‘X – MARKS THE SPOT

‘X – MARKS THE SPOT

The year 2003 may very well be remembered as the x factor, with the expats set to embark on a buying spree, with real estate earmarked as the preferred investment. Given that global markets are near rock bottom, all eyes are on bricks and mortar with Mosman top of the list for many. Already this year there is encouraging sales evidence, and given the lack of property it is the quiet “off the market” sales that are coming to the fore. The share market disappointments are largely responsible for the change in direction given that the UK market is down thirty per cent. The US is slightly better, although their shares are twenty two per cent cheaper than twelve months ago, and our All Ordinaries index is thirteen per cent down. I believe that our market will return a minimum twenty five per cent capital appreciation this year, and at some stage the average price will break the two million mark. (Steve, does not share my bold predictions on this).

This week we saw the Housing Industry Association release a study which identified the average new mortgage as accounting for forty per cent of the average disposable income. The report went on to say that housing was more affordable when interest rates were at seventeen per cent way back in 1990. Personally, I can’t agree with that because back then, the best seller was ‘Chateau cardboard’, better known today as the good old wine cask, as households battled to make ends meet, thanks to the ‘recession that we had to have’. Unemployment was double that of today, and employers battled to keep their staff in employment. Today, the first home buyers who took advantage of the grant are actually cashing in on the rising market, and trading up as they increase their individual wealth base. So let’s have a look at what Messrs. Simeon and Patrick were selling homes for in 1990.

A semi in Holt Avenue was fetching $383,000, a terrace home in Cremorne Road sold for $645,000, a home on Stanton Road just a few minutes to the beach sold for $760,000, and a grand home on Prince Albert Street sold for a staggering $1,050,000. As a matter of interest our largest sale for the year was a waterfront in Carrington Avenue which sold for $1,400,000 and that was a forced sale. Our cheapest sale for the year was a one bedroom unit in Clifford Street for $145,000. Next week I will address 1991 property sales compared to the boom of 1988 where we saw in some instances, home values drop by as much as fifty per cent. Yes, housing was so affordable then! At this time the banks were booting clients out of their homes, and marketing campaigns had a sad caption, “Our instructions are to sell – Mortgagee in Possession”. Thankfully today, such captions are stored away in the archives where they belong!

With so much discussion about Land Tax at the moment, John Brogden has finally made a statement, wherein he renewed his pledge to abolish the Premium Property Tax, if elected. That will make 1400 NSW residents happy. This year the NSW Government collected $14 million, and it is an absolute disgrace that this tax was introduced in 1998 in the first place.

As we get back into the swing of the market, this week we exchanged ten million dollars worth of property. Marize exchanged four apartments this week, and we are getting desperate for more properties. What a difference a few months make. At the end of last year nobody wanted to buy them, today there is a race to exchange. Once again there was a window of opportunity to buy well at the end of 2002. This won’t happen again until supply exceeds demand. Looks like we are in for another interesting year, given that our Internet sales have just soared to $142,684,500 Cheers and clink ^__^

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