Abbotsford: 8 Turner: Bidder 3. Bought for $1,520,000. John Piccolo of Woodards talking 3 bidders through their options.

Since the start of 2010 we have seen buyers itching to get into the market… the amount of bidders in the North has increased as the weeks have progressed.

Where is everyone coming from…? Well it appears a combination of people who missed out in 2009, investors returning to the market and obviously a new bread of buyers that made the decision to purchase at the beginning of 2010. Add this to positive media commentary, historically low interest rates and relatively low stock levels and you have the ingredients for a boom. But values already rose 20% in Melbourne last year so that should mean we are at the end of the boom…? Correct?

Well the truth is we really don’t know, but we are seeing strong results in the market place and we are seeing bidders in serious numbers.

Take 290 Lennox Street, Richmond sold by Edward Hobbs of Biggin & Scott quote range of $700,000 – $770,000, 8 bidders in totals and more importantly 4 bidders still in the race as the property moved above $900,000, eventually selling for $985,000. The main story line here is bidder depth and market movement with 3 bidders who would have paid above $900,000 for that property that are frustrated and still active in the market place. It was a great auction with Mr Hobbs adding “the market is red hot at the moment with vendors extremely happy achieving prices above expectations across the board”

Similar storey at 102 Keele Street Collingwood sold by Paul Markovic of Peter Markovic, huge crowd of over 150 people, so big that the auction was stopping traffic. The original quote was $490,000. Bidding was opened strongly at $570,000 and then bids went to – $620,000 – $670,000 – $700,000 $710,000 $740,000 in literally a matter of moments. Needless to say the vast majority of the crowd were in amazement. There was a total of 6 bidders however I suspect there was the same amount hidden in the crowd who did not manage to place a bid – again frustrated bidders and lots of them.

David Oster of Jellis Criag Ivanhoe indicated that when the market was strong in 2007 that used to mean  4 or 5 bidders, now it means 8, 10 sometimes 12 bidders. Mr Oster aslo added “there are frustrated and desperate buyers out there who just want to get into the market” and importantly “despite price increases properties are still more affordable than they were in 2007 as interest rates at that time we approaching 10%”

So with the amount of bidders  and people rushing into the market are we starting to see a pack mentality? remember Warren Buffet’s famous Quote -  ”be fearfull when others are greedy, and be greedy when others are fearfull” I don’t yet believe its time to be greedy nor fearfull its just time to be informed.  There are prices that we see out there that are well over the odds and there are prices out there that are just strong results given strong market fundamentals – its very important to know the difference.

Know Your Market!