We have been waiting all year for the Mosman housing market to mount a formidable challenge to the market – this week it’s officially game – on. Three weeks ago there were 115 houses on the market, last week it increased to 133, this week on Domain it has jumped to 147 which is the highest number of houses we have seen throughout 2011. Given Mosman has (approximately) 4,900 houses,  is approximately (actually just under) 5 per cent of the total volume which is the exact target number and where the market should be under normal market trade conditions.

Next week’s inflation numbers will determine the RBA’s next rate move – The Reserve Bank of Australia (RBA) has had a difficult task in 2011 balancing the cash rate given its projections that Australia faces elevated inflation over 2011, 2012 and 2013. So a string of good data might stop RBA from cutting rates: Economists although the “subdued”state of the housing market identified that prices had fallen 3 per cent over the year to August. So our housing destiny takes shape where it should be noted that we’re the richest nation on earth, according to a Credit Suisse report.

The Credit Suisse report also notes the European sovereign debt crisis is not expected to stop a new generation of millionaires emerging in the next five years, with the greatest wealth growth likely to occur in the booming Asia – Pacific (that would be Australia.)

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We sent our Virtual Realty News eye in the sky Tim Mooney to capture The Trots given Hot to trot: latest inner west housing development a ‘game changer’. The Harold Park venue for the trots is  about to become one of Sydney’s largest inner–city housing developments – 1,250 new prestige apartments and terraces that will push up property prices (great news for the property markets). Mirvac is developing the site and will also be creating a 20 – hectare green belt linking Bicentennial Park to Blackwattle Bay.

Uncertainty clouds start of spring auction season grabbed my attention when the Westpac – Melbourne Institute quarterly house price expectation index fell to 9 in October, from a reading of 15.3 in the three months to July. This was its lowest level since May 2009, with doubts about the housing market lingering. This is a national measure so with interest, I noted that 38.7 per cent see prices rising in the next twelve months and 31.5 per cent see them unchanged. Almost one – third (29.8 per cent) predicted falls over the next year, so 70.2 per cent see prices increasing or remaining steady over the next twelve months. Quite funny that real estate is a long term hold not a short term play which was recently evidenced with the reality price failures of The Block and The Renovators on television.

Even the ‘World’s Greatest Treasurer’ was drawn into the debate with Wayne Swan telling the ABC that he doesn’t agree with the International Monetary Fund (IMF) report which indicates Australia’s house prices are overvalued by ten to fifteen per cent. The RBA has plenty of room to move on Australia’s cash rate which presently sits at 4.75 per cent. Last week SQM Research disclosed that Australia has 362,793 houses for sale – Mosman contributed just 133 which was an increase of 24.3 per cent on the same time last year.

The last Census report in 2007 identified that in Australia, thirty per cent rent, so it was interesting to read the Australian Property Monitors – Rental Report where only Sydney recorded growth in unit median weekly asking prices for the quarter of 2.2 per cent.

Lower North Shore has it all for renters – but at a cost as rents soar in major cities as Sydney rents rocket by 13 per cent: report.We have a population in the fastest growth mode yet residential building down 5.3 per cent in June in  quarter. So do the mathematics about supply V demand.  It’s simple and a no – brainer. So Australia’s greatest property pest Steve Keen is back at it again – Property prices to fall 20% by 2013 yer’s end: Steve Keen. A property guru who sold his $500,000 (plus a bit) apartment on South Dowling Street based on his global financial crisis predictions that property prices would fall by 40 per cent back on September 2008.   In my opinion, in Australia, he is the court jester of real estate, but given the Sydney rental data we have published, he has in all probability decided to buy back in?

MOSMAN – 2088

• Number of houses on the market last week – 115
• Number of houses on the market this week – 133
• Number of apartments on the market last week – 78
• Number of apartments on the market this week – 86

CREMORNE – 2090

• Number of houses on the market last week – 16
• Number of houses on the market this week – 15
• Number of apartments on the market last week – 34
• Number of apartments on the market this week – 36

NEUTRAL BAY – 2089

• Number of houses on the market last week – 15
• Number of houses on the market this week – 17
• Number of apartments on the market last week – 80
• Number of apartments on the market this week – 83

For this week’s sales in 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

I have gone easy on Julia Gillard’s Fort Fumble or should that read Fort F*&! – up as the political hit has been arranged – it’s a Right mess for Julia Gillard as Labor factions fight. The powerful NSW Right which also destroyed NSW has allegedly activated another political assassination. Ironic they had the terminal finger on the trigger to remove Kevin Rudd and they now intend to do the same to their anointed replacement.

