What goes around comes around – well, maybe: 61-63 Alfred St, Kew is re-offered to the market (Richard James, Jellis Craig), but we await a result. Passed in, $5,300,000, 2 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 55% on the 31 auctions we attended, down on last week. The Weekly Review Bidderman, our demand indicator, was steady at 1.6.

Market Summary:

From the results over the past few weeks, it could be easy to conclude that the market is a bit all over the place – up one week, down the next.  But we don’t believe that the market is as inconsistent as it may appear. It’s just very picky at the moment when it comes to stock and price.

Before Easter we had good stock and we had vendors prepared to sell at market price. The result was solid clearance rates. After Easter things got quiet again – was it was because of the economic news or was it the lack of quality stock? Things improved last weekend when we saw some solid results across the board on quality market priced stock. And then this weekend we were back to slightly weaker clearance rates. Why?

We believe the inconsistency really is down to stock quality and seller pricing.

Two very public cases this weekend demonstrate why:

61-63 Alfred St, Kew (Richard James) – This was a huge 2300 sqm block that sold under the hammer with 6 bidders for $4,850,000 in May 2009 in front of a big crowd (see our auction report of the day). This time around another 100 strong crowd saw two bidders fight it out to $5,300,000. But instead of being sold under the hammer, it was passed in. The market has been up and back down since 2009, but overall pretty flat in growth terms between then and now, yet here you have a 10% increase, with nothing done to the home and the home is passed-in. We are not saying the agent acted inappropriately or that the vendor shouldn’t want more. But the thing is, the market will record this as a pass-in, even though all things being equal it was a good result.

6 Caroline St, Hawthorn East (James Tostevin) – This is a good little single fronter investment home. We gave it a James Home Rating of 662/1000 and have bought this type in the street before (2006). In 2010 this sold for just over $1,300,000 at auction and the market has shifted down a little since then on a number of homes – but probably not so much on these types of homes. So even though it passed in at $1,230,000 after 5 bidders – a ‘volcano’ – does this mean the market is a poor one?  The buyers were within 10% of last year’s figure. If the seller wanted to sell today they could have.

Some may look at those pass-ins and see a market in trouble due to no sales. Yet there were 7 bidders, and a pass-in price not too far away from the previous sale prices.

We think the market is an active and efficient one at the moment, especially in Inner Melbourne.

Yes, there is weak bidder interest for overpriced and/or low quality offerings. But there is strong bidder interest on well priced and quality homes – sometimes the level of that interest doesn’t quite match the expectations of the vendor.

Stock levels are historically low (and nothing looks like changing any time soon) and this is helping keep demand tighter and prices firmer than they otherwise might be if the current bidders were spread over a wider array of stock. BUT the market is doing most of what is asked of it.

Footnote: We were out at Bradleys Lane Warrandyte this weekend purchasing a $M home at a public auction. The agents were Chris Chapman of Fletchers and Ian Reid. They quoted the home sensibly to begin with, they then had an offer above their range mid campaign and consequently lifted their buyer range to incorporate that. At auction they had a great turnout and with 3 bidders the home was pushed over the quote and the home was put on the market when asked. A great result was achieved for the seller and the buyer. Isn’t that how auctions should work?

A big grin even though there were no bidders. Michael Nolan (Noel Jones) at 37 Mont Albert Rd, Canterbury, passed in, $1,800,000

• Canterbury, 35 Monomeath Ave, Doug McLauchlan (Marshall White) passed in and bought afterwards, $4,200,000+, no bidders
  The weather was still and the crowd was strong at this auction – with about 100 people in attendance…(See More in Auction Reports)
• Sandringham, 66 Victoria St, James Paynter (Hodges), under the hammer, $3,500,000, 3 bidders
  An amazing Sandringham house in a popular street, and a decent sized crowd of around 50 had turned up to see what would happen at auction on Saturday…(See More in Auction Reports)
• Prahran, 15 Irving Ave, Tom McCarthy (Biggin & Scott), under the hammer, $2,710,000, 2 bidders
  A landmark property on a magnificent allotment of land, practically a “farm for Prahran” were the passionate opening words of auctioneer Tom McCarthy to the gathered group of 70…(See More in Auction Reports)
• Canterbury, 31 Rubens Grove, Mark Dayman (Marshall White), under the hammer, $2,300,000, 3 bidders
  $2,000,000 was the opening bid called out the very moment auctioneer Mark Dayman finished the introduction…(See More in Auction Reports)

• Hawthorn East, 6 Caroline St, James Tostevin (Marshall White), passed in, $1,230,000, 5 bidders
  The light morning drizzle paused briefly and allowed auctioneer James Tostevin to hold the auction outside…(See More in Auction Reports)
• Middle Park, 139 Mills St, David Lack (Biggin & Scott), under the hammer, $1,180,000, 4 bidders
  Auctioneer David Lack said this was a property with multiple options and had the beach so close you could feel the sand between your toes…(See More in Auction Reports)
• Canterbury, 31 Rubens Grove, Mark Dayman (Marshall White), under the hammer, $2,300,000, 3 bidders
  $2,000,000 was the opening bid called out the very moment auctioneer Mark Dayman finished the introduction…(See More in Auction Reports)

• Kew, 61-63 Alfred St,  passed in, $5,300,000, 2 bidders
  “A landmark auction” were the words that auctioneer Richard James used to describe this auction…(See More in Auction Reports)
• Kew, 1 Selbourne Rd, passed in, $3,670,000, 2 bidders
  Landmark Kew property and this auction was well supported by a solid crowd of around 100 people….(See More in Auction Reports)

I reckon we should do this: Scott Patterson (Kay & Burton) sells 162 Mont Albert Rd, Canterbury, under the hammer for $4,166,000, 3 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 68% on the 28 auctions we attended.

The Weekly Review Bidderman, our demand indicator, was 1.6 bidders per auction. There are buyers out there for the A graders and well priced B graders.

Market Summary:

We said last week the market was cool and it was. Agents were glum after the Bunny had been and gone. And the Reserve Bank rate cut seemed to worry more rather than it reassured.

But this week was a different story. The pre Easter market zing that seemed lost last week returned when the good stuff came to market. People felt brighter. Auctions were livelier.

There were four strong sales over $4 million. Three of them sold under the hammer with multiple bidders (see below), which reinforced the fact that if a home is good, the price is right and the agent can get it ‘on the market’ then there is a good chance of a sale.

In the $3m range this weekend were a couple of strong sales including 51 Richmond Terrace Richmond (James Tostevin) and 24 Denbigh Road Armadale (John Morrisby) – a cracker of a home but with a neighbour issue.

Even the $2m range, which was as dead as a doornail over the last fortnight, saw some action (7 sales out of the 12 we monitored). Nick Johnstone resold 1 Norwood Brighton for under $3m after it was reported as sold a few weeks ago for over $3m.

Brighton, 144 Cochrane St: The crowds seemed a bit livelier today. Stewart Lopez (Kay & Burton), bought after auction for an undisclosed amount

This weekend’s results answered two questions:

2)      A longer term question – We’ve had a sustained Bidderman at 1.6 and above for most of the year so far, supporting the sense that the 2012 market is in okay shape. Sure there is a bucket load of homes over $3m doing nothing except taking up internet space – but is this the real market? Sellers who have A or B graders, engage a quality agent, market and price correctly are actually selling.

Price

We believe prices are stabilising, but they are still well off the highs of early 2010 in a lot of cases.

At auction those sellers who ask for less than market seem to get above market, while those who ask for above market seem to get less.

Stock

Auction stock levels in May remain unseasonably low by any measure (although there was a stock spurt this week due to vendors aiming to finish their auction campaign before the Queens Birthday weekend). The market looks like averaging around 75 auctions per weekend this May. Traditionally May is one of the strongest months of the year, and historically we have been above 100 and nudging 150 $M+ scheduled auctions per weekend in Inner East and Bayside. This shortage of stock and a solid Bidderman rate points to no significant price drops till Spring (major economic bad news excepted).

‘Round the Grounds

Boroondara: A return to form with three sales under the hammer over $4m  - 64%
Bayside: Mixed offerings – what was expected to sell did and what wasn’t didn’t – 50%
Stonnington: A solid enough weekend at 60%
Port Phillip: The well priced had multiple bidding – 71%

Biggest Auctions:

Toorak, 10 Rathmines St, Jeremy Fox (RT Edgar), after auction, above $4,300,000
Auctioneer Jeremy Fox looked quite regal positioned in front of this imposing property flanked by his support team…(See More in Auction Reports)

Canterbury, 162 Mont Albert Rd, Scott Patterson (Kay & Burton), under the hammer, $4,166,000, 3 bidders
A medium size crowd gathered in the front garden of this home on the Golden Mile…(See More in Auction Reports)

Balwyn, 6-8 Fitzgerald St, Alastair Craig (Jellis Craig),under the hammer, $4,025,000, 2 bidders
The team at Jellis Craig had a reason to smile today, especially Alastair Craig with four of his auctions selling, including this property…(See More in Auction Reports)

Top Bidderman Auctions:

Armadale, 24 Denbigh Rd, John Morrisby (Jellis Craig), after auction for an amount in excess of $3,000,000,  4 bidders
John Morrisby kindly provided us with the following information…(See More in Auction Reports)

Glen Iris, 2 Hillside Ave, Rob Vickers-Willis (Abercromby’s), after auction above $2,225,000, 3 bidders
A crowd of 30 turned up in the sunshine to watch 3 bidders battle it out for this period family home…(See More in Auction Reports)

Middle Park, 359 Danks St, Greg Hocking (Greg Hocking), under the hammer, above $1,970,000, 3 bidders
Around 60 people attended this Middle Park auction, conducted by the affable  Greg Hocking…(See More in Auction Reports)

Top  Pass Ins:

Toorak, 9 Landale Rd, passed in $3,000,000, no bidders
Showing an affinity for round numbers, auctioneer Gowan Stubbings kicked things off with a vendor bid of $3,000,000…(See More in Auction Reports)

Middle Park, 68 Park Rd, passed in $2,850,000, no bidders
A crowd of 60, including a number of young children and dogs, stood widely dispersed in the tree lined street…(See More in Auction Report)

Brighton, 5 Birdwood Ave, passed in $2,800,000, no bidders
The sun shone brightly in the front yard of this Spanish Mission style home in Brighton’s Golden Mile…(See More in Auction Reports)

Auction Manners

Auction behavior is deteriorating with some vendors and agents, while improving with others.

In the last fortnight we have been involved with three auctions where the agents have priced openly and fairly and got the homes on the market, within the ranges quoted and got excellent results. The agents were Greg Hocking, Tim Blackett of Kay and Burton and Tom Aylward of Jellis Craig.

