While Robert’s Away!

While Robert’s Away!

While our resident author, Robert, is away on holidays (no doubt ear bashing the locals about Mosman real estate!), it is left to us ‘mere mortals’ to carry on his illustrious column!!

It seems each week the real estate editorial debates get longer and longer, involving more and more analysts and self-appointed experts! We’ve never seen the market so confused, so we though we’d clear up the mess and give you a local perspective, but remember, we all know there are no guarantees.

We talk to hundreds of buyers/sellers in Mosman every week. The foremost questions at the moment are, “what’s happening to the market? Is the market really soft at the moment? Will prices rise in Spring? What will happen in the longer term? Will I receive a good price for my property?” They’re Mosman’s million dollar questions.

The short answers are: yes, the market is seasonally soft, coupled with confused buyers who are justifiably, yet unnecessarily nervous about buying property at the moment. It’s all an apparition, just as it was after Sept 11, when buyers picked up great deals for a couple of weeks only. Unlike the share market, which is still searching for its bottom, Mosman’s property market is set to keep rising in the short and longer term. Spring, which is only weeks away will see a ‘small avalanche’ of property hit the market, which will in turn, see prices strengthen as buyer confidence returns. Here’s why.

Interest rates will remain in check as the U.S. economy may remain sluggish for up to 3 years. As Morgan Stanley’s Stephen Roach warned, “the U.S. has better than a 50/50 chance of falling into ‘double-dip’ recession before it can make a meaningful recovery.” The Australian economy should remain strong and the government will do anything to keep growth between 3 to 4% coupled with falling unemployment. So you can expect maybe one ¼ % rate rise this year.

Mosman’s decreasing property supply versus increasing demand, will keep prices high. Mosman is a niche market, not reflective of Sydney’s bigger picture. Ten years ago, approximately 950 Mosman properties sold in the year. This year, the figure will drop to about half, or around 450 properties. It’s well documented that Mosman has captured more of Sydney’s prestige buyer market, than any other suburb. Just recently, Mosman’s average housing price skyrocketed to number one, well ahead of Woollahra in second place, which is reflective of future growth. And, if supply were to increase, the only drop in Mosman’s property will be in the waiting time for its buyers.

When the share markets rebound, Mosman’s property prices will follow suit. If Mosman has any residential bias at the ‘top end’ it would lean toward the finance, banking and asset management fraternity. When the share market starts to recover, watch-out! The prices for prestige property will rise. Yes, it may take a couple of years, so what, it’s a comforting growth factor that you can bank on.

Prestige buyer database has grown by 84% over the last 6 months. For the record, from our registered database of over 2,000 buyers, the $3,000,000 group is the fastest growing segment. So again, with limited supply it’s only a matter of time before demand and prices for prestige property receive a massive boost.

Push – Pull effect will drive property prices up in all price segments. As prices rise at the top end there is a follow-on effect, which lifts the value of all Mosman property. Just consider what you can buy for between $1,000,000 to $2,000,000 in Mosman these days? Only a couple of years ago $1,500,000 bought a generous Mosman property. Today the median sale price in an incredible $1,700,000. Upgrading your property now, may pay a significant ‘Mosman dollar’ dividend in the future.

Analysts predict 11 to 12% growth in property prices over the next 3 years, followed by a boom. So where’s the risk? Also, where else will you find these returns in any investment opportunity, and tax-free of course!

Now we’ve convinced you that the market is strong, don’t just ask your agent to anticipate the value of your property, ask him/her “what he/she will do that’s different and will result in achieving the highest price.” If you’re not satisfied with their answers, then you know what to do. RING RING

PS. For an update of last weeks auction, 24 Clanalpine St exchanged for a very healthy undisclosed figure. 2 The Grove is still in negotiation, with five potential buyers, and an exchange imminent. 12 Shellbank Parade exchanged for $4.7m yesterday – not bad for land value!

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