Mixed messages this week in the market place when the official cash rate (OCR) climbed another +0.25 to now sit on 6.25 per cent. The Reserve Bank of Australia has launched (historically) one of its most aggressive rate attacks on the economy with three increases in the one year. It’s a familiar pattern. In 2000, it inflicted four increases on the economy taking the OCR from 5.50 per cent to 6.25 per cent (the same as today). If the pattern continues we can expect relief in the OCR because in 2001, it reduced rates six times, taking the OCR from 6.25 per cent to the lowest recorded rate of 4.25 per cent. However, since the last reduction in December 2001, the OCR has had eight +0.25 increases. What we are aware of, is that there will be a considerable amount of distressed sales in the struggling property market in the West/South-West, despite the Federal government’s announcement yesterday, that we are now experiencing a thirty year low in unemployment. So you get to keep your job – but some won’t have anywhere to live, when they bundy off. Again, additional pressures on an already fragile rental market where investors are now, almost an extinct species.

One of the most fascinating revelations is the rise and rise and rise, of the Perth property market.

Perth has experienced a staggering 39 per cent surge in property prices over the last twelve months thanks to a resources boom, and a strong migration of disgruntled NSW residents. (It will be interesting to watch their property market when the resources boom shows signs of decline).

Today, the only boom in NSW is from the elected state government that goes from one blunder to another whilst delivering a budget deficit. It is no wonder that young families continue to sell up and relocate in search of a better lifestyle for their families. We won’t see all the damage just yet although there is anecdotal evidence in some property markets where prices are recording forty per cent drops from the peak in 2003.

We (NSW) will see an enormous skills shortage as the good old chippies and sparkies go West. One of the reasons that this move is made easier, is through the Internet where families can go online and research areas of interest on the property portals from home. Previously, one had to board a plane or travel by car, to explore new lifestyle opportunities. It’s getting easier, thanks to much improved online developments where this week raised the bar even higher when they released their innovative Property Reports to their portal. Congratulations to their team who have introduced more improved changes to the portal in the past six months than since it’s intial launch. Our feedback from clients has been most refreshing. It will be interesting to watch the reported and/or delayed PBL launch. I have long said that the property markets can only sustain two pay property portals as the free ones in our case, are simply a waste of space. We are yet to receive a single online enquiry, which I find quite amazing as there are constant reports of increased activities in their market place.

At the end of the day it is all about a serious and successful business plan and in real estate it is all about balancing offline and online to deliver the best results for the business and clients.

This week we received our September quarter results and we were up 25.44 per cent on September 2005 exchanges and up 61.42 per cent on September 2005 settlements. We are in markets that constantly change and the key is, to keep a couple of steps ahead. It is not easy, but as they say “results speak for themselves” !! Cheers ^__^

Leave a Reply

Your email address will not be published. Required fields are marked *