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It’s no secret that the Australian government is up the proverbial creek without a paddle given its federal budget is in crisis. Finance Minister Mathias Cormann told the Ten Network: “We inherited a budget in a very bad shape from the Labor Party, a $30 billion deficit at the time of the election and deteriorating, net debt heading for $200 billion, gross debt heading well beyond $300 billion.”
This week, <a title="Australia’s growth to slow: Goldman Sachs " href="https://www.smh.com.au/business/the-economy/australias-growth-to-slow-goldman-sachs-20131127-2y9b1" target="_blank">Australia’s growth to slow according to Goldman Sachs: </a>“Relative to the acceleration forecast in the global economy, in Australia we expect economic growth to decelerate in 2014, anticipate further easing required by the RBA, forecast additional fiscal drag and see a corporate sector set on a path of investment restraint.” So based on this forecast the federal government is going to have to “trim the sales” where possibly they may be left with no other alternative than to introduce significant tax reforms.
On September 20, 1985 the Hawke/Keating government introduced the <a title="Capital Gains Tax" href="https://en.wikipedia.org/wiki/Capital_gains_tax_in_Australia" target="_blank">capital gains tax</a> in Australia where the tax only applies to assets acquired on or after that date where the most significant exemption was the family home which to this day remains tax free. On July 1, 2000 the Howard/Costello government introduced the goods and services tax (GST) a value added tax of 10% on most goods and services transactions. It replaced the previous federal wholesale sales tax system and was designed to phase out a number of various state and territory government taxes, duties and levies such as banking taxes and stamp duty. Well we know the states and territories have all put stamp duty up since then.
<a title="Record Stamp Duty windfall for NSW government " href="https://www.whocrashedtheeconomy.com.au/blog/2013/11/record-stamp-duty-windfall-for-nsw-government/" target="_blank">Record stamp duty windfall for NSW government </a>where figures published by the NSW Office of State Revenue showed a record $356.8 million was made from stamp duty receipts collected in October 2013. The booming property market has done wonders for the NSW state government’s September quarterly budget. The June budget had forecast a $374 million deficit, but a surplus of $239 million was actually achieved. You can see why the states and territories opted to ignore removing stamp duty from their respective cash registers.
<img alt="26-11-2013 9-46-01 AM" src="https://www.rwm.com.au/files/2013/11/26-11-2013-9-46-01-AM.jpg" width="470" height="321">
In July 1985, the Hawke/Keating government introduced negative gearing, the tax treatment of interest expenses and future gain affects the after tax return. Losses from negatively geared property investments, share investments, and other commercial business ventures are tax – deductible against other taxable personal income in Australia. <a title="Let’s get negative about negative gearing" href="https://www.businessspectator.com.au/article/2013/11/26/property/lets-get-negative-about-negative-gearing" target="_blank">Let’s get negative about negative gearing</a> – “The federal budget is in crisis on the revenue side, and one of the unexamined holes in the budget is the $5 billion a year used to fund negative – gearing tax concessions.”
In recent times property investors have been the major players in the market – more particularly <a title="Asian buyers make up a quarter of buyers in Gold Coast." href="/news" target="_blank">Asian buyers make up a quarter of buyers in Gold Coast.</a> To further add to the confusion when Prime Minister Tony Abbott announced his cabinet he removed the housing portfolio so on that basis his government is actually blindfolded on what is actually happening within the Australian property markets – this was a dumb and ill – informed decision.
<img alt="26-11-2013 11-52-58 AM" src="https://www.rwm.com.au/files/2013/11/26-11-2013-11-52-58-AM.jpg" width="470" height="311">
A few weeks ago <a href="https://www.propertyobserver.com.au/trends/property-will-be-front-and-centre-of-the-government-s-planned-reforms/2013102865949" target="_blank">I wrote</a>: “I am advised that Mosman has approximately 6,000 properties for rental which in itself is a staggering number – 46.6%. If the government were then to be heavy handed on negative gearing the Mosman property market would be absolutely decimated with investor exit strategies.”
Should it be phased in over say a 10 to 15 year period this could bring down the government at the next election as it would provide the Opposition a great platform – much like the carbon tax campaign Tony Abbott fought so hard on to remove the Labor government. Not to dismiss the hostile campaigning from Hawke/Keating who were the architects of this policy reform.
It doesn’t matter which side of the fence you sit on the negative gearing debate is good for the economy and the government given that investors keep investing back into their investment properties which in turn provides jobs for other businesses.
The biggest problem for the government is when the Howard/Costello government introduced the GST this created the ‘cash economy’ where improvements are done less for cash. The households are all over the less for cash while the investors demand the full invoice to claim a greater tax deduction. Therein, lies the problem for the government – it is hammered on both fronts.
So the capital gains tax is severely impacting the GST – the Abbott government would be better served critiquing the capital gains tax where with the family home it becomes a tax deduction and tax is proportionately paid on the sale. Australia today remains one of the very few countries that doesn’t tax the sale of the family home. Obviously this must be retrospective so with one third of Australians renting, another third owning with a mortgage and the remaining third owning their homes outright this could further stimulate the markets.
It would certainly reduce the cash economy.

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Robert Simeon is a director of <a style="font-size: 14px;" title="RWM" href="https://www.rwm.com.au/" target="_blank" rel="nofollow">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a title="Virtual Realty News" href="https://www.rwm.com.au/news/" target="_blank" rel="nofollow">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
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robertsimeon-hRNTwJyXkQ

