Time for property markets to step up and step out!

Time for property markets to step up and step out!

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That proverbial property fence is about to get a whole lot lighter because this week in real estate is good news week! Thus far in 2011, the Mosman house market has erred on the side of caution with historically low property offerings, but is this about to change? Let’s analyse this week’s announcements, bearing in mind that since the global financial crisis (GFC) in 2008 our property markets have been in self–imposed hibernation.

This week, the Reserve Bank of Australia (RBA) decided to leave the cash rate at 4.75 per cent. Here is the Statement by Glenn Stevens, Governor: Monetary Policy Decision. Then the big news announcement that Australia’s gross domestic product (GDP) rose by 1.2 per cent which clearly shows that the summer floods and storms seriously impacted our two biggest export commodities – iron ore and coal. The strong National Accounts position also means that the federal government will not be able to use this as an excuse for not returning the budget deficit back to surplus. A better than expected result as the economy returns to growth in the June quarter so the September quarter should post a positive GDP result also.

Just as interesting as the GDP jumps ahead of market forecasts as consumer spending rises was a revealing survey: more cash, struggling to pay for basics, but spending more on fun. Further evidence this week – RBA graphs highlight growing savings culture where the growing trend of households is to save more and reduce debt. Despite market bets on rate cut the RBA continues to play a waiting game this cautious outlook may help contain inflation.

BUY PRINT

Australia’s unemployment rate rose in August, to 5.3 per cent (the highest level in a year) up from 5.1 per cent in July. Rising unemployment builds case for RBA to cut interest rates given the GDP results the rise in unemployment actually means that the economy is slowing. The September unemployment figures will actually show if this is trending and I suspect that unemployment will continue to rise due to the inherent problems in retail and manufacturing.

This will place the RBA under extreme pressure to lower the cash rate and it will be interesting to see if the banks, this time around, follow suit or play hard ball again? I would expect that this time, (if the following graph is any indication), they will all be singing from the same hymn book

What is interesting is that when the RBA met over cucumber sandwiches in August, there was strong argument to increase the cash rate. One month later, it has acknowledged that the global outlook is deteriorating and Australia will feel it down the track. The September quarter GDP results may tell a completely different story to that of the June quarter? Just as confusing prices fall for first time in two years where on an annual basis, inflation rose by 2.9 per cent in August, slowing from the 3.2 per cent in July.

Sydney house sales slow but steady before expected late spring uptake which is an expected, given the recent ‘shock’ market capitulations last month. We also share the opinion that the spring market set to bloom late so we expect the Mosman market to step up and step out in September, October, November and December. The telltale factor will be an easy observation – just watch the stock levels!  We expect to see a week on week growth through to Christmas. I would have to agree that the economy and housing markets are stronger than you think although households are still concerned about ‘that’ stench – Rio Tinto warns Gillard over carbon tax.

    MOSMAN – 2088

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    • Number of houses on the market last week – 107
    • Number of houses on the market this week – 115
    • Number of apartments on the market last week – 93
    • Number of apartments on the market this week – 91

    CREMORNE – 2090

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    • Number of houses on the market last week – 14
    • Number of houses on the market this week – 14
    • Number of apartments on the market last week – 31
    • Number of apartments on the market this week – 34

    NEUTRAL BAY – 2089

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    • Number of houses on the market last week – 9
    • Number of houses on the market this week – 13
    • Number of apartments on the market last week – 67
    • Number of apartments on the market this week – 79

For this week’s sales in Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here It is interesting to note from the past week’s activity that anecdotal sales evidence keeps growing as against declining.

The Australian – Bill Leak

Another diabolical week for Julia Gillard and her Fort Fumble with voter satisfaction plunging: Gillard’s support dives to new low. The obvious was stated in that only a miracle can save Julia Gillard as Labor moves on to the main game: who’s next? Stockbroker Charlie Aitken stepped up his attack on Julia Gillard by forecasting that the Australian equities market would rally by ten per cent if the Prime Minister was rolled.  I reported a few editions back, that Julia Gillard has until Christmas to turn her popularity around and I stand by that!

Cheers ^__^

4 Responses to “Time for property markets to step up and step out!”

  • Good news is always welcome. And as I am currently house-hunting, it would be great to see more properties enter the market.

  • Ann says:

    It pays to ring around on insurance, got the renewal for home and contents and it was increased 19%, with no claims made. Shopped around and got a much better deal – same as prior year

  • Gordon says:

    Charlie Aitken is no doubt partly right about the stockmarket (and the housing market?) rising if Gillard goes. But we really need an additional trifecta to get things moving:

    Remove the inane threat of a carbon dioxide tax that most people realise now will wreck our economy for no gain whatever;

    Put the closet communists back in their Green-veneer box, so that they are no longer perceived to be running the country; and

    Restore a proper workplace balance, so unions are no longer running it. They can’t even spell productivity, let alone know what it means. As Henry Ergas notes in today’s Australian “The coercive powers centre on Fair Work Australia; of the 11 fulltime appointments Gillard made…, nine have a union background. And those nine have performed to script…”

  • Ann says:

    Look at the Union Leaders on the Government front bench, some have never had a job outside Unions and Politics!!! Just amazing

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