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Get Organised for the next Super Saturday – October 23rd

Newstock

Some of our buyer prayers have been answered

Market: Even with significantly reduced auction numbers this weekend (owing to a more important event which finally delivered a result that proved there was justice in the world), we still saw a pretty healthy market result for sellers – with a 74% Clearance Rate on the 55 $Million+ auctions we monitored. Of those 55 auctions, 9 results were not reported. But even that is not unreasonable under the circumstances of the GF Replay.

There seems little doubt that the market is on the rise. The big interest now is how the market will absorb the stock surge that will culminate in Spring/Summer’s first Super Saturday on October 23rd.

And it really is Super Saturday - with a massive 81 $M+ auctions booked for Boroondara alone, and around 200 $M+ auctions booked in our key focus $M+ areas – Bayside and Inner East. Check out the size of the Weekly Review this week (it’s as big as a phone book). By comparison this weekend saw only one quarter of that number of auctions. So if you were at an auction this weekend, those four bidders you competed against may well be spread across four homes in a couple of weeks. Well that’s the “buyer-hope” theory anyway.

This Week’s Highlights:

  • Two sales showing vastly differing values
    a) Land at 101 River Avenue Plenty (39,500 sqm), which can be subdivided, was auctioned  by Rob Stefanovski of LJ Hooker Greensborough and  bought for $3,830,000 or $96 per sq metre
    b) A large land parcel (1,813 sqm) at 3-5 Heath St Sandringham sold after a failed auction by Bill Jowett of Buxton for $2,800,000 or $1,544 per sq metre
  • The major stock inflows that took place on Monday, Tuesday and Wednesday when agents began their marketing campaigns for the next Super Saturday – October 23rd.
  • The continued improvement of the $3M+ market – two examples below
    a) Off market in Black St (Peter Bourbaud and Barb Gregory) – bought for around $4 million
    b) 27 Moorhouse Armadale with Gowan Stubbings of – bought after an Expression of Interest campaign for more than $5 million
  • The Pies Forward Line pressure (whoops, sorry – I got distracted)

Auction Snapshot from this weekend: 133 Rathmines Fairfield: Michael Fry and Grant Leonard of Nelson Alexander. Bought under the hammer for $1,116,000. 5 bidders.
113RathminesThere was a buzz about this well located timber period home, which had had its quote lifted to $930,000 during the campaign. It was a surprising development given Grant’s comment that the property failed to attract any interest in the high $800s a few months ago with a quiet sale campaign. It was on the market with the first bid at $900,000. Second bid $950,000. Third bid $970,000. Fourth bid-  bang $1,000,000. Three more bidders joined in before the action stopped at $1,116,000. It was a well run auction campaign. I always enjoy a Michael Fry auction. He has a sophisticated grace about him incongruent with the fact that he is yanking the dollars from buyers’ pockets. Enjoyable to watch unless you’re an underbidder – which unfortunately this time we were.

Bumper Market Insight: We have an information packed Market Insight this week; even though there are no Market Wraps, Bidderman, reports or videos.  The footy replay threw this auction weekend into a bit of chaos, with a few auctions even changing days. But it was a very low stock weekend anyway, so no major damage. All $M results are at the end of this Market Insight. But the big news now is the next three weekends that will lead full bore into the Melbourne Cup Long Weekend.

Stock Levels and Price Assessment:
The big question the market will be asking now is: What will happen to prices on October 23rd? With this big stock influx, how is the price game of snakes and ladders going to pan out? Are we going to see the slippery snake andsnakesandladders big price slide of May 2010 or will the market just take this in its stride, as it did this time last year, with prices climbing further up the ladder? Time will tell. Importantly as buyers you need to get yourself organised – and don’t count your chickens before they’ve hatched.

With this apparent largess of choice, perhaps you don’t need brilliant home-seeking skills right at this moment. But you will need first class assessment procedures (e.g. sorting the goodies from the baddies in terms of prospects, and working out which one is best from a “happy wife = happy life” point of view). You will also need good negotiation strategies – because while you may have more choice, you will also have competition. Remember, our bidders per auction indicator Bidderman was strong on lower numbers in September, especially on good homes. On the flipside, some sellers expectations may be disappointed, so planning good negotiation strategies will improve your chances of grabbing a bargain when it presents.

