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Last Saturday’s NSW election delivered a cataclysmic demolition leaving Australia’s oldest party cracked at foundation with damage – so severe it may never recover. A political party with an insatiable self interest and indulgence whose  ethos became – “Bugger you Jack – I’m all right.” Sixteen years in power and nobody has anything nice thing to say about them. What a legacy!

The Estate of the Late Fort Crumble remains a rotting carcass with plenty of family members driving more nails into an already splintered coffin. NSW Labor has lost its base, and the plot to such an extent that NSW a drag on Julia Gillard: Paul Keating who once coined the phrase “where goes NSW Labor, goes federal Labor” as this stinging loss sends federal message although Fed govt downplays NSW Labor defeat.

Paul Keating has certainly not been silent no room for ‘sicko populism’ as Keating unloads on Labor where a herculean effort needed if Labor is to rebound. Even though likely NSW Labor leader is the worst choice possible as even Bob Hawke calls for ALP makeover given the Labor ‘disease’ will prove hard to heal and it is abundantly clear that they are ignoring their very own medical advice. No time for fighting, fix the factions and let the learning begin where only now we can read Paul Keating’s Dear John letter.

BUY PRINT

A new political dawn for NSW and everyone is hoping for a new beginning as business leaders’ call on new NSW government for quick action. Barry O’Farrell deserves credit where it’s due – they just didn’t see him coming as well as the three biggest myths of the NSW election result.

We still have Julia Gillard’s Fort Fumble which suddenly, is starting to resemble the Estate of the Late Fort Crumble with battles breaking out on all fronts. Bob Brown says Greens won’t rubber – stamp Labor’s mining tax as Resources Minister Martin Ferguson calls Greens basket – weavers and labels leader ‘soapbox’ Bob which left observers declaring – “them’s  fightin’ words”. The NBN then turned ugly as Fort Fumble refused to rule out using federal laws against states that oppose its plans to connect with Labor ready to use law to force NBN link – up – that would be the democracy prayer.

No hope for PM’s East Timor solution – Now up a creek without a paddle. As experts undermine government’s climate policy as that NSW word appears again – carbon is poison to tax reform. Even the Productivity Commission chief turns up heat on carbon tax debate although the knockout blow came as Andrew Wilkie sets deadline for pokie plan so Fort Fumble has just over six weeks to introduce this reform that will attack every pub and club across Australia or lose its balance of power. “Where goes NSW Labor, goes federal Labor” Hi Ho – Hi Ho – it’s off to the polls we go!

There is no denying that Barry O’Farrell has a huge job ahead and none is greater than taming the volatility of our property markets. Crisis looms as first – home buyers priced out of market and rents are expected to now grow faster than inflation. The Real Estate Institute of New South Wales (REINSW) issued a statement last week that State’s next Premier faces immediate housing supply and affordability crisis as the overall rental vacancy rate in Sydney fell 0.4 per cent to 1.1 per cent in February and the vacancy rate for Sydney’s ‘inner’ suburbs (0 – 10km from the CBD remained unchanged at 1.2 per cent).  In a perfect city (if that exists anymore) the vacancy rate should sit somewhere from 2.5 per cent to 3.5 per cent – Bazza you have a big problem! The REINSW cited “the rental crisis is a direct result of an inadequate, expensive and complex planning system and an inequitable property tax regime including high stamp duty rates, the raft of other imposts including land tax and the recently introduced ‘ad valorem’ tax.”

Well for starters, with the removal of Australia’s most incompetent, corrupt and inept government last Saturday – Big Bazza promised to abolish the ‘ad valorem’ tax if he was elected Premier. The NSW ALP (now known as the NSW Australian Lost Party) was responsible for we’re out of here, say hordes hankering for state satisfaction as people are now fleeing NSW at a rate of 50 packed cars each day and the NSW population is growing at the third – slowest rate in the nation. The picture that emerges from the Bureau of Statistics figures is of a state Australians move to and leave. About 19,000 Australians moved to NSW between the June and September quarters, and 21,000 left. In contrast, Queensland also had 19,000 arrivals, and only 9000 departures.

Western Australia is the fastest growing state, boosting its population at an annual rate of 2.2 per cent, followed by Queensland (1.6 per cent) and Victoria (1.5 per cent) NSW is fourth at (1.2 per cent), ahead of South Australia and Tasmania. Once upon a time NSW used to be number one, but this changed when the Australian Lost Party took over.

How to slash out– of–control house prices – cap city populations which would have catastrophic consequences with predictions that in Sydney alone, house prices would fall by more than 18 per cent over the next ten years. No need to sugar coat the real estate market as home prices flat line in difficult market.

It is quite simple to explain the problems that caused our real estate markets to flat line because the stressed don’t spend. Suncorp revealed its analysis of what causes Australians the most stress and here are the seven most stressful events.

1. Having your home and belongings destroyed by a natural disaster
2. Serious illness or injury
3. Losing your job
4. Getting divorced
5. Having a child
6. Moving house
7. Getting married

Australians are more concerned about losing their jobs – which explains why that ring of confidence is presently missing in our property markets. Also, we need better taxes, not bigger taxes so in another amazing announcement by Julia Gillard PM orders GST review to punish states that let economies stagnate. So a Carbon Tax won’t impact productivity? We have been warned this week that we can expect to be paying $2.00 a litre for petrol!

Robbie Mac was right (he predicted on the blog this week that I would run out of room to announce the $5.000 + Mosman house sales from 2005 – 2010).  Next week hopefully, as I have compiled all the results.

John Robertson was elected as Opposition leader for the Estate of the Late Fort Crumble to which the general public responded – try telling somebody who actually cares!

