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Some would suggest that the global financial crisis (GFC) is over. Some would rightly suggest that today, given many of the remnants that are still unresolved, it is far from over. <a title="Eurozone falls into second recession since 2009" href="https://www.smh.com.au/business/world-business/eurozone-falls-into-second-recession-since-2009-20121116-29fgm" target="_blank">Eurozone falls into second recession since 2009</a>, and then you have that minor issue called the "fiscal cliff". The cliff is a legislated bundle of government spending cuts and tax increases totalling $US608 billion that are due to take effect automatically on January 1.
So I was fascinated this week to read the latest buzzword – SMBC (small to medium business crisis). Alan Kohler wrote on Business Spectator – <a title="What crisis? This crisis" href="https://www.businessspectator.com.au/bs.nsf/Article/Dutch-disease-GFC-economy-SME-NAB-commodities-mini-pd20121114-ZZQR7?opendocument&amp;src=rss" target="_blank">What crisis? This crisis</a> – “Yesterday’s monthly business survey from NAB should be setting off alarm bells in Canberra and through every bank and big company boardroom in the country: Australia’s non-mining businesses are in serious trouble just as the resources boom ends. There will be nothing to take its place.”
“This is a genuine national crisis, but the problem is that it’s going largely undetected and unaddressed because it is not showing in the broad economic data, which is what the Reserve Bank sets interest rates by. That’s why rates were left on hold this month, and may be again in December.”
Personally, I see the end of Australia’s mining boom as a positive as it will allow our business sector to re-calibrate – especially the building sector, which put down tools on building sites to chase work at the then highly profitable mines. <a title="Mining’s double whammy to weigh on growth" href="https://www.smh.com.au/business/the-economy/rba-cuts-growth-forecast-for-third-time-20121109-2928n" target="_blank">Mining’s double whammy to weigh on growth</a> in its statement on monetary policy, the Reserve Bank said weaker spending in the resources sector had prompted it to drop gross domestic product (GDP) growth forecasts for 2013 to below 2.75 percent, compared to 3.0 percent in the August statement.
For a moment forget the mining sector. Australia’s alternate businesses, i.e. those that make up the SMBC, are simply being smashed by one predator – online!
Let’s look at the facts that clearly announce where business is headed – startling data I found on the internet.
<ul>
<li>There are 7 billion people on Earth, with 5.1 billion owning a mobile phone.</li>
<li>It takes 90 minutes for the average person to respond to an email. It takes 90 seconds for the average person to respond to a text message.</li>
<li>91% of all smartphone users have their phone within arm’s reach 24/7.</li>
<li>According to Google’s Our Mobile Planet, smartphone penetration in Australia is now at 52%; however a report by Telsyte predicts that nearly 90% of Australian mobile phone users will have a smartphone as their primary device in 2015.</li>
<li>Nearly 60% of smartphone users access the internet every day on their smartphone and 74% don’t leave home without it.</li>
<li>A massive 94% of smartphone users have researched a product or service on their phones, and only 59% look at first page results when searching on their smartphones.</li>
<li>Interestingly, the three most popular places where people use their smartphones, are home (98%), on the go (85%) and in the office (73%).</li>
</ul>
<img src="/images/stories/2012/11/simeonnov16.jpg" width="470">
 
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<a target="_blank" href="https://www.smh.com.au/business/online-mega-sale-to-lift-local-retail-20121112-298g3" title="Online mega sale to lift local retail">Online mega sale to lift local retail</a> – from Tuesday Australia will experience its first online frenzy when up to 150 retailers will slash their online prices – by between 15% and 90% for 24 hours. Shoppers will have to access <a target="_blank" href="https://clickfrenzy.com.au/" title="clickfrenzy.com.au">clickfrenzy.com.au</a> to access the retailers’ online deals, and this will be the first of many to come. What we are seeing with this is that finally retailers are acknowledging that online is the future.
As for the real estate industry, it will survive. However, the businesses with the dominant online platforms will succeed and those that don’t understand it will perish – like many other industries.
So what is happening with interest rates? Here is a clue.
<img src="/images/stories/2012/11/simeonnov161.jpg" width="470">
Despite the ‘World’s Greatest Treasurer’ believing that the lower the cash rate the better the economy, in 2013 Australia is looking at the lowest cash rates ever seen before. On that analogy, one can reasonably expect that 2013 will be another tough year in real estate.
If this proves to be correct then print advertising (as we know it) will collapse in 2013 and real estate advertising's major spend will be online. Newspapers are not that smart when it comes to real estate advertising expenditure – they need to focus on the little picture not the big picture. Newspaper advertising in the future is merely a point of introduction to online, not vice versa.
<img src="/images/stories/2012/11/simeonnov162.jpg" width="470">
Again the same story in Mosman, where we are seeing a reduction in volume compared with this time last year. This can be easily explained. It is too expensive to move given the trading costs, and when homes are sold for less than replacement value – it is not a coincidence that markets then stagnate. Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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robertsimeon-hRNTwJyXkQ

Aussie retailers finally acknowledge online is the future, and real estate must too

