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In a world where the barriers of Nation States are barely barriers and the society and economies are global in every way, the victory of President-Elect Obama has caused excitement throughout the world that is similar to the fall of the Soviet Union and the bringing down of the Berlin Wall.
It has been a monumental week for the United States and the entire world and we extend our congratulations and best wishes to President-Elect Obama and his new administration.
He enters office at one of the most important points in world history- the US is at war in Afghanistan and Iraq, Iran and Pakistan are perhaps greater threats than North Korea, climate change fear is extreme and the need for alternative energy sources has never been more urgent and the US and world economies are in the biggest state of crisis since the Great Depression and business and consumer confidence is shattered.
I don’t envy his position but I am proud of our friends in the United States for so convincingly offering Obama a clear mandate to fulfill his promise of change. Change was needed and the United States as the engine room of the world is vital in the success and prosperity of so many nations – Australia included.
I wrote an article which is a must read which detailed the size of the American economy compared to China, UK, Japan and Germany. We can also look forward to the announcement of key cabinet positions and I believe it will be a bi-partisan administration.
The election of Barack Obama changes the world’s view that America is a racist nation and his message of ’spreading the wealth’ provides a welcome corrective to the failed Wall Street mantra ‘greed is good.’(Thank you Henry Thornton).
I’m excited to see what reforms are put into place – including financial regulation, health, education and welfare. As an Australian we enjoy so many safety net protections (although they are far from perfect) and the US reforms may lead to benefits throughout the entire world.
George W Bush has spent like someone spending other people’s money (maybe things would be different if it actually was money coming from his own bank account) and Obama has to resolve this situation as well as a host of other things already discussed.
He is a classy, charismatic man who appears genuine and committed to change for the good of all. He has so far relied on high quality advisers, has kept his nerve, been rational and displayed an infectious level of energy. Good luck President-Elect Obama.
FYI: Read more articles on Obama, and the US Election Race
Lewis Hamilton has just won the Formula 1 Grand Prix Championship in Brazil, becoming the youngest and the first black winner of arguably one of the pinnacle titles in sport. British runner Paula Radcliffe has just won the New York Marathon for the third time, and with an amazing comeback story. Which of these stories is the prelude to the coming week?
Races start and often have nail-biting finishes, and this week has plenty of events with a result still to be determined. We have the US Presidential Election and the Melbourne Cup Carnival in Australia. People will hold their breaths, then on Wednesday will wake up to a new day.
Some fear change, but shouldn’t. The only constant is change, and appreciating this fact is pivotal in ensuring you are in control of your life, particularly given the current economic climate.
Keep pace with the race, go directly to the Nov 3, 2008 MTLH e-mag, or browse through the MTLH blog where we’re never short of something to say!
Regards,
Michael Marquette & Simon Turner
“Never confuse brilliance with a bull market.” Wall Street proverb
FYI: Read previous MTLH e-mag’s
Tuesday 4 November 2008 is shaping up to be a historical day:
- The US Presidential Election will either see the first African-American President (Obama) or the first female Vice-President (Palin) together with the eldest first-term President (McCain).
- The Reserve Bank of Australia will meet and, all things being equal, will almost certainly cut interest rates.
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It’s Melbourne Cup flutter fever throughout Australia.
You don’t need to be a gambler to have an opinion on the outcome of at least two out of three events, and broadly speaking one could achieve a hat trick by betting that “a horse” will win the Emirates Cup in Melbourne.
Where the interesting debate lies is in the margin of change. If Obama wins, how many Electoral College Votes will it be by? And, should the RBA cut interest rates, how much will the reduction be?
Let’s hone in on the Australian interest rate debate. Current factors influencing the RBA are:
- The Australian dollar is weak, hovering around US60 cents to the Australian dollar and having fallen 40% since July;
- Inflation is high (around 5%);
- Consumer and business confidence is lowering;
- Global growth prospects are poor;
- World oil and commodity prices are becoming more sensible;
- Unemployment is marginally on the increase;
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The government’s intervention by guaranteeing some deposits has not created the market stability intended.
