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When Julia Gillard stealthily snatched the keys to Fort Fumble from Kevin Rudd in the dead of night, June 23 2010, her action was based on the party’s belief that he had “lost his way”. Ten months later the party is now shipwrecked on Point Rock at Hard Place.

In political speak, the compass is often called a poll, although Prime Minister Julia Gillard recently commented after disastrous polling, “I don’t comment on the polls, and I don’t spend much time wondering about them.” The polls were close to one hundred per cent correct long before Fort Fumble was decimated at last month’s NSW election. Polls come and go, and so do leaders as was the case in NSW where it become a simple choice of either ditch the policies or ditch the leader.  It’s now Julia Gillard versus the carbon tax, NBN Co, East Timor solution and a budget deficit that’s getting worse, not better.

Infrastructure is without a doubt the greatest problem facing modern day Australia today. NSW firms get crumbs as workers flee – almost half of NSW businesses are having difficulty finding skilled employees as they compete with the higher pay packets being offered in the mining sector.  NSW faces a skilled worker shortage given the reconstruction work in Queensland and the ever expanding mining sectors which will drive wages to dangerous levels as the shortages multiply each month and inflation will follow as inflation on a knife – edge.

BUY PRINT

I asked Tim Mooney if (by chance) he would be flying over Westminster Abbey to get an aerial shot of today’s Royal Wedding.  Unfortunately, due to budget restrictions, we settled on The Abbey in Glebe, Sydney

New home starts in 2011 are fast tracking the weakest declines since the mid 1990’s with property prices remaining subdued and many will say this is a good thing. Although on the flip side, it means that the circular flow of income (which is the oxygen for the economy) stalls, with the lack of economic growth and confidence. Home prices declined nationally in March quarter: APM we expect the same results once the June quarter figures are announced given housing credit growth remains fragile.

This week’s inflation numbers certainly point to higher interest rates by year’s end as Australia’s consumer price index rose 1.6 per cent in the March quarter (its largest quarterly jump in almost five years). The housing group is up from the 0.6 per cent level of the December quarter, with the annual rate of increase, the lowest since the September quarter of 2007. Contributing to the annual increase of 4.8 per cent for the housing group, were substantial increases in the price of utilities – 11.7 per cent for electricity, 12.8 per cent for water and sewerage and 6.2 per cent for property rates and charges. Rents increased by 4.5 per cent for the year on a weighted average, over eight capital cities and the cost of house purchase increased 2.6 per cent.

Source: The Australian, Bill Leak

Show us the money Mr Swan: it’s time to stop squandering our future by Malcolm Turnbull :Well, one thing to be said for Swan’s latest excuse is that it makes a change from the past three years of using the global financial crisis to justify failed programs and irresponsible choices.

Of course Wayne Swan nails it, when it comes to explaining the economic machinations of our economy.  Petrol jumped 8.8 per cent, vegetables increased by 16 per cent following the Queensland and Victorian floods and Cyclone Yasi and fruit increased by 14.5 per cent.  Surprise and further surprise, almost forty (40) per cent of retail spending by Australian households now lands in the cash registers of either Coles or Woolworths, according to exclusive new research by Commonwealth Bank grocery giants in 40% grab. For example: bananas cost $2.99 a kilo prior to Cyclone Yasi and jumped to $16.00 a kilo in March.

CBA’s analysis conducted for The Sunday Telegraph shows that of the $242 billion in retail sales last year, $94.3 billion or 38.9 per cent, is taken by one of the corporate giants (Coles or Woolworths) who command $46.7bn and $47.5bn respectively.

Just can’t resist another dig at the Carbon tax battle: bureaucracy v business which is an interesting debate although it should be noted that a politician will always place his/her very own job security way  ahead of endorsing a tax that threatens the length of their careers . The Carbon tax will destroy the Gillard government as the people sit in poll position and the Government is on the way to the panel beaters. Liar, liar – hair on fire!

Thousands to be stuck in NBN ‘limbo’ which is another amazing example of incompetence as thousands of Australians (many in regional areas think of the Independents) can now expect years of worse, not better, internet services as the NBN rolls out across Australia. Well it is currently stalled and facing huge cost blow–outs NBN Co housing forecasts deemed unrealistic.  Oh dear, here we go again!

