 – 08.”

Australian businesses turned sour in August, as global markets tumbled as business confidence sapped by global turmoil. Prompting global economy in danger zone: World Bank chief “Unless Europe, Japan, and the United States can also face up to responsibilities they will drag down not only themselves, but the global economy.” Again on the flip – side consumer sentiment for buying a house at a two – year high:Westpac a house as consumer confidence rebounds strongly in September.

Decades of wealth from boom as commodities exports forecast to hit $480 billion which is an economic transformation unparalleled in the nation’s history with its resources and commodities boom. Australia continues impressive trade run where it has posted a trade surplus in 15 of the past 16 months. Of course this will be detrimental to house prices – not!

One must also not forget that NSW to scrap full  first – home stamp duty concessions for existing homes from 2012 so watch the market run hard up to Christmas with buyers getting in before the changes from 1 January 2012. To see what effect this has on the market it will be interesting to watch the following numbers each week – especially apartment sales.

MOSMAN – 2088

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• Number of houses on the market last week – 115
• Number of houses on the market this week – 111
• Number of apartments on the market last week – 91
• Number of apartments on the market this week – 93

CREMORNE – 2090

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• Number of houses on the market last week – 14
• Number of houses on the market this week – 14
• Number of apartments on the market last week – 34
• Number of apartments on the market this week – 26

NEUTRAL BAY – 2089

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• Number of houses on the market last week – 13
• Number of houses on the market this week – 12
• Number of apartments on the market last week – 79
• Number of apartments on the market this week – 80

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

Julia Gillard’s Fort Fumble was at it again when it was revealed that Labor plans Future Fund withdrawal as it takes aim at budget surplus only to then read that the government denies plans to raid Future Fund. The only problem for Fort Fumble is that Finance Department head, David Tune, had revealed the government’s revenue estimates for 2012/13 included revenue from “the unexpected sale of assets from the Future Fund”, along with the disposal of Defence properties, housing and land. Watch this space – caught red handed one might suggest? The reporting of such information would explain why Fort Fumble announced this week an enquiry into Australia’s media?

Struggling with the truth would have nothing to do with it – or would it? Mining tax rate hits 41.5%: study revealing federal Treasury used an “unconventional” method in claiming the mining industry paid just 27 per cent tax during last year’s heated debate over the now defunct resources super profits tax (RSPT). Its replacement the resources tax could be in for a tough time looks like failing just like its predecessor.

Business failures jump 12% in June quarter compared to 4.1% in the previous quarter which is exactly what a strong Australian dollar will do to some industries.

So get in, buckle up and hold on, as by all accounts we are all in for an amazing ride and one we’ve never seen before!

We are proud to announce that at the Richardson & Wrench Annual Awards presentation last night,we were named number one office in NSW and number one nationally. We would like to thank everyone for their ongoing support.

Cheers ^__^

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16.09.11Robert Simeon8 Comments »

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There is no doubt that a large proportion of our housing market is delicately poised and many are pointing to an overpriced top –end.  I don’t subscribe to that theory and believe it runs much deeper, to what is called ‘human sentiment’.   The global financial crisis (GFC) has led to a re – evaluation of our lifestyles, especially when it comes to property. The GFC brought about an immediate end to Australia’s unprecedented eighteen year run of economic growth which in real terms meant that a large proportion of workers and business owners experienced income declines not seen for nearly two decades.

When we analyse our property market, we need to apply the strongest rule– of–thumb which is the Household Estimates of 2007 – 2008. The next Census of Population and Housing will be conducted on August 9, 2011. The current Household Estimates tells us that in Australia, 2,399,900 (30 per cent) households rent property. Those that own without a mortgage make up 2,679,200 (34 per cent) which leaves us with the market that banks are now fighting for – the 2,835,200 (36 per cent) who own with a mortgage.

Rates may hold for year: Reserve chief so then we see NAB’s exit plan triggers fresh lender mortgage war with rivals so happy days as consumers to win as Big Four banks declare war. Credit is an economy’s rocket fuel which has now been superseded in Australia as household savings outgrow spending. We need to dig deeper to find what’s behind the credit drought? “Much of the world is currently suffering a nasty hangover from explosive credit growth. And while we’ve so far escaped any scorching pain in Australia, credit growth has throttled back to near 20 year lows. After a 12 year credit binge Australians are now carrying more debt than ever. The First Home Buyer Grant encouraged the take up of mortgages and cheap credit financed consumer spending, from credit cards to margin loans.”

