STOP PRESS: March, while not huge in numbers, did finish the month with 3 solid mid week $3M+ buys – including 4 bidders at $7 million or better at 2 of them.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8m’s
• Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – mid week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000. James Connell said afterwards that this market was not all bad news and Huntingfield supported that.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,200,000
• South Yarra – The Caroline Coachhouse – they were looking for $3m ish for a very long time (eg in the years) and now Mike Gibson – Kay and Burton has got it away.

South Yarra 17 Acland St: Gerald Delany. Fairly typical of the market for the slightly overpriced or slightly less than perfect. Passed-In with no bidders and now for sale at POA.

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Week Ending 26th March: The Market at this level was fairly quiet this week with the good sales, price wise but not too many of them.

• Templestowe, 9 Edwin: On the market since October of last year with Jeremy Tyrell of Fletchers. Has been bought for in excess of $4,700,000
• Richmond 37 Docker: Ken Griffith of Jellis Craig. Bought at auction, $3,300,000 – $3,500,000
• Hawthorn 23 Lisson Grove: Michael Lui of Marshall White. Bought after auction $3,600,000 – $3,800,000
• Toorak 17 Lansell: Lisa Jarrett of Abercrombys. On the market since December of last year and selling for circle mid $3′s

Armadale 1026 Malvern Road: The recipe was there for a good auction - quality period home on big land - however the market is a different beast from some time ago at this price level and a quiet auction took place with Jack Bongiorno in charge. Opened on a bid of $3,400,000, passed in to that bidder and was bought after for an undisclosed amount. Crowd of 40.

Week Ending 19th March:

Off Markets, Forthcoming Auctions and Expressions of Interest are increasing as market stock levels begin to rise dramatically. However some big sales including a $13,000,000+ in Toorak and a $7,000,000+ in Brighton along with a few other $3m+ buys indicate the market hadn’t completely gone to sleep .

James Tostevin: “Overall a good day. The $3m+ market is hard to read and we are not getting huge numbers of bidders at many auctions;  so there is a case to say the results may be looking healthier than the market actually is – but from a purely stats points of view (clearance rates) today was a good day.”

In Boroondara:

• Balwyn 34-36 Linckens:  (Toby Parker of Hocking Stuart) – a $3m+ auction slotted in for auction this weekend has been bought before.The quote was over $3.7m and if, as we believe, it was bought for close to $4 million then it was a strong sale.
• Kew 41 Victor Avenue: (James Tostevin) – Two strong bidders and sold under the hammer for $4,100,000.
• Canterbury 17a Alexander Avenue: Passed In $3,200,000. No bidders
• Kew 22 Stawell: Passed In $3,000,000. 0 bidders.

In Stonnington:

• 19 Kingston St, Malvern East, Iain Carmichael (BenMac); After auction in excess of $4,600,000
  “Auctioneer Iain Carmichael was in charge of proceedings for this picture perfect home.  A large crowd of over 80 packed in to the beautiful mature gardens surrounding the house, as the sun shone to show this property at its very best.  The initial vendor bid of $4,250,000 didn’t seem over the top given the location of this park-adjacent idyll.  Despite the auctioneer being confident of a sale, no further bids were forthcoming and, after referral to the vendor, the property was passed in. (Debbie McTaggart)
  Footnote: Nobody bid at auction at $4,250,000 but 2 bidders emerged post auction and fought it out afterwards to a price well in excess of the reserve and well in excess of $4,600,000. Go figure.
• Armadale 1026 Malvern: James Redfern of Marshall White: Passed in $3,400,000 and bought afterwards. 1 bidder.

In Bayside:

• Brighton 29 St Ninians: As always, auctioneer Jonathan Dixon opened proceedings right on time and the preliminaries were soon completed. This property has a supreme and uninterrupted view of the Bay from the City to Royal Brighton Yacht Club and the potential for future development was clearly explained by Mr Dixon. Nevertheless, no bids were forthcoming and the property was passed in on a vendor bid of $7,300,000.
• Brighton 18A Martin: Passed In for $3,300,000. 1 bidder.

Labour Day Weekend March 12th: As expected minimal activity over the weekend; well no auctions that is – a heap of new stock was listed to go onto an already over supplied market.

Brighton 2 Shandford: Bought Post Auction for over $7 million or in around $10,000 per sq metre - meaning Melbourne absolute waterfront is amongst the most sought after land in the world. Regina Schmidt and Brian Devlin from Buxton.

