Game Changer – Stonnington Council Destroys Auction

Wordonthestreet

At 6.00pm Saturday, the overall Inner Melbourne $2M+ market results:

Family Home Clearance Rate of 81% on the 36 Inner Melbourne $M+ auctions we covered.

Combined with James Bidderman (bidders per auction) @ 1.7 on lowish auction stock numbers.

Is the market on a turn? As we said last week, for the first time in a long while, the ingredients (overseas Asian buyers weakening in number?) may be there for a turn.

This week only continues our thinking along the lines of it may be – not ‘it is’ – just it ‘may be’.

Why do we think that?

Very simply – results.

We are seeing tight stock numbers, which should be holding bidding numbers up (it is, but only just) if the market was rocking along. New stock numbers for September are now noticeably increasing over the upcoming footy finals period – this will ask the question and the bidder numbers will answer it, about spring market strength.

The lower bidder numbers (Bidderman) are due to either a weakening market or a more discerning market – meaning what’s on offer, is not bringing the numbers out. This is the ‘may be’ for us, as the level of interest and the price gap is widening between A and C graders – a possible sign of an easing market.

Towards half the auctions we covered today were lones or ducks (one or no bidders.) By contrast, 1 in 4 or 25%, still went ballistic with four or more bidders – this is not clear a sign of anything (in the short term); as it can be either a falling or discerning A and C grader market. This is the lowest Bidderman we have recorded in a very long time – in part due to the huge number of bought before’s, where we only put one bidder against the result – if this continues as is, then we do have a falling market.

So bought before’s are increasing – all this ‘tell’ on the market, means right now, is that good agents and smart sellers are recognising and acting on a bird in the hand, is better than none or two in the bush.

This week’s ten bought before’s is the highest number we have ever recorded on this sized sample. Better than 1 in 4 (or 27%) of homes didn’t get tested at auction. Have you got the right buying strategy?

All of the above points to a gyrating market – is that a change or an anomaly?

I’m not that smart as to know yet.

What about the strong Clearance Rates you say?

By themselves, the clearance rate stats are not a conclusive predictive stat on market strength; there can be a significant lag as auction bidders drop, but homes are still being bought and sold – especially due to the 2015/2016 market depth of wounded underbidders.

Three or four may be’s above. Lets talk more next week, when we will see the completed results of the James 100 Auction Test and you will be able to compare the following:

* Same time last year and,

* Our May 100 Auction Challenge Result of this year to now.

Bayside continues to be weak – but for over a decade it has not had the depth, that the Inner East has – nor the prices (is there opportunity?).

If we are on the turn, then fringe suburbs and fringe positions (like main roads) and fringe prices (high), will start to falter over spring (are you selling in these micro markets?).

26.8.17

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James Auction Report: Forget about the US Open beginning in a couple of days, the action was here at 16 Stradbroke Avenue, Toorak.

Auctioneer John Bongiorno took centre court, kicking things off with a vendor bid of $5,500,000 and we saw the beginning of one of the most powerful auctions I have witnessed. It was even somewhat comical that the first bidders were on opposite sides of the court, so it was literally like watching the tennis!

Okay, back to the start … vendor bid of $5,500,000 and rises of $50,000 were called for. Bidder 1 straight in, followed by Bidder 2, back to Bidder 1 and Bidder 3 joins – $5,700,000. Back and forth Bidder 1 and Bidder 3 began their first rally in $50,000 bids before stalling at $5,950,000. This very short pause came at the perfect time for Bidder 4 to join in at $6,000,000. Mr Bongiorno took a quick breath and announced it on the market before catching back up to the bids.

Talk about a rally? Bidders 1 and 4 – Wow! Firstly, let’s park the $6,000,000 for now because it takes too long to call the whole number when the bids are coming in this fast; these men mean business – $50k, $100k, $150k, $200k, $250k $300k $350K… fast forward because well… you get the idea (and also… we are now parking the $7,000,000 – keep up!). The rally continued to $7,300,000 when Bidder 1 stalled and Bidder 2 made a comeback.

Making it into the final round, Bidder 4 had his eye on the prize and he was not here to muck around, coming straight back each time. Bidders 2 with a different approach, took more time to make their decisions. . . the duo took the home to $7,805,000 when the home was finally knocked down to Bidder 4.  (Simone Clarke)

Thank you linesman, thank you ball boys – $10,000 per sqm for Toorak land – no home!

