.

The carbon tax debacle went toxic for Labor this week when Newspoll announced its fortnightly report card – record Labor low on carbon fury. In just two weeks, Julia Gillard’s personal support has gone from its highest since becoming Prime Minister in June last year, to her worst. The Party’s credibility is now in free fall. In an astonishing revelation, Julia Gillard announced “I will continue to press to price carbon and we will get this done from 1 July, 2012”- despite anecdotal evidence that most voters believe PM broke carbon tax promise. The present carbon tax model is doomed for failure although Julia Gillard told carbon tax debate will be easy to win once the public is informed.  This is too funny for words given that due diligence thus far, is zero.

High price of short – term tactics which begs the question, will this be a short term government when it is abundantly clear that an early election is the only way out when Australia is virtually ungovernable. “Julia Gillard has learnt this week that politicians who ignore the lessons of history find themselves with historically low popularity ratings. Instead of taking a leaf out of John Howard’s script on the GST, the Prime Minister has dug a hole for Labor by trying to fast track a carbon – cum – emissions trading scheme. It is yet another sign of failure of the Gillard and Rudd governments to put long – term strategic goals ahead of short – term political tactics.”

BUY PRINT

Australia ducked the Global Financial Crisis (GFC) and it now it is faced with the Gillard Financial Crisis – Gillard is now Prime Minister in name only. Plans for a carbon tax appear to have shaken consumer confidence as carbon tax blamed for contributing to slump in consumer confidence. “Pessimists now outnumber optimists in their outlook on family finances over the next 12 months for the first time since March 2009, when Australia risked falling into recession. Westpac chief economist Bill Evans said the key factors behind the unexpectedly large fall in the index – down 2.4 per cent in March from a month earlier – seemed to be concerns over budget and tax issues, and petrol prices. While there is no specific evidence – we expect that the key negative for households … relates to the government’s commitment to price on carbon by July next year.” The Greens are killing Labor as the PM sees green and her MPs see red.

The carbon tax announcement is arguably the dumbest announcement ever made within the foundations of Australia’s political history. “Operation Abort” is already being announced – Windsor savages carbon tax strategy with the accusation of “putting the cart before the horse” because of “pressure from the Greens.” Ironic that Julia Gillard became Prime Minister with blood on her hands and months later she is haemorrhaging profusely with short – term policies that threaten the profitability of households – carbon tax is a dog ready to bite Labor.

Ziggy Switkowski wrote an interesting piece on Business Spectator Only carbon fools rush in despite industry recommending that Fort Fumble hold – off with the carbon tax until details have been formulated.  Combet: An early announcement was appropriate despite a carbon tax framework with no details to negotiate with industry. Despite business pressure for a delay, Deputy Prime Minister Wayne Swan rejects calls to delay carbon tax. This will get ugly and eventually end up with another meteoric back – flip where Caucus will take Gillard and Swan as the carcass. Keep watching the polls which will get worse for Fort Fumble especially when Kristina Keneally gets whipped at the election in two week’s time.

Property sales reach 10 – year low and the Gillard Financial Crisis is not helping matters. We note that Sydney rental market to tighten as lease is more in the new Australian dream. This does not help Australian construction contracted for the ninth consecutive month in February as the tools go down slow – down in construction activity . What we are witnessing now could be described as what the hell? Nation in regional retreat as consumers continue to tighten the belt as purses remain shut tight.

“In a grim picture revealing many families are doing it tough, about 700,000 taxpayers entered into special repayments with the Tax Office in 2009/10 – an increase of 32 per cent in four years” as Australians crippled by tax burden. The number of Australians failing to lodge a tax return has blown out to about 4 million and small businesses have racked up a crippling $9.4 billion in Tax Office debts. Households in retreat increase pressure on carbon tax with the inevitable outcome that rising bills cause consumer blues.

Every week we post on our website the weekly recorded sales activity for our demographic , so it came as little surprise when I read auction rates fudged by failed campaigns. Mosman in all probability (based on my observations) has the lowest auction clearance rate in Australia, based on results of the number of properties submitted. Yes, each week we see auction properties that are passed in and the results conveniently buried.  Some week’s/months later, when sold, they are recorded as auction sales. The last time we extrapolated the data, the auction clearance rate in Mosman was just under twenty (20) per cent. So yes, the current system is rorted. In fairness, we are really a private treaty business (maybe in 2009. we auctioned five or seven properties in total).

We intend to publish the Mosman sales results for the “above $5.000 million house market” for the past ten years, in next week’s edition.

As you will be aware, I have a bee in my bonnet over the carbon tax which every day is fast-tracking the Home Insulation Scheme. Our economy is struggling and Julia Gillard has her foot firmly on the accelerator of destruction. Alas, the Gillard Financial Crisis!

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

Cheers ^__^

Follow Me on Twitter

11.03.11Robert Simeon8 Comments »

.
However, (for some) there will be strong consequences along the way – which is always the case when governments artificially inseminate markets in an attempt to prop them up in uncertain financial times. One only has to look closely at the cash rate movements at the Reserve Bank of Australia (RBA) to see the storm clouds on the horizon after the RBA slashed the cash rate to 3.00 per cent in April 2009. And bear in mind that it was 7.25 per cent in March 2008. At or about the same time, Governments at both state and federal levels were promoting the First Home Buyers Grant (FHBG). First time purchasers locked in a fixed rate as shelter from the ongoing rental increases under cover of Stamp Duty inducements in the form of grants. One does not need to be Einstein to calculate that the cash rate will be significantly higher when the fixed loan agreement expires. Yet for some strange reason, the banks are blamed.

