It wasn’t just the weather that was cold this weekend – so was the general mood at auctions across the board. The chilly atmosphere seems to have affected demand, with a significant drop in Bidderman, down to 1.1 from a steady 1.6 during all of May. As we approach Her Majesty’s holiday next weekend, winter is looking a little bleaker (activity-wise) if we consider this weekend’s results as a sign of things to come.
Of the 28 auctions we reported on this weekend, 12 were ducks (no bids). That’s almost 50%. Demand seems to have frozen even for good homes – 38 Laburnum St, Brighton, for instance, which we thought was a really good home (if perhaps one bedroom short) and gave a James Home Rating of 758/1000. It had no bidders, at what we thought was a very low quote of $1,600,000+.
Overall though the market has been solid to date. Was this weekend representative of a general mood change or just a vagary of the market? Time will tell.
- Armadale, 69 Rose St, Justin Long (Marshall White), under hammer, $3,900,000, 3 bidders
A great auction here with strong bidding from the two main contenders…(See More in Auction Reports)
- South Yarra, 18 Hawksburn Rd, Marcus Chiminello (Marshall White), after auction, above $3,100,000, 2 bidders
A big crowd of around 90 people lined the street to watch Marcus Chiminello in action…(See More in Auction Reports)
- Armadale, 51 Stuart St, John Bongiorno (Marshall White), after auction, $2,720,000, 3 bidders
Auctioneer John Bongiorno was in a jovial mood for his last auction of the day, at one point offering a bag of lollies to a little girl to encourage her father to bid again…(See More in Auction Reports
- Camberwell, 50 Seymour Grove. Steve Burke (Jellis Craig) after auction, $3.55m. Reserve was $2.9m. This was a tennis court site, so is purely a land buy, with land price working out at $1987 square metre
- Malvern, 19 Finlayson St, Andrew Hayne (Marshall White), under hammer, $1,420,000, 4 bidders. With the temperature gauge showing only 11 degrees, the mid sized crowd was well rugged up to see the affable Andrew Hayne talk about the many positives of owning this period home…(See More in Auction Reports)
- Kew, 89 Edgevale Rd, Paul Williamson (Jellis Craig), under hammer, undisclosed above $1,760,000, 3 bidders. The cold brisk morning didn’t stop a crowd of 80 people from coming to see this double fronted Victorian sell under the hammer, with auctioneer Paul Williamson and agent Mark Lawson presiding…(See More in Auction Reports)
- Hawthorn, 1 Lyndhurst Cres, James Tostevin (Marshall White), under hammer, $2,051,000, 3 bidders. ‘I stood here 14 years earlier and auctioned this property’, announced James Tostevin, and when a firm bid of $1,770,000 came flying straight off the bat, it appeared he would sell the home again today…(See More in Auction Reports)
Biggest Pass Ins:
- Canterbury, 85 Mont Albert Rd, passed in, $4,700,000, no bidders. Plenty of foot traffic at this auction…(See More in Auction Reports)
- Beaumaris, 493-497 Balcombe Rd, passed in, $3,050,000 (for three blocks), no bidders. This auction was a quiet affair…(See More in Auction Reports)
- Armadale, 70 Northcote Rd, passed in, $2,500,000, no bidders. A queue formed to inspect this Armadale property in the moments prior to the auction (See More in Auction Reports)
Agent Survey: How are stock levels looking after the Queen’s Birthday Weekend, compared to late May?
Justin Long, Marshall White (Armadale): All agents felt that May, which is traditionally a boom month (as there are no long weekends or school holidays to contend with), would be far busier. Most vendors who have yet to commit for June campaigns will now more likely avoid the Queen’s Birthday weekend and school holiday disruptions and begin looking at auction dates in August as the next alternative. Agents will need to rely on private sales to supplement the last 5 weeks of the financial year.
David Lack, Biggin & Scott (Port Melbourne): We have seen stock levels at much higher levels in Port Melbourne than in the past 2 years but it is looking much quieter past the Queen’s Birthday Weekend. This is despite above average clearance rates over the past 4 weeks.
