2011 Best Auction Photo - I see Red: The Hocking Stuart boys - Andrew Stuart, David Wood and Michael Coen - bring a glimmer of colour to an otherwise dreary Melbourne day on July 30th. 20 Barrett St, Albert Park had no bidders but was bought after auction for $2,200,000. Sums up the year for most agents. Jen Milligan the reporter and photographer

At 6pm on Saturday, the James Clearance Rate for $M+ was 46% on the 24 auctions we attended. The Weekly Review Bidderman, our demand indicator, was 1.3.

This Weekend’s Market
It was a weekend that exemplified what 2011 has mostly been about – big enough crowds, and even spirited bidding in some cases, but ultimately a failure by many sellers to accept what buyers were prepared to pay. The overall market is definitely finishing the year on a flat note.

In fact, with the exception of two in Boroondara and one in Glen Eira, none of the properties we reported on sold under the hammer this weekend. By the end of the day, the final clearance rate for Boroondara was 47%, Port Phillip was 44%, Bayside was 36% and Stonnington 29%. To be balanced, overall it wasn’t an exciting stock weekend.

However one auction of excitement was 17 Yarraford Alphington (Andrew Simondson of Collins Simms). Our initial thoughts were $1.6m to $1.7m for value, our rating was 557/1000 and our finishing comment was “Overall a home that will attract a limited but probably very emotional audience”. The under the hammer result ended up around $400,000 away from where we initially thought and probably $300,000 over reserve (so what do we all know sometimes) as a couple of must-havers fought it out – further proof that if the property is well marketed and regarded as an A-grader, then strong prices can still happen. As 2011 draws to a close the market continues to remain two-faced; a reasonably strong one for a limited number of market priced A and B graders and another far bigger, far weaker and price falling one for overpriced A, B or C graders.

With the number of auctions dropping to next to nothing over the next couple of weeks before going into the long summer hiatus, this is our final Market News edition for 2011. This weekend’s auction reports are still available for viewing and our Buyer Advocacy office is open until December 17th.

Please read on however, for our summation of the year that was. Read on too for our James Market News Annual Awards and our revisiting of the best auctions of 2011.

2011 Table of Contents Christmas Edition

• 2011 – Year in Review
• James Market News Annual Awards
• 5 Great Auctions in 2011
• Christmas Thank Yous
• Legends’ Thoughts on 2012 will be in Buyer Masterclass over the next week.

2011 YEAR IN REVIEW

2011 has been a year some in the property market – chiefly sellers and some agents – would possibly rather forget. For buyers it’s been a little better, when there’s been a reasonable supply of good stock. But buyers’ enthusiasm has been constrained by nervousness about economic events unfolding beyond our shores. So while they’ve been out there looking, and while in many cases they’ve been keen to buy, they haven’t wanted to pay too much – certainly not as much as what many sellers are demanding. For many sellers it’s not been a happy result – and some of them will be still on the market with their now stale offerings in the new year.

Read on for our season-by-season account of how the year unfolded.

LATE SUMMER

After 2010 finished in a state we described as ‘balanced and healthy’, 2011 started with a bit of warmth, even moving into ‘hot’ for the $1 million market. On the last weekend in February, clearance rates for the auctions we attended were up at 74% and Bidderman was at 2.

But a flush of new stock slated to come on to the market in March and April would be the test of whether the warmth we saw in the last weekend of summer represented an underlying hotting up or a temporary New Year afterglow.

The story was different with the $3m+ plus market, which was dead as a doornail with very few homes changing hands. Geographically too, the trend at the Top End of the market reversed – with Bayside performing a lot better than the Inner East (in fact Brighton townhouses at the $3m level were almost walking out the door).

AUTUMN

The New Year afterglow had indeed faded by March, with buyers increasingly nervous about world events, the stock market, the government – the whole shebang. Coinciding with this buyer nervousness was a flood of new stock coming onto the market as would-be sellers also nervous about the future decided to try and sell quickly.

The surge in stock was not taken up by the market and consequently we saw declining auction clearance rates and bidder numbers, and a market groaning under the weight of stock numbers. Not only was new stock coming on that would previously have been gobbled up, but it was having to compete with an increasing backlog of pass-ins from previous weeks. This compounding rate of stock build meant price only had one way to go – and that was down. It wasn’t quite a price free fall, however, as most sellers, including those  at the $3m+ level, had the resources to ride out what they thought was just a blip of negativity.

Red Zone - Bidders under 1.5 - Falling Prices - Click to enlarge

EASTER

From around Easter the market had the first of two short periods of 2011 price spiking (September was the other). Those sellers who had the good luck or good management to be in the market at this time saw some good results – especially those with sensibly priced A grade properties. 

May 21^st was probably the high point for sellers, with the clearance rate a whopping 84% on the 37 auctions we attended and Bidderman of over 2. It was the 2011 weekend to be selling.

WINTER

However, the late autumn cheer turned out to be nothing more than a brief flare of optimism before we went into a grinding winter with little activity as the supply of good quality stock dried up, and buyers stayed home uninspired by what was on offer. It was not so much a negative as a boring market.

Prices flat-lined and even fell on lower quality homes. The exception was the rare occasion when a quality home hit the market, but overall the market was off by as much as 10% from the last peak in April 2010.

The unluckiest sellers this year were those that went to auction on August 6 the day after the stockmarket plunged by more than 4% on fears the global financial crisis was re-emerging. Just 3 of the 25 auctions we covered sold under the hammer – that’s 12% – though by the end of the day that figure had gone up to 55%.

After that weekend of panic, the rest of winter wasn’t quite the disaster that some had feared. It was more a ‘nothing’ market, with little good stock on offer, and most auctions seemed a tug of war rather than a race – even when there was solid support from buyers. Vendors refused to budge on price, and buyers weren’t prepared to pay what they saw as inflated asking prices – and the result, more often than not, was a stalemate.

Red Zone - Poor Price Matching - Falling Prices - Click to enlarge

EARLY SPRING

Early Spring saw a reprieve from the doom and gloom of winter, with the second of the year’s upwards price spikes. The $3 million plus market did particularly well. On August 27 we reported that 11 homes had sold for a total of $55 million in one week.  Clearance rates were back up over 60%. The heat stayed for most of the month of September at $3M+.

Why did this happen? It was like April – it was about buyers looking into the future and seeing not a lot of good stock coming on. The supply and price equation showed that demand was there when conditions were right – and September proved it.

But by mid-September we were back in the ‘two speed market’. This division between over-priced lower grade properties and good quality well priced properties had been going on all year, but it became more entrenched as the year went on and buyers flocked to A-grade auctions and stayed away in droves from the rest.

At the lower end it was a vicious circle of low bidder demand resulting in poor results, making sellers reluctant to put their houses on the market. Which meant little in the way of good stock around, so buyers already feeling cautious about the economy anyway weren’t bothering to go out there and bid on the little that was on offer.

Meanwhile, at that upper level, where buyers weren’t so concerned about the economy, they were snapping up whatever good quality stock was coming on to the market. All you need is couple of bidders at this level to push the price up, and even at this point we were seeing auctions with three or more.

However the up spike was short-lived. By the end of September the heat had dissipated as opportunistic sellers flooded their properties onto the market. Within a fortnight most of the good news for sellers was over. And, as it turned out, that was it for sellers in terms of good news in 2011. For buyers though, the good news has rolled on for the rest of the year with a great combination of falling prices and increased choice.

LATE SPRING

With the AFL season ending a week later than usual, the spotlight was on October 22 as the day of culmination for many auction campaigns and the biggest Super Saturday for 2011. 150 auctions were slated for the $1 million market in the Inner east and Bayside, three times as many as the previous week, and twice as many as we’d seen on any weekend since autumn.

But it was a day of pouring rain and frustrated hopes for many sellers, with a clearance rate of just 43% on the 46 auctions we attended. And many of the properties that passed in on that hopeful day sat on the market for weeks to come. Three weeks after Super Saturday our survey showed that a third of those properties still had not sold.

Even so, the market was not exactly on its knees. Yes, prices were continuing to fall and in some cases falling quite substantially. But when vendors were prepared to fall in with the market, there were bidders. In fact, if choice and falling prices are your definition of a good buyers’ market, this was an ideal buyers’ market.

2011 - Falling Prices - Click to enlarge

WHAT DOES THIS MEAN FOR 2012?

There is a lot talk going on about the market being overpriced and the bubble bursting. But the fact is the bubble has already well and truly burst. Prices right now appear to be tumbling as much as they did in the GFC. Even on some good homes they are down 5%- 10% and as much as 20% since our last high water mark (April 2010) on the weaker homes.

But markets can turn quickly. To recap on recent history, we saw this kind of price discounting through the GFC in 2008 – although, please the GFC was heavier than 2011. But we also saw prices climbing back up the next year, with  a mini boom occurring up until Anzac Day 2010. During that period some prices on some homes rose by as much as 30%. Our graphic representation to the right shows how prices have moved in the past couple of years.

And while we have seen big price drops in 2011 (on all but the best of the best), there is not the panic we saw three years ago. The market appears to be accepting these ups and downs as a normal gyration and these gyrations may well become bigger and more regular in 2012 as we all become more ‘fully informed’ through media saturation.

Our best bit of advice for 2012: The Market is Two-faced:

Look at the Bidderman stats over the last 3 weeks. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. It was the same story last week, with 17 bidders on 4 homes but only 15 bidders on the other 21 homes we reported on. This week we saw  26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. Which shows that properties that are hot, are really hot. Those that aren’t, need a good agent.

