.
Forget the spin and electoral rhetoric – Australia had just one quarter of negative growth yet in the wash – up many businesses did very well from the (apparently) worst global financial crisis (GFC) since the Great Depression. Danny John from the Sydney Morning Herald wrote “What crisis? Westpac gains ground from the GFC “A close study of Westpac’s annual financial result shows just how much the country’s second – biggest bank has benefited from the gains in revenue – and therefore market share – which all four of the majors have enjoyed in the wake of the global financial crisis.” No doubt shareholders will be happy with this most taxing banking stimulus!

That other stimulus paints an entirely new picture IMF praises handling of financial crisis when Peter Martin from the Sydney Morning Herald wrote “The International Monetary Fund has singled out Australia as one of the best managed economies, declaring that only Denmark, Korea, Norway, Australia and Sweden among advanced economies will require little or no medium – term adjustment to keep government debt at safe levels”. Now that may be fine however, Fort Fumble (Federal government) has some amazing housekeeping to balance both past and present where it will require some pretty amazing creative accountancy to balance its books. You can read Fort Fumble’s very own accountancy plan MYOB – (May You Obey Bureaucrats) here.

Tim Mooney Photography captures Cammeray, Tunks Park and Northbridge Golf Course

www.timmooneyphotography.com

Still on creative accounting, the award would have to go to our very own Nathan Rees who presides over Fort Crumble. This week he approved a three per cent pay rise for all NSW MP’s making himself the highest paid in Australia after The Emperor – Kevin Rudd. Now before we jump to conclusions both are battling enormous budget deficits so that in itself highlights the pressure they currently find themselves in.

The Sunday Telegraph revealed “Nathan Rees’ master plan to convince NSW to give him one more term. “Nathan Rees needs cash – and plenty of it – to convince fed – up voters to give Labor one more chance. Linda Silimalis reported “Embattled NSW Premier Nathan Rees is pleading with Kevin Rudd to help fund a $10 billion – plus pre – election spending spree to save his government.” Reads more like a last rites request although many would agree that from a business growth analogy, NSW passed away a few years ago and remains the highest taxing state with the least to show in terms of infrastructure.

As we all know, everything requires a plan although it would appear that a few requiring that stimulus are looking rather sick after construction on a Fort Fumble rail project was shut down in Sydney due to a financial blow–out, allegedly caused by poor planning. Our very own Minister for Infrastructure and Transport, Anthony Albanese, said earlier this year, that this project to take freight trains off the Sydney passenger rail network would be completed by early 2010 (now on hold indefinitely). Note this is a Fort Fumble initiative as against another Fort Crumble ongoing malfunction.

For me, another great read of the week was the transcript from Stateline NSW – when Quentin Dempster quizzed Kevin Rudd and Nathan Rees – Discredited

Later in the week, The Daily Telegraph ran the story – Developer lobbies for Della Bosca (Bonka) to become premier. The country’s biggest property developer Harry Triguboff is privately lobbying Labor Party officials to support John Della Bosca’s bid to become NSW premier. You can draw your own conclusions on that although it is interesting to see a property developer interested in re-building Fort Crumble – (I will get to that shortly) as trigger – happy. Makes plenty of sense when the NSW government has next to no idea about building infrastructure. After all it is actually broke!

The Melbourne Cup rate increase (whilst widely tipped) had little effect on the punters and a record $95.600 million was bet on race day. The Emperor keeps telling us that we need his stimulus yet Australia is the only country raising its cash rate so who is actually punting?

Macquarie Economics Research – How high will rates go? They lead the tipping competition on our interest rate predictions? “The similarity between the October and November statements suggests that the Reserve Bank of Australia (RBA) game plan remains unchanged. This means that the first stage of tightening will be out to get interest rates back towards a neutral level – which we think this is now 4 1/2 %“. That means another 100 basis point increases although it should be noted that the RBA has never before increased the cash rate three months in a row.

Robert Gottliebsen wrote on Business Spectator  Rate rises may backfire “Tomorrow’s Melbourne Cup deliberations by the Reserve Bank board present issues far more complex than most commentators are canvassing.” Enter Harry Triguboff again backed by the Macquarie Bank graph (above). “The Reserve Bank, its hidden agenda is that it is deeply concerned that the recent sharp rise in dwelling prices and the bank fears that a new bout of housing affordability issues and an eventual price bubble is looming as Australia’s housing prices move outside world trends. The rising prices move outside world trends. The rising dwelling prices are pushing the central bank towards lifting interest rates more sharply, despite Treasury caution.”

“Then enter Harry Triguboff – the largest owner and builder of apartments in Sydney and a major force in Queensland.”

“Understandably many discount Triguboff’s conclusions because he clearly has an axe to grind. But over the years I have found that the base trends that Triguboff isolates are right nine times out of 10, but his remedies are uncomfortable. When Sydney was booming he said the city was dying, but then declared it would not die because eventually the politicians and local councils would start making sensible decisions. It’s taken eight years but they are now listening to him.”

“Triguboff points out that for the last five years the construction of Australian housing has been half the demand created by rising population, so a huge backlog has developed.”