So, given that it’s pretty much a given that interest rates will be cut, how much by? Well, the Marquette Turner team, in taking the above conditions into account, believe that the cut will be between half of one percentage points and three quarters of a percentage point. This will be an important shot in the arm for home owners and home buyers alike – whether it will be a silver bullet for the Australian housing market is probably on par with the likelihood of the eldest horse in the race winning from mid-stream. Simon Turner
FYI: Read other articles on interest rates, or housing affordability, or the US Presidential Election
It’s a salivating thought for anyone that has an interest in the outcome of the US Presidential race, and the Economist magazine is providing the opportunity.
I already had an interest prior to our visit to the US two weeks ago for the Who’s Who in Luxury Real Estate Awards, and hearing of the Economist’s clever use of the US Electoral College voting system upon the world’s population, it’s great to have the opportunity to “vote”.
I fully recognize that the typical vote is a domestic issue and choice for US citizens (and residents, of course). The result, however, affects the world. Whether or not you consider yourself to be a global citizen, and whether or not you are a Democrat or Republican in your preference, it is hard to dispute that as the most powerful country on Earth the US President has a significant impact upon us all.
It is for this reason that, whether or not you choose to take part in the Economist’s mock-election, the actual result after November 4, 2008 of either the Democratic candidates Barrack Obama & Joe Biden, or the Republican’s
John McCain & Sarah Palin, will invariably play a huge role in the coming years of your life.
More information: VOTE HERE; read more about Marquette Turner’s
award winning trip to the US
On my way across to the US yesterday I really couldn’t help but hear people on the plane discussing the state of the US economy. Confidence is very low and it would seem as a foreigner that Americans are looking for change which seems to be Barack Obama. The Americans I have met so far aren’t talking recession – they are talking about a “Depression”.
I spoke with a retired man who discussed how terrified he was of Sarah Palin: he believes that the US needed someone young and energized like Obama and he was genuinely worried that John McCain could die and the US would end up with Sarah Palin as President which would send a terrible signal to the rest of the world about Americans as a whole. He also just wanted George Bush to go and described him as a “lame duck President”.
It made me think just how lucky we are in Australia. Our property market is holding up price wise although sales volumes are taking a beating and are only a fraction of previous years. With interest rates decreasing (the massive 1% decrease this week is key) and more decreases likely to come, property throughout Australia is starting to look very good. I strongly believe that investors both domestically and abroad are already starting to look at Australia as a safe haven for money.
Our banks are safe and deposits are guaranteed. Australian interest rates are decreasing and property pricing is not volatile, with demand from immigration assisting throughout Australia. With rental yields increasing, property as an asset class is looking extremely attractive. Marquette Turner Luxury Homes will be doing all we can during our time in the US to promote Australia a safe haven and with the Australian dollar falling, foreign investment in our wonderful country is looking very attractive.
VOTERS in electorates recording the highest rates of home repossessions voted more strongly for Labor than areas not facing the same home-loan pressures, according to figures on the influence mortgage stress had on the federal election result.
The data offers the first firm evidence that mortgage stress and six interest rate rises were a key influence in seats covering Sydney’s west, south-west, the Hunter and the Central Coast.
In a Fairfax analysis of lower house seats in NSW and the ACT, high home-repossession rates were a better indicator of Labor receiving a stronger vote than either high unemployment rates or lower average incomes.
The top 10 home repossession electorates were identified and these 10 electorates recorded an average swing to the ALP of 6.7 per cent, compared with an average NSW swing of 5.4 per cent, using the ABC’s analysis of election results.
The swing to Labor in the 10 seats with the highest unemployment rate was 6.2 per cent and the swing to Labor in the 10 seats with the lowest income was below the state average at 5 per cent.
