This article appeared in The Weekly Review.

Hello, my name is Mal James and I’m a buyer agent. I was having a light lunch at Grossi Florentino’s in Bourke Street when Journalist Jim rang my mobile.

Mal: Hello, James Buyer Advocates, how can I help you?

Jim: Jim Brown from the Daily News here. The markets, Mal, what’s your latest take on the market?

Mal: Which market, Jim?

Jim: The property market.

Mal: Yes, Jim, but which part of the property market? Are you asking me about a specific Property type like high-end apartments or lower-end single-fronted period homes? Are you asking me Positionally; say leafy green inner-eastern Hawthorn or a very different market at Bayside Brighton? Or are you asking me about a specific Price market like under a million dollars or over $2 million?

Jim: That’s your 3Ps again, Mal – Price, Property or Position. Actually, Mal, I was just after a headline. 3Ps isn’t a headline grabber.

Mal: How about homes crash or prices rocket or agent cheats system?

Jim: That’s better, Mal.

Mal: Sorry, wrong guy, but on the above I can give you six different headlines. High-end apartments have been in the doldrums; however, recently things are a little different.

Jim: Why are high-end apartments different now?

Mal: In my opinion, it’s a supply issue. Lack of new supply created by the GFC completely freezing new developments 18 months ago has reduced the normal amount available for sale, so even the current small number of buyers face some sort of a limited supply market. The market has strengthened – a teeny bit.

Jim: I was just after a headline. How do apartments differ from other types of Property, eg single-fronted period homes?

Mal: Melbourne buyers have had a love affair with single fronted period homes for more than a century and homes currently around a million dollars are going gangbusters (for sellers).

Jim: Why?

Mal: Flexibility of uses and therefore a large pool of demand. You buy it when you’re single because it’s cheaper, renting the extra rooms to your mates. As you meet your perfect match and have kids, you decide you really like the lifestyle the area has to offer near shops, rail and schools, so you renovate. In your twilight years, it’s low maintenance and a well located gem. There’s consistent underlying demand with no increase in supply. In May 2010, prices are very strong. In the past 10 years, we’ve seen many of these properties triple in value.

Jim: Two very different Property markets. What about the Price markets?

Mal: In May 2010, there are two. Under $1.5 million has generally been hot. At auctions, we are seeing three to seven bidders and it has been this way for a lot of 2009 and all of 2010. However, above $1.5 million, the cool winds of change are flowing in May 2010 with a big increase in pass-ins.

Jim: Why the difference? We all have the same interest rates.

Mal: Discretion. At a million dollars, the yuppies (if that is still a word) are forced buyers. They have to put a roof over the family’s head. Interest rates are only just starting to bite and demand relative to supply is still strong; therefore solid prices. However, at $2 million, many buyers have alternatives – they can renovate or sit still. It’s frosty specifically in $2 million-plus Toorak where buyers are thinking later maybe better than sooner to buy and sellers are thinking sooner maybe better than later to sell. Therefore the Toorak $2 million-plus market is unbalanced and in May 2010 these imbalances mean a price weakening.

Jim: And what about the third P – Positional markets?

Mal: We use Bidderman (bidders per auction) as our measure of market strength and in areas such as Richmond, Carlton and so on, Bidderman is the highest on record with three and five bidders per auction being the norm. This Positional market is boiling. In Hawthorn and Kew we are still seeing large numbers of properties at all price levels turning over at auctions but agents are reporting buyer mood changes and Bidderman is dropping. Bayside seems to be cooling slightly as well, although early days.

Jim: So, overall, what’s happening? What’s the headline, Mal?

Mal: Jim, a one-size-fits-all property headline really doesn’t work. In fact, if you are buying a $2 million home in Hawthorn and you read a Bayside $1 million apartment headline, then you may go into a negotiations with all the wrong information. Each weekend the market is different on each home and, while overall market trend knowledge is useful, there is no accurate blanket statement. Now, Jim, about my press photo, do you think I look good from the right side or left … Jim … hello … are you still there? Jim? Hmmm, must have dropped out!