In the thick of it, Iain Carmichael (BenMac) takes 31 Finch St, Malvern East to a sale price of $3,360,000. 2 bidders and a crowd of 120.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 58% for the 24 auctions we attended. Of those, eight sold under the hammer.

Bidderman, our Demand Indicator, increased to nearly 1.5 bidders per auction. However, a third of the auctions we attended still had only one bidder.

Due to the election we have a reduced coverage this weekend with no individual council reporting or auction videos, however we still reported on 24 auctions.

Stop Press: Buyer Opinion Article on the Hung Spring Market – The Election Effect.

Market: Still quiet

The past month has seen a general feeling of quietness in the market and nothing has happened this weekend to make us think any differently (at least overall). The election has had an effect on the market, despite many experts (buying and selling agents) saying early on it wasn’t going to. A hung parliament could put further uncertainty into the mind of some, and possibly affect early Spring buyers (demand).

The main property election issue (if there was one) was the migration debate, which would affect long term upper end demand.

Highlights: Some emerging noise in the $3m+ market

• Those a little higher up the food chain should note that another two homes over $3 million were bought this weekend. With two last week also selling at this level, it is fair to say that a bit of noise is drifting back to this very quiet end of the market.
• 31 Finch St Malvern: BenMac, (Agent & Auctioneer Iain Carmichael), 2 bidders, 120 people, Bought Under Hammer $3,360,000:
  “A big crowd turned up to see Iain Carmichael of BenMac go through his professional routine in front of 120 people for this home in need of a serious reno, but with a great address, façade and land size. Things started slowly with a vendor bid at $3,200,000. After some delay another $25,000 was offered. More delay, a half time break and a second vendor bid was placed at $3,250,000. This got a second live bidder going before the property was declared ‘on the market’ and was sold to the original bidder at $3,360,000. Considering the work required it was a healthy result.”(Mal James)
• 4 Moorakyne Ave Malvern: Marshall White, (Peter Bennison and Joanna Nairn & Auctioneer Justin Long), 2 bidders, 60 people, Bought Under Hammer $3,000,000:
  “Wow!  After a day of pass-ins and vendor bids, this auction had it all – two bidders, 60 bids and a purchase price of $3,000,000.   Auctioneer Justin Long worked hard with the two bidders, who clearly had one thing on their minds and that was buying a quality home in one of Malvern’s most sought-after locations. There was a buzz in the crowd as people walked away thinking what an entertaining auction they had just seen.” (Guy Angwin)

Agent Opinions: Spring Stock Levels

Same question as last week – where are we heading?

Philippe Batters, Williams Batters – South Yarra: “No new stock coming on in large numbers. Not sure how the market will be. Apartment buyers are going well up to a million, with jaded stock market investors now buying. Above $2m has been tough.”

Paul Keane,  Jellis Craig – Glen Iris: “There are more and more (auction) bookings heading into October; The election is influencing September listings – there are not as many as previous years. Still more sales are happening quietly now – more and more private homes. Family homes are the most we are seeing and mainly in the $1.25m to $1.75m range. You don’t want to be buying and then re-selling the same home within 12 months due to increased risk.”

Jeremy Desmier, Fletchers – Balwyn: “September is lean but October is looking good.  More stock coming than in the last few weeks but below what has been seen in previous Septembers. For good quality homes in the mid-range ($1m – $1.5m) there is a shortage.”

Rod Richardson, Hocking Stuart – Brighton: “There is still a lot of demand for good quality family homes. Stock is low at the moment but hopefully will pick up for Spring. I think, myself, that we will have a late Spring (auction wise) in October/November. There is a real shortage of family homes in the $1.5-$2.5m price range.”

Michael Ramsay, Buyer Agent: “Stock levels are lower than last year. A number of people have already purchased and didn’t wait till spring. Vendors are thinking the market is not in a healthy position so they are holding.”

The Issue: Stock Levels

At this time of the year the market is still talking about Spring stock levels – more so than price or even the footy. The general consensus is that stock levels are picking up on June and July, if we judge by the increased number of appraisals reported by many agents last week. This fits in with historical trends, but at this stage numbers are still below the levels of last year’s Spring and this year’s Autumn markets.

It seems that the stock flood we saw in May will not repeat itself this Spring. However, as we know in Australia, home markets, just like the weather, can change quickly and without notice. And while September seems lean compared to earlier in the year and to last year, October is looking stronger in terms of the number of homes up for Auction.

The theory on the Spring market is that if the early market (i.e. September) is positive, then buyers will compete and push prices up. And when September’s ‘wait-and-see’ sellers see good results, they will put their homes on the market in middle Spring. Given that activity breeds activity, a number of early Spring buyers are likely to become sellers late in Spring. A late year surge of stock tends to rebalance the market and soften prices (although that is not always the case, as we saw in 2009 when theory went out the door and prices went up another 10% just prior to Christmas).

Around Grand Final, market watcher’s thoughts will move from Stock Levels to Clearance Rates and finally to Price Trends.

BidderBuzz Auction of the Day (2): The main action is still in the early $M segment.

56 Manningtree Rd Hawthorn: Steve Burke, Jellis Craig; 5 bidders, 100 people, bought under the hammer for $1,250,000.
“A huge turnout of 100 waited quietly for the commencement of the auction.  Steve Burke kick-started the bidding with a vendor bid of $950,000 and, with his enthusiasm and energy, it did not take long for the bidding to take off.  Five bidders were vying for this property – Mr Burke’s arms and head got a real workout as he directed his attention from bidder to bidder spread out in the crowd.  The bidding was rapid and the property was eventually bought under the hammer for $1,250,000.” (Sue Agnoleto)

9 Docker St Elwood: Biggin & Scott (Kharla Williams & Auctioneer Bill Stavrakis), 5 bidders, 70 people, bought $1,350,000:
“It is always a pleasure to watch a Bill Stavrakis auction and today was no exception. From the get go, Mr Stavrakis had the crowd’s undivided attention and his enthusiasm was quickly rewarded with five strong bidders coming forward from the crowd of around 70. An opening bid of $750,000, while low, was quickly followed by rapid-fire bidding from the five parties involved and the property was soon on the market at $1,200,000. In the end it was a dual between two keen bidders, with the successful purchaser buying the property under the hammer for $1,350,000. A great auction and strong result for Mr Stavrakis and the Biggin & Scott team.” (Jen Milligan)

Market News TV: Quoting and Reserves

The topic of quoting and reserves always generates comment. And our agent videos are particularly edgy and honest on this issue. For Stonnington we have Gerald Delany of Kay & Burton; Boroondara – Mark “Lama” Dayman and Scott “Pretty Boy” Patterson; and Bayside – Hocking Stuart’s Jenny Dwyer and Barb Gregory. Click on them in the wraps or go to the Videos section at the top of this page and then go to Stonnington, Boroondara and Bayside videos.

Buyer Opinion: This week our James Buyer Opinion is a conversation piece, entitled “The best negotiation tool may be a coffee.” Now in Buyer Opinion Archives. Read our new Hung Market opinion piece.

Don’t normally send cheerios but we met some really nice people this week and unfortunately things didn’t go their way due to an unusual set of circumstances – we are thinking of you and it does get better.

We Only Buy Homes

Bill "Sade" Stavrakis (Biggin & Scott) works the crowd at 9 Docker St, Elwood. 5 bidders, Bought under the hammer for $1,350,000.