The word from the street – what is really going on?

Market News banner

Paul Richards reflecting what we all are thinking - what is happening? 16 Norfolk Surrey Hills - one bidder - sells afterwards over $3,100,000

Paul Richards reflecting what we all are thinking – what is happening? 16 Norfolk, Surrey Hills – one bidder – sells afterwards over $3,100,000. We like Paul at James, straight talker!

Happy Mothers Day to all our Mums – the real home decision makers.

This week in James Market News:

  1. Market Commentary – Three-week Challenge of 100 reported auctions
  2. Auction Action – 33 auction results
  3. Inside James – buy-then-sell service and Mal’s auction observations

Market Commentary Banner
13.5.17

135

At 6.00pm Saturday, the overall market results were solid, if you just look at the Clearance Rate of 82% on the 33 $M+ auctions we covered.

However, if you look a little deeper, is down from the standard 2.7 bidders per auction to 2.2 – 36% of all auctions were ducks or lone rangers, meaning one bidder or less. If this continues, then in our opinion, we are moving from a rising to a more steadying market.

However, before we announce that we are off the step-up and onto a plateau on the Inner Melbourne’s current price staircase (October 2012 – now), let’s see how the next two weeks go in the James Big 100 Auction test (see below).

Oh Mal, you are just making excuses – you’re talking the market up.

No – Look at the stats!

Today we recorded over 2 for Bidderman, on substantial at auction, with a Clearance Rate of 82%. In a market that has been hit by a wave of negative headlines AND in a month that traditionally eases more than most other months AND in a week that wasn’t all that exciting (quality wise) AND with good stock levels, the market still produced very strong figures today.

And hey, we didn’t squib by choosing the goodies – read the summaries on the 6 auctions I personally covered in Inside James. We as a group covered a lot of B graders as well, mostly over $2m (only one below $1.5m, because I had a vested interest) and from Kew to Brighton, Toorak to Malvern East (wide cross section).

Overall we see the market as strong. On-the-ground the market is telling us, at this stage, prices are more likely to rise than fall, however Bidderman was down today, let’s monitor that.

Iain Carmichael so eloquently put it “Still lifting gently off the back of relatively tight at the Top End.”

50 Nicholson Street, South Yarra

50 Nicholson Street, South Yarra Passed In $2,700,000, 0 bidders

In this issue, we bring the first of our three reports on what is really happening in the Inner Melbourne market.

Is it all doom and gloom as per Citibank’s Floppy D graph, where they predict an impending fall based on strong fundamentals?

Does the Chris Richardson pre-budget statement “Young, Don’t buy now” hold more water than a cooking sieve?

Is The Australian’s assertion of a market fall, based on the internet click thru rate dropping, during holiday weeks and weekends, off the mark or are they really smarter than we gave them credit for?

In other words is the market weakening substantially or is it a case of the young people’s affordability issue (which is very real) morphing itself into the market is dangerous/falling (which we think is baloney, right here and now) across the mainstream media headlines. Either way we are going to measure the market for real.

Stay Tuned –  over the next three weeks –  as we report direct from the trenches, the streets and the auction tarmac on what is really going on in the Inner Melbourne Market.

The Three Week May Challenge.

Bidders per auction, combined with good stock levels, combined with on homes at auction.

These are three stats (across a wide sample) that cannot be manipulated by an “expert or journalist” looking at a new set of tea leaves and seeing the world in a different way, just for a humdinger headline or press release.

So it’s very simple, we at James Buyer Advocates will cover and report back the results on 100 randomly chosen auctions, over $1 million in Inner East and on 13th, (today) 20th and 27th May.

The two disclaimers.

Expect a slight drop in May as May and October are the year’s most fluid months due to big stock numbers. A small seasonal drop in clearances and Bidderman is to be expected.

With new underquoting laws in play, it is possible that the market will operate marginally differently during this May transition month.

And gee, vendors may be getting ahead of themselves – but that always happens in a strong market – for once we will be cheering the agents on.

The Market Measurements

Rising Market: Over 70% Clearance Rate (auctions bought versus auctions conducted) with over 2 Bidderman (bidders per auction), on auction numbers over 100 per weekend in Inner Melbourne.

Steady Market: Between 60 and 70% Clearance Rate, bidders below 2 per auction on auction numbers over 100 per weekend in Inner Melbourne – which we are happy to accept is an easing market, off solid highs of the last few years.

Falling Market: Below 60% Clearance Rate, bidders below 1.5 per auction, on auction numbers over 100 per weekend in Inner Melbourne.

These definitions are exactly the same market definitions as we used last year, when we last carried out this exercise on such a scale, but that was in February, not May.

These definitions are on our James dials that you see every week (since 2008).

Target

Our Rising “target” is 70 homes actually transacted on the three Saturdays of the 100 auctions AND we have over 200 bidders at those same 100 auctions.

If we have less than above, then the market is easing and if we have a lot less; eg less than 120 bidders and less than 60 homes sell on the three days, then we are definitely in a falling market.