These facts should show you the importance of

• Research
• Multiple Negotiation Strategy – low and high
• Price Framing – may be $100,000s away from where you are.
• Selection in buying now determines for your future in selling.

Auctioneer of the Year – Growling Jack
It was an easy choice this year: ‘Growling’ Jack Bongiorno has been the standout auctioneer in our patch in 2011. And while it is true an auctioneer is only as good as the selling agents who support him (in this case Heather and Rae in particular), you still have to go out there and perform.

In the past we have been critical of Growling Jack’s opening waffle (it was too long) and while that has improved, there are still auctioneers with a better opening patter. So why is he our auctioneer of the year in 2011?

Simple – in the guts of the auction and at the business end he is the strongest, most effective performer out there right now. In a tough market place – and many auctions are tough right now – Growling Jack takes the audience and the bidders on. He challenges them, makes them laugh, makes them cry and most of all he keeps things going – rarely missing a beat in terms of numbers or momentum. In 2011 if you wanted to see the best, then you needed to watch a full-on Growling Jack auction – it was on many occasions a masterpiece of theatre and business combined. Hat off to you Jack!

Also on the podium are Phillip Kingston and Antony Woodley – these guys a good, bloody good and they extract money from the crowd where others can’t. Philip Kingston is still the auctioneers’ auctioneer and the most consistent performer over the last decade in our opinion. Antony Woodley is a pro – his spiel, tempo, bid retention, bid suggestion are almost faultless and his auctions should be viewed by young auctioneers as a training manual.

Agent of the Year – Marcus Chiminello
Only a few years ago Marcus was our young agent of the year; this year he seems to have really come of age. Particularly towards the end of the year, he flew home to the finishing post with some very big deals. Specialising in new homes and apartments, his years of consistent data basing and marketing have really begun to pay off and Marcus’s name was, in 2011, the name we heard the most when it came to the big deals getting done. His strengths lie in two things – his ability to match a buyer and seller and his way of doing business. We find it simple, open and straightforward. Yes he does step quote, like almost all Marshall White agents, but he is more open about it and guides buyers through the process a lot better than most (he keeps you informed and if you deserve it, he treats you with respect). There are many great agents out there in 2011 and in our opinion Marcus Chiminello was amongst the best of them. Hat off to you Marcus!

Agency of the Year –Kay and Burton
In 2011 Kay and Burton’s performance in a tough market at the Top End set them apart. In their specialty, the Ultra Top End, they have made their mark with some very substantial sales and they have done it consistently. They have gained a first rate performer in Scott Patterson to head up their Hawthorn Office and unfortunately lost a doyen in Gerald, who has retired. All through this, under Mike Gibson, they haven’t missed a beat. What separates them from their main rivals, besides their consistent professionalism, is they have not attracted anywhere near the level of negative comment about their quoting from buyers we deal with. Kay and Burton are a first rate company and this year in our opinion they have been the best we have come across. Hat off to you Michael!

Innovation of the Year – The Kay and Burton Report
Sure others do it – but nobody does it as well and the first few minutes of this report are compulsive viewing each time it comes out. It’s slick, informative and is looks solid – a great marketing tool that lifts the bar for all of us. Hat off to you Tracey.

Young Agent of the Year – Campbell Ward
Honesty and Decency are the two words we associate with Jellis Craig’s Campbell Ward when it comes to real estate. In fact Campbell is very much NOT how many of you may think about selling agents – he is quiet, polite and generally low key. With his partner and mentor Peter Batrouney they form one the more effective teams in Boroondara. Campbell we hope you never change and we also hope that more and more young agents see that you can park you ego to the side, you can be open and honest with buyers and sellers and you can have a very successful real estate career. Hat off to you Campbell and may many others follow in your real estate footsteps.

Raspberry of the Year

Step Quoting – when it’s done inappropriately, (and not all step quoting is illegal or immoral),  it is the biggest negative to our industry and we urge buyers not to tolerate blatant lying around what an agent expects a property to go for. Report them, put in claims for your expenses such as building and pest reports, hassle them, ask them for a comparable sale to justify their attempt to treat you with contempt. Sellers – when your agent lies for or to you in this market, you may actually end up with a lower price than if your agent has been truthful. Buyers are not idiots, they will pay you back after a pass-in, if they feel you have not negotiated in good faith.

The Bayside Market – we are not sure what’s in the water in Bayside. But it has clearly affected some vendors and some agents there. The Bayside Market is actually a lot healthier than it may appear in terms of would-be buyers; but as long as sellers and agents remain so far apart when it comes to asking price versus market price,  the market will continue to operate on lower levels than it needs to.

2011 Auction Report of the Year – Reporter Daniel Ehrenreich
Super Saturday – October 22nd  – 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders

Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

September 3rd – 29 Rose St, Armadale, John Bongiorno (Marshall White); Under the hammer $3,030,000, 9 bidders

Well here we are with the MW trifecta – Jack, Rae and Heather. The monkey and the two organ grinders some unkind people may say. The crowd is big, but not unexpected (125) and they are here to watch the theatrics and possible fireworks as this home was only bought and sold 3 years ago for a tad under $2,500,000. There is talk the current owners want a fair bit more than their money back. We get the usual start from Jack – solid and professional and then to the real theatre. $2,000,000 bid from Bidder One is refused/half taken and a vendor bid at $2,250,000 is slammed back – geez Jack is in an aggressive mood. A second bidder chimes in at $2,275,000 and a 1/2 time break is taken. That was a surprise. “Get on with it” Jack barks out at the crowd upon his return. Bidder Three tries $10,000 – “No” screams back Jack. He has obviously been well prepped about big interest by Heather and Rae, but nonetheless it’s still very aggressive bid refusals. Two more bidders take it up to $2,425,000 and we have some momentum – some real momentum. Jack says there is no reserve – and he issues the challenge bid or you’ll  “get overrun” at the pass-in. Boy, is he sticking it up the crowd – Jack is at his petulant best and it seems to be paying off. Please this is not gay abandon – Heather and Rae must have briefed him there were multiple bidders. Bidder 5 – $2,500,000. Bidder 6 – $2,600,000. Jack has won the crowd over with his self deprecating humor intertwined with a certain downright arrogance that he has in spades today. Lots of bidding and we are at $2,800,000  – Bidder 7. $2,875,000 and a couple of bidders rightfully push hard for an answer to the question.  “Is it on the market Jack?” they repeatedly ask and belatedly and smartly Jack retreats back inside for an answer – this was a time for concession, empathy, not bravado and Jack read it perfectly. On his return – wait for it “Yes it’s on the market” he fires into the main “on the market” enquirer and Jack adds “now bid – no pressure but we’re all watching you”. $2,925,000 – Bidder 8. Straight through $3m with a new bidder – that’s 9 in total. Bought under the hammer for $3,030,000. Wow! And the market is dead for all homes – NOT. Not sure who should take a bow for this – certainly Rae and Heather – and the home, the sellers, the market, Jack, the bidders. Why don’t you all take a bow. Bloody ripper auction.

August 13th – 4 Glan Avon, Hawthorn, James Tostevin (Marshall White); Under the hammer $2,815,000, 3 bidders
Enchanting riverside parcel of land with a couple of possible development issues, sees a large crowd of 130 in attendance wondering what this rarity will bring. James Tostevin is our auctioneer and the centrepoint to his opening spiel is a letter from council saying basically no heritage overlay. This is why James is a great agent – attention to detail and he powerfully makes his case that you can build what you want (STCA). To the uninitiated most would not realise just how powerful this presentation was by James. It’s rare you see a commanding performance before the bidding even begins, but his delivery was strong and persuasive – obviously this has been a issue and he buried it firmly, leaving bidders in no doubt and free to raise their hands. I dare say he was also the catalyst in getting this letter – many agents would simply not have bothered by saying – “make your own enquiries”. Anyway to the bidding – Bidder one opens at $2,000,000 and an immediate vendor bid at $2,200,000 is placed on top. Bidder 2 at $2,250,000. Bidder 1 – $2,300,000. Bidder 3 – $2,400,000. We move between bidders in $50,000’s to $2,550,000 and then in $25,000’s and then less. A word back on the auctioneer – James has always been highly regarded as an auctioneer by us – but I suppose because he is such a good agent we have always seen him as that first and auctioneer second. Today his bidder suggestions, pace and pathos were near faultless. This was turning into a truly command performance. After a small momentum drop we arrive at $2,625,000 and James calls a half –time break. This no doubt is to seek vendor instructions, but it is also because he too feels a drop in momentum and a break is called for so as he can return and revitalize his dueling bidders. We get to $2,700,000 and then $2,710,000 and it’s still not on the market: James suggests a bid to $2,750,000 which gets the nod and immediately it’s announced it on the market. Well done we are playing fair rules today not the bulldust pass-in and Claytons reserve. As we begin to slow James eeeks out every last bid with good humour and a certain intangible feeling which gets the hand of the underbidder up a few more times than perhaps he wanted to. It looks like it’s gone at $2,810,000 but a final $5,000 and the other bidder has it – exhausted and delighted all at the same time. Really a near faultless performance with no referral to notes – and people think anybody can be an agent or auctioneer – bravo James a brilliant, powerful 20 minutes and in the Top 10 of all auctions I have seen.