However, we’ve also been involved in two cases where the vendors allowed their agents to give them low quotes and when their property was passed in to us, the old Clayton’s Reserves tricks began again. (This is where the agent gives a much higher reserve price during pass-in negotiations than would have applied during the auction.) We feel that CAV (Consumer Affairs Victoria) should at least look at vendors if they give a Clayton’s reserve outside their clearly stated range. We have not seen CAV at an auction this year – possibly they are undercover, possibly they think the problems of auction quoting and poor vendor behaviour have disappeared.

As well, one agency in Boroondara totally disrespects the highest bidder and the exclusive right to negotiate concept. The practice of dealing with other bidders while not even talking to the highest bidder after a pass-in is unprofessional and against the spirit of the auction. Fewer bidders will try to be the highest bidder if the auctioneer continues to falsely claim that he will treat with the highest bidder at the exclusion of others and then does not. The agent’s excuse is that Chinese people won’t bid at auction and so we must talk to them afterwards. That’s pathetic. Of course Chinese people won’t bid at auction if you keep talking to them after every auction pass-in, you numbskull. This is a top line agency and the auctioneer should know better – he is cheating the system that produces a good income for him.

Buyer Masterclass - Validation and Dealmaking – check out what we have to say in this week’s Buyer Masterclass.

Big crowd, big auction: 35 Broadway, Camberwell, Alastair Craig and Steve Burke (Jellis Craig) bought under the hammer for $3,425,000, with a very strong 6 bidders

At 6pm on Saturday, the James Clearance Rate for the $M+  market was 55% on the 33 auctions we attended.

The Weekly Review Bidderman, our demand indicator, was at 1.6 bidders per auction.

Market Summary: Overall the market continues to show us that well priced quality homes have a very solid following – as you’ll see by our Bidderbuzz and Biggest Auction Reports below, and by the fact that Bidderman remained fairly constant at around 1.6 bidders per auction.

However, there has definitely been some cooling of interest in the last week or so. There have been fewer buyers through opens, slightly glummer agents and lower auction clearance rates. For example, a quick survey of 8 auctions in the $2m to $3m range saw just 2 bought and 6 passed-in. The fact is that this price bracket doesn’t have a lot of exciting new stock right now and the overhang is no better or is overpriced.

But it’s not just this money segment. With the exception of early $1 million family homes there just isn’t the same zing in the air as there was in March.

The big question for market watchers is whether this change is due to buyer sentiment lowering with the economic news and therefore a longer term change. Or whether this change is a temporary one that is simply due to the dearth of quality new stock entering the market right now. At this stage we think its the latter.

Round the Grounds – $M+
Boroondara: Hot in Broadway – the rest quieter at 54%
Port Phillip: All the market can do is sell what’s on offer – 6 out of 7
Stonnington: Not much on offer and not much happening – at 44%
Mmmm Bayside is slipping a bit at 43%

The Godfather is back! G-E-R-A-L-D Delany (Kay & Burton) in form at 39-43 Mayfield Ave, Malvern, bought under the hammer for $7,131,510, 3 bidders

Top Bidderman Auctions:

Camberwell, 1 Water St, James Tostevin (Marshall White), under the hammer, $1,350,000, 6 bidders
Wow! What an auction! Under light drizzle, auctioneer James Tostevin conducted an auction that left the crowd of 60 breathless…(See More in Auction Reports)

Port Melbourne, 405 Nott St, Kaine Lanyon (Marshall White), under the hammer, $1,312,000, 6 bidders
A sea of colourful umbrellas filled the street at this Port Melbourne auction….(See More in Auction Reports)

Hawthorn, 43 Power St, Hamish Tostevin (Marshall White), after auction, $2,100,000, 3 bidders
Hoping to hold the auction in the backyard to showcase the tranquilty of the property, auctioneer Hamish Tostevin was forced to hold the auction indoors due to the persistent rain…(See More in Auction Reports)

Biggest Pass Ins:

Brighton, 10 Kent Ave, passed in, $3,300,000, 2 bidders
Nick Johnstone is re-auctioning this Golden Mile new build after an unsuccessful effort last year in front of a crowd of around 60…(See More in Auction Reports)

Armadale, 20 Royal Crescent, passed in, $2,500,000, no bidders
There is something about Wayne Gillespie designed spaces – they just work well in terms of proportion and functionality, and the extension at 20 Royal Crescent is no different…(See More in Auction Reports)

Prahran, 25 Highbury Grove, passed in, $2,300,000, no bidders
Even the canines were dressed appropriately for this auction…(See More in Auction Reports)

$3M+ Summary: The past couple of weeks have seen a marginal negative change in market sentiment at the Ultra Top End. But we feel it’s important to highlight the 5th sale at around $10 million that took place recently and that confirmed both the Pre Easter market spike and the power of the Kay and Burton Mexican Wave. The latest, a property at 61 Kensington South Yarra, was sold by Andrew Baines (he will need a tax advisor this month!) for more than $13,000,000. The property had something of a chequered past in terms of being on again, off again, sold, then sort of sold, then not sold. As a large landholding so close to the CBD it had positives. But it also had negatives: being near the freeway (noise) and overlooking power lines (visuals). That is what made for an interesting deal – it was a battle of wide opinions. Nonetheless it sold.

That makes a total of five sales in recent weeks at around the $10 million mark. Four were from Kay and Burton and one was from Marshall White.

So, after almost nothing for six months (a Kenley and maybe a Linlithgow excepted), bang – five were gone in a fortnight or so. Obviously buyers and sellers felt better and the K&B agents clearly smelled that. They did their Mexican Wave job well and pre-warned a number of buyers through a whisper campaign of what may happen. And see what happened! As soon as the first domino fell, the agents shouted (quietly) from the roof tops “Told you so” – and that lit the fuse on four more circa $10 million sales.

At times like this, when skilled agents are involved, certain homes appear to be under an irresistible force and deals get done. There is nothing wrong with this. It’s brilliant marketing and it’s what needs to happen to get a number of deals over the line. It’s not all buyers either – sellers are in on the Mexican Wave as well. They hear the whispers, see the results, get told “I told you so” too, and their price dexterity improves as they see real, concrete opportunity floating by.

However now that the early pre-Easter selling season is over, it seems that momentum has been lost again and the buying crowd are refocused on another game.

In the last few weeks the gloss at the Top End has faded a bit. Buyers are not quite as excited about what’s on offer – understandably given there are not a lot of publicly listed new hotties out there. As well some sellers have unwisely misread the recent activity as a market price increase and as such, without thinking, have in many cases priced their homes back into the too hard basket.

There were two strong results this weekend in the $3m+ segment. But overall there was a decided lack of interest in a number of homes in this segment that passed-in.

Malvern, 39-43 Mayfield Ave, Gerald Delany (Kay & Burton), under the hammer, $7,131,510, 3 bidders
It felt like an entourage of Kay & Burton agents in attendance here and it did take a bit to get going due to the wet weather…(See More in Auction Reports)

Camberwell, 35 Broadway, Alastair Craig (Jellis Craig), under the hammer, $3,425,000, 6 bidders
A much anticipated auction this one as the property was a rare offering – an original home with fantastic bones on excellent land size and prized north facing rear…(See More in Auction Reports)

Brighton, 42 Bay St, Jonathan Dixon (JP Dixon), bought after auction for an undisclosed amount above $2,635,000, 2 bidders
Looking forward to seeing Jonathan Dixon auctioning this old English character home on largish land (1220 sqm) at 42 Bay Street Brighton…(See More in Auction Reports)

So will it get any better – is there any more stock on the way?

James Redfern, Marshall White (Armadale): “Stock levels are frustratingly low at the moment and are low for late May and early June. However, the levels are ever so slightly stronger than the same time last year and confidence is creeping back. The low stock levels are currently underpinning the market.”

Stewart Lopez, Kay & Burton (Brighton): “There are quite a few properties coming through ‘off market’ and low key campaigns. Other private sales are being converted to media campaigns, but overall a lack of choice in most ranges.”

John Holdsworth, Hocking Holdsworth (Albert Park): “At this stage, May is looking ok for stock although, compared with recent years , it appears to be well down. May always used to be a very busy month on the run into winter. June, at this stage, seems to be well down due to the normal seasonal down-swing and general lack of confidence amongst potential sellers.”

Alastair Craig, Jellis Craig (Hawthorn): “At this stage we are booking steadily, but we will be down on previous years, which in my opinion will enhance the clearance rate and benefit those who are willing to commit.”

Andrew Stuart, Hocking Stuart (Albert Park): “Stock levels continue to stay at very low levels, and caution exists from both buyers and sellers: Buyers are not confident that prices are on the way up and sellers are reluctant to test the market given the fact that buyers aren’t buying! It’s a bit of a vicious circle – the market needs confidence! (Perhaps some strong leadership from those at the top might help!)

Read this week’s Buyer Masterclass – Validation and Dealmaking

• The Reserve Bank’s interest rate cuts can have  mixed results at the Top End – some deals are closer together others are further apart.
• How do you get validation if you want to do more in the way of due diligence than take the selling agent’s word as gospel?
• How do you negotiate in this market?

In full flight: Danielle Martin (Barleys) at 3/19 Eildon Rd, St Kilda, bought after auction for an undisclosed amount above $1,300,000.

At 6pm on Saturday, the James Clearance Rate for $M+ was 74% on the 23 auctions we attended.

Welcome back after an extended Easter break. As you were probably aware, there has been nothing to report auction wise until this weekend. Even this weekend it hasn’t been much – in terms of numbers anyway.

Overall the market is actually reasonably healthy right now – but this could simply be due to very low new stock levels.

The Weekly Review Bidderman, our demand indicator, was up at 1.7 bidders per auction. With such low stock levels we’re not sure how much we can read into this stat. However, March had good numbers of stock and also ended up with a Bidderman rate at this level, so there may be some substance in it. We have not however published individual council clearance rates in the market wraps this week as the samples were simply too low for meaningful data.

Market Summary: The news of the moment really is the unseasonably low levels  of new stock.

We have always considered around 100 auctions in Bayside and Inner East a solid weekend. May is traditionally a big month for solid weekends. In May 2010, for instance, there were over 1000 sales over $1m recorded across all of Melbourne. But this year the cupboard is decidedly bare, with the next two weeks (the first two weeks of May) showing a paltry 70 scheduled $M+ auctions each weekend in the Inner East and Bayside markets (Melbourne’s $M+ Engine Room).

These numbers are actually a bit of a shock to all in the industry.The word around the traps pre Easter had been a lot more upbeat about stock levels than has proven to be the case.

What does this all mean?