The government should look at CGT on the family home

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It’s that time of the year when businesses start working on strategies to implement for next year and removing the strategies that failed – the biggest question is what should be priority one? It’s pretty simple actually given all roads point to Google. In 1998, Google’s first year, the annual number of Google searches reached 3,600,000, in 2010 it reached 1,324,670,000,000 and in 2012 it jumped to 1,873,910,000,000. The problem for most businesses is their online activity is being ignored by Google as it has tightened the way in which it collects data, today it rewards those businesses that adapt their online activities using Google as the platform.
For example businesses now need to be feeding into <a title="Google+" href="https://plus.google.com/u/0/b/105552035154250004018/+RwmAuMosman/posts" target="_blank">Google+</a>, Google+ Business Page and Google Places to name a few to start with. In recent years we have seen many businesses moving to Gmail as they align themselves to the power of Google’s web asset leverage. Google+ is closing in on Facebook with Google+ now attracting 1,203 million visitors per month and yes, you guessed it, you can’t operate Google+ without a Gmail account.
Joseph Healy from the NAB wrote an interesting piece this week – <a title="Who dares wins in a brave new world." href="https://www.businessspectator.com.au/article/2013/11/18/economy/who-dares-wins-brave-new-world" target="_blank">Who dares wins in a brave new world.</a> “We’ve seen new business models emerge and old ones decline. Established institutions have gone out of business and new leaders have emerged – often through radically altering their business models or even government intervention. The fact is however, looking historically this sense of change is nothing new – for century’s industries, economies and even geographies have been ebbing and flowing. In many ways we have moved to a phase of change that is less evolutionary and more revolutionary or transformational in nature.”
So as we cast our attention to 2014 it’s reassuring that <a title="economists forecast steady growth for Australia" href="https://www.brisbanetimes.com.au/business/the-economy/economists-forecast-steady-growth-for-australia-20131121-2xx1q" target="_blank">economists forecast steady growth for Australia</a> with economic growth set to climb steadily in the two years ahead. The Australian economy grew 2.6% in the year to June, down from 3.7% a year earlier. The forecasters anticipate that growth will hit 2.9% in 2014 and 3% throughout 2015.
The <a title="RBA eying housing market amid signs of lower rates working" href="https://www.smh.com.au/business/the-economy/rba-eyeing-housing-market-amid-signs-of-lower-rates-working-20131119-2xs8k" target="_blank">RBA is eying the housing market amid signs of lower rates working</a> which is becoming increasingly obvious to all watching the Sydney property markets – I’m tipping that houses in Mosman sales for 2013 will break the $1 billion in sales which has not happened since the global financial crisis. <a title="For the heftiest loans, the winner is Sydney" href="https://smh.domain.com.au/real-estate-news/for-the-heftiest-loans-the-winner-is-sydney-20131119-2xt8t" target="_blank">For the heftiest loans, the winner is Sydney</a>; “The harbourside municipality of Woollahra had the nation’s heftiest monthly mortgage repayments of $3250 in 2011, closely followed by Mosman and Manly (both $3033). The council areas of Hunters Hill, Ku-ring-gai, Leichhardt, Pittwater and Waverley were next, each with a median monthly repayment of $3000. Two exclusive waterfront Perth neighbourhoods, Cottesloe and Nedlands, were the only two areas outside Sydney to figure among the top 10 council areas for mortgage repayments.”
<a href="https://www.rwm.com.au/files/2013/11/18-11-2013-12-03-16-PM.jpg"><img alt="18-11-2013 12-03-16 PM" src="https://www.rwm.com.au/files/2013/11/18-11-2013-12-03-16-PM.jpg" width="510" height="411"></a>
Strong price gains over the past year mean Sydney has 123 suburbs with a median price in the $1 million to $2 million dollar range, seven suburbs with a median price in the $2 million to $3 million range and three suburbs with a median price over $3 million, according to Australian Property Monitors. All the signs are there for the property markets to further improve in 2014 and beyond. Mosman briefly hit 100 houses on the market earlier this week then dropped back to 99 when I do the figures each Thursday.
<img alt="18-11-2013 9-32-03 AM" src="https://www.rwm.com.au/files/2013/11/18-11-2013-9-32-03-AM.jpg" width="470" height="307">
<a title="Generation Rent left out in the cold" href="https://www.smh.com.au/business/generation-rent-left-out-in-the-cold-20131117-2xp14" target="_blank">Generation rent left out in the cold</a> with the roaring popularity of property investment – aided by generous tax breaks – is turning us into a nation of landlords. And this is inflicting a hefty toll on younger generations. Throw in the strong injection of Chinese buyers and it’s no surprise that the market demographics are so strong. People in China traditionally associate fortune with lucky numbers. Number eight has long been regarded as the luckiest number is Chinese culture and why is Mosman now so popular? Aside from the obvious the postcode is also 2088. The number two usually suggests germination and harmony.

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Robert Simeon is a director of <a style="font-size: 14px;" title="RWM" href="https://www.rwm.com.au/" target="_blank" rel="nofollow">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a title="Virtual Realty News" href="https://www.rwm.com.au/news/" target="_blank" rel="nofollow">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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The top business strategy for 2014: All roads lead to Google

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A very interesting question was raised this to week as to what exactly is the best and most accurate way of determining the strength of the property market? For years I have argued that the current methodology is both flawed and lazy. For example in Sydney we have approximately 637 suburbs in 38 local government areas, it would make much more sense if the property data aggregators compiled data based on the local government areas to provide a more exacting position than say just Sydney.
<a target="_blank" href="https://www.macrobusiness.com.au/2013/11/dodgy-auctions-figures-put-buyers-at-risk/" title="Misleading property auction figures ‘put buyers at risk’">Misleading property auction figures ‘put buyers at risk’</a> and “Inflated and inaccurate auction clearance rates may push misinformed buyers into the market, according to AquAsia strategist Mark Bayley. At best, these figures provide only a rough guide to a small sample of the overall sales, and that sample is inherently biased.”
Allow me to clarify this further, according to APM Property Data Mosman houses has thus far recorded 284 sales of which 223 were by private treaty and 57 by auction – which actually comes out at 280 not the 284 that they report. Mosman has an adjusted clearance rate of 43% although 61% of these sales were recorded by private treaty we see that just 20% were sold at auction. The reason why we hear so much about the clearance rates is that this is the fastest way media companies can talk the market up in an attempt to lure in vendors to advertise in their newspapers. It is as simple as that.
Last week we did an analysis of the Mosman housing market sales in 2013, 2012 and 2007 to see how the market was tracking so this week we had a look at Mosman apartments.
Mosman apartment sales January 1, 2013 to November 14, 2013.
Total – 371
Average price – $973,076
Private treaty – 273
Public auction – 48
Total value sold – $361,011,098
Adjusted clearance rate – 63%
And you’re right, the numbers of sold don’t add up they are 50 short.
 
Mosman apartment sales January 1, 2012 to December 31, 2012
Total – 467
Average price – $842,615
Private treaty – 380
Public auction – 54
Total value sold – $393,501,098
Adjusted clearance rate – 36%
The discrepancy this time is 33 properties.
 