May 21st – 17 Murchison, St Kilda East, Phillip Kingston (Gary Peer); After Auction Just under $1,700,000, 2 bidders
Nice little home this one, well thought out with unusual entry but it works for me. Quote is $1,600,000 to $1,760,000 and while car parking is not brilliant, it is an above average typical quirky St. Kilda East home and should have interest. At this price, the quote seems full, well let’s wait and see. Just about to start and Phillip says he is holding it inside. Good idea it’s cozy by the fire. Down to business; we like Phillip Kingston. You know – he is one of Melbourne’s Dons when it comes to auctions. This crowd of around 40 is in for a treat as the rear is a great amphitheatre for this sure to be entertaining auction. Phillip would have been a stand up in a previous life or a politician – he is simply the most powerful story teller that operates on Melbourne auction weekends and today with emotion and genuine passion he leads the crowd into a place where they all want to be and that place is here. A nice little interim joke, the crowd laughs gently as Phillip calls for bids. Nothing arrives and a vendor bid is placed at $1,600,000. A few jokes about his fellow agents and Phillip reminds any potential bidders that bid now or face a non transparent post auction process. No action and first call, second call, half-time and zippo. Just before Phillip closes the auction, a ripper question is asked. “Phillip can I can bid lower than $1,600,000”. “No” – politely comes the reply. And finally $1,605,000 comes and a second bidder in at $1,610,000. Game on at the death – or is it. It’s like drawing teeth and surprisingly that’s all she wrote. Passed In at $1,610,000, a surprising first act to this two act play. If Phillip couldn’t get another $5,000 then there wasn’t another. We await the final installment. Postscript: sold after within the range – believed to be under $1,700,000.

February 26th – 33 Middle Crescent, Brighton, Jason Swift (Hodges); Bought under the hammer, $4,300,000, 3 bidders
“Hey start me where you like – somebody bounce my ball” cried out the cockney accent of Jason Swift. I loved this auction; it was entertaining , bold and good ‘ol fashion fun. Jason Swift gave us piles of corn, humour, clichés and he gave the auction something else – character and the more important – momentum . At first you might think, hmmm bit strange – bloody Pom doing an auction – but mate he’s as Aussie as Jack Thompson and I loved the way he auctioned this home. The crowd was spread out – the vendor wanted a big but not ridiculous number and with good work pre-auction and a classy performance on the day, Hodges got what their client wanted. Well done Jason; I’m not sure how many people know just how good that was – bringing a crowd with you at this level is what only a few can do well. That was definitely a 2 hat performance. Opened at $3,000,000; on market at $4,200,000 concluding under the hammer at $4,300,000. Great theatre and a great way to finish the day.”

Thank Yous
Even though we are on the other side, as a group we receive mentoring and support from James Connell, Mike Gibson, Gerald Delany, James Tostevin and Richard Earle and many others and we thank them for that. Personally I find my chats with Rob Vickers-Willis, Justin Long, Scott Patterson, Hamish Tostevin, Peter Batrouney and Richard Winneke and many others very helpful and stimulating. We could not produce what we produce each week without the access of selling agency principals such as David Hart, Tim Derham, Jock Langley, Stephen Tickell, Peter Kennett, Iain Carmichael, Geoff Cayzer, Andrew Stuart, Campbell Cooney, Bill Stavrakis, Jeremy Fox and Jonathan Dixon to name but a few – so thank you. Each week we are out there sniffing around, digging things up, reporting the good and the not so good; yet rarely do we have any interference and never have we been pressured to change anything. In a world of prima donnas (supposedly) we get a very fair run and we thank almost all selling agents for that.

Buyer Advocacy has an important role to play in providing an alternative voice for buyers and we acknowledge the contribution of our main competitors in David Morrell and Chris Koren.

While we don’t agree with everything Chris Vedelago from The Age writes and no doubt vice-versa, we acknowledge his contributions as being the best overall in the mainstream press. Its amazing to us the lack of quality insights provided by the dailies into Melbourne Property. Often they are no more than a collection of dubious quotes cobbled together with no meaning or value.

We would also like to thank Eileen from the The Weekly Review who puts up our Buyer articles most weeks, even the ones that carry some controversy – thanks for staying brave.

To our own production team leaders in Simone Clarke and Jen Milligan thank you for another great year – I still don’t know how you organise what you do each auction week. To my personal editor Karin, who keeps me in check, thank you.  To our independent management advisors in Chris Farrell and  Peter Tanner thank you. To co-workers Guy, Julie and Naomi and partners Gina the Boss and Architect Adam thank you. To all our auction reporters Kate Agnoleto, Debbie McTaggart, Joshua Bong, Doug Paget, Daniel Ehrenreich, Lexie Stewart, Nikki Hills and the real old boy, David James, another great year of reporting and thank you – without you none of this would be possible. To a few of our favourites who moved onto greener pastures this year in Michael, Kris and Peter and our new IT partners Kate and Michael at Andmine thank you.

And finally to all of you who come up to us at opens and auctions and say nice things (mostly), who write tens of  letters to us every week, asking us questions and saying nice and not so nice things (fair enough if you keep it polite) – thank you. And lastly to you, who gave us  over 500,000 visits (incredible stat from Google) during 2011, thank you all for your support. We at James hope you have a safe and happy Christmas and New Year (we are open till December 17th) and look forward to seeing you next year in 2012 to do it all over again (office opens 16th January) – our first Market News will be back in mid February 2012.

Big auction, big crowd and big bidder numbers: 98-100 Mont Albert, Canterbury, Alastair Craig (Jellis Craig), under the hammer, $3,380,000, 6 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 50% on the 36 auctions we attended. Auction-wise it was only the second 100+ auction day for $M+ homes in Inner East and Bayside since Autumn – and all things considered it wasn’t a shocker. However it certainly wasn’t positive news for sellers with high expectations. You can feel the market is slipping away a little more for them. We are firmly in a downward spike (which started on Preliminary Final Day 2011) on the back of an overall downward trend since Anzac Day 2010.

The exceptions to this blanket statement are quality, well priced Top End homes – they still have some real ooomph!

Going forward, there is a fortnight of decent auction numbers to go (around 80 on each of December 3rd and December 10th) before things start to really shut down for Santa.

The Weekly Review Bidderman, our demand indicator, was 1.5 bidders per auction this weekend. But this was again very polarised around a few good auctions, with the majority having  little multiple interest.

Given all of the above, we have adjusted our James $M+ Market Indicator below Buyers Market to Cool.

The downward price spike may lead to a shortage of quality stock going forward, given that discretionary sellers don’t come into falling markets unless they cease to be discretionary sellers. There are a lot of stales (long term pass-ins) and rebadgers (unsolds from earlier in the year coming back to market) starting to clog up the machinations between buyer and seller in late 2011.

Next year’s 2012 Autumn market has little choice but to start with this anchor of overhang. How individual buyer and sellers will go depends in many ways on their goals and the skill of their buying or selling agents.

However, amongst this negativity there was a glimmer of positiveness from a mid week auction (Wednesday 23rd November) we attended.

58 Glyndon Rd, Camberwell (Jock Langley of Abercromby’s)
Private Auction only 7 people in attendance.
James Home Rating Excerpt: Big home in the ‘almost ‘burbs’ on 2100 sqm with tennis court – it’s all about the land.
James Auction Report BOUGHT over $3,300,000:  We attended this mid week private auction  just in case a bargain was to be had. No bargain, with a very healthy auction by Tim Derham of Abercromby’s. With three bidders it passed in for $3,300,000 and a bit. A deal was negotiated afterwards in excess of that figure. Strong result for outer Camberwell!

“Round the Grounds Saturday – Overall Stonnington was a shining light. Bayside’s woes are increasing due to long term auction overpricing at the Top End

• Port Phillip – In a month when no reported sale has been over $2 million, this weekend was a continuation of the weakness with a 20% Clearance Rate
• Boroondara – Under the weight of stock numbers, Boroondara continues to ease – 43%
• Bayside – High end Brighton is not happening (outside the Golden Mile) and because of the continuing number of pass-ins, buyers are increasingly nervous, asking themselves: “What is the right price – is it a bit less or a lot less?” – 35%
• Stonnington – Island in a storm. Vendors must be listening to their agents again with a surprisingly strong number – 67%.

Overall Market Summary for Spring 2011

In 4 of the previous 5 years, at this time, buyers have been keen as mustard to buy anything that was on offer – GFC 2008 being the exception.

In late 2011 buyers are simply not doing that. They are not lurching around like disaster victims looking at near empty supermarket shelves, snatching at stale stock, overpriced offerings and out of date goods. Buyers are there, but they are far more discerning than in years gone by.

There is minimal panic as most buyers feel 2012 will be better for them. Whether or not that is true remains to be seen.

As a buyer, if you can mentally cope with a falling market (and prices have fallen for most of the year on all properties except the best of the best), then it doesn’t get much better for you with the solid stock levels we’re seeing now  (as long as you can find what you want).

In this last few weeks of Spring, buyers have been able to consider purchases without having the spectre of “there will never be another” hanging over their head, because … there has always been another. That’s not to say there has been no competition for good homes, but it has been a far more civilised buyers market than for much of the last decade.

As for buying and selling agents, transactions have been steady, not at the heady levels of last year and we have all had to work harder (not a bad thing); but business has been solid enough to keep the wolf from the door.

For sellers it has been a different story. They have fallen into two categories: those that listen and want to sell and those that don’t. Or to put it another way: there are those that have a well priced quality offering and those that don’t.

Not that we’re picking on sellers. In 2011, buyers have also needed to listen. If it was good quality and well priced then you needed to compete or else you missed out.  If you bought it “cheaply without pressure” then possibly you bought what nobody else wanted and that is not a good thing going forward.

