At 6pm on Saturday, the James Clearance Rate for the $M+ market was 55% on the 33 auctions we attended.
Market Summary: Overall the market continues to show us that well priced quality homes have a very solid following – as you’ll see by our Bidderbuzz and Biggest Auction Reports below, and by the fact that Bidderman remained fairly constant at around 1.6 bidders per auction.
However, there has definitely been some cooling of interest in the last week or so. There have been fewer buyers through opens, slightly glummer agents and lower auction clearance rates. For example, a quick survey of 8 auctions in the $2m to $3m range saw just 2 bought and 6 passed-in. The fact is that this price bracket doesn’t have a lot of exciting new stock right now and the overhang is no better or is overpriced.
But it’s not just this money segment. With the exception of early $1 million family homes there just isn’t the same zing in the air as there was in March.
The big question for market watchers is whether this change is due to buyer sentiment lowering with the economic news and therefore a longer term change. Or whether this change is a temporary one that is simply due to the dearth of quality new stock entering the market right now. At this stage we think its the latter.
Round the Grounds – $M+
Boroondara: Hot in Broadway – the rest quieter at 54%
Port Phillip: All the market can do is sell what’s on offer – 6 out of 7
Stonnington: Not much on offer and not much happening – at 44%
Mmmm Bayside is slipping a bit at 43%
Top Bidderman Auctions:
Camberwell, 1 Water St, James Tostevin (Marshall White), under the hammer, $1,350,000, 6 bidders
Wow! What an auction! Under light drizzle, auctioneer James Tostevin conducted an auction that left the crowd of 60 breathless…(See More in Auction Reports)
Port Melbourne, 405 Nott St, Kaine Lanyon (Marshall White), under the hammer, $1,312,000, 6 bidders
A sea of colourful umbrellas filled the street at this Port Melbourne auction….(See More in Auction Reports)
Hawthorn, 43 Power St, Hamish Tostevin (Marshall White), after auction, $2,100,000, 3 bidders
Hoping to hold the auction in the backyard to showcase the tranquilty of the property, auctioneer Hamish Tostevin was forced to hold the auction indoors due to the persistent rain…(See More in Auction Reports)
Biggest Pass Ins:
Brighton, 10 Kent Ave, passed in, $3,300,000, 2 bidders
Nick Johnstone is re-auctioning this Golden Mile new build after an unsuccessful effort last year in front of a crowd of around 60…(See More in Auction Reports)
Armadale, 20 Royal Crescent, passed in, $2,500,000, no bidders
There is something about Wayne Gillespie designed spaces – they just work well in terms of proportion and functionality, and the extension at 20 Royal Crescent is no different…(See More in Auction Reports)
Prahran, 25 Highbury Grove, passed in, $2,300,000, no bidders
Even the canines were dressed appropriately for this auction…(See More in Auction Reports)
$3M+ Summary: The past couple of weeks have seen a marginal negative change in market sentiment at the Ultra Top End. But we feel it’s important to highlight the 5th sale at around $10 million that took place recently and that confirmed both the Pre Easter market spike and the power of the Kay and Burton Mexican Wave. The latest, a property at 61 Kensington South Yarra, was sold by Andrew Baines (he will need a tax advisor this month!) for more than $13,000,000. The property had something of a chequered past in terms of being on again, off again, sold, then sort of sold, then not sold. As a large landholding so close to the CBD it had positives. But it also had negatives: being near the freeway (noise) and overlooking power lines (visuals). That is what made for an interesting deal – it was a battle of wide opinions. Nonetheless it sold.
That makes a total of five sales in recent weeks at around the $10 million mark. Four were from Kay and Burton and one was from Marshall White.
So, after almost nothing for six months (a Kenley and maybe a Linlithgow excepted), bang – five were gone in a fortnight or so. Obviously buyers and sellers felt better and the K&B agents clearly smelled that. They did their Mexican Wave job well and pre-warned a number of buyers through a whisper campaign of what may happen. And see what happened! As soon as the first domino fell, the agents shouted (quietly) from the roof tops “Told you so” – and that lit the fuse on four more circa $10 million sales.
At times like this, when skilled agents are involved, certain homes appear to be under an irresistible force and deals get done. There is nothing wrong with this. It’s brilliant marketing and it’s what needs to happen to get a number of deals over the line. It’s not all buyers either – sellers are in on the Mexican Wave as well. They hear the whispers, see the results, get told “I told you so” too, and their price dexterity improves as they see real, concrete opportunity floating by.
However now that the early pre-Easter selling season is over, it seems that momentum has been lost again and the buying crowd are refocused on another game.
In the last few weeks the gloss at the Top End has faded a bit. Buyers are not quite as excited about what’s on offer – understandably given there are not a lot of publicly listed new hotties out there. As well some sellers have unwisely misread the recent activity as a market price increase and as such, without thinking, have in many cases priced their homes back into the too hard basket.
There were two strong results this weekend in the $3m+ segment. But overall there was a decided lack of interest in a number of homes in this segment that passed-in.
Malvern, 39-43 Mayfield Ave, Gerald Delany (Kay & Burton), under the hammer, $7,131,510, 3 bidders
It felt like an entourage of Kay & Burton agents in attendance here and it did take a bit to get going due to the wet weather…(See More in Auction Reports)
Camberwell, 35 Broadway, Alastair Craig (Jellis Craig), under the hammer, $3,425,000, 6 bidders
A much anticipated auction this one as the property was a rare offering – an original home with fantastic bones on excellent land size and prized north facing rear…(See More in Auction Reports)
Brighton, 42 Bay St, Jonathan Dixon (JP Dixon), bought after auction for an undisclosed amount above $2,635,000, 2 bidders
Looking forward to seeing Jonathan Dixon auctioning this old English character home on largish land (1220 sqm) at 42 Bay Street Brighton…(See More in Auction Reports)
So will it get any better – is there any more stock on the way?
James Redfern, Marshall White (Armadale): “Stock levels are frustratingly low at the moment and are low for late May and early June. However, the levels are ever so slightly stronger than the same time last year and confidence is creeping back. The low stock levels are currently underpinning the market.”
Stewart Lopez, Kay & Burton (Brighton): “There are quite a few properties coming through ‘off market’ and low key campaigns. Other private sales are being converted to media campaigns, but overall a lack of choice in most ranges.”
John Holdsworth, Hocking Holdsworth (Albert Park): “At this stage, May is looking ok for stock although, compared with recent years , it appears to be well down. May always used to be a very busy month on the run into winter. June, at this stage, seems to be well down due to the normal seasonal down-swing and general lack of confidence amongst potential sellers.”
Alastair Craig, Jellis Craig (Hawthorn): “At this stage we are booking steadily, but we will be down on previous years, which in my opinion will enhance the clearance rate and benefit those who are willing to commit.”
Andrew Stuart, Hocking Stuart (Albert Park): “Stock levels continue to stay at very low levels, and caution exists from both buyers and sellers: Buyers are not confident that prices are on the way up and sellers are reluctant to test the market given the fact that buyers aren’t buying! It’s a bit of a vicious circle – the market needs confidence! (Perhaps some strong leadership from those at the top might help!)
- The Reserve Bank’s interest rate cuts can have mixed results at the Top End – some deals are closer together others are further apart.
- How do you get validation if you want to do more in the way of due diligence than take the selling agent’s word as gospel?
- How do you negotiate in this market?
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