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The NSW O’Farrell government is facing an interesting dilemma – does it borrow and risk losing its precious triple-A credit rating or sell off state assets? I’m sure everyone has mixed feelings about which is the smarter alternative, although I must admit I favour losing the triple-A credit rating for one simple reason: it makes the government leaner and meaner.  Business is run under that economic philosophy, so why not the NSW government?
There is nothing wrong with <a target="_blank" href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2012-10-04/infrastructure-funding-questions/4295198" title="infrastructure funding questions">infrastructure funding questions</a> given that in previous governments the taxpayer waste defied all logic, e.g. the failed/aborted Rozelle Metro, for which the previous NSW government wasted $500 million and all for no gain. The O’Farrell government has $53 billion earmarked for transport and roads infrastructure and services over the next four years – <a target="_blank" href="https://www.transport.nsw.gov.au/media-releases/rebuilding-nsw-20-year-vision-transport" title="Rebuilding NSW: 20 – year vision.">Rebuilding NSW: 20-year vision.</a>
You may be surprised to learn that on November 19 to 20 the <a target="_blank" href="https://www.expotrade.net.au/events/nsw-major-projects-conference-2012" title="4th Annual NSW Major Projects Conference 2012 ">4th Annual NSW Major Projects Conference 2012</a> is being held, where they will state the obvious. “New South Wales is entering an exciting time of renewal as the challenges to build and exceed beyond its past achievements is reaching critical tipping point. The NSW economy has grown to become the largest and most diverse economy in Australia, contributing one third of the nation’s gross domestic product and is home to 32% of Australia’s population, with even more significant population growth on the near horizon.”
One would be correct in asking why NSW holding is just its fourth annual NSW major projects conference when it should be around the 24th. The simple answer is that due to "no infrastructure" under the previous government, in all probability it was formed from pure desperation to simply get something happening. <a target="_blank" href="https://www.smh.com.au/opinion/politics/city-might-appear-to-be-down-but-it-is-far-from-out-20121107-28y98" title="City might appear to be down, but it is far from out">City might appear to be down, but it is far from out</a>, which takes me to James Packer’s article – <a target="_blank" href="https://www.smh.com.au/nsw/for-the-good-of-sydney-back-this-plan-20121102-28p9t" title="For the good of Sydney, back this plan ">For the good of Sydney, back this plan</a> – a very interesting read, and I back his plan.
The biggest news for the property market this week was <a target="_blank" href="/news" title="Macquarie Group takes Yellow Brick Road into home loans market">Macquarie Group takes Yellow Brick Road into home loans market</a>, which will cause Yellow Brick Road to go  head-to-head with the big four banks. Under the deal, Yellow Brick Road will try to undercut the big banks by offering a 1.15 percentage point discount on all new homes in the first 12 months of the loan. The big four have actively acquired all the second-tier banks to protect their market share, which is approximately 80% of the Australian home loan market. It should also be noted that most of the biggest real estate agencies within Australia bank with Macquarie Bank (us included), so this announcement provides Macquarie Bank with direct access to Australia’s biggest and most successful real estate agencies. I will make a prediction Yellow Brick Road will be the first bank to respond to a rate cut by the Reserve Bank of Australia (RBA).
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We predicted last week that the RBA would keep the cash rate at 3.25%, which I believe is directly aimed at what happens in the United States of America following the re-election of Barack Obama –<a target="_blank" href="https://www.smh.com.au/world/us-election/superman-has-just-54-days-to-save-the-world-20121107-28yls" title=" Superman has just 54 days to save the world."> Superman has just 54 days to save the world.</a> The simple reality is that the <a target="_blank" href="https://www.smh.com.au/business/rba-holds-rates-but-with-a-loose-grip-20121106-28w3t" title="RBA holds rates but with a loose grip.">RBA holds rates but with a loose grip.</a> So the stark reality of the decision is quite simple:<a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/RBA-rates-decision-Glenn-Stevens-commodities-dolla-pd20121106-ZS7EF?opendocument&amp;src=rss" title=" RBA keeps its powder dry."> RBA keeps its powder dry.</a> Congratulations to the ANZ economists, who have correctly called the RBA’s cash rate announcements seven for 10 thus far in 2012.
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<a target="_blank" href="https://www.smh.com.au/business/building-data-still-gloomy-outlook-brighter-20121107-28x8p" title="Building data still gloomy, outlook brighter ">Building data still gloomy, outlook brighter </a>although it should be noted that construction activity in Australia has now been in contraction for 29 months. If that is not a warning to the Gillard government then nothing is.  When the economic principle of supply v demand is applied, you don’t have to be Einstein to work out which demographic market is going to benefit.  Australia already is recording the highest ever rental markets, which are  being further driven by the Gillard government decision: <a target="_blank" href="https://www.propertyobserver.com.au/new-south-wales/sydneys-rental-market-feeling-the-sting-of-changes-to-living-away-from-home-allowance-carlie-ziri/2012092556792" title="Sydney executive rentals stung by Living Away from Home Allowance reform.">Sydney executive rentals stung by Living Away from Home Allowance reform.</a> An idiotic decision that punishes business simply because our elected government is marred by reckless spending deficiencies – decisions are made solely on re-election not economic competence.
Fascinating that 12 months ago, <a target="_blank" href="/news">Mosman </a>houses and apartments reached their peak numbers for 2011. The same can’t be said for 2012, with house listings down 32% from 365 days ago. For property voyeurs, this clearly indicates a strong market and it will be interesting to see whether  the house numbers fall below 100. In 2011, Mosman recorded 38 weeks with house volumes below 100, the lowest recording being just 78.
Robert Simeon is a director of <a 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 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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Yellow Brick Road likely to be the first to respond to the next RBA rate cut

