It’s going to be a white (hot) Christmas

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95 Broadway, Camberwell sells Under the Hammer $4,020,000, 4 bidders (Mark Salvati).

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Welcome to our 2016 Bumper Christmas Edition.

In this, our last article for 2016 – the key to good sex, nothing about that American bloke and a segment on how to get $70,000 for free every year.

Plenty of positives, but apologies we don’t seem to have any fake news!

And to the Market.

Wow, what a finish to the year! What a finish to Spring 2016.

Look at the James measurements dials – they are all red – basically off the charts.

Big at 2.8 bidders per auction.

Big James $M+ Clearance Rate at a whopping 84%.

Big Stock levels – it was a Super Saturday.

Meaning on the 193 auctions we reviewed there were 162 buyers who bought; however there were 347 buyers who didn’t buy and will compete against you next week, next month or next February.

The market in Spring 2016 is strong and it is deep, especially for A-graders and it would need a man-made or natural disaster to not be starting that way in 2017.

It is also strong for us at James Buyer Advocates on market – having publicly bought $34 million worth of family homes for clients in the last three weeks – Malvern East (Rae Tomlinson); Brighton (Ian Jackson); Brighton (Peter Kennett); (James Tostevin); St Kilda (James Redfern); Brighton ( Kate Strickland); Glen Iris (Daniel Wheeler); Malvern (Hugh Tomlinson). Off Market is also hot for us, heading into Christmas.

November’s Top Three Hotties:

  1. without Heritage – the recent $ per sqm lift is incredible– especially in and back in Boroondara again.
  2. Homes on smaller parcels of land – well located to trains and shops – for upsizers, downsizers, old and young, rich and poor – everybody seems to want these smaller homes this spring. A considerable part of our work is now working with parents to buy for children of clients – before they are priced out of a future market.
  3. Toorak, Brighton and Boroondara – feel back again at The Top – and that is because Asian and Asian Australian families are back in force, after being away late 2015/early 2016.

So when will it end?

No doubt the mainstream media, stockbrokers and some financial advisers (who don’t make money from ) will be telling us all over Christmas, that the world will be ending soon – and who knows – they may be right – but we’ve seen no signs this Spring – in fact no signs in 2016, 2015, 2014, 2013 and late 2012.

Crowd of 250 at 6 Belmont Avenue Kew (Chris Barrett). Under the hammer over $6,260,000. Volcano - 4 bidders.

Crowd of 250 at 6 Belmont Avenue (Chris Barrett). Under the hammer over $6,260,000. Volcano – 4 bidders.

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Camberwell, 95 Broadway (Richard Earle) – Under the Hammer $4,020,000, 4 bidders

Armadale, 3 Alleyne Avenue (Lachie Fraser Smith) – Under the Hammer (undisc. mid $3m), 3 bidders

Armadale, 4 Mercer Road (Justin Long) – Under the Hammer $3,512,500, 3 bidders

Click here for all James Auction Reports

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Port Melbourne, 126 Heath Street (Greg Hocking) – Under the Hammer $3,705,000, 6 bidders

Surrey Hills, 39 York Street (James Tostevin) – Under the Hammer $2,676,000, 5 bidders

Hampton, 49 Service Street (Robin Parker) – Under the Hammer $1,740,000, 5 bidders

Click here for all James Auction Reports

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Kew, 6 Belmont Avenue – Passed In $6,260,000, 4 bidders. Sold Afterwards.

Armadale, 44 Hampden Road – Passed In $4,200,000, 0 bidders

Glen Iris, 16 Bourne Road – Passed In $3,650,000, 1 bidder. Sold Afterwards.

Click here for all James Auction Reports

Do you want to find one of our James Auction Reports dating back to 2009 – click here. We’ve bid on or bought at or covered in detail over 5650 Auctions

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Antony Woodley sells 25 Russell Street, Camberwell Under the Hammer $3,225,000, 3 bidders.

 Last Market News ’till February 2017

So Santa is upon us. Thank you to all the agents and principals from all the real estate agencies across Melbourne – we may be on different sides, but we are never interfered with as we report auctions – never asked to leave (even when the result is unflattering) and never not guided to where results may be.

So thank you to Al Craig, Steven Abbott and Andrew McCann, Michael Gibson and Ross Savas, Jack Bongiorno and James Connell, Jeremy Fox, Campbell Cooney, Peter Kennett and David Hart, Rob Vickers-Willis, Bill Stavrakis and Phillip Kingston, David Wood and Geoff Cayzer, Nick Johnstone, Tim Heavyside, Elliot Gill and Peter Perrignon and the many other agents and agency principals who help us and agree the public should be informed.

