Whilst the majority of attention is centred rightfully, on the Commonwealth Games, you would still have noticed that the auction clearance rate in Melbourne is falling. When Sydney hosted the Olympics in 2000 (which is also when we launched our first edition of Virtual Realty News) it took some considerable time after the closing ceremony for our markets to gather momentum. It will be very interesting to see how quickly the Melbourne property market recovers after the excitement of hosting the Commonwealth Games.

You read it here first !! Mosman this week broke the $2,000,000 mark and it is now official that the average price for a home that falls under the 2088 postcode is $2,039,000 (up from $1,997,000 last month). The median price for a home in Mosman is now $1,775,000 and for the twelve months to March 1, 2006 the median price has risen by 11 per cent. The 2005 median price for Mosman was $1,675,000. Don’t you love it when your buck gets a boost! It is not just the houses that are performing strongly, the apartment market is fast following suit. With the average price of an apartment climbing to $662,000, the latest median price is now $515,000 which represents overall, a 10 per cent increase for the twelve months to March 1, 2006. This is obviously not contagious as houses in Cremorne and Neutral Bay posted losses of 10 per cent and 17 per cent respectively over the same period of time. The average price of a house in Cremorne is $1,407,000 with the median, currently at $1,100,000 (our record breaking sale in Cremorne settled this week so these figures will improve next month). Apartments fared better with the average price of an apartment now at $591,000 and the median price now sitting at $490,000 which, overall on the twelve months, is a 3 per cent decline.

Neutral Bay continues to resemble a “pea in a soup bowl” given that sales evidence on houses (which is low) continues to drag the prices down. The average price in Neutral Bay for a home was $1,108,000 with the median coming in at $915,000 which overall is a 17 per cent decline in the median price. Again, just like Cremorne, the apartments performed better with a $591,000 average, the median came in at $490,000 with the median change slipping just 3 per cent. Cammeray houses posted an average of $974,000 with a median of $885,000 which overall was a 7 per cent drop. Apartments increased to an average of $546,000, a median of $500,000, with the overall increase sitting at 4 per cent. To place these statistics in greater perspective, in 2005 Mosman recorded 240 house sales, Neutral Bay 62, Cremorne 80 and Cammeray 72. In apartments, Mosman posted 402 sales, Neutral Bay 219 sales, Cremorne had 309 sales and Cammeray posted just 110 sales.

Great to see Harry ‘Trigger’ Triguboff state last week that unless rents rise by thirty (yes 30) per cent, he won’t be building any new apartment complexes. I will leave you to consider whether or not that is a good thing. As we have stated for quite some considerable time now, rents have (since the removal of the Vendor Tax), increased on average, by ten per cent across the board. Our economy, could certainly not sustain rents at those levels and it is ludicrous to suggest that this is even a likelihood. The vacancy rate for Sydney currently sits at 2.6 per cent and yes, it will continue to fall for as long as investors choose to stay out of the residential market. The irony of the current situation is that investors are out of the property markets due entirely to brain–dead, Bob Carr tax policies. Not because the residential property markets were under-performing. On the contrary, the latest figures indicate that the vast majority of the property niche markets are in the black.

Whilst the attention will be on the Mosman $ breaking the $2,000,000 barrier, the immediate future looks great for the top end markets with Babcock & Brown about to send out some large bonuses to staff. Whenever the merchant banks deliver bonuses, the property market is always at the top of the shopping list, otherwise known as “the indulgence market”. This might explain the two big top–end sales posted in Clifton Gardens and Balmoral this week by our Stephen Patrick and Jacqui Rowland–Smith. Unfortunately, a couple of confidentiality agreements ensure that the addresses remain confidential. However, if you have been following our Internet sales you will see that this week they climbed to $444,471,000 !! Looks to me that all parties are subscribers to that little electronic thing called “Virtual Realty News”. Love it when a plan comes together !! ^__^

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