“Triguboff now says: “If the Reserve Bank insists on raising interest rates in the hope of suppressing prices then they must understand that they will in turn suppress construction.”

“Banks are still very cautious and will insist on decent margins of profit, otherwise they will not advance loans to developers. I know that the Reserve Bank does not want to do it, but they have to make up their minds. Interest rates should not rise until building activity increase significantly. That is the true reasons for raising interest rates – stop oversupply. But all the evidence and rents and prices point to undersupply for the foreseeable future.”

“What Triguboff is highlighting is that the dramatic rises in Australia’s population complicate the interest rate argument. The Reserve Bank will not halt interest rates because of the Triguboff warning, but they need to understand that their current decision making process may create the opposite of what they expect in long – term dwelling prices.”

This should be a cornerstone point with the Ken Henry Review into Australia’s taxation report which is due on Christmas Eve.

On a lighter note – towel surfing was introduced to Australia last Friday when over 200 people on Bondi Beach joined in a synchronous dance to the music of local resident Ben Lee. I wonder when it will come to Balmoral Beach or possibly an open for inspection. (Turn up the volume).

Our property markets need to start dancing to the right tune – the RBA is obviously playing the wrong music as the dance floor is empty.

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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6.11.09Robert Simeon2 Comments »

Consumer spending grew 0.6 per cent in the March quarter and the lucky country avoided technical recession. Depending on your political flavour, there was lots of political back slapping and back stabbing but more importantly, credit resonated through markets. The ASX 200 soared through 4,000 identifying five consecutive trading days above $5 billion (seven month high) – it was good news week for financial and property markets.

Fort Crumble (NSW government) had another negative quarter (0.2 per cent) and is technically in recession although ‘Premier Please’ remains in denial because the figure excluded exports. I am now focussing on ways to export a politician!

In business, you have to reach your Key Performance Indicators (KPI’s) or it’s simply time to go. Surely the same ethos must now apply to elected politicians. There is no better example than what is happening at Fort Crumble, as the Sydney Morning Herald reported earlier week – “NSW burden drags nation deeper into strife. Business is calling for radical intervention to stop the former premier state’s decline, reports Jessica Irvine, Economics Editor.

Tim Mooney Photography

www.timmooneyphotography.com

The decade-long slide by NSW into economic oblivion, if not arrested, may stymie the Rudd Government’s attempts to kick start the national economy out of recession.

The once “premier state” has been going backwards, compared to other states since the Sydney Olympics, on key indicators of economic health including growth, business investment, jobs, home building, wages a Herald analysis of official figures has found.” I have put the main points raised in the article in point form.

• NSW now contributes less than 32 per cent of the country’s economic production, down from 34.5 per cent just after the Games. An exodus of people interstate has also led NSW’s population share to shrink by 1 percentage point to 32.5 per cent.
• Even more remarkable has been the slump in NSW’s share of new business investment and new home building activity. Of every dollar businesses spend investing in new equipment and buildings, NSW accounts for just 23 cents, down from 35 cents in late 2000.
• And despite being home to one-third of Australia’s population, only 15 per cent of all new home-building takes place in NSW. The state approved just 1558 new homes in March, behind Victoria (4023) and Queensland (2052).
• NSW’s jobless rate remains consistently one of the highest in the country and the traditional wage premium NSW workers enjoyed over other states has all but evaporated. In late 2005 NSW employees earned $3500 more a year than the national average. Now it is just $500.
• Of $8.5 billion in transport spending announced in the federal budget on May 12, Sydney received just $91 million for a study on the West Metro, compared to $3.2 billion for a Melbourne rail project”.

Ouch! Brilliant investigative reporting. Now imagine if employment contracts were based on KPI’s. The vast majority of those in NSW government would be unemployed. Simply put: no longer can they remain a protected species especially when the state’s Budget deficit is announced on June 16. Fort Crumble is suggesting $1 – $2 billion some economists are already suggesting a massive $6-$8 billion deficit.

Should this be the case, NSW has then moved from critical to life–support where again, the once “premier state” is trading insolvent with a business plan outlined on the back of a postage stamp.

With Fort Crumble in a “state of shock” following Ruddy Fantastic’s Nation Building snub – it was somewhat ironic that it leaked (prior to Budget night) its approval of major road projects totalling $4.4 billion. For obvious reasons the approvals only apply to Labor seats because, after all, it is all about re-election.

Key Performance Indicators in NSW have been replaced by Key Political Intervention where a politician earns more in government than in opposition. Cash for votes are alive and well in NSW politics – although around the corner where Struggle Street meets at the intersection of Rage Road, our esteemed Premier, ‘Nathan Please’ has a problem with his unions. A bummer for Treasury as the unions flatly rejected a suggested freeze of the state’s public sector wages – teachers, nurses and police – better known as a Key People Indicator.

The same can’t be said for Ruddy Fantastic’s first home buyers grant. High beaming himself in parliament this week, he announced that a record 18,736 punters took up Labor’s offer in April. In past editions I have previously likened this grant to throwing lollies onto a highway – there will be casualties. For example: back in economic growth times, south-west Sydney identified home price collapses of around forty per cent – yet in recession (until this week) these very same areas are now in (Chk Chk) boom mode.