An associate professor of economics at the University of Western Sydney, Steve Keen, said household debt had become a pressing issue since the 2004 election, with total debts as a proportion of disposable household income increasing from 128 per cent to 160 per cent.
Over the same period the percentage of household income required to service debts had increased from 11 per cent to 16 per cent, meaning rising debt levels and interest rates had created a “double whammy”.
People with mortgage repayments of between $1400 and $1600 a month, just above the average repayment, stood out as one group that moved solidly to Labor.
Interestingly, the ABC’s election analyst, Antony Green, noted the seats identified by Fitch did not appear to select the seats with the lowest incomes, but rather those facing the highest cost-of-living expenses.
Simon Turner
Here’s some light-hearted relief from this year’s federal election campaigning, compiled by ABC News.
The latest Newspoll shows while the Coalition has slightly narrowed the gap on Labor, it still has ground to make up
The poll of 20 Nov in the Australian newspaper shows the Coalition closing the gap slightly on the primary vote, up 1point to 41 per cent. This is 5 points behind Labor, which has dropped 2 points to 46 per cent.
On a two party-preferred basis, the Coalition has climbed one point to 46 per cent, eight points behind Labor on 54 per cent.
The gap between John Howard and Kevin Rudd has also narrowed slightly, 42 per cent would prefer Mr Howard as Prime Minister, up 2 points, compared to 46 per cent opting for Mr Rudd.
It’s the closest preferred PM result in six months.
On the issue of economic management, John Howard has maintained his lead, despite an unprecedented interest rate rise during the election campaign.
As for Malcolm Turnbull’s seat of Wentworth (Marquette Turner HQ), a new poll suggests he is facing an uphill battle to retain his seat.
A Nielsen poll of 901 Wentworth voters, published in Fairfax newspapers, shows Greens preferences could give Labor’s George Newhouse, leading to a Labor win in the seat for the first time since federation.
Even though Mr Turnbull leads the primary vote by 45 per cent to 36 per cent, Greens candidate Susan Jarnason is attracting 17 per cent support in the primary vote and her preferences will flow to Labor, leaving Mr Newhouse leading Mr Turnbull by 52 percent to 48 percent on a two party preferred basis.
This of course does not factor in the shadow over Mr Newhouse’s head as to whether he is inellegible to be a candidate. A Liberal Party spokesperson cites Mr Newhouse, as well as 12 other Labor candidates throughout Australia, whose candidacy is questionable. The ALP completely disputes such assertions and whilst this could lead to a spate of by-elections post-election, it could also shore up support for the ALP leading up to the election as voters turn against the Coalition for raising such assertions.
Finally, a special telephone Morgan Poll of 435 electors conducted last night (November 20) shows a swing (0.8%) to the Liberals in the five Western Australian marginal seats of Brand, Cowan, Hasluck, Stirling and Swan.
In these five key WA seats, Liberal primary support is 44%, ALP 42.5%, Greens 9.5%, One Nation 1% and Independent/Others 3%.
After allocating preferences the two-party preferred result is Liberal 50.5%, ALP 49.5% – a swing of 0.8% to the Liberals since the 2004 election. Simon Turner
Ten Years On: Constitutional crisis looms
The President, John Howard, said yesterday he would not hesitate to use his powers of dismissal if the Prime Minister could not resolve the dispute that caused the Opposition to block key bills in the Senate.
The Opposition Leader, Malcolm Turnbull, has told Liberal senators to follow a policy of “total obstruction” until the Prime Minister, Peter Garrett, abandons his plan to build a nuclear reactor in every state capital. Mr Turnbull is supported by four of the eight Greens senators, three of the six Holy Family senators, and the Democrat Senator Natasha Stott-Despoja.
Mr Howard delivered his threat during a ceremony in Canberra to mark Australia’s return to 20 million people under the “depopulate or perish” program. Mr Howard congratulated the Government on its anti-immigration and anti-fertility measures, which put Australia on track to reach the so-called “Flannery line” of 18 million by 2026.
