With the benefit of hindsight!

With the benefit of hindsight!

The latter part of the 2008 real estate market was stymied with speculation that in 2009, it would resemble a blood bath. For obvious reasons there was limited engagement resulting in record low transactions for the calendar year, with many suggesting that this was a clear case of ‘the calm before the storm’.

Already in 2009 we have seen that the property market bears absolutely no resemblance to the one that was predicted in 2008. The general consensus is that prices have been adjusted down and these adjustments vary from ten to twenty per cent. Anecdotal sales evidence suggests that the longer the time on the market, the greater the price adjustment.

My simple daily test for the Mosman real estate market is to monitor the number of houses currently available on www.domain.com.au This applies to all suburbs for that matter. At the end of 2008, listings for Mosman houses were nudging 200 on the Domain property portal. Today, (when one deducts the properties with multiple entries and wrong demographics) the number is just over 145.

To put this into greater perspective, in 2008 it was suggested that we could expect as many as thirty per cent of Mosman’s (approximately 4,900) houses to be on the market where we would see mortgagee-in- possession carnage. The reality is that currently, the Mosman house market is offering just over two per cent – a far cry from vocal predictions of thirty (plus) per cent.

Not to forget Mosman apartments. This is a very strong market where the Queen of Mosman apartment sales (our very own Marize Bellomo) notched up five sales this week.

We are now starting to see this resonate through the property market transactions that continue to build momentum. It has taken the purchasers just two months to get a clearer positioning of real estate markets. We are not attempting to talk our property market up – rather, to share the detailed research that we engage in that differentiates our agency’s obvious point of difference over our competitors. We prefer to offer anecdotal evidence from our research, not speculative, ill-informed rants.

It is not just in real estate that this exists as Alan Kohler wrote on his www.businessspectator.com.au “Wrong Diagnosis” about the demise of Pacific Brands. “Pacific Brands immediate problem is debt, not sales and margin.” This problem is exactly the same in real estate where high debt ratios can also have devastating effects – which is exactly what we are seeing globally. Closer to home, in 2008 we saw the Sydney South – West property markets in a free fall as a direct result of high debt ratios. These markets today are in recovery mode. I did enjoy this comment by Alan Kohler in his article. “Our political leaders, when they can spare a moment from slogging each other off and engaging in the most pathetic spin, and to the extent that they are doing anything useful at all, are focusing on the symptom not the cause – on consumer spending and employment, not credit creation.”

Our brilliant Treasurer, Wayne Swan, was boasting that his December “cash splash” was spent by many, buying “jocks and socks”. Makes one wonder what Pacific Brands think of his statement (a Bonding moment)? The theatre coming out of Canberra is nothing more than a very ordinary act. With each day, the unemployment rate escalates and I am confident that the unemployment explosion would settle down if Pay Roll Tax was abolished to enable businesses to preserve jobs. Pay Roll Tax is easily the most heinous tax and it is just a shame that Wayne Swan fails to understand this simple fact – the $14 billion a year Australian business tax that State governments charge businesses in return for employing staff. Australian businesses continue to proceed with caution although no politicians (Kevin Rudd, Malcolm Turnbull or Joe Hockey) have questioned why Australia’s official interest rate has fallen from 7.25 per cent to 3.25 per cent, yet business lending rates remain closer to the 7 per cent rate. Yes – businesses that employ Australians!!

So what is it that Kevin Rudd and Wayne Swan do *not* understand? Already the theatre is calling for a Theresa Rudd encore, given that she has successfully run an Australian business.

Australia is in a fortunate position where our banks are so strong that Boston Consulting announced this week, that Westpac was the world’s most profitable bank.

A shame that Kevin Rudd and Wayne Swan keep telling Australian businesses to mind their own business which explains why unemployment will continue to rise. As Alan Kohler suggested, ‘focus on the symptom not the cause’.

Our politicians on all sides are best summed up as Dumber versus Dumber. The Rudd/Swan “cash splashes” were all about buying votes, not about shoring up businesses. I call it Incompetent Diagnosis!

Cheers ^__^

This week’s Mosman real estate sales, Cremorne real estate sales, Cremorne Point real estate sales, Neutral Bay real estate sales – http://www.rwm.com.au/news/

Oh and Mosman also posted an $8.000 million + house sale this week 

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