We’ve got No Trumps today

There is some fight in this old dog. 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. There is some fight in this old dog. land breaks the $10,000 per sqm barrier at this 5 bidder, $9,020,000 auction with Warwick Anderson. 12 St Georges Road, . Warwick WOW.

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Its 6.00pm Saturday and the James Clearance rate for $M+ Inner Melbourne is 88% on the 26 Auctions we covered today.

James Bidderman, that is, bidders per auction, is 2.8.

Super Strong.

Big numbers of bought befores and look at the Volcanoes 48%. That means every second auction had 4 or more bidders and how about this; there were 15 bidders today in Toorak/South Yarra at an average of $6,000,000 of which 12 didn’t buy.

So we can safely say we’ve got No Trumps today.

 

Toorak land breaks the barrier of $10,000 per sqm at a 5 bidder, $9,020,000 auction.

Let’s put that in perspective: Toorak land – yes it is AAA – is now similar in price to beachfront, Domain and Middle Park.

More perspective: 4 years ago Toorak land was around 60% of the $ per sqm rate of Brighton beachfront and Middle Park premium. There was a $5,000 to $8,000 per sqm differential.

Admittedly, today was a super hot auction and not all Toorak land is at this price – but WOW, WOW, WOW. Warwick WOW! (He’s an avid James Market News reader.)

Toorak, Brighton and Hawthorn are seemingly ascending back to where they think they belong – well ahead of the Balwyns, Burwoods and the Bentleighs – the time seems to have have passed for those simple suburb changeovers – where they were almost like for like a few years ago.

 

He's got all the moves has Kaine Lanyon. And he danced with 7 at 5 Tiuna Grove Elwood to $3,572,000 - under the hammer

He’s got all the moves has Kaine Lanyon. And he danced with 7 at 5 Tiuna Grove, Elwood to $3,572,000 – under the hammer.

So where is the market at Post ‘Melbourne Cup?

Some people involved in buying and selling have a degree of nervousness right now.

For sellers, the Trump election has raised some questions and those questions won’t start to get answers for 6 months to 12 months – so uncertainty may creep in.

We saw uncertainty at 9/11 time, but our Melbourne was not as internationalised and it had little affect on our markets.

We saw uncertainty in the Chinese market last year as the rules around FIRB and stamp duty and other taxes became unclear. The Top End market eased, as Chinese buyers pulled back. Once it became clear that those taxes had to be paid and/or the Chinese market had worked out ways around these issues, the Top End market strengthened again this year – admittedly not to the level of fervour of early 2015.

Will China be affected by Trump and more to the point, if yes, what effects will that have here on our Top End?

Significant is my answer – if the effect is significant on Chinese buyers and nobody else takes their place.

However, Trump, by default may encourage more money to be put into our market (in the short term) by Chinese people wanting to act sooner rather than later.

It could in fact be a mini surge as our Top End markets are still being influenced by Asian into them.

Trump is a big talker and a big spender – that seems to be his personality – so if he continues as he has, then possibly the next few months/years may be a boom before any bust of reality hits.

Trump will be a factor for a while in the minds of some (he is hard to forget) – how you deal with Trump will, in a large part be determined by how he sits in your mind.

Is there an opportunity to buy and your usual competing buyer has been Trumped?

Is there an opportunity to sell because you feel the future may be Trumpified?

Nobody really knows; but many are watching.

In my opinion, Trump is much like underquoting – say whatever you need to say to get a deal done and because it works, that means it’s okay. Who cares what damage you do along the way, because that’s business – you know business, that’s the thing where anything goes, if it’s profitable.

The only legitimate Trump issue from my perception is my lack of knowledge and understanding of how many Middle Americans are obviously hurting and to that I am willing to listen. If Trump can work – then good on him – I don’t agree with his methods, but I guess my opinion isn’t really worrying him at this stage.

We move on.

Big time POWERLIFTING post pass-in at 35 Northcote Road Armadale - John Bongiorno - 1 bidder.

Big time POWERLIFTING post pass-in at 35 Northcote Road, Armadale – John Bongiorno – 1 bidder.

Before Trump – eg last week – we were having more and more discussions with our buying clients around managing mild panic.

The mild panic related to wondering if the market was going to out-pace them.

Our answer was simple – No it won’t. It never does if you act in the shorter term.

Markets never move so fast for our clients, that those willing to act prudently are unable to buy.

