.

Rupert Murdoch once said, “The internet has been the most fundamental change during my lifetime and for hundreds of years”. Someone the other day said, “It’s the biggest thing since Guttenberg” and then someone else said, “No, it’s the biggest thing since the invention of writing.” If that is the case (and I certainly don’t doubt it) it illustrates the numbers in Australian businesses who have trouble reading!

From my perspective, consumers use the Internet to see what’s happening, whether it be social media, online newspapers, online shopping, real estate etc – etc. The secret is growing the audience, otherwise known as Unique Visitors (UVs), which has become a huge problem within Australian businesses as they struggle to formulate effective and successful online strategies. Just look at our retail markets which are being decimated as they struggle to compete with the world’s biggest shopping centre – online! In the last week, David Jones, Coles, Harvey Norman, Woolworths fight for flexible opening hours to compete with internet trade which is an absolute no brainer given Australian shoppers ripped off by retailer mark – ups – Choice. Even Myer tries its luck with using Facebook, Youtube in social media marketing which is quite amazing and retailers must now move to online and not ‘offline’. Although retail sales beat forecasts in April however the simple reality is that Sydney, Melbourne and Brisbane remain in the top 10 most expensive cities in the world as department stores struggle to set sale.

The cost of living in Australia is skyrocketing as is the Aussie dollar, so consumers are cashing in on these new online markets. Consumers in retail are now negotiating online, much like ‘ducks to water’. A click not a salesman’s pitch comes with an online review. How times change – just a decade ago, the Australian dollar was struggling at 47.75 US cents. Today Australian retail is finding it almost impossible to compete, given the Australian dollar is sitting now at around 108.00 US cents.

BUY PRINT

The changing face of online advertising provides a fascinating critique of where businesses need to be: make no mistake, this is not a false alarm. The conundrum facing businesses is, that what is happening today, was never contemplated during those hazy university days. By 2015, what we do today will look like a 1980’s re-run of Homicide.

VIDEO ADVERTISING

 

Google predicts that by 2015, 50 per cent of ad campaigns will include video ads – Australians are now watching almost 1 billion videos online each month. Video based advertising grew by 83 per cent year on year in Australia, total video spend by advertisers equated to 5.3 per cent ($33.4m). This demonstrates just where this industry will be, in four short years.

MOBILE ADVERTISING

 

By 2015, it is expected that mobile internet will surpass desktop internet usage – global mobile advertising spent, will total $3.3 billion in 2011 and expected to reach $20.6 billion by 2015.

Fairfax Media Chief Executive, Greg Hywood, this week announced era of free content is over says Fairfax chief therefore charging users to access parts of the Fairfax website.  Good luck Greg!  I respectfully suggest that you look at your point of difference over your competitors? I can’t think of one, given the current trend is for leading print journalists to move to online models.

Commonwealth Bank still paying the price for November rate stinger a consumer rebuke can cost a business millions in lost revenues (better known as customer comfort).  The Fairfax move could easily result in consumer dissatisfaction. After all the ABC website will always be free. The jury is still out – however the consumer sentencing could very well be terminal.  Which takes me to that other sales pitch.

The dumbest sales pitch of the week would go to Cate Blanchett who, when launching her Carbon Tax campaign said, ‘Say Yes”.  Cate – Australians have no say in the carbon tax and why would you suggest we say yes, when the carbon price is yet to be announced? Even stranger – Australia’s greatest political lie was Julia Gillard’s announcement that “there will be no carbon tax under any government that I lead”.  We don’t get a say with the Carbon Tax but we do have opinion polls.

Source: The Australian- order Bill Leak’s print

 

The March quarter Gross Domestic Product (GDP) was released this week – Economy suffers biggest quarterly contraction in 20 years with a 1.2 per cent decline recorded.  Floods and cyclones severely impacted exports. Whilst many are expecting a positive mining return it should be noted that eight of the nineteen industry sectors contracted in the March quarter. A recession? It’s technically possible “With housing finance falling, retail struggling as consumers reduce their spending and move towards foreign online retail for their purchases, and business credit 1.1 per cent lower than a year ago, it won’t be an easy ride. It will also make Wayne Swan’s budget estimates look increasingly rubbery.”

This brings me to the real estate industry which reminds me of the retail industry – both have no idea about using technology and modern age marketing strategies. Consumers demand facts that are exacting for their very own market analysis. When real estate markets start declining there is an overwhelming tendency by real estate agents to hide and not face the realities of the day.

Real estate agents absolutely hate these graphs as they paint a negative marketing positioning. I happen to love them, because we have a weekly blog and that allows us to defend our real estate markets. Like the GDP figures, real estate markets need to be assessed on a Quarter by Quarter basis too. So let’s look at the Mosman market (data is still not complete, with many sale prices yet to be recorded.) We will compare the Mosman March Quarter 2010 with the March Quarter 2011.