Mosman apartment sales January 1, 2007 to December 31, 2007.
Total – 482
Average price – $852,660
Private treaty – 338
Public auction – 62
Total value sold – $410,982,261
Adjusted clearance rate – 55%
The discrepancy this time is 82 properties.
The most noticeable statistic here is that in 2007 the average price was $852,660, in 2012 $842,615 and in 2013 it has jumped to $973,076 which will get higher as there are many more sales to be recorded. Out of interest for Mosman houses in 2007, the average price was $3,035,363, in 2012 $2,852,759 and in 2013 it sits at $2,677,052 where we would expect this is to conservatively hit $3,000,000 once the properties start to sell. In September/October RWM sold over $100 million where approximately 75 million of those sales were kept confidential until settlements take place in early to mid-2014.
Interesting piece by Steve Keen who is notorious for calling the property markets incorrectly where finally he admitted in Business Spectator – <a target="_blank" href="https://www.businessspectator.com.au/article/2013/11/12/property/i-will-be-wrong-house-prices" title="I will be wrong on house prices">I will be wrong on house prices</a>. Given the lowest ever cash rate it looks at this point in time that the Lower North Shore property markets are in for a bumper 2014.
Forget watching the clearance rate numbers just watch the numbers of properties on the market in Virtual Realty News. In last week’s edition I pointed out in 2012 out of 52 weeks there were on 33 occasions more than 100 houses on the market. In 2013 Mosman has only broken the 100 mark on just four occasions. Based on this week’s numbers it looks like we won’t see Mosman hitting triple figures again in 2013.
Sanity prevailed over at Mosman Council this week when the elected councillors voted unanimously to vote against the proposed subdividing of Mosman into five new suburbs. The Mayor wrote in an email “I regret that in my recent Special Occasional Letter discussing the possible use of geographical names in Mosman, I inadvertently provided significant misinformation. As described there, the intention behind the council proposal for consultation on the use of historic geographic names, such as Balmoral and Beauty Point, was to allow residents the choice whether to use the local historic name or simply Mosman as was traditionally done.
Today, in response to council questioning, the Geographical Names Board advised council that it does not allow this choice. If an area were renamed, residents of that area would be required to adopt that address albeit that all areas would share a 2088 postcode.”
Well I can’t see this proposal ever seeing the light of day again.

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Robert Simeon is a director of <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
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The current method of gauging the strength of the market is both flawed and lazy

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Without a doubt one of the overwhelming characteristics of the Mosman market was the insatiable desire of residents to trade in the market. Today, it is instinctively clear that this desire has been lost as a result of the global financial crisis (GFC) as residents re-calibrate their lifestyles and requirements. For example, in 2012 out of 52 weeks there were on 33 occasions more than 100 houses on the market. In 2013 Mosman has only broken the 100 mark on just four occasions which explains why so few houses are on the market. I did a comparison for house sales in Mosman for 2013, 2012 and 2007 (the golden market before the GFC hit.)
Bear in mind before the GFC Mosman used to trade approximately 10% of the approximate 4,800 houses – 480.
Mosman house sales January 1 2013 to November 7 2013.
<ul>
<li>
Total – 267
</li>
<li>
Average Price – $2,825,942
</li>
<li>
Private Treaty – 207
</li>
<li>
Public Auction – 60
</li>
<li>
Total Value Sold – $714,324,833
</li>
<li>
Adjusted Clearance Rate – 44%
<ul></ul>
</li>
</ul>
Mosman house sales January 1 2012 to December 31 2012.
<ul>
<li>
Total – 283
</li>
<li>
Average price – $2,852,759
</li>
<li>
Private treaty – 250
</li>
<li>
Public auction – 33
</li>
<li>
Total value sold – $788,975,000
</li>
<li>
Adjusted clearance rate – 22%
</li>
</ul>
Based on what is on the market today it would be fair to assume that 2013 Mosman house sales will go very close to reaching $1 billion as well as breaking the 300 barrier, so all in all the Mosman market is performing much better than many give credit.
Mosman house sales January 1 2007 to December 31 2007.
<ul>
<li>Total – 374</li>
<li>
Average price – $3,035,363
</li>
<li>
Private treaty – 324
</li>
<li>
Public auction – 50
</li>
<li>
Total value sold – $1,135,225,667
</li>
<li>
Adjusted clearance rate – 38%
<ul></ul>
</li>
</ul>
So that’s what the good old days looked like although I’m prepared to forecast that Mosman will go very close to $1 billion in 2013 with total value sold. Houses are in blue and apartments in purple.
<img alt="7-11-2013 1-13-12 PM" src="https://www.rwm.com.au/files/2013/11/7-11-2013-1-13-12-PM.jpg" width="470" height="243">
Of course next year is another story with <a title="surging Sydney property market could spoil RBA’s New Year " href="/news" target="_blank">surging Sydney property market could spoil RBA’s New Year </a>given on Melbourne Cup Day the Reserve Bank of Australia (RBA) left the cash rate at 2.50% so I don’t think the cash rate will be changing anytime soon. The Aussie dollar is climbing back slowly to a possible parity so should the RBA raise the cash rate this would almost certainly drive the Aussie dollar to parity and beyond.
SQM Research director Louis Christopher was reported as saying the “number of enthusiastic buyers, particularly in Sydney, was behind the shortage of housing stock on the market” compared to this time last year. He said Sydney’s stock levels were down a “staggering” 17.3% which is about right given Mosman is struggling to break 100 yet two years ago we had 175 houses on the market in November 2011.
<img alt="6-11-2013 10-17-51 AM" src="https://www.rwm.com.au/files/2013/11/6-11-2013-10-17-51-AM.jpg" width="470" height="320">
Record low interest rates have seen the Sydney property market recording yearly growth past double digits to sit at 11.4% according to the Australian Bureau of Statistics (ABS). Sydney is leading the way with the weighted average of the eight capital cities posting a more than healthy 7.6% gain for the twelve months to September 2013. Canberra and Adelaide are still lagging behind recording 1.2 and 0.6% for the quarter. Perth (0.2%), Darwin (0.4%), Brisbane (1.2%), Hobart (1.4%), Melbourne (1.9%) and Sydney posting (3.6%) so one can only imagine the conundrum facing the RBA with which direction to take the cash rate.
Unless Sydney starts cooling down it will in all probability allow certain areas to crash and burn given the rest of Australia is so far behind. The areas that will be hardest hit will be south-west Sydney which previously has always had huge price corrections and given they are recording record prices so it’s hard to see this being sustained. In 2004, south-west Sydney sustained drops of up to 55% although this time around I don’t see it being as severe given what rocked the market then was the cash rate jumping from 4.25% in February 2002 to 6.75% in December 2007.
The cash rate will go back up and as history shows there are always casualties along the way.