The “Big Four” banks have recently announced the removal of the much despised exit fees so now customers have freedom of choice to shop around. Maybe Fort Fumble’s treasurer Wayne Swan would like to explain why he approved Westpac’s acquisition of St George Bank and the CBA’s acquisition of Bank West? Instead we read Treasurer Wayne Swan flags change to four – pillars policy “the government is determined to see a new pillar in the banking system, particularly based on our mutual sector.”

If St George and Bank West were still individual entities they would be pillars five and six and the building societies and credit unions would fill positions seven, eight, nine, ten etc. Instead we see Independents back Greens’ bank bill which is nothing more than a misguided attempt to overhaul banks. The bill follows weeks of debate over the size of bank chiefs’ pay packets, interest rate hikes, high fees and the power of the big four banks. Here we go again, with more political posturing and a memory vacuum, when we consider that these very same bank chiefs positioned their respective pillars to be world’s best, during the global financial crisis. Unlike other countries, Fort Fumble was not required to bail them out and ironically today, they are bailing out on them!

The double exit strategy – excuse me for laughing as I have just read The best price signaller in the land by Peter Costello.

BUY PRINT

One thing for sure with property prices, is that there will always be waves of hysteria coupled with those who like to make waves. If you can’t ride it stay on the sand – Virtual Realty News

“Now that both sides of politics have decided to crack down on the evil practice of price signalling we might as well ask who does it and why. Because some people may not be aware that the biggest price signaller is not the Commonwealth Bank or Westpac or any of the other “evil” commercial banks. The biggest price signaller in the interest rate market is the Reserve Bank, the one the government owns.” Said Peter Costello. Of course the banks need more consistency given banks slower to lift deposit than interest rates where the more money they hold as deposits, the greater the control they have over the costs of funding. Hardly an instrument to entice depositors!

Rising wages ‘outpace growth’ the warning comes as new figures show wages are increasing at their quickest rate in two years. Business groups highlighted the potential for the $43 billion National Broadband Network to “exacerbate skill shortages and drive up wages”. Personally, I am yet to meet a supporter of this broadband ‘white elephant’. I’m definitely not a supporter and believe the money could be much better spent on hospitals, rail and roads. When I look at our Google Analytics for our website which includes Virtual Realty News it reveals the Connection Speeds – 39.97 per cent use DSL, 26.16 per cent are on Cable, 24.5 per cent are Unknown, 5.92 per cent use T1 and 1.72 per cent are on Dialup (once upon a time we were all on Dialup). For the NBN project to provide a return on capital, Fort Fumble requires over 8,000,000 million Australian to sign up. Talk about ‘the impossible dream’!

Here is why Australia can ill afford another “white elephant” as Kevin Rudd shared the blame for Labor’s errors. Addressing a business function earlier this week Mine boom biggest shock, says Treasury Ken Henry. Dr Henry said the current mining boom was between three and four times bigger than the last big boom in the 1970’s, which pushed inflation up to 17.5 per cent. Inflation is currently running at 2.80 per cent. Reserve Bank of Australia says the boom to run for 20 years as the tally of resource projects with mining firms’ commitments, soars to $133bn. At your service, our economy’s a work in progress by Ross Gittins from the Sydney Morning Herald “The structure of our economy is set to change over the 2010s, creating winners and losers and plenty of complaints. So it’s worth remembering the economy’s structure has been changing continuously since the gold rush”. Which brings us to The boom is back, and this time we may avoid the bust or will we? If we do survive we are going to need plenty of help from those banking “four pillars”.

Treasury’s move from mining to real estate during the week, was more a case of undermining the Department of Bricks and Mortar – Treasury sounds the alarm on ‘property bubble. Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the USA. Maybe they should read RBA intervened to avert housing slump given Aust mortgage market seen stable in third quarter. Total construction work done in Australia, fell 2.1 per cent in the September quarter. Our population is growing and building is declining!

So let’s see what is happening to Mosman prices for houses and units.

Source: Australian Property Monitors

Source: Australian Property Monitors

The Dyson Austen Top Ten Prestige Residential Survey 2010 Q3 July – September prepared for the Real Estate Institute of NSW, will be released this weekend – so here is a sneak preview for our Virtual Realty News subscribers. We thank Simon Feilich from Dyson Austen for the early scoop (being a subscriber has advantages).

The total value of the survey has increased forty two (42) per cent from the previous quarter thanks to the record breaking $52 million sale at 100 Wolseley Road Point Piper. The Eastern Suburbs dominate the results, recording ninety per cent of the recorded sales – a phenomenal effort. The graph that I always look forward to viewing is the highest value and total value of Top Ten transactions per quarter from 2004 to 2010 to see how our markets are aiming up. “Quarter 3 2010 recorded the fourth highest quarter on record – the main driver in this quarter is the almost ten (10) per cent increase in the equity market in July 2010” said Simon Feilich. All in all a very strong message for our top-end property markets.

So for those who are huffing and puffing about property prices, don’t forget that in every back garden you will always find swings and roundabouts.

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

Follow Me on Twitter

26.11.10Robert Simeon7 Comments »

.

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!

BUY PRINT

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

Follow Me on Twitter

19.11.10Robert Simeon13 Comments »

.
Actually not that different with the three P’s that pertain to property – position, position and position. Throw in politicians and bankers and what we have is the 2010 equivalent of economic soup that is murky and far from palatable. During the global financial crisis (GFC) Westpac and the Commonwealth banks wrote approximately eighty (80) per cent of all mortgages which explains why today, collectively, they own the largest mortgage books. Alan Kohler wrote on The Drum that banks only have themselves to blame which has caused a stir given many consumers are losing faith in our pillars of society. Of course, there has been plenty of gratuitous PR advice for our friends in banking although the politics of banking was intelligently addressed when Janet Albrechtsen wrote in The Australian – Let’s hear the positive story from the banks.

