It was music to our ears this week, when our favourite ‘head teller’ re-assured the property market that interest rate increases were a long way off. The ‘Governor of Moolah’ landed an awesome uppercut on BIS Shrapnel which foolishly stated recently, “that Sydney house prices could fall by up to seven per cent over the next three years because of higher interest rates”. BIS is actually predicting that the standard variable home loan will rise as high as nine per cent by the second half of 2006. It is quite clear by reading the ‘head teller’s rendition of ‘My Way’ this week, that rates will remain in a holding pattern until next year. As for BIS Shrapnel, well stand-up comedy could be a likely alternative, as the majority are laughing at them – not with them.

Whilst most would agree that we are in a slow-down mode, one needs to look at the major cause for the slow-down. Does the name ‘Bobby Dazzler’ sound familiar ? Transaction costs otherwise known as NSW Government fines for property participation are the major cause for the decline in available property in Mosman. Given that the formula applied to determine the duty payable, turns twenty next year (property prices are much higher in 2006, than 1986) most would agree that the time has arrived to set a Stamp Duty that encourages and not discourages purchasers. I guess the ‘Governor of Moolah’ has to remain politically correct by not commenting on the effect that this duty has on the property market.

Last week we raised a few eyebrows when we published the number of houses that have traded in Mosman since 1995. We received quite a few emails requesting statistics in Cremorne and Neutral Bay. In order to keep these numbers in proportion to Mosman I will publish the Mosman statistics again.

If you look at the figures for all suburbs since 2001 the volume of houses available has been on the decline, and we can assure you one hundred per cent that the pattern will continue. With just two weeks before the accountants pull up stumps for 2005, the property market will move from offline advertising (Fairfax and The Mosman Daily) to online marketing, as July is a write-off month with no new marketing campaigns commencing. Most gauge the strength of the property market by the number of phone calls an office receives. This rule of thumb has now changed as we now pay particular attention to our online traffic which for us, still remains at record levels.

What you will also hear about over the next few months is off-market sales and we can tell from some of our recent inspections, that this method of selling is very much alive and well. Top-end of town buyers prefer it this way as do many vendors who prefer greater confidentiality, that is until settlement (unless they purchased the home in the maiden name of the wife which makes it harder to track and is of course, totally legal). It will be a harder market as we won’t have as many properties, however vendors today are now selling with the agency that can offer them the best infrastructure. We now invite prospective vendors to come into our office and we show them first hand what the largest e-business in Mosman looks like and how it will work for them.

When markets get tougher we have to get smarter. Mosman has approximately 4,900 houses and from 1995 to 2004 approximately 3,771 have sold, which explains why volume is on the decline. Except for those relocating, it makes very little sense for the market to continue trading because of transaction costs and this is a common theme all over the property market. On a brighter note, it confirms that prices will not decline, they will actually increase.

Over the next couple of weeks we will be launching another electronic extension to our business called Virtual Realty Results. We are proud to announce that it is also an industry first. I am not going to say too much about it except to confirm that it will become, over time, very popular with the other IT based real estate agencies. The fact is that we have created it and you will see it here first… Cheers

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