1. Market price has now stabilised on homes that are marketed at market price. It appears that sellers are in a Catch 22 at the moment: if they ask for too much they often don’t get it, but if they don’t ask for too much, they often end up with a good result. Cases in point: while we attended 12 Ferndale Glen Iris (James Redfern see below) and it ran as hotly as we expected, two other auctions had considerably more action than we thought they would at the start of the auction. See reports for 22 Urquhart St Hawthorn (Stuart Evans)  and 29 Mayston Hawthorn East (James Tostevin and Greg Toogood). Vendors were strong but not greedy and we feel they got above their expected result.  Neither of these were great properties – but they weren’t bad either.
2. For the immediate future, with such low stock levels, the market has almost no choice but to hold firm on price on good properties. So despite a significant reduction in discretionary demand (from investors and from families buying on a whim) we now appear below the low water mark to satisfy minimum market demand – that is, buyers who have to buy to put a roof over their family’s head.
3. If you are a family home buyer you may need to adjust your strategy in terms of process and price. Your price thoughts may need to remain flexible as the market is still awash with “unloveds” and the number one rule in good buying, good growth and good investment is to not pay more than market price. BUT at the same time a number of auctions are moving beyond the  conservative price thoughts of many buyers. That means that your processes may need to include stales and pass-ins and off markets as more homes are being exchanged via these methods, particularly the latter. Why are off markets happening if the market is OK? The market is OK but it’s not a universal guarantee when sellers market their home fairly that they will sell it; so a number of sellers are looking to exchange their homes via the off market (no advertising) method of sale to reduce the chance of public pain. But let’s not get too carried away with secret sales – this is a common occurrence at the $3m+ level. However in and around $1m it’s still really the exception rather than the rule.

Question: Do you agree that May is looking a little light (although better than April), and do you think this Winter will be quiet in relation to stock?

Peter Perrignon, Hocking Stuart (Richmond): “May is definitely better than April for numbers. Richmond is much stronger than South Yarra and Toorak and we have 20 auctions booked for May in Richmond. There are no signs that June is going to be busy in either of our offices so I suspect that the winter numbers will be down this year over last year.”

Hamish Tostevin, Marshall White (Hawthorn): “May is a lot stronger than April, due to the Easter school holiday period.  We are definitely back on track in relation to auction numbers, however it’s not the Massive May we all thought. There is no doubt the winter period will be a lot quieter in comparison to what we anticipate for early Spring. However, forecasting ahead, it is our view or hopes that there may well be a late rush at the end of June, prior to the next school holidays (all being well)!!

Jack Bongiorno, Marshall White (Brighton): ” Overall we expect numbers to be much lighter for May than this time last year. However a potential cut in interest rates may inject more confidence in the market. (But) things are looking quiet heading towards Spring.”

Glen Iris, 10 Barina Rd, Karl Fitch (Noel Jones), bought after auction for $1,240,000, 3 bidders

$3M+ Summary: Yes it’s been quieter in April but it hasn’t been as quiet as you think, right at the very Top of the Top.

Last year we had three $3m+ activity spikes – one around Easter, one in September and a small one for two weeks in December. Those spikes featured homes in and around $3m to $7m.

March 2012 was definitely a spike in terms of activity and April has continued in that vein – not so much in terms of numbers (due to the holidays) but in terms of substantial deals.

Worth noting are four recent sales at around the $10 million mark (3 over and 1 just under). What that says is that people are acting. We last saw this level of activity in August last year where $55 million worth of property sold across 11 sales. In some ways the 2012 Easter weekend was just as impressive with 3 and possibly a 4th ultra-quiet sale in South Yarra transacting for over $10 million and another one very close to it.

A quick rundown on some of the biggies:

• Level 39, Royal Domain Tower, 368 St Kilda Road, Melbourne
  Whole floor in excess of 50 squares. Sold by Andrew Baines of Kay and Burton – Over $8,000,000.
• 26 Albany Road Toorak
  Set on grounds totaling approximately 2,476sqm, a championship-size tennis court and indoor/outdoor pool. Sold by Michael Gibson of Kay and Burton. Over $10,000,000. On the market for over a year and offers back and forth saw this home sell in excess for, we believe, $11,000,000.
• 1 Millswyn St South Yarra
  On 2,152sqm approx in South Yarra – yes it’s part commercial but it’s a big piece of residential dirt. Sold by Michael Gibson and Matt Davis of Kay and Burton for over $10,000,000 we believe.
• 21- 23 Kooyoongkoot Road Hawthorn – Sold by Marcus Chiminello of Marshall White. Over $12,000,000
  Tennis court court and pool on 2,788 sqm – just down from another big parcel of land at 33 which sold for around $8,000,000 last month.
• 49 Irving Road Toorak – it’s been on the market longer than Richmond have been trying to win their latest premiership, but it has finally been put away by Jeremy Fox for $5,000,000 on the knocker.
• 7 Maple Grove Toorak - slightly dated home with a tricky floor plan. Sold by Michael Armstrong for over $4,500,000
• 38 Havelock Road Hawthorn East – 1300+ sqm in size, had been on the market for some time with initial quotes in excess of $4 million. Sold by Glen Coutinho of Hocking Stuart for just above the mid $3 millions.
• And the Balwyn Formula is back in vogue (sort of), that is, small land, big new home and big price – with 3 such homes recently sold in the suburb: 57 Citview (Brett Philipp);  31 Elliott (John Bradbury) and 111 Winmalee (Jin Shang). All sold for between $2,800,000 and $3,200,000 with land sizes between 650 and 750 sq metres. Prices are down but activity is improving.
• 79 Beaconsfield Parade Albert Park – the sale was managed by Paul Western of Cayzer Real Estate.   On land of 409m2. Passed in at auction on the 3/03/12 and sold on 4/04/12 in the range of $3.2m to $3.5m

Glen Iris, 12 Ferndale Grove, Growling Jack (Marshall White), under the hammer, $1,625,000, 5 bidders

Biggest Auctions:

Hawthorn East, 29 Mayston St, James Tostevin (Marshall White), under the hammer, $1,965,000, 3 bidders
Edwardian timber home – north facing rear on good land at 600sqm plus…(See More in Auction Reports)

Glen Iris, 12 Ferndale Rd, John Bongiorno, (Marshall White), under the hammer, $1,625,000, 5 bidders
A beautiful summer’s day greets the crowd, around 90, who have rocked up to see how this market litmus test – a lovely renovated, single level, timber period home – will go…(See More in Auction Reports)

Top Bidderman Auctions:

Windsor, 50 Lewisham Rd, Elliot Gill (BenMac), under the hammer, $987,500, 5 bidders
The assembled crowd of 35 stood quietly enjoying the autumn sunshine…(See More in Auction Reports)

Sandringham, 54 Vincent St, Mark Earle (Buxton), under the hammer, $1,253,000, 4 bidders
This was one of the most entertaining auctions I had been to for a while…(See More in Auction Reports)

Top Pass Ins

Middle Park, 328 Danks St, passed in, $3,700,000, no bidders
Perfect autumn day and a perfect house. What more could auctioneer Greg Hocking want…(See More in Auction Reports)

South Melbourne, 153 Nelson Rd, passed in, $2,400,000, no bidders
Auctioneer Andrew Stuart is always passionate about the homes he sells and it came as no surprise when he said “this street out-performs most in the area and in Melbourne…(See More in Auction Reports)

Acknowledgement for Peter Perrignon’s photo from news.com.au (Andrew Henshaw)

It was 'red' everywhere today, with practically everything selling. The Fox aka Jeremy (RT Edgar), 27 Selborne St, Toorak, selling after auction, $3,300,000, 1 bidder

At 6pm on Saturday, the James Clearance Rate for $M+ was 79% on the 34 auctions we attended. On what we covered it was a sizzling result (in terms of activity) and supports the market improvement most have been claiming in 2012. HOWEVER this has happened in five of the previous six years (see chart below) and so we are not saying it’s a new paradigm. What we are saying is the market is doing everything that is being asked of it. And should late April and May activity hold up, then yes the overall market has shifted into new, more positive territory in early 2012.

The Weekly Review Bidderman, our demand indicator, was 1.9 bidders per auction. When you consider the huge increase of stock on offer (this was one of only a handful of Super Saturdays in the last year) it’s a significant number. Interestingly, while there were only 5 volcanoes (4+ bidders) among the 34 auctions we covered, there were also only 6 ducks (no bidders) and two of those ducks sold immediately afterwards.

This indicates a depth and consistency in the bidding – a sign of a healthy market. The “solid market” commentary is also supported by the fact that the week before Labour Day saw a 70% plus James clearance rate as well – also on a very good stock day. In other words, despite our Clearance Rate of this weekend being stronger than other weekends, and stronger than the individual councils we cover, we don’t believe this weekend was a statistical fluke unrepresentative of the market for quality, well priced homes.

Our description of the market is not a future prediction; what we are saying is that right now the market is solid, very solid. If the stats and the street vibes say something different come late April or early May we will report that and any market mood change.

In addition good numbers indicate that selling agents have been getting the right messages out (although some have just been lucky). Overall, the high clearance rates mean agents are doing their job well.

Market Summary:

This weekend was a culmination of a build-up in market strength that has been going on all month. Why?

1. Many buyers feel they can’t wait any longer, especially given that the post Easter market is looking light on for stock.
2. Many sellers have accepted that the market has dropped in price, they can’t see it going up any time soon (in price) and are prepared to sell when offered a fair market price.

However, this is not completely unexpected. And, as you can see below, most years in recent times have had fast starts. It’s what happens after Easter that sets the tone for the year. However, given that April is looking light on for stock and given the strength of demand shown by the very solid Bidderman rate, the market has a good chance of remaining solid.

The big, big question is what will happen after Easter.

Below is a representation on what has happened in previous years in terms of overall price. As you can see, when the Easter Bunny spins the roulette wheel where he (or she) stops on price nobody knows.

Déjà vu – 24 Kingsley St, Camberwell -  this is a case study for the Middle $M+ Market over the last few years, which overall has been an incredible roller coaster but is now roughly where it was in 2007. The home itself hasn’t changed much – it still needs an ensuite and a renovation at the rear. The report below is from our extensive auction and ratings database on quality homes.

24 Kingsley St, Camberwell

James Home Rating August 2009: 720/1000. “Really good street presence and with some planting down the sides will be an even better classic Victorian. Front rooms are impressive however the back needs attention.  Will you over capitalise? – no. A good finished build is $2m plus in this market. Love the street – great width and this is a great area – private – limited traffic and a stone’s throw from Camberwell Junction – train just down the road. Good land. With a good renovation this could rate as high as 850. This is a great long term investment.”

