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Properties Struggling to Move after Passing In

What are you talking about - course the market's OK! St Kilda East 239 Alma Road: Phillip Kingston: Bought for $1,500,000: 3 bidders (Photo Kate Agnoleto)

What are you talking about? - course the market's OK! St Kilda East 239 Alma Road: Phillip Kingston: Bought for $1,500,000: 3 bidders (Photo Kate Agnoleto)

At 6pm on Saturday, the James Clearance Rate on the 31 auctions we covered was 58%.

Bidderman, our indicator of average bidders per auction, had a small rise to 1.6 bidders per auction, in part due to four volcanoes (strong auctions) including one 7 bidder auction in 28 Barrington St Kew.

These figures indicate that the market has now cooled – not frozen or falling apart, just cooled. That means we have moved into a buyers’ market, perhaps until Easter and possibly until Spring.

Well-priced homes are still selling. And there have been some surprising above-expectation results, such as 28 Barrington Kew (Glen Coutinho) which sold for $2,230,000 and, last week,Victor Road Kew (James Tostevin) at $4.1 million. But if the market doesn’t agree with initial pricing then it’s a slow, torturous journey to get a result. See our special Pass-Ins and Stales Report below.

This week we also look at the returns of serve on The Economist’s article as the ‘Experts’ hit back against the “Overpriced” headlines of last week.

This Weekend’s Market Summary:

This weekend in most places, except Boroondara, there was limited $M+ stock on offer at auction. The individual council clearance rates we report on in our market wraps could be distorted due to a) lack of auctions and b) lack of overall quality in those auctions. But this is not to imply a lack of stock in general – there are high levels of $M+ stock available across the board and Boroondara in particular is almost awash with homes on the market.

Looking specifically for a moment at Boroondara (Kew, Hawthorn, Canterbury and ), while this market may be a little out of kilter with the rest of Melbourne in terms of auction numbers, in the past few years it is a market that has shown the strongest resilience against negativity. It was affected by the GST for the shortest time, and has had the biggest since. This weekend too it seemed to have a little oomph and we expect the clearance rate for Boorondara $M+ homes to be in the high 50s to low 60s.

But it does have a fight on its hands right now, with the main demand drivers (overseas buyers) reducing greatly in activity and supply to the market continuing to arrive week after week. Which means that buyers who can look beyond the headlines will find opportunities, and with the right strategies you should be in a position to push back a little against the seemingly never ending sellers’ market.

The next few weeks will be better in terms of auction quality in the top of the Top End in Boroondara. As long as those properties sell and the clearance rates stay stable, and if new stock reduces post Easter, we could move back to a balanced market. But if stock continues to come on in big numbers then the market will almost certainly remain cool with a significant change in demand sentiment.

Most of the $M+ homes on offer that sold this weekend were in the early $1 million range.

Bayside, Port Phillip, Stonnington have been quiet, with only a handful of sales in the post auction wash up from March 19th  and likewise at auction this weekend. In Port Phillip this is understandable as the Grand Prix completely extinguishes the market for almost a month. Why auction numbers are down in Brighton, Toorak and Malvern is not completely obvious – well not to us anyway. April 9th is shaping up as a Super Saturday of some sorts with almost 120 auctions in Boroondara and Stonnington combined. $M+ auctions in Bayside are still light on at the top of the Top End with mainly $1 million to $2 million homes on offer for the next few weeks leading into Easter. Most of the top of the Top End in Bayside is not going to auction.

Agent thoughts: Has the market changed since before the Labour Day weekend?
Chris Barrett, , Hawthorn:
“There have been a lot of people in the media talking about a negative change in the market since Labour day weekend, I however have found this to be unsubstantiated. As long as vendors prices are realistic and the property is presented well vendors can expect solid interest in their home.”
John Clarkson, Hocking Stuart, Brighton:
“Good properties near local attractions and amenities, schools, shopping and the beach are still attracting a high level of enquiry.  Since Labour Day weekend the message is clear: If you are realistically priced you have a very good chance of selling . If you are above market perception, enquiry is reduced to a trickle.”  * For John’s full comments please see the Bayside weekly wrap.

James Special Report: Pass-Ins and Stales – The Autumn overhang build up.

We went back and re-examined all the auctions we reported on this year in 2011 and we revisited all the pass-ins, using still advertised on the net to determine their still for sale status. Please note that the table below is only connected with PASS-INS, not the homes we reported as bought before, at or just after auction on the day.

The table does make for interesting reading on the fate of a home that the market does not consider to be priced correctly at auction.