On a buying note, the Golden Mile in Brighton is still alive and well with Regina Schmidt and Brian Devlin from Buxton getting 2 Shandford away post auction for an undisclosed amount over $7 million and in fact over Shandford’s other $7 million sale of a few weeks ago. This home had some positives and will possibly be retained but with two blocks totaling around 1400 sqm going for nearly $15,000,000 this shows that Melbourne absolute waterfront has some of the most sought after beach front in the world on a dollar per sq metre basis.

Another quieter one in the Golden Mile just before the long weekend – 11 Kent Avenue (Stan Fisher of Biggin and Scott) – was reported as bought again for an undisclosed amount having been sold only last year for a tick over $4 million. The rest of Melbourne may be a little quiet, but Golden Mile Brighton is relatively hot for land sales (compared to previous years).

In the heart of the Bagel Belt at 85 Lumeah Road Caulfield North (Gowan Stubbings of Kay and Burton) a large block of land (around 1800 sqm) with a tired home on it was sold for an undisclosed amount for over $4 million, under the hammer, having been on the market at $3.5 million – 3 bidders. That makes it number two along with Langdon Road at or over $4m in the last fortnight in Caulfield.

In Stonnington 20 St Georges has been bought for an undisclosed amount. The property had been quietly on the market for some time before a more public campaign this year. The asking price estimate was $12,000,000 to $15,000,000 and it is believed to have been sold in the middle. Andrew Tolson of TBM was the selling agent. We went through it a few times on behalf of different clients and found it to be a home of some class with good light and a nice flowing floor plan – slight negatives were a less than full-sized tennis court and some overlooking at the rear (although it was not significant and, if you lost the tennis court, planting could remedy that). Being St Georges it commanded a premium – although to date its “little brother” down the road at No 10 hasn’t sold at an already passed Expressions of Interest deadline. However, considering the home’s characteristics, it would be hats off to the agents if it got near their $10,000,000 ask, even if it is St Georges.

Also went through 14 Bruce St Toorak late last month –  it has been bought for a reasonable margin over $3,000,000. Again showing the power of good architects and in particular Wayne Gillespie. Difficult block and orientation and a market place that has competition for supply, so this was a good result for an Expressions of Interest campaign and the man that sells a number of these very quietly – Marcus Chiminello.

‘Hoping for $3m in a different market but didn’t quite get there’ stories: In Port Phillip, 7 Pilley Street in St Kilda East, which was originally marketed at an ambitious around $3 million, has been bought for around $2.6 million - Jeremy Fox of RT Edgar. All things considered, this was still a very good result for the area. In Malvern, 5 Gaynor Court with Rob Vickers-Willis got to $2.73 million and a three storey terrace home in Carlton with Anthony Gattuso of AG Property got around the same amount. All solid results.

Overall still a lot of properties on the market at this $3m+ price level that have completed normal auction and Expression of Interest with no result.

Malvern 66 Claremont: Iain Carmichael: Bought for $3,700,000: 3 bidders: At this point, someone yelled "is it on the market?" and the BenMac team hastily retreated inside to speak to the vendor. Upon his return, Mr Carmichael said yes indeed it was on the market and it was here that the bidding really took off. After the price hit $3,625,000, one of the bidders went bang - $3,700,000 - and knocked everyone else out of the competition. A great finish to a great auction

Week Ending 5th March: All the bigger deals were basically in one spot, Stonnington.

Actual Boughts in Stonnington:

• Malvern 19 Hamilton – Justin Long – At Auction – $4,357,000
• Malvern 66 Claremont – Iain Carmichael – At Auction – $3,700,000
• Toorak 9 Ross – Justin Long – Auction – over $3,600,000
• Toorak – 3 Teringa – Andrew(s) McCann and Macmillan of Benmac – post last weeks auction – over $3,500,000 – nearly $5000 per sqm for rear south facing land
• Toorak – 611 Toorak Road – Expressions of Interest – Greg Herman of RT Edgar – $3,500,000
• Toorak – 231 Kooyong Road – James Redfern – Post last Saturday’s auction – over $3,500,000
• Malvern East – 127 Finch St – Rob Vickers-Willis – $3,300,000

Bayside: A Key land Indicator

• 11 William St Brighton with Rod Richardson of Hocking Stuart – $3,100,000 for 1383 sqm of land = $2,241 per sqm for land in central Brighton. Solid and expected result. 5 bidders.