Thank you to all at James who report each week and help us put it together – Hugh, Rhi, Simone(s), Jamie, Phil, Mark, Chris, Gina, Kathy, Val, Catherine, Sara, Bridget and Josh. And to our wonderful editors for the year Nic (great job) and you too Randall (great job) – thank you both very much.

And finally, thank you to our 10,000-plus readers for your support and for coming up to say hello at auctions or OFI’s – thank you to our clients, who without you we wouldn’t exist and thank you to those who refer us clients and our key architects, builders, lawyers and town planner contacts – James, Dennis, Rebecca, Henry and a lot, lot more.

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Reflective of the sombre mood at 6 Missouri, Brighton which passed in with no bidders at $2,000,000. Maybe these guys needed a Powerlift. Our photo of the year by Val Smith.

The story for many buyers in 2016. Reflective of the sombre mood at 6 Missouri, Brighton which passed in with no bidders at $2,000,000. Maybe these guys needed a Powerlift. Our photo of the year by Val Smith.

Summary of the year that was 2016

1. It was low stock all the way through 2016. This was the singular biggest story of the year – and in our opinion this is the trend of the future. Many buyers think it will change and you don’t need sophisticated strategies to buy well; but they also probably don’t believe in climate change either.

With immigration, population and changing community attitudes to buying and holding (ALL DEMAND) – as well as less land near private schools, shops and Inner Melbourne trains (SUPPLY) fewer homebuying opportunities per buyer is the way of the future. You should consider getting professional help.

2. Despite the incredibly negative AND wrong reports by mainstream media at the beginning of the year – we have now had our fifth bull market year in a row since October 2012 (when the latest market surge started) and we have seen our 12th from 16 positive years since the new millennium.

3. The market at the really has changed – it’s away from under the hammer in almost all months except for October/November. Only 18 of the first 100 sales over $4 million in Toorak, Brighton and Hawthorn in 2016 were under the hammer – 82 were off market, before or after auction, private sale, EOI etc.

4. The Asian market left and returned - left (August 2015) on a hiatus due to uncertainty around FIRB, immigration and stamp duty – and then returned (post Easter 2016) in force, to compete again big time.

5. Finished the year 2016 very strongly – in particular on land in the 3 jewels (Hawthorn, Toorak and Brighton) – land is back like gold again – which is a reflection of Asian and Australian Asians re-entering the market in the second half of 2016, in our opinion as strongly as the first half of 2015.

2016 James Marketnews Highlights

December 2015 - Started 2015 like a runaway train – finished 2015 like an express.  Click here for article

January 2016 – G’day 2016! The Peninsula, Melbourne OFI’s and James has started more positively than the newspaper headlines.  Click here for article 

Feb 20, 27 and Mar 5 We covered exactly 100 auctions and 80 sold with a Bidderman of 2.5 – WOW.

There really is “bugger all” (it’s a technical property term used by us sophisticated agents) quality stock on offer right now.

And with this change from Chinese nationals, with them missing in action (bidding wise – still solid numbers at OFI’s) we no longer have a driver at the front of the Melbourne market bus.

April – We’re back and the market is still in a forward gear, sans the 2015 Asian overdrive.  Click here for article

May – It is actually true that the Inner Melbourne Market is more affected by immigration than interest rates.  Click here for article

Some more big lifting att 11 Kasouka Road Camberwell against a vendor bid and a one bidder pass-in by the agents Tom Ryan and Richard Earle.

Some more big POWERLIFTING at 11 Kasouka Road Camberwell against a vendor bid and a one bidder pass-in by the agents Tom Ryan and Richard Earle. Runner Up photo of the year by Josh Lipshut.

The amount of money that is out there, is much larger than a decade ago, even a few years ago and is so significant (that in our opinion) we now have three distinct price markets:

Lower End  – which used to be sub $m – but now is $1m to $2m.

Middle Tier – which used to be either non-existent or say $2m – is now a clear separate $3m to $6m market.

Top End – which used to be $3m-plus but is now $7m to $10m and a fair bit more on some occasions.

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July - July has been fairly busy away from the auctions! Click here for article

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James Special Report Series on Off Markets

Article One: Click here for article 

Article Two: Click here for article 

Article Three: Click here for article 

August – The Asian Market returned in force. The market has started like a fire engine not a delivery truck.

Yes, we are a multi-cultural city and therefore it’s impossible for us to determine the exact nature of everybody’s citizenship on the fly at an auction – so what we are saying is, we are seeing stronger and more bidding from buyers with an Asian background in the here and now – more bidding than we did in the second half of last year and the first half of this year.

