Those ‘green shoots’ today, resemble a jungle!

Those ‘green shoots’ today, resemble a jungle!

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I did a Google (Australia’s most visited website) key word search on Global Financial Crisis (GFC) this week and found 33,400,000 results that identify just how popular this acronym has become since its creation in late 2007. Australian Policy Online this week published an interesting report The economic vitality report: the impact of the GFC on Australians. This report draws some interesting conclusions namely:

  • The GFC proved to be more a slowdown than a recession in Australia.
  • In early 2009, there was a high level of concern regarding the economy. This was short lived, owing to effective fiscal and monetary policy measures, and by the end of 2009 the economy gained momentum (recently confirmed by economic growth data).
  • The GFC had a different impact on different age groups.
  • Indicative of the success of economic policy, spending across the board increased and spiked, following government cash handouts and tax cuts. There was no evidence of consumers having a frugal Christmas in 2009.
  • Even though the economy improved throughout 2009, more consumers felt their personal circumstances had declined.

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GardenIsland
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With one hundred percent confidence we can advise that this week’s picture is of Garden Island – just don’t ask where the garden or island is?

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Tim Mooney Photography

Whilst in Australia economic growth is expected to continue the latest Westpac – Melbourne Institute leading index indicated that the likely pace of activity three to nine months into 2010 posted an annualised growth rate of 6.3 per cent. This is well above the previous predicted growth rate of 2.7 per cent.

Encouraging – although what we do know is that whilst temporarily marinated in the GFC, Australia has a systemic infrastructure epidemic emerging (actually it has been there for years). Lack of housing will challenge recovery – Reserve Bank of Australia (RBA) assistant governor (economics) Philip Lowe said “the rate of increase in homes has been below the average of the past fifty years, while population has increased at its fastest pace over the same period.”

Stockland managing director Matthew Quinn was much more succinct, declaring that Australia faces a housing affordability “time bomb”. “Australia’s current shortage of 200,000 homes and an annual shortfall of 60,000, would balloon to 800,000 by 2020, if no reforms were undertaken.” This is what I have been saying for ages. The hopeless and misguided Nation Building expend – a – thon is nothing more than an economic embarrassment where housing not schools, should be the priority.

Housing shortage to quadruple Australia’s shortage of available homes will more than quadruple to almost half a million by 2020 if the nation doesn’t increase the pace of construction. The Housing Industry Association (HIA) identified a need for 466,000 new homes to be built by 2020 (currently down by 109,000).

We need a population strategy although Fort Fumble (Federal Government) would point to this week’s announcement by the Australian Bureau of Statistics that new home starts rose by 15.1 per cent (40,022 commencements) in the December quarter of 2009. This is the biggest quarterly increase since 2001 (an 11 per cent increase from the September quarter).
Hold off the celebrations. The real Litmus Test will be revealed with the March quarter results when we see the effect on the real market after the First Home Buyers Grant was removed. More on struggle street as prices, rate rises, the average size of a home loan has risen by forty per cent since 2005. More than half a million Australians are now struggling to meet their repayments according to Fujitsu’s Mortgage Stress survey and rates are heading up not down.

Throw in this week’s announcement from Fort Crumble (NSW Government) that electricity bills will raise by a cumulative total of 64 per cent by 2013. The Australian Chamber of Commerce and Industry advised the RBA this week to hold fire on interest rate hikes until they have a better understanding of the Australian economy. I predict a March quarter decline from the December quarter results for home prices in some areas – given March is the first quarter minus the First Home Buyer Grants.

Our top – end markets will continue to do well because being close to the Central Business District, infrastructure is already in place. However, for those heading west, things can only get worse as all infrastructure initiatives have now been curtailed. Fort Crumble is a classic example as it has absolutely no infrastructure policies on its respective radar. The Australian published this week a very interesting graph that identifies how well our top – end markets are progressing following the GFC Wealthy buyers push prestige prices up.

441213-bizmoney-top-sales-aus-graphic

What can’t be ignored is our congestion problem. Fort Crumble has canned all transport infrastructure initiatives because it is broke. The State of Australian Cities Report identified that productivity growth in Australia’s seventeen capital cities (populations greater than 100,000) was critical to our economy. Australia faces a $20b congestion problem where road congestion, estimated at $9.4 billion in 2005, was likely to rise to $20 billion by 2020. Population boom means double trouble for the west with Sydney’s population due to balloon 40 per cent in 30 years. New forecasts reveal the number of people in the south – west will more than double while those in the city centre will leap 60 per cent. Not a fantastic outlook given Road congestion tax mooted is congestion the toll for a free road? As there will be no need for listening to radio as consumers will be listening to electronic government toll contribution sounds as they drive around Sydney.