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It’s becoming more obvious that Australian politics is nothing more than smoke and mirrors. Fort Fumble this week released its <a title="Asian Century" href="https://asiancentury.dpmc.gov.au/" target="_blank">Asian Century</a> white paper. Australian business leaders doubt the government has the determination or resources to carry out the ambitious proposals – <a title="flat reception for white paper." href="https://www.smh.com.au/business/flat-reception-for-white-paper-20121029-28dsr" target="_blank">flat reception for white paper.</a> Alan Kohler wrote on Business Spectator <a title="White paper, wish paper " href="https://www.businessspectator.com.au/bs.nsf/Article/Australian-in-the-Asian-Century-white-paper-pd20121029-ZHRJS?OpenDocument&amp;emcontent_Kohler" target="_blank">White paper, wish paper</a>: "Reading the white paper called “Australia in the Asian Century” is a very surprising and uplifting experience: it lists all these wonderful things that are going to happen to our nation by 2025. I had no idea."
I did read the white paper, which took me back to the <a title="CEO – Pulse " href="https://www.businessspectator.com.au/bs.nsf/full-coverage?openview&amp;restricttocategory=ceo+pulse" target="_blank">CEO – Pulse, </a>where last quarter the CEO scorecard for the government’s performance in managing the economy was steady at 2.9 out of 10.
Remember the aim of past Treasury secretary Ken Henry’s tax review was to have a root-and-branch look at the Australian tax system by designing something that would/should position Australia to best deal with the challenges that lie ahead? History shows that next to nothing eventuated from the proposals so I believe my cynicism is well founded. Australia’s governments are not in a financial position to fund such far-fetched, imaginary proposals.
I’ll keep harping on because I believe Australia’s infrastructure problems have now reached diabolical proportions simply because we can’t afford to fund progress.
<a title="Future Fund not an infrastructure dump ground: Costello " href="https://www.businessspectator.com.au/bs.nsf/Article/Future-Fund-not-an-infrastructure-dump-ground-Cost-pd20121026-ZFQH2?OpenDocument&amp;src=mp" target="_blank">Future Fund not an infrastructure dump ground: Costello </a>which is a very fair assessment – it should not be used as a “dropping pond” for bad assets. Biggest embarrassment of the week <a title="$1b error: NSW swings from deficit to surplus " href="https://www.smh.com.au/nsw/1b-error-nsw-swings-from-deficit-to-surplus-20121031-28j8s" target="_blank">$1billion error: NSW swings from deficit to surplus </a>– hello! Only incompetent fools could make such an embarrassing error.
This takes me to the best article of the week (in my opinion) by Robert Gottliebsen – <a title="Removing the bloat from the public service." href="https://www.businessspectator.com.au/bs.nsf/Article/Removing-the-bloat-from-the-public-service-pd20121030-ZJS22?OpenDocument&amp;src=mp" target="_blank">Removing the bloat from the public service.</a> “Today’s graphs from Accenture should scare every Australian. We can’t even contemplate being a leader in Asia until we tackle the abysmal state of our federal, state and local public services. The inefficiency and waste in these public services is sucking Australia dry and Accenture warn that unless we do something about it, our ageing population means that Australia faces a grim future funding squeeze.”
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Two weeks ago we reported that the number of Mosman houses on the market was 22% down on this time last year. Last week brought a slight increase to 23%, this week it has climbed to 27%. We still predict this figure will jump as high as 35% in coming weeks.
Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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Australia's infrastructure problems have reached diabolical proportions

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Without a shadow of a doubt (in my opinion) the best critique of the Australian economy is the Business Spectator <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/full-coverage?openview&amp;restricttocategory=ceo+pulse" title="CEO pulse">CEO pulse</a>, where on a quarterly basis Australia’s leading chief executives deliver their (not sugar -oated) thoughts on just exactly how they see the Australian economy. CEOs on the Australian Economy:
<ul>
<li>CEO(s) remain far more optimistic about the prospects for their own organisation than they are about the Australian economy. Optimism about prospects for the Australian economy and their own organisations in the next 12 months have decreased slightly compared with quarter two this year and quarter three last year.</li>
<li>Expectations around employment, capital investment, profit, sales and operating expenditure in the next 12 months are down slightly from last quarter. The proportion of CEOs expecting increased profit over the next 12 months is down significantly to 49% from 64% last quarter.</li>
<li>CEO scorecard for the government’s performance in managing the economy is steady at 2.9 out of 10. While the longer-term trend is downwards, it is not significantly different from the score given at the same time last year.</li>
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Look at this how you want, however when a government can’t even reach a score of three out of 10 the resonating message is pretty clear. In February 2010, the scorecard peaked at 5.4 out of 10, and this has continued in a downward spiral reaching 2.6 out of 10 in September 2011.
Quote of the Week would have to go to Peter Costello, “Never in budget has history so little been promised so many times.” <a target="_blank" href="https://www.smh.com.au/opinion/politics/on-its-own-measures-labor-falls-well-short-20121023-283af" title="On its own measure Labor falls well short">On its own measure Labor falls well short</a>, an interesting assessment from a previous treasurer, who delivered 12 budgets. <a target="_blank" href="https://afr.com/p/national/swan_grip_on_surplus_gets_slippery_DtZ0lTolFYAQfrBR9Wh2SP" title="Swan’s grip on surplus gets slippery">Swan’s grip on surplus gets slippery</a>, which is exactly what we alluded to a few weeks ago when we suggested <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/Australia-budget-surplus-government-MYEFO-pd20121024-ZCTTM?OpenDocument&amp;src=sph&amp;src=rot" title="prepare for an early election">prepare for an early election</a>. Not surprising then are this week’s revelations that Wayne Swan and Julia Gillard’s MRRT has thus far posted a zero return. Obviously, the "big three" mining companies have executed the perfect sting on the government when they sat down to negotiate the MRRT.
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I love reading articles about the top-end property market – <a target="_blank" href="https://afr.com/p/blogs/christopher_joye/homeowners_confident_but_luxury_qkiXQ9ualbS7z2z8EX7neP" title="Homeowners confident but luxury market loses lustre.">Home owners confident but luxury market loses lustre.</a> A great read by Christopher Joye, which clearly identifies that NSW remains the most bullish top-end market in Australia. <a href="/news">Mosman</a> is arguably performing the best of Australia’s entire top-end suburbs, with reports our office has posted another double-digit sale getting stronger and stronger. When property markets are in a downward correction mode, the top-end gets punished the most, but when it starts to recover it always posts the fastest capital appreciation. Historically, top-end property markets perform at optimum levels when a Liberal government is in power, so we sense a hedging of bets on the basis that Australia will go to the polls in March 2013.
Last week we reported that the number of Mosman houses on the market was 22% down on this time last year, this week a slight increase to 23%. We predict this number will jump significantly in coming weeks to approximately 40%.  For example: <a target="_blank" href="https://www.rwm.com.au/140207/" title="45 Shadforth Street Mosman">45 Shadforth Street Mosman</a> sold in just one week – with a one-week settlement.
Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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Mosman performing best of Australia's top-end property markets