Ruddy Fantastic advised parliament this week that 18,736 excited homeowners took up Labor’s cash for letterbox incentive in April. This is much like the Federal budget’s spend plan – spend now and pay later. After all it’s only money and the artificial insemination of property markets has subprime written all over it. Just that this time around, we have the Australian version.

The Reserve Bank of Australia (RBA) left the cash rate at 3.00 per cent this week where we remain at 1969 equivalents. Forget Struggle Street and Rage Road, when rates do go up (and in all probability this will happen around July/August next year). For many inductees into the property market, this will result in Road Kill (depending on respective loan agreements) as our economy moves from deflation to inflation mode.

What inflated this week were our subscriber sales which jumped last week from$848,794,010 to $859,094,019. In total, we exchanged $ 13,905,000 worth of properties. As I suggested over a month ago, the market has bottomed and purchasers and vendors are now engaging (we don’t make these figures up – they actually happen). The big online businesses are leading the way!

Another great (free) daily read launched on the Internet this week www.thepunch.com.au from the News Ltd online stable. This week’s YouTube is Rove’s explanation on how Australia avoided recession (turn your speakers up) – very funny.

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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5.06.09Robert Simeon4 Comments »

Like teenagers who just received their first credit cards, Kevin Rudd and Wayne Swan have collectively joined Australian state and territory governments with a deficit budget (once approved in the Senate). To put this into greater perspective, the NSW government (Fort Crumble) has been broke for years despite record tax receipts and yet infrastructure maintenance remained all but non – existent. With world leaders announcing stimulus packages (and I agree we need them) let’s not camouflage these massive fiscal announcements under the guise of combating the Global Financial Crisis (GFC). The problems in NSW (and the other states and territories for that matter) happened well before the GFC.

Last Friday, I read with interest an article on www.crikey.com.au by John Hewson – economist and former Liberal party leader titled “Hewson : we could see an election this year” where in part he made the following comment “At best, the Rudd Government’s second stimulatory package will just buy some time — simply delay the inevitable. As long as the global recession continues to deepen and, as a consequence, China’s growth continues to stall, the best Rudd can hope for is to hold up consumer spending by the cash handouts sufficient to avoid a technical recession — namely, two consecutive quarters of negative growth. “The plot this week began to thicken.

Ross Gittins from The Sydney Morning Herald www.smh.com.au filed this week an article titled “With best intent, politics intrudes” A great read so here are the first nine paragraphs “Kevin Rudd has long been afraid the downturn in the economy will cost him re-election, making his Government a one – term wonder. Malcolm Turnbull knows the downturn offers the best chance he’ll get to defy history and win the election, thus securing his own leadership.

These never – to – be admitted truths explain the political games both men are playing over last week’s budgetary stimulus package, even as the economy burns.

If you want to understand what’s happening in the economy and the rights and wrongs of economic policy you have to be able to distinguish between the politics and the economics. But that’s not easy because the pollies are always trying to disguise their political motives as economic.

Whatever successful politicians do or say, the political implications of what they do are never far from the front of their minds – even when they’re doing just what they should be doing in the nation’s interests.

As part of his long-running efforts to ensure he doesn’t get blamed for the recession. Rudd has repeatedly emphasised how bleak the news is from overseas and how badly it will affect us. It’s true, of course, but saying it is so often and so forcefully risks adding to the blow to business and consumer confidence.

Rudd hopes he can escape blame for the downturn provided he’s seen to have done his best to respond to it. That’s partly why he keeps popping up every few weeks with another measure to counter it.

Even so, mainstream economic gloom-from the International Monetary Fund to the Australian Treasury and most macro-economists – has been urging the Government to use the budget to stimulate demand, to make the stimulus big to get it happening as soon as possible.

It needs to be big because the global recession is expected to be so severe, it needs to start as soon as possible because getting in before the economy starts unravelling will be more effective.

Of course, the need for haste doesn’t justify Rudd’s attempt to push the legislation through Parliament in just a day or two.”

Back to the thickening plot of Rudd’s early election (alleged) plans. So this investigative agent went off to The Tally Room where he found that the Queensland Labor government must call a state election by September 2009. This is to win a fifth term where a loss would seriously impact what some media outlets are already calling the “Ruddslide”. A clue: infrastructure spending to improve state government perceptions for approval levels, maybe re-election?

Then the clanger in yesterday’s Daily Telegraph with the headline “Protect Rees, Rudd tells Labor MPs” I loved this – “Labor Party bosses have been ordered to protect Premier Nathan Rees from a leadership challenge and “calm down NSW” to allow Kevin Rudd to call a possible early election in the second half of this year.

Oh dear – what extent some individuals will go to, to preserve and stroke their suffering egos. A case of once bitten twice shy? Maybe a case of Sunrise to Sunset!

Next week, we address the amendment to Land Tax legislation where the Premier Nathan Rees introduced his premium rate and investment property owners had the current rate of 1.6 per cent increased to 2.00 per cent for investment properties valued over $2,250,000.