Nick Johnstone, Nick Johnstone (Brighton): Stock levels are at all time lows. I can’t understand why people would be waiting for spring as buyers have no choice!! We have lots of buyers and no properties, this is when a Buyers’ Market can become a Sellers’ Market.
End of Autumn $3M+ Summary in a nutshell:
- There was some life at the Top of the Top End with sales over $7m under the hammer at Seacombe Brighton (John Bongiorno) and Mayfield Malvern (Gerald Delany) and through private sale at Domain South Yarra (Andrew Baines) and Hampden Armadale (Jeremy Fox). This follows on from last month’s 5 sales circa $10,000,000.
- Buyer love has been spread across new and period homes.
- Negotiations have become a lot more man on man or one on one; in contrast to 2010 or other boom years which were all about processes.
- Turnover at this level is down on previous years.
- The web is chockers with vendors who seem comfortable advertising their home as overpriced and/or unsaleable – meaning that there are a lot of long term stales of $3m+ advertised. Unless they are mopped up during Winter this flotsam will continue to plague the market for many Spring sellers.
There were a couple of very sold results (price-wise) to finish the month, including 4 The Ridge Canterbury (Michael Ebeling of RT Edgar) which went past $6.5m on the way to be bought at month’s end. Our James Rating was 735/1000 and this home was a rose in amongst a few thorns in the street but nonetheless was super high quality. Along with another good result at 50 Fellows St, Kew (Tom Aylward) the signs are that the market could be returning or possibly had never left for uber quality new builds. The second completion was through an EOI campaign (also not completely dead) for another new build at 51 Fairbairn Road Toorak (Michael Armstrong of Kay and Burton). The deal was completed the day after the end of the campaign.
Frustration and Poor Decision Making:
As we move into the winter period, certain things happen.
- Buying and Selling Agents get sacked because their clients think they are not working hard enough, meaning they are bringing few or no options to the table.
- Many buyers and sellers become frustrated at the inactivity and make poor decisions and – in the buyers case – can end up paying over the odds or buying the wrong home. Yes there are some good buys but there are also some troublesome buys out there only attracting attention because of the new stock shortage. Just because a home is cheaper than you thought or cheaper than a year ago or even just because its a period home in need of some work, does not necessarily make it a good buy for your family.
Case in Point
The Queen Anne/Federation style home at 2 Shoobra Rd, Elsternwick has been on and off the market a number of times since it was sold on the 1st of August 2009 for $1.44m. We reported it then as a bang up auction with multiple bidding. The owners had reportedly planned to divide it down the middle and sell it off as two dwellings.
Clearly there was a change in plans and the property came quietly back onto the market at $1.3m+. After a full campaign and an auction on the 4th of March this year, it sold for under $1.2m. We are not sure why it’s back on the market so quickly after the March 4th sale.
Amongst the possible concerns is the fact that the house backs on to Glenhuntly Road shops that run along the property’s northern boundary. However those concerns were obvious at the time of purchase. There may well be other issues which have meant the numbers did not stack up. (Guy Angwin)
So what to do?
- Firstly, be clear on what it is you are trying to achieve. Are you just after a building, a post code and a price (short term and non-emotional) or are you after a home, a sanctuary and a fair deal (long term and emotional)?
- Secondly, recognize that winter traditionally has a significant drop in turnover and this winter the market is already starting behind the eight ball in terms of stock levels, putting it at historic lows.
- Thirdly, buyers should understand that even though the world seems to be a negative place, our part of the world is still attracting people who want to live here. When you do spot a good home, in all likelihood you will have to compete and compete strongly.
- Fourthly, try something a bit different. The definition of insanity is to repeat the same actions over and over again expecting a different result. If you are not getting the job done (finding a new home) then consider engaging a professional. You could also consider revisiting stales, checking out off-markets, door knocking and so on.
So you may have to be patient and simply sit Winter out, hoping Spring will bring you a goodie. What’s wrong with having a break and coming back refreshed in a few months?
Next weekend is Queen’s Birthday weekend with almost no auctions and so we will take a break in reporting.Email This Article to a Friend