Plenty of rhetoric this week as home owners angered by increases in interest rates then news broke that the Big Four banks to dump exit fees as backlash grows against lenders. Then late this week ANZ raises rates, scraps exit fees at or about the same time as ASIC bans banks from double – dip mortgage exit fees which means banks that charge customers to establish a mortgage, will no longer be able to apply contentious exit fees. Too early to say who will get the last laugh with this announcement – possibly bank establishment fees will rise? Certainly the four new P’s won’t change.

BUY PRINT

Is the landscape at Circular Quay about to change? Special deal on city skyscraper as a giant residential tower, double the size of any other building in Circular Quay, is expected to be approved soon. The site Gold Fields House is set to become a luxury apartment block that will tower 191 m above Circular Quay making it Sydney’s eighth tallest building. Sydney has only one of the top 10 tallest buildings in Australia – which prompts the discussion for progress of our capital city.

Australian Property Monitors released its House Price Report for September 2010 and here are the key findings:

• National median house prices remain effectively unchanged at +0.1 per cent for the quarter with annual house price growth slowing to +11.5%
• Most capital cities experienced falls in prices over the quarter; however the major markets of Melbourne and Sydney bucked the trend recording positive quarterly house price growth
• National price units (excluding Tasmania) have fallen slightly, down -0.4% for the quarter, with annual growth falling sharply to +6.5%
• Unit prices have fallen in all cities except Melbourne, with Brisbane experiencing the largest price decline, falling -2.8% for the quarter

Source: Australian Property Monitors

SYDNEY

• House prices increased slightly by +0.7% in the September quarter, which is the third consecutive quarter of slowing growth.
• Unit prices have started falling for the first time since 2008, recording -0.1% for the quarter.
• Sydney’s median house price is now $634,346 and the median unit price has fallen slightly to $436,714.
• Annual house price growth sits at +11.3% and unit price growth is at +7.3%, both trending downwards.

Weak demand made for rate surprise all things considered the clearance rates are positive, although the most important conclusion would be that prices are flat lining. It is only natural that auction clearance rates fall on rate rise and we are seeing anecdotal sales evidence. One interesting observation in Mosman at present, is that private treaty sales are producing the highest volume.

Here is the comparative analysis for Mosman houses:

Mosman Houses 2009 – 1 January 2009 to 31 December 2009

• Total sold – 322
• Private Treaty – 281
• Public Auction – 41
• Total Value Sold – $815,649,751
• Median price – $2,094,000
• Average price – $2,564,936
• Highest price – $13,200,000 (RWM)

Mosman Houses 2010 – 1 January 2010 to 10 November 2010

• Total sold – 292
• Private Treaty – 219
• Public Auction – 73
• Total Value Sold – $639,048,555
• Median price – $2,100,000
• Average price – $2,468,570
• Highest price – $12,600,000 (RWM)

It should be noted that with the 2010 house sales, that the vast majority of sale prices are yet to be recorded, so we expect this year’s total value for houses sold, to be considerably higher $750,000,000 approximately. For example, this week, RWM recorded the second highest house sale for Mosman in 2010 which is yet to be recorded. Here is the Macquarie Research Economics Forecast where it should be noted that the banks have already moved the cash rate to the Reserve Bank of Australia (RBA) Macquarie Research Forecast for Quarter 1 – 2011. So what we now have is an official cash rate and a real cash rate, which I will call the “real, official cash rate” – ROCR!

So to the four new P’s – polls, populism, performance and of course profits which continue to stymie our Forts Fumble and Crumble. The politician who should have been Premier of NSW, Blacktown MP Paul Gibson ‘Fed up’ NSW Labor MP quits so now thirteen (13) Labor MP’s have announced their retirement in the past two months. Paul Gibson “we’ve moved from platform and policy and pursued a poll driven agenda.” Fort Crumble is shambolic and an embarrassment where Transport Minister John Robertson has already called his transport removalists to grab the now vacated seat. Thirteen, with more to come as powerbroker Joe Tripodi quits. Premier Kristina “Bambi” Keneally has (unofficially now) been placed on the endangered species list due to a lack of interest – polls, populism, performance and no profit.

A perfect dismount from the strangest election ever – You can say that again! The four new P’s continue to dominate as Julia Gillard losing ground to Tony Abbott, News poll shows given the continuance of Labor’s policy woes pile up. No doubt we will be hearing and reading plenty more about this in the months to come. Fort Crumble continues to disintegrate – polls and populism shape public perceptions. Fort Fumble relies on the hope factor – Swan’s numbers looking rubbery when more ‘courage’ needed in spending cuts, says Access Economics. Polls, populism, performance and of course profits continue to threaten the capability of Fort Fumble.

Back in 2000, Virtual Realty News subscriber sales sat at zero when we launched our online platform. Today, they sit at $998,770,220 so we are now $1,229,780 from breaking the $1,000,000,000 mark.

Unfortunately, this week’s $10.000 million plus Balmoral sale did not qualify – another big week of local sales which suggests a strong run of property transactions through to Christmas.

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

Follow Me on Twitter

12.11.10Robert Simeon5 Comments »

.
After all, we are in the greatest performing economy on the planet. Having sailed through and mostly ahead of the global financial crisis (GFC), our property markets once again find themselves positioned at the business–end, following a term of prolonged holding patterns. Ground conditions are perfect for take–off, with clear skies ahead and very little turbulence on the radar. Although what remains unclear, is who will be playing and who will be staying? The buzz word during the GFC was stimulus and it was merchant bankers who stimulated top–end property markets. There was no better example than Mosman, which remains the most expensive municipality (not suburb) in Australia. Bankers’ bonuses have been ‘rivers of gold’ for our bricks and mortar markets (merchant bankers remain our single largest subscribers) although their market engagement appears to have peaked in early 2008.

