The 2009 Mosman property market this week went bottoms-up!

The 2009 Mosman property market this week went bottoms-up!

Our Foreign Investment Review Board (FIRB) appears to be much busier of late with early indications pointing to the Mosman house market as now in active engagement. What a difference a week can make and we are certainly not talking apparitions – rather anecdotal sales evidence. Expats have suddenly upgraded their position to buy recommendations and the 2008 house rules of engagement no longer appear to bear any resemblance.

On our blog last week, Patricia requested “Robert … An acknowledgement and analysis of the factors surrounding the high inventory of upper – end homes ($3,000,000+) that have been on the market for 6+ months (some almost a year) would be illuminating.” I love blogs as they get to the coal face of our property markets. Watch for more agencies offering this facility (highly unlikely).

In our first edition this year we highlighted the fact that (according to Australian Property Monitors) Mosman in 2008 transacted just 219 sales which is the lowest volume in decades. The hangover of the Global Financial Crisis (GFC). In 2007, Mosman, recorded 384 house transactions and in 2006 the volume was 440. Back to 2008 where the last six months was an absolute disaster evidenced by the following data.

January 2008 – 8 house sales

February 2008 – 24 house sales

March 2008 – 24 house sales

April 2008 – 25 house sales

May 2008 – 30 house sales

June 2008 – 20 house sales

The GFC decline

July 2008 – 17 house sales

August 2008 – 22 house sales

September 2008 – 13 house sales

October 2008 – 14 house sales

November 2008 – 12 house sales

December 2008 – 9 house sales

Many owners who might otherwise be selling, have to decided to hold their market position. After the Stock Market crash of 1987 where the economy came to a complete halt many forget that our property markets were in full boom just six months later in June 1988.

The buyers are calling for blood and vendors are blowing raspberries!

When I look at www.domain.com.au (the number one Mosman property portal) there are 147 houses listed – then when I remove co-agents and apartments that sneak in, it actually comes to 127. The greatest myth in Mosman is that half the market is for sale. This would equate to 2,450 houses which is a complete nonsense. Currently just 2.5 to 3 per cent are on the market. A far cry from our previous house volume trades of 6 to 8 per cent which we put down to the raspberry factor.

Back to Patricia and our blog “Hello again … Another disquieting aspect of the current Mosman market is the high volume of single –family homes available for lease for $1,000+ /wk.

In a normal market, www.domain.com.au ordinarily lists 40 – 45 Mosman houses for lease. Currently there are over 90 available with the majority over $1,000/wk. MANY of these have been available for several months. It appears that the corporate leasing markets have all but disappeared.
Thanks for any thoughts on this leasing segment.”

The leasing market for houses is actually on par with normal market demand and when one removes the double-dipping, Mosman has actually just 66 houses for lease. Although Domain lists this week’s volume as being 77 houses. It needs to be noted that more than a few properties are multi listed. The top-end of the market is somewhat weak – a result of the GFC. It should be noted that a few vendors who have sold have gone into rental properties.

Back to bottoms – up! When you look at this week’s sales activity (remember where you read it first), RWM sold two properties for $3.025 million and $3.500 million, a home in Waitovu Street was sold for $3.800 million, Prince Albert Street $6.000 million, Hopetoun Avenue $7.000 million and the big double digit Clifton Garden’s sale. RWM posted the highest recorded sale for 2008 with the sale of a Raglan Street waterfront for $14.700 million and last week’s sale is not far behind it. Congratulations to Richard Simeon who negotiated both these sales. All the sales recorded over the last week were Internet based advertising campaigns. I am of the opinion that our Mosman property market has now bottomed (given the current anecdotal sales evidence) when compared to the 2008 sales volumes.