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“Since the financial crisis, our national savings rate has increased sharply. That’s what one would expect. Thrift usually follows excess, especially when a string of interest rate increases and higher food and energy prices reduce disposable income. A higher savings rate and the resulting lower credit growth are rational responses.”

Jonathan Chancellor from the Sydney Morning Herald wrote Sydney’s reality check – “there will be joy for some and tears for others in 2011.”  Mosman in 2011, has started off in lock–down mode with available properties well down on previous years. Records tumble but rise in listings will cool prices which is always an accurate assessment.

Our review of Richardson & Wrench Mosman & Neutral Bay’s (RWM) sales results for 2010, revealed   sixteen new street records in a challenging market. This week we set a new street record when contracts were exchanged for 42 Cowles Road Mosman.

Here at RWM we constantly challenge the markets with anecdotal evidence. For example, we combined sales data from Domain Property Data with the resources of RWM Property Research and listed below, are Mosman house sales from 1999 to 2005.  Footnote: pay particular attention to average and median growth as well as auction clearance rates.

1999 – Mosman House Sales to $5,000,000

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• Number of houses sold – 424
• Total Value – $522,523,578
• Median Price – $1,067,000
• Average Price – $1,235,280
• Highest Price – $6,400,000
• Auction Clearance Rate – 45 per cent
• House Sales to $999,999 – 185
• House Sales above $1,000,000 – 189
• House Sales above $2,000,000 – 39
• House Sales above $3,000,000 – 9
• House Sales above $4,000,000 – 2

RWM Research observations: Mosman has approximately 4,900 houses so 8.7% per cent of houses sold. House sales up to $999,999 were 374 which is approximately 88.5 per cent of total sales.

2000 – Mosman House Sales to $5,000,000

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• Number of houses sold – 332
• Total Value – $441,452,395
• Median Price – $1,155,000
• Average Price – $1,329,677
• Highest Price – $5,900,000
• Auction Clearance Rate – 51 per cent
• House Sales to $999,999 – 119
• House Sales above $1,000,000 – 137
• House Sales above $2,000,000 – 62
• House Sales above $3,000,000 – 11
• House Sales above $4,000,000 – 3

RWM Research observations: Mosman has approximately 4,900 houses so 6.6 per cent of houses sold. The auction clearance rate increased from 45 per cent to 51 per cent. House sales up to $999,999 were 256 which is approximately 77 per cent of total sales.

2001 – Mosman House Sales to $5,000,000

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• Number of houses sold – 399
• Total Value – $618,004,118
• Median Price – $1,300,000
• Average Price – $1,548,882
• Highest Price – $15,500,000 (RWM)
• Auction Clearance Rate – 54 per cent
• House Sales to $999,999 – 122
• House Sales above $1,000,000 – 161
• House Sales above $2,000,000 – 73
• House sales above $3,000,000 – 32
• House Sales above $4,000,000 – 11

RWM Research observations: Mosman has approximately 4,900 houses so 8.1 per cent of houses sold. House sales up to $999,999 were 283 which is approximately 71 per cent of total sales The auction clearance rate increased from 51 per cent to 54 per cent.

2002 – Mosman House Sales to $5,000,000

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• Number of houses sold – 346
• Total Value – $644,541,555
• Median Price – $1,652,500
• Average Price – $1,862,836
• Highest Price – $4,855,000
• Auction Clearance Rate – 54 per cent
• House Sales to $999,999 – 70
• House Sales above $1,000,000 – 127
• House Sales above $2,000,000 – 96
• House Sales above $3,000,000 – 36
• House Sales above $4,000,000 – 17

RWM Research observations: Mosman has approximately 4,900 houses so 7.00 per cent of houses sold. House sales up to $999,999 were 197 which is approximately 57 per cent of total sales. This figure was down from 71 per cent the previous year which is evidenced by increases in the median and average prices. Auction clearance rates remained at 54 per cent.