As Paul Keating once said – “where goes NSW Labor, goes federal Labor!

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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1.04.11Robert Simeon12 Comments »

We transacted $61,238,200 in sales (houses and apartments) last month. Fantastic, but we are still aware of the caution that needs to be exercised in the current financial and property markets. Certainly a strong contributing factor was the announcement that in the March quarter 2009, the economy grew 0.4 per cent which saw Australia avoid a technical recession. Economic growth forecasts from the Reserve Bank of Australia (RBA) May Statement of Monetary Policy, predicted that the March quarter would contract by 0.4 per cent and this would then be mirrored in the June quarter 2009. Our subscriber sales broke a new barrier last week and now sit on $909,716,219.

All eyes will obviously be on the June quarter economic growth figures which (if positive) will lead to stronger market sentiment. The Irish economy shrank by 8.5 per cent in the March quarter 2009. The road to recovery will be re- built on small steps, not leaps and bounds.

South Head – Sydney Harbour www.timmooneyphotography.com

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Whilst property prices dropped, it was interesting to see vendors using the cheaper, electronic form of marketing. When this happens, the real estate agencies running hi-tech online models lead the markets simply because they have stronger lines of communication and larger audiences. Just as interesting, is the ever-increasing number of subscribers to Virtual Realty News. Of course this is no surprise, given the growth of social online networking and real estate has an enormous online audience of property voyeurs – a sign of the times.

Did you notice in the aerial photograph, that the Eastern Suburbs has a red tint in its foundations? Well actually, it’s not just the East, but all markets. Australian households have lost a staggering 36 per cent of their financial wealth since the impact of the global financial crisis (GFC). We can now expect the worm to turn, (although very cautiously) based on the report from the Australian Bureau of Statistics (ABS) that the combined wealth of households at the end of March 2009, was $787 billion. In September 2007, household wealth was $1.246 billion. What remains to be seen is when and where cash and bank deposits re-emerge in financial and property markets.

The general “rule of thumb” in property is that one third rent, the second third own with a mortgage and the final third own, without a mortgage. Now it gets interesting as we attempt to track these monetary circular flows of income.

Rent

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The most dangerous demographic, which in recent times has displayed multiple personalities – to rent or become a First Home Buyer. In May 2009 – 7,300 (double 2008 levels) took advantage of government grants in NSW. Australia wide, 19,607 jumped into property and the total thus far is just over 97,000 (anyone else thinking of the subprime model?).

This is a false economy for a number of reasons given that rents continue to climb. New home sales slumped nationwide last month and sales contracted by 5.7 per cent in May. Building approvals fell 12.5 per cent to 9,953 units in May, seasonally adjusted, from a downwardly revised 11,374 units according to the ABS. In the year to May, building approvals fell 22.4 per cent.

The Real Estate Institute of NSW reported this week, that the Sydney rental vacancy rate fell to just one per cent in May 2009 (the lowest recording in twelve months). In a healthy market, the rate should sit anywhere between 2.5 to 3.5 per cent. Alarm bells should be (but are not) ringing as those in rental accommodation are buying (97,000+) which takes us now to those with mortgages.

Home owners with mortgages

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Another tight-rope market given that property prices are recovering (the market has bottomed) and interest rates are at 49 year lows. The RBA is caught between a rock and hard place. It can lower the cash rate further however this decision is based on economic outlook and unemployment – which look on the positive side. The major banks are dealing the cards as they want to increase rates citing higher borrowing costs. The RBA cash rate currently sits on 3.00 per cent which remains unchanged for the last two months. The CPI Inflation Rate year to March 2009 presently is 2.5 per cent.



With Australia’s unemployment rate at 5.7 per cent in May it is highly unlikely that the RBA would drop the cash rate below 2.5 per cent. The lowest cash rate was recorded back in January 1960 at 2.89 per cent. Should the RBA drop the cash rate further, there is no guarantee that the major banks will follow suit.

Home owners without mortgages

These are the main game players given the importance of where they invest their monies. Many moved out of the property markets simply because the incompetent NSW government taxed them out of the financial equation. Despite attractive rental returns, their cash and bank deposits will in all probability head back to the share market. Boston Consulting Group recently announced that Australian companies are some of the world’s best in creating wealth value for shareholders. Their research identified that in the five years to the end of 2008, the Top 100 companies listed on the ASX generated shareholder returns of 6 per cent. Europe (0 per cent), United States (-2 per cent) and Japan (-3 per cent).

Now think of inflation and Ruddy Fantastic’s Fort Fumble (Federal government) where inflation was ballooning way beyond the RBA’s comfort zones due to the three inflation accelerants – rent, food and petrol.

Unlike our business (RWM) Kevin Rudd and Wayne Swan have an online problem and Fuel Watch and Grocery Watch (election promises) which have failed miserably, are nothing more than embarrassing failures.

So what we have now, are banks controlling interest rates, petrol companies running amok (again), and Coles and Woolworths setting food prices! Hardly Nation Building – yet Ruddy Fantastic flagged the possibility of taking ownership of state public hospitals. This week he stated “I was absolutely clear cut about that possibility at the last election.”

No doubt he has plans to implement a Hospital Watch website too!

Australian businesses are doing well, on the road to recovery. Fort Crumble (NSW government) conducted an internal poll and concluded that the majority of its members would not be returned at the next election – shock horror!

Keep an eye out for rental vacancies, interest rates, petrol and food prices and hope that the road to recovery does not become the long and winding road.

Cheers ^__^

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

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3.07.09Robert Simeon5 Comments »