The one thing Bob Carr got right with his mini-budget was that it is built around miniscule intelligence. I am predicting that it will further attract investors. The only thing that would see this situation change dramatically is entirely dependent on what John Brogden says, the Liberals will do, should they be elected in three year’s time. Should the Liberals announce that they would abolish the 2.25 percent stamp duty, one would hardly expect any investors to sell in the immediate future, so the government would reach nowhere near the anticipated $690 million per annum. Should we see a withdrawal of investors from the market, watch the rental market skyrocket, with annual rental increases in the vicinity of ten to fifteen percent per annum. Investors are now guaranteed a three-year window of greater rental returns. One should not forget that investors only ventured back into real estate because they identified a safety-net following the much publicised corporate collapses and under-performing share prices. It is blatantly obvious that Brogden won’t do a Latham and offer a knee-jerk reaction. Brogden has bunkered himself down, obviously preparing a measured response. The simple suggestion of paying stamp duty on a purchase, then the annual land tax, then stamp duty on the sale, clearly indicates the arrogance the Carr Government shows for its constituents.

Whilst it is great news to see the abolition of the Premium Property Tax, (which was an all time disgrace) I am mystified to understand the rationale behind the one-off tax of seven per cent for purchases in excess of $3,000,000. Given that purchasers already pay 5.5 per cent in Stamp Duty for every property over one million dollars, this then equates to a 1.5 per cent increase or $15,000.00 for every million over three million dollars. The Stamp Duty rate was set in December 1986 when only a handful of properties in Sydney were worth the magical million. Today in all fairness, it should be 2.5 per cent based on current property values. Once again this will be flawed as the market will experience reduced stock levels for quite some time. As after the seven years of prolific trading, it is only natural that we will see reduced levels of properties on the market.

I am sure that everyone will welcome the tax relief for first home buyers and it was interesting to look at the figures for the First Home Benefits from 1 July 2000 to 30 September 2003. The top 20 suburbs who participated in the grants are Liverpool, Campbelltown, Cabramatta, Mt Druitt, Blacktown, Gosford, Wagga Wagga, Wyong, Wentworthville, Bankstown, Kellyville, Glendenning, Hinchinbrook, Fairfield, Lakemba, Penrith, Werrington, Tamworth, Quakers Hill and Dubbo. Interesting to note that not any Eastern Suburbs or Northern Suburbs made the list. Since July1, 2000 the total value of grants has been $1,537,232,912.00 or just $40,453,497.68 per month.

The real question that needs to be asked of the man who runs the “State of Decay” is where has all the money gone, how has it been squandered? Since 1995 the Carr government has collected an extra $4.7 billion in Stamp Duty from its budget of $21.7 billion. This government has, over the last seven years, collected more revenue that any other state in this country’s history, and now they are in the red! This is arguably the greatest financial mismanagement that this country has ever seen, and there is no light at the end of the tunnel. Well maybe there is a light, in the form of a light bulb which indicates that NSW is mentally and physically bankrupt.

Nothing seems to work for the government, transport, education, water resources, finances, displaced public servants, and hospitals. The list goes on! NSW has the largest mat and biggest broom in the country. If it was a public company administrators would have been appointed long ago.

As predicted the ‘Governor of Moolah’ left the rates at 5.25 per cent which comes as no surprise, given the reports this week that Sydney recorded the lowest auction clearance rate in March for thirteen years. I have stated previously that the property market is far from being an exacting science, and it is all about niche markets. The simple truth is that, yes, we are seeing a price adjustment in some instances however it is just a short term hiccup as we anticipate that the property market is in a stage of consolidation. The true test will be with the next run of auctions that start at the end of the month.

Have a great Easter, and it will be very interesting to see if Broggers plays his hand before or after Easter. Given the strong position he is now in, many are predicting a game set and match to the Opposition leader. Cheers and clink ^__^

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