2003 – Mosman House Sales to $5,000,000

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• Number of houses sold – 334
• Total Value – $671,627,182
• Median Price – $1,699,500
• Average Price – $2,010,859
• Highest Price – $11,000,000
• Auction Clearance Rate – 40 per cent
• House Sales to $999,999 – 47
• House Sales above $1,000,000 – 139
• House Sales above $2,000,000 – 89
• House Sales above $3,000,000 – 44
• House Sales above $4,000,000 – 15

RWM Research observations: Mosman has approximately 4,900 houses so 6.8 per cent of houses sold. House sales up to $999,999 were 186 which is approximately 55 per cent of total sales. For the first time ever the average price broke $2,000,000. Auction clearance rates dropped from 54 per cent to 40 per cent.

2004 – Mosman House Sales to $5,000,000

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• Number of houses sold – 282
• Total Value – $522,988,257
• Median Price – $1,632,500
• Average Price – $1,854,568
• Highest Price – $11,000,000
• Auction Clearance Rate – 26 per cent
• House Sales to $999,999 – 42
• House Sales above $1,000,000 – 127
• House Sales above $2,000,000 – 68
• House Sales above $3,000,000 – 39
• House Sales above $4,000,000 – 6

RWM Research observations: Mosman has approximately 4,900 houses so 5.7 per cent of houses sold. House sales up to $999,999 were 169 which is approximately 60 per cent of total sales. The average price dropped below $2,000,000 and auction clearance rates dropped from 40 per cent to 26 per cent.

2005 – Mosman House Sales to $5,000,000

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• Number of houses sold – 278
• Total Value – $560,951,000
• Median Price – $1,842,500
• Average Price – $2,017,809
• Highest Price – $14,800,000
• Auction Clearance Rate – 36 per cent
• House Sales to $999,999 – 38
• House Sales above $1,000,000 – 115
• House Sales above $2,000,000 – 60
• House Sales above $3,000,000 – 52
• House Sales above $4,000,000 – 13

RWM Research observations: Mosman has approximately 4,900 houses so 5.6 per cent of houses sold. House sales to $999,999 were 153 which is approximately 60 per cent of sales. The average price was back up again over $2,000,000. Auction clearance rates increased from 26 per cent to 36 per cent.

In next week’s edition we will complete the house sales up to $5,000,000 and reveal the market movements from 2006 to 2010. Watch for the impact the GFC had on our markets. In 1999, sales up to $999,999 made up 88.5 per cent of total sales.  In 2005, they only made up 60 per cent of total sales and by 2010 had dropped to 28 per cent.

I will leave Forts Fumble and Crumble alone this week as the above cartoon says it all – Fort Crumble has had 16 years in the palace. It is not looking pretty for Premier Bambi – even the Nationals will outpoll Labor in the March election. Current polls have the Coalition holding 73 of the 93 seats, Nationals with 19 seats and Labor holding (at best) 14 seats. In all probability it will get worse between now and Execution Day. Oops! I mean Election Day.

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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18.02.11Robert Simeon2 Comments »

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Another fascinating week following the recent federal election. Our new politics takes on a toxic taste, the newly elected Fort Fumble is under attack and there will be plenty of casualties. Whilst treason within Fort Fumble can never be ruled out – Paul Kelly in The Australian wrote “Welcome to the new politics once inconceivable yet now on stunning display: the discredited Kristina Keneally NSW government, the ACTU and the Greens in a united troika against the Labor government of Julia Gillard.” Whatever the outcome, this will get ugly, especially when one throws in the broadband battle: PM appeals to opposition as bills reintroduced.

Wayne Swan ‘no’ to release of mining tax figures which defies a Senate order as the deal with big miners unravelling. Was there ever a deal? These are but a few issues which will impact seriously on the Australian economy. Such as mining tax ‘unravelling budget surplus’ – Abbott although it is fast resembling a mining and banking war as Labor’s besieged on two fronts.

Will Keneally burn Gillard? I don’t think so you broke our deal, Gillard tells Keneally so this hissy fit then became the “Battle of the Birds” – (finger salutes included.) Paul Kelly wrote “there are many morals from these events; the clearest is that the NSW government is radioactive in a political sense and will contaminate anything it touches.”