James Control Price August 2009 : Dirt $1,631,700 + Building $400,000 = $2,031,700. We have based our price on land sales at 36 Moorhouse (1.65m) last weekend and 32 Moorhouse St (1.4m land for just under 600 sq m) during the week. Land in the area has risen dramatically in the last few months and this building, while needing a substantial rear renovation, has the makings of a classic Victorian home and therefore has substantial value.

James Auction Report March 2012: Bought After Auction $2,000,000 to $2,100,000. 2 bidders.  Geordie Dixon and Steve Abbott of Jellis Craig. The crowd of around 65 spilled out of the manicured front gardens and into the pretty Camberwell street as autumn leaves fluttered from the trees. Steve looked for an opening bid and got one at $1,600,000. While it was a little on the low side, Steve was happy to accept the offer but quickly tabled a vendor bid of $1,800,000, which was closer to the quoted price of around $2m. Bidding continued with bidder 1 offering strong bids of $25k and a second bidder making $10k bids. Eventually the property was passed in at $2,000,000 to bidder 1, where negotiations began and finished afterwards between that and $2,100,000. (Jen Milligan)

James Auction Report May 2010: Bought After Auction $2,150,000. 2 bidders. Scott Patterson and Richard Winneke of Jellis Craig. A large crowd of 120 gathered under overcast skies on this picturesque street. Auctioneer Scott Patterson was keen for things to get moving opening with a vendor bid of $1,900,000, quickly followed by another at $1,925,000. This stirred two bidders and some steady back and forth bidding took place. The property passed in at $2,100,000 and was bought after for $2,150,000. (Architect Adam)

James Auction Report August 2009: Bought Under the Hammer. $2,000,000. 6 bidders. Jeremy Desmier and Alan Bramich of Fletchers.  Great crowd for a great property, with about 120 people in attendance. Auctioneer Jeremy Desmier did not need to wait long for an opening bid on this Camberwell beauty. The opening bid was $1.2 million. Rapid-fire bidding from six bidders saw this on the market at $1.5 million and the pace continued in the $1.9 million range. Property was sold for an undisclosed figure. (Mal James)

$3M+ Summary: Solid finish to the month – partly as a result of vendors lowering their expectations as they feel the market may get worse before it gets better, partly due to some good stock and partly due to buyers not seeing anything of note on the market after Easter. Some notable mid week and off market sales:

• Kooyong 11 Moralla Rd - over $5,000,000. Expressions of Interest still working with Michael Armstrong of Kay and Burton. Below the initial quote but a solid result in this market
• Brighton 13 Halifax St – $3,000,000. At initial quote. Nick Johnstone of Nick Johnstone Real Estate.
• Kew 53 Barnard Gr - Paul Richards of Bekdon Richards for over $6,000,000 earlier this month. Below the initial quote but solid result in this market
• Malvern 8 Harvey St - Justin Long of Marshall White moved on Monday for, we think, over $4 million – We went through it late last year and thought it may take some time to shift – if he has achieved anything over $4m in this market it would be a credit to his persistence and a good result for both parties.
• Brighton, 2a Chelsea St – Sturt Hinton of Kay and Burton got this away after an eternity on the market for an extremely healthy result of $3,600,000 (according to another agent).

Another one has quietly gone in the Gascoigne with Kay and Burton circa $3m price level. And a result on the big one in Boroondara should emerge soon to give some leadership at the Top of the Top End, which has seemed to be lacking till now. (Not trying to be tricky but we do respect privacy when asked.)

As for our company, we have had two recent purchases over $3m. The majority, however, have been in the $2m to $3m range inclduing buys in Hawthorn East (Marshall White), Hawthorn (Jellis Craig), Brighton (Barleys), South Yarra (Hocking Stuart), Kew (Marshall White), St Kilda (Marshall White), Glen Iris (Jellis Craig), Black Rock (CBRE), Brighton East (Thomsons), Elsternwick (Biggin and Scott), Surrey Hills (Jellis Craig) and Balwyn (Kay and Burton) this month.

To keep some perspective if you read our archived $3m+ reports from previous years, you will see the same buoyant activity leading into Easter. When it gets really interesting is after Easter.

February Top End Pass-Ins still really struggling a month later!

But it’s not all good news at this level if you don’t get the price right. A month ago we reported on ten auctions over $2.5 million. Two sold on the day and eight were passed in. Since then a further two have sold – both at less than the pass-in price. Although the stat is on a small sample it does suggest a 40% clearance rate after a month at this level.

CAMBERWELL, 24 Kingsley St, Steven Abbott (Jellis Craig), after auction, above $2m, 2 bidders

‘Round the Grounds: Market Wrap Headlines

• Boroondara – Many of the sales were right at the lower end of a million and the pass-ins were mostly higher end – 62% on 50+ Auctions
• Stonnington – A drop from last week at 62% but 3 solid sales over $3million
• Bayside – Every one we reported on was bought – 9 from 9 – 70% on all auctions in Bayside
• Port Phillip – Two solid weeks in a row – a 2012 anomaly – 73%

A word from the experts: The market has improved. Which segment has improved the most and which has improved the least?

Justin Long, Marshall White (Armadale): “There is no doubt that vendors, especially in the $1 – $3m range, have become more realistic and, as a result, buyers are responding favourably. In the $5m plus range, there is greater price sensitivity from vendors, especially those not pressed to sell. But even then there is increased activity”

Richard Winneke, Jellis Craig (Hawthorn): “There is a lot of demand for homes in the $1m-$1.5 m range, especially if well positioned (location) and offering 3-4 beds plus 2 bathrooms. Least improved area - the $2.25m plus market is very patchy. The home must be in an A grade street and/ or fully renovated with a good floor plan.”

Nick Johnstone, Nick Johnstone (Brighton): “I believe the good quality family homes with 4 plus bedrooms on 700 sqm in the $1.6 – $3m range are the strongest. The hardest market is apartments, purely because there is so much choice. But the apartments that are well finished are still commanding good prices.”

Biggest Auctions:

Prahran, 4 Grandview Grove, Jeremy Fox (RT Edgar), under the hammer, $4,570,000, 3 bidders
This was a Super Saturday sizzler! Three determined bidders contested for this breathtaking property after auctioneer Jeremy Fox kicked things off with an opening vendor bid of $4,000,000…(See more in Auction Report)

James Home Rating 865/1000 “I found it hard to find fault with this home – it’s WOW all over – the flow works brilliantly, locale for Prahran is in THE street and garaging, kitchen, laundry set up is efficient and classy – the northern light is brought in nicely into living areas. The bedroom set up works and the reflection pools aren’t twee – they are classy. Do I sound over the top on this? This home will fly and I mean fly unless the RT boys cook the quote or the vendor is dreaming. Best guide is 51 Murray St Prahran in May 2010 (See our rating and auction report, over $3,700,000) and the recent sale of similar land size without the same WOW by same company a couple of weeks ago at 22 Murray St (north of $3,400,000). Our suggested strategy to buy – dig deep on the day or go hard and early now!  ” Mal James

Malvern, 14 Lysterville Ave, Andrew Hayne (Marshall White), under the hammer, undisclosed over $3,300,000, 5 bidders
A big Super Saturday crowd gathered to see auctioneer Andrew Hayne hold court, quite literally, in the huge backyard of this house…(See more in Auction Reports)

Toorak, 27 Selborne St, Jeremy Fox (RT Edgar), after auction, $3,300,000, 1 bidder
Auctioneer Jeremy Fox began proceedings by accepting an opening bid of $3,100,000. A second bidder elevated the price but not enough to reach reserve…(See more in Auction Reports)

Top Bidderman Auctions:

• Camberwell, 9 Hartwell Hill Rd, Scott Patterson (Kay & Burton), under the hammer, 6 bidders
  One of the first auctions of the day and it was well attended, with over 70 counted in the crowd….(See more in Auction Reports)
• Kew 11 Maxwell St, Hamish Tostevin (Marshall White), under the hammer, $1,875,000, 4 bidders
  No nonsense auction here, in front of around 70 people….(See more in Auction Reports)
• Elsternwick, 4 Prentice St, Bill Stavrakis (Biggin Scott), under the hammer, undisclosed above $1,180,000, 4 bidders
  A crowd of 70 turned out to see this Edwardian sell. Bill Stavrakis looked to the crowd for start where there was a geniune bid of $950,000…(See more in Auction Reports)

Top 3 Pass In:

• Toorak 49 Irving, passed in on a vendor bid at $4,500,000
• Camberwell, 12a Royal Cres, passed in $4,100,000, no bidders
  A very gusty auction which at times silenced auctioneer Scott Patterson but it wasn’t this that provided the biggest challenge rather it was the lack of bidders present….(See more in Auction Reports)
• Toorak, 7 Grong Grong Crt, passed in $2,700,000, no bidders
  Auctioneer Justin Long was on song at 7 Grong Grong! He did an admirable job of selling the features and location of this townhouse but it didn’t strike a chord with the crowd…(See more in Auction Reports)

Buyer Masterclass: How to buy well in this or any market – check out this week’s article!

Footnote: There were around 150 scheduled auctions over $1m in Bayside and Inner East; but a number of them did not reach the magic million mark (sign of the times) and in the end we looked at around 120 auctions – so today was an almost Super Saturday.

Market News now takes three weeks off for school holidays and low stock weeks – little to report auction wise. Although a bit still going on behind the scenes, such as an off market at 38 Sussex St Brighton (Julian Augustini), a ripper mid sized Edwardian in need of a reno,  selling mid week before the formal campaign at mid $2′s; while on the other side a Gascoigne classic and a Scotch Hill beauty did not get acceptable buyers by the completion of the formal part of their campaigns and so the real horse trading begins over Easter to find the right levels.

Don’t eat too much chocolate!

$3,000,000 in McKinnon - Yep McKinnon - well almost, $2,930,000 with 3 bidders. Phillip Kingston and Adam Joske from Gary Peer.

At 6pm on Saturday, the James Clearance Rate for $M+ was 56% on the 32 auctions we attended. However we think that bare statistic understates the quality of the $M+ market, given we included a number of fringe auctions today and that current stock levels are swollen right now. All in all we think it’s a borderline balanced market.

The Weekly Review Bidderman, our demand indicator, was a healthy 1.6 bidders per auction. One in three auctions we covered had three or more bidders. However 1 in 3 auctions were ducks (no bidders) and the other third were somewhere in between.

Market Summary

Decisions are being made again. It’s as simple as that. Both buyers and sellers are making decisions again and as a result market activity has been picking up all month.

Most agents are reporting a good March with good results and this is happening because:

1. Sellers are saying – OK let’s focus on meeting the market rather than getting “my” price.
2. Buyers are saying – let’s buy a home rather than worry about the future.