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If you reside in NSW, you’d be excused for shaking your head in total disbelief. Not a case of where did they get the money for that? Rather, why is there no money for that? <a title="Public transport better in Mumbai than Sydney: PwC report" href="https://www.smh.com.au/nsw/transport-and-infrastructure-better-in-mumbai-than-sydney-pwc-report-20121015-27m08" target="_blank">Public transport better in Mumbai than Sydney: PwC report</a> Sydney ranks number four on the list of ‘worst major cities in the world for public transport’. Yet, <a title="Sydney the second most expensive city in the world " href="https://www.heraldsun.com.au/money/sydney-worlds-second-most-expensive-city-in-the-world/story-e6frfh5f-1226495524501" target="_blank">Sydney is the second most expensive city in the world, </a>which all sounds a bit rich (no pun intended) and for the record, Tokyo is the most expensive city in the world. If you look closely at NSW infrastructure, the general rule of thumb is that it is now 20 years behind best practice. So where then did all those billions of tax dollars go?
<a title="ousing shortage in NSW to reach 140,000 in four years" href="https://news.domain.com.au/domain/real-estate-news/nsw-needs-140000-new-homes-in-four-years-minister-20121015-27mi7" target="_blank">Housing shortage in NSW to reach 140,000 in four years</a>, which would explain statistics that show 30 percent of NSW dwellings are now rented. This just happens to be the highest recorded figure since 1958. Figures from RP Data show new rental listings dropped from 45,365 in the four weeks ending September 9 to 34,591 in the four weeks ending October 7. <a title="Rental listings down in every state in past month: RP Data" href="/news" target="_blank">Rental listings down in every state in past month: RP Data</a> NSW dropped from 12,390 to 9,018 – the figure was 11,560 this time last year.
Let’s be honest here – governments are not that smart. It’s almost impossible to entice property developers in NSW when Mumbai offers better transport than NSW. While <a title="Sydney on top of the property rich list " href="https://www.smh.com.au/business/property/sydney-tops-property-rich-list-20121011-27f56" target="_blank">Sydney is on top of the property rich list </a>with 19 of Australia’s most expensive 25 suburbs, they don’t really rely on public transport. It should be noted that <a title="Canberra’s big balancing act could hit negative gearing" href="https://www.smh.com.au/business/canberras-big-balancing-act-could-hit-negative-gearing-20121011-27fj4" target="_blank">Canberra’s big balancing act could hit negative gearing</a>. Should this happen and investors bail, our rents will skyrocket. Real estate markets need investors as do the third of Australians who are currently in rental accommodation.
<a title="Housing demand on the rise as population growth at highest rate in three years: Tim Lawless " href="https://www.propertyobserver.com.au/demographics/housing-demand-on-the-rise-as-population-growth-at-highest-rate-in-three-years-tim-lawless/2012101457076" target="_blank">Housing demand on the rise as population growth at highest rate in three years: Tim Lawless</a>,which is a compound property dilemma considering our record low interest rates will (not could) create a ‘mini-Sydney’ property boom. Rents are escalating at the highest rate and that in turn drives new purchasers into the marketplace – even though they may not want to be there. <a title="Adding air to a housing bubble" href="https://www.businessspectator.com.au/bs.nsf/Article/property-housing-equities-interest-rates-home-lend-pd20121017-Z5REL?opendocument&amp;src=rss" target="_blank">This could add air to a housing bubble</a>. Forget the global financial crisis. The ineptitude of Australian governments could well deliver a recession identical to that of the early 1990s.
Two graphs I grabbed this week identify the problems Australia faces.
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The Mosman housing market is going from strength to strength and Mosman houses today are 22% down on the numbers offered this week last year. I predict that over the coming weeks, this figure will climb as high as 40%. Heaven forbid: after years of that horrible GFC, we are now seeing a vendors’ market for houses. Who would have thought?
Robert Simeon is a director of <a 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 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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Mosman housing market going from strength to strength