History shows that Australia’s property markets respond much better under the alternate government – maybe property buyers should read into that?

Cheers ^__^

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21.10.11Robert Simeon2 Comments »

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What we are seeing today is that a statement such as this,  generally refers to the cost of living which shows no signs of abating anytime soon. Solid economic growth still likely, index shows which is somewhat contradictory, because while  Australia can expect a solid growth rate in the first half of 2011,the annualised Westpac – Melbourne Institute growth rate is  already being revised down. With the leading index coming in at 4.6 per cent in September and remaining above the long term trend of 3.1 per cent, it should also be noted that it is well down from the 10.3 per cent index recorded in March this year.

Julia Gillard’s  Fort Fumble urgently needs an economic architect given Canberra’s delusion: the budget is the economy which now has our elected federal Government at scary cross roads – OECD takes aim at Labor policies. “Australia’s proposed mining tax is too low; the goods and services tax should be higher and extended to food, and the approach to the national broadband network conflicts with international studies.”  In a hung parliament, the words ‘looking – up’ should be  removed from political rhetoric  along with the hopeless policies that shadow the Gillard/Swan shaky leadership foundations. The problematic elephant (aside from the NBN) that constantly circles the ALP ring  of confidence is the time to clear the decks of the Rudd mistakes. This  is not likely anytime soon, as the polls are recording a revolt of disappointment which is hardly a policy affirmation for economic reforms. More voter angst!

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A stunning revelation when RBA expected higher rate rises by banks based on strengthening economic activity and rising inflation which makes for interesting times and it is more than likely, that the annualised Westpac – Melbourne Institute growth rate will continue its decline. Nobody would have been surprised to read that banks’ fattened margins exposed when figures released by the Prudential Regulation Authority revealed that the banks’ average cost of funding  loans, escalated by less than the RBA cash rate in the year to June. The figures revealed that the Reserve cash rate climbed 1.36 percentage points between June quarters 2009 and 2010. The average rate by the big banks to secure funding, climbed 0.88 points. Given the banks are well ahead of the official RBA cash rate it is highly unlikely that the RBA will raise the cash rate at its next meeting  in December (the next scheduled meeting is not until February 2011). Just as interesting Reserve Bank data unfairly abused in rates debate and a strange sequence of events as banks slower to lift deposit than interest rates which would not surprise anyone.

A great read Re – regulating the banks in public view by Dr. John Hewson “While legislation to give/increase the powers of the ACCC  in relation to “price signalling” etc and bans on mortgage exit fees etc are likely to be helpful, they are, in reality, unlikely to make much substantive or sustainable difference. Look at the way other “oligopolists” such as Woolworths and Coles consistently snub their noses at the ACCC, as do the oil companies. Of course, substantial penalties and making “cartel behaviour” a criminal offence, with the risk of jail for the senior executives involved, as in some countries in the airline industry, may give such processes real teeth, but none of our political leaders have yet been prepared to go that far.”  I always enjoy reading the blog comments “Margaret Thatcher’s often repeated line, “there is no such thing as a society. Just individuals and families.” Treasurer Wayne Swan is due to release Fort Fumble’s response to the “Bank Debate” next month probably sometime between Christmas and New Year.

Probably, it will  coincide with Australia’s broadband release as Conroy defies pressure to release NBN report which (conveniently) just so happens to occur after Parliament has risen for the summer break. In a perfect Parliament, politicians who approve taxpayer funded policy initiatives that turn out to be costly “white elephants”, should immediately resign – as is generally the case in big business.  Rest easy as Prime Minister Julia Gillard vows to put fine tooth coomb through NBN on behalf of Fort Fumble, which is getting very interesting given bid to gag minister in Senate.

For example: NSW could have been $4.6b ahead if the state government (Fort Crumble) had borrowed to fund the building of all tollways built in the city. The NSW state election is due in March 2011 – Keneally welcomes Labor exodus which is actually more like a mass evacuation.  Unfortunately premier “Bambi” has resisted the lead of her fellow politicians.

Things are looking up: rents to rise as home building lags as economic forecaster BIS Shrapnel predicts renters (one third of our market) will have to get used to annual increases of between 5 to 7 per cent in Perth, Brisbane and Sydney and 3 to 5 per cent in Melbourne, Hobart and Adelaide over the next 24 to 36 months. Data from the Australian Bureau of Statistics (ABS) identifies that building approvals fell to a 15 month low in September. Throw in Melbourne, Sydney and Brisbane which are in the top 10 most expensive markets in the world and you can draw two conclusions. Tax receipts from small businesses to Fort Fumble will continue to decline and the budget deficit will continue to grow as Sydney No. 2 in prime rents.