How long will this continue?

In the shorter term, who knows, but it appears the Asian market has already adjusted to the hurdles of restrictive bank lending, tougher FIRB and higher stamp duties. The Asian market feels like it is reinvigorating, maybe even reinventing and remains the most influential market segment this millennium – but it’s early days in this new almost (still bloody cold) post winter 2016 market.

We still fail to see what some economists keep saying in direct contravention to simple long term demand and supply laws; with regards to the longer term pricing of Melbourne’s inner city market. Sure, price will go up and down in the shorter term; but in the long term population is increasing (demand) and inner Melbourne home sites are decreasing (supply) which means price will go………. Of course a major change may occur, but the negative talk assumes that it will, we cannot see that evidence, so we are assuming it won’t, until proven otherwise (in the longer term).

August – Downsizers – New v Old – A clash of generations!

Young people are The New Downsizers – even before they’ve upsized.

Young people are the new downsizers in expectations, in mortgage commitments – $2m or $3m mortgages for many, are neither desirable nor manageable.

Many in the younger generation want to travel, to be free; they don’t want or can’t afford the material anchors, that huge homes and huge mortgages bring.

However, whilst they don’t want an impossible mortgage – they still want the groovy location or the location they grew up in; a car space and walk to the shops and train – all those things, that in the last decade have meant an increasingly bigger mortgage – enter the young downsizer concept.

James Special Report on Complicated Decision Making – 3

As James Buyer Advocates we are engaged by our clients to help them get what they want.

How do they do that in this complicated, information overloaded, emotion charged and distracting world?

It is the number 3.

Why?

I believe it’s a contemplative and wise number – it’s full of alternatives, but not too many – it can give a thinker or non thinker comfort as it allows them to move on without too much pressure.

In other words 3 pieces of information or 3 options at any one time, in a framework that bring on another 3 and another 3 until the desired outcome is achieved.

Click here for the article

James Special Report Series on Negotiations

Article One: Click here for article
Article Two: Click here for article
Article Three: Click here for article

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October – The Market is not all about the Auction: Click here for article 

Below are the first hundred sales in 2016, over $4,000,000 in Toorak, Hawthorn and Brighton from Government, ours and REIV data sources. Only 18 of the first 100 sales in 2016, above $4,000,000, were “under the hammer” auction sales. The reds below are the auction sales. We blurred them because private and off-market sales don’t ask to be public, in the way auction people and auction sales do.

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October  Have you been Powerlifted today?  Click here for article 

November  We’ve Got No Trumps Today: Click here for article

Toorak land breaks the $10,000 per sqm barrier at this 5 bidder, $9,020,000 auction with Warwick Anderson. 12 St Georges Road, Toorak. Warwick WOW!

November James Special Report Series on Beautiful Decisions: See Below

Josh Stirling and Christine Ford, who are maybe are a little bit weird, sold a home that is even more weird (but we, who are a lot weird, really liked it) – click on this picture or google address for our James Home Rating. 21-23 Thackeray St Elwood Under the Hammer $3,680,000, 3 bidders.

Josh Stirling and Christine Ford, who maybe are a little bit weird, sold a home that is even more weird (but we, who are a lot weird, really liked it). 21-23 Thackeray St, Elwood, Under the Hammer $3,680,000, 3 bidders. Third place photo of the year by Gina Kantzas.

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Welcome to the final in a our 3-part series on beautiful decisions.

A quick summary of Beautiful Decisions so far.

Article One: Understand there are beautiful decisions you can make. Click here

Article Two: A process of rigour that allows for beautiful decisions to be made by you. Click here

Article Three: Beautiful Decisions in under a minute and each one could make you a million dollars without any effort.

Three key steps to a beautiful decision:

1. What is it I really, really want? (Clarity)

2. Is this it – is this any good? (Assessment)

3. How much, how do I best get it? ()

Most of our clients, at the start, thought we were a 90% chance of losing and a 10% chance of making it and together we chose to focus 100% on the 10% (quote re-worked by us from premiership winning coach Luke Beveridge).

Source Wikipedia

Source Wikipedia

Beautiful Decision number one – Play Monopoly

When I was young I used to love playing Monopoly – it is such an instructive game on property and the main play that works for you, compound interest.

This is how real life Monopoly works.

You can make $70,000 a year for the rest of your life for nothing, except a beautiful decision – if you understand compound interest and buy one home a decade.

In 2010 you buy a home at $1,000,000 and you get $30,000 in rent – it costs you $50,000 to own the home in interest.