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<a title="What if the GFC is permanent?" href="https://www.smh.com.au/business/what-if-the-gfc-is-permanent-20121005-273ch" target="_blank">What if the GFC is permanent?</a> Well, permanent is a tad over the top, although I do agree with IMF chief economist “that the world would not recover from the financial crisis until at least 2018”. When we look at our home front today, we see <a title="Australia’s growth straight jacket" href="https://www.smh.com.au/business/australias-growth-straight-jacket-20121010-27c0m" target="_blank">Australia’s growth straight jacket</a> given the peaking of the mining boom and historically low interest rates, which will result in increased debt in our housing markets. There is no mistaking we are in an entirely new business world where unemployment will increase as businesses engage and employ cheaper alternatives via the internet.
A classic example <a title="service sector crunched as jobs go overseas " href="https://www.smh.com.au/business/service-sector-crunched-as-jobs-go-overseas-20121009-27aet" target="_blank">service sector crunched as jobs go overseas </a>– over the last four years, 80,000 service sector jobs have left our shores. Thanks to the internet, businesses are faced with re-inventing themselves in order to remain competitive. Once upon a time, all a business required was an effective business model; however today, this business model must be paralleled with the online model. Capturing consumers is now based on electronic ingenuity where the focus has moved to electronic media. Our means of communicating are no longer home grown as our society now communicates through imported overseas products – namely Google, Apple and Samsung.
<a title="Australia Post bows to online shopping revolution" href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2012-10-11/post-office-smart-lockers-rolled-out-for-online-purchases/4306946" target="_blank">Australia Post bows to online shopping revolution</a> and is about to open hundreds of 24-hour a day parcel lockers where purchasers will be sent a PIN code that will enable them to retrieve their respective purchases at a time to suit and not have to queue at a Post Office.
Last week, I made comment that Australia should be charging GST on online purchases over $100. <a title="Australian retailers securing more of the online retail pie: CommBank" href="https://www.propertyobserver.com.au/retail/australian-retailers-securing-more-of-online-retail-pie-commbank/2012100857042" target="_blank">Australian retailers securing more of the online retail pie: CommBank</a>. “With the debate over online GST still raging, the CBA points out imposing GST on purchasers above $100 would hit 57% of online transactions, against 4%.”
The <a title="IMF warns recession risk ‘alarmingly high’" href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2012-10-09/imf-lowers-growth-forecast/4302666" target="_blank">IMF warns recession risk ‘alarmingly high’</a>, which is fair comment, considering that world trading has slumped. The volume of goods being shipped around the world increased just 3.2%, after growth of 5.8% last year and 12.6% the previous year. Now we’re talking just businesses and not taking into account the vast majority of governments across the globe that are drowning in debt as they wallow in budget deficits.
A few weeks ago I suggested to Virtual Realty News subscribers that we will be going to the polls in March 2013 because I believe it would be suicide for the Gillard government to call an election after it delivers the 2013 budget fiasco. <a title="Why we need an early election" href="https://www.businessspectator.com.au/bs.nsf/Article/Labor-coalition-Liberal-March-election-MYEFO-pd20121011-YXSSU?OpenDocument&amp;src=mp" target="_blank">Why we need an early election</a> “two rumours have been aired in the past week that one can only hope are true – that the midyear economic and fiscal outlook (MYEFO) will be released earlier than usual, and that a snap election will be held in March of next year. Both these decisions are made by the government, and the ring of truth to the rumours stems from the fact that without these decisions being taken, Labor is likely finished.” Remember where you read it first.
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<a target="_blank" href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2012-10-04/janda-house-boom/4293828" title="As the mining boom ends, the housing boom begins ">As the mining boom ends, the housing boom begins </a>so in conjunction with a record-low cash rate (which possibly go lower) throw in yet another first-home buyer scheme. On October 1, NSW introduced a package of measures aimed at delivering around $35,000 to first-home buyers of new dwellings priced at or under $550,000. With new construction collapsing in recent years, incentive bribes to purchase new properties are dangerous, when history shows it is much like buying a new car – drive it from the showroom and it depreciates 20%. Australia will have a cash rate of 3% forever.
Now we are seeing <a target="_blank" href="https://www.propertyobserver.com.au/residential/home-buying-sentiment-surges-to-highest-level-in-three-years-westpac-melbourne-institute-index/2012100957068" title="home buying sentiment surges to highest level in three years: Westpac Melbourne Institute Index">home buying sentiment surges to highest level in three years: Westpac Melbourne Institute Index</a>, which also coincides with investors leaving the ‘shock’ market rising <a target="_blank" href="https://www.propertyobserver.com.au/landlords/rising-rental-yields-to-draw-investors-back-into-housing-market-rba-deputy-governor-philip-lowe/2012100957062" title="rental yields to draw investors back to housing.">rental yields to draw investors back to housing.</a> Again on the flip side, we are observing <a target="_blank" href="https://smh.domain.com.au/real-estate-news/record-in-high-house-rents-could-force-families-into-flats-20121010-27dl5" title="record in high house rents could force families into flats">record in high house rents could force families into flats</a>, which is a classic case of governments telling constituents what they are doing internationally. What about <a target="_blank" href="https://www.propertyobserver.com.au/landlords/rent-rises-to-outpace-house-price-growth-over-next-two-years-nab/2012101157090" title="rent rises to outpace house growth over next two years: NAB.">rent rises to outpace house growth over next two years: NAB.</a>
Once upon a time it was all about home grown. Australia has enormous housing issues, yet our leaders are more intent on debating sexism, text messages, speeches and prostitution on social media.
Australia’s politicians are more concerned about re-election and distractions via social media and are not addressing the hard (real) social issues that confront our country.
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Good news for Mosman sellers as stock levels are well down on volumes compared with this time last year. School holidays are now over, and it is somewhat surprising to see a minimal increase in the number of houses on the market in Mosman this week. Unlike many other markets, Mosman appears to have very little interest in selling.
Robert Simeon is a director of <a 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 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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Government bribes for first-home buyers to buy new properties are dangerous