Yes, the cost of living is certainly looking up!

“There is no such thing as a society. Just individuals and families – Margaret Thatcher”

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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19.11.10Robert Simeon13 Comments »

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The  worry is, will Fort Fumble (Federal government) tax the living daylights out of businesses to pay down the Treasury’s projected budget deficit for 2009/10 of $57.7 billion? . Nobody denies the fact that Australia (like the rest of the World) required a stimulus package although in Australia there remains a strong school of thought that our economy was misdiagnosed and over-medicated. With the convalescing now over, we are  told that all markets (property included) are back to 2007 levels. What a recovery!  Annualised growth rate in November 2009 was 5.4 per cent, December 2009 up to 6.2 per cent which was 3.5 points above the long – term projections.

The Westpac – Melbourne Institute, leading index of economic activity, (they predict the future three to nine months ahead) suggests that our financial genie (not to be confused with Wayne Swan’s inflation genie) is predicting boom times ahead.  Thank goodness we offer a weekly edition, because just 365 days ago, (February 2009) we were  told by The Emperor (Kevin Rudd) that ‘this is the worst economic catastrophe since The Great Depression’. Elected politicians keep pointing to cash splashes and stimulus packages and I must admit that the Rudd approved bicycle track at The Spit has done wonders for  the Mosman economy!  A defining moment that delivered our economic recovery and hundreds of Australian municipalities share stories of such inspiration.

Chowder Bay, Clifton Gardens.  Well worth a visit and drop into Ripples on picturesque Sydney Harbour for a fine dining experience.  On the right hand side of our page we list links to some of Sydney’s finest eateries as well as other businesses too, for your perusal and enjoyment.

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. www.timmooneyphotography.com .

The news just got worse (again) for The Emperor when a Senate enquiry revealed this week  an “alleged” gross waste of tax payer dollars (otherwise known as his stimulus) with the ineffective insulation of up to 400,000 homes under the national home insulation program. A study revealed that 30 to 40 per cent of work done was not compliant. Quite scary given that approximately one million homeowners have taken advantage of this stimulus programme. Loss of life has occurred as well as house fires that result directly from our very own version of No (know) Minister! Fort Fumble now has to allocate another fifty million taxpayer dollars  to fix the shoddy workmanship.

Now let’s wrap up the Neutral Bay house sales comparison for 2009 and 2008. For this week’s new subscribers, here is the Mosman and Cremorne sales data. It’s not exclusive.  All agents/agencies have access, but they don’t have a database or a newsletter.  For our competitors, technology is not a priority!  The Sydney Morning Herald last Saturday, revealed that its Domain property portals Top 10 searched for NSW suburbs on Domain in 2009.

• 1. Surry Hills 2,537,285
• 2. Mosman 2,291,860
• 3. Randwick 2,237,146
• 4. Darlinghurst 2,159,211
• 5. Paddington 2,030,416
• 6. Newtown 1,872,869
• 7. Chatswood 1,685,820
• 8. Marrickville 1,694,580
• 9. Bondi 1,682,834
• 10. Coogee 1,662,332

. When one adds up the Top 10 that is 19,854,353 online inspections for just ten suburbs alone – yet agents/agencies continue to place the Internet on ignore? The real reason is that when it comes to the Internet, the agents/agencies are the ones that have to pay for it – not vendors. When one observes the dominant agencies across Sydney they are the businesses that offer and present the strongest online relationships within their demographic real estate markets.

NEUTRAL BAY PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2009 to 31 DECEMBER 2009

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• Total number offered – 60 (Mosman 334)
• Total number of sales recorded – 60 (Mosman 303)
• Total value sold – $83,281,400 (Mosman $668,966,377)
• Public Auction – 13 properties to a total value of $19,462,000
• Private Treaty – 47 properties to a total value of $63,819,400
• Median price – $1,134,000 (Mosman $2,000,000)
• Average price – $1,388,023 (Mosman $2,397,728)
• Highest sale – $7,600,000 RWM (Mosman $13,500,000 RWM)

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NEUTRAL BAY PROPERTIES SOLD REPORT – (House and Semi only)

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1 JANUARY 2008 to 31 DECEMBER SOLD REPORT – (House and Semi only)

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• Total number offered – 67 (Mosman 360)
• Total number of sales recorded – 56 (Mosman 287)
• Total value sold – $93,561,000 (Mosman $774,865,612)
• Public Auction – 17 properties to a total value of $23,432,000
• Private Treaty – 39 properties to a total value of $70,129,000
• Median price – $1,216,000 (Mosman $2,275,000)
• Average price – $1,670,732 (Mosman $2,738,041)
• Highest sale – $4,650,000 (Mosman $14,700,000 RWM)

RP Data revealed this week that in 2009, the highest recorded number of first – home buyers on record plunged into the property market. A staggering 191,000 new entrants. This figure equates to 70,000 more first – home buyers jumping in before the grants finished. A 55 per cent increase!  This is a potential train wreck should the cash rate keep climbing. Only time will tell. America had sub -prime and Australia (potentially) has grant -prime.

