At 6pm on Saturday, the James Clearance Rate for $M+ was 68% on the 28 auctions we attended.
We said last week the market was cool and it was. Agents were glum after the Bunny had been and gone. And the Reserve Bank rate cut seemed to worry more rather than it reassured.
But this week was a different story. The pre Easter market zing that seemed lost last week returned when the good stuff came to market. People felt brighter. Auctions were livelier.
There were four strong sales over $4 million. Three of them sold under the hammer with multiple bidders (see below), which reinforced the fact that if a home is good, the price is right and the agent can get it ‘on the market’ then there is a good chance of a sale.
In the $3m range this weekend were a couple of strong sales including 51 Richmond Terrace Richmond (James Tostevin) and 24 Denbigh Road Armadale (John Morrisby) – a cracker of a home but with a neighbour issue.
Even the $2m range, which was as dead as a doornail over the last fortnight, saw some action (7 sales out of the 12 we monitored). Nick Johnstone resold 1 Norwood Brighton for under $3m after it was reported as sold a few weeks ago for over $3m.
This weekend’s results answered two questions:
- 1) A short term question – The cooling of the market over the last fortnight now seems to have been due to the quality of auction offerings (generally uninspiring). The $M+ auction clearance rate improvement demonstrates that. Our company bought 4 out of 5 this weekend at $1m+, $2m+, $2m+ and $4m+. At all five auctions we competed against other bidders. Three of the properties were bought under the hammer. The previous weekend we had only bid on one property – but that was due to a lack of quality, not a lack of buyers. We’re not saying the market is ripping along and it may be that significant future stock increases will leave it wanting – but right now it is doing just about everything asked of it.
2) A longer term question – We’ve had a sustained Bidderman at 1.6 and above for most of the year so far, supporting the sense that the 2012 market is in okay shape. Sure there is a bucket load of homes over $3m doing nothing except taking up internet space – but is this the real market? Sellers who have A or B graders, engage a quality agent, market and price correctly are actually selling.
We believe prices are stabilising, but they are still well off the highs of early 2010 in a lot of cases.
At auction those sellers who ask for less than market seem to get above market, while those who ask for above market seem to get less.
Auction stock levels in May remain unseasonably low by any measure (although there was a stock spurt this week due to vendors aiming to finish their auction campaign before the Queens Birthday weekend). The market looks like averaging around 75 auctions per weekend this May. Traditionally May is one of the strongest months of the year, and historically we have been above 100 and nudging 150 $M+ scheduled auctions per weekend in Inner East and Bayside. This shortage of stock and a solid Bidderman rate points to no significant price drops till Spring (major economic bad news excepted).
‘Round the Grounds
Boroondara: A return to form with three sales under the hammer over $4m - 64%
Bayside: Mixed offerings – what was expected to sell did and what wasn’t didn’t – 50%
Stonnington: A solid enough weekend at 60%
Port Phillip: The well priced had multiple bidding – 71%
Toorak, 10 Rathmines St, Jeremy Fox (RT Edgar), after auction, above $4,300,000
Auctioneer Jeremy Fox looked quite regal positioned in front of this imposing property flanked by his support team…(See More in Auction Reports)
Canterbury, 162 Mont Albert Rd, Scott Patterson (Kay & Burton), under the hammer, $4,166,000, 3 bidders
A medium size crowd gathered in the front garden of this home on the Golden Mile…(See More in Auction Reports)
Balwyn, 6-8 Fitzgerald St, Alastair Craig (Jellis Craig),under the hammer, $4,025,000, 2 bidders
The team at Jellis Craig had a reason to smile today, especially Alastair Craig with four of his auctions selling, including this property…(See More in Auction Reports)
Top Bidderman Auctions:
Armadale, 24 Denbigh Rd, John Morrisby (Jellis Craig), after auction for an amount in excess of $3,000,000, 4 bidders
John Morrisby kindly provided us with the following information…(See More in Auction Reports)
Glen Iris, 2 Hillside Ave, Rob Vickers-Willis (Abercromby’s), after auction above $2,225,000, 3 bidders
A crowd of 30 turned up in the sunshine to watch 3 bidders battle it out for this period family home…(See More in Auction Reports)
Middle Park, 359 Danks St, Greg Hocking (Greg Hocking), under the hammer, above $1,970,000, 3 bidders
Around 60 people attended this Middle Park auction, conducted by the affable Greg Hocking…(See More in Auction Reports)
Top Pass Ins:
Toorak, 9 Landale Rd, passed in $3,000,000, no bidders
Showing an affinity for round numbers, auctioneer Gowan Stubbings kicked things off with a vendor bid of $3,000,000…(See More in Auction Reports)
Middle Park, 68 Park Rd, passed in $2,850,000, no bidders
A crowd of 60, including a number of young children and dogs, stood widely dispersed in the tree lined street…(See More in Auction Report)
Brighton, 5 Birdwood Ave, passed in $2,800,000, no bidders
The sun shone brightly in the front yard of this Spanish Mission style home in Brighton’s Golden Mile…(See More in Auction Reports)
Auction behavior is deteriorating with some vendors and agents, while improving with others.
In the last fortnight we have been involved with three auctions where the agents have priced openly and fairly and got the homes on the market, within the ranges quoted and got excellent results. The agents were Greg Hocking, Tim Blackett of Kay and Burton and Tom Aylward of Jellis Craig.
However, we’ve also been involved in two cases where the vendors allowed their agents to give them low quotes and when their property was passed in to us, the old Clayton’s Reserves tricks began again. (This is where the agent gives a much higher reserve price during pass-in negotiations than would have applied during the auction.) We feel that CAV (Consumer Affairs Victoria) should at least look at vendors if they give a Clayton’s reserve outside their clearly stated range. We have not seen CAV at an auction this year – possibly they are undercover, possibly they think the problems of auction quoting and poor vendor behaviour have disappeared.
As well, one agency in Boroondara totally disrespects the highest bidder and the exclusive right to negotiate concept. The practice of dealing with other bidders while not even talking to the highest bidder after a pass-in is unprofessional and against the spirit of the auction. Fewer bidders will try to be the highest bidder if the auctioneer continues to falsely claim that he will treat with the highest bidder at the exclusion of others and then does not. The agent’s excuse is that Chinese people won’t bid at auction and so we must talk to them afterwards. That’s pathetic. Of course Chinese people won’t bid at auction if you keep talking to them after every auction pass-in, you numbskull. This is a top line agency and the auctioneer should know better – he is cheating the system that produces a good income for him.
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