In The Australian Niki Savva wrote this brilliant piece Lead on reform or lose way – “Julia Gillard has failed to take charge and shape the national debate on key issues. More than 100 days in both jobs, Julia Gillard has failed to properly define herself as Prime Minister or as Labor leader.” Then to Premier Bambi (I will have to borrow that) – “If a state Premier as damaged and weakened as NSW’s Kristina Keneally feels emboldened enough to challenge Gillard on an issue involving unions, and one central to Gillard’s claim of success as a reformer, negotiator and administrator, then the Prime Minister is in real trouble.” Don’t forget the farmers are up in arms given their “rivers no longer run free.”

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Building industry faces skills shortfall as the booming mining industry is now moving our skilled workers away from building infrastructure as construction industry braced for upturn. The Australian Industry Group (Ai Group)/Australian Construction Association (ACA) construction outlook survey expects the value of construction work to rise by 5.9 per cent during 2010/11 and then 7.9 per cent in 2011/12. This follows just 1.5 per cent in 2009/12 which is led by iron ore and coal; commodity export prices have soared by 52 per cent in the past year to surpass the pre–global financial crisis. Australia’s jobless rate creates wage pressures, report says given skilled workers are headed off to make their fortunes, thanks to our mining boom.

Fast but not free is key to future crisis approach where there are similarities with the failed Fort Fumble home insulation bungle. “The coordinator general and the kitchen cabinet that made all decisions about stimulus spending got the speed they wanted: actually they got a kind of modern – day gold fever: 200 insulation installing firms mushroomed to 10,834 in less than a year and the budget for the program blew out by $400 million.” Australia appears to be digging plenty of mines without any foundations given house building activity hits 18 – month low. Australia has a labour market of just 12 million people – the mining industry is eating up the construction industry. Julia Gillard needs to immediately remove the GST from the residential construction industry and get licensed builders back building houses. Recently it was revealed that Australia has a shortage of approximately 200,000 houses and this will grow to 800,000 by 2020 which identifies glaring problems within the Australian building industry.

Much written, read and said about the condition of Australia’s housing markets, so we found this RP Data graph an interesting insight into the state of play. Here are the Top 5 suburbs around Australia for the year to July 2010. No need to guess which suburb leads NSW for total value of sales.

Mosman dropped to third in the apartment stakes although what is interesting, are the results for Manly and Dee Why. With just eight weeks left in the official selling season for 2010, a Melbourne Cup cash rate increase will certainly test many niche property markets (which we preview next week). Compelling viewing given Mosman stock levels for both apartments and houses are on the rise as the graph below shows.

Always something to write about in our industry although I could not believe my eyes when I read Minister moves to mandate NBN so even if you don’t want Fort Fumble’s national broadband network you will be charged (reportedly $300) to be connected to it. Of course, this will probably blow out to $500 plus by the time the trenches are dug.

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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22.10.10Robert Simeon6 Comments »

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Australian property markets make compelling viewing for letterbox voyeurs given we’ve never been better despite the crisis. According to the Australian Bureau of Statistics (ABS) we are healthier, wealthier and wiser and Australia, during the first half of the global financial crisis, was one of only three developed countries with finances and economies remaining positive. On the flip side, housing affordability and conditions continue to deteriorate based on the Measures of Progress report released by the ABS which plots social and economic changes every ten years across Australia. In the ten years to 2009, the homes that were affordable to low income earners, fell from 15 per cent to 7 per cent.

The Reserve Bank of Australia (RBA) again defied market expectations this week when it left the cash rate at 4.5 per cent for the fifth straight month. The letterbox voyeurs of doom and gloom were quick to regroup following the RBA rates surprise when they trumpeted focus shifts to November for rate rise. The RP Data – Rismark August home value indices revealed that Sydney has been one of only two capital cities to avoid any falls in value, recording a 0.2 per cent rise in house and unit values over the quarter (the other city was Canberra). Price trends put Sydney buyers in the driving seat “The improved value proposition in Sydney’s housing market is also helping to keep more residents from departing for other states. Based on the latest data from the ABS (to March 2010), the outflow of residents from NSW has not been this low for 15 years.” No doubting that this would have something to do with the forthcoming removal of its incompetent government – Fort Crumble.

