Newsletter Issue 33

At the time of writing this newsletter we have just received the announcement from the Reserve Bank regarding the expected interest rate rise of 0.25 per cent. Traditionally, the mere talk of an interest rate rise temporarily stifles the market, but that appears not to have happened this time around.

It remains to be seen - now that the announcement has been made - how it will impact the market. Having experienced similar conditions over 30 years in real estate I have noted that there is almost always a knee jerk reaction for a few weeks and then the market returns to normal.

Having said that however, the real estate market appears to have reverted to a more traditional and stable one, being neither a buyers or sellers market.

This is the market that most experienced real estate agents enjoy because it is more conducive to retaining those people who intend to remain in the industry long term. A boom always attracts more short term operators who find it tough going when the market changes.

Our randomly selected winner for a weekend away at Hobart's Grand Chancellor is Peter Sawdon. Mr. Sawdon is currently selling his property through Barry Ackerly and was delighted when Barry told him of his win. Congratulations Peter!

A very elderly gentleman, (mid nineties) very well dressed, hair well groomed, great looking suit, flower in his lapel smelling slightly of a good after shave, presenting a well looked after image, walks into an upscale cocktail lounge. Seated at the bar is an elderly looking lady, (mid eighties). The gentleman walks over, sits along side of her, orders a drink, takes a sip, turns to her and says, "So tell me, do I come here often?"

An elderly gentleman had serious hearing problems for a number of years. He went to the doctor and the doctor was able to have him fitted for a set of hearing aids that allowed the gentleman to hear 100 per cent. He went back in a month to the doctor and the doctor said, "Your hearing is perfect. Your family must be really pleased that you can hear again." The gentleman replied, "Oh, I haven't told my family yet. I just sit around and listen to the conversations. I've changed my will three times!"

An elderly couple had dinner at another couple's house, and after eating, the wives left the table and went into the kitchen. The two gentlemen were talking, and one said, "Last night we went out to a new restaurant and it was really great. I would recommend it very highly." The other man said, "What is the name of the restaurant?" The first man thought and thought and finally said, "What is the name of that flower you give to someone you love? You know ... the one that's red and has thorns." "Do you mean a rose?" "Yes, that's the one," replied the man. He then turned towards the kitchen and yelled, "Rose, what's the name of that restaurant we went to last night?"

At a certain hospital, where regulations required a wheelchair for patients being discharged, a student nurse found one elderly gentleman, already dressed and sitting on the bed with a suitcase at his feet, who insisted he didn't need help to leave the hospital.  After a chat about rules being rules, he reluctantly let her wheel him to the elevator. On the way down she asked him if his wife was meeting him. "I don't know," he said. "She's still upstairs in the bathroom changing out of her hospital gown."

36 per cent of 20 to 29 year olds in Australia still reside in the parental home, according to recent figures from Melbourne-based marketing intelligence agency Quantum.

Often referred to as `KIPPERS' (Kids In Parents' Pockets Eroding Retirement Savings) by social analysts, the adult children of the baby boom generation are more frequently opting to live with parents, their independence being eschewed in favour of subsidised rent, home-cooked meals and a free laundry service.

The rising costs of housing and further education, together with a reduction in state support, have previously been identified as factors making young people stay at home for longer.

However, Quantum analyst David Chalke believes that escalating house prices are not to blame for preventing generation Y from taking their first step onto the property ladder.

"The house price argument is as much an excuse as a reason - many of them could afford to buy a one-bedroom apartment...it's really a combination of convenience, not wanting to commit to anything, and compliant parents," Mr Chalke said.

According to the Australian Bureau of Statistics, only 21 per cent of people in their 20's lived with their parents in 1976, with this figure jumping to 30 per cent in 2001. This trend is not specific to Australia, with research conducted by financial services group Prudential highlighting that in the UK approximately 6.8 million over 18's live with their parents, less than half pay rent, and many are given additional cash to spend each week.

Angus MacIver, director of research at Prudential, said that the findings "may come as a rude shock to parents who expect their kids to be out the door when they turn 18. These days, parents may have them for much longer".