Meringue Pie

At this stage I wanted to put in a Lou Richards (Go Pies) stunt challenge, in dedication of the great man and say if we didn’t get past 70 Clearance rate or 200 bidders in the 100 auction 3 week challenge,  then I would sit in the middle of Glenferrie Road or Toorak Road or Church St and take a meringue pie in the face from all and sundry. But those far more mature than myself said no I can’t do that, as it would detract from the importance of what we are doing here.

week1week2week3

Market Fundamentals

Local Confidence () – feels solid to us. Bidderman 2.7 (ish) all year and all last year – granted not today.

Rising Population (demand) –  1000 per week.

Negative gearing (demand) – as predicted, zippo substantial, Budgetary changes that will affect the market.

No more (supply) – yep, some in Maribyrnong (6000 – how many weeks, yes weeks of rising population will that cover) – but none Inner East or Bayside.

Immigration – skilled (demand). Did I hear during the week on radio, that Melbourne ’s biggest employer is the overseas student market? Please don’t quote me – I may have misheard.

What to Buy - Good PPP’s

* Good (Property)

* Workable floor plan – in good condition, with wet areas in right place and some room to grow;  but can/should be cosmetically unappealing and really recommend good light (Property)

* Market price close to median for Market Type (Price)

* Near a train, Inner over Outer (Position)

* And you buy only what you really, really want AND can afford AND with a financial buffer for / job/circumstance changes. For youngies, yep one less trip OS (actually na, do the trip, life is short) or avo on toast or new car is worth it, for long term family stability and happiness.

Future

Of course the market will drop at some stage, that is what markets do – they rise and fall on the tide of opinion, which is driven by demand and supply fundamentals. Our point and what we are saying to our buyers, is we don’t think the market is doing what the newspapers headlines are implying now (which falsely affects buying/selling strategies) AND so what, isn’t buying for the long term, (when you can) a better strategy than trying to pick the short term market?

I was out there at 6 auctions today as the James Buyer Advocates group covered 33 – on our way to the three week James 100 auctions challenge. Can I ask how many The Australian, The Age, Citibank, Access Economics, other headline writers and your property advisor or you actually covered and attended?

100 Coverage Guidelines

We promised the most colourless James Market News you have seen all year – limited opinion, very few editorial paragraphs, just fact after fact after fact. Very limited edits on our auction reporting and we do not tell our reporters what to write – just report the facts as you see them, is our mantra. All auctions were randomly chosen in advance on Friday, by office staff (allowing for reporters timetables) – the only guidance – higher end and give a cross section of A, B and C graders, spread across our geographical area of Bayside and Inner East. We do not cherry-pick good or bad results.

So here is what’s happening, here are the real stories, not the fake news headlines.

Towers

Auction Action

27 Thanet Ave, Malvern 5

The General – Iain Carmichael sold 27 Thanet Ave, Malvern After Auction $3,175,000, 1 bidder.

BidderBuzz banner

Port Melbourne, 49 Edwards Avenue sold Under the Hammer $1,995,000, 7 bidders

Kew, 8 Mawson Street (James Tostevin) sold Under the Hammer $4,515,000, 5 bidders

Surrey Hills, 29 Weybridge Street (Doug McLauchlan) sold Under the Hammer $2,360,000, 4 bidders

South Melbourne, 27 Lyell Street (Marty Fox) sold Under the Hammer $1,820,000, 4 bidders

Brighton, 39 Warleigh Grove (Julian Augustini) sold Under the Hammer $1,350,000, 4 bidders

For all James Auction Reports

Stonnington Purple banner

66 Claremont Ave, Malvern

How are you Mr Smooth? Andrew Hayne sells 66 Claremont Ave, Malvern After Auction $5,025,000, 3 bidders.

Toorak, 3 Benson Avenue (Gowan Stubbings) sold Under the Hammer $6,560,000, 3 bidders

Toorak, 177 Kooyong Road (Jeremy Fox) sold After Auction $5,870,000, 1 bidder

Toorak, 241 Kooyong Road (Andrew Hayne) sold After Auction $4,370,000, 3 bidders

For all James Auction Reports

Bayside Blue Banner

12 Harold Street

12 Harold Street, Sandringham sells Under the Hammer $2,955,000, 2 bidders – Stephen Tickell. The old fella (well he’s not that old) is still banging out some great results)

Sandringham, 55 Fernhill Road (Stephen Tickell) Under the Hammer $3,000,010, 2 bidders

Sandringham, 12 Harold Street (Stephen Tickell) Under the Hammer $2,955,000, 2 bidders

Brighton East, 1 Curzon Street (Bert Geraerts) Under the Hammer $1,975,000, 2 bidders

For all James Auction Reports

Inner East green banner

16 Church St, Canterbury

Marcus Chiminello sells 16 Church Street, Canterbury Under the Hammer $2,425,000, 4 bidders. Marcus give me a ring and I will talk to you about that beard – can I suggest a hat instead!