These assertions have been supported by a number of sales, particularly in the $2m to $4m bracket, over the last few weeks.

Other evidence is the fact that our company has been involved in four more purchases this week, averaging over $2m in Brighton, Hawthorn, South Yarra and Hawthorn East.

Why?

Life goes on. We don’t believe it’s any more complicated than that. Children are still being born, growing up and leaving home.  These things aren’t going to be stopped by the Greek economy – and Melbourne is a healthy place at the Top End to be and in which to own a home in March 2012.

The last fortnight has had limited auction results on low quantity/quality offerings. However this weekend with around 100 auctions $M+ in Inner East and Bayside we have seen the continuing public signs of positivity in the market of late February. Sure, this weekend’s clearance rates weren’t stellar but then the number of auctions were up significantly.

Next Week, the last auction day before Easter, is a Super Saturday with around 150 scheduled auctions over $1m in Inner East and Bayside. This is our first for the year (which just shows how the market has contracted since last year). The market really only has one more hurdle before Spring before we can confidently say that some positive life has returned. That hurdle is the late April to late May market – really the last run before things quieten down for Winter.

Price

Yes, there is increased activity but if you think that necessarily means prices have increased then as a buyer you may be overpaying and if you are a seller you may not be selling. Increased activity in early 2012 means more buyers and sellers agreeing on price and those agreements are largely occurring because sellers are meeting the market.

$1m to $2m – This market is now officially solid on any A grader or reasonably priced B grader. And prices may even be firming a tad. Look at the Highbury Grove Prahran (Andrew McCann) auction report, where we saw another strong auction on the back of a big price next door a few weeks ago.

$2m to $4m – This market has had a real lift in activity this month. A few stales (long term unsolds) have been cleaned up, such as 4 Hampton Grove Camberwell (James Redfern). This property went to auction last year and three bidders took it to $2.4m. The home was then  offered at $2.75 million post auction, even though $2.4 million seemed the right number. But the vendor stuck to his guns and sold mid week to a new buyer for $2.55 million (hats off to him). We think the reason this price segment is doing well is prices are coming back and vendors are meeting the market. But it’s not all one way.

$5m and above – This market has had a smattering of action, with a couple of $6m plus sales through Abercrombys this week and a huge one on the Hawthorn Horizon seemingly wrapped up. But that is about it. We have been through a couple of quiet $10m+ homes mid week (off market) and the big question is whether these and a few others sneaking onto the market will actually get some real buyers through. Our opinion is that the market is very iffy on price where the air is thin and that those floating the big numbers will remain owners rather than sellers. But we’ve been wrong before.

Risk

This is something many buyers don’t take into the equation when buying. However this market must surely be showing observant buyers that risk is just as important an element in home buying as cash flow and capital growth. And while people think we have been giving Black Rock a hard time in recent times it is simply to show what can happen to a great but fringe suburb when the market starts to feel pain. We covered 3 auctions in the area this weekend – all good sized circa 1000 sqm blocks.

1. 21 Iluka St, passed in, $1,925,000, no bidders
2. 40 Middleton St, passed in, $1,800,000, no bidders
3. 48 Second St, passed in, $1,200,000, no bidders

This is a graphical representation of how the boom markets of 2007 and 2009 worked, compared to the two tiered normal markets of 2011 and 2012.

$3M+ Summary
It’s neck and neck for the strongest areas this month: in Brighton 7 properties have sold for over $3m, in Hawthorn, Kew and Canterbury there were also 7 and in Toorak 6 have sold for the month so far.

• East Melbourne, 125 Gipps St, the newly married Nathan Waterson should be able to pay for his wedding with this private sale at slightly below $4 million. This was a great terrace home and a good result. But it was below the initial asking price and it took a fair while for the vendors to come into line. Next door’s ask now seems even more courageous than when we first heard it. But I have had the taste of humble pie this month once or twice so will wait and see.
• Kew, 5 Tregarron Avenue, Sam Wilkinson – Expressions of Interest in the mid $3 millions. Now with Sam who has deservedly a good reputation at this price level, is he not the young Brains on the Thunderbirds!
• Hawthorn East a quiet one away for Nicholas Franzmann and hopalong Walter Dodich in the over $3m category. New home build – good result in the end.

The Abercrombys Private Auction – possibly the new Expressions of Interest. Private Auctions are where a home is advertised usually for a mid week auction and only those who register interest are allowed to attend.

11 Bates St Malvern East was a great example of how it works. A number of pre arranged private inspections were organised during the course of an advertised auction campaign. A few days before (Thursday) all potential buyers registered interest and were required to indicate a starting bid. In this case $5.9 million was the written starting bid (I’m not sure what that proves, but anyway).

Read our full report on Private Auctions and all results in our $3m+ plus section.

A word from the experts: When will the market start up after Easter, as we have little new stock this week?

Alastair Craig, Jellis Craig (Hawthorn): Traditionally Easter and the school holidays are always a quieter time for transacting family homes, whereas apartments, units and townhouses sale activity remains fairly constant. In our experience “the early bird catches the worm” meaning that people who are ready to place their home on the market, with the first ad appearing on the 14^th or 21^st April, and therefore auction on the 5^th or 12^th May, will experience less competition. In most cases this relates to a stronger price. In my opinion 26^th May and 2^nd June will be extremely busy as they are the last two prime Saturdays prior to winter and School Holidays.

Iain Carmichael, BenMac (Armadale): Two schools of thought on this one:  Most people have been happy to carry the Easter Weekend in weeks two and three of their four week campaigns and  auction on Saturdays 14 and 21 April; whereas others are choosing to give Easter a wide berth and select Saturday 5 May and beyond so that all weekend Open Houses fall after Easter. There will be a large number of auctions held in May so sellers will have to weigh up the whether a June date is preferable.

Greg Hocking, Greg Hocking (Albert Park): Supply is tight and as such propping up the market to a degree. The market is quite robust for properties up to $1m but as you approach $2m and above the market is patchy. People are seeing opportunities to move up the food chain as they are realizing discounts of 10 to 15% on the new purchase.

Brighton, 8 St Ninians Crt, David Hart (Buxton), under the hammer, $4,900,000, 3 bidders

‘Round the Grounds:

• Stonnington – Nothing that special on sale but all you can do is sell them – 80%
• Boroondara – Big numbers on offer so 66% is pretty solid
• Bayside – Sandringham is on fire over the last month and Brighton and Hampton not bad either – the rest so/so – 61%
• Port Phillip – Stock is still very low so 75% maybe a bit flattering

Biggest Auctions:

Brighton, 8 St Ninians Crt, David Hart (Buxton), under the hammer, $4,900,000, 3 bidders
Don’t Brighton people like the smell of a mortgagee auction in the afternoon and they have come in droves at the smell of blood – and when I say droves I mean that…(See more in Auction Reports)

McKinnon, 41 Rose St, Phillip Kingston (Gary Peer), under the hammer, $2,930,000, 3 bidders
I’ve never seen so many people at an auction before! Normally when I go to an auction there is a car park with 200 meters of the property and today, when I couldn’t even turn into the street, I suspected that this wasn’t going to be a normal auction…(See more in Auction Reports)

Toorak, 9 Fairbairn Rd, Gowan Stubbings (Kay & Burton), under the hammer, $2,505,000, 3 bidders
Gowan ‘Hollywood’ Stubbings leads off proceedings for this beautiful mid-sized Victorian in front of a crowd of about 40…(See more in Auction Reports)

Top Bidderman Auctions:

Hawthorn East, 39 Auburn Grove,  Glen Coutinho (Hocking Stuart), under the hammer, $1,520,000, 5 bidders
Like a conductor is to his musicians, so Glen Coutinho was to his bidders as he skilfully orchestrated 5 of them in a furious battle…(See more in Auction Reports)

Hawthorn East, 7 Station St, Steve Abbott (Jellis Craig), under the hammer, undisclosed, 5 bidders
A real buzz to this auction and the weather was pleasant as auctioneer Steven Abbott conducted proceedings in his usual no-nonsense manner in front of over 100 people…(See more in Auction Reports)

Top  Pass Ins

Brighton, 11 Alverna Grove,  passed in, $3,000,000, no bidders
A big crowd turned out to have a look at this impressive 7 year old home overlooking parkland at the end of a dead end street….(See more in Auction Reports)

Balwyn, 26 Metung, passed in, $3,000,000

Bentleigh, 15 Vickery St, Craig Williamson (Buxton), bought after auction, $1,200,000, 3 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 57% on the 23 auctions we attended. That figure represented a dip down from last week, but the stock quality was not up to what we have been seeing lately.

The Weekly Review Bidderman, our demand indicator, was 1.3 bidders per auction. 1 in 3 homes were ducks (no bidder auctions) – a substantial change from two weeks ago. However, again this may have been simply a reflection of this weekend’s overall lower quality.

The market away from auctions is not as quiet as these stats may indicate. As a company we have bought six homes in the last fortnight (Kew, Brighton, Glen Iris, Black Rock, Balwyn and St Kilda)  and the overall $3m+ market has had a number of substantial sales. Our full report on the current state of the $3m+ market is in this week’s The Weekly Review and will be republished in our $3m+ report section at week’s end.

With only 50 auctions at $M+ in Bayside and Inner East, this weekend we are giving you a Marketnews LITE version. The majority of them were below $2 million and a number were, shall we say, less than exciting offerings.

Next weekend is a solid one, stock-wise, with double the number of this weekend’s scheduled auctions at around 100. The pre Easter weekend of March 31 sees our first $M+ Super Saturday for 2012 with the number of auctions approaching the magic 150 mark.

Many parts of the market are still clearly operating at lower price levels than in previous years. The Land Only segment is a case in point. For instance we saw 19 Ebden Black Rock pass in this weekend for $1,525,000 after having changed hands for almost $2,000,000 a few years ago.  This is a good spot. But Black Rock, like Balwyn North and Bentleigh East are fringe suburbs and fringe suburbs are seeing Top End land prices drop and drop at faster rates than Melbourne’s Jewels such as Brighton, Hawthorn and Toorak. This is a normal market cyclical phenomenon where fringe land prices increase more dramatically (percentage wise) in rising markets but also fall at a faster percentage rate in tougher markets.

So despite the uplift in activity in the last month – and there really has been an uplift in activity, the ‘record price’ is still clearly the  exception rather than the norm in early 2012.

Elsternwick, 29 Orrong Rd, Bill Stavrakis (Biggin & Scott), under the hammer, $2,100,000, 4 bidders

Below is a sample of what we covered in our Auction Reports this weekend.