What is acutely clear, is that households have been actively paying down debt, instead of rolling it over and taking on more. Not that long ago, real estate agents made diary notes as to when the big banks were paying bonuses, which translated into the annual game of house trap!

Property markets move in mysterious ways (remember when the GST was introduced in 2000?). We saw property developers in Mosman gradually withdraw (especially with houses) because the additional ten per cent impacted their returns on investment and this once popular vocation became academic.

BUY PRINT

Pittwater weekenders were also very popular in the real estate indulgence markets where these properties failed the financial reconciliation of the GFC as the owners headed back home.

Another factor that needs to be considered when house values are flat, is that when additional acquisition costs (stamp duty) and selling costs are measured, vendors find themselves at breakeven. This was the norm, when purchasers were playing with additional income streams and stimulating markets with bonuses that can no longer be taken for granted. The following three graphs show the volume of stock on the market for houses and apartments in Mosman, Cremorne and Neutral Bay, with houses showing much more consistent patterns.

MOSMAN

CREMORNE

NEUTRAL BAY

The Punch guide to our rich suburbs and big houses identifies a study conducted 2003–04 and 2007–08 which identified Mosman as having the highest average income in Australia, at $131,606 (the national average is $44,402). Considering that we are now post GFC and these results are more than two years old, it will be interesting to see if there are any significant changes to Sydney’s wealthiest the richest in the land.

Confidence has always provided the much needed oxygen to all financial markets so overseas travellers would be happy this week, to see the dollar bounces as economy worries fade. The question many are asking is ‘will confidence remain sky high’? Consumers turn cautious as outlooks clouds when the Westpac and Melbourne Institute released its index this week which showed that consumer sentiment fell 5 per cent in September to 113.2.

The consumer sentiment must have been taken before Julia Gillard announces cabinet which is just in time as parliament resumes in two weeks. The broadband debate will be riveting given Tony Abbott picks Turnbull to ‘demolish’ Gillard’s broadband plan. I wonder if he read skills shortage threatens Gillard’s NBN pledge when it was revealed the regional rollout could face a skills shortage. “The Communications Electrical and Plumbing Union estimates around 7,000 now have the competency to work on the NBN’s construction, but 25,000 technicians will be needed each year to build and operate the network over the period of its construction.” In the meantime, The Emperor is off to the USA for a sleepover at the White House and here are the other cabinet members.

The big banking announcement of the week was Basel III agreement announced. Global regulators are enforcing rules for banks to hold top–quality capital totalling seven per cent of their risk bearing assets (up from two per cent) to prevent any repeat of the recent international credit crisis. Australian banks are unfazed by tough new rules given they already qualify, with the ANZ sitting on 11.1 per cent, Commonwealth Bank 10.1 per cent, NAB 9.4 per cent and Westpac 8.6 per cent according to Deutsche Bank figures. Our banks are jumping back into the property market as lenders back throwing cash at buyers although our property bubble is too fit to burst. ‘A report last week from Moody’s Investor Service found that delinquency rates are still very low. For example 30+ days – past due delinquencies were 1.34 per cent in June compared to 1.39 per cent in May. That means that less than 2 per cent of loans are falling into arrears of 30 or more days past the due date’.

As stated previously, many Australian households are pre–paying their mortgages. Major banks report that over 55 per cent of mortgagees are ahead on their payment schedule, with 40 per cent, by more than a year. What a pity that U.S.A. banks were not in that position when subprime hit!

Here is a great one on one interview by our very own Steve Patrick with Glen Spratt from Mortgageport.

This video was produced by visualdomain

This week, we celebrated the 10th anniversary of the Sydney Olympic Games. Coincidentally, we celebrated the 10th birthday of Virtual Realty News. Ten years ago, when I sent out our first edition, it went to 38 subscribers (we still have a few of these originals) and look where we are today – $956,784,220 in online subscriber sales and Australia’s longest and most successful online newsletter. I am proud to say that over that time we have never missed a single edition. We have quite a few new initiatives in store and will be working very closely with visualdomain to produce fortnightly/monthly (still working that out) video editions of Virtual Realty News for those who don’t want to read them. Stay tuned for many more real estate industry firsts!

All will be revealed soon.

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

Follow Me on Twitter

17.09.10Robert Simeon4 Comments »

.
The cocoon of life in Australia has never before been under greater scrutiny where many await the findings of the Henry Tax Review recommendations (reportedly 10 centimetres thick). Just what remains to be seen is, exactly what comes first? And just who will be indentified as swimming in those new “rivers of gold” that will allow The Emperor (Kevin Rudd) to stimulate his fast growing budget deficit. It would be difficult to imagine his “financial conservative” tag re-emerging!

The Late Kerry Packer once said “Now of course I am minimising my tax. And if anyone in this country doesn’t minimise their tax they want their heads read. Because as a government, I can tell you you’re not spending it so well that we should be donating extra.”

Welcome back to our first 2010 edition – where we celebrate our tenth year of Virtual Realty News (VRN) arriving weekly into your inboxes. Your scribe has somewhat mixed emotions relating to the year(s) ahead. Fort Fumble (Federal government) simply put; has a cash flow problem.