Boroondara: Action at the Top End almost non-existent

• Stock Surge – Large amounts of $M+ stock are hitting the market for pre-Easter campaigns
• 61 Bellett Camberwell has been on the market since July of last year and was sold by Sam Wilkinson of Kay and Burton mid week for $3,100,000.
• The Balwyn formula of big block, new home, big price tag seems to have come to a grinding halt – very few high end new sales. Opportunity?
• Off markets are on the increase.

Port Phillip: The overpriced are as cold as ice in Port Phillip right now. No bites, no action – as evidenced by the pass-ins of yesterday and the first two weeks of this market.

• I went to a Beaconsfield auction yesterday – the offering slightly less than perfect but still a great spot – however the start was a $4million vendor bid and then a $4,250,000 vendor bid. I may have to eat humble pie when the result comes in but for me the four sales on this strip over $4m last year seemed different offerings.
• 49 Howe Crescent, which was advertised in an Expressions of Interest campaign for later this month, sold last week well over its $5m+ guideline for more than $6m (we believe). A very rare large land size at 915 sqm with a double fronted Victorian on it shows the pulling power of large land so close to the CBD in the St Vincent Garden precinct (or just off it). Michael Coen of Hocking Stuart was the dealmaker on this one. Good job.

Give me one more bid: Elliot Gill, Bennison Mackinnon, tries to coax some bids from the small crowd at 15 Soudan St, Malvern. Bought after auction, $1,600,000, 1 bidder

Key Points: Slightly healthier clearance rate in Stonnington this weekend with 63% on reported $1-million-plus auctions. However, we only saw 1 property sell under the hammer out of the 8 auctions we monitored, with 2 bought before, 2 bought after auction and the other 3 passing in.

Glen Coutinho (Hocking Stuart) means business at 12 Beaconsfield Rd, Hawthorn East. Under the hammer, $1,256,000, three bidders

Key Points:

• We covered 11 auctions across Boroondara on Saturday. Of those, 4 sold under the hammer, and 4 were bought after.
• Bidders on all bar one auction.
• Big crowd increases.
• The biggest auction of the day was 42 Wattle Valley Rd, Canterbury (Richard Winneke of Jellis Craig), which had an after-auction sale price in excess of $3,400,000 and a massive crowd of around 250 people.
• 2 Berkeley St Hawthorn suprisingly sold – considering it was surrounded by for a number of overlooking flats – Robert Vickers-Willis of Abercrombys – good get at over $3,000,000

Biggest Auction of the Day: 42 Wattle Valley Rd, Canterbury, Scott Patterson, Jellis Craig, Bought after (undisclosed in excess of $3,400,000), 1 bidder, crowd of 250
“Like most people in Melbourne I love going to the football. Now, those reading this might say “what are you on about Guy? This is a property report”. Well, the picture I am trying to paint is the auction at 42 Wattle Valley Road was just like going to the football – the crowd has huge! Probably close to three hundred people. Inside the house there were queues to get into the bedrooms and trying to get upstairs was near impossible. This was anticipated as this was a very special house. You don’t get a James Buyer Rating of 805 unless it ticks all the boxes. Now back to the auction, what an anticlimax! If you were the vendor you would think there must have been a number of parties amongst the crowd looking to lock horns and fight to the death to buy this stunning home. Unfortunately there was little bidding action . After a vendor bid of $3,425,000, there was a very last minute bid of $1,000 just to secure right to negotiate after the auction.” (Guy Angwin)

Agent Q & A: What is your view on pricing?

Scott Patterson, Jellis Craig, Hawthorn:“The  market is patchy at the moment and we are seeing mixed results. The homes with the ‘wow’ factor often attract concentrated bidding at auctions and with the properties that don’t need work, there is always more interest in those as many people don’t have the time to fix them up. As for the homes with poor floor plans, it certainly affects their appeal. I would say there is a 20 per cent difference in price to those with good floor plans.”

Glen Coutinho, Hocking Stuart, Hawthorn:“Now that the government is sorted out, the market should remain healthy between now and Christmas. There is a shortage of good houses. Apart from the usual disruptions of the AFL and the racing season, there are still some good selling days.”