Source: Domain Property Data

MOSMAN HOUSE SALES MARCH QUARTER 2010

• Total Number Offered – 105
• Private Treaty – 75
• Public Auction – 16
• Total Sales – 91
• Total Value Sold – $230,950,500
• Average Price – $2,685,470

MOSMAN HOUSE SALES MARCH QUARTER 2011

• Total Number Offered – 84
• Private Treaty – 47
• Public Auction – 14
• Total Sales – 61
• Total Value Sold – $107,071,000
• Average Price – $2,817,657

RWM RESEARCH – Another 28 sold properties are still to have their sale prices recorded so the Total Value Sold will increase significantly from the current figure of $107,071,000. The Average Price for a Mosman house in the March Quarter 2010 was $2,685,470.  In the March Quarter 2011 it increased to $2,817,657 with a strong possibility that when the remaining sales are recorded it will go higher. In the March quarter 2009 the average price was $2,653,061, 2008 $3,093,770, 2007 $2,617,332, 2006 $2,303,107 and 2005 $2,296,323.

There are approximately 4,900 houses in Mosman – so here are this week’s statistics for properties currently for sale in Mosman, Cremorne and Neutral Bay.

MOSMAN – 2088

• Number of houses on the market last week – 118
• Number of houses on the market this week – 118
• Number of apartments on the market last week – 96
• Number of apartments on the market this week – 96

CREMORNE – 2090

• Number of houses on the market last week – 18
• Number of houses on the market this week – 17
• Number of apartments on the market last week – 36
• Number of apartments on the market this week – 37

NEUTRAL BAY – 2089

• Number of houses on the market last week – 12
• Number of houses on the market this week – 13
• Number of apartments on the market last week – 58
• Number of apartments on the market this week – 66

For those subscribers who absolutely love statistics, of the 4,900 houses in Mosman,  just 118 are on the market this week. That is just 2.40 per cent!  When the Mosman house market is trading at full speed, there are around 275 houses on the market which represents 5.61 per cent. No other real estate agency in Mosman follows the Mosman market closer than Richardson & Wrench Mosman & Neutral Bay (RWM).

Without a doubt, the worst and most embarrassing property statistic that emerged this week was that the rental vacancy rate for Sydney suburbs within a 10 – kilometre radius of the CBD, fell 0.2 per cent to 0.9 per cent in April, REINSW data.  A healthy rental market should have a vacancy rate somewhere in the range of 2.5 per cent to 3.00 per cent. In my eleven years of writing Virtual Realty News this is the lowest recorded vacancy rate that Sydney has ever seen and a bloody disgrace – when rents will continue to sky rocket.

Bear in mind that one in four to retire without owning home: study yet Julia Gillard’s hopeless Fort Fumble wants to spend billions on a NBN scheme and a Carbon Tax. Throw in rising cost of living expenses and still Wayne Swan tells us that the Australian economy is tracking well?

There is also huge vacancy rate in Canberra and for politicians, it’s actually between their ears.

Alas, the Death of Salesman in 2011? If you sell, using the latest technologies, consumers will buy. If you don’t, your market will be significantly diminished.  Should the June GDP results decline again, it means nobody is buying Australia or the government for that matter. We all know nobody ever buys taxes!

Jonathan Chancellor files his final ‘Title Deeds’ tomorrow after 26 years of writing Australia’s most iconic real estate read. Jonathan still remains tight – lipped about his move which is to online publishing and all I can say is – Crikey!! Margie Blok, who is no stranger to “Title Deeds”, will be taking over letter – box patrol.

Cheers ^__^

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

Follow Me on Twitter

3.06.11Robert Simeon4 Comments »

I well remember (some years ago) attending a real estate conference where the message was “success leaves clues”. Just one week ago we heard that Australia had avoided a technical recession. The same can be said for some real estate agencies that are individually turning market sentiment around with respective niche markets (suburbs) now moving from negative price expectations to positive sales results.

A common theme in business is judgement by individual results that resonate within the public gallery of observation and real estate markets worldwide have a massive number of adjudicators, both negative and positive.

One month ago I wrote, that in our opinion, the Mosman market had bottomed. Today, this coincides with another problem that highlights the shortage of new properties.

Tim Mooney Photography – Taronga Zoo, Mosman

www.timmooneyphotography.com

For those real estate addicts there are always interesting blogs concerning the Australian real estate industry on www.business2.com.au. There are plenty of inside real estate commentaries and debates are often heated – well worth a subscription and it’s free!

In the 2009 Mosman market (thus far), distressed vendor volumes have not eventuated, despite ongoing critical evaluations from many in the public gallery. The banking fraternity has now dismissed speculation (and expectations for that matter) that this financial crisis was a storm that simply could not weathered. How wrong was that theory?

With the passage of time, we are now starting to see our property markets stabilise and indentify upward price growth.

We publish every sale we execute http://www.rwm.com.au/sales-list/sold_listing/. Others ‘invent’ sales and make media announcements with no evidence to support such claims. Hey Presto or Pinocchio’s property announcements? Without clarification such claims remain on the nose!