In 2020 your home is worth $2,000,000 and you get $60,000 in rent and hopefully you are still paying $50,000 in interest.

You go to the bank and you now buy another home at $2,000,000 and you get $60,000 in rent and it costs you $100,000 interest. You can do that because of your capital growth.

In 2030 you have a home that is worth $4,000,000 and you get $120,000 in rent and it costs you $50,000 in interest and you have a second home worth $4,000,000 with rent at $120,000 and interest at $100,000.

You go to bank and buy a third home at $4,000,000 and you get $120,000 in rent and it costs you $200,000 in interest but you also have a $90,000 surplus on the other two homes and so its costing you – well actually nothing – you are being paid $10,000 to hold three homes as they go up in value.

In 2030 you are holding $12,000,000 worth of homes for nothing.

And so in 2040 when you have $24,000,000 of homes, you either buy another home or you sell one of the homes for $8,000,000 – you pay off you debt and you have two homes left (two million dollars in todays money) for free or of course you can do nothing.

There are tax implications – and you can’t rent if you live in it and ………………… interest rates may change.

Hello – wake up – Negative Freddy – manage around that, as the home may go up a lot more (historically doubles every 7 to 8 years), rent may work for you better, you might get a work windfall, what about tax concessions and or ……..

By making a beautiful decision now, in 30 years time you have $2,000,000 in today’s money, in your pocket by doing absolutely nothing – except a beautiful decision.

Not enough, have to wait too long, what if……………

And that’s the rub isn’t it Blockheads – this doesn’t all happen in eight weeks and $2 million is not enough.

But think about it – if you were given nearly $70,000 annually, increasing in line with the cost of living, for the rest of your life, with almost no risk and all you did was make a beautiful decision today then would you……………….. most wouldn’t and most don’t.

You can make a million dollars in today’s money without lifting a hammer, depriving yourself of anything and you could travel the world for free and get all the Scotch or St Leonards school fees for free ……… all because you understand compounding interest and beautiful decisions.

Ain’t that the truth Jane and Ian, Jo and Jim, Lyn-Li and Graham.

The formula is only slightly different if you involve one home to live in – in the process.

Anna and Adam - understand compound interest and capital growth - we bought for them in 2004. Click here for their video.

Anna and Adam – understand compound interest and capital growth – we bought for them in 2004. Look on James Buyer Advocates Facebook or click here for their video.

Beautiful decision two – Gentrifying or Improving Suburbs

In the 1990s it was Albert Park. In the New Millenium we were buying in Yarraville and Sunshine and Burwood and Highett.

Even in 2015 we were still buying less than 5 km from the city under $2,000 per sqm for clients.

You can buy in the same suburb at 2/3 of the price.

You can buy in the next precinct at a 25% discount.

I feel you smiling David and Joanne.

Three tips to Gentrification (google it):

  1. Don’t be first in – you’re not that smart.
  2. Don’t be last in – you’re paying too much.
  3. Don’t buy over the median and don’t buy crap that you have to renovate too much as it always cost you more.

Beautiful Decision number three – Upscale on the Gap

We love it when the market goes off – there is that opportunity to close the gap on the homes above you and trade up well; especially if you are a doctor or somebody with a reliable income. So your $2m home today will be worth $1.8m on a market dip – but $5m home could dip to $3.8m – that’s how you make a million dollars – timing and some courage. Looking good now Marina and Malcolm, Alicia and Craig, Zara and Andrew, Karen and Bruce.

Beautiful Decision number four – Love of the home – Frank

One of my favourite guys Frank, who I miss deeply – loved the home he and his wife, Louise, bought and lived in. He absoluuuuuutely loved it – it was down at Rye backbeach – we bought it smart – he hired me after I beat him at auction on another place a long time ago – he paid a fair bit – but he was soooooo happy. We became friends. Life is short.

Source: Inspired Hygiene

Source: Inspired Hygiene

Beautiful Decision number five – Look from the In Out – not always from Out to get In. Look down, not always up and look sideways occasionally. Look behind, not always ahead.

Some of the best homes to live in, some of the nicest suburbs, some of the best coffee and just as close to the CBD is 50-75% the cost of what you are looking for now.

Oh Mal, you are bulltishing.

Really?

1. We bought a home recently in Toorak, less than 10 minutes from Lauriston under $2,500,000 – ready to move in and on its own land. Look sideways.

2. We bought a home and land with a tennis court near Camberwell Junction under $3.5 million – when the client’s budget was $5m. Don’t always reach for the sky – look down as well.