2009 produced just one election – Queensland. 2010 however, offers four elections being three state; Tasmania and South Australia in March and Victoria in November. The Emperor will also contest his second term which no doubt will be the taxing election given he has now frozen his (failed) climate cap for an economic sombrero! Rubbing hard on that inflation genie (growing from within) no need for predictions as 2010 will be either The Emperor ruling the roost or morphing a feather duster. Interest rates, inflation and our banks to name just a few are threatening and indeed most inclement. For example, this week Westpac withdrew from the home loan market when RAMS (Australia’s largest mortgage broker) was reined in (no loans) until Westpac gets its funding issues in order – what a message that sends to our property markets (especially to first home buyers).

Tim Mooney Photography

.

Again, Australia’s finest aerial photographer Tim Mooney, will be showcasing his amazing captures with each and every edition of VRN. No wonder Prince William declared that he would like to buy a residence in Sydney – he spent plenty of time cruising Mosman foreshores and who could argue with this view. It is a fact that ‘Balmoral’ is very well known within the Royal family!

.
The global financial crisis (GFC) dealt the death knell for every state and territory in Australia – all of which are now trading in budget deficit. Only Western Australia and Queensland can return to the black due to mining royalties.

Without the benefit of hindsight it appears more than likely that in five years time, state and territory governments will simply be made redundant given their inability to manage infrastructures within their electorates (did Henry pick that?) Fort Crumble (NSW government) is Australia’s finest example of incompetence personified – it’s still going backwards and has been doing so for well over a decade. At least our property markets are back on the road to recovery having posted a most impressive December quarter report card adding to the intrigue for the March 2010 results.

As strange as it may seem, if you cast your mind back prior to the GFC where, for housing prices to shake and move it could only start at the top-end. Australian Property Monitors (APM) identified that this is exactly what happened over the December quarter where average prices nationwide, recorded an average 12.1 per cent increase. The Reserve Bank of Australia (RBA) raised the cash rate – an unprecedented three consecutive months to finish 2009 at 3.75 per cent. Next Tuesday, when the Board meets for cucumber sandwiches and English breakfast tea, the cash rate will move to 4.00 per cent in another effort to curb our exuberance for bricks and mortar (the result of cash splashes and government gifts for first home buyers) – a false economy!

The latest RBA figures identify that consumers spent more than $20 billion on credit and charge cards in November (December figures not in yet) so do the maths as the average Australian credit card debt now sits at $3,196.00. Consumer confidence that is currently at near record levels, is in for some shock treatment, thanks to irresponsible government intervention. The top – end was slow, contracted and non responsive to the GFC, because these home owners were smashed in the recession of the early nineties. Now those who were too young to remember will have their turn and this is highlighted by the Westpac retreat this week from the home loan market.

As a result of overcast economic conditions during the GFC, landlords were aware that a paying tenant was a viable business model where APM identified that houses increased 2.2 per cent and apartments 2.4 per cent in the December quarter. With the economic clouds now clearing (given that in 2007 and 2008 rents rose by an average 12 per cent) the rental amnesty is now over and they will again be up, up, and away in 2010. Don’t forget that Australia’s immigration intake (rightly or wrongly) is the highest of any other country on the planet. Despite new construction remaining in the doldrums as consumption/immigration grows, the “lucky country” is failing miserably in the accountability stakes.

I make no apologies for my dislike of politicians (generally) especially when during a worldwide economic downturn, they sugar coat the economy with taxpayer monies. The Westpac decision this week flew under the political radar – quite conveniently.

Although, I do love the irony! The Henry Tax Review will target high income earners and they in-turn will benefit financially from the government- promoted property debutants. Interest rates are heading north – government intervention and opportunity knocks.

A pleasure to welcome Andrew Blaxland to the RWM fold. We have been chasing him for years and he is a perfect mix for our culture. Subscriber sales have jumped to $892,854,220 and hopefully our business model will record the magic billion this year (Australian record). In 2009 we led the market and this won’t change in 2010.

Welcome back friends and foes, it will be action packed for property voyeurs!

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/

Follow Me on Twitter

29.01.10Robert Simeon6 Comments »

.
Twelve months ago in our final edition of Virtual Realty News for 2008 I wrote – “The first six months of 2009 will be hard (not necessarily harder) and I believe the next six months will see a mild rebound leading to much stronger property markets!” As it turned out this prediction was one hundred per cent correct and in June 2009 we posted $63,000,000 in sales – the rest (just like that edition) is now history. Despite an avalanche of doomsday prophecies (and there were plenty) the missing link for the prophets was that they simply underestimated the power of the Internet and smart business models.

Every day, we spend an intoxicating amount of time in front of a computer – reading, writing and communicating. Just weeks prior to our final edition in 2008 I wrote – “I have said it before and I stand by my previous comments that in the recession of the early 1990’s there was no Internet and no electronic information highway that today, has played a dominant role in the recovery process.” Once informed, the decision making process is activated – the dominance of online during the global financial crisis is now a legacy that will continue to grow and dominate.

Some would suggest that it was a stimulus package but I would argue that those prophets would not know the difference between ‘Word’ and ‘Outlook’. Politicians make a habit of wording their outlook differently, based (more often) on spamming the minds of the electorate with nonsense.

The hive of activity as the Boxing Day – Sydney to Hobart race is fast approaching

www.timmooneyphotography.com

So what are our predictions for the Mosman property market in 2010? Don’t worry if you blink, as it won’t be moving that fast although we see strong signs of renewed confidence. Housing prices will increase but we see no need to panic because we see upward growth in property values – that is growth (not boom). The Australian Bureau of Statistics (ABS) announced this week that lending for the construction of new homes rose dramatically in October increasing by 5.7 per cent. New home loans have now officially increased in 13 of the last 14 months – population explosion?