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If there is one thing we have learned in 2012, it is that political parties from both sides will say and do anything to win an election, no matter what the consequences. If we are to learn just one thing from the global financial crisis, we must focus on one word – DEBT. What made the GFC even more contagious was government debt. So why do households and businesses react differently to governments when confronted with the same financial woes?
<a title="The debt we can’t pay is growing" href="https://www.businessspectator.com.au/bs.nsf/Article/David-Murray-Future-Fund-super-superannuation-Gill-pd20121004-YQUDS?OpenDocument&amp;src=sph" target="_blank">The debt we can’t pay is growing</a> a fascinating insight from Rob Burgess on Business Spectator, where he correctly refers not to an economist or business writer but the former head of the Future Fund, David Murray. Mindful of the fact that Commonwealth net debt is only 9.6% of GDP, combined state and federal debt is now around 29% of GDP. This quickly brought a rebuke from <a title=" Prime Minister - Comparing the Greek economy to Australia is ‘absurd’." href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2012-10-04/comparing-greek-economy-to-australia27s-is-27absurd27/4295674" target="_blank">Prime Minister – Comparing the Greek economy to Australia is ‘absurd’.</a>
Enter David Murray again, who believes “it is easily possible for Australia to suffer an economic downturn similar in magnitude to the one experienced by Greece”. The problem for the Gillard government is that its own debt continues to far exceed income and ignorantly, it refuses to cut its own overheads. On the other hand, businesses have cut costs, which explains why tax receipts are down and Australia finds itself in a state of hypocrisy. Let’s join those dots again.
This week we saw the Reserve Bank of Australia (RBA) lower the cash rate to 3.25% from 3.5%. A call to the cavalry – let the real estate market steer the economy to bigger and better things. Although – <a title="The RBA’s interest rate kryptonite" href="https://www.businessspectator.com.au/bs.nsf/Article/rates-RBA-China-slowdown-interest-Stevens-pd20121003-YPSKB?OpenDocument&amp;src=sph&amp;src=rot" target="_blank">The RBA’s interest rate kryptonite</a> “it is now clear that the Chinese comeback that prompted the RBA to raise the interest rate six times between October 2009 and May 2010, and then again in November 2010, was unsustainable. That 1.75 percentage point increase in the cash rate in 2009 – 10, while the Fed, the Bank of England, and the ECB and the Bank of Japan all left their rates on hold, helped lift the Australian dollar from 65 cents in early 2009 to 110 cents last year. The increase in lending rates for households and businesses knocked the stuffing out of the Australian economy”.
So here we go again, throw more lollies onto the highway and see who runs out to grab them.
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The correct unemployment rate in <a target="_blank" href="https://www.whocrashedtheeconomy.com/blog/2012/10/unemployment-hits-10/" title="Australia unemployment hits 10% ">Australia unemployment hits 10%, </a>which is almost double the Australian Bureau of Statistics’ (ABS) unemployment rate. The irony is, that businesses have corrected their profitability yet the federal government refuses to move with the times. This would also explain why the newly elected Queensland, NSW and Victoria governments are tightening their belts – <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/States-face-GST-squeeze-SP-pd20121004-YQU6A?OpenDocument&amp;src=hp30" title="States face GST squeeze: S&amp;P.">States face GST squeeze: S&amp;P.</a> <img src="/images/stories/2012/10/simeonoct92.jpg" width="470">
If the federal government were half smart (and our pollies are not) it would immediately bring GST into online sales above $50 (presently above $1,000). It won’t happen because the federal government is more concerned about losing votes with an election looming. When the GST was introduced in 2000 computers (online) were not even a consideration. Times have changed, yet our federal government won’t change!
The good news for vendors on the home front as our markets move from a purchasers’ market to a vendors’ market. Certainly another cash rate reduction will only further ignite the property markets. Having said that <a title="rate cuts shows Reserve Bank’s sober view of global economy" href="https://www.smh.com.au/business/rate-cut-shows-reserve-banks-sober-view-of-global-economy-20121002-26xdr" target="_blank">rate cuts shows Reserve Bank’s sober view of global economy</a> although it must be noted <a title="lower rates risk fuelling bubbles: ANZ" href="https://www.smh.com.au/business/the-economy/lower-rates-risk-fuelling-bubbles-anz-20121004-270qb" target="_blank">lower rates risk fuelling bubbles: ANZ</a> – a possibility, however, a tad early to call.
I believe our market is too smart to fall into that trap.
Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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RBA's rate cut a call to the real estate cavalry

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I may have been deeply buried (surprise, surprise) when the Interactive Advertising Bureau (IAB) reported online advertising for the 2011-12 financial year had reached $3.14 billion, eclipsing the previous record by more than $549 million. The 21% jump also included $47.4 million in mobile advertising, which the IAB reported for the first time. <a title="Online ad spend jumps to $3bn" href="https://www.theaustralian.com.au/media/monday-section/online-ad-spend-jumps-to-3bn/story-fna1k39o-1226448698058" target="_blank">Online ad spend jumps to $3 billion</a> – other predictions are that online advertising will surpass television spending within 12 months, and print (the largest sector) will be eclipsed in 2014. Just five years ago, the breakdown in print to online spends was approximately 75% (print) and 25% (online).
<a title="Online advertising industry breaks through the $3b barrier with growth across all categories" href="https://www.iabaustralia.com.au/index.php?/news/story/online_advertising_industry_breaks_through_all_categories02" target="_blank">Online advertising industry breaks through the $3 billion barrier with growth across all categories</a>, which is an amazing achievement that demonstrates how quickly online is now dominating our markets. This month Google celebrated its 14th birthday which is all the more amazing given the role it plays in our day-to-day lives. I believed it was important to drill down to find the accelerant that ignited this online tsunami which I believe started on April 3, 2010, when Apple Inc released its brilliant tablet computer, otherwise known as the first generation iPad.
It is interesting to note that Apple Inc sold 3.27 million iPads in the third quarter of 2010, 4.19 million in the fourth quarter of 2010, 7.33 million in the first quarter of 2011, 4.69 million in the second quarter of 2011, 9.25 million in the third quarter of 2011, 11.12 million in quarter four 2011, 15.3 million in quareter one 2012, 11.80 million in the second quarter of 2012 and 17 million in the third quarter of 2012. This is phenomenal growth and also led the army of consumers to move from dumb phones to smartphones. In a nutshell, this translates into how our economies have now embraced technologies, which in turn will result in newspapers moving sooner rather than later into digital formats only.
Steve Maraboli said “As a business leader you have to ask yourself, am I creating a consumer environment that is conducive to loyalty? If the answer is no, FIX IT!”
It has been a while, although it was always going to happen. <a title="house prices to surge 15% by late 2013 as rates fall 100 basis points: Australian Financial Reviews David Bassanese" href="https://www.propertyobserver.com.au/residential/house-prices-to-surge-15-by-late-2013-as-rates-fall-100-basis-points-australian-financial-reviews-david-bassanese/2012092456754" target="_blank">House prices are set to surge 15% by late 2013 as rates fall 100 basis points, says the Australian Financial Review's David Bassanese</a>, which is a pretty fair assumption given <a title="Australian House prices surge in September." href="https://afr.com/f/free/blogs/christopher_joye/australian_house_prices_surge_in_vXMdu05e75yB7GJcaDWkcO" target="_blank">Australian house prices surged in September.</a>
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Australia (on the global property stage) has witnessed <a target="_blank" href="https://www.smh.com.au/business/banking-and-finance/borrowers-in-a-hurry-to-pay-off-mortgages-20120925-26ilm" title="borrowers in a hurry to pay off mortgages ">borrowers in a hurry to pay off mortgages, </a>the Reserve Bank of Australia (RBA) has found. Around half of all borrowers are ahead on mortgage payments. In total, the RBA estimated mortgage prepayment buffers in Australia were equivalent to around one and a half years ahead of scheduled repayments based on current interest rates. I don’t believe the RBA will cut the cash rate when it meets this week, although it was interesting to read <a target="_blank" href="/news" title="South – west Sydney mortgage borrowers lead RBA’s 15 most vulnerable localities.">South-west Sydney mortgage borrowers lead the RBA’s 15 most vulnerable localities.</a> <img src="/images/stories/2012/09/rbasept25.gif">
As we predicted the number of properties available is starting to subside, and this will continue until mid-October, when the market embarks on the final run to Christmas. Yes, Christmas.
Robert Simeon is a director of <a 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 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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Aussie borrowers in a hurry to pay off mortgages, and number of properties on the market subsides