Late 2011 has in our opinion, been a watershed, one where sanity and balance has returned to the markets and it has been buyer led.

If 2008 was the year of the GFC, 2009 the year of the rebound, 2010 the bumper year then we think 2011 has been the year of the split and balanced markets.

The Inner Melbourne $M+ market is right now a real dichotomy – a market of two dimensions – there are the haves (properties with bidders) and the have-nots (properties with no solid interest).

All the data we collect supports this.

Bidderman: Look at these stats over the last 3 weeks, which highlight in our opinion exactly what has been happening to a large extent all year. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. Last week the same story – 17 bidders on 4 homes auctioned and only 15 bidders combined on the other 21 homes that we reported on. This week we had 26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. If you are hot, you can be really hot and if you’re not then you need a panadol and a good agent.

Clearance Rates: Basically on auction day the chance of selling is 50/50. That is for every home the market judges worth buying it also judges one is not worth buying (at the asking price).

Stales: (long term pass-ins) The market is acting on properties where prices are adjusted, and continuing to pass over homes where the vendor remains committed to a price rather than a result. One month after Super Saturday a full third of the homes that went to auction still had not been sold. It is not true for agents to say they are all being cleaned up. They are not.

Expressions of Interest: No different to auctions. At the Top End last month we nominated 8 homes to monitor as having Expressions of Interest closing dates either side of the Melbourne Cup. Of those 8 – 4, or 50%, have sold around the proposed closing time and the others remain on the market. The 4 that have sold were goodies and they got exceptional prices. The other 4, well they remain unattached to a buyer.

With this being the second last Marketnews for the year (and by the way thank you for your support – we just recently achieved our 500,000th reader for the year to our james.net.au websites) we thought we would look at the Top 3 things buyers can do to take advantage of what is on offer before Christmas.

1)   Find: Off markets, stales, rebadgers and pass-ins. Many homes are being re-presented after failed campaigns early in the year. If they failed on price then, why pay it now? Off markets are back in season as many recent buyers would be keen to see a quiet sale before Christmas rather than wait till 2012 – there may be a bargain there. Stales – don’t give up. If it’s a home you like then revisit with a  written offer – even if the asking price is baloney. Rule One in this market: if you don’t ask, you don’t get. Man up and put the offer in!

2)  Assess Price: Use past sales carefully and change their meaning – sales of six months ago are now the ceiling prices, not the floor prices (as in previous years). The market is going backwards in price, not forwards (A graders excepted).

3)   Negotiate: - As buyers if you want to negotiate to your advantage while still maintaining a reasonable level of risk in terms of buying versus missing out on the home, then you need to be able to apply the Fisherman’s Friend Wet Fish Slap on overpriced homes. You know the commercial – where she gives him an uppercut with a wet fish. If the price is baloney and you are not going to pay it, don’t walk away – you may be doing yourself and the seller a disservice, as you may in fact be the best buyer. Go and hit the seller with the Fisherman’s Friend Wet Fish Slap and then apply pain relief afterwards. This is exactly what our selling agent friends have been doing for years in post auction negotiations. They hit you hard with a big number, then they offer to relieve your pain (slightly). So if you have a sensible price, go and offer it – you may well be the seller’s best deal and if you walk away because of your timidity, then both you and the seller lose. If a Fisherman’s Friend Wet Fish Slap is not your caper consider hiring a professional who can help you – it’s invigorating. And of course if it doesn’t have the desired effect – consider moving on.

The $3M+ market: After last week’s less than stellar showing at auction for $3M+, results were slightly better this weekend:

Bought

• 98-100 Mont Albert Road, Canterbury (Alastair Craig) – $3,380,000 – 6 bidders
• 25 Grange Road, Kew (James Tostevin) – Around $3,000,000 – 1 bidder
• 24 Anderson Street, Malvern East (Heather Elder) – Around $3,000,000 – 2 bidders

Passed-In

• 2 Collins Street, Brighton – $2,975,000 – 0 bidders
• 1022 Malvern Road, Armadale – $2,800,000 – 0 bidders
• 21 Wattle Road, Hawthorn – $3,050,000 – 0 bidders
• 68 Molesworth Street, Kew – $4,600,000  – 0 bidders
• 20 McGregor Street, Middle Park – $3,200,000 – 0 bidders

3 strongish results during the week:

Friday 25th November – 58 Howitt Road, Caulfield North has been bought for a record Caulfield price according to the effervescent Ross Savas of Kay and Burton. The price;  well can say they were talking $6 million and the calibre of the home leads us to conclude they would have got that, so over is definitely not out of the question. This was a truly great home, our James Home Rating of 838/1000 is one of the highest we have scored this year. The market is obviously still recognising and paying for great quality.

Thursday 24th November – 25 Montalto Avenue, Toorak ( Nicole Gleeson) – Basically land only for the area as the home requires a serious reno. Passed-in last Saturday on a lone vendor bid of $3,450,000 and bought Saturday for an undisclosed amount.

Monday 21st November – 6-8 Myrtle Street, Brighton (Barb Gregory – Marshall White Brighton). Last weekend’s biggest auction – and another private one at that, was completed at a price over the quote of $6,000,000. So another solid Golden Mile sale with land in excess of 1600 sqm plus some solid improvements and another good result for Marshall White in Brighton. While private auctions are very secretive they seem to meet the vendors’ requirements for privacy and a buyers’ liking for transparency – perhaps a way of the future for some key homes.

BRIGHTON EAST, 13 Holmhurst Crt: Mark Earle (Buxton) does his best to encourage bidding but to no avail, passed in $2,000,000, 1 bidder

Biggest Sale: 98-100 Mont Albert Rd, Canterbury, Alastair Craig (Jellis Craig); Under the hammer $3,380,000, 6 bidders
There was a real buzz before the start of this auction and the team at Jellis Craig knew it as well, as I counted at least six agents all coming along to support auctioneer Alastair Craig. The crowd size was decent too with around 70 crowding around the kitchen and family room. There was no need for a vendor bid as a confident opening bid of $2,600,000 was made and the auction was off and running. The bids came from all around the room and at times it was hard to see who was bidding because of the tightly packed crowd. But this did not impede on the flow of the auction and once Mr Craig flicked the switch and declared the property on the market a roar came from the crowd. The increased chatter and activity brought a tingle to the spine as the bidders knew things were serious and the auction moved up a gear. Six bidders were now fighting it out, each trying to outfox each other with small bids and big knockout bids; in fact all manner of tactics were brought to the table. But amongst the storm and flurry the original bidder stood firm swatting back every threat and finally emerged victorious in the end. A terrific auction and the crowd agreed who all clapped loudly and congratulated the winning bidder. (Joshua Bong)

Biggest Pass In: 68 Molesworth St, Kew, James Tostevin (Marshall White); Passed in $4,600,000, no bidders
One of the last auctions of the day and in front of around 40 people, auctioneer James Tostevin sung the praises of this fine modern home keenly (perhaps calling it a masterpiece was bit of a stretch…..). James went on to say there are many Molesworth Streets in Melbourne but there really is only one that people remember and that is this one in Kew. Fair enough I thought, good call – there are some great properties here and it is a very special part of the world. Under sprinkling rain, a vendor bid of $4,600,000 was made and after several minutes of searching for a bid and then referring to the vendor, the property passed in at that mark.  (Adam Woledge)

Bidderbuzz Auction: 14 Clyde St, Glen Iris, John Bongiorno (Marshall White); Under the hammer $1,204,000, 5 bidders
A group of 30 clutching their umbrellas scurried quickly inside this Glen Iris property.  A “simply stunning” property were the enthusiastic words of auctioneer Growling Jack Bongiorno, to the assembled group in his preamble.  An opening bid of $950,000 was promptly offered from the crowd.  With his humour, Growling Jack had those in attendance laughing at many points throughout the auction creating a more relaxed atmosphere.  With four additional bidders joining the mix, the competition for the property was obvious.  The property was announced on the market at $1,170,000 and this news sparked a flurry of bidding.  The property was bought under the hammer for $1,204,000 to the applause of all. (Kate Agnoleto)

Buyer Masterclass: Negotiating on a property is all about balancing the risks with the rewards. Find out more in this week’s Buyer Masterclass, The Risks of Chasing  a Housebuying Reward.

We Only Buy Homes

The rain didn't deter the crowds. 20 McGregor, Middle Park, Damian O'Sullivan (Marshall White), passed in $3,200,000. No bidders but a big crowd of 170.

Through the blurry eyes of wet auction watchers - this is how most of us saw today. Hawthorn, 93 Liddiard St (Lachie Fraser-Smith of Bennison Mackinnon) Bought under the hammer, $1,807,000, 3 bidders

At 6pm on Saturday, the James Clearance Rate for $M+ was 44% on the 25 auctions we attended.

The Weekly Review Bidderman, our demand indicator, was 1.3 bidders per auction. But Bidderman is very inconsistent – last week we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. This week the same story – 17 bidders on 4 homes auctioned and only 15 bidders combined on the other 21 homes that we reported on. Demand is there if the home is good and priced correctly – if its not, then silence greets the auctioneer and seller come auction day.

Market Summary

The Christmas Stock Rush has really gained some momentum in the last few weeks with a large influx of private sale homes coming onto the market – especially at the Top End (see our stock graphs).  We saw around 85 $M+ auctions this weekend, and next week looks like breaking the magic 100 barrier for $M+ auctions in Inner East and Bayside. So solid auction weekends, especially for 2011.

All this has to be good for buyers. Where in recent times our main challenge has been finding quality homes – now the bulk of our work has moved to assessment and negotiation.