According to the Reserve Bank of Australia (RBA) consumer confidence eased in February (although it was 36 per cent higher than a year ago) with businesses and households  throwing caution to the wind. The RBA said that business loans declined seven per cent in 2009 which is the lowest recorded since the recession of the early nineties.

If you think The Emperor has had a tough couple of weeks, the Bungle State – Fort Crumble (NSW government) continues to show its complete incompetence. The $5.3 billion CBD Metro is looking as shaky as a poll and already aligned with the Cross City Tunnel and Lane Cove Tunnel – both broke just like Fort Crumble – Metro headed for disaster:  Opposition.

Finally – two comments grabbed my attention this week.

The first – The Emperor, announcing a $10 million boost to meet a Labor commitment to halve the nation’s homeless rates by 2020.  A fantastic cause but what if it was  $60 million?  Unfortunately, the other  $50 million has to be spent on the insulation stuff – up. Well it is an election year  and we remember in 1987, Bob Hawke launching  his election campaign by promising that no child would be living in poverty within three years. The National Youth Commission (NYC) identified the number of  homeless 12 – 18 year olds fell from 26,060 in 2001 to 21,940 in 2006;  Now, the situation is worsening due to soaring home prices. Housing affordability fell by 140 per cent between 1986 and 2006 where in 1986, 3.6 times average income was needed to buy a house;  by 2006, the purchase price required 7.0 years pay. I keep tagging Kevin Rudd in Virtual Realty News in the hope that when he reads the edition he will post on the blog. I know that his office reads it -  just a tad slow on blogging!

The second is Fort Crumble’s NSW Planning Minister, Tony Kelly, who obviously has had so many portfolios (and Premiers) he has lost the plot.  No pun intended!  More land won’t mean more houses: Kelly. Given that Fort Crumble can’t roll out any transport infrastructure this is what he said “prospective buyers should blame private sector inaction, and the fact most people want to live close to Sydney’s centre and not its rural outskirts.” Maybe Tony, that perception is aligned to the fact that your very own government struggles to build a sand castle let alone a transport model that works or arrives on time for that matter. Not to forget the taxes that developers are forced to pay to obtain a Development Approval/Building Approval.

See you next week to upset somebody else!

Cheers ^__^

This week’s open for inspections http://www.rwm.com.au/sales-list/open_times_sales/

For this week’s recorded Balmoral real estate, 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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19.02.10Robert Simeon6 Comments »

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The Australian real estate market is an amazing landscape of media commentaries that although initially, in the limelight, have now been be deemed unreliable. Of course the manipulation of the Global Financial Crisis (GFC) has led to a media storm where hired guns are in retreat – and licking (terminal) media wounds. So I could not resist the temptation to re-visit the human headlines relating to our real estate industry since the onset of the GFC.

As Alan Kay once said “The best way to predict the future is to invent it.”

Before the swine flu, real estate markets were subjected to unrelenting forecasts that simply never came to fruition – enter Professor Steve Keen (no doubt humming the words of “Climb every Mountain”) the King of property forecast bloopers. On November 28, 2008 Keen predicted zero interest rates within two years and a forty (40) per cent drop in house prices within five years (double the drop in the United States). Macquarie Bank interest rate strategist, Rory Robertson, declared that “Dr Keen’s gloomy predictions of an Australian housing market plunge had a one per cent chance of being right.” This then prompted Robertson to challenge Keen that the loser would wear a T-shirt saying “I was hopelessly wrong on home prices! Ask me how.” And make a 200km trek from Canberra to Mt Kosciusko. For the record Rory Robertson thus far, has been spot – on with his market predictions.

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Tim Mooney Photography – Manly beach back to Sydney CBD

timmooneyphotography.com
www.sydneywaterfronts.com

When the Reserve Bank of Australia (RBA) met this week, it was prediction time. What would it do with the official cash rate? It didn’t go to zero but remained (for the third month in a row) at three (3) per cent. Whilst the RBA has strong concerns with unemployment, inflation is the growing concern (as I predicted in last week’s edition). RBA governor, Glenn Stevens, said, “The Board’s current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed.”