With GST receipts already down by approximately 40 per cent, the elected governments simply increase taxes which results in businesses reducing staff.

Nine years on – it is now revealed that GST has increased taxes NOT reduced them. The platform was fraudulently sold to the voting public.

The GFC did not help – however State governments are just as bad, even worse. They escalate the financial remorse for taxpayers and it will only get worse.

A hard week for all Australians, especially those involved in the tragedy of the bush fires in Victoria. We have placed a link on our homepage for those who wish to contribute.

http://www.rwm.com.au/2009/02/victorian-bushfire-appeal-2009/

Cheers ^__^

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13.02.09Robert Simeon3 Comments »

The only real way to actually pass judgement on the state of play within the property market, is to access the previous quarters. The September quarter figures announced this week will certainly raise more than a few eyebrows. Whilst the NSW property market performed well in the September quarter, it was considerably down compared to previous quarters, which clearly indicates that the property market is in cruise-mode. However, it is interesting to note that it is good news for the Mosman market and bad news for the real estate agents. Woollahra, recorded the highest median price of $1,560,000 for Local Government Areas with a 12.9% increase. This is the first time in quite a while that Mosman has dropped to number two position, with a median price of $1,535,000. This is a -1.76 reduction from the previous quarter. This clearly indicates that the volume of properties for sale in Mosman is reducing. Given that we only have some 5,900 houses, the vast majority of those sold are now going into home-renovation mode. Another significant factor contributing to the lack of houses on the market is the Stamp Duty. Many now have decided to renovate as in some cases the cost of moving, equates to the cost of renovation. I would anticipate over the next few years that the volume of sales in our area will continue to diminish, which will all but guarantee property values in the area will not show any significant decreases.

Whilst the volume of property sales in Mosman is down, it is alarming to see that the growth areas are Illawarra with 11.5 per cent growth and the Hunter region which recorded its highest annual growth since September 1995. What has not been determined is what proportion of these sales actually went to investors from Sydney as against their own domestic market, which is not renowned for being a high trading market. Moving back to Sydney, again the Campbelltown area is highlighted with just a 2.8 per cent quarter increase and 17.1 per cent overall for the year. With regard to the highest turnover areas, again, it is the Western Suburbs leading the way with Blacktown first and Penrith and Baulkham Hills following close behind. What is interesting to note is that this September quarter did not have the .25 per cent rate increase, so many will be eagerly awaiting the results of the December quarter. The home unit market for the September quarter was thirty per cent down from the previous September quarter, so I am sure that the ‘Governor of Moolah’ will be very happy with these statistics. Also great news was that the residential vacancy rate dropped to 3.7 per cent for the quarter, which is well down on the 4.4 per cent for the same period last year.

One of the most insightful articles to appear in the print media was one written by Alan Kohler for The Sydney Morning Herald. It was titled, “It’s not property on fire, it’s debt, silly” and it was one very intelligent and brilliant interpretation of the property market. As a few have been saying all year, Mr Kohler is right on the money!!” The Reserve Bank is trying to target a debt/property binge with an increase in the interest rate, probably in the order of 1 percentage point by the middle of next year. It wants us to stop borrowing so much and start saving, so it has put up the price of money. Kohler then went on to say that, “but pretty soon, possibly within 12 months, it will have to turn around and cut rates again to prevent the slowdown becoming a recession.” There is plenty of talk that the rates may hit six per cent. All this will do, is send the market into a ‘holding-pattern’ mentality which many will see as a positive step.What many forget is that the cash rate target on May 3, 2000 was six per cent which is hardly a long time ago and I am sure that the investors will encourage this as an increase only highlights the advantages of negative gearing. The last thing the ‘Governor of Moolah’ wants to see is more investor money being driven back to the investment unit sector.

There is absolutely no doubting that the property market is becoming a science, as at this time every year we record the lowest clearance rates. The December quarter is historically, the only quarter of the year where the purchasers have a greater control over the market, as was evidenced at this exact time last year. The interesting outcome was that the buyers united to sit-out the quarter and see what happened in the January quarter of this year. The result was a twenty per cent hike in prices from the December quarter! What remains to be seen is which of the purchasers will execute contracts in this quarter or take a punt for the January quarter. May I offer this little bit of advice – “a bird in the hand, is worth two in the bush”.

From our perspective the intensity of the market has eased. We are still trading, however and this week we exchanged eight properties with a value of $7,680,000. This figure accounted for three houses and five apartments, so it is still most encouraging to see balance in the property market. We at RWM continue to read a totally different market to many of our colleagues in the industry who are having trouble coming to terms with ‘increased intensity’ to secure the sale. As we keep saying here in the office, “it’s easier to open the door of opportunity after you have a key position”. Simply, it is all about which key one selects to ignite their market!! Cheers and clink…^__^

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29.11.03Robert SimeonNo Comments »

There is just one truism when it comes to property reporting in the media ‘the weaker the argument the stronger the words’. Just take this week for example. On Monday in The Sydney Morning Herald we were told “Homes bust ‘within three years’”, with BIS Shrapnel warning of sharp rises in home loan rates which would then bring about the bursting of the bubble. All I can agree with is the “shrapnel” part. The guys from ‘BIS Projectiles’ went on to say that the variable rate of interest would be 10.1 per cent in 2006, and even went on to predict a recession similar to the one that Paul Keating delivered back in 1990-1991. Given that currently the economic fundamentals for the Australian economy remain, in a word, “robust”, one would seriously need to look at their high-risk investment exposure, namely those get-rich quick property seminars. What happened in the past was the dreaded domino theory as investors quickly liquidate their exposure to that particular market. This should not be construed as being the same for our housing market. The two bear no similarities what soever. Even back in those ‘cask wine’ days, Mosman had fewer than 20 mortgagee sales over the entire three years. Now there is a clue!!