Spring Prices continue to fall on homes that do not meet the market.
The representation below shows clearly what is happening as Spring unfolds. New stock is coming onto the market at all price levels, particularly at the highest level. Demand is simply not there (on many homes) at the prices being asked – hence the falling Bidderman and Clearance Rates – and this is resulting in falling prices for those that don’t originally meet the market and then have to sell.

Price is such a movable beast right now so as a buyer, it is good to have an open mind and strategies (within your acceptable risk v reward parameters) that can take advantage of the lay of the land. That is not to say that all the goodies are being given away – far from it, if you have a well priced A-grader – but once a home falls into that certain category (e.g, stale, overpriced or a B grader) then significant discounts are possible if the vendor needs to sell.

But a buyer needs to know what to do, how to do it and when to do it to be successful. By example, in the last fortnight or so one property in the $3 million range was purchased for more than $700,000 off the original asking price; another was bought for  $300,000+ off the original asking price and that was a $2 million home.

Now, more so than at any other time this year, it is a true buyers’ market with Great Choice and Flexible Pricing.

Lack of auction price matching continues this weekend  – $M+ Clearance Rates.

• Bayside – 44%
• Boroondara – 55%
• Stonnington – 39%

$3M+ Segment:  Some solid mid week sales – but lousy at auction today.

• 4 Kiers Court, Caulfield North (Phillip French), one of the more distinctive homes I have seen this year, is now reported as sold at $3,475,000.
• 181 Gipps St, East Melbourne (Sarah Case), over 1000 sqm, was bought undisclosed and finally to complete the RT Edgar trifecta
• 29 Loch St, St Kilda West (Anthony Grimwade), almost 1000 sqm plus period home, was bought for $3,800,000.
• 3/61 Nepean Highway, Aspendale (Rowan Thompson),  which we reported as passed-in last weekend, has now been bought for $3,150,000.

At auction only two out of nine were reported as sold at the $3m+ level.

• 19 Florence St, Kew (Diana Healy) – Bought for over $3,600,000
• 2 Monomeath Pl, Canterbury ( Richard Earle) – Bought after for over $3,100,000

Pass-Ins at

• 47 York St, Kilda West – $3,800,000
• 24 Monaro Rd, Kooyong – $3,500,000
• 25 Montalto Ave, Toorak – $3,450,000
• 9 Berry St, East Melbourne – $3,200,000
• 11 Victor Ave, Kew – $3,000,000
• 2 Snooks Crt, Brighton – $3,000,000
• 26 Stawell St, Kew – $2,950,000

The shoe was on the other foot today – an auction experience.

An auction we covered in Inner Melbourne this weekend* had an opening bid of $2.8 million when some people may have thought $2.2 million was the right money to finish on. The auctioneer almost choked on his gavel and asked for the bid to be confirmed. The buyer confirmed the bid. After a quick consultation with the vendor the property was declared on the market and sold under the hammer for $2.8 million.

Except that the only and ‘winning’ bidder did not sign the contract when asked to do so, and the property is currently still for sale. The auction appears to have been ruined. As we see the facts and as we are told, the bidder should in our opinion face some legal action – although we are not lawyers and we have not heard the bidder’s side of the story.

In this case we have  sympathy for the seller and for the selling agent. But what about the crap buyers put up with every week?

At another auction this weekend** (coincidentally with the same agency), a bidder had gotten a building inspection done on a $1.5m-ish agent quote and turned up to the auction to find that the passed in on a reserve of $2m. Should the agency or the owner be obliged to pay the buyer’s building inspection fees that were done beforehand in good faith? Given that the seller through their agent has misrepresented their position and caused a loss to the buyer, we feel they should. We also wonder whether action should not also be taken against sellers who persist in using agents who continue to behave poorly by step quoting illegally.

So while on the face of it we think what happened today was appalling buyer behaviour, we repeat that we have not heard the buyer’s side.

We are not taking the moral high ground – we cannot afford that sort of real estate. But we are continuing to highlight step quoting and other poor behaviour instances that if left unchecked will damage the auction system that we otherwise so admire for its buyer and seller transparency.

*We have changed the details and removed the auction report to protect the seller’s position, as that is the decent thing to do – the home still needs to be sold.

** Details changed as the property has still not been sold

CANTERBURY, 2 Monomeath Place: The biggest sale of the day, Richard Earle (Jellis Craig), bought after auction above $3,000,000, 1 bidder

Biggest Sale: 2 Monomeath Pl, Canterbury, Richard Earle (Jellis Craig); After auction, in excess of $3,100,000, 1 bidder
A nice sized crowd of about 50 turned up to this auction despite the weather turning sticky and humid. Auctioneer Richard Earle was at the helm but, despite his enthusiasm, the crowd was shy and only one bidder put their hand up to bid. However, this bid was good enough for Mr Earle as he promptly passed the property in to begin negotiations with the sole bidder. Bought after for an undisclosed amount. (Joshua Bong)

Biggest Pass In: 47 York St, St Kilda West, Greg Hocking (Hocking Holdsworth Real Estate); Passed in, $3,800,000, no bidders
Auctioneer Greg Hocking brought his “A grade” preamble to the auction of this fine period family home in St Kilda West, only minutes to the beach and Fitzroy Street. After asking for and receiving no opening bids, Greg placed a vendor bid of $3,800,000, calling for rises of $25,000. Still no interest and half time was called. On returning, still no bids and the property was passed in. (Guy Angwin)

Bidderbuzz Auction: 10 Mills St, Hampton, Rowan Thompson (RT Edgar); Under the hammer $1,325,000, 5 bidders
A nice wide, quiet street, an old property on a big block within 100 metres of Hampton Street shops. What an opportunity! Auctioneer Rowan Thompson thought so too and so did the five bidders who were all anxious to buy this interesting property. Lively bidding became frantic as the auction progressed. The “on market” level of $1,200,000 was soon reached and it was obvious that three parties were particularly keen. The auctioneer would have accepted well over 50 bids in total, many down to only $1,000 at a time. He was really busy! The property was finally knocked down for $1,325,000. A good result. (David James)

Buyer Masterclass: The Risks of Chasing a Housebuying Reward – negotiating on a property is all about balancing the risks with the rewards. Find out more in this week’s Buyer Masterclass.

We Only Buy Homes

Subdued mood: Toorak, 25 Montalto Ave, Jason Scillio (Kay & Burton), passed-in $3,450,000, no bidders

Perfect day, perfect setting. 3/61 Nepean Hwy, Aspendale (Rowan Thompson, RT Edgar). Massive crowd and a picture perfect back drop - but the home still passed in at $3 million.

At 6pm on Saturday, the James Clearance Rate for $M+ was 48% on the 29 auctions we attended.

The Weekly Review Bidderman, our demand indicator, was 1.6 bidders per auction. But that average figure doesn’t tell the full story.

Market Summary

This weekend was a tale of some homes with a lot of bidders and some without any. That’s been happening a bit lately, but in this case the stats were very stark and indicative of what is happening in this market. Of the 26 auctioned homes we attended (3 had been bought before) on this weekend, 5 had a total 27 bidders and possibly more – that’s at least 5 bidders each! There was a total of 14 bidders across the other 21 $M+ auctions – so some of those had no bidders at all.

Of the five homes that had five or more bidders, two sold for over $5 million and two for over $2 million. They were in Carlton, Elsternwick, Surrey Hills, Toorak and Hawthorn

The majority of the other 21 homes had average bidding and passed in. A number of these will remain as passed-in until the would-be sellers realise that while we have a good market at market prices, it’s a very limited market above that. Your best price these days seems to be on the market early and let the bidders decide.

For sellers who have decided to stick to their guns, and let their property pass in – we thought we would go back in time and look at what’s happened to all the properties that passed in on Super Saturday (October 22).

Super Saturday Wash up: 1/3rd of all $M+ homes auctioned have not yet sold
Super Saturday, October 22, was three weeks ago. And just to remind you – the clearance rate on or before the day (October 22nd) was a disappointing and slightly surprising 43%. Of the 47 $M+ homes we reported on, 27 didn’t sell.

So what’s happened since then? Well, despite the racing distractions, a further 11 have sold, giving Super Saturday a thee week clearance rate of 64%. The market is clearly not as strong as it was two years ago when we were seeing 90% clearance rates after this length of time. However it’s nothing like the troubled times in 2008 (GFC).

Basically auction homes are falling into three categories

1. Selling on or before the day – The market priced: A graders and some well priced B graders, where the vendor has quoted conservatively and met the market. There is strong bidding – look again at this weekend’s results.
2. Selling a few weeks after the auction – The risk takers: meaning buyer and seller risk takers. Prices have generally been above the pass-in price but well short of the asking price. The risk for buyers is that someone else buys, and the risk for sellers is that they don’t sell.
3. Not selling within a few weeks – The stales: With family homes the price is either scaring off buyers from making any offers or they’re making an offer usually at a lower price than pass-ins and being rejected. The next likely scenario for the seller is withdrawing their property from the market, sitting there on the net with no action or trying to sell by significantly discounting their original price.

Bayside sellers appear to be particularly bad at pricing their homes to the market. Some of their pricing is fanciful. Looking at the results, an inexperienced onlooker might conclude that the Bayside market is shot to pieces. It’s not: we have Bayside buyers on our books. It’s just that more than a few sellers are so far from where the real market is we’re not sure why they waste their money on advertising.