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Robert Simeon is a director of <a style="font-size: 14px;" title="RWM" href="https://www.rwm.com.au/" rel="nofollow" target="_blank">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985.
He has also been writing real estate blog <a title="Virtual Realty News" href="https://www.rwm.com.au/news/" rel="nofollow" target="_blank">Virtual Realty News</a> since 2000.
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
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Sydney property market is going to give the RBA one hell of a headache

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Oh dear – the lunatics are trying to run the asylum! Mosman has always had its individual niche suburbs – Balmoral (not Balmoral Beach), Clifton Gardens, Mosman Bay and Beauty Point. Although at the end of the day it is Mosman 2088 so I see the attempt to subdivide Mosman into five new identities is nothing more than bureaucracy gone mad.
Further confirmation is the media outlets are having a field day at the expense of Mosman –<a target="_blank" href="https://www.smh.com.au/nsw/five-uneasy-pieces-as-mosman-faces-splitup-20131030-2whgw" title=" Five uneasy pieces as Mosman faces split – up"> five uneasy pieces as Mosman faces split–up</a> which makes it sound like an ugly divorce. <a target="_blank" href="https://www.smh.com.au/comment/smh-letters/return-to-sender-mosman-change-of-address-a-pretence-20131031-2wlyf" title="Plan to lock suburb out of its harbour fronts ">Plan to lock suburb out of its harbour fronts, </a>so on the one hand you have a new suburb Balmoral Beach although your home may front onto Chinamans Beach? Has this actually been thought through?
<img height="300" width="250" src="/images/stories/2013/11/06/mosman_division.jpg" alt="mosman_division" style="display: block; margin-left: auto; margin-right: auto;">
Source: Mosman Council
When I go  to look at the houses listed in Mosman that is exactly where you find every house. As For Balmoral Beach – 0, Clifton Gardens – 0, Beauty Point – 0 and Mosman Bay – 0. So it’s not that hard to see what the consumer thinks and simply shows how confusing and ill-informed such a proposal is. As they say “if it isn’t broken don’t try and fix it” and I believe there are plenty of other issues at which Mosman Council would be better directing its resources instead of again carelessly wasting taxpayer money.
<img height="354" width="470" src="/images/stories/2013/11/06/mosman-nov-5-one.jpg" alt="mosman-nov-5-one">
Photo: A suggested name change map for the Mosman Council (digitally altered)
Last week I read with interest an article that appeared in the Australian Financial Review – <a target="_blank" href="https://www.afr.com/p/national/why_this_bn_fund_manager_won_touch_eaK1Mbv4DRp3lqKKZRo8fJ" title="Why this $80bn fund manager won’t touch Australian banks.">Why this $80bn fund manager won’t touch Australian banks.</a> I liked this question to First Eagle portfolio manager Matthew McLennan by Christopher Joye. “You are clearly very knowledgeable on the Australian economy – what are your views on the resurgent Aussie housing market? It is interesting to me when you hear a politician saying this is not a housing bubble – that is just a supply – constrained market. At the end of the day, I think the Australian housing market is instinctively on the full side of fair value in a situation where the natural constituency, the marginal buyer, is already quite levered.”
I thought interesting analysis; then I thought let’s see what this so called bubble looks like and just exactly what is causing this ‘bubble’. It can be explained quite easily – supply.
The average Mosman agency today has approximately 5% of the properties on their rental lists available. Ten years ago that figure was 10-15% and twenty years ago it was 25%. Very few practicing agents today would ever remember how rental properties were once offered with rent – free inducements to prospective tenants.
<img height="285" width="470" src="https://www.rwm.com.au/files/2013/10/29-10-2013-12-38-47-PM.jpg" alt="29-10-2013 12-38-47 PM" class="aligncenter size-full wp-image-8258" style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;">
There are just 90 houses in Mosman available for purchase today, this time last year 114, and this time two years ago 155. For apartments we have 55, this time last year 92, and this time two years ago 110. So you can see a pattern forming where the last time Mosman reached 100 houses was back on May 23 of this year – and in our peak selling season spring/summer we are struggling to reach triple figures.
So again it is supply that is controlling the market and whilst it remains at record lows it is fair to say that Mosman does not have a bubble or alternatively if it does have a bubble there is next to no air in it. Cremorne houses available are 9, and twelve months ago there were 15 and two years ago 16. Cremorne apartments you have a choice of 15, and twelve months ago 15, and two years ago 36. Neutral Bay houses offer 11, and twelve months ago 20 and two years ago 18. Neutral Bay apartments offer 26, twelve months ago there were 56 available and two years ago you had 98 apartments for sale – so there is a very clear pattern evolving.
<img height="415" width="470" src="https://www.rwm.com.au/files/2013/10/28-10-2013-9-31-44-AM.jpg" alt="28-10-2013 9-31-44 AM" class="aligncenter size-full wp-image-8259" style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;">
I prefer to offer a handkerchief analysis of the market as against media outlets who offer the blanket analysis although it would be correct to suggest that the two bear absolutely no resemblance.
So then you have the constant innuendo that our banks are fast – tracking a sub – prime experience yet the ANZ posted this week a $6.498 billion profit up 11% from the previous year. NAB announced yesterday a profit of $5.940 billion profit up nine per cent on the previous year. I did note immediately following the profit announcements the Australian Prudential Regulation Authority (APRA) advised Australia’s largest banks to limit their dividend payouts to investors to allow the banks to comply with the new rules requiring them to maintain higher capital thresholds.
Whatever currency takes your fancy or whatever name you want to call it – the Mosman dollar still looks very, very impressive.

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Robert Simeon is a director of <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/" title="RWM" style="font-size: 14px;">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a target="_blank" rel="nofollow" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
 
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The lunatics have taken over the asylum: Attempt to divide Mosman is bureaucracy gone mad

