Today we live in unprecedented times. Never before have we seen monetary policy attacked so aggressively where households (finally) come to the fore – not to be confused with four. I was speaking with a journalist this week about the state of the property markets and said. “They say you have to lose a Grand Final before you can win one. The same can be said with recessions where Generation X is much better positioned (based on previous bear markets) compared to Generation Y – who are experiencing market volatility for the first time and it is not improving – just yet.”

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5.12.08Robert SimeonNo Comments »

Discretionary spending is now first and foremost our defining Global Positioning Satellite (GPS) the irony being that in future the vast majority will be viewing Local Positioning Satellite (LPS). This is where our recovery of lost dollars starts (well for most anyway). In troubled times where the volume of the “bridge over troubled waters” is now playing at the maximum we need to move to a different beat which for obvious reasons, starts at home (sweet home), the only asset that remains tax free.

Very few countries globally, enjoy a tax free environment for their principal place of residence. The current market environment presents a leap frog market where losses can, in a few year’s time be capitalised into tax free capital gains. As real estate markets shift so should market sentiment and is was no better example than those who purchased during the last recession (1990 – 1993). They saw entry price double within a few years (tax free with the principal place of residence.)

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28.11.08Robert Simeon3 Comments »

Well it is now official! Sydney has the world’s most unaffordable housing market and because (we believe) house prices will show strong gains through to Christmas and beyond, the situation will get worse, before it gets better. Now before you jump to the conclusion that I may be suffering the effects of too much sun (following my recent break) there are some amazing statistics that have recently emerged that more than support this prediction. Continue reading »

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8.08.08Robert 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 »

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

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

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

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

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9.11.02Robert SimeonNo Comments »

While our resident author, Robert, is away on holidays (no doubt ear bashing the locals about Mosman real estate!), it is left to us ‘mere mortals’ to carry on his illustrious column!!

It seems each week the real estate editorial debates get longer and longer, involving more and more analysts and self-appointed experts! We’ve never seen the market so confused, so we though we’d clear up the mess and give you a local perspective, but remember, we all know there are no guarantees.

We talk to hundreds of buyers/sellers in Mosman every week. The foremost questions at the moment are, “what’s happening to the market? Is the market really soft at the moment? Will prices rise in Spring? What will happen in the longer term? Will I receive a good price for my property?” They’re Mosman’s million dollar questions.

The short answers are: yes, the market is seasonally soft, coupled with confused buyers who are justifiably, yet unnecessarily nervous about buying property at the moment. It’s all an apparition, just as it was after Sept 11, when buyers picked up great deals for a couple of weeks only. Unlike the share market, which is still searching for its bottom, Mosman’s property market is set to keep rising in the short and longer term. Spring, which is only weeks away will see a ‘small avalanche’ of property hit the market, which will in turn, see prices strengthen as buyer confidence returns. Here’s why.

Interest rates will remain in check as the U.S. economy may remain sluggish for up to 3 years. As Morgan Stanley’s Stephen Roach warned, “the U.S. has better than a 50/50 chance of falling into ‘double-dip’ recession before it can make a meaningful recovery.” The Australian economy should remain strong and the government will do anything to keep growth between 3 to 4% coupled with falling unemployment. So you can expect maybe one ¼ % rate rise this year.

Mosman’s decreasing property supply versus increasing demand, will keep prices high. Mosman is a niche market, not reflective of Sydney’s bigger picture. Ten years ago, approximately 950 Mosman properties sold in the year. This year, the figure will drop to about half, or around 450 properties. It’s well documented that Mosman has captured more of Sydney’s prestige buyer market, than any other suburb. Just recently, Mosman’s average housing price skyrocketed to number one, well ahead of Woollahra in second place, which is reflective of future growth. And, if supply were to increase, the only drop in Mosman’s property will be in the waiting time for its buyers.

When the share markets rebound, Mosman’s property prices will follow suit. If Mosman has any residential bias at the ‘top end’ it would lean toward the finance, banking and asset management fraternity. When the share market starts to recover, watch-out! The prices for prestige property will rise. Yes, it may take a couple of years, so what, it’s a comforting growth factor that you can bank on.

Prestige buyer database has grown by 84% over the last 6 months. For the record, from our registered database of over 2,000 buyers, the $3,000,000 group is the fastest growing segment. So again, with limited supply it’s only a matter of time before demand and prices for prestige property receive a massive boost.

Push – Pull effect will drive property prices up in all price segments. As prices rise at the top end there is a follow-on effect, which lifts the value of all Mosman property. Just consider what you can buy for between $1,000,000 to $2,000,000 in Mosman these days? Only a couple of years ago $1,500,000 bought a generous Mosman property. Today the median sale price in an incredible $1,700,000. Upgrading your property now, may pay a significant ‘Mosman dollar’ dividend in the future.

Analysts predict 11 to 12% growth in property prices over the next 3 years, followed by a boom. So where’s the risk? Also, where else will you find these returns in any investment opportunity, and tax-free of course!

Now we’ve convinced you that the market is strong, don’t just ask your agent to anticipate the value of your property, ask him/her “what he/she will do that’s different and will result in achieving the highest price.” If you’re not satisfied with their answers, then you know what to do. RING RING

PS. For an update of last weeks auction, 24 Clanalpine St exchanged for a very healthy undisclosed figure. 2 The Grove is still in negotiation, with five potential buyers, and an exchange imminent. 12 Shellbank Parade exchanged for $4.7m yesterday – not bad for land value!

20.07.02Richard SimeonNo Comments »