Have a look at our Forward Auction Booking graphs below to get an idea of what is ahead of you: (click on a graph to enlarge)

baysidensstonnnsboornsppns

There are also some exciting trophy homes on offer through private sale and off market – especially in the $3m+ segment.

Have a look at the New Stock Graph at the top of Market Insight – which compares the last week in September to the last week in June, (private sale and auction weekly new stock numbers are combined).

Special Report on the $3m Market

The $3m+ is back, after the self induced May hiccup that led to a very quiet winter.

There have been over 50 buys in the month of September at this level, with buyers coming from all quarters. Let’s pick one of the segments – around $4million. We have bought 3 homes at this specific level in the last few weeks. All were classic period homes with land of over 1000 square metres. Two were bought post auction (eg after a pass-in) and one was off market (Black St Brighton). However, the interesting thing were the buyer profiles. One buyer was a change of life family, one was a growing family that needed more space, and one was an expat family returning from overseas. This is a fairly accurate representation of the range of people we look for homes for. Of the last case – expats returning from overseas -Brighton high end agent Peter Bourbaud believes “this group will push the market along for the next few years, after a couple of very quiet years from the expat community”. We concur. Last year we conducted very little in business terms last year for expats. However in 2010 there has been a distinct pick up in action from expats returning home.

The James September $3m+ Report with all reported $3m+ boughts and solds can be viewed from the Home Page (next to Market Insight and below Buyer Masterclass) or click here

If you are new to the $3m market you may find the charts below (using 2007 to 2010 Valuer General, REIV and our own James Databases) of some value, as they help to show how the overall $3m+ market works. Note particularly that:

  • The two powerhouse $3m+ are Brighton and Toorak (see 2009 results graphed below). However these two behave quiet differently from each other (see median graph). More on that another time.
  • More $3m+ is bought later in the year than early. (2009 graphed below)
  • There are some real name streets around and there are some falsies (where if you pay top dollar you will stand out like a beacon)
  • Less than a quarter (25%) of $3m+ homes sell under the hammer at auction (click on September Graph below)
  • A lot more activity is off market (not advertised) at this $3m+ level than any other price point, e.g. sub $3m.

Click on any of the graphs below to bring them up to full size

whenwheremedianstreetstop103M plus graphs

Agent Comments on the current $3m+ market

  • “Prior to the school holiday period there was some renewed strength in $3m+ market due to things stabilising after the election and to the shortage of good quality homes. With the spring market in full swing it will be very interesting to see what happens with the increase of volume. But if the enquiry rates are anything to go by, October will be a strong month of sales.” Andrew Hayne of Marshall White
  • “The $3 million plus market is strong, and we are expecting a big finish to spring in this market for good family homes.” of JP Dixon Brighton
  • “There seems to have been a resurgence of buyer enquiry for the upper end properties recently.  It will be interesting to see if this follows through once we see increased stock levels after the school holidays and round 2 of the Grand Final.” Julian Augustini of Hodges Brighton
  • Andrew Baynes from Kay and Burton South Yarra “Last Monday was the busiest auction sign up day for me in 10 years.”

Media Monitor: Domain – The Age 2/10/10. Headlined: “Hands up if you don’t have a clue” by Josh Jennings. Basically a solid article – but Josh, how many homes has Dr Damien Eldridge, Economics Lecturer from La Trobe University, bought using his quoted bidding advice this year? Would it have been 5 or 10 or 50? Going by his auction comments we were unclear as to whether you were holding him out as an expert – or simply providing supporting evidence to your headline.

We are not all brickbats here for the mainstream press. Congratulations to Chris Vedelago from The Age who this year has been consistently reporting the market as it really is and who actually seems to get out of the ivory tower (that so many property reporters are stuck in) and goes to auctions and talks to agents. We mightn’t always agree with you Chris, but we respect your work. Keep it up and keep getting out into the market.