Date Suburb Address Passed In Current Result Asking Price Comment
Feb 19th 139 Beaconsfield Parade $3,250,000 Still for Sale $3,500,000 Soft $3m+ Market
Balwyn 12 Creswick $3,425,000 Still for Sale $3,450,000 Stock Glut of this type
16a Coronet $1,800,000 Still for Sale $1,795,000
Brighton East 47 Grant $1,600,000 Still for Sale $1,600,000- $1,700,000 Initial Asking Price?
Camberwell 7 Bellett $1,700,000 Still for Sale $1,645,000
Camberwell 31 Canterbury $3,810,000 Bought a few days later $4,000,000+ Good selling result
Carlton North 735 Drummond $1,225,000 Still for Sale $1,350,000
Kew 33 Edgevale $1,400,000 Since Bought $1,500,000+ Surprised it didn’t sell on day
Malvern 26 Cressy $1,560,000 Since Bought $1,630,000 Good selling result
Malvern East 7 Chanak $955,000 Since Bought $1,100,000
St Kilda East 49 Mary $4,000,000 Still for Sale $3,975,000 Price
Feb 26th Balwyn North 15 Stephens $3,650,000 Still for Sale $3,000,000+ Stock Glut of this type
Brighton 2 Maher $1,600,000 Since Bought $1,500,000+
Canterbury 22 Milton $1,950,000 Withdrawn
Elwood 46 Goldsmith $1,850,000 Since Bought $1,850,000+
36 Ormond $2,900,000 Still for Sale POA
10 Streeton $1,780,000 Since Bought $1,780,000+
Malvern East 50 Finch $4,100,000 Still for Sale $5,000,000 Unusual home
St Kilda 12 Gurner $1,800,000 Still for Sale POA
March 5th Albert Park 64 Kerferd $1,950,000 Still for Sale POA Lacks a carpark
Beaumaris 392 Beach $2,225,000 Still for Sale $2,350,000
Brighton 7 Yuille $2,500,000 Still for Sale $2,600,000
Brighton East 54 Comer $1,320,000 Since Bought $1,320,000+
Canterbury 33 Alexandra $2,500,000 Still for Sale $2,850,000
41 Hopetoun $2,100,000 Still for Sale POA
Elwood 6 Dickens $3,460,000 Still for Sale $3,750,000 Unusual home
Hawthorn 66 Manningtree $2,650,000 Still for Sale $2,850,000 Price?
Kew 69 Argyle $1,500,000 Still for Sale $1,600,000
Middle Park 279 Beaconsfield $4,250,000 Still for Sale POA Price?
68 Wrights Terrace $1,610,000 Still for Sale POA
52 Croydon $1,680,000 Still for Sale $1,725,000
Toorak 3 McMaster $3,200,000 Still for Sale POA
March 19th Brighton 20 Kinane $2,000,000 Still for Sale POA
18a Martin $3,300,000 Still for Sale POA Unusual Home
16 Munro $1,650,000 Still for Sale POA
29 St Ninians $7,300,000 Still for Sale POA
Brighton East 77 Comer $2,200,000 Still for Sale POA
Camberwell 67 Athelstan $1,860,000 Still for Sale $1,980,000
Canterbury 17a Alexandra $3,200,000 Still for Sale $3,400,000 Stock Glut of this type
13 Olive $1,100,000 Still for Sale $1,250,000
Ivanhoe East 8 Longstaff $1,900,000 Still for Sale $2,100,000
Kew 22 Stawell $3,000,000 Since Bought $3,300,000 Solid Selling Result
36 Uvadale $1,825,000 Since Bought $1,900,000+ Just told of sale at time of publishing
Middle Park 336 Danks $1,400,000 Still for Sale $1,400,000 – $1,500,000
Toorak 37 Lansell $2,800,000 Still for Sale $3,400,000

PassInMouldy

The table below shows Adjusted Clearance Rates comparing”On the Day” Clearance Rates with “On the Day plus Bought since”. Back in February 19 and 26 Pass-ins were taken up fairly quickly. However the most interesting stat is the lack of take up on Passed-in homes over the last two weeks of auctions: only 3 in 26.

  • 1 of the 13 unsolds from the March 5th pass-ins and
  • 2 of the 13 from the March 19th pass-ins.

This we feel confirms the view that the $M+ market started the year as balanced, but around Labour Day took a cooling direction.

Date James $M+ auctions Clearance Rate Then Clearance Rate Now
Feb 19th 30 63% 76%
Feb 26th 31 74% 84%
Mar 5th 32 59% 62%
Mar 19th 32 59% 65%
What's happening Nick? Bentleigh 7 Eddys: Bought $1,312,500: 3 bidders. (Photo: David James)

What's happening Nick? Bentleigh 7 Eddys: Bought $1,312,500: 3 bidders. (Photo: David James)

James Big Issue: Agents claiming there are 100% Clearance rates in this market are just as misleading as saying the market is in freefall – both are far from the truth. Klarity Kris and Architect Adam cover it in the James Big Issue Video. Here is a summary of what they say.