Granted, you may have to make some adjustments in expectations and that you do through your PPP levers. However if you are on the ball, ready to go and realistic with your PPP’s (Price, Property, Position) – then you will be successful.

That was and still is our advice to our clients.

The people that have trouble in strong and rising markets, are those that don’t follow a process of rigour and/or don’t actually act or act poorly on impulse.

That process of rigour involves:

  1. What do I really, really want?
  2. Is this it? Is this any good?
  3. How do I best get it?

If this, or a similar process, ceases to become your guiding light as a buyer, then in all likelihood you are into a NOISE environment.

Our series on noise can found in our Masterclass Articles by clicking here.

We have seen a great deal of noise this week. The antivenin for noise and panic are sound buying processes with rigour.

Instead of looking at each property in panic and desperation, look at:

  1. What do I really, really want?
  2. Is this it? Is this any good?
  3. How do I best get it?

If you are going after a few and getting close – then by logic you are in the mix.

If you are not getting close regularly, then that is not actually the market –  your PPP’s are out of whack with reality and something needs to be adjusted. Eg Smaller land or further out or different property type or yep, more money.

Once your adjustments see you back competing, then return to the process of rigour:

  1. What do I really, really want?
  2. Is this it? Is this any good?
  3. How do I best get it?

Do that, stay active, act when appropriate and no market will ever run past you.

Aaaaand CUT. That's a wrap Paul. Land only at 23 Grange Road Kew with Paul Caine sells under the hammer for $4,850,000 or exactly $5,000 per square metre. 3 bidders.

Aaaaand CUT! That’s a wrap Paul. Land only at 23 Grange Road, Kew with Paul Caine sells under the hammer for $4,850,000 or exactly $5,000 per square metre. 3 bidders.

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TOORAK, 12 ST GEORGES ROAD, Warwick Anderson, Under Hammer, $9,020,000, 5 bidders

TOORAK, 9 GLYNDEBOURNE AVENUE, Mark Wridgway, Under Hammer, $6,040,000, 4 bidders

SOUTH YARRA, 18 AVOCA STREET, Paul Castran, Under Hammer, $5,700,000 , 6 bidders

To view all James auctions click here.

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ELWOOD, 5 TIUNA GROVE, Kaine Lanyon, Under Hammer, $3,572,000, 7 bidders

BRIGHTON EAST, 50 LUCAS STREET, Andrew Campbell, Under Hammer, $2,550,000, 5 bidders

HAWTHORN, 16 PINE STREET, Hamish Tostevin, Under Hammer, $1,712,000, 5 bidders

To view all James auctions click here.

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BRIGHTON, 9 SUSSEX STREET, passed in on a vendor bid at $4,700,000, 1 bidder.

ARMADALE, 35 NORTHCOTE ROAD, passed in on a vendor bid, but another huge power lift afterwards saw it sold sold undisclosed.

HAWTHORN, 23 YORK STREET, passed in, 2 bidders at $1,900,000.

To view all James auctions click here.

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Beautiful Decisions – Buy/Sell

Welcome to our final series for the year – over the next three weeks we will try to highlight just how much is added to your life with beautiful decisions.

This final 2016 series is about getting the most out of buying and selling a home via a beautiful decision.

We are splitting the series into three parts:

1.     Understanding there are beautiful decisions you can make.

2.     A process of rigour that allows for beautiful decisions to be made by you.

3.     Practically, how that all may look and work for you.

A beautiful decision is one that allows you to live your life with meaning – it allows time as we Anglo’s say to smell the roses and as we Orientals say to live in the moment – as we Christians/Muslims/Jews say to be closer to God and as we Buddhists/Taoists/Hindus say to find the way.

A beautiful decision comes from within, by dealing with the outside in a beautiful way.

Lost you already? Load of crap – just show me the money?

Buying and selling a home in a beautiful manner is about seeing the money and having a meaningful life; whilst managing some of the “mistakes”, we all will inevitably make along the way.

Personally, in my life I have got so many things “wrong” – in business you may say I’m a dunce – why only this year I made an internal business decision that cost near on $250,000, produced no income and caused some stress to me and to my co-workers, who I care about.  Unfortunately it’s part of my life’s learning process, as generally in certain aspects, I’m a slow learner.

From time to time I have parted with work and “life” partners, due in part to my inability to communicate on levels satisfactory to them.

At times I have felt under stress. However, basically I am a very happy person – well I feel I am.