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I love a debate. I read rates could pop house price bubble: economist Dean Baker who tipped the US housing market collapse says Australia’s high house prices are at risk of slumping if interest rates rise further. US banks still remain on a government-induced life support and Australian banks are posting healthy profits with net interest margins back at pre GFC levels. RBA officially given a role as stabiliser for financial system where its mandate has been broadened for the first time to take into account the stability of the nation’s financial system. From the end of October, the majority of the big banks will start reporting full year profits which, for the big four banks, are expected to report a combined record profit of more than $21 billion. US property markets were decimated when subprime hit. This was brought about by the banks going into liquidation and I fail to see any such similarities – no cigar for Dean Baker. The Sydney property market can’t and won’t collapse, given the first third of households rent, the second own with a mortgage and the final third, own with no mortgage.

Housing estimates from the ABS identify that at the last count (2007 – 2008) Australia had 7,914,300 homes, compared to US figures over the same period at 112,362,848. Hardly an intelligent summation given the stark differences – have I loved this housing debate!

As we have discussed previously in Virtual Realty News Mosman has approximately 4,900 houses where (for arguments sake) approximately 1,666 rent, 1,666 own with a mortgage and the other 1,666 own without a mortgage. Interest rate increases affect the 1,666 that have a mortgage and not the 3,222 who rent or own without a mortgage. After looking at 2007, 2008, 2009 and 2010 house sales in Mosman, I can confidently say that it would take a financial tsunami to see our property prices drop to the levels predicted by Dean Baker.

• Mosman house sales in 2007 – 414
• Mosman house sales in 2008 – 269
• Mosman house sales in 2009 – 322
• Mosman house sales in 2010 – 255

IMF sees risk in ‘mild overvaluation’ of Aussie house prices given it will stress–test Australia’s mortgage market. House prices in eight major cities rose by 18.4 per cent in the year to June, prompting some analysts to warn of a bubble. House building activity hits 18 – month low a direct result of builders on Fort Fumble/Princess Gillard’s playgrounds of gold. Why build with their money when they can build using Gillard’s ‘cash for tuckshop’ building contracts.

I noted whilst reading Macquarie Economics Research The Australian Insider – Outlook for the December quarter 2010, their observations pertaining to the above graphs.

• Stepping back from the state–based detail, it is also obvious that the housing market is in a vastly different position to that prevailing in 2006 – 07. Not only has housing finance fallen by 26% since September 2009, it is also 26 % below its average level over 2006 – 07 (a period when finance was fairly stable). This means that dwelling commencements could easily fall by over 20% over 2011.

Only the uninformed would suggest that Australia has a housing bubble, because it is very clear that we are suffering from an undersupply, not an oversupply. Our non – existent house bubble presents another excellent explanation which takes one back to very basic economics – supply V demand.

When you have a government funded Builders Revolution it’s no wonder the tools are down!

No doubt when they complete their government guaranteed building works (when they return from their respective overseas holiday jaunts) may we again see the cement being poured on construction sites.

As they say “when you’re on a good thing – stick to it” hence, the Builders Education Revolution.

For connoisseurs of outstanding Mosman waterfronts look no further than this sensational Sydney Harbour residence – click here.

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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8.10.10Robert Simeon2 Comments »

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

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

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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4.06.10Robert Simeon11 Comments »

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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  worry is, will Fort Fumble (Federal government) tax the living daylights out of businesses to pay down the Treasury’s projected budget deficit for 2009/10 of $57.7 billion? . Nobody denies the fact that Australia (like the rest of the World) required a stimulus package although in Australia there remains a strong school of thought that our economy was misdiagnosed and over-medicated. With the convalescing now over, we are  told that all markets (property included) are back to 2007 levels. What a recovery!  Annualised growth rate in November 2009 was 5.4 per cent, December 2009 up to 6.2 per cent which was 3.5 points above the long – term projections.