The very next day in The Sydney Morning Herald, Mr Alan Kohler (a man I really rate with respect) wrote an article with the headline “Property buyers have just been sensible”. Mr Kohler said, “Apart from the fact that there is not yet a real estate bubble in Australia, as opposed to a sustainable once-off shift up in property values due to lower interest rates, there is another factor that will keep prices where they are for a few years yet.” Mr Kohler then went on to say, “Actually there are two property markets: owner-occupied and investment. Each is dancing to a different drum but neither has gone crazy,” which is exactly what we have been saying all along. They are completely different and bear not the slightest similarity. It is just a few who appear to have confused the two, which in turn led to the creation of their fixation on the imaginary property bubble. It should be clear to all that such a bubble is merely a mirage.

No doubt the ‘Governor of Moolah’ will be happy when he observes that houses and apartments are still selling for higher prices across Australia however, they are now taking longer to sell, according to the “Home Price Guide”. In Sydney, the median price increased by eighteen per cent over the last twelve months, up from $550,000 to $650,000. It was interesting to note that average yields fell to 2.9 per cent, which overall was a drop of 3.3 per cent. The apartment market over the same period jumped from $385,000 to $419,000 , and it was claimed that the apartments are averaging 47 days on the market, as compared to our apartments at RWM, which average ten days. The average price for a Mosman home for the twelve months to 31 August 2003 sits at $1,785,979, and for a unit it currently is $603,179.

It is very interesting to look at the overall dynamics of the property market and what is evolving. We had quite a few e-mails last week regarding our Internet sales which currently stand at $204,438,000. The number one salesperson in our office is not actually a person, it is our database! The July – September quarter for us was an all time record. The month of September was a new monthly record with $42,685,000 in property sales. The simple answer to what, how and why, is that we are mastering the art of the Internet. We have invested hundreds of thousands of dollars in research and development. We, as an agency, would be in the top one per cent in Australia, when it comes to understanding and successfully implementing the Internet with our client base and properties. We will definitely be here in 2006 to see if BIS Projectiles long -term predictions are correct. Sadly for some, many agents won’t be joining us. Love it or hate it, the Internet is fast taking over our industry!! Clink and cheers…^__^

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4.10.03Robert SimeonNo Comments »

As they say, “the easiest way to start an argument these days is to get two economists together”. ‘The Economist’ ran an interesting story last week predicting a global fall in property prices, based on the theory of “I know boats”!! Once again, we see the supposed property bubble being blown up or blown out of total proportion again. The simple truth is that nobody can predict the future, so I will offer this little one about the property market, ‘it has to rain, before we see another rainbow’.

The Sydney Morning Herald journalist Stephen Bartholomeusz, gets a gold star for his interpretation on this latest AOMD = Article of Mass Destruction. Mr Bartholomeusz correctly identified that many ingredients make up the property industry, and the only sector of the market that could cause concern is that of the investment market. Given that the ‘Governor of Moolah’ has decided to leave the cash rate target at the same level for twelve months, it appears that our economy is trading well au naturel!!

We have always grown up looking at statistics, personally when I was a kid I was only concerned about Racquel Welch and her vital statistics. If you look at the statistics published this the week, you will see that the average price for a home in Mosman for the twelve months to April was $1,776,001. This figure is down by a life threatening $9348 from the previous month where it peaked at $1,785,349. Does this mean that the value of a home is easing back? It certainly does not! It means that more, less expensive homes were sold during this period, and this does not include private treaty sales. On the other hand, The Mosman Daily excelled itself again this week, when they ran a story headed “Mosman Slips in Price”. One does not have be a brain surgeon, to identify that in 2003 the market has been tight with properties, hence 49 properties were sold in the Mosman area with an average price of $1.19 million. Now here is the funny part, they are comparing it to the December quarter, which recorded 56 homes sold for an average of $1.5 million. Nothing ever happens in January, and these figures do not include private treaty sales, nor those where the vendors place a confidentiality statement on the sale price. In this period we sold a home in Burran Avenue for $9.5 million, and another in Hopetoun for $6.00 million, neither were used in the calculation!! Also, that does not include another six homes we sold greater than $2m that escaped the system. Great to see the asylum is still running true to form. Even more amazing is that some agents believe these figures, and some are telling vendors to cash in now before it is too late.

