First cab off the rank: 10am auction at 12 Barry St Kew: and a range of emotions for Alastair Craig, Chloe Quinn and Richard Winneke, all of Jellis Craig, as they sail through the reserve at $1,650,000 and on to an impressive $1,950,000. 5 bidders. (Photo Amy Wong)

At 6pm on Saturday, the James Million-Dollar-Plus Clearance Rate was 72% for the 36 auctions we attended on a wild and woolly Melbourne Saturday afternoon. It was a tricky day for auctioneers, spectators, reporters and photographers, with cosy indoor or wet outdoor auctions the norm.

Bidderman, our Demand Indicator, was at 1.6 bidders per auction.  We think Bidderman was almost as strong as last week, despite dropping a little this week. Today, only one in six auctions had no proven bidders; with a few selling afterwards despite no bidding at auction (Reed St Albert Park, Hopetoun Road Toorak, and Oakwood Avenue Brighton). To further support our claim of a stronger Bidderman, only two of the auctions we attended today had five bidders or more; meaning there was an even spread of bidders across most properties offered. Also we had a focus (possible statistical distortion) on $3 million-plus auctions today where you would expect less bidders per auction. Overall Bidderman was solid.

Overall Market: Right now, the market may be better than you think … and for some, it may be poorer. The million-dollar-plus market we cover is a tale of two cities.

By the Bay, a few are talking the market up and they are doing so without supporting numbers (except in isolated pockets eg $3 million last fortnight). In the East, a number of market watchers have been talking the market down but they too are not supported by recent numbers of the past fortnight.

The overall market went through a flat spot from May to early August (flat or plateau is agent code for falling prices), due initially to larger than normal stock numbers (supply), which was not matched by demand and then the winter hiatus tapered things off. However, over the past two weeks, the numbers have been stronger for sellers as the market has been strengthening. It’s early days though and October is the real test.

At marketnews, we have a few measurements that give us perspective snapshots of what the overall million-dollar-plus market is doing.

Market Strength – we measure number of bidders per hundred auctions / clearance rate per hundred auctions and the past two weeks have been 160 (bidders per 100)/72 (clearance rate) and 190/65 respectively – it’s a measurement just like your blood pressure. To give you some perspective: in the heat of the Spring 2009 and Autumn 2010 markets, we had some 300/80 weekends and in the depths of the GFC we had 80/40 weekends. On the 19 June 2010 auction weekend, just as we were going into winter, we had 110 bidders per hundred auctions/50% clearance rate or 110/50. Our yardstick for a strong and possibly price increasing market is 200/70; that is 200 bidders per 100 auctions/ 70% $M+ clearance rate, providing this can be sustained for four to six weeks and the market is of a reasonable size.

Market Size: So to check the size of the million-dollar-plus market within our focus areas, we also look at numbers of million-ddollar-plus auctions. Again 100 is the number. 100 million-dollar-plus auctions (Boroondara, Bayside, Stonnington and Port Phillip combined) is a strong weekend. Perspective:  at the peaks in May, we were over 150 auctions per weekend; however, by early August, we had dropped to 60 auctions, each of the first two weekends, with the election and almost no auctions on the third weekend. Since the election, we have had 103 and 91 auctions - (remember 100 as a good-sized weekend).  This shows that both weekends have been good-sized markets with reasonable bidder strength and solid clearance rates meaning for us – an improving market.

$3M+ Market: This market continues to blossom likes the new buds of spring – it’s not on fire, price or number wise, but it is starting to emerge from its winter doldrums – an increase in October stock may of course stop it in its tracks – let’s wait and see. See our full $3m+ report this Monday (below Buyer Masterclass). Some highlights: 6 Head St Brighton (beachfront Golden Mile), which looked liked global warming may get it before a buyer did, was reported sold this week for we believe around $7,000,000 – Jeremy Fox RT Edgar. Add in 1a Como over $6,000,000 - Michael Ebeling and RT Edgar is also showing the $3m+ market has some legs. Today’s auction results confirm this as an early trend.

Please note this is our overall opinion across Melbourne on our sampled data and it’s a snapshot only. Furthermore, if you were just focusing on Boroondara you would say the market is actually at the tipping point of price improvement for sellers. If your buying focus is Bayside, then you would call us spin doctors if we proclaimed the overall market as strong. It’s only two weeks of Spring data and October really is the big Spring test but, for now, it seems a strengthening market and a tale of two cities.

Highlights:

• 49 Harcourt St, Hawthorn East: James Tostevin of Marshall White 2 bidders  (over $7,200,000)
  James Auction Report: Did you hear that the $6m+ market is a little quiet in Boroondara? Oh you did – well, James Tostevin and his two Harcourt bidders hadn’t. Look, it’s a really good home, but I thought a vendor bid at $6,800,000 courageous – then again, what do I know! I was even more surprised when a first, and then a second, bidder joined in over $7,000,000. Passed in and bought after, believed to be in excess of $7,200,000. That by any stretch was an above average result.
• 1 Myamyn St, Armadale  Andrew Macmillan of Benmac 2 bidders $3,215,000
• 6 Bonview Rd Malvern – Peter Bennison  of Marshall White (more than $3,700,000) 3 bidders.
• 19 Acland St, South Yarra - Greg Herman and Warwick Anderson of RT Edgar $3,600,000 and 4 bidders
  James Auction Report: After a day of pass ins and relatively low attendances, it was nice to attend an auction with multiple bidders all looking to secure a fine property in a much sort after area. Four keen bidders kept auctioneer Warwick Anderson’s attention as they showed their interest early, bidding strongly and quickly looking for that knock-out blow. It came fifteen minutes later for a price of $3,600,000. (Guy Angwin)
• 1 Hopetoun Rd, Toorak – Justin Long of Marshall White (undisclosed over $5,500,000): 0 bidders – bought after.