Average cost of congestion graphic-420x0

MOSMAN HOUSE & SEMI SALES SAME PERIOD 2009 – 2010

1 JANUARY 2009 TO 18 MARCH 2009 – 1 JANUARY 2010 TO 18 MARCH 2010

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  • 2009 – Total properties offered 50
  • 2010 – Total properties offered 62
  • 2009 – Total properties sold 40
  • 2010 – Total properties sold 53
  • 2009 – Auction 3 sales
  • 2009 – Private Treaty 37 sales
  • 2010 – Auction 33 sales
  • 2010 – Private Treaty 20 sales
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    Note: When we publish the weekly sales each week (Click Here). The previous week’s ‘withdrawn’ or ‘passed in’ auction properties (strangely some week’s later) now appear as Sold Auction results.

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  • 2009 – Total Value Sold $110,025,000
  • 2010 – Total Value Sold $83,754,000
  • 2009 – Average Price $2,821,153
  • 2010 – Average Price $2,263,621

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We will be updating these sales results every few weeks for your observation.

Figures provided from Domain Property Data

Household finances worsen as rates rise and Wayne Swan has advised that business will be consulted on tax review which will be released before the May 11 budget – so work on May 10 – Fort Fumble refuse to release this working paper (due in March). Even better, the Fort Crumble Fudge-it which is close to being declared as insolvent. Watch this Saturday’s state elections in Tasmania and South Australia with interest.

Kevin Rudd hits new low with voters –  The Emperor can ill afford any huge swings from the Labor faithful given that he is next up on the election front.

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate Click Here

This week’s RWM open for inspections Click Here

9 Responses to “Those ‘green shoots’ today, resemble a jungle!”

  • Mark says:

    Well done Robert, another very interesting read. It will be interesting to see how the Emperor and the Monk handle the politics over the next 7 weeks while parliament is in ANOTHER recess.

  • Gordon says:

    Yes, Mark, but some people might suggest that they are safer when in recess!

    More seriously, there could be a jolt at the lower end of the market because of the first home grant changes. By definition first home buyers may not have a lot of experience, and so the FHOG probably inflated values in that sector by up to $50,000 as people rushed to qualify. Rising interest rates will now see some burnt fingers.

    Overall, it seems there’ll continue to be a big housing shortfall because punitive land taxes ensure that insufficient funds will continue to be invested in this sector. But we shouldn’t hold our breath waiting for this inconvenient fact to be recognised by either Fort Fumble or Fort Crumbled.

  • Mark says:

    Its interesting to see the transparency of the Federal Goverment about to disappear on April 30. Senator Conroy has canned the free to air digital TV coverage of House of Reps and Senate and Senate committee meetings on channels 47 & 48. Its a disgrace. How are Australians going to get unbiased and unedited coverage of what is happening in Canberra? They intend to have it available via a podcast on the web, but the amount of download not to mention the latency and quality will take us backward. How can the average Australian afford to watch proceedings considering the download limits on many plans. IT IS A BACKWARD STEP AND ANOTHER EXAMPLE OF TRYING TO COVER UP WHAT IS REALLY HAPPENING.

  • Tim Mooney says:

    Does anybody have a request for something they would like to see photographed from the air? I fly twice a week so its possible to satisfy a few requests

  • Mark says:

    Tim,

    How about Brisbane Water on the Central Coast. The key areas like Patonga, Lobster Beach, Saratoga, Avoca, Copacabana?

    Thanks

  • Tim Mooney says:

    Thanks Mark
    Next time I’m that way I’ll add them to the list
    Cheers
    TM

  • Mark,

    Mention my name with your request and Tim adds another 20 per cent to the bill 🙂 Actually many subscribers have now contacted me with similar requests given that in high resolution these pictures look fantastic.

  • Mark says:

    Robert

    Ok in that case Tim, Phuket between December 25, 2010 – January 15, 2011. Spot the OZ Special Agent on beach on at the Aussie bar.

  • Mark, I will make that task much easier for Tim – look for the 3 x 5 metre Australian flag that I proudly fly when I am there on a 17 metre bamboo flagpole. Not to forget the array of beauties that I am seated with on Patong Beach 🙂

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