Certainly this argument is greatly assisted by the sale of a Perth mansion this week for a new Australian record of $57.500 million dollars. RP Data wrote on its blog this week – “The improvement in equities markets and business conditions has prompted many top end buyers to venture back into the market. For a while there were many bargains to be had – premium housing markets took the biggest value dive of any sector around the country in 2008 and now seeing the biggest jump. Values in the top end are now once again at record levels, having risen 2.4 per cent higher than the previous peak recorded back in February 2008. On an annual basis many of these premium suburbs have recorded some of the largest falls in median house prices however, it is clear with confidence returning many areas are set to bounce back or already doing so.”

Politicians and banks will provide great fodder for Virtual Realty News in 2010.

It has already started with this week’s Westpac “banana debacle” when it stupidly sent customers an email justifying its recent interest rate hike. Its rationale was to compare Westpac as the business selling banana smoothies – too much egg nog I thought, so have a look.

Maybe this graph presents a more accurate positioning from the “Bananas in Pyjamas” who must think all their customers are in a slumber with no Internet access.

Fort Fumble – Federal Government

.
Fascinated by spending other people’s money (tax payers) whilst consumed with the belief that Australia still requires its stimulus package, The Emperor (Kevin Rudd) is currently holidaying in northern Europe. His preferred mode of transport has been letting him down – given Air Force One has ongoing mechanical problems – much like our economy.

Co-pilot Wayne Swan needs to masticate more, because his ears keep popping. As was pointed out in Letters to the Editor, this week in The Daily Telegraph. “Treasurer Wayne Swan fools no one with his ongoing bleating about banks raising interest rates much more than the Reserve Bank. What’s he doing to restore the competitive pressures that have collapsed in the financial services sector under his brief watch? While the Government discriminates against smaller financial institutions in its guarantees for wholesale funding, his utterances are simply deceptive posturing.” The co-pilot did approve the acquisition of St George bank to Westpac so have a banana smoothie on the house.

The Mad Monk is waiting in the wings although that too, may be an aborted takeoff with plenty of Liberals in the hanger. Malcolm Turnbull will probably head back to merchant banking where approval ratings will improve considerably.

Fort Crumble – NSW Government

.
Where does one start – the most incompetent governing body in Australia’s history – the ‘violent crumble’ of all governments?

Robert Gottliebsen recently wrote on Business Spectator “We’re scaring off housing investors. Governments, whether they be in Canberra or in the states, often pass legislation without ever understanding its consequences.” He is referring to our housing crisis and talking about property investor taxes. “This means that if you hold an average investment property in Sydney and this pushes you over the $376,000 land tax limit, it makes no sense to invest in another. The annual holding cost figures look roughly like this: land tax 1.6 per cent; rates/water 1.0 per cent; mortgage interest 7.00 per cent plus; and maintenance/agent 1.0 per cent. That’s represents total costs of 10.6 per cent of your investment.” Rents will go through the roof over the next twenty four months.

Thoroughly enjoyed reading an article this week in The Daily Telegraph – NSW leads economic rebound. “NSW is leading the national economic recovery with forecasts of a miraculous turnaround in growth figures in the coming year. The State’s Budget is also expected to return to surplus a year earlier than expected, with a $872 million surplus expected in 2010 – 2011.” Technically it was broke well before the global financial crisis although this did not restrict the excitement of newly elected Premier Kristina “doodle dandy” Keneally “who has absolutely no tertiary qualifications” from shrieking (with accent) that the NSW Budget was “back in the black”. Oh dear!

No doubt “doodle dandy” would have been suitably impressed to learn that Nathan “no strings attached” Rees, brilliantly negotiated the sale of our three Manly JetCats that cost NSW taxpayers $3 million – with the purchaser flogging them off shore for more millions. Nathan “no strings” out, and Kristina “doodle dandy” in – so much to look forward to next year.

It has been our absolute pleasure delivering Virtual Realty News to your inbox each week and we are now into our tenth year (never missed an edition). I remain very confident that in 2010 we will be the very first Australian real estate agency to break the magic $1 billion in subscriber sales – currently at $887,154,220.

Special thanks to the aerial photographic gymnast of the sky Tim Mooney for his amazing photographs – a weekly highlight (for us) to explore his vast library of photography.

We thank you for your patronage. Defamation suits have been interesting and engaging (it’s just that I am an advocate for freedom of speech). The audit of our books by The Office of State Revenue was a highlight which re-inforced the fact that Virtual Realty News keeps annoying Forts Fumble and Crumble.

We will return to your inbox in late – January 2010 and go (weekly) all the way through to December 2010. It’s a tough job – but somebody has to do it!

Merry Christmas and have a brilliant, happy and prosperous New Year.

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/

Follow Me on Twitter

11.12.09Robert Simeon10 Comments »

.
An extraordinary week in Australian politics that resembled the “Battle of Sydney Harbour” or maybe “Battleships in the Big Bathtub” – where part of all contestants’ boundaries (by coincidence) were the high water marks of Sydney Harbour. The “Mad Monk” won line honours and yet, as with any race (fluid spill motions) there are always protests and on the very same day, the Reserve Bank of Australia (RBA) broke tradition and raised the cash rate (+0.25%) for the third consecutive month – a day of threes!

The cash rate, now at 3.75 per cent, keeps heading north and whilst on north, rumours that “The Emperor” Kevin Rudd is auditioning for Getaway, remain totally unsubstantiated. We can however, be sure that somewhere, he is up – up – and away and if he does call a double dissolution, will have to return to our shores sooner rather than later.