James Analysis: We saw at $8,000 per sqm or $6,000,000 prior to auction; so this was a very, very strong result. James Home Rating 575/1000 – click here.

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gamechanger

Game Changer – Council Destroys Auction

I’m nervous, very nervous.

If you are a buyer or seller in Stonnington, you should be too.

This is a story about an innocent family, who have had their lives heavily, negatively impacted by their own council – this is a story of betrayal – this is not a story about the rights or wrongs of Heritage Overlays.

PART ONE:

If what I am told by the selling agents is true, then recently I witnessed one of the more serious and unacceptable actions by a Council – Stonnington Council.

Which on the face of it, could and should lead to a significant court case AND if it is being repeated elsewhere in Stonnington; could and should lead to a class action, THAT may threaten the very existence of Stonnington Council.

I know half of it to be true (Part 2) – from a potential buyer point of view. For the rest we have relied on the words of the selling agents.

I am not naming the as it is still for sale; although if it does sell, in all likelihood, the result will have been significantly damaged by what has gone on.

Some background

Currently, there are people in your neighbourhood, who in doing their job, are wiping millions of dollars off the value of your home and there is very little you can do about it.

Stonnington Council has engaged these people.

These people are not criminals, but some may say what they are doing is a crime.

They are people who drive around and nominate your individual home – no, not the street, not the precinct, not a public building – but your private home that you live in, your nest egg – to be given a special heritage overlay – and in doing so, in many instances wipe 10 to 20% off the value of your home.

Now please, we all have opinions on properties and I’m guilty as charged; in fact, I’m one of the worst offenders, however you can choose to ignore what I say.

In the case of these people driving around on behalf of Stonnington Council – they cannot be ignored.

As well, most of us want to see some version of Heritage controls to protect important sites, important public buildings and important precincts. Nothing in this article is about the rights or wrongs of the overall Heritage concept or whether the home in question is worthy of a Heritage Order or not (excuse my smirk on the latter point).

Very few of us want to see carte blanche (I am not engaged by or work for developers).

But what right does your council have, to so severely impact on a seemingly innocent homeowner, who is selling their home – to destroy their sale process – to cut the value of their home by up to 20% – all without warning, all without consent?

It is a betrayal of whom the council is meant to be looking after – its residents and ratepayers.

If what we are being told by the agent representing the owner is true (and I have no reason to doubt it) – then…

WITHOUT WARNING, ONE DAY BEFORE AN AUCTION, a private home being “provisionally placed on a Heritage Register” by Stonnington Council, is a completely and totally unacceptable action – without significant compensation being paid by Stonnington to the owner.

If those within the Council feel so strongly that homes must be placed on a “register” at the 11th hour, then they need to be funding legal objections if the owners so decide AND/OR setting up a fund (they may need in the tens of millions) to compensate the owners of those individual one-off homes, they deem of heritage significance – just like the Vic Roads has to or the State Government has to.

This is not about the rights and wrongs of Heritage, this is about Stonnington Council’s purported behaviour and inconsistencies.

If the community through its officers, deems a home must be ‘saved’ then so be it. However councils must be open and honest with the public and fair in their timing.

How does a homeowner object to a council one day before an auction and ……. still have a competitive auction?

The timing of the note below, needs to be investigated as much as the contents.

Was it simply a random drive down the street by the Council? If so how does that work?

Is somebody monitoring auctions at the Council?

Was the council officer under pressure from a neighbour?

Or is this simply how Heritage works in Stonnington in 2017?

Stonnington Council must compensate this seller and others AND bring into place, a fairer set of Heritage actioning guidelines.

BUT there is more, lots more. There’s more to this episode than whether or not you agree with Heritage controls (James Buyer Advocates totally support community determined and consistent Heritage protections).

READ ON 

PART TWO:

We as professional buyer advocates went through our usual due diligence processes to try and buy this home including:

  • Checking all legal documentation
  • Have an independent property lawyer check all documentation (Section 32’s)
  • Ringing Council – town planning
  • Checking Government Database for zonings and overlays etc
  • Below is the paperwork we and our client’s solicitors viewed in the Section 32

NO HERITAGE OVERLAY – check the date.

Stonnington1There is a comment about possible change to homes with a heritage overlay or next to homes with a heritage overlay.

Below is the government database we also checked – we believe we were thorough.

NO HERITAGE OVERLAY – not next to any HERITAGE OVERLAY – CLEAN SHEET.