Then Mr Howard departed from his prepared speech to add: “When Peter Garrett reached across the party divide to nominate me as the first president of the republic, he called it an act of national reconciliation. I told him at the time that this would not prevent me from doing my duty to the nation, and that includes ensuring the Parliament can function.”
Mr Howard’s remarks were immediately condemned by the Victorian Premier, Peter Costello, and the NSW Premier, Pru Goward. Both are supporters of Mr Garrett’s program to cut Australia’s dependence on coal-fired power stations. “That little toad kept me waiting so long I had to move back to Melbourne and join the Labor Party to get career advancement,” Mr Costello said. “Now he’s threatening the first green Labor government in this country’s history. He should respect the Garrett mandate.”
Mr Garrett accused Mr Turnbull of wanting to continue Australia’s greenhouse emissions so global warming would give his Woollahra home a water frontage.
STOP PRESS: the College of Cardinals in Rome has elected an Australian as the new Pope. He is the former politician Tony Abbott, who returned to the priesthood in 2008 after the Liberal Party failed to choose him as leader.
He will take the name Pope Abbott I, “in recognition of the way a humble Abbott can rise, through hard work and determination, to the top job in the world’s most powerful religious corporation.”
Pope Abbott said his first priority was to “ramp up” what he called “the war of ideas with Islam”. “Christianity needs to be packaged more dynamically, and I believe I have the diplomatic skills to do that,” he said.
Original article featured in the Sydney Morning Herald, Stay in Touch feature.
Polling Suggests Carnage
The Australian Electoral Commission has announced that 13,645,073 voters are enrolled for this Saturday’s election.
That represents 550,000 more than had been on the electoral rolls three years earlier (13,098,461) and almost 1.3 million than actually voted in the 2004 election!
The commission also gave a breakdown of the age groupings of the Australian electorate. These are:
18-24: 1,535,870.
25-39: 3,513,510.
40-54: 3,856,190.
55 and over: 4,739,500.
So – on which side of the fence are the majority of these groups sitting?
AC Nielsen’s polling is showing that Labor is destroying the Coalition in all age groups but the over-55s, where the Coalition has an advantage nationally of 49 per cent to 43 per cent in the primary vote. Considering it is also the largest voting group, it is quite evident why John Howard and his team is ploughing such a huge effort of time and policy promises into them.
Even then, when compared to the previous 4 elections won by the Coalition, Labor has been able to gain on average an additional 9 percentage points among over-55 voters.
In the other age groups the Coalition is severely struggling and the carnage in NSW and Queensland will be immense. Only WA is offering a glimmer of hope for John Howard to keep the Kirribilli lights on. Simon Turner
On Wednesday and Thursday, Roy Morgan Research used a representative sample of the Australian electorate to monitor their responses to the the seven main political advertisements running on television for the L-NP and ALP, ACTU, and ALP/Greens/Australian Democrats.
The role of The Reactor was to monitor whether the advertising made them “more inclined to the L-NP or the ALP”. Between each advertisement, respondents returned to a neutral position.
Typically, the respondents react in accordance with party lines, spokespeople and topics.
Whilst this was generally the case over the last few evenings, the ACTU advertisement of the young woman and the middle-aged couple talking about how Work Choices is hurting working families, clearly touched a nerve with L-NP supporters as well as their own followers. Similarly, so did the ALP advertisement reminding the electorate of the six interest rate rises under the L-NP Government.
The L-NP appeared to be talking only to their traditional electorate and failed to move ALP voters. The ALP/Greens/Australian Democrats ad about ‘time to restore the balance to the House of Review’ did not move either ALP or L-NP supporters to any extent.
What the parties must do to win:
· The ALP needs to cement their traditional supporters as well as continue to motivate some L-NP voters as they appear to be achieving well. Watch a simple yet effective video from Kevin07
· The L-NP needs not only to focus its traditional voters, but also those “soft ALP voters”. It’s advertising must be clearer, leaner and broader.