Elsternwick, 29 Orrong Rd, Bill Stavrakis (Biggin & Scott), under the hammer, $2,100,000, 4 bidders
Attending the auction at 29 Orrong Road in Elsternwick was like returning to the good old days of the property market…(See more in Auction Reports)

Malvern East, 94 Tooronga Rd, Karl Fitch (Noel Jones), under the hammer, $1,250,000, 5 bidders
We all love the theatre of auctions and this one didn’t disappoint, thanks to five bidders vying for the property!…(See more in Auction Reports)

Toorak, 101 Canterbury Rd, Tim Derham (Abercromby’s), under the hammer, $1,851,000, 4 bidders
“A blue chip piece of real estate in the heart of Toorak in a magnificent and convenient location”, were the passionate words of Tim Derham in his preamble, in front of the assembled group of 40…(See more in Auction Reports)

Malvern East, 20 Coppin St, Iain Carmichael (BenMac), bought after, $2,550,000, no bidders
A widely dispersed group of 60, many of whom were neighbours, gathered to witness this Malvern East auction…(See more in Auction Reports)

Balwyn, 13 Palmer Ave, Steve Abbott (Jellis Craig), passed in, $2,400,000, no bidders
A nice-sized crowd and the sun out and shining, what more could auctioneer Steven Abbott want…(See more in Auction Reports)

Bentleigh, 15 Vickery St, Craig Williamson (Buxton), after auction, $1,200,000, 3 bidders
Auctioneer Craig Williamson did not waste any time mentioning to the crowd that earlier in the day his agency had sold three properties that had a combined total of eighteen bidders…(See more in Auction Reports)

Looking forward to next week and giving you our full analysis on where the market is heading @ $M+

Like father like son. Learning the auction business. A Melbourne tradition. 38 Lambeth Ave, Armadale, under the hammer, $2,569,000, 4 bidders. John Bongiorno (Marshall White).

At 6pm on Saturday, the James Clearance Rate for $M+ was 74% on the 34 auctions we attended. We are now well and truly in the realm of a balanced market.

The Weekly Review Bidderman, our demand indicator, was 1.8 bidders per auction – a significant rise on the last two weeks.

Stock levels were fairly solid again this weekend and are looking to be healthy through most of March. So any demand stats coming in, are off a healthy base.

Market Summary:

Analysing the above data more closely, 25% of the auctions had 3 or more bidders while only 10% were ducks (i.e. no bidder auctions). These are the sort of stats that provide early indications of a strengthening market. Should this demand be sustained on the solid auction numbers in the next few weeks leading up to Easter, then it’s safe to say for now that the $M+ market, as a whole, has performed a lot better than most expected and that we may be in fact be in a stabilising price phase.

However if we have a repeat of 2011, where demand fell away after a fairly positive pre Labour Day 2011 market, then all we are seeing now is a bit of price spiking.

As we keep saying, it is early days. But the numbers are substantial and if the clearance rates continue to improve and the bidder numbers continue to increase then in time we could see an end to price falls and prices could in time begin to climb again (the current market has been trending downwards since Anzac Day 2010).

Our focus for the above statements is the $1m to $2m segment. We are still not seeing any significant positive momentum in the $3m plus market. Sure, agents are claiming they’re getting offers on properties and yes, some long term stales are being cleaned up. But they are at lower prices and happening when the vendor is meeting the market not the other way around. So before we acknowledge any uniform improvement across all segments of the market, we need to see the Top level perform in greater numbers and a lot more consistently.

Do all the good deals have to drag out?
Not necessarily. You can make it hard for yourself and the other side if you want, but good negotiations aren’t necessarily long, unpleasant and drawn out. Indeed, why wouldn’t you negotiate in a timely manner if it is right for both parties?

As a case in point, we were involved in a Bayside $M+ property purchase mid week that had been sitting around since before Xmas. With the help of the selling agent we were able to conclude a mutually acceptable agreement in a few hours. Both the buying and the selling sides had done their due diligence and were ready to deal – and both sides wanted a satisfactory result. So in the space of a few hours, a couple of coffees and several phone calls, the basis of an agreement was reached and then signed off on.

There are many deals out there in ‘real estate land’ that haven’t worked out just because both sides have insisted on taking what they think is the ‘moral’ or ‘right’ stance (otherwise known as the ‘ego’ or ‘victim’ position). But over the decades we have found that the best position for buying and selling is the ‘agreement’ position.

The fact is that there is no relationship between the time and pain involved in a negotiation, and the quality of the outcome you end up with.  Otherwise how could anybody think a 15 minute Saturday auction was a good thing?

So don’t rush. Don’t go in unprepared or without good representation. But at the same time don’t snatch defeat from the jaws of victory for no good reason other than it seemed too quick or too easy. How dumb would it be if the negotiation could have been good, simple and quick and you still said no! Helllooo sucker.

CAMBERWELL, 11 Wiringa Ave: Scott Patterson, passed in ($1,560,000, 5 bidders) then sold after

Cooling – off:
On March 1 (last week) the cooling off laws were amended so that now almost all purchases, except those transacted three days either side of an auction, are subject to a cooling-off period. Previously agents could remove the purchaser’s ability to end a contract within three business days of signing by forcing them to seek legal advice prior to making an offer.

Will this amendment have any material effect on the upper end market?

It may. What’s likely is that we’ll see less agents considering offers that come in well before auction day, and agents busier than ever before on the three days just before and after the auction when an agreement can be locked in with more certainty.

We may also see less of the early Auction ring-around with a good offer. Let’s say an agent receives a $3,500,000 offer in writing on a $3,000,000 home three weeks before the auction. Why would the agent do the ring-around to other buyers, potentially scaring them away from the home at $3,500,000, if there was a possibility that the $3,500,000 buyer might exercise his right to cool off? That would significantly affect the auction momentum. What’s more likely now is that the seller will simply accept the $3,500,000, wait till the cooling off is over and then tell other buyers the deal is done – perhaps creating more heat between selling agent and buyers.

Alternatively, there may now be a potentially acceptable buyer strategy where the buyer makes a high offer, then takes advantage of the protection of the cooling off period to end the contract and then comes in later at a lower amount and perhaps under another name – having seriously disrupted the sale process.

What about a boardroom auction? Does this qualify as a publicly advertised auction in all cases with regards to cooling off? What is the definition of publicly advertised? We are looking forward to a clarification on this from the REIV and the government.

Cooling off raises other issues too – especially if you are involved in long negotiations. What most people don’t realise is that your cooling off period begins when you make an offer, not when agreement is reached with the seller. So if the negotiating process takes longer than 3 business days, you will have lost your cooling-off period. There are also some other tricky issues re forfeiture of monies, and the actual process of claiming cooling off. So get some legal or buying agent advice before relying on it as a strategy.

Personally we think you are unwise to use cooling-off as a strategy in negotiation. We as an organisation do not use it as a negotiating strategy. Our strong recommendation is that you do all your due diligence prior to signing.

$3M+ Summary:
As we came to the end of February, most of the work we are involved in at this price level is off market or pre market.

However two really good properties that have just commenced their public selling campaigns should provide a very good public indication of where the market is at: 29 Kooyongkoot Rd, Hawthorn (Michael Armstrong) and  11 Bates St, Malvern (Tim Derham and Jeff Gole). We have inspected and rated both these properties, and there is more information on both in our regular article on the $3m+ Property Market. We’ll be very interested to see the outcomes of these sales.

We had the first signs of life in the Inner East this weekend, and it seems the Bayside Top End may be dragging itself out of its Summer slumber. After last week’s Sandringham Top End action, we saw solid sales this week at:

• Albert Park, 2 Kerferd Place (Oliver Bruce and Kaine Lanyon) – Mid Week Auction bought for $2,380,000
• Brighton, 192 Church St (Ian Jackson) – On market for some time at over $4m – Bought mid week just shy of that
• Brighton, 47 Champion St (Ian Jackson) – On market (with another agent) for an eternity, considering its quality, with an asking initially over $3.5m – Bought mid week for just under $3m.
• See Biggest Auctions below - 5 results over $3m and also one at 112 McKean St Fitzroy with Shayne Mooney of Nelson Alexander

However, there is still a lot of property at this price level on the market in Bayside and the Inner East that is simply sitting there doing nothing.

Overall the $3M+ market is seen by optimists as treading water and by realists as still edging backwards.

BRIGHTON, 19 St Ninians: Nick Johnstone, bought after auction for $3,150,000, 1 bidder

‘Round the Grounds: Market Wrap Headlines

• Boroondara – Bidder Numbers up on Solid Stock Numbers – 72%
• Stonnington – Steady as she goes and first action at the Top End – 68%
• Port Phillip – The best numbers for the year so far on good stock numbers – 65%
• Bayside – Leading the way at $3M+ with 5 sales this week – 73%

A word from the experts: Bumper Edition due to our break next weekend.

How has the $M+ market started, and what are stock levels like pre-Easter?

James Tostevin, Marshall White (Hawthorn): “A very encouraging and promising start to 2012, with multiple bidders at most auctions and literally double the numbers of buyers for open for inspections this year compared to the last quarter of 2011”.

Mike Gibson, Kay & Burton (South Yarra): “The million dollar market has started a little stronger than where it finished in December. The volume of properties is also increasing and it would appear that buyers are more confident in moving forward in 2012.”

Gary Peer, Gary Peer (Caulfield North): “ There is a small burst of quality properties coming on the market pre-Easter, which may result in a quiet winter season.”

John Holdsworth, Greg Hocking (Albert Park): “Stock levels are somewhat distorted in Albert and Middle Park because of the long weekend and car races, and then Easter. So far on low turnover, the million dollar plus market is still patchy.”

Jenny Dwyer, Hocking Stuart (Sandringham): “The million dollar market has seen a renewed sense of activity since the New Year, with solid prices being achieved. Attendances are on the increase at open for inspections and auction crowds are larger than the spring market.  Pre Easter auctions and private sales are high across all price ranges and all suburbs.”

Iain Carmichael, BenMac (Armadale): “Last week we were of the view that the auction market for $1 million plus properties delivered strongly on its first real test for the year – for us, a 75% clearance. Last weekend (Saturday 25) resulted in a few more pass-ins than we would have liked. And who knows what next weekend will bring. It’s a tricky market to categorise but no doubt it will explain itself as the year rolls out.”

Richard Winneke, Jellis Craig (Hawthorn): “From our perspective it has started very strongly. There have been several bidders at almost every auction so far. Buyers have finally realised it is a good time to buy- why wait any longer?”

Andrew Stuart, Hocking Stuart (Albert Park): “It seems  there is renewed confidence in all sectors of the inner-city bayside market. The sentiment now is that perhaps we have hit the bottom and that prices may again be on the move upwards. Hopefully there is a spark that will get the engine rolling again!!  Stock levels pre Easter are down on last year. However, should vendors get a sniff of increased activity we should see a lift in listings for the period immediately after Easter.”