Bidderbuzz Auction of the Day: 34 Kinkora Rd, Hawthorn, David Oster, Jellis Craig, Under the hammer $2,690,000, 6 bidders
“Auctioneer David Oster led a ripper of an auction in the highly sought-after Grace Park Estate. There was interest from the get go with an opening genuine bid of $2,000,000, promptly followed by two others from the crowd of around 150. As the price rose so did the bidder numbers – 6 in total, joining the quest to secure this Hawthorn home. The determined bidding of one at $2,500,000 saw the property go on the market soon after at $2,506,000. At $2,690,000 five bidders bowed out to the unwavering bidder left standing. The crowd erupted in applause at this strong result and quickly disappeared, most likely for a coffee at nearby “Liar Liar” to recall the entertaining spectacle of this Spring mid-morning auction.” (Julia Atkinson)

Clearance Rates & Monitor Table:

Forward Auction Stock Levels

Not everyone in Melbourne was home watching the football on Saturday. Around 250 people watched Scott Patterson (Jellis Craig) in action at 42 Wattle Valley Rd, Canterbury. Passed in $3,425,000. One bidder. Bought after, undisclosed.

We only buy homes

Hampton 48 Mills: Stephen Tickell straining everything to get that last drop of cash from the auction. 3 bidders. Bought for $1,560,000.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 49% for the 37 auctions we attended. By 8pm it was 62% (seemingly a balanced result between buyer and seller).

Bidderman, our Demand Indicator, was at 1.6 – a level we feel continues to be a good representation of current demand: borderline – a  market that may be in balance but is on an edge.

Issues
This weekend was the first solid and uninterrupted auction market test since we all stopped for school holidays at the end of June. At that time we were seeing prices falling on big stock numbers. Since then the market has mopped up more than we expected. However the last few weeks have been very quiet. Saturday was no different – quiet – despite the largest auction offering for a month. With good stock tightening and an election interruption coming, it is looking more and more likely that the market will continue to flounder and gyrate until Spring.

A fortnight ago we thought prices had more chance of falling than rising, however to be completely frank it’s not as clear to us any more. The opposite is also possible. And next week we may have a different opinion.

Yes, good stock is selling, but good stock sells even during a depression. Most homes around a million dollars are selling. For the rest of the $M+market, there seems to be no clear direction at present. We are in balance but it does not appear a stable balance.

Highlights

• Everything sold in Stonnington - 12 from 12. Prahran was particularly impressive, with 6 bought out of 6
• There were two 5 bidder auctions – both by Tom McCarthy and Philip Moore of Biggin and Scott -  14 Green Prahran – $1,653,000 and 13 Hornby Street - $1,476,000.
• Prahran was hot – it had the second highest sale at 41 Closeburn, Prahran with Andrew Macmillan of Benmac – $2,586,000
• The top sale we witnessed this weekend was with Mark Wridgway and Michael Ebeling of RT Edgar at 58 Washington St Toorak – $3,350,000 post auction (for land buyers in the area that added up to $3900 per square metre).
• Flinders Caravan Park was reported as sold during the week for around $6 million. Stay tuned for subdivision plans and possibly a rare Flinders township land release.
• In Port Melbourne/Albert Park there were five single fronteds for sale in various different guises. One sold, four passed in, but three have since sold after. There were 7 bidders in total.
• There were a couple of $3,000,000 pass-ins in Bayside – possibly reflecting the large stock overhang at this level in the area.

Activity Levels – just look at the graph below to confirm what we are saying about large drops in activity levels for $M+ sales. It shows sales for the week ending June 26th v the week ending July 30th. The reasons for the drop in sales are partly seasonal, but also partly unusual – and it’s worth remembering that a number of those May/June 2010 buyers will have to become Spring 2010 sellers sometime.

Agent Comments - This week we asked if the election was affecting the market. The market wraps contain some very boring answers. (The agents aren’t boring – the election is.)

Mark Wridgway from RT Edgar: “The Election is having no effect in Top End Melbourne which is mostly pro conservative. People figure from the property angle that Labour should win so the choices are: as is (which is regarded as OK) if Labour wins or slightly better if the Libs win. As opposed to  2007  when incumbent Liberal Government looked like they were on the way out and therefore conservative sellers held off as 2007 Labour was an unknown. Fewer people act in times of unknowns.”