The Westpac – Melbourne Institute, leading index of economic activity, (they predict the future three to nine months ahead) suggests that our financial genie (not to be confused with Wayne Swan’s inflation genie) is predicting boom times ahead.  Thank goodness we offer a weekly edition, because just 365 days ago, (February 2009) we were  told by The Emperor (Kevin Rudd) that ‘this is the worst economic catastrophe since The Great Depression’. Elected politicians keep pointing to cash splashes and stimulus packages and I must admit that the Rudd approved bicycle track at The Spit has done wonders for  the Mosman economy!  A defining moment that delivered our economic recovery and hundreds of Australian municipalities share stories of such inspiration.

Chowder Bay, Clifton Gardens.  Well worth a visit and drop into Ripples on picturesque Sydney Harbour for a fine dining experience.  On the right hand side of our page we list links to some of Sydney’s finest eateries as well as other businesses too, for your perusal and enjoyment.

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The news just got worse (again) for The Emperor when a Senate enquiry revealed this week  an “alleged” gross waste of tax payer dollars (otherwise known as his stimulus) with the ineffective insulation of up to 400,000 homes under the national home insulation program. A study revealed that 30 to 40 per cent of work done was not compliant. Quite scary given that approximately one million homeowners have taken advantage of this stimulus programme. Loss of life has occurred as well as house fires that result directly from our very own version of No (know) Minister! Fort Fumble now has to allocate another fifty million taxpayer dollars  to fix the shoddy workmanship.

Now let’s wrap up the Neutral Bay house sales comparison for 2009 and 2008. For this week’s new subscribers, here is the Mosman and Cremorne sales data. It’s not exclusive.  All agents/agencies have access, but they don’t have a database or a newsletter.  For our competitors, technology is not a priority!  The Sydney Morning Herald last Saturday, revealed that its Domain property portals Top 10 searched for NSW suburbs on Domain in 2009.

• 1. Surry Hills 2,537,285
• 2. Mosman 2,291,860
• 3. Randwick 2,237,146
• 4. Darlinghurst 2,159,211
• 5. Paddington 2,030,416
• 6. Newtown 1,872,869
• 7. Chatswood 1,685,820
• 8. Marrickville 1,694,580
• 9. Bondi 1,682,834
• 10. Coogee 1,662,332

. When one adds up the Top 10 that is 19,854,353 online inspections for just ten suburbs alone – yet agents/agencies continue to place the Internet on ignore? The real reason is that when it comes to the Internet, the agents/agencies are the ones that have to pay for it – not vendors. When one observes the dominant agencies across Sydney they are the businesses that offer and present the strongest online relationships within their demographic real estate markets.

NEUTRAL BAY PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2009 to 31 DECEMBER 2009

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• Total number offered – 60 (Mosman 334)
• Total number of sales recorded – 60 (Mosman 303)
• Total value sold – $83,281,400 (Mosman $668,966,377)
• Public Auction – 13 properties to a total value of $19,462,000
• Private Treaty – 47 properties to a total value of $63,819,400
• Median price – $1,134,000 (Mosman $2,000,000)
• Average price – $1,388,023 (Mosman $2,397,728)
• Highest sale – $7,600,000 RWM (Mosman $13,500,000 RWM)

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NEUTRAL BAY PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2008 to 31 DECEMBER SOLD REPORT – (House and Semi only)

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• Total number offered – 67 (Mosman 360)
• Total number of sales recorded – 56 (Mosman 287)
• Total value sold – $93,561,000 (Mosman $774,865,612)
• Public Auction – 17 properties to a total value of $23,432,000
• Private Treaty – 39 properties to a total value of $70,129,000
• Median price – $1,216,000 (Mosman $2,275,000)
• Average price – $1,670,732 (Mosman $2,738,041)
• Highest sale – $4,650,000 (Mosman $14,700,000 RWM)

RP Data revealed this week that in 2009, the highest recorded number of first – home buyers on record plunged into the property market. A staggering 191,000 new entrants. This figure equates to 70,000 more first – home buyers jumping in before the grants finished. A 55 per cent increase!  This is a potential train wreck should the cash rate keep climbing. Only time will tell. America had sub -prime and Australia (potentially) has grant -prime.

