Posts Tagged ‘Reserve Bank of Australia’

rsimeon

Blame our Governments for high property prices

With another federal election now passed all the political rhetoric about infrastructure will be buried until the next election in three years’ time. Sadly, in Australia our elected governments are only interested in the one thing – taxes.

Since the early 1980’s politicians have conveniently discussed the construction of a high – speed rail link along the east coast where typically nothing has happened, although you can be guaranteed that it will be mentioned again prior to the next federal election. In 2013 the High Speed Rail Study Phase 2 Report estimated that a conventional High Speed Rail Express trip from Sydney to Melbourne would take 2 hours and 44 minutes … more »

rsimeon

It’s the safe money that’s in property

A question that I have been asked on more than a few occasions has been what are some of the real game changers that I have seen in my time selling real estate?  My first response is the obvious how long have we got? Although the greatest innovation for me was when the newly elected Labor government back in 2007 required the Reserve Bank of Australia (RBA) to be transparent (for the first time) by publishing the minutes immediately following their last meeting. What we seem to forget  (all too quickly) is that prior to this all the RBA would do was advise that the cash rate had either remained … more »

rsimeon

Watch the cash rate – not the market


I’ve always liked the saying “can’t see the forest for the trees” given it appropriately sums up so much of the distorted self – indoctrinated bias of opinion pertaining to real estate in Australia. The debate has never been so fierce – especially when it comes to the definition of that ‘’bubble”. I am of the firm belief that it is those who are actual historians of the Australian property markets who are the ones with the greatest ability to call the exact path and outcomes.

If you want to end the “bubble” debate simply ask the question – “So when do you see this bubble bursting? “It’s always the fastest … more »

rsimeon

For my next trick: A mountain out of a molehill

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When it comes to real estate in Australia there is no better saying than “if you want to make a mountain out a molehill – just keep adding dirt.” So when we were conveniently advised this week that Sydney house prices rose 5 per cent for the three months to the end of August, resulting in a 16 per cent year – on – year growth, my immediate thought was what a complete load of rubbish.

Here’s why this figure is misleading and a complete distortion of the truth.

So this week I called one of Sydney’s leading auctioneers and asked “if we break down the Sydney housing market into municipalities, given … more »

rsimeon

An optical illusion they call a “property bubble”


Spare a thought for those property writers in Australia where it has become increasingly obvious that the pressure of having little to write about is taking its toll. The cash rate together with the inner workings of Australia’s Reserve Bank (RBA) has always remained a fascination for many although with the next rate rise possibly not until sometime in 2016 – a new search for a property headline has begun in earnest.

Enter the rise and rise of the ‘property bubble’ – although I am quite sure in my thirty years of working in the real estate industry I am mystified as I have never seen a ‘property bubble’ although I … more »

rsimeon

The RBA has parked the Australian property market

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It’s hardly surprising that the Reserve Bank of Australia (RBA) decided to park the cash rate indefinitely given the complexities associated with Australia’s fascination of owning real estate. When one looks closely at the RBA data our household debt has now climbed to a record $1.870 trillion. Its cause has certainly not been assisted by the avalanche of auto – pilot investors which led the RBA to announce this week that it has concerns about ‘significant’ uncertainty.

Of great concern globally is that all the central banks presently have their respective cash rates parked at close to zero which has resulted in even greater debt, even though growth keeps trending well … more »

rsimeon

Real estate markets: plenty of dare and little truth

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There goes another financial year where for all intents and purposes profits should have been up and back to pre-Global Financial Crisis (GFC) levels. Some a step further by posting all time record profits given their respective graduation from the GFC together with the valuable lessons learned, which were then adopted then executed.

Having said that we should closely look at the Reserve Bank’s four prevailing views on the property market as each and every point raised is not just a concern but more of a forecast which in all probability will eventuate. The most important message from … more »

rsimeon

Australian real estate requires new foundations

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I’m not exactly sure where I’m trying to go with this so let’s imagine a massive jigsaw puzzle scattered across the floor and we’re trying to make some semblance of this mess.

Has the time come that the current methodology of real estate in Australia (which is seriously flawed) is ripe for demolition and an entirely different business model should be built to replace what we have today?

Let’s start on the basis that currently in Australia one third rent, the next third own with a mortgage and the final third own their home without a mortgage. Now, the Australian real estate market consists of thousands upon thousands of niche markets yet … more »

rsimeon

Nothing wrong with the occasional lesson in history

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As widely expected the Reserve Bank of Australia (RBA) decided again to leave the cash rate in a holding pattern for the seventh straight meeting although somewhat surprising the rhetoric was considerably different this time around. Sydney is the elephant in the room with house prices jumping 15.6 per cent in the last year according to RP Data although I would add that this is a lazy way of explaining and defining the property markets across Sydney given they are all performing differently – some are hot and some are not.

Back to the RBA where in an extraordinary week we heard both Glenn Stevens and treasury secretary Martin Parkinson publicly … more »

rsimeon

The RBA Has One Hell Of A Headache

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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 … more »

rsimeon

Why We Have Less Property On The Market

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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. Prepare for interest rates rising sooner than expected if America raises 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 per cent borrowers would be slugged an extra $755 million of extra repayments collectively. The … more »

rsimeon

Move Along, Nothing Happening Here – Yeah Right

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When one blogs 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 bush fires 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 … more »