Mark Earle, Buxton (Sandringham): “For quality homes that are priced in accordance with recent comparable sales, the market is strong.  Numbers in general are surprisingly strong but this hasn’t translated to sales just yet.”

Greg Toogood (Jellis Craig) - man in charge! 7 Ross St, Kew, under the hammer, $1,920,000, 5 bidders

Biggest Auctions:

Hawthorn East, 2 Buley St, Jason Scillio (Kay & Burton), after auction above $3,700,000, 2 bidders: Jason Scillio was our master of ceremonies here and he led the way strongly and professionally, politely refusing low increment bids and keeping the auction moving along smoothly and quickly…(see more in Auction Reports)

Malvern, 9 Woodmason St, Jeremy Fox (RT Edgar), after auction, above $3,530,000, 3 bidders: Interested to see how this recently on the market and sold quality home goes at this indoor auction in front of crowd of around 40…(see more in Auction Reports)

Toorak, 33 Evans Court, Gowan Stubbings, After Auction, around $3,400,000, 1 bidder: This beautifully presented property attracted a sizeable crowd on a gloomy day. An opening bid from the crowd of $3,260,000 was trumped by auctioneer Gowan Stubbings ..(see more in Auction Reports)

Brighton, 3 Tennyson St, Leigh Hallamore (Buxton), under the hammer, $3,270,000, 3 bidders: Indoor auctions aren’t always that exciting, but this bucked the trend and was fast paced, entertaining and high energy all rolled in to one…(see more in Auction Reports)

Brighton, St Ninians Rd, Nick Johnstone (Nick Johnstone), after auction, $3,150,000, 1 bidder: The loud chatter of the crowd, with umbrellas in hand, who stood in a series of small huddles, made the weather seem much less dreary….(see more in Auction Reports)

Top Bidderman Auctions:

Brighton East, 734 Hawthorn Road, Phil de Fegely, under the hammer, $2,220,000, 5 bidders:  A sea of shoes lined the front entrance and the assembled group of 60 swamped the front two rooms of the property….(see more in Auction Reports)

Kew, 7 Ross St, Richard Earle (Jellis Craig), under the hammer, $1,920,000, 5 bidders: Here was an auction in two halves. A slow start had Richard Earle posting three consecutive vendor bids, opening at $1,600,000 and chipping in two more to $1,630,000….(see more in Auction Reports)

Armadale, 38 Lambeth Ave, John Bongiorno (Marshall White), under the hammer, 4 bidders: This is my first Growling Jack auction for the year and he was in fine form in front of a very wet crowd of 120…(see more in Auction Reports)

Top 3 Pass Ins

Canterbury, 16 Monomeath Ave, Doug McLauchlan (Marshall White), $4,700,000, no bidders: Outside, and under a substantial porch, a crowd of 80 gathered. Doug McLauchlan opened with a vendor bid of $4,500,000, adding another at $4,600,000…(see more in Auction Reports)

Elwood, 8 Dickens St, Marshall Rushford (Hocking Stuart), $2,950,000,  2 bidders: This great old dame attracted a lot of curious bystanders – even (I was told) a former owner of this amazing old mansion, who had come along to see just how much it was worth in today’s market…..(see more in Auction Reports)

Brighton East, 10 Connor St, David Gilham (Noel Jones), passed in, $2,050,000, 1 bidder: A cool, wet autumn morning in a delightfully quiet and well maintained street – it was the perfect setting for an auction…(see more in Auction Reports)

Big Issue Video: Mal and Architect Adam discuss the early 2012 Market. Click on the live action.

No Marketnews next week due to Labour Day long weekend.

Mirror Mirror on the wall, is the market going to rise or is it going to fall? Richard Earle and Steve Burke looking for inspiration and bidders, but neither were forthcoming at 72 Princes St Kew. Passed in for $2,425,000. No bidders.

At 6pm on Saturday, the James Clearance Rate for $M+ was 59% on the 37 auctions we attended. That figure was steady on last week. The Weekly Review Bidderman, our demand indicator, was also steady on last week, at 1.5 bidders per auction. The $2.5m+ market was weak, with 8 from 10 reported as having passed-in; but the rest of the market looked pretty balanced.

Market Summary:
Last week started pretty well for both buyers and sellers – especially when you consider the negative press backdrop re job losses. And the reason it started well was because there actually was a market.  Buyers and sellers were transacting. Buyers were competing on the right homes, and sellers were moving their homes on at the right price. This week was a similar story except at the highest of the high end.

Last week was characterised by just as many sales in the 3 hours post auction as there were sales during the 15 minutes under the hammer. This week was a similar story – except at the $3m level.

Despite the records showing that 8 out of the 10 homes selling at the $2.5m  level were passed in this weekend, there does seem to be some spark out there right now. It’s not quite showing up in the stats, but we feel that buyer interest is building, especially at the lower $M+ levels. The strongest spark is from buyers waiting for a sign to validate their price thoughts and who, when that sign comes via an offer from another buyer, are returning fire and lifting their price, sometimes quite strongly and rapidly.

What does this mean? In our opinion it shows there is cautious demand and if this continues or spreads more widely then the market may stabilise and ultimately could increase in price. It’s very early days. But the signs are certainly not all negative out there in the lower part of the million dollar plus quality market right now. Buyers will put up a bit of a fight these days rather than walk away as they did for most of Spring 2011.  For example: 18 Bamfield Sandringham with Mark Earle and Peter Hickey of Buxton, which couldn’t get a sniff at $2,200,000 last year, concluded in a boardroom auction this weekend at $2,300,000 with 3 bidders. That was after the 10 Victoria St (Peter Kennett) re-auction last week (around the corner) had 3 bidders, after a non event last year.

Another interesting market characteristic last week was the huge variances in bidder numbers at each auction – few had many, while many had few. This week the spread was a little more even across the board.

Last week was low on stock numbers with 50 auctions over a $M in Bayside and Inner East. This weekend and next weekend are both solid weekends with more than 100 auctions – and there are some more solid weekends leading up to Easter.

So after two weeks into the market, what are we sure about?

Price, as a blanket statement, is up to 25% off the price highs of Anzac Day 2010. Good evidence of this is land prices in all suburbs, but in particular places such as Balwyn and North Balwyn where the typical 2010 $3.3m French Provincial build and sell has now become the 2012 $2.8m French Provincial build and sell.
The degree of discounting depends on

• The Quality Characteristics of the home, combined with
• The initial offering price to market

1. The overall market has a number of segments that are now roughly at pre GFC 2007 prices (although this is a generalisation). But there are also a number of exceptions, such as the single fronted 6 Highbury Grove Prahran (John Morrisby) which showed a 50% increase in value between 2007 and 2012 with no improvements to the property (see auction report).
2. There is definitely a feeling of increased activity in the last fortnight. Selling agents are far more positive than they were in January. This is supported by numbers going through open for inspections, bidder numbers and finally transactions. A few biggies that were cleaned up this week (but at lower prices than initially offered) were:

3 Park St Brighton (Jason Gill) – Wrapped up this week at just under $3m after being on the market for a fair while.

47-49 Victoria St Sandringham (Julian Augustini) – Big parcel of land, on the market since late last year and sold in the mid $3ms.

324 Beaconsfield Parade St Kilda West (Shane Siemers) – Went to auction last year at over $5m and sold, we believe, in the sub $4m range this week.

The Deli Lama - Mark Dayman was back working the crowd in his usual entertaining manner - we missed him - and he got the 2 bidders to $3,900,000 at 2 Laurel Court Hawthorn East - but that still wasn’t enough!

‘Round the Grounds $M+:
Boroondara: 70% clearance rate on solid auction numbers – strong and steady as per last week
Stonnington: No complaints from sellers or buyers – 72%
Port Phillip: No mystery here, agent pricing continues to be too high – 46%
Bayside: Transactions are mainly forced rather than joyous ones, but they are happening – with Sandringham the best Top End performer this week (away from auctions) – 64%

A word from the experts: How did auctions over $1m start, and what are stock levels like for March?

Justin Long, Marshall White (Armadale): “Certainly we have found there has been a little more strength this year already – a combination of December/January starvation of supply, vendor realism kicking in and perhaps just a hint of good economic news around the world and locally. March stock levels are strong.”

Hamish Tostevin, Marshall White (Hawthorn): “Yes the sales started quite well last weekend, with 9 sales in excess of $1,000,000, and some good bidding at the auctions. We are optimistic about this continuing and, if the inspection numbers are any indication, there should be some solid weekends ahead of us. March auction numbers have certainly continued to get stronger in the back half of the month prior to the Easter weekend – especially the 24^th and 31^st which are emerging as strong weekends. ”

Peter Kennett, Hocking Stuart (Brighton): “As far as future auctions for March…there definitely are a fresh crop of buyers in the market as well as some from last year. A vendor will be able sell their property, only if they are in tune with today’s market  sentiment as buyers are very well aware of over inflated prices.”

Geoff Cayzer, Cayzer (Albert Park): “The stock levels listed by our company for March would be approximately 50% less when compared with March 2011, bearing in mind the Melbourne Grand Prix being held from March 15^th – 18^th.”

Scott "Pretty Boy" Patterson was not so pretty on Saturday when 29 Hopetoun Canterbury passed in at $2,650,000. No bidders.