Market News TV: On Tuesday of this week we ask the question: Is the ACCC or CAV the right watchdog for the real estate industry? Check out our Agent Opinion Videos.

Buyer Masterclass: We conclude our Negotiation Masterclass series with an article on Backward Bidding. From next week until Christmas we will be looking at “Pricing and Values” in Million Dollar Melbourne

we only buy homes

Reported Results:

BANYULE
GREENSBOROUGH 122 Albion $1,075,000 Bought
EAGLEMONT 24 Mount Street undisclosed Bought
IVANHOE 111 The Boulevard Passed In
IVANHOE EAST 300 Lower Heidelberg Road Passed In
BAYSIDE
BEAUMARIS 11 Point Avenue Not Reported
BEAUMARIS 4 Hutchison Avenue Passed In
BRIGHTON 687 Hampton Street Not Reported
BRIGHTON 1 Inner Crescent Not Reported
HAMPTON 121 Linacre Road Not Reported
SANDRINGHAM 221 Bluff Road $960,000 Bought
BOROONDARA
13 Mernda $1,220,000 Bought
BALWYN NORTH 444 Balwyn Road $1,106,000 Bought
BALWYN NORTH 74 Cityview Road Passed In
CAMBERWELL 17 Laxdale Road undisclosed Bought
CANTERBURY 10 Quantock Street undisclosed Bought
GLEN IRIS 43 Denman Avenue Not Reported
GLEN IRIS 1 Southland Street $1,209,000 Bought
GLEN IRIS 29 Beryl Street undisclosed Bought
4 Wattle Grove undisclosed Bought
HAWTHORN 1/31 Robinson Road $1,265,000 Bought
HAWTHORN EAST 24 Currajong Road undisclosed Bought
HAWTHORN EAST 3/62 Anderson Road Not Reported
KEW 56 Hartington Street $820,000 Bought
KEW 24 College Parade $1,236,000 Bought
KEW EAST 5 Spruzen Avenue Passed In
MONT ALBERT 2 Smythe Avenue $1,520,000 Bought
SURREY HILLS 19 Windsor Crescent $930,000 Bought
DAREBIN
FAIRFIELD 133 Rathmines Street undisclosed Bought
NORTHCOTE 16 Boothby $1,060,000 Bought
NORTHCOTE 5 Bridge $988,000 Bought
GLEN EIRA
ORMOND 1 Bewdley Street $1,270,000 Bought
HOBSONS BAY
WILLIAMSTOWN 37 Victoria Street Not Reported
WILLIAMSTOWN 155 Cecil St Passed In
KINGSTON
Parkdale 34 Fifth Passed In
MELBOURNE
CARLTON NORTH 324 Pigdon Street Passed In
MELBOURNE 505 St Kilda St Passed In
NORTH MELBOURNE 46 Molesworth Street $1,200,000 Bought
PARKVILLE 101/228 The Avenue $1,200,000 Bought
MOONEE VALLEY
FLEMINGTON 1a Tunbridge Passed In
ESSENDON 103 Primrose Street undisclosed Bought
ESSENDON 67 McCracken Street $1,510,000 Bought
MORELAND
BRUNSWICK 23 Loyola Avenue Passed In
NILLUMBIK
PLENTY 77-101 River $3,830,000 Bought
PORT PHILLIP
ELWOOD 15 Ruskin Street $1,900,000 Bought
152 Albert Street $1,030,000 Bought
STONNINGTON
ARMADALE 1/32 Mercer $1,120,000 Bought
MALVERN 13 Thanet Street Bought
MALVERN 17 Thanet Street undisclosed Bought
MALVERN EAST 9 Camira Passed In
MALVERN EAST 33 Cairnes Not Reported
SOUTH YARRA 26 Albion $1,375,000 Bought
SOUTH YARRA 19 Hobson Undisclosed Bought
TOORAK 1/183 Kooyong Road Not Reported
TOORAK 9/404 Toorak Road Undisclosed Bought
WHITEHORSE
BLACKBURN 270 Burwood Highway 1,181,000 Bought
PENINSULAS
QUEENSCLIFF 80 Mercer Passed In

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