Today, what we need is less government in business and more business in government. The property market is a classic example of this as the government allowed it to go un-checked for way too long. Now it is a monster that still remains out of control. As the property market simmers along just like the upcoming Summer, we predict that it will provide plenty of heat in the coming months. The housing affordability issue still remains unanswered given that the governments realise that today, they have made monumental mistakes by not paying more attention to the 1987 – 1993 markets. Many will argue that as a direct result of those markets, rates were deregulated, which then brought about the introduction of cheaper money, which then ignited the property market. What we are seeing today is a focus on inflation which in turn determines where interest rates sit. So how can some suggest a rate increase when inflation is down around two per cent? Maybe they see also, that the property market is set to launch again !!

Many are looking at building approvals as a market identifier however this could be misleading, as many investors are applying the “lock and load” theory as they are renting the properties out. If you look at property, it is blatantly obvious that long-term, it never goes backwards. With the help of the Internet, investors are travelling the countryside looking for investment opportunities. Our Apartment Division is more active today than ever due to our market offering positive cash flow returns. Now we are seeing rents rising as we re-let properties, and much of this is due directly to the vendor duty tax of 2.25 per cent. The mind-set of “lock and load”, means that less properties will be offered and prices will continue to climb. This again brings us back to the housing affordability, “as rents climb savings decline”. Now that a crisis is declared, it will be interesting to see how governments intervene. The median cost of a home in Sydney is more than nine times annual earnings, whereas seven years ago it was six times. Saying that house prices are cooling, is an absurdity as the property market still has plenty of sting left in it. Newcastle is a classic case of a strong property market, it is still posting an annual growth of 21 per cent. There is a very strong pattern evolving with investors concentrating on the eastern sea board as all these areas are still very much in the black.

Again if one needs to aim the blame, the Internet is very much a culprit, as the entire eastern sea board can be tracked from the comfort of one’s home. Data is so easy to obtain (but we need to be careful with that, don’t we) and acquisition strategies can then be applied. Where positive cash flows are applied, investors are applying leverage against their assets, and with a positive return the asset then goes into debt reduction, which today is happening faster as rents are now on the climb. The vendor duty tax is really about building a better future for the property owner, which is the direct opposite of what ‘Bobby Dazzler’ Carr had expressed when he introduced it. Real estate agencies are also pushing for rent increases as it improves their bottom line. It is fair to say that this tax will be an outright fizzer !!

Congratulations to Steve Patrick who won the Ronald H. Pillinger Award when he was declared the number one sales principal nationally in the Richardson & Wrench network for 2004 . Richard Simeon came in seventh which also is a fantastic effort, and yours truly sneaked in at ninth. Great effort to get all the Directors in the Top 10. Without a doubt one of the finest stars of the future is Marize Bellomo, Manager of our Apartment Division who in just three years with us came in seventh in the Top 10 salespeople in our network. Many thanks to all the other members of our staff who really put it in those hard yards which saw us finish second as the top office, behind Double Bay. We were the number one office in the network for the North Shore. If you thought the Olympics made for fantastic watching, keep watching the property market over the next four months. Cheers and clink !! ^__^

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