The TD – Securities/Melbourne Institute inflation gauge rose 0.4 per cent in June, following an 0.3 per cent fall in May and no change in April. Annual inflation (measured by the gauge) identified that the rate in May was 1.5 per cent. The RBA’s target range is to contain inflation between 2 to 3 per cent. The inflation accelerants to watch will be petrol, food and household rents which are repeat offenders in the Australian economy.

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Figures released this week by The Australian Bureau of Statistics (ABS) show that, for the eighth month in a row, real estate buyers took out 2.2 per cent more home loans in May (up again from the 0.9 per cent April figures). It should also be noted, that first – home buyers increased from 28.6 percent in April, to 29.5 per cent in May. The Federal Government’s first – home owner’s grant is a concern (another prediction, another story and another day).

The one thing missing from our markets (until June) has been confidence so it came as little surprise to see consumer confidence surging in July to its highest level in eighteen months. The Westpac – Melbourne Institute index of consumer sentiment rose in the month to 109.4 points, seasonally adjusted. The index in July was up 38.5 per cent from a year ago, prompting Westpac Banking chief economist to announce “This is unquestionably a stunning result.” On the back of our $61, 238,200 sales last month, it would be reasonable to suggest that we are not witnessing predictions, rather market affirmations – with no conspiracy theories.

Of greater concern is the continuing decline in construction where house building contracted for seventeen (17) consecutive months in June. Detached home sales decreased by 9.9 per cent in NSW which is based on delayed projects and difficult credit conditions. Too hard for our elected politicians to fathom – even though they launched ‘Nation Building’. Simply put, you can’t put a plaque on a house although you can on a school or a hospital. It is abundantly clear that Ruddy Fantastic has stuffed this up and many are calling Nation Building ‘Plaque Building’ – ah egos at work!

One prediction I did make some time ago was that Google (the online bible) would enter the Australian property market and take on www.domain.com.au and www.realestate.com.au with a free service. Google launched Google Maps at 3.00 pm on Monday this week and the exclusive announcement can be read at www.business2.com.au I have uploaded the video Google release for your perusal or you can see for yourself by clicking on http://maps.google.com.au/

Richardson & Wrench Mosman & Neutral Bay (RWM) is ranked at number one on Google for Mosman real estate searches. I just love it when a plan comes together!

Fort Crumble (NSW government) has been active in the real estate market busily selling our police stations to off-set mismanagement and dwindling coffers. Nine police stations (including Mosman) and another 200 buildings and parcels of land, including the Sydney Fish Market, are now being listed and sold by Fort Crumble’s real estate agent (not RWM). Obviously our inept premier expects our police officers to work from home to keep overheads down.

The unemployment rate was announced this week with a moderate rise, to see 0.1 ppt to 5.8 per cent (prediction 5.9 per cent) NSW (6.5%), Victoria (6.0%), Qld (5.4%), WA (5.1%), SA (5.4%)and Tasmania (4.7%).

A prediction on NSW labor being re-elected? No hindsight required however, there is always the Hope Factor. Many subscribers would have seen television advertorials boasting contributions to a building and jobs creation programme for the state of NSW (another huge tax payer cost). The alternative is to give away our state assets simply because those involved were not intelligent enough to manage our economy in the first place.

It’s no wonder NSW leads Australia in bankruptcy when our very own elected government is staring down the barrel of a Part X agreement.

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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10.07.09Robert Simeon4 Comments »

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

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

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

Tim Mooney Photography – Taronga Zoo, Mosman

www.timmooneyphotography.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Cheers ^__^

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

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12.06.09Robert Simeon4 Comments »

Despite the ongoing economic rumblings Mosman real estate sales, Cremorne real estate sales, Neutral Bay real estate sales and Cammeray real estate sales in 2008 have been mixed results thus far. It has become most increasingly difficult to call these unique markets given sentiments change based on an overload of data which more often than not remains strangely in the negative zone. Better known today as the Mosman myths and the real estate mysteries where facts never get in the way of a good story.

Better still the 2008 property “twilight” zones where (aside from media) the only thing that I see knocking is opportunity. Given the current propensity of living in the past like casting similarities to The Great Depression what many forget is that in 1995 our lives were then programmed for the greatest (not depression) change ever seen before – that being the Internet (exactly where you are now).

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21.11.08Robert Simeon6 Comments »