Family Homes – Not all family homes go up

7 Ardrie Road Malvern East

This home was bought in 2000 for $410,000 and resold again in 2007 for $1,995,000 by James Redfern of Marshall White. It was a great result at the time. For whatever reason the new owners decided to move after two and a half years and it was sold by Abercromby’s Robert Vickers Willis earlier this year in the mid $1.9 millions or slightly less than the 2007 price. The market was strong in February but unfortunately come May the deal had fallen through. We reported the re-auction last weekend.

James Auction Report: With the weather taking a turn for the worse, auctioneer Tim Derham opened the auction with a vendor bid of $1,650,000. With the umbrellas opening in the crowd and the atmosphere souring, no bids were made for the Malvern East property. Derham did all he could to extract a bid from the reluctant crowd before returning to discuss the situation with the vendor. Upon his return, he suffered an equal amount of bad luck. There were no bids made for the property and it was eventually passed in. The property has since been sold by Robert for a tad over $1,700,000.

What to learn from this? – and please no smarty pants here – I lost money on my first marital home 25 years ago. What we can learn is:

• Good properties do perform well over a longer period
• Properties that have to be sold over a shorter period of time have an added risk of being subject to short term market fluctuations
• Properties that are above the median price for the precinct are particularly susceptible to market movements
• Agents can get very strong prices from buyers – e.g. both James Redfern and Robert Vickers Willis got above-market prices which came back to the buyer at resale time.
• The market moves down as well as up in home buying.

What could be done to reduce the risk when buying a good home? After all, this home had a very good James Home Rating of 792/1000

1. Consider land to value ratios – the lower they are, the more susceptible you are to a reduced growth result.
2. Be clear as to why you are buying – Clarity. Then buy for the long term.
3. Buying homes well above the normal precinct price attract greater risk, especially when this is combined with point 1 – lower land to value ratios.

Apartments
Good insight from Gerry Gordon of Hocking Stuart (Peter you need to buy Gerry a new tie): “Sweet spot in apartments is when size matches price point. Many apartment buyers are attracted to a price. Price point people are being attracted to Bayside. Healthy apartment market below a million. Getting 5% return.”

Stock Levels
This week we trawled through old stock lists, off markets, stales and unsolds. The stock we trawled through was mainly unfinished or rubbish apart from the Top of the Top End – where there are good quality unsolds. We thought a few weeks ago (as we came back from holidays) that there was more good stock around than there actually was. What happened? More good stock got mopped up in the flurry pre school holiday break than we first thought (examine our Buyer Activity graphs in the Market Wraps). Around the traps, the word is that Spring seems to be shaping up OK for both buyers and sellers. Up until then you can see the reduced new stock levels  (graph below). Prices are holding at present.

Wormie - the chart below represents our best guess on what $M+ prices are doing right now.

James Buyer Opinion: This week we have reprinted our opinion article that was published in Business Age last week. We update our opinion piece every Wednesday and next week is we will start a 9 week series on Negotiation. Our first article is: “How to ask the “On the Market?” question – without being a smart aleck”.

Thank you for your continued support of our company in ratings, news and advocacy. Over the next month or two you will hopefully witness major improvements in the video quality as we improve our technical capabilities to match the incredible numbers of people now watching them.

We Only Buy Homes

Mal

Balwyn 80 City Road: A good crowd turned up to see not much happen - a common occurrence across Million Dollar Melbourne today.

What is it with redheads? They're running the country - and now they're taking over the auctions. We counted six in this photo in amongst auctioneer Phillip Kingston from Gary Peer. 7A Nightingale St Kilda East. Bought After $1,200,000. 1 bidder.

At 6pm Saturday the James Clearance Rate on the 22 $M+ Auctions we covered was 59%.

Our Demand Indicator Bidderman was 2.2.  Hmmm – an interesting increase but it was off a very low turnover.

Today’s Highlights

1)      Bidders were present at 18 of the 22 auctions we covered –  and at three auctions there were 6+bidders

• 23 Sunburst Avenue Balwyn North (Doug McLauchlan of Marshall White)
• 12 Lennox St Hawthorn (Russell Turner of Christopher Russell)
• 7 Monomeath Avenue Toorak (Justin Long of Marshall White)

2)      The Pies are top of the ladder – and the election is on

We couldn’t find many $M+ auctions worth covering and only one of the auctions we covered went over $2m this weekend. So with the small numbers – just coming out of  the winter hiatus – it was like a first back training run before we get into the winter season proper over the next few weeks.