Our subscriber sales climbed this week to $876,114,019 (up $17,020,020 from last week). Over the past two weeks, we have executed $27,320,009 in sales to subscribers of Virtual Realty News only. We don’t include our other sales where vendors/purchasers are not subscribers – see our recent sales pages.

It would be reckless in our opinion, for real estate agents in Mosman to suggest to vendors that prices will only get lower. Rather be on the market than just in it and for the record, RWM has transacted the highest volume of Mosman house sales in 2009 – more than any other local real estate agency.

What many forget is the simple market philosophy of meet and greet. As a vendor, you can’t greet the market if one refuses to meet it. Our recent sales successes have evolved because we found the competition instead of blaming the dark cloud of the Global Financial Recession.

This analogy also applies to advertising where ‘online’ in 2009 is the peak performer. Print media, formerly a print meat market, has lost vendor appeal. It now has to compete with the ever evolving online markets where interactive social networking is the preferred option of consumers.

They say in rugby circles “use it or lose it” and the best advice I can offer to print publications is, “if you can’t beat ‘em – join ‘em”. There is still a vital role for print to play in real estate. I believe however, that the answer is classified advertising used as a directory to point consumers to more advanced and informative online presentations.

Rupert Murdoch announced this week that he believes that within a decade (I think three – five years) that the majority of newspapers will be delivered electronically. Mr Murdoch said, “If you’ve got a newspaper with a great name and great reputation, and you are trusted, the people in that community are going to need access to your source of news.”Mr Murdoch said, “This can all be served digitally and much more cheaply than it is now in a newspaper.” In an average week RWM would send up to 100,000 (sales and rentals) emails to clients on our database.

The Westpac – Melbourne Institute index of consumer sentiment rose 12.7 per cent to 100.1 points in June as a result of the strong economic growth figures recorded in the March quarter 2009. In May, the index recorded 88.8 points so a recorded index above 100 points has happened for the first time in seventeen months. As the mature markets rebound, a large proportion of this growth can be attributed to first – home buyers who could be called ‘the crash test babies’.

There is a clear message in the following graph which identities that the average first-home loan in NSW has increased by more than $50,000 (market competition). In just over a year, the average loan has increased to $300,000, thanks to record low interest rates and government hand-outs. The cheapest home loan currently available is with the Commonwealth Bank (CBA) at 5.64 per cent. The long – term cost of funding is increasing, which explains why (since January 2008) the CBA has held on to 0.82 per cent of net official Reserve Bank of Australia cash rate reductions.

In April 2009, home loans to first – home buyers reached a 14 month high as the dash for cash handouts from Federal and State Governments reached fever-pitch. The numbers taking out first time home loans jumped to 28 per cent in April – the highest share to first home buyers since the Australian Bureau of Statistics commenced recording in 1991.

Overall, home loan approvals have risen consecutively for the last seven months. Oh dear…. artificially inseminating property markets with the probability of an early election will equate to carnage for enthusiastic and naive property market debutants.

Ross Greenwood wrote a brilliant article on Money News. “Right now the Federal Government is at pains to tell everyone – including us the mug – punters to the International Monetary Fund that it will not exceed its own, self – imposed, borrowing limits. How much? $200 billion. And here’s a worry. If you work in a bank’s money market operation; or if you are a politician; the millions turn into billions and it rolls off the tip of the tongue a bit too easily.

But every dollar that is borrowed, some time, has to be repaid. By you, by me and by the rest of the country.

Just after 5 o’clock tonight I did a bit of maths for Jason Morrison. But it’s so staggering its worth repeating now. First though … here’s what Chairman Rudd has been saying about – what he calls – these temporary borrowings. Remember those words … temporary deficit … but the total Government debt could end up around $200 billion.

So here’s a very basic calculation … I used a home loan calculator to work it out … it’s that simple.
$200 billion is $200 million. The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of twenty years.

Now here’s where it gets scary … really scary.

The repayments on $200 billion come to more than one and a quarter billion dollars – every month – for 20 years. It works out we – as taxpayers – will be repaying $15.4 billion in interest and principal every year … $733 for every man woman and child – every year.

The total interest bill over the 20 years is – get this – $108 billion.

And remember, this is a Government that just 18 months ago had NO debt … NO debt. In fact it had enough money to create the Future Fund to pay the future liabilities of public servants superannuation … and it had enough to stick $20 billion into the Building Australia Fund last year …” Oh dear …

The Australian Bureau of Statistics reported this week, that unemployment in Australia was up to 5.7 per cent. NSW lead the country in May, with 6.4 per cent. Of greatest concern is that with first home buyers, Ruddy Fantastic has been shaking his sauce bottle for an election party of mammoth proportions that will see heads spinning with an almighty hangover. Much like Nation Building which is being watched closely – with interest!

Then again, why do people find interest on debt interesting?

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/

Follow Me on Twitter

12.06.09Robert Simeon4 Comments »