To give a better understanding of the Rudd/Gillard management style of running Australia, former Finance Minister Lindsay Tanner will release his book next week titled “SIDESHOW” Ex-minister unloads on Rudd govt.

Lindsay Tanner – on the 2010 Campaign – “The worst in living memory. Banal slogans, robotic delivery, and trivial policy announcement deployed by both major parties.”

Lindsay Tanner – on Federal politics –  “Modern politics now resembles a Hollywood blockbuster: all special effects and no plot.

Last week we covered Mosman house sales and total value sold – 2000 to 2010. This week –

MOSMAN AVERAGE HOUSE PRICES FROM 2000 TO 2010

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Source: Domain Property Data

• 2000 – Up to $5,000,000 $1,329,677. Above $5,000,000 $5,637,500
• 2001 – Up to $5,000,000 $1,548,882. Above $5,000,000 $6,561,428
• 2002 – Up to $5,000,000 $1,862,836. Above $5,000,000 $6,587,500
• 2003 – Up to $5,000,000 $2,010,859. Above $5,000,000 $6,316,000
• 2004 – Up to $5,000,000 $1,854,568. Above $5,000,000 $6,941,722
• 2005 – Up to $5,000,000 $2,017,809. Above $5,000,000 $8,741,333
• 2006 – Up to $5,000,000 $2,110,469. Above $5,000,000 $7,115,228
• 2007 – Up to $5,000,000 $2,291,431. Above $5,000,000 $7,845,348
• 2008 – Up to $5,000,000 $2,267,210. Above $5,000,000 $7,170,000
• 2009 – Up to $5,000,000 $2,276,172. Above $5,000,000 $7,226,136
• 2010 – Up to $5,000,000 $2,355,472. Above $5,000,000 $7,212,826

Now that is a pretty consistent score card in both market demographics, especially when we take into consideration, the global financial crisis (2008 – 2010). Interesting statistics to bear in mind when the 2011 Budget is explained, given that the global financial crisis was in the northern hemisphere!

Next week, we will release the Mosman March quarter house sales for 2010, as compared to 2011.

Anyone prepared to make a prediction?

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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29.04.11Robert Simeon7 Comments »

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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 »

Yes – Fort Crumble (NSW government) is basically lost and now trying to turn back time. Today, it is stone motherless broke and with no idea how to turn the economy around, can conveniently lay the blame on the global financial crisis. The 2008/09 budget announcement re-winds the clock to 1996 (when NSW was last in deficit). With an estimated budget deficit of $1.3 billion for 2008/09 and net debt to rise to $12.9 billion by June 2010, it’s hard to believe that Fort Crumble can return a budget surplus again. (It could not manage NSW in economic growth – with record tax/GST receipts).

Last Sunday, editor of The Sunday Telegraph Neil Breen wrote “Labor bungling a total turn-off” where he too turned back time. Neil Breen wrote “On Tuesday, Treasurer Eric Roozendaal will deliver the 15th budget since Labor was returned to government in NSW at the 1995 election. They switched off. Long ago.”

What an amazing capture by Tim Mooney – my favourite photo so far and one that illustrates just what makes Mosman so special. A natural suburb with a striking seascape where nature is preserved over housing development – be the judge? Since Tim joined our online platform, Virtual Realty News, many subscribers have contacted him to purchase his photos for their enjoyment.

Website: www.timmooneyphotography.com

Email: info@timmooneyphotography.com

Back to Neil Breen, “You need only read the following excerpt to understand why. It’s from then Treasurer Michael Egan’s first budget speech 14 years ago.

Labor was back in power and was feisty.

“For too long, we have put up with long hospital waiting lists, an understaffed police service, inadequate child protection and lack of accommodation for the disabled.”Mr Egan thundered.

“This budget delivers major improvements in hospitals, schools, police and crime prevention and community services.” Sound familiar?

Fourteen years on, everything is broken and now, our Premier ‘Nathan Please’ has listed Mosman police station for sale – indeed a backward step. If he can’t manage a surplus, how can he manage debt – by living in the past?

Thank goodness the Reserve Bank of Australia (RBA) remains on the money. This week it released board minutes from its last meeting – keeping its powder dry. As our economy manoeuvres its way through a global crisis there are obvious and escalating concerns which were highlighted when the Commonwealth Bank raised its standard variable rate last Friday (still below competitors.)