  • Still some surprising results. Two in particular, both in Boroondara, that stand out are Victor Avenue in Kew with James Tostevin – which sold for a hard to believe $4,100,000. Nic Franzman, Mark Dayman and Nic Ptak also from Marshall White’s result at 22 Stawell St Kew for $3,300,000. That was also a most surprising result
  • We are hearing from agents 100% clearance rates – mainly due to agents feeling they need to respond to the Negativity of The Economist’s article and the Earthquakes, which for the moment have contributed to dampening demand.
  • An interesting stat is that only 3 of the 26 homes we reported as passed in after auction in the last two weeks of auctions have since sold.
  • We could say that 3 from 26 is reflective of the market strength – a far cry from the 100% Clearance Rate stats, BUT 3 from 26 while true, is also misrepresenting the market just as is reporting 100% clearance rates
  • The market was in a balanced state pre Labour Day and as expected it is now going into a cooling phase until Easter due to increased stock levels and drop in demand intensity.

The message for buyers

  • You have choice in the $3m+ range but there are still a few surprisingly strong results
  • You will still have to compete relatively strongly if the home is good and well priced in that $1m to $1.5m range
  • And the middle range say circle $2m to $2.5m is a bit of moving beast – the trend is not crystal clear to us at this stage.

Click on the JAMES BIG ISSUE video with Architect Adam and Klarity Kris in the middle of the home page

Media Monitor: Are Melbourne homes overpriced?

The case for being overpriced arose from The Economist’s article – which we reported on last week.  And now this week the case against those seemingly extreme overpriced by 56% headlines.

Rob Brooker head of economics from the NAB

  1. Current events such as floods and Japan are affecting Melbourne short term, but long term our fundamentals are very strong.
  2. Not suggesting prices are going to increase rapidly as affordability is hard pressed right now but we do have a shortage of housing stock.

His comments can be found in the excellent Kay and Burton report – sure it’s a selling tool but we listen to the expert commentary each time it’s on It’s well produced, they have credible experts and it’s relevant to our high end Melbourne market. Check it out, at least the expert comment stuff. The home fluff afterwards is up to you: http://www.kayburton.com.au/kayburtonreport

Paul Bloxham – HSBC’s chief economist for Australia and New Zealand, and a former RBA economist savages The Economist’s article stating “it’s too naive to be useful”. His main points in the Business Spectator are

  1. We have an undersupply in inner city areas (totally agree with this comment)
  2. Our stock is very high quality and has improved considerably over the last 20 years contributing to the increases in price paid (totally agree with this comment)
  3. Very strong and improving economy (beyond our level of expertise but sounds good)

For the full article http://www.businessspectator.com.au/bs.nsf/Article/Australian-property-prices-housing-bubble-pd20110317-F24WP?OpenDocument&src=sph This was supplied by Al Craig of Jellis Craig – thank you.

‘Round the Grounds Headlines:
Boroondara- Some solid results but the trend is down under weight of stock numbers.
Bayside- Little movement on a lot of the recent Auction pass-ins
Stonnington
- Small numbers of $M+ auctions today – although plenty of Top End non auction stock available
Port Phillip
-With the Grand Prix – only 4 key $M+ auctions – 3 sold
More detailed analysis on our Weekly Local Council Market Wraps

Biggest Sales we can report:

  • Templestowe, 9 Edwin: On the market since October of last year with Jeremy Tyrell of Fletchers. Has been bought for in excess of $4,700,000
  • Richmond 37 Docker: Ken Griffith of Jellis Craig. Bought at auction, $3,300,000 – $3,500,000
  • Hawthorn 23 Lisson Grove: Michael Lui of Marshall White. Bought after auction $3,600,000 – $3,800,000
  • Toorak 17 Lansell, Lisa Jarrett of Abercrombys. On the market since December of last year

Biggest Sale we covered after auction: 44 Mary St Hawthorn, Antony Woodley of Marshall White. Above $2,700,000 (Undisclosed): Bought after auction, 1 bidder

Biggest Sale we covered under the hammer: 28 Barrington Ave, Kew, Glen Coutinho (Hocking Stuart), Under the hammer $2,230,000, 7 bidders (WOW)
“This Kew property did attract a crowd of 80 people, with quite a few potential buyers in the mix. The auctioneer, Glen Countinho, had to field bids from a whopping seven different bidders! Despite the light rain, the flow of the auction was quite amazing and reached the final amount of $2,230,000 before the hammer came down.” (Sonia Matmati)

Biggest Pass In: 68 Studley Park Rd, Kew, Passed in, $3,700,000
“A very pretty setting for an auction. Standing on an elevated embankment, auctioneer Richard Earle literally oversaw proceedings. He began by highlighting the virtues of this property with energy and detail. No bids came forth, however, so it was passed in for $3,700,000.”

Auction Video: This week i’ts down to Brighton with Klarity Kris at 22 Oakwood Ave, a Hocking Stuart auction with Peter Kennett. Click on the live action.

Please Note: we always ask permission to film and we always show respect at each auction. We also never video at an auction we are bidding at. If you are at an auction and don’t wish to be videoed, there are designated no-video zones. See our co-workers or ask the auctioneer.

Buyer Master Class: Klarity Kris discusses what’s necessary when buying a home when there are kids in the picture. Is it double storey single fronted or single storey double fronted!

Copyright: Mouldy Bread Picture from ChemistryWorldBlog.

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