$3M+ Market continues to produce some results

Non-Auction sales:

• 16 Kenley Court, Toorak, (Michael Gibson of Kay and Burton) – sold for over $12 million for nearly 2000 sqm of land and a very substantial home. James Home Rating 779/1000.
• 24-26 Balmerino Avenue, Toorak, (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land including tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and bought immediately after for an undisclosed amount. As I went through this home it felt mostly about the land and the sweeping views, however I suppose that is the way with almost all Toorak homes. The end result was $3,800 per sqm approx.
• 4 Lisbuoy Court Toorak, (Nicole Gleeson and Michael Gibson) – Townhouse with some land for over $4,000,000.

Auction Sales:

• 47 Kinkora Road Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders (see report below)
• 49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders

‘Round the Grounds

• Boroondara – Not much better than last week and not as good as it was – 53%
• Stonnington – Reasonably Solid and 64%
• Bayside – There continues to be minimum buyer and seller price matching – 44%

HAWTHORN, 47 Kinkora Rd, Peter Batrouney and Campbell Ward (Jellis Craig). The grand old home in the Grace Park estate was bought under the hammer, $5,660,000, 4 bidders

Biggest Sale: 47 Kinkora Rd, Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders
Grace Park, north facing rear, big land and beautiful period home. Some may say a drover’s dog could sell this on a sunny day, but that would be unfair on Peter Batrouney and Campbell Ward. This writer knows for sure we will get a first rate performance and in all likelihood a very solid result. About 120 have gathered in the back yard and we begin with a vendor bid of $5,000,000. Quickly in $50,000s between Bidder 1 and Bidder 2 we reach $5,300,000 and a half time break. 2 more bidders join in and it’s on the market at $5,500,000. A few up bids and she all stops at $5,660,000. A typical successful Peter Batrouney and Campbell Ward / Grace Park auction. (Mal James)

Biggest Pass In: 3/61 Nepean Hwy, Aspendale, Rowan Thompson (RT Edgar); Passed in $3,000,000, 1 bidder
The excitement was in the air and the house was buzzing with people enjoying the sunshine and the stunning panoramic view of the beach literally on the doorstep.  With only 500 beach front homes in Melbourne, explained auctioneer Rowan Thompson to the large crowd of 100, the “international standard resort style” property represented  a wonderful opportunity.  Mr Thompson opened proceedings with a vendor bid of $2,800,000 and sought $100,000 rises.  With Mr Thompson’s encouragement, a bidder from the crowd obliged with a bid of $2,900,000.  A vendor bid of $3,000,000 followed and despite Mr Thomson’s best efforts, there was no further bidding on the day and the property was passed in on the vendor bid.  (Kate Agnoleto)

Bidderbuzz Auction 1: 539 Canning St, Carlton North, Tom Roberts (Nelson Alexander); Under the hammer $1,300,000, 5 bidders
This auction was going to be the hottest of hot with a very conservative quote at $900,000 to $990,000 and a wonderful A grader on offer. 539 Canning was always about width and side access and at 6.5m, with lane at the side this renovatable period home was as good as is offered in this area due to the ongoing options it provides. Around 100 or so people turned up in anticipation to see what auctioneer Tom Roberts was going to extract in the end.

After the usual Robert’s spiel we were away instantaneously with a 950 then 960 then $1million bid all within 10 seconds. Twenty seconds later we were on the market at $1,050,000 and then past that to $1,080,000.

One bidder, Chris Koren of Morrell and Koren, was leading the bidding in strong style – coming back at each and every bidder quickly and assertively. It was textbook bidding and he is a master at this when he is on his game, as he so obviously was today. At $1,180,000 the fifth bidder, also an advocate, joined the battle. At this stage we had dropped to $500s and $1000s and with both advocates firmly positioned it looked like this was going to be a long and drawn out battle. And so it turned out to be – with auctioneer Tom Roberts taking a back seat, allowing Chris with his strong and firm style to battle it out with Guy Angwin (from our company). The two advocates continued past $1,200,000, then $1,240,000 and then $1,275,000 – at each milestone getting crowd applause like they were witnessing a momentous MCG event.

Eventually at $1,300,000 Chris Koren who had led the auction all the way, was declared the victor and a deserved one at that. Commiserations to the underbidders. The eventual buyers bought well and not over the top either. Our estimates at a strong auction were $1.2m to $1.3m for this prime A grader – a far cry from the 900k to 990k quote. But no complaints re underquoting as the home was on the market quickly. (Mal James)

Bidderbuzz Auction 2: 29 Guildford Rd, Surrey Hills, Jeremy Desmier (Fletchers); Under the hammer $2,185,000, 7 bidders
The auction of this property had a fractious beginning when four different parties all asked questions of auctioneer Jeremy Desmier ranging from – “are there easements?”  – “is the property subject to Heritage overlays?” -  “can I demolish?” – “what are the land tax implications?”. The tone was set – this was going to be war with seven bidders all trying to buy this rough diamond just waiting to be polished. Consistent with all the initial interest, a genuine bid of $1,500,000 started proceedings, soon followed by two other bidders looking to control the auction. Just when you thought this bidding war was losing momentum multiple bidders joined in and for the next twenty minutes strategies were put to the test.  Eventually the property was bought for $2,185,000, a very entertaining auction from beginning to end. (Guy Angwin)

The Big Issue Video: The Big Issue is back! Click on the video for the late Spring mail.

Buyer Masterclass: Negotiating on a property is all about balancing the risks with the rewards. Check out this week’s Buyer Masterclass – The Risks of Chasing a Housebuying Reward.

We Only Buy Homes

GLEN IRIS, 22 Wilson: The Abercromby's team, Rob Vickers-Willis, Andrew Harlock and Tim Derham marching out for some action. Bought after auction for an undisclosed amount above $1,900,000.

I love you darling and thanks for buying this nice little $6 million beachfronter. 2 Mytton Grove, Brighton. Greg Costello (RT Edgar), under the hammer, $6,050,000, 2 bidders.

At 6pm on Saturday, the James Clearance Rate for $M+ was 50% on the 28 auctions we attended. What made the difference between those that sold and those that didn’t? As with most of this year’s market, quality properties priced to market sold, while those off the boil on price and quality didn’t.

The Weekly Review Bidderman, our demand indicator, was 1 bidder per auction. There was only one volcano (4+ bidders) out of the 28 auctions we attended and more than a third were duck auctions (no bidders). This has been this way for most of Spring and a clear indicator that we are now in a falling market, price-wise.

Market Summary

Timing: We know we shouldn’t raise the Santa stuff just yet, but effectively you have just three more weeks of new advertised stock and then another couple of weeks of mop ups and off markets (that are due for a February auction). And then the big hairy, bearded man is here with his unquarantined animals and pressies.

Stock Levels: So how are stock levels right now and what is the action like?

We were initially tempted to give reporting a miss this weekend as there were only 55 scheduled auctions over $1m. But upon some analysis we were able to find 30 reasonably good homes which we felt gave us a good sample.

Over the next two weeks around 80 auctions (each week) are scheduled at $1m or more. The last week in November does have closer to 100 scheduled, but effectively we have had only one Spring weekend in excess of the 100 auctions that signals a solid day in Bayside and the Inner East. So please send food parcels to your favourite selling agent – as both turnover and clearance rates are down to low lows. However we are finding there are homes to buy, there is good stock out there and more so than a month ago. For this to be the case there must also be falling demand otherwise you would not be seeing falling prices on reduced stock levels. But it is not exactly a free-fall as we are still getting beaten now and then at auctions (when we have to go there) – not by highly priced sellers, but by other buyers.

Previously Negative Sentiment: The last two solid auction weeks – Super Saturday (October 22) and then way back to Preliminary final day (September 24) – were negative for both buyers and sellers in all parts except Boroondara council. They were negative because of low clearance rates – indicating minimal price agreements between buyer and seller.

Correct Pricing: Having said that we can’t help but feel the market is a fair way off its knees. Yes prices are falling – of that there is no doubt and they’re falling quite substantially, up to 10% in the last few months on many homes, even some of the good ones. But – that’s right there’s a but – if the vendor falls in with the market then there are bidders. So the market is not toxic, it’s just in a downward phase. It is in fact a good buyers’ market if choice and falling prices are your definition of a good buyers’ market .

A classic case is 24 Roslyn St Brighton (Stephen Tickell). Bought in June 2007 for $2.3m, last year its owners tried to sell at $2.7m-ish with no takers. This weekend it was back on the market with a quote of $2m+ and, guess what, with two strong bidders it sold for exactly what was paid 4 years ago towards the end of the 2007 bull run. Which demonstrates our point that the market is operating as markets do: they correct and they go up and down.

Wormie: People keep asking how prices are going at the Top end, so we decided to bring Wormie back. This is our best effort at graphically representing where we think the Top End market has gone over the last few years. It’s not an exact science – it’s our opinion.

$3M+ Market: Has the action returned after the September excitement was followed by an early October siesta? We think yes – it is back. People do have cash and they are parting with it when they find the right home. In the last 10 days at least 9 homes over $4 million have been bought and sold. So it’s not dead at the Top End by any measure.

Some Auction Results today

• 2 Mytton Grove, Brighton, Greg Costello (RT Edgar), under the hammer $6,050,000 – 2 bidders
• 15 Dudley St, Brighton, Leigh Hallamore (Buxton), after auction $4,000,000+ (undisclosed) -0 bidders
• 15 Chastleton Ave, Toorak,  Warwick Anderson ( RT Edgar), under the hammer, $4,135,000 – 4 bidders

Pass-Ins

• 58 Kooyongkoot Road, Hawthorn – $3,400,000 – 0 bidders
• 51 Cookson Street, Camberwell – $2,850,000 – 0 bidders

Expressions of Interest: The $3M+ market is not all about auctions. In October the selling agent’s weapon of choice for selling properties above $3m and particularly above $5m moved from Auction to Expressions of Interest. Many EoIs were scheduled for completion either side of the racing carnival. Some results are in from our 8 randomly selected EoI campaigns.