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We also rang Stonnington Council two days before the auction and asked if there were any issues with this home or surrounding homes.

NONE was the council officer’s response.

Footnote: Stonnington Council may well solve this future “risk” by refusing to take calls, as some other councils do. Is that fair?

ALL CLEAR AND WE ARE GOING TO BID AT AUCTION.

Then with 24 hours to go – this letter is sent to us, by the ethical selling agents and ethical but no doubt distraught owners.

They are ethical if, as they say, they had no previous knowledge (they could’ve hidden this in post-auction paperwork, as some do).

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Whoops – the council has decided it may be worthy of a ‘Heritage Overlay’ – no, not the whole street – much of which has been developed – just this one home and no, not for any brilliant architect’s work … but because it LOOKS LIKE some brilliant architect’s work….

Again looking at the home and then looking at the “Heritage Order” it does make you wonder, but personal opinions of taste ARE NOT at the heart of these issues.

This letter came one day before the scheduled publicly advertised auction, no warning and was not asked for.

Imagine if the owner hadn’t opened their mail before the auction.

Imagine if the owner was overseas.

Imagine if the agent and the owner were not ethical people and just hid it in the post-auction paperwork. Many buyers sign after an auction without looking at the paperwork closely.

Imagine…

Well I did imagine, and our client would be suing the owner and the council and our solicitor and probably me if we had of bought it – as they wanted to rebuild.

Imagine if the current owner was relying on the extra money, when they bought another home some time ago, to pay off mortgages and now they can’t, because their home is worth 20% less or worse, simply doesn’t sell.

However, equally importantly is: how can any buyer trust any Stonnington Section 32 in the future?

Imagine if you as a buyer, buy a Stonnington home in the future – you could be slapped with one of these at anytime – you have no certainty – this is why I’m nervous and you should be scared.

There are human beings here () and it appears Stonnington Council is engaging in completely unacceptable behaviour on at least 3 fronts:

1. What right does Stonnington Council have to make random calls on individual private homes without financial compensation?

2. What duty of care does Stonnington Council have to serve the above type of letter, one day before an auction without financial marketing compensation to sellers?

3. What duty of care does Stonnington Council have to buyers (yes, our buying client engaged outside professionals on this matter) to provide straightforward paperwork for the Section 32’s.

If the above questions cannot be answered satisfactorily, then Stonnington Council has an endemic problem – one that can’t be washed away by an apology, saying the timing was unfortunate.

If you live in Stonnington, in a period home and you are looking to buy in or sell out, then you have a significantly elevated risk profile.

We consider this situation to be a major breach of an individual’s rights and you in Stonnington or any other council should, in our opinion, not stand for it.

This innocent family is facing a major crisis, and it appears to be entirely bought on by Stonnington Council.

Of course there needs to be rules and protections for all of us, but not on such an individually damaging piecemeal basis – that is not the rule of law, not the Australian way.

Well that is what we think, what do you think?

FOOTNOTE: 

The auction was dead – totally dead – a vendor bid – dead.

Two days before, this was a brilliant offering and we said so in our rating.

SOLUTIONS:

1. A clear and simple across the board Stonnington Heritage strategy – no piecemeal one-off’s.

2. Clear and firm actioning guidelines – no last minute pre-sale shenanigans.

3. Publicly known transitional timeframes, if the Council wants major changes.

4. Compensation measures (with dollar limits) for those adversely affected during transition.

5. Up to date, accurate and easy to understand Stonnington documentation – computerised for Section 32’s.

6. Clear explanations to future buyers as to what they may expect from Stonnington Council, with regards to Heritage on their intended property.

7. Financial settlement with the sellers above (we have no financial or social connection with them) – on the face of it, this was just plain wrong.

RIGHT OF REPLY: We will print in full and distribute to our 10,000 readers, any correspondence from Stonnington Council on this matter, if and whenever they choose to respond. You may think we should have got their side, before publishing this story – we did – we called them a few days before the auction and they told us, AS A PROSPECTIVE BUYER, there were no issues.

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Inside James

While a lot of our activity has been off-market, we pretty well reflected the on-market in the last week, with two bought under the hammer and two bought before auction.

Khartoum, Caulfield North $2.5m ish – Rae and Heather; Blackfriars, Toorak $5m ish – Nicole Gleeson; View, Mont Albert $2.2m ish – Stuart Evans and we bought Victoria, Fitzroy $2.5m ish – Roland Paterson/Arch Staver (love those shoes) with 4 bidders.