Who has the most stamina as we edge towards the finish line? Simon Turner
Watch the Roy Morgan Reactor, a very clever use of graphs that move in time with ALP and Coalition announcements and ads.
As part of its electioneering, Labor has unveiled a $150 million promise to build up to 600 new houses and units across the country to provide better access to housing for homeless people.
Mr Rudd, speaking at a Mission Australia shelter in inner Sydney, said Labor’s aim is to halve the number of homeless people turned away from shelters each year within five years and close the gap within a decade to ensure all homeless obtained shelter.
“This is all part of reaching out with a helping hand to Australians in need,” he told reporters.
Mr Rudd said figures from the Australian Institute of Health and Welfare indicated that in 2005-06 there were 3,383 requests for emergency accommodation that could not be met.
That was almost five per cent of the total number of requests for emergency accommodation, he said. At Mission Australia, where Mr Rudd talked to residents, more than half of all single adult women seeking accommodation are turned away.
“In a nation that has experienced 16 consecutive years of economic growth, this is simply not acceptable,” stated Mr Rudd. Simon Turner
Should Labor win Government, it has promised to establish low-tax saving accounts to encourage first home buyers to save more towards a house deposit.
Under the scheme, which will cost $600 million over four years, first home buyers can make a pre-tax deposit of up to $5000 per year into a special deposit saving account that will be taxed at just 15%. Another $5000 per year after-tax can also be deposited, with interest from the full sum in the account also taxed at the low 15% rate.
The money can only be accessed after four years and must be put towards a home deposit – money can still be withdrawn if not used for that purpose, but the value of the tax concessions will be subtracted from the sum withdrawn. A minimum deposit of $1000 per year is required to keep an account open and the total amount deposited cannot exceed $50,000.
By encouraging first home owners to save, the scheme will help reduce debt levels and the use of expensive deposit guarantees like mortgage insurance, according to Housing Industry Association senior executive director Chris Lamont.
For many, however, even the $1000 minimum may be tough for some people to meet, particularly given that rental prices are on the high side, but certainly some assistance and encouragement is better than nothing. Simon Turner
Read Marquette Turner’s account of the Coalition’s policy
Whilst neither party’s leader joined the fanfair at Flemington, Howard’s favourite, Mahler, came in third and Rudd backed the winner Efficient (after his original choice was scratched).
Simon Turner
Broadband is front and centre in election campaigning today, with Coalition Communication Minister Helen Coonan seeking to capitalise on OECD figures showing that Australia has the 9th fastest broadband in the world.
According to Coonan, the OECD’s global internet rankings show Australia is performing well compared to many other developed nations, and clearly does not support Kevin Rudd’s claim that Australia’s broadband performance is woeful.
As well as the 9th fastest broadband in the world, Australia also has the 4th most affordable broadband, the 6th fastest broadband connection speeds and the 12th fastest take-up of broadband services of the 30 countries surveyed by the OECD.
Simon Turner
With the Federal election unfolding the concept of an education revolution has pricked my ears up. Recently the Marquette Turner Director’s convened a “think tank” where we spent two days in lockdown considering how best to continue educating our team as well as what new initiatives could help in attracting high calibre individuals to our company and also the industry as a whole. Simon Turner, Christine Watson and myself are committed to a transformed industry where tertiary level training is compulsory and negotiation is formally taught and examined. Our vision is to see the real estate industry in Australia mature into the profession that it needs to be – much like Accounting, Medicine and Law.
The reality is that real estate agents are one of the highest paid consultants in any industry, yet the entry requirements are so low and the training reality is that very few people ever fail once enrolled in the course. The “pass everyone” mentality is continuing to see hundreds of people enter the industry – most really should not be there. I have listened to the education plans of both major parties and while they are both touting to increase spending on education there appears to be little focus on improving or completely restructuring the training requirements for real estate and other professions which are in desperate need of an overhaul. Marquette Turner is a fierce opponent of the “increase places” education revolution that seems to be the centrepiece of what we are hearing. Simply increasing the number of places does not improve systems that are clearly failing and in need of immediate attention.