According to the Reserve Bank of Australia (RBA) consumer confidence eased in February (although it was 36 per cent higher than a year ago) with businesses and households  throwing caution to the wind. The RBA said that business loans declined seven per cent in 2009 which is the lowest recorded since the recession of the early nineties.

If you think The Emperor has had a tough couple of weeks, the Bungle State – Fort Crumble (NSW government) continues to show its complete incompetence. The $5.3 billion CBD Metro is looking as shaky as a poll and already aligned with the Cross City Tunnel and Lane Cove Tunnel – both broke just like Fort Crumble – Metro headed for disaster:  Opposition.

Finally – two comments grabbed my attention this week.

The first – The Emperor, announcing a $10 million boost to meet a Labor commitment to halve the nation’s homeless rates by 2020.  A fantastic cause but what if it was  $60 million?  Unfortunately, the other  $50 million has to be spent on the insulation stuff – up. Well it is an election year  and we remember in 1987, Bob Hawke launching  his election campaign by promising that no child would be living in poverty within three years. The National Youth Commission (NYC) identified the number of  homeless 12 – 18 year olds fell from 26,060 in 2001 to 21,940 in 2006;  Now, the situation is worsening due to soaring home prices. Housing affordability fell by 140 per cent between 1986 and 2006 where in 1986, 3.6 times average income was needed to buy a house;  by 2006, the purchase price required 7.0 years pay. I keep tagging Kevin Rudd in Virtual Realty News in the hope that when he reads the edition he will post on the blog. I know that his office reads it -  just a tad slow on blogging!

The second is Fort Crumble’s NSW Planning Minister, Tony Kelly, who obviously has had so many portfolios (and Premiers) he has lost the plot.  No pun intended!  More land won’t mean more houses: Kelly. Given that Fort Crumble can’t roll out any transport infrastructure this is what he said “prospective buyers should blame private sector inaction, and the fact most people want to live close to Sydney’s centre and not its rural outskirts.” Maybe Tony, that perception is aligned to the fact that your very own government struggles to build a sand castle let alone a transport model that works or arrives on time for that matter. Not to forget the taxes that developers are forced to pay to obtain a Development Approval/Building Approval.

See you next week to upset somebody else!

Cheers ^__^

This week’s open for inspections http://www.rwm.com.au/sales-list/open_times_sales/

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

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19.02.10Robert Simeon6 Comments »

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

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

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

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

www.timmooneyphotography.com

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

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

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

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

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

Fort Fumble – Federal Government

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

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

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

Fort Crumble – NSW Government

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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11.12.09Robert Simeon10 Comments »

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An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.

Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”

Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.

www.timmooneyphotography.com

Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”

“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.

Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian

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Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

• “The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”

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Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.

RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.

The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).

Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)

Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.

Cheers ^__^

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

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4.12.09Robert Simeon1 Comment »

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

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

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

www.timmooneyphotography.com

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

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

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

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

“Nothing could be further from the truth.”

“It is time for a reality check.”

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

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

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

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

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

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

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

Clip of the Week

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

Inspiration personified – Gavin’s Bridge Climb

Cheers

^__^

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

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20.11.09Robert Simeon4 Comments »

My curiosity was stirred last week by M Jackson, who said that, (subject to approval) the Australian Securities and Investment Commission (ASIC) may allow you to have a punt on our property markets. Described as a world first, ASX punters can take out a derivative contract based on Rismark/RP Data market indices which are in turn quoted daily to the share market. I did laugh when I read ‘daily’ – try months after the event if real estate agents decide to block data sales access.

Back to M Jackson’s comment on last week’s blog – “Contrary to popular myth, the water in Australian plugholes goes down the same way as everywhere else. So, too, the housing market. Figures from the Bureau of Statistics (ABS) on Monday showed that prices in eight capital cities were down by a record 2.2 per cent between December and March. The fourth quarterly fall in a row brought the year – on – year rate of decline to almost 7 per cent.”

Rismark/RP Data reported national dwelling values increased by 1.52 per cent for March 2009. Then the ABS reports a 2.2 per cent decline. Somebody got it wrong – but hey, take a punt?