"While this may not be a problem in itself, the real worry is how much these kids cost, and the extent to which they eat into parents' retirement savings" said Mr MacIver. "Whether our kids leave home at 18, 20 or 30 years of age, families need to plan ahead for every eventuality. Not only do they need to plan to help their children, they also need to balance that with the need to plan their own retirement," he said.

Kicking-off a savings scheme or pension as early as possible for their kids is an excellent start."

As part of its annual Winter Fire Safety Campaign, the Victorian Government has recently launched a winter fire safety awareness initiative for elderly Victorians, installing smoke alarms in over one thousand homes.

Deputy Chief Fire Officer Shane Wright, Acting CEO of the Metropolitan Fire Board (MFB), said that older adults are a high risk group in fire.

"Some medications decrease mobility and hearing which can reduce the ability to detect and escape from fire. Impairments can make it difficult for some people to respond quickly to a developing fire. Living alone can also increase their vulnerability to fire," Mr Wright said.

Conventional smoke alarms have audible alarms that alert people to the presence of smoke, and provide precious extra seconds to escape from the home. These alarms are effective for those who can hear them, but alternative types of signals must be considered for people who are deaf or hearing impaired.

There are a number of models of smoke alarms on the market for the hearing or sight impaired. One model consists of a conventional smoke alarm with an additional bright white xenon strobe light. Placed above a bed, the flashing strobe will awaken and alert hearing impaired and deaf people to smoke and fire. Another model consists of vibrating pads which are placed under the pillow and vibrate when the smoke alarm is activated.

Some alarms are designed so that they can be interconnected with other conventional alarms in different locations within the home. If one of the alarms senses smoke, all alarms will sound, the strobe will flash and the vibrating pad will operate.

Whichever alarm system you choose for your home or that of your elderly relatives, there are some basic rules to its installation and maintenance, such as placement (away from cooking appliances and bathrooms) and regularly checking/changing the batteries.

Keep in mind that smoke alarms are intended to detect smoke before it reaches the bedrooms. Alarms should be located in the path of travel that people will most likely take to evacuate the building such as hallways and near the base of stairs leading to second-storey bedrooms.

The number of births in Australia in 2005 was the highest recorded since 1992, according to figures released by the Australian Bureau of Statistics.

There were 261,400 births registered in the year ended 31 December 2005, an increase of 2.4 per cent (or 6,200 babies) on 2004. The number of deaths registered was 130,600, a 1.8 per cent reduction on the numbers of deaths registered in 2004.

More births and fewer deaths during the 2005 calendar year pushed the natural increase (the excess of births over deaths) of Australia's population to its highest level in 11 years. Australia's natural increase was 130,800 people, an increase of 7 per cent (or 8,600 people) on the 2004 figure (122,200).

The Australian population grew by 242,300 (or 1.2 per cent) during the year ended 31 December 2005. Natural increase contributed 54 per cent, and net overseas migration contributed 46 per cent to this total, reaching just under 20.5 million people.

All states and territories gained population in 2005, with Queensland experiencing the largest percentage gain (1.9 per cent or 74,800 people) and South Australia the lowest (0.6 per cent or 9,900 people). Queensland's population now exceeds 4 million people.

The Northern Territory, having the second highest population growth rate for 2005, has experienced a large change over the last four years increasing from a growth rate of 0.1 per cent in 2002 to 1.8 per cent in 2005.

As mentioned at the beginning of this letter the local real estate scene has stabilised along more traditional lines. Vendors are not attracting the premium prices that occurred in the boom but purchasers still need to negotiate up to a reasonable price if they wish to secure the property they want. There are still some buyers who feel they are in a strong negotiating position, only to find they miss out on a property to someone else who is more realistic with their offer.

So the market appears to be at a healthy balance and should remain so despite minor fluctuations in interest rates.

With that as a backdrop, it is interesting to note that in the Northern region of Tasmania, residential dwelling sales volume in the 2nd quarter of 2006 has increased by around 10% compared to last year, with our own Company showing a 26 per cent increase. So despite some negativity in the Industry the market is remaining relatively strong.

As always if you have any comments or questions do not hesitate to contact me.

Regards,

Noel R. Towns
Managing Director