If we can help you in that $2m to $10m range actually buy on or off-market well, then please contact Gina on 0457 835 255 or our office 9804 3133.

Stonnington Purple banner

Malvern Volcano - 2 Thanet with Gowan Stubbings - $3,610,000, under the hammer, 4 bidders

Malvern Volcano – 2 Thanet with Gowan Stubbings – $3,610,000, under the hammer, 4 bidders

Toorak, 16 Stradbroke Avenue (John Bongiorno) Under Hammer $7,805,000 4 Bidders

Glen Iris, (Stonnington), 1 Anthony Street (Andrew Hayne) Under Hammer $5,770,000 6 Bidders

Toorak, 9 Denham Place (Gerald Delany) Under Hammer $4,700,000 3 Bidders

For all 36 James Auction Reports

Some interesting results

4 Blackfriars Close ToorakJames Home Rating 732/1000 – click here 

2 Thanet Street MalvernJames Home Rating 649/1000 – click here

Bayside Blue Banner

The Brighton Smoothie Nick Johnstone delivers 3 bidders and an under the hammer result of $2,830,000 at 53 Elwood St Brighton

The Brighton Smoothie, Nick Johnstone delivers 3 bidders and an under the hammer result of $2,830,000 at 53 Elwood St

Brighton, 53 Elwood Street (Nick Johnstone) Under Hammer $2,830,000 3 Bidders

Albert Park, 59 Barrett Street (Warwick Gardiner) After Auction $2,340,000 2 Bidders

Port Melbourne, 96 Nott Street (Oliver Bruce) After Auction $2,300,000 1 Bidder

For all 36 James Auction Reports

Bayside still remains an almost untouched Wilderness, as we covered more auctions today (12) than bidders (10). Bayside Bidderman less than 1 or as the bears would say, the GFC Bidderman. But before we all look for the exits, it should be noted that Bayside is often slow out of the winter blocks, as the beasts need to see the sun and smell the coconut oil, before they awaken from their hibernation. Mmmm … let’s hope that coconut oil is strong in 2017 and the sun comes soon.

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Glen Iris, 1 Anthony. "A-graders" still flying in any suburb, as Andrew Hayne proved with a volcanic 6 bidders to $5,770,000. Hold on - you did say Glen Iris - $5m and more - Wow

Glen Iris, 1 Anthony. “A-graders” still flying in any suburb, as Andrew Hayne proved with a volcanic 6 bidders to $5,770,000. Hold on – you did say Glen Iris – $5m and more -Wow.

Kew, 20 John Street (Scott Patterson) Under Hammer $5,200,000, 3 Bidders

Hawthorn, 14 Callantina Road (James Tostevin) Under Hammer $3,620,000, 5 Bidders. WOW was my thought when I saw this result – our rating didn’t even hit 500 – James Home Rating 473/1000 click here – due to the degree of block difficulty. Unless all five of these bidders are looking to move in as-is (I doubt it), then that means $3,600,000 plus $1,500,000 to build plus $250,000 to $500,000 extra engineering ground works due to slope, plus holding costs for say two years $400,000 and there is not a lot of change out of $6,000,000. Unimproved land today was $4,600 per sqm and when completed it’s $7,600 per sqm. Big commitment – but hey, the last two bidders were prepared to do it – that’s market strength.

Canterbury, 10 Scott Street (James Tostevin) After Auction $3,300,000, 0 Bidders

biggest pass ins

For all 36 James Auction Reports

Malvern East, 101 Finch Street (Jason Swift) Passed In $4,600,000, 0 Bidders

South Melbourne, 4 Anderson Street (Oliver Bruce) Passed In $4,500,000, 0 Bidders

Elwood, 382 Barkly Street (James Paynter) Passed In $4,000,000, 0 Bidders

These guys had plenty of friends today at the pass-in planet.

EarlySpring100Auction

Today was Week two of our 3-Week 100 Auction Test. Next week we report the results of the three weeks of stats.

We at James Buyer Advocates are covering and reporting back the results on 100 randomly chosen auctions, over $2 million in Inner East and Bayside on August 19th, 26th and September 2nd to find out where the Top End Inner Melbourne market is really at, in Early Spring 2017.

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 the 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.

James

Go Pies – Bucks has done enough to keep his job Eddie.


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