Tim Mooney Photography

www.timmooneyphotography.com

Back to M Jackson’s comment – “Gross rentals yields of about 3 per cent, meanwhile, are near all – time lows; if houses were stocks, they’d be trading on wobbly price/earnings multiples of more than 30 times. Unemployment data, to be released on Thursday, may show a rise to almost 6 per cent, the highest level in six years. Job ads fell again in April. Mortgage flows are sputtering. The props are falling away. Currently the SFE is constructing a tradeable index on Australian housing, which should be completed by and ready by August 2009. I can’t wait to go short. If there was one specific to the Lower North Shore in Sydney. I would have double the size positions.”

I thank M Jackson for his input and look forward to reading more responses to our blogs.

The Global Financial Crisis was brought about by global banking institutions investing in (probable and possible) markets based on high debt ratios – otherwise known as gambling. The process for aggregating property data has always been flawed – highlighted by the simple fact that the ABS and Rismark/RP Data constantly report conflicting property data positions. Definitely not an each – way bet!

Consider the property market reality, if ASIC approves the trade derivative contracts and the Australian real estate agencies automatically cease providing all sales data to all the aggregators? It would then be one, two, three, four, five and six months until such data became available. Just who would punt on such irregularities? The data aggregators don’t act in harmony with real estate agencies in Australia where there is not the slightest possibility of any change – anytime soon. I would predict (and support) a total real estate data black–out.

After all, we act for our vendors (first and foremost) and are under absolutely no obligation to report sales data that aggregator’s then on-sell to institutions. One only has to look at the banning of shorting banking stocks to observe that this is conducive to assisting economic growth in a recession. The real estate industry is the largest employer in Australia where our economy is only in a sound position because our banking system is world’s best practise and world’s best profits too.

Simply put: real estate agencies would cease reporting sales and rental data and agents would then lengthen the odds quite considerably. If such a market was created where (just say) you could bet on the Mosman market – I would hope that collectively, Mosman agencies would turn such a proposal into a blank canvas with data support.

From “bricks and mortar” to “punt and hunt” derivative markets! The only people that I can see making money from these proposed markets are actually the real estate agents. Is this Australia’s financial version of subprime – a buy position without actually owning a house? Short on being exact and very long on accuracy.

I thought Malcolm Turnbull’s Budget response to be lame (to say the least). However, with the possibility of a double dissolution around the corner, it makes sense to keep ones “powder dry”. As one subscriber said this week, “depending upon the government for your future financial security, is like hiring an accountant who is a compulsive gambler!”

Ruddy Fantastic and Wayne Swans’ missing word disorder’ may have been cured this week when it was revealed on www.smh.com.au “It’s been suggested that Kevin Rudd would not utter the phrase “$300 billion” for fears his words will be used in coalition advertisements during the next election campaign.” So much for “sticks and stones may break my bones but words will never hurt me.” Then “Mr Rudd said Australia’s debt would peak at “around 200, or gross debt at about 300” in 2013 – 14. Now journalists are on to this political spin game and will play this to their hearts’ content. Very petty, although Australia’s deficit needs much more than petty cash as we will continually be reminded for many years to come.

Australia’s housing prices are at their most affordable level in seven years and in the March quarter the Housing Industry Association – Commonwealth Bank First Home Buyer Affordability Index recorded a 14.6 per cent increase. The average home loan fell by 11 per cent from $2056 a month to $1831 last year.

Despite confidence levels still being down, car sales in April were up on the March figures. Just as interesting is that in Mosman on www.domain.com.au there are only 118 houses/semis (I removed double entries, apartments, and out of area listings from the listed 135) available for sale which is an all time low in available stock levels. This will only get tighter over winter given that purchasers are now engaging with vendors.

This week’s video is a brilliant story about the annual Balmoral Burn Race Day which happens next Sunday on May 31. The Balmoral Burn Sponsors’ Dinner takes place on Friday May 29, 2009 so watch the video for more details. Keeping in the theme, this week’s aerial photograph by Tim Mooney Photography, highlights the best beach on our planet and in the background Awaba Street – the Balmoral Burn tread mill. Congratulations to Phil and Julie Kearns who started this brilliant fundraising event back in 2001. Given that I have won the race three times now, I am no longer eligible to compete.

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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22.05.09Robert Simeon8 Comments »