At 6pm on Saturday, the James Clearance Rate for $M+ was 59% on the 37 auctions we attended. That figure was steady on last week. The Weekly Review Bidderman, our demand indicator, was also steady on last week, at 1.5 bidders per auction. The $2.5m+ market was weak, with 8 from 10 reported as having passed-in; but the rest of the market looked pretty balanced.
Last week started pretty well for both buyers and sellers – especially when you consider the negative press backdrop re job losses. And the reason it started well was because there actually was a market. Buyers and sellers were transacting. Buyers were competing on the right homes, and sellers were moving their homes on at the right price. This week was a similar story except at the highest of the high end.
Last week was characterised by just as many sales in the 3 hours post auction as there were sales during the 15 minutes under the hammer. This week was a similar story – except at the $3m level.
Despite the records showing that 8 out of the 10 homes selling at the $2.5m level were passed in this weekend, there does seem to be some spark out there right now. It’s not quite showing up in the stats, but we feel that buyer interest is building, especially at the lower $M+ levels. The strongest spark is from buyers waiting for a sign to validate their price thoughts and who, when that sign comes via an offer from another buyer, are returning fire and lifting their price, sometimes quite strongly and rapidly.
What does this mean? In our opinion it shows there is cautious demand and if this continues or spreads more widely then the market may stabilise and ultimately could increase in price. It’s very early days. But the signs are certainly not all negative out there in the lower part of the million dollar plus quality market right now. Buyers will put up a bit of a fight these days rather than walk away as they did for most of Spring 2011. For example: 18 Bamfield Sandringham with Mark Earle and Peter Hickey of Buxton, which couldn’t get a sniff at $2,200,000 last year, concluded in a boardroom auction this weekend at $2,300,000 with 3 bidders. That was after the 10 Victoria St (Peter Kennett) re-auction last week (around the corner) had 3 bidders, after a non event last year.
Another interesting market characteristic last week was the huge variances in bidder numbers at each auction – few had many, while many had few. This week the spread was a little more even across the board.
Last week was low on stock numbers with 50 auctions over a $M in Bayside and Inner East. This weekend and next weekend are both solid weekends with more than 100 auctions – and there are some more solid weekends leading up to Easter.
So after two weeks into the market, what are we sure about?
Price, as a blanket statement, is up to 25% off the price highs of Anzac Day 2010. Good evidence of this is land prices in all suburbs, but in particular places such as Balwyn and North Balwyn where the typical 2010 $3.3m French Provincial build and sell has now become the 2012 $2.8m French Provincial build and sell.
The degree of discounting depends on
- The Quality Characteristics of the home, combined with
- The initial offering price to market
- The overall market has a number of segments that are now roughly at pre GFC 2007 prices (although this is a generalisation). But there are also a number of exceptions, such as the single fronted 6 Highbury Grove Prahran (John Morrisby) which showed a 50% increase in value between 2007 and 2012 with no improvements to the property (see auction report).
- There is definitely a feeling of increased activity in the last fortnight. Selling agents are far more positive than they were in January. This is supported by numbers going through open for inspections, bidder numbers and finally transactions. A few biggies that were cleaned up this week (but at lower prices than initially offered) were:
3 Park St Brighton (Jason Gill) – Wrapped up this week at just under $3m after being on the market for a fair while.
47-49 Victoria St Sandringham (Julian Augustini) – Big parcel of land, on the market since late last year and sold in the mid $3ms.
324 Beaconsfield Parade St Kilda West (Shane Siemers) – Went to auction last year at over $5m and sold, we believe, in the sub $4m range this week.
‘Round the Grounds $M+:
Boroondara: 70% clearance rate on solid auction numbers – strong and steady as per last week
Stonnington: No complaints from sellers or buyers – 72%
Port Phillip: No mystery here, agent pricing continues to be too high – 46%
Bayside: Transactions are mainly forced rather than joyous ones, but they are happening – with Sandringham the best Top End performer this week (away from auctions) – 64%
A word from the experts: How did auctions over $1m start, and what are stock levels like for March?
