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Lets look at the $3m+ – how is it going?

The Grand Prix wasn't the only thing happening in Port Phillip on Saturday. John Carter sells 57 Tennyson St, Elwood under the hammer for $2,281,000, 5 bidders

At 6.00 pm on Saturday the James Clearance Rate for Melbourne’s $M+ property was 56% on the 34 auctions we covered. The Weekly Review , our bidders per auction measurement, was 1.8.

Both these stats were down on last week and ducks (no bidder auctions) were up. But given the early REIV Clearance rate was still around 70%, our clearance stat may have been an anomaly. It certainly felt just as strong out there on the good auctions we were at. The stats may also have been  affected by the fact that we skewed our coverage this weekend to cover a number of high end $3m+ homes and, as we explain below, this price segment does not have the legs the lower price segments have.

  • Ducks (no bidder auctions) – 38%
  • Lone Rangers (one bidder auctions) – 3%
  • Norms (2 or 3 bidder auctions) – 34%
  • Volcanoes ( 4 or more bidder auctions) – 25%
  • Win to the ducks today!

    Bidderbuzz Auctions:

    Kew, 33 Edgecombe St, James Tostevin, (), under hammer, $3,410,000, 5 bidders
    One of the last auctions in a very busy day. For auctioneer James Tostevin it was his seventh! I along with around 150 or so others was very interested to see what would happen, as the house had undergone an amazing transformation…(See More in Auction Reports)

    Elwood, 57 Tennyson St, John Carter (Hocking Stuart), under hammer, $2,281,000, 5 bidders
    Two half times, five bidders and the property bought under the hammer – what a great start to the day for auctioneer John Carter. John did a great job managing five bidders…(See More in Auction Reports)

    Richmond, 18 Jessie St, Daniel Atsis, (Hocking Stuart), undisclosed, above $1,510,000, 5 bidders
    After feeling the drizzle at my previous auction, it was a delight to feel the sun on my face as I stood shoulder- to- shoulder with the 75 or so people who lined Jessie St this afternoon…(See More in Auction Reports)

    Boroondara – Clearance Rate was 71% on 53 auctions – strong
    While it was nice to take a breather last week, the property market in million-dollar-plus Melbourne certainly looks to be rolling on in a positive way….(See More in Adam’s Boroondara Market Wrap)

    Port Phillip – Clearance Rate was 100% on 3 auctions
    With the Grand Prix on this weekend, normally sleepy Port Phillip is currently clogged up with bollards and crowd controllers directing traffic…(See More in Guy’s Port Phillip Market Wrap)

    Bayside – Clearance Rate was 59% on 17 auctions – OK
    There were again over 20 auctions on in Bayside this weekend. But even while other areas of Melbourne continued to see strong (Boroondara 77% for February 23 and March 2; and Stonnington 78% and 85% respectively)…(See More in Kris’s Bayside Market Wrap)

    Stonnington – Clearance Rate was 71% 25 auctions – strong
    The positivity in the market has continued into March. There is now consistent evidence of buyers showing their readiness to transact….(See More in Gina’s Stonnington Market Wrap)

    And some of today’s Auction highlights:

    Highest Auctions:

    • Brighton, 24 Bay St, Leigh Hallamore, (Buxton), sold under hammer, $4,850,000, 2 bidders
      Auctioneer Leigh Hallamore started the day quietly asking for an opening. After a long pause, a genuine bidder offered $3,000,000. Leigh was quick to say that it was a start, ‘a low start’…(See More in Auction Reports)
    • Balwyn North, 60 Tuxen St, Toby Parker, (Hocking Stuart), sold after auction, undisclosed above $4,315,000, 2 bidders
      Toby Parker was our master of ceremonies here…(See More in Auctio Reports)
    • , 9-10 Lisbuoy Crt, Tim Derham, (Abercromby’s), sold under hammer, $3,840,000, 3 bidders
      On a quiet tree-lined Toorak cul-de-sac a crowd of 60 wandered up to this pair of maisonettes, which is a likely development site. Auctioneer Tim Derham’s raspy voice carried well but made no initial impact on the observers…(See More in Auction Reports)

    Biggest Pass Ins:

    • Toorak, 11 Hopetoun Rd, passed in, $5,200,000, 2 bidders
      Melbourne’s recent hot streak was but a distant memory today with a sudden change in weather doing its best, but failing, to dampen the enthusiasm of the 80-strong crowd who had gathered to witness the auction of this iconic property…(See More in Auction Reports)
    • Balwyn, 11 Chatfield Ave, passed in, $3,700,000, no bidders
      The pre-auction inspection was an absolute traffic-jam of families. All told, when auctioneer Doug McLauchlan asked everyone outside that he was about to commence proceedings there were at least 100 people..(See More in Auction Reports)
    • East Melbourne, 110 Powlett St, passed in, $3,550,000, no bidders
      It was a crisp and clear, beautiful blue-sky morning for the auction of this immaculately renovated heritage terrace in peaceful East Melbourne. A crowd of 100 gathered on the lush green grass…(See More in Auction Reports)

    Balwyn North, 60 Tuxen St, Laurence Murphy and Maurice Di Marzio, bought after auction for an undisclosed amount above $4,315,000. Two bidders

    2013 So Far…

    There is no doubt that results so far in early 2013 in the $1m to $2m price bracket have been well above what most selling agents expected in terms of deals done and the ease at which some of them have been done.

    This is not just agent hype. Agents are not just cherry picking the good results and hiding the bad ones (well not as much as 2011). The market reality is that right now the lower end of the , i.e. the $1m to $2m range in , is really rockin’ as many buyers come a knockin’.

    Price expectations are rising – the laws of life say they must be.

    While this weekend has been solid, numbers-wise, next weekend will be another Super Saturday before we shut down for an Easter break. That means three out the four pre Easter auction days have been Super Saturdays. To put that into perspective, in 2012 there were three Super Saturdays for the whole year (a Super Saturday by our measurement is around 150 $1 million + Auctions in Bayside and the Inner East).

    That is like the French Open, Wimbledon, and the US Open being scheduled back-to-back. To go one step further it’s like the French, Wimbledon and the US Open all being back-to-back, in the same town, with many days being a sell-out. Which is what it has been like so far on the $1 million plus property market.

    If this continues next week, then what would you expect to happen to “ticket prices” and “scalping” after Easter?

    Look at Bidderman – our bidders per auction measurement for the Melbourne $M+ market. So far this year it has been consistently over 2 (except this weekend). Sure, it’s not quite the heady days of 2007 and late 2009/early 2010 when it was up around 3, but it is well above last year’s mean number of 1.5 bidders per auction.

    So what we are currently seeing at the $1m to $2m level in Inner Melbourne is:

    • – plentiful stock.
    • Demand – deep on the good ones. Typical of what we have been seeing was a Marshall White Boardroom Auction of 19 Lennox St Hawthorn (Antony Woodley) on a Thursday night which had 5 bidders and sold for $1,965,000.

    That’s the lower end of the Top end. What about the Top of the Top end – the $3m+ market?

    At this level things are not so clear cut. Nobody feels the market is in the state of it was for much of late Autumn, Winter and early Spring of last year. But no-one operating at this level appears to be as cock-a-hoop as those whose businesses are operating lower down the food chain.

    As you can see from our dedicated $3m+ section there are sales happening including:

    1. Big Price - 38 Central Park Road Malvern East (James Redfern) – Period home in the Gascoigne on solid but not huge land. It was gone before the auction campaign got started for a near unbelievable price of around mid $4m’s. On this I admit I don’t get it – last time it sold for what I thought was $700,000 over the odds. This time, well the mind boggles. This is not a criticism – I obviously have got it wrong on this home. But it is still an incredible result (or else they wouldn’t have sold it when they did).

    2. Mop Up – Sales are not flying yet – This is partly why we say prices haven’t yet proven to us they are on the move

    • 7 Winifred Toorak – Tim Wilson – This has been on the market for nearly a year but Tim’s patience saw a result in the mid $3 millions this week
    • 16 Albert Brighton – Bought and sold by JP Dixon twice within the last year for the same mid $3 millions price – minus stamps, holding costs and agent fees?
    • 6 Benson Toorak – The unfinished symphony (home) sold through Phillip French for high $2 millions – less than what was paid when it was in a different state 2 years ago.
    • Toorak, 202 Kooyong Road -We went through this late last year as an off market. It was sold by Michael Armstrong around the mid $5 million mark.
    • 6 Burke Road, Glen Iris (1357 sqm) – sold in an Expressions of Interest (EOI) campaign for just over $3,000,000 by Rob Vickers-Willis (Rob Vickers Willis).