As I live in Melbourne, there have been three key vehicles that have allowed me to be happy, to basically do whatever I wanted to do – outside a loving family, highly skilled staff and some sensational clients.

Those three things for me, have been:

1.     My ability to think and to feel and to do. Like any Grammar School boy with European ancestry, most of my life has been within a relatively rigid logic/scientific based brain framework – I have from time to time been able to think and make decisions instinctively using a intuitive/feelings based framework – and I am getting better.

2.     Business. If there is one thing I would encourage a lot of younger people to do it’s don’t get a degree and follow a life of 9-5, unless that is what you really, really want to do. Instead I would encourage a life of continuous real learning, real education, real knowledge building. There are many paths to a meaningful life and ladder climbers and non-climbers can all be happy.

3.     Understand how property works and use it to make it, make your life better.

And so point 3 – the point of this 3 part series, understand how property can make your life better.

Property is “the asset” of immense in monetary, emotional and spiritual terms.

Understand property and you could well find a healthier connection with money, a stronger connection with your family and a greater freedom in your relationship with yourself.

Understanding property and you buy and sell in a beautiful manner – in other words make beautiful decisions.

Geez, Mal you are taking your time in getting to the point. Am I?

Or Am I trying to encourage lifting your eyes from a tidbit, that gives you a quick thrill at the next auction – to a place, a focus and a vision that will set you right for life – even allowing for a few “mistakes”.

Beautiful decisions I have found rarely come from reading a “how to” article one day and applying the next.

Beautiful decisions come from deeper than that.

Let’s get more personal. And I am doing so to help, not to boast (ask my , I have little to boast of and a lot to be humble about). My life is not one of incredible success in what much of society labels as success these days.

There is nothing special about me in terms of rags to riches.

My main difference from the norm, is that I say, and I actually am, for the most part very happy – and it is property that has been a conduit, not the only one, but a key one.

In the mid 80’s I got divorced.

Sold the home we had only just bought in Ferny Creek and successfully negotiated a $14,000 loss on a $46,000 purchase. That takes some doing.

Two years later while living in East Doncaster by myself in a rented home, my mother said, “son you useless human being, you should buy the home you are living in and here is $15,000 for the deposit”.

I paid $66,000. A year or so later somebody offered me around $130,000 and I sold.

The beautiful decision was selling Ferny Creek – it was always going to be a loser and so good to have moved on. My first mistake in property was selling East Doncaster, instead of leveraging it.

Around the mid 90’s I had married again and on the cusp of having children, a property opportunity came up in Brighton.

It was unexpected, but I had been reading some property books – Jan Somers (Australian teacher and property writer – the matriarch to all those books on zero to a gazillon homes in 3.6 seconds) and so we as a family shelled out no money down and took over a bank loan of $350,000.

The property was cash flow positive from day one. That deal was offered to two others as well, but they couldn’t see the value.

Over the next few years we leveraged the property and bought more homes, some of which we gave to family members and ten years later we sold the Brighton investment for $2,250,000.

I sold it poorly (from a financial point of view) – Why? Well, because I sold it.

10 years later, whilst still being cash flow positive it fetched $4.5m in an auction sale.

I pushed for the sale because I was getting concerned about debt levels and I just wanted to see a bank account that had money in it.

Along the way I successfully traversed not getting sucked into off-the-plans, tech bubble and mezzanine financing and…………Henry Kaye (great showman with a good story, just left his good story in the seminar room). I recently ran into a Henry Kaye associate, hidden in the bushes of life – not good people.

So we get to the GFC – the family has splurged on renovations and bitten off more than we could chew or in truth what I felt comfortable with, as I was being spooked by the noise of world doom and gloom.

So in another brilliant property move I sold a home in Durrant Street, Brighton for around $800,000. The home was worth $1,200,000 in 2007 and $1,200,000 in 2009 – but I brilliantly moved it on in 2008 and sold for $800,000 – a bit less than double what we had paid for it less than 10 years before – but stamp duty, CGT, fees – nope, not that smart.

There were other sales and purchases along the way and occasionally I got it right as I feel property has covered off on;

3 lots of private school fees.

A couple more business mistakes.

World travel for family to Tanzania, New York, South America, Europe, India, Vietnam and …………………

A stable family life for our extended family……….

Supporting family members into their own homes……

Property will also be a way of helping our children into their homes in the future, just like my mother and father helped me in the mid 80’s.