Gerard Henderson wrote an interesting article that appeared in the Sydney Morning Herald – Lodge is a long way off, but the new man will shore up base. “Since its formation in 1944, the Liberal Party has won office from Labor on three occasions, Robert Menzies defeated Ben Chifley in 1949, Malcolm Fraser prevailed over Gough Whitlam in December 1975 and John Howard vanquished Paul Keating in March 1996.” What I did find amazing was this “It is most unlikely that Abbott can lead the Coalition to victory in next year’s election. No government has been defeated in its first election since 1931, when Labor prime minister, James Scullin, faced not only the impact of the Great Depression but also splits within his own party.”

Was the Mad Monk bunkered down at his Mosman headquarters – whilst observing troop movements at the harbour bunkers of Turnbull and Hockey? Loose lips sink ships. We asked Tim Mooney to fly over Tony Abbott’s Mosman bunker.

www.timmooneyphotography.com

Westpac has jumped the starting gun where as quick as a flash it raised its standard variable home loan by 45 basis points to 6.76 per cent which comes into effect today. On November 5, 2009 John Rolfe from The Daily Telegraph wrote Cut Government taxes on savings, says Westpac boss Gail Kelly. It would appear to some, that raising rates has nothing to do with household savings. National Australia Bank (NAB) increased its home loan rates by +0.25 per cent and then attacked Westpac with this announcement “We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.”

“Westpac CEO Gail Kelly argued yesterday (November 4, 2009) that if we all had more money salted away the country could have ducked the global financial crisis.” So in the aftermath now that the crisis has passed one can only then assume that Westpac is quickly making up for lost opportunities. Business Spectator – THE DISTILLERY: Waving Westpac through John Durie of The Australian concludes that the bank “is acting entirely rationally by extending the duration of its loans, chasing deposits aggressively as evidenced by its present campaign offering 6.8 per cent for 12 – month money and raising the cost of loans to protect profits. Its deposits now offer 130 basis points more than its closest competitors and 145 basis points more than the ANZ. This is a bank demonstrating its market strength emphatically, unworried by the potential for either market or political downside.” Or “roughly in simpatico is Matthew Stevens of The Australian who reasons that “Westpac’s decision to confront its customers with the nasty realities of our national funding dilemma serves to, once again, demonstrate the shaping dislocation of the Australian banking system triggered by the GFC. The latest credit growth numbers, for example, confirm the widening schism of the Four Pillars into a two – and – two – configuration. The data shows that the Commonwealth and Westpac now dominate the system growth like never before, speaking for 80 per cent of loan growth over October.” Wayne Swan approved the acquisition St George Bank by Westpac.

Market share of the big four banks, including BankWest and St George as at September 30 / Source: The Australian

.

Macquarie Economics Research wrote Interest Rate Outlook – Gradual gets quicker

• “The RBA lifted the cash rate by 25bps in December. While the RBA’s view of the world has changed little since November, the news over the past month has reinforced their view that the recovery in train is on stable ground. We expect the cash rate to reach 4.50 % by the end of 2010.”

.

.

.

Reserve Bank Deputy Governor Ric Battellino is indeed very upbeat about the Australian economy in that we can expect and look forward to years of economic growth on the back of booming resources, escalating population growth with rising household incomes. The RBA is predicting a strong escalation of house prices because Australia had entered “a new upswing” that would extend its record 18 years of continuous economic expansion.

RP Data revealed this week that house prices have doubled to an average $600,000 over the past ten years – the average Sydney house price was $300,000 back in 1999. The average price for an apartment in 1999 was $270,000 today it is $457,274.

The latest BIS Shrapnel Residential Property Prospects report identified that residential rent are expected to rise by an average 5.8 per cent a year over the next three years. This compares with a 5.7 per cent increase in 2009 and an average annual rate of 4.4 per cent between 2002 and 2008. Throw in an electricity bill expected to rise by 60 per cent over the next three years (according to an IPART report).

Fort Crumble was at it again and we now have our fourth premier in four years – recruitment companies would be well justified in opening up a sacked premier’s division. Now we have our first female premier – Kristina Keneally (no strings attached)! Can’t wait to see who makes up her front bench? Not that she will have any say in it! The Daily Telegraph is running a petition for an early election (To Sign)

Last edition of Virtual Realty News for 2009 next week – the chaos of this week would be very hard to beat. Thankfully it is controlled – however we all know that elected politicians make great puppeteers.

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/

Follow Me on Twitter

4.12.09Robert Simeon1 Comment »

.
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/

Follow Me on Twitter

6.11.09Robert Simeon2 Comments »

.
Coincidentally, Sydney this week experienced a once in a lifetime (so they say) dust – up which as it turns out was both physical and personal. One was delivered by Mother Nature and the other is the mother of all property taxes and by all reports (leaked thus far) it will take some time for the dust to settle. Since GST was introduced in 2000 on an electoral platform that taxes would come down (only to see them increased) – nine years on, Fort Fumble (Federal government) and every state and territory government is now drowning in budget deficits.

Briefly, there was a ‘red’ lining to the clouds when former US president Bill Clinton (give the man a cigar) said Kevin Rudd (The Emperor) was one of the world’s smartest leaders. Clinton said “his friend was well – read, well – informed and an expert on China.” Well Slick Willy that’s why we call him The Emperor, because just like China everything is now in the red!

.

Tim Mooney Photography

www.timmooneyphotography.com

My tax rules: the Ken Henry way by Peter Martin from The Sydney Morning Herald was certainly an eye opener or as Ken Henry puts it “a-once-in-a-generation game changer.” We have heard that before (twice this week too).
.