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Take a snapshot (pun intended) of your business today – now think five years ahead and consider the very real possibility that more than half of small businesses will cease to exist as we know them today.
Five years ago in Virtual Realty News I predicted that David Jones and Myer would struggle to exist in 10 years’ time. The online tsunami has now ventured into fever pitch and it’s only going to get worse for the non-believers. Keep joining the dots and you will eventually join the chorus.
Online shopping is cheaper for consumers but much more expensive for the businesses marketing products because they now have to roll out state-of-the-art online platforms. <a target="_blank" href="https://www.smh.com.au/business/economy-is-better-off-with-digital-disruption-20120916-260b2" title="Economy is better off with digital disruption">Economy is better off with digital disruption</a>– “Instead, they show how established businesses facing huge technological change can get in all sorts of traps – thanks to something known as the 'innovators' dilemma'. The idea was developed in the 1990s by an American business guru, Clayton Christensen. In a nutshell, it explains why large companies often struggle to deal with revolutionary changes in technology.”
The simple reason is that in their ignorance, they just don’t understand.
“It goes a long way to understanding why so many companies at the sharp end of the digital revolution – media and retail in particular – are going through such upheavals. It’s also a lot more helpful than much of the public discussion of companies’ handling of technological change, which often falls into one of two categories. On the one hand, companies that innovate successfully are often surrounded by a type of mythology, with much of the credit going to an ambitious or brilliant chief executive.
"The popular tale of Apple’s late boss, Steve Jobs, seems to fit this mould. At the other end of the spectrum, there are the stories of the stubborn failure to change. When Kodak filed for bankruptcy this year, for instance, the narrative was that it refused to embrace digital cameras until it was too late.”
The real estate industry is now facing that “Kodak moment” – where I believe at least a third of agencies in Australia will be forced to close. How? <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/Key-Fairfax-publications-digital-only-by-2019-repo-pd20120912-Y2SUW?opendocument&amp;src=rss" title="Key Fairfax publications ‘digital only’ by 2019: analysts ">Key Fairfax publications ‘digital only’ by 2019: analysts</a> Commonwealth Bank of Australia analysts said in a report that, while some will cut sooner, titles including The Sydney Morning Herald, The Age and The Canberra Times will be “digital only” by 2019.
I believe this will happen much sooner given the huge debt that Fairfax Media is carrying. Which explains why the rumour mill is now running amok – <a target="_blank" href="https://www.theaustralian.com.au/media/fairfax-the-age-is-not-for-sale/story-e6frg996-1226477407061" title="Fairfax: The Age is not for sale.">Fairfax: The Age is not for sale.</a>
Real estate agencies have been judged by their print presence so what happens when this presence no longer exists? It’s very simple: they will be judged by their online presence, although those eyeballs were driven to their websites thanks to print media combined with online email alerts.
Real estate businesses have been totally dependent on print advertising (vendor paid) to promote their businesses – now the onus will be on the respective agencies to entice new business through their online models.
 
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It has been a long time coming given Richardson &amp; Wrench Mosman/Neutral Bay (RWM) was the first single agency to send out an email alert back in September 2000 and the only Australian agency to post over $1 billion in database sales.
We, like many other real estate agencies, are working on that new online model, which will cost six figures and upwards. The survival stakes for avoiding that “Kodak moment” within the real estate industry is set to sky rocket!
All I can say is, watch this space. I have been waiting impatiently for over a decade for this moment to arrive, when real estate agencies will have to completely re-think their marketing strategies. A case of do or die.
IT and video production will be the star performers over the next five years, as will the .tv websites, all of which RWM will be rolling out over the next six months (otherwise known as life after print advertising).
The next phase of real estate advertising will see the agents paying for it – not the vendors. The leading real estate agencies will offset these costs from third-party local advertising.
Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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The real estate industry is facing its 'Kodak moment' and must embrace digital media or die