Part of a very meaningful life, for me, so far.

Butter wouldn't melt in G-E-R-A-L-D's mouth, but it didn't stop him doing some serious POWERLIFTING with 1 bidder at 40 Studley Avenue KEW.

Butter wouldn’t melt in G-E-R-A-L-D’s mouth, but it didn’t stop him doing some serious POWERLIFTING with 1 bidder at 40 Studley Avenue, KEW.

I reckon I’m in the mid to higher range for beautiful decisions on the property scale. I’m not talking about property developers or serial renovators – I haven’t lifted a hammer in anger in my life or bought an extra letterbox for any of the addresses I’ve owned. I am just talking about passive, family ownership.

At the lower end in property happiness are the many who make decisions that are less than beautiful – they buy the wrong type of homes, in the wrong positions – they build mortgages, they constantly swap homes, incurring fees and they buy for too much and they sell for too little – all the time.

They are unhappy, they are striving for something “more”, something “better”. They are unknowledgeable (about property) and they are impatient.

Also at the lower end are those frozen in fear of making decisions. For most of us good property decisions seem to happen around once or twice a decade. However, when those opportunities come up, many people freeze – they are too scared to make a leap of faith for fear of error.

I have found that if the PPP (Price, Property and Position) fundamentals and the emotional connections are right, then around the edges of price is irrelevant. Edges of price are not beautiful decisions – beautiful decisions revolve around the bigger picture and to be beautiful you eventually have to make a decision – otherwise inaction becomes your decision and yes that can be beautiful in relation to a specific instance, but as a constant strategy, unless you’ve inherited well, inaction does not work.

Then there is a minority at the higher end – they make beautiful decisions on property.

I’m not saying money is the only determining factor on property.

Is an unhappy person in a $20,000,000 Toorak mansion with $14,000,000 debt a better property person that Mr and Mrs with 3 kids in on 700 sqm and no debt, valued at $2,900,000; having just got back from an around Australia family trip? I think not necessarily.

Smart and happy property people know clearly what it is they want, they don’t take excessive risks and no they don’t buy and sell all the time.

They could have 3 homes (saving them for children), maybe only 1 – no mortgage or reducing mortgages – they understand that the hard yards are best done in the 3-18 month decisions of a buy/sell, not the 10-15 years post decision and they know that getting 2 out of 3 right, means basically the hard yards in life are greatly reduced (if they so choose).

These sorts of people rarely sell and if they do, it’s not primarily to realise a profit (for profit’s sake), but to buy better or to enjoy the fruits of their previous beautiful decision(s).

To make and enjoy a beautiful decision – we think it’s important to firstly know that there are ones to make.

In our third week – we look at the wash around a beautiful buy/sell decision.

We see that on $3m homes – some will pay $2,800,000 and others will pay $3,400,000.

We see that some will sell their home for $2,700,000 and others will get $3,300,000.

Some will renovate wildly and some not at all.

and then we will watch as that $1,200,000 “profit” turns into $2,000,000 in 7 years.

That $2,000,000 then turns into $4,000,000 “tax free profit” in today’s money in the period of time it took to educate all the kids – all of which were paid for by your home (I mean correctly, your beautiful decision) – also paid for was your overseas travel and your ridiculously expensive new car and, hey, your significant donation to poverty and the homeless and ……….

Meanwhile the $0 Property man or woman remained battling with their second job, examining the insides of their superannuation fees and interest rate and fighting with the missus as to why they just can’t afford the holiday they want.

The first step in making a beautiful decision is understanding that they are there to be made. 

Until next week then,

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This week we launched our new Off-Market website (as the first part of our major website rebuild), with the two-fold idea of finding more homes for our clients and helping agents who take the trouble to bring off markets to us/our clients. We only give the addresses of off-markets to our clients, so if you wish to become a client or you have a family home to sell in Boroondara, Bayside and Stonnington over $2,000,000 then please contact our office on 9804 3133.

As with our opinions, all properties we advertise as off-market are real – we are just circumspect as to address, because sellers and agents do not want them identified.

More James Buyer Advocates outside the dots thinking, for our buying clients, in this difficult market for buyers – click here:  www.offmarket.com.au

As well, another initiative specific for our buying clients – personal letterbox drops for specific clients. If you are a seller please see this sample below of what you may see in your letterbox. We are always happy to look at buying family homes for our clients on 9804 3133.

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