TAKING TIME TO TAKE STOCK !!

TAKING TIME TO TAKE STOCK !!

It’s anyone’s guess what our property market will do in 2005, however, you can be assured that it will be under constant surveillance. Who knows if one could be so forthright as to even suggest that market analysts may consider adopting a plural mentality by recognising that the property markets in NSW, are actually made up by a number of blatantly obvious niche markets. Will the stock levels continue to compact as was the case in 2004 ? Will those who constantly berate the property markets adopt a positioning whereby greater intellectual fortitude will now be applied. We can be assured that the ‘Governor of Moolah’ will have eleven meetings in 2005 to discuss the state of the economy and set the Cash Rate target, currently at 5.25%. Will he apply the same mind-set in 2005, as was the case in 2004. Over the last 37 months, just four rate increases have been applied, despite not a single rate increase being applied to the property markets last year. For some who obsess about the property markets due entirely to their inability to read them, I suggest an anger management course. Then there are those who make their asset work to enable them to build wealth, due entirely to the simple reality that the principal place of residence is tax free.

So how did our ‘niche’ market finish in 2004 ? Our last edition was on December 11,2004 and our subscriber sales were at $277,065,500. We then finished the year at $285,790,500 and our last exchange took place on December 27, 2004 which overall was a great conclusion to the year. So far this year we have exchanged two homes, one in Spofforth Street for $1,400,000 and another in Fairfax Road Balmoral for $3,750,000. You can watch this space as we have some magnificent homes ready for launch in 2005. For those who follow the apartment market we have exchanged Holt Avenue for $650,000 and Ourimbah Road for $390,000 and of the current twenty six apartments on offer, a further twelve are awaiting exchange or under offer. This market is strong, with Internet enquiries running at a premium.

If you look at how the Mosman market finished overall in 2004 with a very impressive average price for a home at $1,845,946. The median change in home values over the twelve month period was just a five per cent increase. For an apartment in Mosman, it finished at $587,309 and the median price identified a five per cent climb over the twelve months also. The average price for a home in Neutral Bay finished at $1,326,979 and that equates to six per cent for the year. Apartments concluded the year at $615,133 which was a zero gain over the previous twelve months. In Cremorne, houses averaged out at $1,297,946 and that too was a zero gain, and apartments improved to $590,078 a four per cent gain. Last but not least, Cammeray houses finished at $1,095,407, again a zero per cent gain, and if you owned an apartment it jumped one per cent to finish at $532,616. So from those statistics one can conclude that the property markets here are balanced and have consolidated. It would be safe to suggest that this area is not courting parachutes !!

As we said back at the end of 2004 “investors are returning to our property markets”. Given recent figures released by the Australian Bureau of Statistics that have confirmed this, home loans to investors increased by 8.1 per cent. Actually, for most of 2004 we enjoyed a healthy relationship with investors despite suggestions to the contrary. Our ‘hands-on relationship’ was actually marinated with anecdotal sales evidence. We are constantly receiving positive feedback from the participants in this niche market, and on a further positive note for 2005, this tradition is definitely continuing. A likely cause of this could very well be represented by the fact that the property markets now continue to out-perform the share market.

Listed property trusts were a stand-out performer in posting enormous gains in 2004, so much so that they out-performed the share market by just over four per cent last year. With the exception of 2003, the listed property trusts have, since 1999, delivered higher returns than equities and the popular Aussie bonds. It is an interesting comparison to look at the returns for a home in Mosman which delivered five per cent in 2004. Listed property trusts returned 32.2 per cent. The share market delivered 27.9 per cent which still explains why the share market has started 2005 with plenty of gusto.

We are glad to be back and 2005 brings in our fifth year of ‘Virtual Realty News’. We will be calling the shots in our property market each week until the middle of December 2005. Sit back and relax, as we are predicting a very smooth ride for our ‘niche’ market this year. We believe that volume again will be significantly down. Many are confused as to what brought on the reduction in volume. Well, it has something to do with Australia having a small population. Many of the participants in the property market are enjoying their asset, and moving houses is in the future and not in the present. Cheers and clink ^__^

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