Justin Long, Marshall White (Armadale): “Certainly we have found there has been a little more strength this year already – a combination of December/January starvation of supply, vendor realism kicking in and perhaps just a hint of good economic news around the world and locally. March stock levels are strong.”
Hamish Tostevin, Marshall White (Hawthorn): “Yes the sales started quite well last weekend, with 9 sales in excess of $1,000,000, and some good bidding at the auctions. We are optimistic about this continuing and, if the inspection numbers are any indication, there should be some solid weekends ahead of us. March auction numbers have certainly continued to get stronger in the back half of the month prior to the Easter weekend – especially the 24th and 31st which are emerging as strong weekends. ”
Peter Kennett, Hocking Stuart (Brighton): “As far as future auctions for March…there definitely are a fresh crop of buyers in the market as well as some from last year. A vendor will be able sell their property, only if they are in tune with today’s market sentiment as buyers are very well aware of over inflated prices.”
Geoff Cayzer, Cayzer (Albert Park): “The stock levels listed by our company for March would be approximately 50% less when compared with March 2011, bearing in mind the Melbourne Grand Prix being held from March 15th – 18th.”
Hawthorn, 84 Kinkora Rd, Alastair Craig (Jellis Craig), Under the hammer, undisclosed above $2,500,000, 4 bidders
A lively, interested crowd squeezed inside for this one. In the kitchen, living area and hallways they listened to Alastair Craig’s friendly, relaxed opening message…(See more in Auction Reports)
Armadale, 86 Wattletree Rd, Andrew Hayne (Marshall White), Bought after, undisclosed above $2,470,000, 1 bidder
With the hot sun almost oppressive, standing room in the shade was at a premium….(See more in Auction Reports)
East Melbourne, 112 Powlett St, Iain Carmichael (BenMac), Bought after, $2,045,000, 2 bidders
A hot Melbourne afternoon with a near perfect blue sky, and many found shady refuge on the wide median strip here to watch auctioneer Iain Carmichael ply his trade and sell this double-storey Victorian Row terrace, in one of East Melbourne’s best streets. What a great place to live!…(See more in Auction Reports)
Top Bidderman Auctions:
Brighton East, 49 Regent St, Rodney Morley (Woodards TBM), Under the hammer, $1,285,000, 5 bidders
It was an exceptionally good idea to hold the auction under the carport and in the shaded front yard of the home – and with the free bottles of water handed out before proceedings started, the Woodards team was off to a good start!…(See more in Auction Reports)
South Yarra, 33 Clara St, John Bongiorno (Marshall White), Under the hammer, $941,000, 4 bidders
By his own admission, auctioneer John Bongiorno’s opening bid of $800,000 was on the low side. But it worked a treat!…(See more in Auction Reports)
Biggest Pass Ins:
Hawthorn East, 2 Laurel Court, Mark Dayman (Marshall White), Passed in, $3,900,000, 2 bidders
The weather was hot and sticky but that didn’t stop a good crowd of around 120 people attending this auction at 2 Laurel Court in Hawthorn East…(See more in Auction Reports)
Canterbury, 29 Hopetoun Ave, Scott Patterson (Kay & Burton), Passed in, $2,650,000, no bidders
Short and sharp auction this one. In front of around 30 people and in dry hot weather, auctioneer Scott Patterson gave a concise account of the home and the auction rules and looked for an opening bid around the $2,600,000-$2,700.000 mark, but none from the crowd were forthcoming…(See more in Auction Reports)
Malvern, 119 Stanhope St, Andrew Macmillan (Benmac), Passed in, $2,500,000, no bidders
Andrew Macmillan leads us into the auction in front of a smallish crowd of around 40. Solid Edwardian – nicely renovated on 740 sqm. These homes always sell…(See more in Auction Reports)