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A fascinating week with the Abbott government establishing its commission of audit in order to return the budget back to surplus which will require wide – ranging cuts. <a title=" Return to budget will be ‘a herculean task" href="https://www.theaustralian.com.au/national-affairs/policy/return-to-budget-surplus-will-be-a-herculean-task-says-deloitte-access-economics-report/story-fn59nsif-1226743490437" target="_blank"> Return to budget will be ‘a herculean task</a>’, says Deloitte Access Economics so the leading question then is where are these 'rivers of gold' that the government will release in order to get the budget back to surplus?
I can’t see this happening anytime soon given these new cuts (whatever they will be) won’t be introduced until after the next election. The Abbott government’s preferred approach is to submit their reforms (cuts) to the voters at the next election seeking a mandate.
Front and centre will be property – <a title="housing is Australia’s great boondoggle" href="https://www.businessspectator.com.au/article/2013/10/24/australian-news/housing-australias-great-boondoggle" target="_blank">housing is Australia’s great boondoggle</a>. If Joe Hockey’s audit committee is looking for a way to save a lazy $43 billion a year, the middle and upper-class welfare that is Australia’s housing policy might be a good place to start.
The Grattan Institute’s <a title="Renovating Housing Policy" href="https://grattan.edu.au/publications/reports/post/renovating-housing-policy/" target="_blank">renovating housing policy</a> has determined that this massive wealth transfer puts $36 billion in the hands of existing home owners and a further $6.8 billion goes towards subsidising owner – investors into a product that delivers yields that are generally lower than equities or fixed interest. Between them, owner occupiers and investors receive over 90% of government funding directed towards the housing market.
The report confirms that government tax and welfare policies are contributing to housing unaffordability in Australia, with most of the welfare pie directed towards home owners and high income earners. Investors benefit from negative gearing and discounts on capital gains tax. First home buyers receive the first home buyer’s grant, which while popular, largely accrues to home owners via higher prices.
This motivated me to do a case study on Mosman and the conclusions sent alarm bells ringing. I went to the Mosman Council website and looked at the 2011 Census data.
MOSMAN
<ul>
<li>
Number of Houses: 4,746
</li>
<li>
Number of Apartments: 8,079
</li>
<li>
Combined Total: 12,891*
</li>
</ul>
*Includes three houseboats, eight other and 55 not stated. The census also showed at the time it was conducted that 1,242 dwellings not occupied.
I am advised that Mosman has approximately 6,000 properties for rental which in itself is a staggering number – 46.6%. If the government were then to be heavy handed on negative gearing the Mosman property market would be absolutely decimated with investor exit strategies.
NORTH SYDNEY
<ul>
<li>
Number of Houses: 4,518
</li>
<li>
Number of Apartments: 30,188
</li>
<li>
Combined Total: 34,897
</li>
</ul>
We don’t know how many properties are leased in the municipality of North Sydney.
<img alt="22-10-2013 1-54-30 PM" src="https://www.rwm.com.au/files/2013/10/22-10-2013-1-54-30-PM.jpg" width="470" height="651">
<img alt="22-10-2013 2-41-30 PM" src="https://www.rwm.com.au/files/2013/10/22-10-2013-2-41-30-PM.jpg" width="470" height="273">
<a title="Leave negative gearing alone: REIA" href="https://www.propertyobserver.com.au/finance/leave-negative-gearing-alone-reia/2013102165847" target="_blank">Leave negative gearing alone</a> said the REIA which was an expected response although the argument that carried the most weight was <a title="REIA persists with negative gearing lies" href="https://www.onlineopinion.com.au/view.asp?article=15604" target="_blank">REIA persists with negative gearing lies</a>. Reserve Bank of Australia data clearly shows that the overwhelming majority of investors - over 90% - buy pre-existing dwellings, and the proportion of investors buying new dwellings has fallen spectacularly since negative gearing was reintroduced in September 1987.
On the other hand, one area that could be looked at is the <a href="https://www.businessspectator.com.au/article/2013/10/18/politics/political-capital-locked-house-prices" target="_blank">GST that applies to new homes</a>. It is around one quarter of the taxes and charges that “drive a wedge between home builders and buyers”. Taxes and charges, including having to pay infrastructure bills up front, make up 40% of the cost of a new dwelling. This would explain why Australia’s new home construction is in the doldrums – and won’t be changing anytime soon. Furthermore this also sheds light on why so many of Australia’s construction companies have been forced into liquidation.
If the government does submit to abolish negative gearing at the next election it would win overwhelmingly given one third of Australia’s population rent, one third own with a mortgage and one third own without a mortgage.
<a title="Sydney beats $700,000 price barrier" href="https://canberratimes.domain.com.au/real-estate-news/sydney-beats-700000-price-barrier-20131023-2w1la" target="_blank">Sydney beats $700,000 price barrier</a> in the September quarter the median price jumped 4.2% to $722,718 – as one commentator remarked “We are in uncharted territory now.”

<hr>
Robert Simeon is a director of <a style="font-size: 14px;" title="RWM" href="https://www.rwm.com.au/" target="_blank" rel="nofollow">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a title="Virtual Realty News" href="https://www.rwm.com.au/news/" target="_blank" rel="nofollow">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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Property will be front and centre of the government's planned reforms