Lowlight:

• The continuing poor performances in the Bayside markets for sellers.  With most results in, we are looking at 33% (Port Phillip) and 50% (Bayside) clearance rates. This is only compounding the overhang problem that still exists from the May stock oversupply which resulted in a number of Winter stales (unsolds). There has to be opportunity here for fringe buyers of fringe homes and possibly for good buyers of good homes, especially if October brings more stock but no more bidders.

A little bit different(1): In-house auctions.
Last Wednesday at 6pm, Peter Batrouney and Richard Earle of Jellis Craig auctioned six blocks of land (Walpole St Kew) at the QPO coffee shop  in Kew. This is rare in residential auction terms in Victoria as it was not on location. It’s not so rare in other states  or in the commercial auction world where many auctions are carried out in a big auditorium away from the property. It was interesting to note this form of auction was a complete success with five from six selling under the hammer and the final one the following morning. Five of the six were reported as being sold to Asian buyers and new homes will go on all six blocks. Price ranged from $1631 per sqm facing Peel St to $2121 per sqm facing Walpole St. All blocks were sold between $1,250,000 and $1,625,000. As we keep saying, nothing wrong with the Boroondara market this past month or so.

Editorial: No auction lover would like to see Melbourne’s unique street theatre evaporate – more go to auctions than a game of AFL footy. So please not too many of these – they’re boring.

A little bit different (2)
Remember the 70s TV show called The Persuaders with Roger Moore and Tony Curtis?  How apt a title for these two. It should not be hard to believe and apologies for the lack of focus but Alastair “Tony” Craig (Jellis Craig) and James “Roger” Connell (Marshall White) share a lighter moment at the Harcourt St Hawthorn East auction – who said they’re all enemies.

Shoe Sale at 2 Crest Avenue Balwyn - buy any pair over $2,600,000 and you get a free home says Doug McLauchlan of Marshall White. One bidder took up his offer post auction.

John Bongiorno of Marshall White “With 19 from 23 sold today (MW) we now seem into a very normal market and it was bordering on strong today – for us this is a far cry from election and mining tax interruptions of a month ago. We are still 15% down on stock on last year but just as you thought the pendulum maybe swinging the wrong way - it didn’t.”

Mark Rathgeber of Noel Jones “The market is solid in and around a million dollars. Once you get towards two million dollars in Balwyn you need to be new and French Provincial or something else and discounted. The Asian market is no longer paying anywhere near new home prices for second hand stock.”

Richard Earle of Jellis Craig “The numbers speak for themselves  with 27 from 35 auctions (JC) sold today. Yes buyers are shying away from overprice and poor homes but nothing new there. We are in lower stock level territory now and the market is reflecting that by strengthening – October will be an interesting congruence of vendor expectation and bidder demand and how they react with the anticipated stock increases – assuming the election doesn’t continue to drag on.”

BidderBuzz Auction of the Day: 68 Head St, Brighton, Leigh Hallamore, Buxton, 5 bidders:
“A 100 strong crowd, many of whom were interested onlookers, awaited this Brighton auction. There was a chatty convivial vibe despite the poor weather. Leigh Hallamore was energetic in his approach and with a bid of $1,500,000 from within the crowd the auction was off to a flying start. Five bidders were vying for this property with Mr Hallamore getting an aerobic workout as her swivelled from one bidder to the next, spread out in the crowd. The property was bought under the hammer for $2,255,000 to a round of applause. A great result.” (Sue Agnoleto)

Issue: Stock Levels.
The last few weeks the marketnews has been reporting a lean September and a stronger October stock wise and the graph below confirms this with low stock levels leading into the election a good burst for the last fortnight and now declining numbers until the first week in October.

Marketnews TV: This week Klarity Kris questions the Ladies in Red – Jenny Dwyer and Barb Gregory of Hocking Stuart – about Quoting and Reserves – check out the agent opinion videos to the right of this article. Next week Andrew McCann from Benmac responds to selling agent comments and criticisms of his company’s ”reserve within the quote range” point of difference policy. Marketnews TV is good TV this and next week.

Video Auctions: This week we have videos from Architect Adam at 4 Reed St, Albert Park and Klarity Kris is at 6 Bonview Rd, Malvern. Check them out on Market News TV.

Buyer Opinion: Buyer Masterclass tackles “Negotiation is all in the mind(set)” and on Wednesday look out for “Negotiation through Cultures”. All this is building towards our “Backward Bidding” article coming to you Grand Final week.

We Only Buy Homes and Go Pies – how good are we looking!

Anybody care for a dance? Tim Fletcher said yes and three bidders came with him. 15 Louise Avenue Mont Albert: Bought under the hammer for $1,825,000. (Photo Amy Wong)