Navigating markets a key challenge for 2013: Robert Simeon

What a difference a week makes! Yesterday the Australian stock market posted a 53 – month high where the benchmark S&P/ASX 200 index lifted 1.34 percent to 5104.1 points, and the All Ordinaries index rallied to finish at 5120.4 points. Who would have thought – there she blows?

The most challenging dilemma facing the business community in 2013 is actually navigating the many markets that determine our economy – after all everyone is always seeking an opinion. The best way I’ve found to circumvent this is to religiously read – CEO PULSE. The views from Australia’s leading chief executives on:

• Predictions for 2013
• Economic Outlook
• Outlook for their organisation
• What keeps them awake at night
• What advice they’d give to Julia Gillard and Tony Abbott.

CEO PULSE: Snapping the wallets shut – Australian CEO’s are much more confident in 2013 although the survey found that those expecting a rise in operating expenditure rose from 33 to 49 percent and those expecting a decrease in operating costs dropped from 37 to 29 percent. It is most apparent that many Australian businesses are being hit hard by the high Australian dollar – RBA documents show bank considers $A overvalued by 4 to 15 percent. In unison to the CEO thoughts in CEO PULSE it came as little surprise to see CAPEX falls against expectations in December.

According to the Australian Bureau of Statistics (ABS) CAPEX fell 1.2 percent in the December quarter seasonally adjusted to $40.988 billion during the quarter. Private capital expenditure is now 10 percent higher than it was in the previous December quarter.

Steady growth forecast for Aussie economy – “The economy holds a large amount of offshore debt, households retain substantial debt because of high house prices and its banks are reliant on foreign investor funding.’’ They went on to say – “Our base case is that Australia’s economic growth will remain close to trend over the coming years.”

Macquarie Bank recently stated in their Global market outlook for 2013 – according to Macquarie Private Wealth, there are four investment themes that will drive the investment market in 2013.

• The commodity price boom is over – It’s now clear that the commodity boom ended in 2011 – but that isn’t necessarily bad news for investors because that doesn’t necessarily mean that China has stopped growing

• The rise of the Chinese consumer – While large – scale Chinese demand continues, the composition of Chinese growth is changing. A historic shift away from investment spending and towards consumer spending will require investors to think very differently about ways to gain exposure to China

• Markets learning to live with a Europe in crisis – While the European debt crisis is far from over, the level of investor concern has dwindled.

• Is this the beginning of a US housing recovery? – It’s no secret that the US economy continues to face some hurdles, including high unemployment of more than seven percent and the impact of austerity measures, but evidence of a housing recovery continues to build. The potential benefits to employment and investor confidence may prove to be some of the positive surprises for markets in 2013.

Let the good times roll again, says Baird – an improving international outlook means the backdrop for the state economy is better than at anytime since the beginning of the global financial crisis six years ago. With $40b of profits in the bag, the recovery gains momentum it is quite apparent that earnings growth has well and truly moved into the positive.

Again volumes are down with patterns emerging that our demographic housing markets remain in a holding – pattern. Something will eventually break so my prediction is that we will see a run on the property market. There won’t be a cash rate reduction when the Reserve Bank of Australia (RBA) meets this month as Global housing hots up.

Source: Domain Property Monitors

MOSMAN – 2088

• Number of houses on the market this time 2012 – 139
• Number of houses on the market last week – 103
.Number of houses on the market this week – 105

• Number of apartments on the market this time 2012 –126
• Number of apartments on the market last week – 80
.Number of apartments on the market this week – 76

CREMORNE – 2090

• Number of houses on the market this time 2012– 17
• Number of houses on the market last week – 15
.Number of houses on the market this week – 17

• Number of apartments on the market this time 2012– 23
• Number of apartments on the market last week – 21
.Number of apartments on the market this week – 20

NEUTRAL BAY – 2089

• Number of houses on the market this time 2012 – 22
• Number of houses on the market last week – 14
.Number of houses on the market this week – 15

• Number of apartments on the market this time 2012 – 63
• Number of apartments on the market last week – 38
.Number of apartments on the market this week – 39

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.
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Signs of rebound in property keep watching the clearance rates which are closing in on 80 percent which previously indicated that property markets are booming. This time around following the Global Financial Crisis (GFC) it is apparent that the lower end markets are booming with the top – end markets showing much more caution. Having said that, there are clear indications – Views and lifestyle lure buyers back to waterfront properties. It should be noted that the vast majority of Mosman’s top – end acquisitions have gone to Chinese buyers.

With Australia (and other institutions) focused on what is happening in China it must be reassuring that Chinese buyer’s see our property markets as a ‘buy recommendation’ – There she blows & there she goes!

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. The RWM real estate model has sold in excess of $1 billion in database sales globally.