Data doesn’t lie when you keep misreading it: Robert Simeon

Another fascinating week with Australia experiencing a significant stock market correction followed by the National Reform Summit which in all probability won’t amount to anything given the responsibility rests with our politicians. When it comes to anything economic in Australia we see a typical allergy where they are too frightened to come into contact with these issues.

Since 2013, the internet population grew approximately 20% – from 2.4 billion to 3.2 billion people yet for some strange reason we still struggle to understand data, or is it that the data we should be seeing is withheld? Australia’s misunderstood property markets are a prime example – with Sydney well ahead of the country in terms of inaccuracy in reporting.

One of the main areas for concern to come from the National Reform Summit was productivity where many believe Australia has come to a grinding halt which is replicated with our present GDP growth rates. For some time now I have been carefully watching property growth rates which (wait for it) closely resemble our GDP results.

To further explain we closely looked at sales data from 2009 to 2014 for house and apartment sales in Seaforth, Mosman, Cremorne, Neutral Bay, Cammeray and Northbridge where the total number of households equates to 39,227.Source CoreLogic RP Data.

We need to bear in mind that when you closely examine individual suburb markets at five (5) per cent turnover per annum the market turnover is normal and slightly under-performing. When it gets to ten (10) % per annum turnover the market is considered strong and when the market hits fifteen (15) % turnover per annum that is a boom. The last time we witnessed the market hitting 15% was in 1988.

So we took the six year averages for sales and this is what we found.

• Seaforth – Average number of sales from 2009 to 2014 per annum – 120 houses which equates to 5.1% of the total market on a per annum basis.
• Seaforth – Average number of sales from 2009 to 2014 per annum – 16 apartments which equates to 4.7% of the total market on a per annum basis.
• Mosman – Average number of sales from 2009 to 2014 per annum – 312 houses which equates to 5.3% of the total market on a per annum basis.
• Mosman – Average number of sales from 2009 to 2014 per annum – 492 apartments which equates to 4.9% of the total market on a per annum basis.
• Cremorne – Average number of sales from 2009 to 2014 per annum – 62 houses which equates to 4.6% of the total market on a per annum basis.
• Cremorne – Average number of sales from 2009 to 2014 per annum – 278 apartments which equates to 5.0% of the total market on a per annum basis.
• Neutral Bay – Average number of sales from 2009 to 2014 per annum – 55 houses which equates to 4.95% of the total market on a per annum basis.
• Neutral Bay – Average number of sales from 2009 to 2014 per annum – 323 apartments which equates to 4.8% of the total market on a per annum basis.
• Cammeray – Average number of sales from 2009 to 2014 per annum – 56 houses which equates to 5.6% of the total market on a per annum basis.
• Cammeray – Average number of sales from 2009 to 2014 per annum – 147 apartments which equates to 5.5% of the total market on a per annum basis.
• Northbridge – Average number of sales from 2009 to 2014 per annum – 88 houses which equates to 4.3% of the total market on a per annum basis.
• Northbridge – Average number of sales from 2009 to 2014 per annum – 28 apartments which equates to 5.5% of the total market on a per annum basis.

When one takes into account that the cash rate at the beginning of 2009 was 3.25% and dropping to 2.50 at the end of 2014 we would have expected the number of properties to be rapidly increasing – which has not been the case. Moreover this reaffirms that business is not doing that well given households are not that interested in taking on more debt, which certainly resonated with a lot that was presented at the National Reform Summit.
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The burning question is what is Canberra going to do about this?

Mosman Houses Sold – Total Number 5,890 Houses

2009 – 303
2010 – 325
2011 – 264
2012 – 276
2013 – 355
2014 – 350

Mosman Apartments Sold – Total Number 10,020 Apartments

2009 – 523
2010 – 453
2011 – 474
2012 – 443
2013 – 543
2014 – 514

Cremorne Houses Sold – Total Number 1,135 Houses

2009 – 71
2010 – 65
2011 – 56
2012 – 56
2013 – 66
2014 – 59

Cremorne Apartments Sold – Total Number 5,481 Apartments

2009 – 339
2010 – 302
2011 – 288
2012 – 218
2013 – 267
2014 – 255

Neutral Bay Houses Sold – Total Number 1,109 Houses

2009 – 61
2010 – 69
2011 – 51
2012 – 51
2013 – 61
2014 – 40

Neutral Bay Apartments Sold – Total Number 6,638 Apartments

2009 – 411
2010 – 362
2011 – 287
2012 – 283
2013 – 308
2014 – 286

Cammeray Houses Sold – Total Number 1,275 Houses

2009 – 58
2010 – 50
2011 – 50
2012 – 56
2013 – 64
2014 – 61

Cammeray Apartments Sold – Total Number 2,610 Apartments

2009 – 156
2010 – 194
2011 – 156
2012 – 107
2013 – 135
2014 – 137

Northbridge Houses Sold – Total Number 1,914 Houses

2009 – 88
2010 – 63
2011 – 68
2012 – 89
2013 – 102
2014 – 94

Northbridge Apartments Sold – Total Number 504 Apartments

2009 – 32
2010 – 33
2011 – 20
2012 – 23
2013 – 35
2014 – 27

Seaforth Houses Sold – Total Number 2,317 Houses

2009 – 113
2010 – 109
2011 – 113
2012 – 121
2013 – 138
2014 – 127

Seaforth Apartments Sold – Total Number 334 Apartments

2009 – 21
2010 – 11
2011 – 10
2012 – 14
2013 – 17
2014 – 26
Source – CoreLogic RP Data

MOSMAN – 2088

• Number of houses on the market this time last year – 69

• Number of houses on the market last week – 53

• Number of houses on the market this week – 65

• Number of apartments on the market this time last year – 51

• Number of apartments on the market last week – 41

• Number of apartments on the market this week – 42

CREMORNE – 2090

• Number of houses on the market this time last year – 7

• Number of houses on the market last week – 2

• Number of houses on the market this week – 4

• Number of apartments on the market this time last year – 15

• Number of apartments on the market last week – 15

• Number of apartments on the market this week – 18

NEUTRAL BAY – 2089

• Number of houses on the market this time last year – 5

• Number of houses on the market last week – 4

•Number of houses on the market this week – 2

• Number of apartments on the market this time last year– 36

• Number of apartments on the market last week – 25

• Number of apartments on the market this week – 30

 ROBERT SIMEON is a director of Richardson Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog Virtual Realty News since 2000.