We have been to the above homes. Check out our ratings on 25 Scott Grove Glen Iris (791/1000) and 33 Coppin Hawthorn (812/1000) which we have made available to the public. Just Google the address and you will see our James Home Rating.

Tennis Anyone?! Excerpt from October 15th James Marketnews: ”Want a home with a Tennis Court in Toorak? Got around $6 million dollars? In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts.”

The $6M Question: After Super Saturday would these three not sell, sell lower or would the Mexican Wave** kick in (see explanation below) and all would sell once one had gone?

The $6M Answer: The Mexican Wave did in fact kick in with all three selling within 24 hours of each other. All three had quotes of $5m to $6m during their campaigns. Scotsburn was bought after a weekend pass-in (over $5m), Montalto was for most of its campaign a private sale, but finished in a Boardroom Auction at just over $7m. Scott Grove was an Expressions of Interest closing Wednesday (with reportedly three interested parties) and sold 2 hours after the deadline for well over $6m.

**Mexican Wave: It’s just like at the MCG: Kay and Burton brings a group of homes together and they push and prod till they get one buyer to perform and then uses that result to get other buyers to put their hands up on other homes. This is planned months beforehand. It’s totally legitimate and it’s brilliant in concept.

RT Edgar: Has had a pretty solid time with 8 properties selling over $2 million in less than a week, including an off market at 68 Walsh St believed to be around $4 million, not mentioned in above dispatches.

Auctioneers: We love a good auction and we love giving good auctioneers a rap. But this weekend we saw a number of so-so performances. Good auctioneering makes a difference to the end result, so when you see confusion and lack of excitement and dragged out ineffective begging you wonder just how much the seller is losing. It’s hard to prove, but logically if you are told the good auctioneers bring in the dollars, then the poor ones must be losing them out the other end. Auctioneering, like buyer and seller agency work, is not a 5 minute skill that anyone can do who has a loud voice.

Growling Jack - behaving well: Jack Bongiorno (Marshall White) at 50 Stuart, Armadale. Bought after auction for an undisclosed amount above $2,200,000. 2 bidders.

‘Round the Grounds

• Boroondara – Is Boroondara Moving off solid onto a Roller coaster? – 44%
• Bayside – Some strong results on the Golden Mile – 53%
• Stonnington – Was anybody still left in Malvern today or were they all at the races! – 33%
• Port Phillip – Not Much Happening

Biggest Sale: 2 Mytton Grove, Brighton, Greg Costello (RT Edgar); Under the hammer $6,050,000, 2 bidders
Brighton Golden Mile Beachfront – these are four words that mean money. In recent times that has meant $8000 to $10,000 per sqm – at least at the northern end. A question our auctioneer Greg Costello asked in his opening spiel was “is this southern part of the Golden Mile more highly regarded than the northern part due to the activity on the beachfront?” Personally, as I run past here every day I think yes, but the auction result will tell us for sure. With the blue sea as our backdrop I’m expecting an exciting auction – irrespective of the market this stuff always sells. Greg Costello is conducting proceedings in front of a small crowd of 30. We start with an opening bid of $4,850,000 from Bidder one. $5,000,000 comes in from Bidder two strongly – solid bid. $5,100,000 from a third bidder – who as it turns out was with Bidder one – so we don’t count him – strange strategy that one. Anyway with a fair bit of action we move up to $5,600,000 in various amounts and then to $5,750,000. At all times Bidder two looks in control and is bidding very well and with some intimidation without being over the top. Normally Greg Costello is in excellent form but today was not his best day with bid retention and there are a number of confusing referrals back to his penciller for clarification. At $5,900,000 the “is it on the market?” question was asked, and after a quick referral, an affirmative answer is returned. There are two more decisive bids from Bidder two and its all his at $6,050,000. Loved the winning bidder’s style – aggressive and sensible and much better than his opponent and also many so called professionals that I have witnessed recently – well done sir – we have a job for you here if you care to apply. (Mal James)

Other Brighton Golden Mile Results: 2 Mytton at $6,050,000 divided by 613 sqm = $9,869 per sqm or almost identical tor previous absolute beachfront sqm rates over the past year (which have maintained themselves in the last year and increased on previous high water marks). 8 Moule Avenue (David Hart) is a classic Golden Mile address (but not absolute beachfront) and sold this weekend for $2,310,000 or $3,510 per metre which on first glance is not expensive but in fact is not too far off previous Golden Mile sqm rates. A third Golden Mile property 15 Dudley St (Regina and Brian) sold for in excess of its pass-in figure at $4,400,000 which again considering the house was nothing other than a nice facade was a very, very solid result.

Biggest Pass In: 58 Kooyongkoot Rd, Hawthorn, Scott Patterson (Kay & Burton); passed in, $3,400,000, no bidders
Could you find a better setting for a Melbourne Spring auction? A tranquil backyard by the pool! In front of around 60 people, auctioneer Scott Patterson gave his usual professional best to attract some crowd bidding but this was to no avail. The property passed in after two vendor bids – $3,300,000 and $3,400,000 respectively – and remains for private sale. (Adam Woledge)

Bidderbuzz Auction: 15 Chastleton Ave, Toorak, Warwick Anderson (RT Edgar); Under the hammer, $4,135,000, 4 bidders
Spirited bidding after a slow start was a welcome sequence at the auction of this single level home in Toorak. A crowd of 80 neighbours chatted quietly throughout the action, eagerly anticipating the value to be determined by the market. After opening on a vendor bid of $3,400,000 and the declaration that the council had valued the property at $3,700,000, auctioneer Warwick Anderson tried to keep pace with the determined 4 bidders. After the second vendor referral, Warwick announced the property on the market at $3,800,000 but the strong bidding continued, with bidder number 4 securing the home at $4,135,000. (Gina Kantzas)

Buyer Masterclass: “Risks of Chasing a Housebuying Reward”. Read the article in The Weekly Review or our Buyer Masterclass.

We Only Buy Homes

The crowd of around 50 clamber for some shade at 8 Moule, Brighton. Leigh Hallamore (Buxton), bought after auction, $2,310,000, 2 bidders

Sums up the day really: Andrew Summons (Hocking Stuart) at 16 Closeburn, Prahran, passed in $1,800,000, 1 bidder.

At 6pm on Saturday, the James Clearance Rate for $M+ was 43% on the 46 auctions we attended.

The Weekly Review Bidderman, our demand indicator, was 1.3 bidders per auction.

As we have the horses stopping most auctions next weekend, this is another bumper edition to last you for two weeks. We covered 46 auctions this weekend to bring you the real news on what is happening in Melbourne’s $M+ market place.  This market news is all about the flavour!

Market Summary

This Saturday was Super Saturday – with more than 150 scheduled auctions expected to go over a million dollars in Inner East and Bayside. And the Saturday Night Scoreboard showed a win to the buyers.

The Scoreboard
Boroondara Big Tick – vendors meeting buyers market – 65% clearance rate
Stonnington – Fail – buyers and sellers not matching – 36%
Port Phillip – Fail – buyers and sellers not matching –  22%
Bayside – Fail – buyers and sellers not matching –45%

We are now back in an ideal Buyers Market with plenty of choice and adjusted vendors. The price spiking in September that was created by pent up Winter demand and some choice offerings has been replaced by a market with good supply and adjusted vendors. Prices are falling and supply seems solid for a while – all good buyer news.

Overall prices have been falling substantially in recent times on all but the best of the best – but this weekend we had the first signs that even A-graders may have to respond to price discounting between now and Christmas.

During 2011 the $3M+ market has been as fickle as we can remember: it disappeared for most of the year, came back with a  vengeance in September and has now seemingly run away lost again. The collection of Expressions of Interest campaigns finishing in late October will be watched by many: there are some great homes, but the results this weekend indicate they may not sell as strongly as September results suggested they might.

To demonstrate the point, only two homes out of 150+ scheduled $M+ auctions reported a sale price over $3 million today.  Yes two – that’s not many.

They were 34 Stevenson St, Kew with James Tostevin, which sold after auction and 7 Barrington Ave, also in Kew, with Scott Patterson, which sold before auction.

Some areas were weaker than others, with Bayside particularly lacklustre today. There was just one sale out of nine auction attempts in Brighton and Brighton East today. At 6 of these auctions, there was just one bidder.