NO RELIEF FOR HOMEBUYERS

.
“But the Henry review has come to the conclusion that other state taxes, much complained about, aren’t actually that bad. Stamp duties on conveyancing and land transactions are changed at a time when people are already borrowing and can afford to pay them. “(Yes every Australian loves making a Stamp duty donation for nothing because in the backyard of the property they are purchasing money actually grows on trees they are purchasing.) “They don’t seem to be much slowing our relentless desire to trade up and they help claw back the untaxed profits we make from capital gains tax exemption for the family home. The review won’t recommend an end to real estate stamp duties for as long as the capital gains tax exemption remains, and even it is unlikely to have courage to recommend an end to the exemption.” You call that a once-in-a-generation game changer?

The Henry Report should be called the Titanic as there are leaks everywhere and unlike ‘leeks’, I see no green-shoots.

PAYROLL TAX TO STAY

.
“Payroll tax is also widely abhorred but from the review’s standpoint is pretty harmless.” Brilliant this comes from a person who has never paid it! “Not only will it stay in defiance of the bulk of submissions on the topic but the review will recommend it be extended by withdrawing a range of exemptions. There are taxes that genuinely hurt employment, the review believes – those that discourage foreign firms from setting up shop and staying here.”

A tarot card economic review (in my opinion) where an “abhorred tax that is pretty harmless despite bulk submissions against this” for simply employing people – now what point is he missing? The Australian Bureau of Statistics (ABS) labour figures for August identified that Australia’s unemployment rate remained at 5.8 per cent; however the economy shed 27,100 jobs which was more than expected. How many would have been saved if we did not have Payroll Tax? We will never know! But we do know that Ken Henry predicted that Australia’s unemployment would peak at 8.5 per cent.

Now I am getting confused, so allow me to elaborate. This week, Treasury Secretary Ken Henry advised the Australian Institute of Company Directors that the Australian economy would have contracted during the global financial crisis if the government (on his recommendation) had not introduced its stimulus measures. What a no brainer, when his report promotes Fort Crumble wastage disguised as a stimulus (tax payer expense) yet rejects on the other hand, individual and business stimulus that otherwise generates and absorbs unemployment.

The Henry Report is a no -no- no report where the stimulus packages only resulted in credit card debt reductions which now brings me to our banks. Well two of them anyway. Where once upon a time (you know the fairy tale) our four banking institutions Westpac, NAB, ANZ and CBA were known as the Four Pillars. Have a look at this to see how the World banking pecking order has changed from 1999 to 2009 (move your mouse at the bottom of the page on each year from 1999 to 2009 and watch the appearances and disappearances.)This is a fascinating report where Westpac and the CBA debut in 2009.

Top 20 Financial Institutions by market capitalisation, $b, 1999 – 2009

Enter Paul Keating, past prime minister. Although I never liked the man, I must admit that he is making plenty of sense. Paul Keating joins the 7.30 Report

Kerry O’Brien “Former Labor prime minister Paul Keating is concerned that as the heat starts to come out of the global financial crisis, the big four banks have corned almost the entire market for new housing loans. Before the crisis, the Commonwealth, Westpac, NAB and the ANZ had just 60 per cent of that market. But new found dominance of the big four is now starting to be reflected in their margins on housing loans.”

Paul Keating “There’s a lot of clever things to do. I mean, here we haven superannuation the third largest pool of savings in the world. $1100 billion, growing at $100 billion a year. These funds could hold Australian AA-house mortgage bonds. No trouble at all. In fact we saw all these dreadful numbers for super, people losing money, but if they had had your or my mortgage they would be getting 6 per cent solid, or 5.5 or 6 per cent.”

Paul Keating “So therefore, we have to work out how much we can have the super funds take the mortgages up. And I think one of the ways that can happen is for the central bank, the Reserve Bank, to trade in housing bonds like it trades in treasury bonds. So it makes a liquid system, a liquid market.”

Paul Keating “And that way … you saw the super funds, they lost enormously on the real estate investment trusts, average losses of 70 per cent. So in property, their portfolios in super were too narrow. If they were widened to take into account the really good mortgages of most Australians – you know, the default rate is .00001 per cent, it’s nothing.”

No doubt Mr Keating read the Bank Mergers Report “The acquisitions of St George Bank by Westpac and Bankwest by the Commonwealth Bank in 2008 increased the market share of the ‘big four’ banks, raising concerns that increasing concentration from bank mergers may be significantly reducing competition in the Australian market for financial services.”

The Housing Industry Association (HIA) survey found that in August, new home sales posted the largest monthly increase in more than three years. Sales of houses were up 11.8 per cent and apartments jumped by 7.5 per cent. It is not just property that is on the run. David Jones this week posted its highest full year profit (on record) up 6.3 per cent.

Interest rates have now bottomed which was clearly identified when the Reserve Bank of Australia (RBA) released this week their Financial Stability Review . “In summary, global financial conditions remain challenging. But, while further setbacks cannot be ruled out, the severe downside risks that loomed six months ago have significantly abated.

Interest rates set to increase and Mosman has just 66 houses advertised on Domain down by approximately 300 per cent this time last year. So if interest rates increase why increase the stimulus further? Humming to the song “I see red, I see red, I see red.”

Whilst on red – have a look at this red hot exclusive release in the Mosman market ESCARPA

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/

Follow Me on Twitter

25.09.09Robert Simeon3 Comments »

It would be simply impossible for anyone to win a spirited debate in defence of the NSW Labor government’s competency over the last decade. If you thought “underbelly” was riveting viewing, imagine a screening of “undergovernment” where honest tax payer monies simply disappeared, just like elected politicians (on pensions). Yet despite NSW record tax receipts, the state government actually went backwards financially and this resulted in the collapse of infrastructure.

The elected government at “Fort Crumble” (NSW government) is now faced with liquidation asset sales – this only happens when you are stone motherless broke. A government initiative to sell when weak and not at the peak is self explanatory. Soon to appear on eBay:-

NSW Government – sales spin to likely buyers.