3. How long does it take to get from Camberwell or Kew to Scotch in peak time – 30 minutes? How long is the trip from Richmond? 10 minutes going against the traffic and there are homes at $2 million. Look In to Out not always Out to In.

4. We recently bought a home – that we recorded was for sale two years ago, but didn’t sell and we followed up off market. Look back not always forward.

Hat’s off to Jayne and Jason, Helen and Richard, Joel and Esther, Trudie and Mark.

Beautiful Decision number six – Period beats New

Wanting the right home – land plus build is for the birds right now, unless that is what you really, really want to do. $4,000,000 plus $2,000,000 build on land without overlays versus $3,500,000 plus $1,000,000 reno on land with heritage.

Talk about a beautiful decision and even better in 10 years time when the $6,000,000 newbie grows to $9,000,000 and the $4,500,000 period home grows to $10,000,000.

On those numbers who are the real Blockheads! 50% growth with higher mortgages versus 100% growth, lower mortgages, free world travel and free school fees – whilst in all likelihood being closer to where you want to be. Like your work Simone and Ben.

Beautiful Decision number seven – Don’t

A lot of the help we give clients is don’t. D-O-N-T.

Don’t sell now.

Don’t buy this one.

Don’t overcapitalise and then sell soon after.

Don’t make a big mistake.

Just Don’t. Good move Kerrie and Michael.

Every time you move it’s 10% – on a $3 million home that is $300,000 tax free – just gone. Every time you buy a home, that doesn’t work for you it’s $300,000 to sell and rebuy and every time you hold onto a goodie – well that’s probably a million dollars in you pocket – especially if you don’t buy an apartment or an off the plan or ……………. there is another $ 1 million by simply …… Don’t make big mistakes!

Speaking of apartments – which we love and buy – but not as you build your wealth.

Tell me why it makes sense to buy an apartment that costs $18,000 per sqm when land is $6,000 per sqm and building a home is $5,000 per sqm. What am I missing?

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One more, D-O-N-T keep repeating the same mistakes – change your mindset, hire a Buyer Advocate and don’t give up. Well done Liz and Henk, Alec and Shirl, Alicia and Shaun.

Beautiful Decision number eight – $1,000,000 in two months

Numbers count. We recently bought a home at $3,700,000 and we had $4,500,000. We may have paid $4,500,000 but the agent refused to deal with us beforehand on three occasions – wouldn’t even allow us to talk – despite our client instructing us to offer. So our client is $800,000 better off and the agent’s client is $800,000 worse off.

Now, if those numbers were repeated on the seller buying, but in reverse meaning the seller now paid $4,500,000 – when they could have paid $3,800,000 – then that is $1,600,000 because they received poor advice from others or most commonly poor advice from themselves.

Now, if you want me to confuse you a bit – add to this, that if the original buyer (our client) had of sold for $4,500,000 instead of $3,700,000 – they would be $1,600,000 better off than they could have been without the good advice.

Is that a $3,200,000 difference in three months between the two – or am I getting confused or exaggerating?

WOW, that’s a lot of mortgage and………. imagine if this was also a person, who played Monopoly and bought period instead of new and…………………

Numbers do count towards happiness.

Source: Mindblowing facts

Source: Mindblowing facts

Beautiful Decision number nine – Happy Wife, Happy Life

Please excuse me ladies while I’m politically incorrect for us blokes.

For the most part women nest and women control the happiness of the home and women make many of the real homebuying decisions (over 90% in our opinion).

Understand this and you will buy in the right position, the right feeling home and you’ll increase your chances of staying happily married.

You can maybe ask for a garage, try and manage the process and…….. just pay the price, buddy – it’s easier.

Look, we are getting better at the cricket again and it’s almost Boxing Day – enjoy a coldie…… move on.

As one of my favourite $13m-plus clients learnt and often correctly repeated – Happy wife, happy life. Evening John!

Hopefully it won’t cost you $13m.

Beautiful Decision number ten – James Buyer Advocates and timing

Homes have gone up 15% to 30% in the last two years and a Buyer Advocate costs you 1% to 2% – if they can suggest a better alternative and buy for you now – even at “full price” plus fee – then you may be in front by a tad. Well done Alan – despite the mental difficulty you had in coughing up our fee, you seem to be well in front – you were great to work with and we both benefited from our mutual association – as it should be, or there is no charge from us at James.

James Off Market Website

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Client Story video featuring Kerrie & Michael

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 Market Insight November 2016 Update Video

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See you next year. James Buyer Advocates is still out there buying for clients up till Christmas.

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