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I’m not sure about you, but it seems to me here we are in 2012 and every government in Australia is crying poor. Without drilling too deep, the common denominator is usually bad management and policies. So why are they stone motherless broke?
In fairness, it is not unique to Australia, it is a worldwide epidemic. Why is it that we have in our businesses and homes state-of-the-art technologies with the world’s highest electricity prices? This reminds me of the saying “politicians and nappies have one thing in common – both need to be changed regularly, and for the same reason”. Best practice is replaced with best guess where budgets are premised on a wing and a prayer.
<a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/State-budgets-may-face-deficits-on-falling-commodi-pd20120903-XRRUL?OpenDocument" title="State budgets face deficits on commodity prices">State budgets face deficits on commodity prices</a> the WA and Queensland budgets could be thrown into deficit to the tune of nearly $2 billion dollars as falling commodity prices hit their resources dependent economies. <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/mining-royalties-queensland-coal-jac-nasser-gottli-pd20120913-Y3T6T?opendocument&amp;src=rss" title="The lies that blind and mining suffers ">The lies that blind and mining suffers </a>– “When is the duty of a state premier, or any leading minister, to tell the public the whole truth?” All we see with mining companies is the government's now taxing the bejesus out of them, so little wonder that pipeline of investment starts to be scaled down. Australia's politicians now find themselves in the position where <a target="_blank" href="https://www.smh.com.au/opinion/politics/promises-promises-now-its-time-to-do-the-sums-20120907-25jc6" title=" promises, promises, now it’s time to do the sums.">after the promises, now it’s time to do the sums.</a>
<a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/Businesses-furious-over-govt-cuts-to-tax-breaks-pd20120907-XWR2Y?opendocument&amp;src=rss" title="Businesses furious over govt cuts to tax breaks">Businesses are furious over government cuts to tax breaks</a>. Corporate Australia has reportedly been told (despite its protests), Labor is planning to go ahead with cuts to tax breaks and incentives worth a total of $6 billion to help achieve budget tax savings. The federal budget has, collapsed which would explain why <a target="_blank" href="https://www.smh.com.au/opinion/political-news/poll-position-gillard-arms-labor-for-early-election-with-new-committee-20120904-25cor" title="Poll position: Gillard arms Labor for early election with new committee">Gillard is arming Labor for early election with new committee</a>, and the word on the street is a March election. The Gillard government won’t go to the polls after the May budget in 2013 due to a massive blow-out! <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/Article/iron-ore-boom-federal-budget-Swan-China-GFC-pd20120910-XYRQH?opendocument&amp;src=rss" title="The bust that Swan didn’t see,">This is the bust that Swan didn’t see,</a> and remember where you heard it first!
{yoogallery src=[images/stories/2012/09/sept12altona]}
In real estate talk Altona (pictured above) is spoken as Australia’s premier property given its amazing pedigree.<a target="_blank" href="https://www.propertyobserver.com.au/news/altona-the-point-piper-harboufront-officially-listed-at-%24us569-million/2012091156517" title="Altona, the Point Piper harbour front, officially listed at $US56.9 million">Altona, the Point Piper harbourfront, has been  officially listed at $US56.9 million</a>, which is an amazing revelation or one huge faux pas on behalf by one listing agent, considering that up until now, the asking price has been somewhat of an industry secret.
Shock horror – <a target="_blank" href="https://www.propertyobserver.com.au/residential/residential-property-capital-growth-has-stalled-in-five-years-since-gfc-rp-data-s-cameron-kusher/2012091056482" title="residential property capital growth has stalled in five years since GFC: RP Data’s Cameron Kusher.">residential property capital growth has stalled in five years since GFC, says RP Data’s Cameron Kusher.</a> Apart from the economic factors, the slowdown in capital gains can also be attributed to the fact that consumers have increased their level of savings and have subsequently reduced their levels of spending (particularly for housing).
<img src="/images/stories/2012/09/capscombined.gif">
<a target="_blank" href="https://www.propertyobserver.com.au/land/unit-starts-boost-residential-construction-in-june-quarter-but-house-starts-fall-to-11-year-low-abs/2012091256526" title="Unit starts boost residential construction in June quarter but house starts fall to 11 – year low">Unit starts boosted residential construction in June quarter, but house starts fell to 11-year low</a>. There has been absolutely no government enquiry (to date) as to why. The pressure test for the top-end Sydney markets were dumbfounded this week when <a target="_blank" href="https://www.propertyobserver.com.au/developments/pacific-bondi-beach-buyers-riding-the-property-wave-through-to-the-2015-tide/2012090956465" title="Pacific Bondi Beach buyers riding the property wave through to the 2015 tide ">Pacific Bondi Beach buyers riding the property wave through to the 2015 tide, </a>where the first release (last weekend) resulted in 74 of the 76 apartments selling for the asking prices. The sales ranged from one-bedroom apartments for $1.9 million (70 square metres) to penthouses for $10.3 million. These are boom market results, although I agree with BIS Shrapnel's Frank Gelber that <a target="_blank" href="https://www.propertyobserver.com.au/residential/new-housing-construction-recovery-a-year-off-and-will-be-uneven-bis-shrapnel-s-frank-gelber/2012091356557" title="new housing construction recovery a year off and will be uneven: BIS Shrapnel’s Frank Gelber">new housing construction recovery a year off and will be uneven</a>.
<a target="_blank" href="https://www.propertyobserver.com.au/economy/with-interest-rates-and-unemployment-low-there-are-economic-positive-signs-all-around-mark-bouris/2012090956456" title="With interest rates and unemployment low, there are economic positive signs all around: Mark Bouris ">With interest rates and unemployment low, there are economic positive signs all around, says YBR's Mark Bouris,</a> which leads me to explain why. There is too much emphasis on what the Reserve Bank of Australia (RBA) does with the cash rate. Interest rates should be organically controlled through completion. This week, the home loans war got angrier when ME Bank cut its three-year rate to 5.39%, which is about 0.5 percentage points below the major banks. No RBA intervention because the bank knows rates will go a lot lower. ME Bank left the first clue – without RBA intervention.
The Mosman September marketing campaigns conclude over the next week (from Saturday) before the school holidays commence (again). If I’m reading the market correctly, the 120 houses on the market this week should start reducing.
Robert Simeon is a director of <a title="RWM" href="https://www.rwm.com.au/" 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/" 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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Governments crying poor, some booming – if uneven – results in the housing market

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;

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<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;

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<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.

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<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."

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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.

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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.

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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.

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Robert Simeon

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