We won’t see a market like 1991-1993. I well remember when I watched “60 Minutes” some years ago, a National Party Senator in Queensland said, the definition of recession is when your neighbour loses his job. The definition of depression is when you lose your job, and the definition of recovery is when Paul Keating loses his job. The property industry is so much smarter today, and the property dynamics are changing right before our eyes. What is evolving is that we are seeing certain months where campaigns will not be run, due to public holidays and school holidays. April was a classic example with Easter, Anzac and school holidays taking up most of the month. July has school holidays from the 5th to 20th, so that month would also not be recommended as a great month to run a campaign. What we will see is more private treaty and Internet marketing of properties, and again this week, we proved the power of our Internet business. We listed a property at 123 Middle Head Road, which was a failed auction with another agency and what they could not do in eight weeks, we managed to do it in 48 hours!! So you can guess how happy the vendors are.

We are more concerned about working the property market, as against those who are fraudulently using statistics to bring the market down. Afterall, “an economist is a man who figures out tomorrow why the things he predicted yesterday, didn’t happen today”. The property market today is transparent, however some never let the facts get in the way of a good story. Statisticians prefer to work with confusion, as against conclusion, and Raquel Welch never looked better!! Cheers and clink… ^__^

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7.06.03Robert SimeonNo Comments »

Nothing beats a classic piece of journalism and an article that appeared in The Sydney Morning Herald last Saturday by John Garnaut headed “Property falls hit the hardest at the high end”, was a beauty!! I loved this one by John Edwards who is Chief Executive of Residex, “It’s too early to call, but it looks to us that we’ve reached the end of the housing cycle”. Well if it is too early, why comment! Or could he perceive the market to be ‘descending down’ just love all this property prophesying. The article went on to say “After taking into account preliminary figures for April, Sydney house and unit prices fell about 0.5 per cent on average over the last three months”. Well nothing happened in April as we had a combination of school holidays, Easter and Anzac Day, so it was not a month to market property, and let us not also forget that a war was playing in the background. As for March, well that was actually a record month for many agents and we sold $35 million dollars worth of property, which was our all time record month. March also saw RWM post the second highest sale price ever recorded in Mosman!! Woo hoo, I loved this one also “The biggest falls in some of Sydney’s most exclusive suburbs, with prices in Mosman down by over 7 per cent”. What an absolute load of rubbish. The market is actually up this year by around 10 per cent, based on our statistics recorded, and the real test will be next week when the May auction results are posted. Now to add to the confusion, the article stated “The Residex figures measure repeat sales rather than median home prices”. Well that would explain it, as the current average price for a home in Mosman is presently at an all time high at $1,785,349 and the figures for April will show the price climb higher.

The Internet came to the fore again this week when we posted two quite amazing sales, given that both purchasers never inspected the properties. One lives in the United Kingdom and another in Hong Kong. We sold a brand new apartment in the new Mirvac development in Hickson Road Walsh Bay for $1,795,000, and an apartment that had been on the market with another agent for six months in Shadforth Street for $1,342,500. Our Internet side of the business has now sold 94 properties, totalling $155,462,000. Now that is what I call a smart business plan! Both the properties in this case were identified exclusively on rwm.com.au. It just goes to show that some “never leave home without it”. This week I read the most amazing quote by the author of The New New Thing, wherein Michael Lewis states “The future will be so different that the past will no longer even be able to serve as a reference – there’ll be no point in examining track records when the race is no longer run on a track”.

It will be very interesting to see how the ‘Governor of Moolah’ responds to the ascending ‘Ozzie Ollar’. The meeting in early June could very well see a rate cut. Now that will make the property market very interesting! Given that we anticipate a strong auction result next week, June could very well have plenty of heat in it. So why not pop down to the auctions next Tuesday night, and Bon Appetit, as the menu will be awesome. Smoked salmon, creme fraiche and caper canapes, mushroom duxelle bouchee, prosciutto wrapped asparagus spears, plus a few more to whet the appetite. We are still deciding on the wine list, and I have always been partial to a soft Merlot in May. There is no point buying a property on an empty stomach!! Some offer Minties, but we much prefer to do our auctions differently as it is important that all our clients end up with a smile.

See you at the opens, or we will see you at the auctions. What you won’t see is the Mosman market down 7 per cent. But there again, the vast majority already knew that!! I wish the guy who keeps writing this stuff, and who also wrote in January “Housing heads from boom to gloom” would subscribe to VRN. In all probability I will have to subscribe him myself. Now there is a clue!! Cheers…^__^

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24.05.03Robert SimeonNo Comments »

The applause in the Sydney property market this week reached a crescendo, with announcements by the Reserve Bank of Australia about the state of the economy, and the much awaited release of Jonathan Chancellor’s ‘tell all’ book about what really happens in the pantry of Sydney property. With the Sydney property market nearing the final curtain for 2002, the orchestra is very much up-beat as it plays the re-mix version of ‘I will survive’, which has left many ‘dancing in the streets’. Next year’s interest rates, will in all probability be as low as a touring English batsman’s Test batting average.