Biggest Auctions:

Hawthorn, 84 Kinkora Rd, Alastair Craig (Jellis Craig), Under the hammer, undisclosed above $2,500,000, 4 bidders
A lively, interested crowd squeezed inside for this one. In the kitchen, living area and hallways they listened to Alastair Craig’s friendly, relaxed opening message…(See more in Auction Reports)

Armadale, 86 Wattletree Rd, Andrew Hayne (Marshall White), Bought after, undisclosed above $2,470,000, 1 bidder
With the hot sun almost oppressive, standing room in the shade was at a premium….(See more in Auction Reports)

East Melbourne, 112 Powlett St, Iain Carmichael (BenMac), Bought after, $2,045,000, 2 bidders
A hot Melbourne afternoon with a near perfect blue sky, and many found shady refuge on the wide median strip here to watch auctioneer Iain Carmichael ply his trade and sell this double-storey Victorian Row terrace, in one of East Melbourne’s best streets. What a great place to live!…(See more in Auction Reports)

Top Bidderman Auctions:

Brighton East, 49 Regent St, Rodney Morley (Woodards TBM), Under the hammer, $1,285,000, 5 bidders
It was an exceptionally good idea to hold the auction under the carport and in the shaded front yard of the home – and with the free bottles of water handed out before proceedings started, the Woodards team was off to a good start!…(See more in Auction Reports)

South Yarra, 33 Clara St, John Bongiorno (Marshall White), Under the hammer, $941,000, 4 bidders
By his own admission, auctioneer John Bongiorno’s opening bid of $800,000 was on the low side. But it worked a treat!…(See more in Auction Reports)

Biggest Pass Ins:

Hawthorn East, 2 Laurel Court, Mark Dayman (Marshall White), Passed in, $3,900,000, 2 bidders
The weather was hot and sticky but that didn’t stop a good crowd of around 120 people attending this auction at 2 Laurel Court in Hawthorn East…(See more in Auction Reports)

Canterbury, 29 Hopetoun Ave, Scott Patterson (Kay & Burton), Passed in, $2,650,000, no bidders
Short and sharp auction this one. In front of around 30 people and in dry hot weather, auctioneer Scott Patterson gave a concise account of the home and the auction rules and looked for an opening bid around the $2,600,000-$2,700.000 mark, but none from the crowd were forthcoming…(See more in Auction Reports)

Malvern, 119 Stanhope St, Andrew Macmillan (Benmac), Passed in, $2,500,000, no bidders
Andrew Macmillan leads us into the auction in front of a smallish crowd of around 40. Solid Edwardian – nicely renovated on 740 sqm. These homes always sell…(See more in Auction Reports)

CAMBERWELL, 46 Gardiner Pde, Mark Williams (Marshall White), bought $1,925,000, 1 bidder: The crowds were out in force but the results didn't necessarily match.

Hellooo Melbourne Million Dollar Plus Market Watchers and welcome to our first edition for 2012. Two big Melbourne sporting events started again this weekend after a summer hiatus – the Pre Season NAB Cup and the Melbourne Auction scene.

On the auction scene, overall demand was not too awful. At 6.00pm Saturday, the James Clearance Rate for $M+ in Inner East and Bayside was 58% on the 31 auctions we attended. The Weekly Review Bidderman, our demand indicator, began the year at 1.5 bidders per auction.

This weekend’s numbers were low, at just over 50 in that $M+ bracket. But next weekend will have well over 100, a solid number. And we’ll see a similar number on March 3 before we have a significant drop on March 10 due to the Labour Day weekend.

Market Wrap-up

• Overall the market appeared weaker on early results, i.e. under the hammer. As the day wore on though, and pass-ins were cleaned up, the indications were that the market seems to have started as well as could be expected. But it’s too soon to say it’s a clear positive trend.
• Stock levels on offer were low in number, in quality and in dollar value. Only two auctions had results over $3m – one sold and one didn’t. So it’s still a bit foggy to us.
• A number of pass-ins were cleaned up post auction – meaning a lot of the action was not visible this weekend.
• The phenomenon that became very evident late in 2011 has continued in 2012. This weekend we counted 46 bidders at 31 auctions – so there is demand out there. BUT there was no evenness: five auctions had 50% of the bidders averaging almost 5 bidders per auction and the other 26 auctions averaged just under one bidder per auction.

‘Round the Grounds:
Bayside – Low levels and mostly unexciting stock, so 56% is an even result.
Boroondara – Actually that’s pretty impressive first up – 83% clearance.
Stonnington – Solid start on low numbers  – 75% clearance
Port Phillip – Whoops – somebody forgot to tell the buyers auctions had started again – 20%

Market Summary – Year to Date 2012.

2011 was a year of generally falling prices – with the exceptions of the months of May, September and December. Yes we finished the year off OK, but it was more a case or arresting the fall rather than any lighting of price rockets.

Last year we saw drops in market values on homes that started too high on price, with owners that then had to sell. This was particularly the case with properties that were of inferior quality or in poor positions. In many cases these drops were 20% and more off the Anzac Day 2010 high. A lot of that fall in value happened in the last quarter of 2011.

On the subject of price falls: some organisations are spruiking median price increases in the last quarter of last year as real stats, which only proves that there are dope tests that can have false positives. The market did have some strong results in December but overall it was a negative second half for many sellers (in terms of lower selling prices or not selling at all).

So how have we started 2012? In a word QUIETLY.

By any previous year’s measurement, 2012 has been pretty quiet out of the blocks – except for agent claims of numbers through opens.

1. Only a handful of $3m+ buys (see our report)
2. Little new stock of high calibre at this price level came onto the market in February. This is particularly so in the Inner East. March may turn out to be different from what we are hearing and seeing pre-market with a number of sellers keen to get a result prior to our early April Easter. But that is conjecture until we see March new stock numbers confirmed.
3. When the market is quiet, agent turnover drops and so do agents’ incomes; unrest builds and the merry-go-round begins. During late 2011 and early 2012 agent coffee shop meetings have been up.

So yes, the market still seems a little quiet, but it’s not that bad. It’s pretty much as expected and this weekend went as well as a selling agent could have hoped for….

What of the claimed increase numbers at open for inspections? We actually support this premise and the implication that demand may be stronger than the results show.  Our enquiry numbers are up and the number of clients looking for homes is also up on this time last year, even if we’ve seen little change in the number of clients in actual negotiation this year compared to last. Result-wise we also started OK, with buys in Fitzroy, Glen Iris and Brighton in the $1m, $2m and $3m price bracket in early February. Over January we were closed as we always are.

Demand being OK can be further supported by our Stale and Stalemate results. As we went into Christmas we had four key $2m to $3m negotiations in stalemate, in that the vendor was fixed at X and our buyer was fixed at Y. It was a stalemate as opposed to a momentum negotiation because the vendor felt no compulsion to lower their price and our buyer had no proof as to why they had to increase their bid.

Ten weeks later, the results on those negotiations are:

1. Burke Road Malvern – Marshall White’s Maddy Kennedy got a surprising near $3m offer from another buyer. It was a really good home but in a difficult location and the auction only produced a vendor bid of $2.4m. Tick to seller.
2. Victoria St Brighton – Barb Gregory of Marshall White Brighton. Another buyer met the reserve of $3.5m. Not surprising – this was a good home and fair price. Tick to seller.
3. Moffat St, Brighton – Bought after some argy-bargy with Chris Bevan of JP Dixon. This was a brilliant design and build and had been on the market for over a year. Tick to both buyer and seller.
4. Camberwell – This is still in a stalemate negotiation, and with other blocks nearby also unsold it’s hard to tell when or even if something may happen on this. No ticks.

A word from the experts: How has the year started?

David Hart, Buxton (Brighton): “Traditionally the Brighton market is pretty slow to gain momentum with regard to stock levels. This year is certainly no different, with a shortage of quality listings across the board.”

Richard Winneke, Jellis Craig (Hawthorn): “The year has started very strongly. We have seen an average of around 20 groups per home (compared to Spring last year with around 10-15). Six out of six $1m+  homes sold at auction on February 11 with Jellis Craig. Many buyers are wanting to buy and are putting  in offers before auction.”

James Connell, Marshall White (Armadale): “It has been a good start to the year with a lot of good activity, positive activity. However, it is still  too early to judge the extent of the momentum.”

BRIGHTON, 1 Farleigh Grove, Greg Costello (RT Edgar), under the hammer, $2,222,000, 6 bidders

Early 2012 Top End Private Sales

• Brighton East, 181 Were St – Kate Strickland – Over $3m – Cutting edge home – Big price for East Brighton
• Brighton, 10 Victoria – Barb Gregory – Over $3.5m – Modern 7 yo family home near the water
• Brighton, 17 Huntingfield – Regina Schmidt and Brian Devlin – Over $3.3m – Big family home
• Brighton 2 Collins Brighton– Regina Schmidt and Brian Devlin – Over $3m – Townhouse, one of a pair
• Brighton 26 Moffat Brighton – Chris Bevan – Cutting edge family home
• Balwyn, 15 Boston – Mark Rathgeber – $3,300,000 – Big family home
• Hawthorn, 58 Kooyongkoot – Scott Patterson – Over $3m – Family home
• Prahran, 22 Murray – Tim Wilson – Over $3m – Big land
• Kew, 65 Stevenson – Paul Richards – Big period home – $3m

ALBERT PARK, 148 Beaconsfield Pde, David Wood (Hocking Stuart), under the hammer, $3,010,000, 4 bidders

3 Biggest Auctions:

Albert Park, 148 Beaconsfield Pde, David Wood (Hocking Stuart), Under the hammer $3,010,000, 4 bidders
A strong crowd converged under the hot Melbourne midday sun to see if this beachside property would find a new owner…. (See more in Auction Reports)

Malvern East, 56 Central Park Rd, Iain Carmichael (Benmac), After auction, $2,680,000, 1 bidder
Great setting for an auction – on the street, across the road from Central Park. This certainly highlighted the big plus of the property – it was all about position…. (See more in Auction Reports)

Sandringham, 10 Victoria St, Peter Kennett (Hocking Stuart), Under the hammer, $1,935,000, 3 bidders
This home had been offered for auction late last year so I, among many of those gathered, was keen to see what would happen when it was offered this time around…..(See more in Auction Reports)

Top Bidderman Auctions:

Brighton, 1 Farleigh Grove, Greg Costello (RT Edgar), Under the hammer, $2,222,000, 6 bidders
My first auction of the year and I’m a little toey as the auction bell rings. It’s not nerves, more anticipation. You see I think it will fly along and I’ve been starved of the buzz of an auction for 8 long weeks…(See more in Auction Reports)

Kooyong, 13 Talbot Cres, Andrew Summons (Hocking Stuart), under the hammer, $1,161,500, 5 bidders
A perfect sunny day provided the backdrop for a great auction and a spectacular auction it was. Auctioneer Andrew Summons took centre stage and in his preamble spoke enthusiastically of the property with its delightful period features and north facing backyard, with the Kooyong location providing a village atmosphere….(See more in Auction Reports)

South Yarra, 21 Nicholson St, John Bongiorno (Marshall White), under the hammer, $1,525,000, 4 bidders
This fine double-fronted Victorian cottage made for the perfect back drop for this auction. And centre stage is where auctioneer John Bongiorno does his best work….(See more in Auction Reports)

Biggest Pass Ins:

Camberwell, 3 Christowel St, Paul Williamson (Jellis Craig), passed in, $3,025,000, no bidders
One of the first big Melbourne auctions of the day (if not the year), and it was much anticipated…(See more in Auction Reports)

Brighton, 20 Birdwood Ave, Stewart Lopez (Kay & Burton), passed in, $2,700,000, no bidders
A good sized crowd of around 40 people were on hand to watch this auction, led by the affable Stewart Lopez…(See more in Auction Reports)

Buyer Masterclass: Should we wait or should we buy now? Read Buyer Masterclass, this Wednesday.

Big Issue: Our next market video will be up this week. Check out the live action.