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The bounce is continuing in the later spring market.

Slamming it down on another $3M+ sale. Mark Wridgway, 39-41 Adelaide St, Armadale, under the hammer, $3,255,000, 4 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 75% on the 28 auctions we attended. The Weekly Review Bidderman, our demand indicator, was 2 bidders per auction.

Both those stats indicate that the bounce was back in the market this week, after last week’s more subdued market.

$M+ Clearance Rates:

  • Boroondara – 88% on solid numbers
  • Bayside – 75% on smaller numbers
  • Port Phillip – 63% on smaller numbers
  • Stonnington – 78% on reasonable numbers

Market Comment

Four weeks ago on October 27th’s Super Saturday the market was genuinely hot. Buyers were pushing the envelopes of expectations, and agents and sellers who had been in the doldrums only a month before were welcoming all bids with open arms.

Two weeks later we felt the mood had eased. Deals were still happening but not at the same level of excitement as October and, as another November week passed, some in the market started to wonder if maybe Super Saturday was a dream – that the market hadn’t really picked up and that we were going to limp into much the same as last year.

While the numbers on Clearance Rates and Bidderman were clearly superior to those in 2011 ($M+ Clearance Rate in Mid November 2011 was 44%  compared to 67% last week), to us early November felt quieter than October and we weren’t so confident the market was maintaining it’s October push.

But the continuing results can no longer be ignored. This week there was little doubt the underlying and improved market strength felt in October is still there.

The market has now been solidly on the improve on all levels. A number of buyers are feeling a sense of urgency out there. It’s as if, in the last week or so, a number of Top End buyers have said “Hey it’s almost Christmas – I’m not mucking around anymore – I want a home”.

And they are acting – have a look at the results in the Market Wraps and at our results below.

So the market moods during Spring 2012 have been: started okay in September after a pretty negative Winter, up in October, eased ever so slightly in early November and now in late November it’s back to moving ahead strongly.

Biggest Sales:

  • Armadale, 39-41 Adelaide St, Mark Wridgway (RT Edgar), under hammer, $3,255,000, 4 bidders
    Here we are at 39-41 Adelaide St Armadale, where Mark Wridgway is auctioning 715 sqm of prime Armadale …(See More in Auction Reports)
  • Hawthorn, 18 Glenroy Rd, Alastair Craig (Jellis Craig), under hammer, $3,250,000, 3 bidders
    This auction was always going to be an interesting one…(See More in Auction Reports)
  • Canterbury, 3 Grange Ave, Scott Patterson (Kay & Burton), after auction, above $2,700,000
    Looks like summer has arrived and the crowd of 60…(See More in Auction Reports)

Bidderbuzz:

  • Hampton, 37 Margarita Street, Frank Hellier (Malcolms), under the hammer, 5 bidders
    There was always going to be solid interest in this home with a $1.2m to $1.3m quote
  • , 4 Marshall Ave, Glen Coutinho (RT Edgar), passed in, $3,162,000, 4 bidders
    As I approach the house at 2.50pm, amidst a flurry or people…(See More in Auction Reports)
  • Prahran, 20 Kelvin Grove, Andrew James (), under hammer, above $1,500,000, 3 bidders
    With the sun beating down many of the crowd sought shade…(See More in Auction Reports)

Pass Ins:

  • Malvern East, 79 Kerferd St, passed in, $2,900,000, 1 bidder
    Grabbing any available spot in the shade, the crowd of around 40 people…(See More in Auction Reports)
  • Hawthorn, 1 Gardiner Rd, passed in, $2,900,000, 0 bidders
    A cricket match across the road called stumps around midday…(See More in Auction Reports)
  • Middle Park, 114 Canterbury Rd, passed in, $2,000,000, no bidders
    Under the hot sun, the small crowd divided themselves evenly to the left and right…(See More in Auction Reports)

Off Market and Quiet Sales, just in , during the week.

  • Trawalla Toorak, around $5.5 million, with Michael Armstrong
  • 28 Sargood St, Toorak around $5.5 million (Munckton design apartment) Ross Savas and Michael Armstrong of Kay and Burton
  • Douglas St, Toorak (apartment) around $3 million with ()
  • 4 Linlithgow Rd, Toorak – relaunched with Andrew Baines and Michael Gibson around mid $7 millions
  • 19 Linlithgow Rd, Toorak – Expressions of Interest with Michael Gibson around mid $8 millions
  • AND 14 Myamyn St Armadale (Gowan Stubbings – Kay and Burton) which was last sold for the mid $3 million in 2009 sold during the week for towards the mid-$4m’s, before auction.

