The Politics Of Property Is Taking Its Toll

The Politics Of Property Is Taking Its Toll

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The OECD this week declared the bleeding obvious. The world economy is slipping back towards recession! It was made very clear who was to blame for this slide and yes, you guessed it, politicians!

Kicking the can towards a global recession a case sensitive issue where re-election is paramount over effective policy strategy. “The Australian economy is forecast to grow by 3.25 percent in 2013, but it ‘remains marked by substantial sectoral disparities’. The government may need to slow budget consolidation and will definitely need to boost “productivity by pursuing reforms in taxation, infrastructure and innovation.” Unlikely, as 2013 is an election year which will be all about promises that will never see the light of day.

Coincidentally, this week marked the 22nd anniversary of the Paul Keating led ‘recession Australia had to have’ and this week it was announced recession possible in 2014, economist warns – a theory I don’t doubt for one single moment. What needs to be closely scrutinised here is how businesses have adapted to the brave new online world where consumer behaviour has radically changed the “acquisition” mentality.

I may have been harping on with this conspiracy theory for over a decade however, I predict that 2013 will be the year of online and I will have more to say about this next week. Follow the bouncing ball has now been replaced with eyeballs. Online shopping in Aust growing rapidly the National Australia Bank’s Online Retail Index shows that online sales grew 26 percent year-on-year to October, compared to 14 percent year-on-year, in May. Consumers have now moved to cyber shopping markets and the problem within Australia is that traditional markets simply don’t get or understand this seismic shift to the new cyber markets.

BUY PRINT

Recently, I suggested that at a bare minimum, 30 percent of Australia’s 10,000 + real estate agencies will be broke within 24 months simply because the cost of property transactions within Australia is too expensive. This takes us directly to the Australian OECD warning regarding taxation. Australian consumers are now saving and not spending!

No better example than smaller banks and non – banks to offer borrowers better mortgage deals in 2013: Delloitte simply because consumers are eyeballing the cyber markets from the comfort of their homes as against making appointments to be interviewed by a bank manager. Further evidence boom days are over for banks: Kelly where Westpac’s chief executive announced the days of Australian banks posting returns on equity of 20 percent or more are long gone.

Let’s look at the Mosman example; where this week we extrapolate the data for Mosman 2012 apartment and townhouse sales – and yes the market this further declined.

    Mosman Apartment and Townhouse Sales – 2010, 2011 and 2012

    Source: Domain Property Data

  • 2012 Sales – 370*
  • 2011 Sales – 472
  • 2010 Sales – 467
  • *Sales still being compiled although it would be reasonable to suggest that sales will be significantly down on previous years. On these figures sales are 22 percent down on 2011.

  • 2012 Total Value – $296,096,984*
  • 2011 Total Value – $379,388,525
  • 2010 Total Value – 379,388,525
  • *Sales still being complied although on this data another 22 percent reduction on 2011.

  • 2012 Average Price – $800,262
  • 2011 Average Price – $803,789
  • 2010 Average Price – $848,928

Next week, we will examine Mosman house data comparisons.

Property listings in Mosman keep declining and Mosman houses fell below the dreaded 100 mark this week. It is most obvious that that the 2010 and 2011 housing markets bear no resemblance. There is a strong argument that in the 2012 market, “the price is right”. Next year, we will have a federal election property confidence is generally much stronger under a Liberal government.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 107
    • Number of houses on the market this week – 98
    • Number of houses on the market this time 2011 – 118
    • Number of apartments on the market last week – 106
    • Number of apartments on the market this week – 106
    • Number of apartments on the market this time – 111

    CREMORNE – 2090

    • Number of houses on the market last week– 13
    • Number of houses on the market this week – 13
    • Number of houses on the market this time 2011 – 14
    • Number of apartments on the market last week – 20
    • Number of apartments on the market this week – 20
    • Number of apartments on the market this time 2011 – 30

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 17
    • Number of houses on the market this week – 16
    • Number of houses on the market this time 2011 – 14
    • Number of apartments on the market last week – 57
    • Number of apartments on the market this week – 53
    • Number of apartments on the market this time 2011 – 93

    For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral
    Bay real estate, Cammeray real estate.

    • Click Here

    For this week’s open for inspections.

    • Click Here

Another grubby week of politics PM responds ‘So what?’ to new AWU claims where despite four files conveniently going missing, the major file is in Seattle. Former Slater & Gordon partner, Nick Styant – Browne conveniently copied the file and keeps drip feeding the Australian media. I think the PM, Julia Gillard, is gone. The Gillard government spent a motza to get a seat on the United Nations General Assembly then abstained on its first vote. Gillard reassures Israel of backing despite UN vote. More a case of Gillard UN vote backdown to save her job which would explain precisely, what the OECD was alluding to.

The Reserve Bank of Australia (RBA) meets next week for the final meeting of 2012. My prediction? The cash rate will be dropped -0.25 points to 3.00 percent to match the Global Financial Crisis (GFC) rate in April 2009 at 3.00 percent. The ‘World’s Greatest Treasurer’ will announce that under Australian Labor, it delivers the lowest interest rates. Some may conclude that it is more a case of its economic policies – refer OECD for example A.

Next week’s edition will be our last for 2012.

Cheers ^__^

2 Responses to “The Politics Of Property Is Taking Its Toll”

  • Ann says:

    Hi Robert,

    You are absolutely correct. Online is booming. Ous sales are up 90.27% financial year to date. Online retailers like Catch of the Day, Grays etc are all booming.

    Catch of the Day for example reserve stock from suppliers and sell that quantity until sold out. They are now re-ordering due to demand.

    You can do all your shopping online with competitive prices and have it delivered securely. The smart online retailers are not charging more like Coles and Woolworths do for groceries.

    Have a great weekend.

  • Good blog and stats. Thanks Rob. I look forward to tomorrow’s VRN.
    Cheers

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