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The problem (as I see it) with commentaries about the Australian property markets is the diverse opinions about which way it’s headed. I see the main hurdle being interest rates, not a booming market, given the former is actually the handbrake on property prices. 
<a title="Prepare for interest rates rising sooner than expected" href="https://www.propertyobserver.com.au/finance/prepare-for-interest-rates-rising-sooner-than-expected-findercomau/2013101665753" target="_blank">Prepare for interest rates rising sooner than expected</a> after America raised their debt ceiling, it could impact funding costs in the Australian home loan market. It was pointed out that should average variable interest rates return to normal levels of 7% borrowers would be slugged an extra $755 million of extra repayments collectively. The Reserve Bank of Australia advises that almost a quarter of lenders’ monies are sourced from offshore so it’s inevitable that these increased costs are passed on to the borrowers.
<a title="Nobel Prize winner Robert Shiller warns of ‘bubbly’ global home prices" href="https://www.smh.com.au/business/world-business/nobel-prize-winner-robert-shiller-warns-of-bubbly-global-home-prices-20131015-2vjh1" target="_blank">Nobel Prize winner Robert Shiller warns of ‘bubbly’ global home prices</a> “This financial crisis that we’ve been going through the last five years has been one that seems to reveal the failure to understand price movements.” Well that’s true in a sense although the accelerator that caused the most damage in the GFC was the shoddy home loans where the lenders in America have absolutely no re- course should a borrower default. Unlike in Australia where, should you default, the lenders immediately commence legal action to recover the outstanding debt.
If you take a moment to look at the Australian Bureau of Statistics (ABS) you will see over the past 10 years Australian house prices have risen by a staggering 64%. Savings also grew by 61% and the Australian share market delivered gains in the order of 60%. Based on that data one should hardly be concerned about the current machinations of the Australian property market.
The minutes from the RBA October meeting were released this week where it was again revealed that they have not ruled out further cuts – although I see this as being highly unlikely. Although the elephant in the room, Australia’s economy has suffered a <a href="https://www.smh.com.au/business/the-economy/economic-growth-loses-momentum-20131016-2vlw3" target="_blank">significant loss of momentum</a> since the start of the year as its transition away from mining investment – led growth gets bumpy.
The Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 3.2% in August, down from 4% in July but marginally above its long term trend of 2.9%.
<img alt="15-10-2013 9-23-37 AM" src="https://www.rwm.com.au/files/2013/10/15-10-2013-9-23-37-AM.jpg" width="470" height="400">
<a title="First home buyer lending drops to lowest point since 2004" href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2013-10-14/home-loans-to-occupiers-drop-in-august/5020168" target="_blank">First home buyer lending drops to lowest point since 2004</a> – well we also have the lowest cash rate ever and lenders are telling the first home buyers to do the calculations for their repayments at 7.00% which explains why they have opted out of the market. You see despite all the ongoing conspiracy theories there is a simple explanation for everything. To further add to the confusion <a title="Sydney home prices forecast to rise by 19 per cent" href="https://www.smh.com.au/business/the-economy/sydney-home-prices-forecast-to-rise-by-19-per-cent-20131015-2vk2l" target="_blank">Sydney home prices forecast to rise by 19%</a> – well this is nothing more than a guesstimate which would have been based on the cash rate remaining at or about its current level. It is also a projection over three years so that would be 6% per annum.
This <a href="https://www.rwm.com.au/news/" target="_blank">week’s sales</a> were mild to say the least although we are seeing a very interesting trend – two years ago Mosman had 147 houses on the market and last year 116 and this week it’s 88. The simple truth is that following the GFC households have toned down their exuberance to play the property markets. In apartments two years ago there were 100 on the market, this time last year 104 and this week 50. The reason why is that we have more investors in the market and they are holding. There are 4,900 houses in Mosman and before the GFC the market would trade at approximately 10% per annum – today this figure sits between 5 and 7%.
<a title="Aussie’s the world’s richest people" href="https://www.smh.com.au/business/the-economy/aussies-the-worlds-richest-people-credit-suisse-20131009-2v7qy" target="_blank">Aussie’s the world’s richest people</a> and <a title="Australian super ranked third in the world " href="https://www.smh.com.au/business/australian-super-ranked-third-in-world-20131007-2v49x" target="_blank">Australian super ranked third in the world, </a>so given all the doom and gloom we have some light at the end of the tunnel.
For mine the biggest announcement of the week <a title="Hockey flags tax reform agenda" href="https://www.businessspectator.com.au/news/2013/10/16/politics/hockey-flags-tax-reform-agenda" target="_blank">Hockey flags tax reform agenda</a> which is exactly what the Labor government should have done with the carbon tax. The previous government sat on the Henry Report into Australia’s taxation system and in turn ignored all the recommendations. At the next election in 2016 voters will have their say – where I would not be surprised if negative gearing cops an enormous hit.

<hr>
Robert Simeon is a director of <a style="font-size: 14px;" title="RWM" href="https://www.rwm.com.au/" target="_blank" rel="nofollow">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a title="Virtual Realty News" href="https://www.rwm.com.au/news/" target="_blank" rel="nofollow">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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No reason to be alarmed by the state of property market: Robert Simeon

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In the modern era we have made confusion an art – form given our tendency to over analyse, which in turn leads to over dramatized responses. The highway of fear is the shortest route to defeat.
Over the past week we have seen some very interesting observations namely: <a target="_blank" href="https://www.businessspectator.com.au/article/2013/10/4/economy/weekend-economist-rate-cuts-revised" title="Rate cuts revised">Rate cuts revised</a> where analysts now have all but ruled out another cash rate reduction in 2013. Global growth forecasts for 2014 tend to fluctuate between 3-4% so everyone will be looking for the stand out economies. Many are suggesting that Australia may very well be a star performer.
The National Australia Bank Business Survey showed <a href="https://news.smh.com.au/breaking-news-business/business-confidence-at-35year-high-20131008-2v57f" target="_blank">business confidence rose eight index points</a> to 12 in September – its highest level since March 2010. The jobless rate fell from 5.8% to 5.6% which really surprised everyone given once again our over – analysis had the jobless rate higher.
The heavy lifting for the rebounding Australian economy starts in Canberra – <a target="_blank" href="https://www.businessspectator.com.au/article/2013/10/10/national-affairs/how-six-senators-will-transform-australia" title="How six senators will transform Australia.">how six senators will transform Australia.</a> “Wake up Australia, wake up. After six years of federal government chaos we now have one of the most stable governments in the developed world. Not only does the government have a strong majority in the lower house but “The Six” plan to support the government in all its major policy decisions.” With the government now assured of a clear passage it can get on with the job of rejuvenating the Australian economy which in itself is a mammoth task.
<a target="_blank" href="https://www.businessspectator.com.au/news/2013/10/8/australian-news/australia-urged-diversify-economy" title="Australia urged to diversify economy">Australia urged to diversify economy</a> as five “super growth” industries could boost the national economy by $250 billion over the next twenty years. Mining is expected to remain a major driver of prosperity, according to a new Delloitte Access Economics report released on Tuesday, with agribusiness, gas, tourism, international education and wealth management well – placed to join it.
We also saw that “property bubble theory” laid to rest – <a target="_blank" href="https://www.propertyobserver.com.au/economy/is-there-a-property-bubble-the-experts-have-their-say/2013100365490" title="Is there a property bubble? The experts have their say">Is there a property bubble? The experts have their say</a>.  As I’ve said all along the “property bubble theory” in Australia is just a pile of rubbish theory. <a target="_blank" href="https://www.smh.com.au/business/the-economy/its-a-housing-boom-not-a-bubble-hsbc-20131008-2v5qn" title="Housing boom is a necessary evil: HSBC">Housing boom is a necessary evil</a> said HSBC<a target="_blank" href="https://www.smh.com.au/business/the-economy/its-a-housing-boom-not-a-bubble-hsbc-20131008-2v5qn" title="Housing boom is a necessary evil: HSBC"></a>, with house prices having risen 9% since the May 2012 lows, and up 5.5% over the past year, it’s clear that momentum is picking up. I must admit that when these increases are scrutinized much closer we will see that the increases are not reflected in every suburb – more so at the lower end markets although eventually it will move to the top – end markets.
The property markets are simply at the early stages of rebalancing growth and the Reserve Bank of Australia would be most happy to see these green shoots. What many forget is that at the lowest cash rate Australia has ever seen it is very easy to service debt. It only becomes interesting once the cash rate is restored to what many call normality which is somewhere from 5.5% to 7%.
<img style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;" height="276" width="470" src="https://www.rwm.com.au/files/2013/10/10-10-2013-9-40-08-AM.jpg" alt="10-10-2013 9-40-08 AM" class="aligncenter size-full wp-image-8225">
New lending has been a key driver of the recent pick – up in real estate values where it should be noted that over the last twelve months home loan approvals have risen by 18%. On that basis it is fair to suggest that we will see single digit growth for the remainder of 2013 and this will move to double – digit growth in 2014.
With school holidays now over the anticipated new listings did not materialise this week with just marginal new stock entering the market. Having said that <a target="_blank" href="https://www.rwm.com.au/news/" title="this week’s sales">this week’s sales</a> were somewhat on the soft side too it should be added in all fairness. We are now into week one of the selling run through to Christmas where by all intent and purpose it looks like property listings will remain on the subdued side. This is not a bad sign given if we were to see an oversupply of stock to hit the market I would have serious doubts about the market engagement – what would then happen is a stagnated market.
It has been a long time coming, but now <a target="_blank" href="https://www.propertyobserver.com.au/trends/strong-housing-market-fuels-dwelling-construction-tim-lawless/2013100865476" title="strong market fuels dwelling construction">strong market fuels dwelling construction</a> and it's great to see the RBA’s monetary policy settings reigniting the construction market again. The NSW region is the driving force behind the surge in dwelling approvals with the latest August data showing a 48% lift in private sector approvals compared to August 2012. Certainly the O’Farrell government can take much of the credit given their relentless push for infrastructure in NSW.
Before we start popping the champagne corks it should also be noted <a target="_blank" href="https://www.smh.com.au/business/the-economy/foreign-buyers-snap-up-residential-property-20131010-2va7c" title="foreign buyers snap up residential property">foreign buyers snap up residential property</a> for the three months to September 30, 165 of new property was bought by foreigners up from 11% in the previous quarter. Unfortunately there really is no accurate measure to get an exacting figure as nobody actually offers this service.
Out of frustration we recently set up RWM Research where our number crunchers are busily digesting data for our area so we will have more to report on this in coming months. I personally don’t believe we will be the only real estate agency to have an in-house research team given its importance for market surveillance.
Like most things in our industry we are just happy to be first.
 