However there were some very exciting auctions. Here is a ripper – read about the other 45 in our auction results section today:

1a Laurel Court Hawthorn East: Hamish Tostevin: 4 bidders. Sold under the

hammer for $1,672,500

An interesting contrast at my first auction of the day. The magpies are warbling while the weather is threatening. It’s good to be alive. I’m sure I will be in for a treat with hammerer Hamish Tostevin, the good looking one of the Tostevin brothers, launching into the crowd of 70 who have gathered in front of this quaint, little, but tired 60s offering on small land. Well, the man is fired up today – loud voice with some good pitch and enthusiasm. Hamish is getting better with age. And so we are away with a solid $1,300,000 bid from the crowd. That seemed to shake the crowd a little – good bid. Bidder 2 at $1,320,000. Hamish is working the bidders well and with Mark Dayman shouting bids in behind, the atmosphere is building. This is powerful auctioning – good bid suggestion, good pace, good pitch and good begging. Two bidders in $10,000 to $1,400,000. There are other bidders here you can feel it. Nobody asking the on the market question but Hamish takes a half-time break anyway. Back he strides purposefully and the property is on the market, well done Hamish – none of this pass-in garbage today. This is going to be a real auction. And guess what the bidding begins to fly with the confidence that it’s on the market. Bidder 3 in $1,480,000. Absolutely brilliant urging and bid retention by Hamish and we are at $1,550,000 in tens and still with the starter. Bidder 4 couldn’t get in at $1,560,000, now he’s in at $1,590,000. Hamish is at his brilliant best, sure he has got bidders but he is working the crowd so well – this is a ripper auction and the auctioneer is putting dollars into the seller’s pockets with a shovel. Bidder 1 back in at $1,600,000. Hamish gives us his golden rule of never leaving on an even number and it gets a good crowd laugh; he then leans over to the nervous bidder and says I can be persuasive. Now we are down to $2,500s. At $1,672,500 and Hamish is still saying please. Bought at that price. Who says Marshall White can’t put a property on the market and get a great result. You can when you have a great auctioneer and a well priced home. $272,500 over reserve – WOW! (Mal James)

Selling Agency Director Comments:

Richard Winneke – If I was a $2 million seller in Boroondara this weekend I was happy.

Michael Gibson – Each week depends on the headlines and Super Saturdays are not good business practice in this market. Quality is selling well.

Scott Patterson – Quality is selling but the rest must be priced well.

James Connell – Vendors have made their price adjustments and the market will kick in again.

Townhouse and Apartment Tales from our Advocates work this week.
Under  $1 million:
14-18 Howitt St South Yarra (Will Walton): A 2 bedroom, 2 bathroom flat. 3 bidders at auction and bought for $735,000 – similar to last sale in the block in August 2010 for $725,000 on a similar $620,000 to $680,000 quote with the same agent.
Why did it sell? This price point has some strength in right areas and this agent specializes in this block.
Price: Same as last year

$1-$2 million:
72a Wilson St Brighton (Sam Paynter) – 3 bedroom townhouse bought before auction due today. Quoted $1.55m and sold for $1.56m last Sunday with one bidder. No real changes to when we went through it last time in May 2007 when it sold for $1,310,000.
Why did it sell? Location and Good Agent
Price: 20% improvement in 4 years

33 Halifax St, Brighton (Regina Schmidt) – 4 bedroom townhouse, quoting $1.55m to $1.7m – brilliantly located, but south side one of a pair – on the market for a week and 5 people went through. Pre-auction offer submitted at $1.6m – offers called for from other four Open For Inspection visitors by 5.00pm. Sells for $1.71m to second offer. Its better twin sold during the GFC for $1,550,000.
Why did it sell? Location and good floorplan. Good Agent.
Price: 10% improvement since GFC

$2-$3million
31 Derby St, Camberwell (Daniel Bradd) – absolute ripper townhouse – see our rating. Quoting $2m+
James Auction Report: Indoor auction with Richard James overseeing proceedings. Opening bid at $2,000,000, Bidder 2 at $2,025,000. Bidder 3 at $2,125,000. On the market at $2,200,000. Bought under the hammer at $2,355,000 – well bid. Good price, good home, good buying.
Why did it sell? Demand exceeding supply for quality townhouses that are priced sensibly at this level. Floorplan and quality really worked as did a great location and the agent, Daniel Bradd is very good at marketing these sorts of homes.
Price: Very solid, but warranted for this quality.

$3 million plus
3002/368 St Kilda Road (Marcus Chiminello) – Thursday night auction @ 7.00 pm. A similar property in the same building on the same side, same square metres, same décor, sold for $3.3m a short time ago. Quoting $3.3m plus then $3.5m plus. Surprising to have an auction in St Kilda Road but Marcus Chiminello and Nicole French (the new Batman and Robin) lined up auctioneer Growling Jack Bongiorno and 3 bidders fought it out past the last sale sales, past the first quote and the last quote and all the way up to $3,800,000.
Why did it sell so well? Demand exceeding Supply for North orientation; 315 sqm size with car parking on the 1^st floor (no dizziness getting in and getting out) and Shrine views. Well marketed by one of the best in the business at this stuff.
Price: Has been gently improving in some key blocks on some key apartments – but it’s all about the apartment characteristics. There are literally hundreds of apartments above a million that have no buyers at all, because they have nothing unique to offer except a very cheap price.

Phillip Kingston - 3 Yarra St Kew. Bought After $1,915,000. 3 bidders. Is he the best auctioneer going around? Well, with Growling Jack Bongiorno, right now they are the form pair!

When the s… hits the fan at auctions – nobody is a winner. We all need to look at our behaviour.

The Age reported widely on a court case this week that concluded successfully for the buyer in that they were awarded $200,000 for agent statements made during the post auction negotiations. The Age quoted Judge Ginnane that: “An estate agent must not engage in misleading or deceitful conduct”.

Step Quoting and Clayton’s Reserves happen every Saturday and in great numbers. In this week’s court case it showed that the buyers, Dr Moss and Ms John, were brave enough and, equally importantly, had the resources to stand up for what they believe was deceitful conduct. We take our hats off to them for simply having a go.

We are not making specific comment on the case  as we feel it asks as many questions about the buying side (identity revelation, strategy, recording conversations, professional representation, valuations, agent confusion, direct negotiation contact with agent, paying higher than the reserve) as it does the selling side (misleading or deceitful conduct, quoting practises, reserve prices, post auction argy bargy, splitting properties). No for us the significance of the court case was that it introduced to sellers the notion that they can be held to account for the behaviour of their agents.

Sellers appear increasingly at risk for the consequences of illegal auction behaviour, such as illegal Step Quoting (where the agents never tell the buyer the correct price) and Clayton’s Reserve behaviour (where the agent tells you a false reserve post auction). The case highlighted that sellers may be vicariously liable for damages with regards to agents behaviour.

Most buyers would not expect selling agents to be anything less than 100% for their clients (the sellers). And we are not saying that an unprepared Top End homebuyer should be given extra protection because they are plain dumb or lazy. Homebuyers who go into a $1 million plus deal thinking they can represent themselves well without extensive, diligent research or professional representation, and by just playing games, in part deserve what they get.

However there is line on what is right and what is wrong and that doesn’t mean even naïve buyers should get zero duty of care from selling agents or sellers.

This week’s court case, through the judgment, showed that society doesn’t want to go back to the wild west days.

However, we are not on the moral high ground, simply because we represent buyers. Buyers should also have a duty of care to sellers. We should not be able to put in buyer offers we know to be false. For instance, is it ok for a buyer or their agent to go to a $2 million Inner East auction and open the bidding at $2.4 million knowing the agents will pass it in (because they are agents who always pass it in), then drop your bid immediately to $1.7 million in post auction negotiations? The buyer agent, who never even had $2.1 million, ruins the auction. They then orchestrate another “unrelated” buyer to come in two weeks later and deal is done at $1.85m, with the seller losing hundreds of thousands of dollars. Is that kind of behaviour okay when you are a buyer? Or do we buyers also need some guidelines?

We think Ms John’s quote from The Age article finishes this point well and sums up how both buying and selling agents should conduct themselves in the market place. Maybe it’s also good advice for buyers and sellers.

“There are some really great real estate agents out there but you just have to be very careful. When you’re buying your home or an investment property, it’s a lot of money and property prices are very high; you have to be very careful because money’s very hard to earn.”

The long and the short of it: Hamish Tostevin and Matthew Elder (Marshall White) at 1a Laurel, Hawthorn East, bought under the hammer, $1,627,500, 4 bidders.

Biggest Sale: 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders
Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

Biggest Pass In: 11 Scotsburn Grove, Toorak, Jeremy Fox (RT Edgar); Passed in, $5,000,000, 1 bidder
A small crowd of around 40 and half are Toorak agents just looking. Jeremy Fox gives us a good solid spiel and we are away. Or are we? Jeremy calls for a $5,000,000 opening bid and gets nothing but silence. He goes inside for his half time break and leaves us all in the rain – actually he was pretty quick to return. I’m typing in Passed in on my Ipad and – whoops no – there was a genuine bid and $5,000,000 is taken up. Then it is passed in to the lone bidder. We await the outcome. (Mal James)

Bidding Buzz Auction: 31 Avondale St, Hampton, Julian Augustini (Hodges); Under the hammer $1,785,000, 5 bidders
This auction had it all – good sized crowd, fierce competitive bidding from five parties, a little controversy thrown in and plenty of entertainment for those who had just gathered to watch! Julian Augustini led proceedings and after he was met with the initial, and all too common silence, was forced to open on a vendor bid of $1,650,000. After a rather slow start, a genuine offer came from the crowd and that’s where things really heated up. Just seconds before he was about to pass the property in a second bidder entered the fray. This was accepted just in time, although the first bidder challenged whether his offer had come too late. The crowd and Hodges team disagreed and the auction continued with more robust competition and three more bidders battling it out to the very end. Mr Augustini handled the pressure beautifully and remained calm and professional throughout. The initial bidder was the victor in the end, becoming the new owner for $1,785,000. (Jen Milligan)

Buyer Masterclass: Heading for the Home Stretch.

No market news next week as the horses are more important than the auctions.

We Only Buy Homes:

CAMBERWELL, 155 Through Rd, Doug McLauchlan (Marshall White) passed in, no bidders but a big crowd of 130.