    3. Another $6m Bay deal – A quiet one in Blairgorwie Court, Brighton which has been on the market for some time and which has finally got away over $6,000,000. Sold through .

    And some more from Bayside

    • 33 Gordon Street, Hampton – This has been up for sale quietly on and off over the last year and recently sold in excess of $4,000,000 (Ian Jackson). The home previously sold in November 2010 between $3,800,000 and $3,900,000
    • 17 Albert Street, Brighton – Sold for just over $4,000,000 (Ian Jackson). The home previously sold in April 2010 for $3,900,000

    4. Fringes – 61 Fourth Street in . This has been on the market for a while and has now sold in the high $2 millions, a good result. Very unusual façade. See our rating at http://www.james.net.au/rating/61-Fourth-Street-

    5. And a couple from Boroondara

    • 25 Redmond Street, Kew (James Tostevin, Marshall White) – This sold strongly before auction for around the $2.9m mark. Bought for land value only, and working out at approximately $3300/m2. Strong result there.
    • 93 Kooyongkoot Road, Hawthorn (Greg Toogood, ) – Sold this week for a figure believed to be in the mid $4m range . Another strong result, for a nice architect-designed home. As a side note, Greg has another one coming up not far away at number 81 – same land size, yet no house (but plenty of rainwater tanks) for around the $3m mark.

    But just looking at all this anecdotal evidence above doesn’t give you clear picture of the Top End direction.

    Sure there are sales now, but in March last year there were sales too. Check out our $3m+ report March 2012. History says we should be doing business this time of the year.

    The Question is whether we are doing more than we should be, whatever that means? Are expectations building in this market? Perhaps! Is the $3m market improving?

    To be honest we really don’t think so or we really don’t know. For us it’s one of those two answers.

    This market (that we love because it is so interesting) is:

    1. Shrouded in secrecy and “bulls…t’ when it comes to results
    2. Has the greatest percentage of off market or hidden transactions
    3. Has such a large overhang of non-sales from 2012 and 2011 and indeed late 2010

    Saying the $3m+ market is “on the up for sure” is a brave, even courageous, call – given there few results to back it up, in our opinion.

    But if the K&B jungle drums produce their transparent Mexican Wave; if Jonathan Dixon books another overseas holiday or if the Marshall White, RT Edgar and Jellis Craig boys become too busy to make special appointments then we will know that the Top of the Top End has moved into 2nd gear. There is no doubt the signs are clear the starter motor has been pressed.


    Glen Coutinho, RT Edgar Boroondara, (Hawthorn): “The S3m plus market seems to have been stronger than property at the $1-2m range partly due to a better performing share market and business confidence. Some high end clients are moving share market profits back into better family homes as the real estate market strengthens in an election year.”

    Justin Long, Marshall White, (Armadale): “There is no doubt in my mind the market is strengthening across all the price ranges, but it is in the $3m+ range (which has perhaps been the toughest) where the increased activity has been noticed more. It is still price sensitive, but there is definitely more engagement between vendors and buyers than we have seen for some time and this may lead to some mild upwards pressure on prices in the coming months.”

    Michael Armstrong, Kay & Burton, (South Yarra): “The $3m+ market much more linked in to financial markets both locally and in the macro sense, hence the increased activity and competition in this part of the market. The $1m-$2m market is more linked to interest rates and ‘affordability’ factors – again such things have also improved in recent times. Both markets are experiencing more turnover and confidence, but for different reasons.”

    Campbell Cooney, Hodges, (Brighton): “Certainly, market sentiment has improved from the beginning of 2013 and is continuing as we communicate. As is often the case, the lower priced properties recover first, followed by the more expensive. Confidence is returning, although at a cautious pace, with many prepared to act (meaning buy/sell) rather than continue to ‘wait and see’. We are experiencing competition between buyers for most property with units flying; the $1.0 – $2.0 million price bracket very active; the $2.0 – $3.0 million range also with activity; and the over $3.0 million properties sensing activity. All expect this to continue (until it doesn’t!).

    Kew, 33 Edgecombe St, James Tostevin, under hammer, $3,410,000, 5 bidders and a big crowd of 150 people

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