I will address the stimulus package next week. What I find interesting is that Kevin Rudd is allocating taxpayer funds that our hopeless and useless State Governments were supposed to expend, based on tax receipts. Much like Mum and Dad bailing out a sibling on a margin call. Kevin Rudd is attempting to buy another term in government at taxpayer expense. Double dipping in taxation is simply not acceptable. State wastage is of greater concern. On the 7.30 Report this week host Kerry O’Brien asked Prime Minister Kevin Rudd if the NSW government would struggle to assemble a Lego set, let alone an infrastructure package. Rudd did not answer the question (for very obvious reasons).

State governments complained when Australia was in economic growth that they needed greater GST receipts and let’s be honest we are in mild recession. Just that it takes eight months to be told that we are in recession. The GST receipts will be down by forty per cent so Fort Crumble (NSW Government) is now bankrupt.

Bottoms – up and cheers to that and blog away ^__^

10 Responses to “The 2009 Mosman property market this week went bottoms-up!”

  • Patricia says:

    Thanks for your insight and clarification on the upper-end of the Mosman market, Robert. An excellent weekly newsletter as usual!

  • Melanie says:

    Robert……” blood and raspberries” I love it thank you not just for a great read but and education !!!!

  • Very well researched article especially showing the current sales volumes and I just love the Fort Crumble description of the NSW out of touch Government !!!! we need Robert to write for the Financial Review. This year will be an interesting one its so refreshing to hear some positive news keep up the good work.

  • Roger says:

    Do you really think with Australia’s debt level running at 1.5 times the underlying income that the housing market (let alone Margin-man – sorry Mosman) is really out of the woods? Gutsy call to call the bottom of the market. Interesting to see how this blog develops if things continue to slide. The facts are very useful, the commentary smacks of desperate self interest. You sound like the people last July who called the initial blip of the stock market crash the bottom. There is a long term shift underway where Australians are going to save more and cut back on the gearing. Australia is behind the UK and the US in its reset as we arent quite as stupid with our loan underwriting as NINJA loans in the US, but a serious deleveraging of the consumer will still continue and deflation in the housing market is far from over.

  • Steve McCarthy says:

    Kevin Rudd is attempting to buy another term in government at taxpayer expense. That really tells the whole story Robert. I’m convinced Mr Rudd and the spin doctors believe the general populace has an IQ of less than 50.
    The NSW government is not even worthy of a Yes Minister skit, shameful, lost, visionless and bankrupt. What is it that some see and others don’t. Expressways that don’t link, 100 year old roads carrying major arterial traffic. Dud Public Transport. Thank God for the front door, close it, pull the blinds, turn on the fans and forget about the rest.
    Trouble is that’s been happening for far too long, and now perhaps people will stand up and demand changes, now!!!!!!!

  • David says:

    Robert
    You mention…….All the sales recorded over the last week were Internet based advertising campaigns….can you elborate….do you mean no press/TV/radio advertising and solely internet?

  • David – that is correct none of the properties sold had been advertised in print in 2009. They were all listed on the internet only which remains the case for the vast majority of properties currently on the market.

    If you look at the print bible Saturday Domain – last weekend just twenty houses were advertisied which for this time of the year is a record low. So we have 20 houses in print and 145 houses online so this leaves a pretty big clue.

  • daniel says:

    There is an old saying in the market and that is “You know what happens when you try to pick bottoms?”. Time will tell.

  • Michael says:

    All these positive thinkings are fine but someone should inform the team of valuers who read & listen to media and when they value the houses they are more negative than the media. A property listed for $4+ negotiated to buy at $3M then valuation comes below purchase price which is $1M less.
    What do you say to this?
    I think the valuers in bank panels are intentionally valueing the properties low to push prices down and you know the rest! Probably they have their instructions from Banks to do so. God knows!

  • Michael,

    I agree 100 per cent with your assessment. Just last week we sold a home for $500,000 more than a formal valuation that an another interested party commissioned. We told the valuer what we believed the property was worth in the current market and the valuer chose to ignore our opinion.

    As they say if valuers had been born with personalities they would be real estate agents 🙂

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