At a dinner this week the man who pulls our purse strings revealed, whilst discussing ‘Monetary Policy in an Uncertain World, with those in attendance “When we come to monetary policy more generally, and we look around us at the challenges facing central banks in other countries, we are reminded that decisions are never easy. But if ever I am tempted to regard the Reserve Bank of Australia’s task as difficult, I quickly banish such thoughts when I look at the task faced by our counterparts elsewhere. I do not think any of us at this time would wish to trade our economy for another, or our monetary policy outlook for that of any other country of which I am aware”. It certainly has been a busy week for Mr. Macfarlane, especially with the unprecedented 2003 forecast earlier in the week that interest rates will be locked at their present low levels until well into next year, and could be cut if the world economy sinks further.

It was only a month or so ago, that the Reserve Bank was indicating a shake-out in the property market. This then turned into a stake-out by buyers who then became as active as a Carr Government policy announcement. I will get onto that a little later!! What we are really seeing is a united front from the powers that be, who are sending out a very clear message, that the real estate market is very much a protected species. It is imperative that this market continues to perform, for our economy to remain positive and progressive. What we now know, (and we have never before witnessed such a market strategy) with the release of this information, is that real estate will play a dominant role next year, and without a shadow of a doubt, the New Year property market will be bullish with plenty of testosterone. This also paves the way for an interesting conclusion to the 2002 market, as we are now seeing many hedging their bets as they see the market climbing to even greater heights, with the current market still offering a window of opportunity.

The Carr Government promised last year that radical changes would be implemented to curb some of the unethical behaviour patterns of some real estate agents, which would come into force this year. Like most of the promises they are still very much on the popular ALP white board. It was only when an investigative report was published in The Sunday Telegraph revealing that the practise by these agents to underquote auctions, was widespread across Sydney. Once again the Government announced that the legislation would come in next year. This was the first time that I have ever witnessed agents being outed, and I applaud those who compiled this report. Once they get tired of staking out the east, we welcome them over here when they write about the over quoting to vendors. We have had some great ones this year. I remember one waterfront was on the market for $9.650 million, to be later sold for $4.320 million, and there are a couple of interesting ones at the moment where agents have indicated double digit sales. Mosman has had just the one double digit sale, and I really can’t see it changing from that, not in the short term anyway.

On Monday evening it was canapes and caviar for the launch of “The Sydney Hot Property Guide” by Jonathan Chancellor, aka Title Deeds. The inaugural release about the goings on of our property industry, and I must say it is a brilliant read. With 125 suburbs covered this really is a must for your bookshelf, as never before has the Sydney market been covered with such depth and accuracy. At the opening I observed some blushes and flushes, and I still can’t work out how the Eastern Suburbs agents can talk and drink, with all those olives in their respective mouths. At a RRP of $21.95 you will make plenty if you follow the paths of those who have made millions from renovating houses.

From reading too much into the market, to now reading all about it!! It could be argued that now the ‘penny is starting to drop’, when it says in the book ‘If Monopoly was a Sydney board game, then Mosman would be Mayfair’. I’ll drink to that, cheers and clink…^__^

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16.11.02Robert SimeonNo Comments »

Whilst many would like to turn back the clock with the benefit of hindsight, there is no denying that the property market has withstood the test of time. There is a noticeable difference within the property industry, as vendors become purchasers at the drop of a hammer. Such is the loyal allegiance to bricks and mortar, steadfast in their resolve that when it comes to building wealth, their code of conduct is driven by a post code. There are just a few significant post codes, and 2088 is one of Australia’s stars. Australia’s rising home prices now lead the world, with the recent figures identifying the biggest yearly increase since the boom of 1989. The Bureau of Statistics has just released the statistics for the year to June 30, with Sydney leading the way with a 21.7 per cent increase, Brisbane finished a close second with a 21.3 per cent increase. Britain recorded a respectable 18.8 per cent increase, and Spain posted a 15.7 per cent increase.

Many argue that over the last four years property prices have jumped 70 per cent, but it will be the investment market that remains under the microscope, given that they accounted for more than half of the increase in new housing loan approvals. Many investors are finding it increasingly difficult to fund their new acquisitions given that tenants still remain few and far between. This could present opportunities further down the track, as some property debutantes discover that not every letter box has a silver lining. If some new developments were to be sold, they would be lucky to break even. Over the last few years we have repeatedly been asked by previous clients to advise their children, who were embarking on their first purchases, on the do’s and don’ts of property. Most were at school and university when we endured the ‘recession that we had to have’ and they have only seen property prices on the rise. Many of the nouveau riche suburbs that have experienced huge capital gains with new developments, will in all probability be re-named ‘struggle street’ as they attempt to survive the current overtures of doom and gloom, not to be confused with the agent’s sales pitch of zoom and boom.

Once again we turn the spotlight back to the Mosman market, home of the Mosman $dollar$ that continually proves to be the most expensive in Australian housing currency. Real Estate Institute figures just released, clearly show that Mosman sales during the June quarter made up just 0.6 per cent of all sales in Sydney over this time. June quarter figures revealed that Mosman posted just 559 sales in the category of the top five local government areas with the highest median house prices. The common denominator is that of the 559 sales, every one posted substantial capital growth. This week we listed a semi on Ourimbah Road. It was sold within 48 hours for $760,000, yes Marize again!! Interestingly enough, we sold an identical semi to this exactly twelve months ago, only a few houses down for $622,000. That is a capital growth of $138,000 in twelve months. The September quarter figures will be very interesting.