It was only yesterday when I was told of a real estate agent in Newcastle offering a potential purchaser part of his commission if he were to buy a house from him. This sort of person should not be in the industry and is a perfect example of why a formal, tertiary level qualification is so desperately needed at Bachelor level as part of the process of cleaning up the real estate industry. More places in existing training programs where standards are low and almost everyone is guaranteed to pass is just not the answer. Let’s hope our politicians are listening. Rest assured that Marquette Turner is working diligently towards creating such a revolution. Michael Marquette
The upcoming Federal election is causing some vendor jitters in deciding when to sell. Vendors are troubled by the election date of November 24, which is a Saturday and real estate agents are doing all they can to avoid auctioning homes on that weekend. At Marquette Turner Estate Agents we have decided to delay all auctions to avoid the election weekend and we are running new sales campaigns well into December which is extremely rare. The election has resulted in a late “real estate Spring” with the usual Spring influx of new property being delayed until December or the new year.
The election wait has also allowed for me to personally consider what I might do on election day. With our Sydney Headquarters being in Crown Street, East Sydney we are positioned in the Federal seat of Wentworth which is currently held by Malcolm Turnbull for the Liberal Party. It just happens that Mr Turnbull is also the Federal Minister for the Environment so I would expect that he would be extremely active in ensuring that the environment is top priority in his electorate. We have nightly rubbish collections during the week and yet we don’t have any recycling facilities for at the Marquette Turner Office. In fact all of our rubbish is collected, unsorted and taken away as if the environment was the last thing on Mr Turnbull’s mind.
It is difficult to get political in any situation as both parties have positives and negatives however when such simple things are ignored by the Federal Minister for the Environment I cannot help but wonder what the best thing to do on election day will be? As a real estate agent and a Director of Marquette Turner Estate Agents I have always seen it as my responsibility to act in the best interests of the properties and clients I represent as well as the company I represent. It is of great concern that our Federal Minister for the Environment could miss something so simple which is only a couple of hundred metres from his office. If Wentworth falls to Labor then Mr Turnbull has only himself to blame – Marquette Turner is committed to a greener world and it is under our own initiative that we promote environmentally friendly ways to market, recycle and run our business.
No one wants to have the distraction of an election on their auction day, so real estate agents and vendors have been playing a guessing game as to how to run their auction campaigns to the best effect
Whilst some have abandoned a spring campaign altogether, Michael Marquette of Marquette Turner points out that this favours vendors as there’ll clearly be less stock on the market.
An election, in Australia, regardless of the result, will seriously have little if any effect on the Australian housing market, says fellow director Simon Turner.
There are so many other factors that are involved in creating market conditions that “sitting on ones hands” proves beneficial to no one.
The Howard camp had a difficult weekend with a rift developing between Environment Minister Malcolm Turnbull and John Howard over signing the Kyoto protocol and coming under increasing pressure of a broken promise over interest rates.
Meanwhile the Greens and ALP are negotiating a preference-swap deal that leaves Family First out in the cold. But reports this morning point out this could mean that tough competition between the minor parties could mean the Coalition will remain in control of the upper house.
The biggest promise comes from Labor leader Kevin Rudd. He has promised a $1 billion package of grants and tax breaks designed to encourage investment in desalination and water recycling infrastructure.
Local and state governments will be able to apply grants of up to $100 million for desalination or waste water recycling projects, while businesses will be eligible for tax breaks worth up to 10% of the value of eligible projects.
Howard has committed a further $390 million for the Work Skills Voucher program. The program provides vouchers worth up to $3000 for people to take courses in areas such as ICT, accounting and administration. The new funding will make room for a further 110,000 people to claim the vouchers.
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