As the retiring member for Higgins announced this week, the greatest challenge facing our economy in years to come will be interest rates and yet, leading economists still maintain that borrowers should remain on variable rates. I don’t agree.

The problem with interest rates, is lack of competition as identified this week in www.crikey.com.au “Since the financial crisis first became apparent, the Government has explicitly put competition second to the need for stability within the Australian financial sector, waving through the merger of two of the five largest banks in Westpac and St George and acquiescing in the Commonwealth’s (CBA) rescue – purchase of Bankwest. The consolidation has come at a time when non- bank mortgage lenders and regional banks have either been driven from the market or badly bruised by the financial crisis, magnifying the damaging anti-competitive effects of the dominance of the Big Four.

Once competition is lost in Australian markets, it is awfully hard to regain. The ACCC has no divestiture power, so even when we are over the impacts of the financial crisis, we will not be able to regain even the limited degree of competition that applied until 2008. The only sensible course of action for most consumers is to buy bank shares, and get at least some benefit from the gouging, exploitation and bastardry that our banks can get away with.

But that’s no help to small businesses that can’t get loans, or face usurious interest rates when they do, or exporters, who face a punishingly high Australian dollar courtesy of our interest rates. Or, for that matter, to the workers who depend on them.”

Much like Michael Egan’s prediction in 1995 (it never came to fruition – only his pension evolved) BIS Shrapnel’s Residential Property Prospects report announced that house prices will rise by nearly 20 per cent over the next three years. “Green – shoots” of recovery based on the first home buyers grant and low interest rates. Green shoots can quickly become red shoots should banks up interest rates – which explains why the RBA continues to keep their powder dry.

One day later, the following graph appeared online criticising BIS Shrapnel for its forward thinking because such forecasts do not consider the x-factor and three years on so much can change. There again, fourteen years on and nothing has changed for the NSW government (other than a huge deficit). With fewer banks today, this scenario is no different from the control that Woolworths and Coles have over food and petrol prices.

Wayne Swan criticises the CBA for “selfish acts” and its rate increase of 0.10 per cent that “threatens recovery” of Australia’s economy (still the lowest). It is somehow puzzling that Ruddy Fantastic then shakes his sauce bottle to all and sundry in an effort to stimulate our economy. Not in agreement, Westpac and St George then increased fixed mortgage rates by 0.5 per cent, citing higher wholesale funding costs. Quite the opposite when the Reserve Bank of Australia (RBA) announced that our Big Four banks are currently enjoying healthier net interest margins (NIM) than before the global financial crisis. “The major banks ‘ NIM currently averages 2.27 per cent, which is a little above the level before the onset of the financial market turbulence in mid 2007.” Nation Building or Bank Gilding?

Back to the NSW budget – with a brilliant spin to kick start the housing sector. A short lived spin – where just one day later the Australian Bureau of Statistics (ABS) announced that (in the first quarter of 2009) home building fell to its lowest level in eight years. Economists then predicted that this sector would increase significantly in the second half of 2009 – this won’t happen as the banks are no longer lending to developers – fact. Re – affirmed by the latest ABS release which (alarmingly) identifies that our NSW government policy (rhetoric) is definitely not in sync with banking policy.

ABS data for the three months to March, identifies that the number of new housing starts has fallen to 5,400, down from 7,500 compared to March 2008. In the March quarter 2004, new starts were 11,000 (a fifty per cent decline). This is what then happens – the following data shows that Sydney clearance rates are now at 71 per cent and above 80 per cent, is considered a boom market.

Subscriber sales jumped this week to $892,096,219. Over the last 18 days, we have sold 16 properties to the value of $47,000,000. I might add that RWM is the only local agency reporting such great sales. As I wrote last week “better to be in the market than on it”, and that means growing your online market, not reducing it. The leaders in real estate today, are those who invested and developed successful online media platforms (years ago). Times have changed. We have and as our sales results prove, businesses need to move with the times. http://www.rwm.com.au/sales-list/sold_listing/

RIP – Paul Eastaway, a Mosman identity who will be greatly missed. A very funny and caring man who brought a smile to everyone’s dial – so many wonderful memories.

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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19.06.09Robert Simeon3 Comments »