What we have today is a much greater focus on the property industry. The statistics, facts and figures are now readily available for all to draw their respective conclusions on the state of the market. I was looking at a home this week, and yes the owner is a subscriber. He suggested that he spoke to another agent who basically echoed what I had written in the previous week’s edition of VRN. I see this as a positive because at least they now know what they are talking about, and it is better that agents talk about our market on a united and informed front. As for the most popular quote in the media at the moment “Economists predict the property bubble to burst”, Mosman has plenty of economists who all own homes, and to the best of my knowledge we don’t have any waiting to purchase, so you can work out where their money is!!

It really is no wonder why so many property stories are doing the rounds at the moment. You see, for the majority it is all good news, and we know that good news travels fast. Just as fast as your edition of Virtual Realty News. When and if the market has a significant adjustment, it will in all probability be here where you read it first, although I am sure that the Property Editor at The Sydney Morning Herald will have a few words to say to me about that one.

Thirsty work this… cheers and clink… ^__^

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14.09.02Robert SimeonNo Comments »

With the principal place of residence, now more appropriately defined as the principal place of income, it is no wonder why we believe that the market has at least another eighteen months to run. The market is determined by clearance rates. This is the barometer we watch closely to monitor market activity each week. I do however have a serious concern that this could rapidly fall, and it will be the agent’s fault, not the market’s! With the market so competitive, there are far to many agencies and agents who have let their ethics go out the window and are buying the business. This is also seeing loyalties and friendships lost as vendors fall ‘hook line and sinker’ for unrealistic opinions of value.

I recently missed out listing a home that I sold to the vendors some years ago, because I was realistic and the agent who won the business was approximately $1,500,000 above my opinion of value. It will be interesting to see whether or not I was correct, time will tell shortly! Maybe the agents today should read an article published in The Sydney Morning Herald on February 1,1997 titled “Agents safe as houses”. In that article I was interviewed as a safe agent and I offered this quote, “Lack of integrity compromises the present and threatens the future”. Personally, I don’t blame the vendors. A promised extra million is a huge tax-free win. Millions play lotto each week, trying to win a million dollars. Now some of the agents have started a new ‘lotto property’ game, and unbeknown to many the odds still remain the same!!

Last week I mentioned the resurgence of the Aussie $. On Anzac Day the Aussie Dollar closed on US54.37, well up from the low on September 19 2001 of US49.05. On July 3 2000 it was at US60.13, on November 17 1997 it hit US70.21 and December 10 1996 it was at US80.28. Yes, it is hard to predict, even Gerry Harvey lost a lazy million dollars when he bet that it would hit US60 after it fell to US53 last year. The Aussie$ has climbed back ten per cent since the events of September 11. This means that we have cheaper overseas holidays and cheaper imported goods, I wonder what it will do to the property industry? As of now, the ex-pats have only been making a small impact on our markets despite what the agents tell you. I’ll bet you did not know that out of the Top 10 homes sold in Mosman last year, not one went to an ex-pat!! As you know we sold more than half of them. ‘Boomerang’ was recently sold to a local. The recent sale of ‘Altona’ went to another nearby resident, despite the constant innuendo that the ex-pats are the driving force behind the property market.

I just love it when I read that an agent is saying we are experiencing good interest from ex-pats in the UK and America. We have many ex-pat subscribers, even a few who are 10 million dollar + buyers who simply haven’t purchased yet, despite agent tales which in all probability, surface after too many ales. I had to laugh this week when I phoned an agent renowned for the ex-pat and Internet beat up. I asked him for his e-mail address. He responded um… ah… www. I said not your URL, the one with the @ in it. After what appeared to be an eternal silence, he said ‘at’ what?? With the Aussie $ firming, the ex-pats could play a much more dominant role in our property market. The reason being, since September 2000 those who purchased are ten per cent better off than those who believed that the Aussie $ would decline even further.

As they say, “Never let the facts get in the way of a good story”. Many unsuspecting vendors could in all probability be facing serious financial trouble, with strong similarities to the early nineties. Today vendors are not selling until they buy, and the purchase is based on the opinions of value provided by the agents. Now, if you are expecting $5,000,000 and you only get $3,750,000 it is not the agent who makes up the difference. It is the vendors future that is threatened, especially with a possible interest rate hike.

To whet your property appetites, we have some great new properties on offer this week… Make sure you take a look at the sensational contemporary home @ 78 Seaforth Crescent, Seaforth , the big traditional family home @ 49 Prince Albert, Mosman, the Balmoral Landmark Estate that has not been offered to market for nearly 50 years @ 33 Stanton Road, Balmoral, the classic Federation home @ 109 Shadforth Street, Mosman, and don’t forget the big, bright semi @ 31 Ourimbah Road, Mosman is now back on the market for Public Auction.

Oh well at least we can say… “We told you so”…!! Cheers ^_^

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27.04.02Robert SimeonNo Comments »