<hr>
 Robert Simeon is a director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
 
He has also been writing real estate blog <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
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On the rebound, Australia may be the star performer of 2014: Robert Simeon

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When one writes as often about the Sydney property market as we do (thirteen years now) – all I can say is that the current media reporting is simply lazy and embarrassing.
The Sydney real estate market consists of approximately 650 niche suburbs yet for some strange reason they are all thrown in together to represent what’s supposedly happening in the marketplace. I was watching a news bulletin this week which showed a map of where the bushfires were and this reminded me of the Sydney property market where some areas are literally on fire and others performing well, however not out of control.
Today, we have no instant data collection of exactly what or where the buyers for each transaction came from – investor, local or overseas, SMSF, first home buyer or home buyer. Politicians want to know nothing about the property markets preferring to lay the responsibilities solely at the hands of the Reserve Bank of Australia (RBA). The Abbott government considers it irrelevant that we don’t even have an appointed housing minister despite repeated warnings and historical data that shows whenever you have significant gains the following pain is even greater.
Last week the RBA wisely decided to leave the <a href="https://www.rba.gov.au/media-releases/2013/mr-13-15" target="_blank">cash rate unchanged at 2.5</a>%. Upon closer examination there were <a href="https://www.smh.com.au/business/comment-and-analysis/on-balance-rba-defers-to-us-drama-20131001-2uqq2" target="_blank">mixed message</a>s on balance, although I see the main debate as <a title="RBA dilemma: strong dollar v bubble risk" href="https://www.smh.com.au/business/the-economy/rba-dilemma-strong-dollar-v-bubble-risk-20130927-2uiur" target="_blank">strong dollar v bubble risk</a> although for mine the most poignant was Alan Kohler’s RBA critique in Business Spectator – <a title="The elephant of scandal in the monetary policy room." href="https://www.businessspectator.com.au/article/2013/10/2/reserve-bank-australia/elephant-scandal-monetary-policy-room" target="_blank">the elephant of scandal in the monetary policy room.</a>
<a title="Shadow Board says stomp on housing" href="https://www.macrobusiness.com.au/2013/10/shadow-board-says-stomp-on-housing/" target="_blank">Shadow Board says stomp on housing</a> – “The RBA should consider signalling that its next move will be to raise official interest rates amid fears loose monetary policy might fuel a house price bubble, according to a ‘shadow board’ of prominent economists. Warwick McKibbin believes that capital is being misallocated ‘’across the economy” and that: “To avoid the US experience during 2001 to 2004, when rates were too low for too long, a move to normal interest rates would be advisable.”
<img src="/images/stories/2013/10/07/simeon-oct-7-one.jpg" width="470" height="391" alt="simeon-oct-7-one">
There is a very good reason as to why; our markets remain in flat line mode (excluding apartments) and the reason? Look no further than <a title=" Unemployment now 10.4% in September (up 0.3% in a month)" href="https://www.roymorgan.com/findings/5219-roy-morgan-unemployment-september-2013-201310010146" target="_blank">unemployment now 10.4% in September (up 0.3% in a month)</a> and up 4.7% since November 2007 – the term of the ALP government.
In September 2013 an estimated 1.3 million Australians (10.4% of the workforce) were unemployed. This is up 46,000 (0.3%) from last month. The Australian workforce was 12,467,000 (up 90,000) comprising 7,413,000 full time workers (up 71,000) and 1,297,000 looking for work (up 46,000) according to Roy Morgan employment estimates. These figures do not include people who have dropped out of the workforce and given up looking. In my opinion this is the most accurate unemployment model as the Australian Bureau of Statistics’ measure is that if you work one hour a week you are considered to be in full employment.
Mosman has approximately 4,900 houses and the greater percentages are connected to the banking industry where the greater percentage of redundancies occurred. It will take time for households to recover which explains why we have and are seeing so few houses on the market and definitely no signs of a boom.
New listings to the market this week went backwards when compared to the previous week although there was a strong week of <a title="Mosman sales." href="https://www.rwm.com.au/news/" target="_blank">Mosman sales.</a> For the first time since we have been recording data Mosman apartments fell below 50 to sit at 48. It was December 6 in 2012 when they were last in triple figures where they sat at 100.
If Australia did have an appointed housing minister we could bring to his/her attention that <a href="https://news.smh.com.au/breaking-news-business/we-need-to-build-more-houses-anz-warns-20130926-2ugcx" target="_blank">Australia urgently needs to be building more apartments and houses</a>. It is abundantly clear (to those interested anyway) that Australia has failed to keep up with population growth.
Since 2000, state and federal governments have failed miserably to bother to understand this portfolio where we see today the NBN Co taking up the vast majority of the debate. Somewhat strange that there appears little to no concern about what exactly is happening inside the home.
Of course governments prefer to rely on Census data which happens every five years with the next data collection in 2016. The last Census in 2011 revealed Australia had a population of 21,507,717 which represented a +8.3% increase from the 2006 Census.
Yet our elected politicians prefer to say – move on, nothing happening here! Oh dear – if ever there was a more crucial time to gather and understand housing data there would be no better time. A housing minister would be an obvious start.