Kew, 8 Mawson Street (James Tostevin) Under the Hammer $4,515,000, 5 bidders

Camberwell, 6 Kingsley Street (James Tostevin) Under the Hammer $3,550,000, 3 bidders

Canterbury, 16 Church Street (Marcus Chiminello) sold Under the Hammer $2,425,000, 4 bidders

For all James Auction Reports

biggest pass ins

Kew, 17 Wimba Avenue Passed In $5,800,000, 2 bidders

Surrey Hills, 16 Norfolk Road Passed In $3,110,000, 1 bidder

South Yarra, 50 Nicholson Street Passed In $2,700,000, 0 bidders

For all James Auction Reports

Inside James

Something a bit different today;

1. A report on on our buy-then-sell and sell-then-buy service

2. Mal attends six auctions as an observer – no bidding.

Buy then sell

Earlier this year we bought for two clients, who then needed to sell their homes and wanted our guidance, so we organised the selling process on their behalf. This is part of the Buy/Sell service and its a common request.

Our clients appointed James Tostevin and Kate Strickland to sell their family homes – both in the $2m range.

At auction today (and not included in our May 100 auction stats) both had very strong results with 4 bidders in Boroondara and 3 bidders in Bayside.

Both were quoted within the guidelines that applied and both achieved over the quote range – one well over.

So Bidderman on the two we were helping sell was 3.5.

Thank you to Kate & James who each donated $5,000 from their own commission to Launch Housing / Hanover Private Rental Initiative.  That’s $10,000 to preventing homelessness and no extra commission to our clients. Tony Keenan, more cheques are almost in the mail – you do a great job!

We do not take a fee, we only represent buyers – so our recommendation of these agents for these two homes, was based on our perceptions of merit for this location and home type and personality of sellers.

Gina

Gina2

Anyway back to what I saw today in the market place personally.

Mal’s observations at six auctions

177 Kooyong Road, Toorak – Jeremy Fox  – 1 bidder and sold after for $5.87m. Had been on the market an absolute eternity and sold for less than it was bought for a number of years ago. Didn’t really tell me anything about the market – accept one person still had a lot confidence in a major, major project and that Jeremy Fox is a hard worker. B grader due to work, overlay and risk in an A grade location with A grade bones on an A grade block – does that make sense?.

39 Warleigh Grove, Brighton – Julian Augustini – 4 bidders and 20% over the reserve, which was a fair one. A strong auction at $1,350,000 for entry level Brighton. I learnt there was real depth in this market for entry level homebuyers/investors as this home was a C grader to B grader, as you don’t own the land outright. Declaration: I live in the street, so may have a vested interest in talking up the result.

70 Paxton Street, Malvern East – Gowan Stubbings – 2 bidders and passed in at $2,897,500 and sold afterwards. I thought it would get just over $3,000,000 – I believe it got just under. A good feeling family home – well bought! Surprised me a bit and no reflection on the agents (they are some of the best), I thought it would go a tad stronger.  What did I learn about the market from this? I saw this as an A grader, even though it was well over Burke Road at $3m and I believe I was a little over on price in my initial thoughts.

17 Wimba Avenue, Kew – Scott Patterson –  big land and tennis court – 2 bidders and passed in at $5,800,000 and sold afterwards for what was believed to be a very big powerlift. Wow, well over $6m – this is a good result for that. What did I learn from this – that Scott Patterson and Tim Picken know how to “powerlift” in a post auction negotiation.

8 Mawson Street, Kew – James Tostevin – average spec home on 800 sqm of good Sackville land – sold for $4,515,000 with 5 bidders. Strong auction. What I learnt from this about the market is what I already knew. That quality land with a house that Chinese people and/or Australians of Chinese heritage love, go very deep in terms of demand on this sort of offering. A grade land and B/C grade home. Well organised by Robert and Mike. Sold 10 years ago for $1.5m approx – $1m for new home – 100% increase in land at least and circa $500k profit on top of that – smart!

241 Kooyong Road, Toorak – Andrew Hayne – a drawn out auction – almost painful (the bidding, not the auctioneer) – but there were 3 bidders. Passed in at $4,215,000 and sold afterwards just under $4.4m. The right money – good uplift afterwards. What did I learn from this – road noise is an issue in any market. B grader.

So on the 6 homes I went to today, they all sold – 3 very strongly and 3 a little bit meekly.

Clearance rate was 100%  and Bidderman was a tad under 3.

These were not all great homes and in fact, they were all difficult homes in some way – all six of them were borderline B graders to A graders, rather than straight A graders.

Opinion – Is the market going up or down?

During my travels today,  I asked this simple question of the auctioneers and agents I encountered and they couldn’t answer steady – they had to choose up or down only;

Jeremy Fox – up

James Tostevin – up

Julian Augustini – up

Andrew Boyce – up

Ross Savas – up

Gowan Stubbings – up

Darren Lewenberg – up

Tim Picken – up

Scott Patterson – up

Andrew Hayne – up

Fiona Ansell-Jones – up

Fiona Counsel – up

Justin Long – up

Michael Paproth – up

What is the market doing? Always stay tuned to James Market News…

Gina Off Market


Tags: , , , , , , , , , , , , ,

Be with James

Would you like to talk to us about finding or negotiating on your next home?
We buy 100 homes for our clients every year.
We buy Inner East and Bayside over $1m.
View more MasterClass Articles

Inside James Market News