Stay tuned – the current market ride is as exciting as the MLC Head of School Saga – and hasn’t that been a ripper read in recent times?

Bidders are back. Glen Coutinho (RT Edgar) at 4 Marshall Ave, Kew, after auction, undisclosed above $3,162,000, 4 bidders

Big Land Sales

This weekend our focus is Big Land Sales.

In the last week or so we bought 9 homes totalling nearly $30 million. They were in Middle Park (Michael Coen Hocking Stuart), (David Wood Hocking Stuart), (Brad Pierce Miles), Kew (Philippe Batters), Brighton (Campbell Cooney Hodges), Fitzroy (Arch Staver of ) , Toorak (Marcus Chiminello of Marshall White), Armadale (Bill Hegarty Real Estate Gallery) and Beaumaris (Nick Jones of Chisholm and Gamon).

A number of these purchases were on big land and it re-highlighted to us the of understanding land, its characteristics and how it can be valued.

Overall the consistent and clear word from all agents is that Developers are gone and they have been replaced by new home buyers looking to build after becoming frustrated with the lack of quality stock for much of 2012.

So what is the story in terms of Land Values?

To give you an idea of what big land is fetching in the main $M+ areas of Bayside and the Inner East, we’ve put together a couple of diagrams on basic land value that you can see below.

The first two diagrams give you starting points on what good land may be worth in specific precincts in November 2012. To arrive at final value ranges, you can go up or down on these figures depending on your own opinion. For instance you would need to add or subtract the value of any additional house, as well as the emotional value of both the land and the house (if any), depending on the circumstance and opportunity.  For ease of communication, we may have oversimplified the illustrations and emphasise that the values indicated are starting points for discussion, not final truths.

Look at 39-41 Adelaide St Armadale (Mark Wridgway), which sold this weekend for $3,255,000. For many this was pretty much a Land Only sale, making the $4,500 per sqm result well above our Armadale suggested of $3,500 per sqm. But others saw value in the building as a development or an income stream – therefore giving the building some considerable value and thus bringing land value back closer to $3,500 per sqm. Plus this is A+ Armadale land.

The third of our diagrams shows how different factors, or land characteristics, can affect the final land value. This demonstrates why the figures in the earlier diagrams are really only starting prices.

We hope these diagrams provide an insight into why experts and buyers can value different land as 100% apart in dollars even while it is only 100 metres apart in geography.

Agent survey: Has there been an increase in land sales, particularly big land sales in recent weeks?

Tom Aylward, Jellis Craig (Hawthorn): “Like a lot of residential property at the moment we are seeing an increase in the baseline prices being paid for the premium offerings. This is reflected notably in some recent land sales for well-located, overlay-free blocks of land (16+m frontages) recently in Kew’s Sackville Ward. We have seen a number of land sales (for single homes sites) where the price per square meter has been 10–15% higher than previous historical highs for land sales in the same area.

Campbell Cooney, Hodges (Brighton):

“Land value only sales are in two main categories –

  1. Best suited for development i.e. apartments; townhouse etc
  2. Good for a new home

The former category is still very flat, with finance difficult to obtain and, even when approved, it comes with onerous conditions (i.e. pre-sales, covenants etc). Add to this an oversupply of apartments, the difficulty to obtain ‘off the plan sales’ and the lowering of prices for the finished products and you understand why these sites are slow to move (and then only at base price rates). The bigger the size, the lower the rate per sq m. Land for the construction of one’s own home is a little brighter. As this is not a ‘profit-based’ initiative, the constraints are not the same. This style of land only is selling more easily with the rate per sq m having stabilised and even increased slightly in recent months.

As always, it is about the position. There is that old saying “you can always improve a property, but you cannot move it”.

Rob Vickers Willis, Abercromby’s (Armadale): We have noticed strong demand for new home sites this year in the Stonnington area. Three recent examples are 1 Denham Place, Toorak which sold on 30 April  for $3,500,000 – 930 sqms, 17 Haverbrack Ave, Malvern on 4 September for $5,000,000 -1450 sqms, plus 5 Ethel st Malvern on 3 November for $1,750,000 – 700 sqms. All houses had previous owners of 20 plus years with grown up families. Interestingly each property is extremely liveable however all purchasers have a strong desire to building something new. The properties are all situated in exclusive addresses surrounded by $ 3-6 million properties, so there is a minimum likelihood of over capitalising. High demand is expected to continue.

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