<hr>
Robert Simeon is a director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985.
He has also been writing real estate blog <a rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
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Politicians don't want to know anything about what's really happening in the property market: Robert Simeon

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I have no doubt that Sydney’s property markets are set for rapid growth at the lower price ranges which will flow to the top-end, however it will be a trickle not a tsunami. They say: when you make a mountain out of a molehill, don’t expect anyone to climb up to see the view. You see the view is otherwise known as an opinion with the voice coming from the Reserve Bank of Australia (RBA). The Sydney Morning Herald conveniently published this week – <a target="_blank" href="https://www.smh.com.au/business/the-economy/how-to-spot-a-housing-bubble-20130925-2ue44" title="How to spot a housing bubble.">how to spot a housing bubble.</a>
When looking at the view of our local market look no further than <a target="_blank" href="https://www.rwm.com.au/news/" title="this week’s sales">this week’s sales</a> which identifies in Mosman, Cremorne, Cremorne Point, Neutral Bay and Cammeray there were 32 sales with 22 of those sales being apartments, making up 69% of the week’s sales. 
<a target="_blank" href="https://www.macrobusiness.com.au/2013/09/rba-get-real-sydney/" title="RBA tells Sydney to get real">RBA tells Sydney to get real</a> when the RBA released its financial stability review this week. “Over the past year or so there has been an increase in property market activity. This is not surprising given the reductions in interest rates. The pick – up in demand, which has been sharper in New South Wales and from investors more generally, has been associated with recent increases in housing prices. It is important that those purchasing property do so with realistic expectations of future dwelling price growth.”
<a target="_blank" href="https://www.smh.com.au/business/reserve-warns-diy-super-may-set-new-property-debt-trap-20130925-2uei4" title="Reserve warns DIY super may set new property debt trap ">Reserve warns DIY super may set new property debt trap </a>although what needs to be pointed out is that Australia’s mortgage market is worth a whopping $1.2 trillion with the SMSFs totalling approximately $80 billion. If you want to throw another hand grenade: the RBA could start a rumour that the Abbott government is looking at abolishing negative gearing. Now that would add plenty to the spinning property fan.
Christopher Joye, writing for the Australian Financial Review wrote <a target="_blank" href="https://www.afr.com/p/markets/market_wrap/only_fools_ignore_bubble_trouble_tcMdVkWXAAWCs1PcK2SG9O" title="Only fools ignore bubble trouble">only fools ignore bubble trouble</a>; “residential property is the biggest source of household wealth and underlies the most important asset – home loans – held by Australia’s colossal and concentrated banking industry, which accounts for 30% of the share market’s value. There is $4000 billion of housing and $1300 billion of debt held against it. It is our most significant investment class. So are we in the throes of a bubble, and should we worry about the risks of one materialising?”
<a style="margin: 0px; padding: 0px; border: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; vertical-align: baseline; color: #be002d; text-decoration: none;" href="https://www.rwm.com.au/files/2013/09/23-09-2013-9-57-43-AM.jpg"><img style="margin: 0px auto; padding: 0px; outline-width: 0px; font-style: inherit; font-family: inherit; display: block; max-width: 100%;" height="219" width="470" src="https://www.rwm.com.au/files/2013/09/23-09-2013-9-57-43-AM.jpg" alt="23-09-2013 9-57-43 AM" class="aligncenter size-full wp-image-8206"></a>
Source: RP Data, ABS, Australian Financial Review
The main issues as I see it is that banks maintain a lending responsibility given our economy still harbours strong concerns with what is happening overseas. What many seem to forget is that despite Australia experiencing a record low cash rate of 2.5%, if the property markets take-off so too will the cash rate. So with all these warnings and variables it would be fair to say there has never been a better time to buy given the cash rate will go-up, so lock and load the present rates in.
Another factor that is being missed is <a target="_blank" href="https://www.scmp.com/property/international/article/1311717/record-number-chinese-buyers-pump-property-prices-sydney" title="Record number of Chinese buyers pump up property prices in Sydney.">record number of Chinese buyers pump up property prices in Sydney.</a> Then you have the combination of Chinese and local investors buying <a target="_blank" href="https://www.afr.com/p/australia2-0/of_barangaroo_apartments_sell_out_jF37jrlXYVTvxYQ5wNsnhK" title="$300m of Barangaroo apartments sell out in hours ">$300m of Barangaroo apartments, which sold out within hours</a>, an expected result given its unique location. Agents today are being taught and advised on <a target="_blank" href="https://www.propertyobserver.com.au/news/marketing-your-property-to-chinese-buyers/2013092465226" title="Marketing your property to Chinese buyers ">marketing your property to Chinese buyers </a>as <a target="_blank" href="https://www.news.com.au/realestate/news/significant-investor-visa-holders-target-highend-sydney-properties/story-fnd91nhy-1226711353150" title="significant investor bias holders target high – end Sydney properties.">significant investor bias holders target high – end Sydney properties.</a>
It will be most interesting to see what the newly elected Abbott government does with the previous government’s Significant Investor Visa (SIV). SIVs were introduced on November 24 2012, and have attracted over 100 applications from wealthy Chinese investors looking to spend at least $5 million in Australia. Whilst some are suggesting that the Abbott government will scrap this initiative it should however be noted that this is aimed at the top-end markets which are showing just a pulse in terms of activity.
Another week of tight listings which continue to remain well down on previous year’s volumes. With school holidays finishing on October 8 we should see just how confident our market is, although I expect that we won’t see much difference from what we have seen all year.
Another reason why (in my opinion) that we have such a strong focus on what’s happening to the property markets at the moment is that there is not that much to write about. Newspapers are renowned for talking real estate up due to them trying to reignite their “rivers of gold” print revenues.
That’s my conspiracy theory.
 
<hr>
 Robert Simeon is a director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.rwm.com.au/" title="RWM">Richardson  Wrench Mosman and Neutral Bay </a>and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.rwm.com.au/news/" title="Virtual Realty News">Virtual Realty News</a> since 2000. 
The RWM real estate model has sold in excess of $1 billion in database sales globally.
 
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There's never been a better time to buy: Robert Simeon

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Robert Simeon

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