Agent Quotes

Scott Patterson of Jellis Craig: “Sold 12 from 16 today throughout the company. Opens and auctions were well attended…those who wish to sell in next month or two could enjoy quite solid results due to lack of supply, because demand seems reasonable… August 28 is looming as big weekend, particularly as it is now the week after the election…only thing is that Hawthorn vs Collingwood might affect crowd numbers etc…’

Hamish Tostevin of Marshall White: ”Opens were steady without being over-run with buyers. Certainly a lack of property at the moment in terms of supply. Should be a solid spring, particularly when the election is out of the way.”

Now, where were we before we were so rudely interrupted (by the school holidays)?

It has been a month since we last reported, and we have seen more Top End activity at Tullamarine than in any other suburb. Was it sales? No. It was our selling agent brethren jetting off to Europe to recharge their batteries. This poor humble buyer agent can only give you a travelogue on the Dubbo Zoo so I won’t bore you with tales of kids and a 12-hour car drive or the fact it ain’t a patch on the Werribee Zoo.

The world is a different place since our last report: back then Kevin ’07 was in charge, Masterchef was still a competition to find the best amateur chef in Australia, not the luckiest cook as it is now, and our $M+ market had prices cooling quicker than a Melbourne winter, after a blistering start to the year (although there were still an incredibly high number of buys).

A month ago we reported that the early 2010 gains had evaporated in the five auction weeks of May due to the sheer number of listings. May’s record supply finally stopped what had, since March 2009, been a rising market, driven initially by international buyer demand and then solid local demand.

So what is happening in our Winter Market (June to August) right now?

To be frank we don’t know for sure yet. But here are some of our thoughts.

1. Prices Now
2. Stock Quality Now
3. Method of Sale Now
4. Risk v Reward Now

Prices Now
Selling agents love to use the ‘p’ word plateau (rather than the four letter ‘f’ word)  to reflect on, or deflect away, thoughts of a declining price market. Right now, we actually agree with the ‘p’ word – especially if you accept that prices fell significantly in May and June. (By the way, the ‘f’ word that selling agents don’t like to use is fall.)

Some reasons prices may be plateuaing are:

• Seasonally reduced action (winter)
• An election on the horizon –  so some buyers and would-be sellers will pause to wait for the result.
• We had a big price fall in May and  for most of us market watchers the way forward is still unclear. Will we see more price drops or …. who knows? Like many, we are waiting for a sign.

Demand in Relation to Price

• This weekend Bidderman was at 2.2 – but, please note, this is based on very low auction volumes and therefore statistical distortions are possible.
• As a buying company,  we have had commitments from a significant number of new clients over the past few weeks.
• We feel it’s better to reflect overall demand as more cautious rather than dropping – however another month or two may tell us a different story.
• Right now, buyers still do have the rare luxury of having their cake and eating it too – if they choose to. Prices have fallen in May/June, and in July we are in a market of reasonable choice. Hooray for buyers!

Private Sale Clearance Rate – the number of Proven Sales is only 11 from 50 – or 22% – over the past six weeks.

Six weeks ago we randomly selected a basket of 50 higher end Private Sale and Expression of Interest properties, right across our $M+ Melbourne market. We did this with the aim of  checking  what was bought 6 weeks later (roughly the same time as a “go to whoa” auction campaign), and to therefore calculate the clearance rates  to see how Private Sales and Expressions of Interest were really going.

We thought this snapshot would provide the best reflection of private sale market activity and confirm or question comments by some selling agents that: “Oh yes, auctions were not as good as March, but we are selling a heap via private sale”. The results proved that while in May agents were selling a heap, it wasn’t so much the case in late June to early July. However,  it could have just been that many agents were away.

• We have made an effort to contact those that were withdrawn without a sale price, and we may have missed a few sales – but overall the non-auction homes are NOT running out the door any faster than the auctions. In fact you could make a strong argument that, as an effective method of sale, auctions are still outperforming private sales in many cases – despite the declining clearance rates, given that only 1 in 4 private sale properties have been bought in 6 weeks.
• These figures must surely help smart buyers put together an offering strategy. It’s certainly prompted us here at James Buyer Advocates to change how we buy in the last two months.

Today’s final word on price – are you a glass half empty of half full person?

If you feel the double-dip recession is fast approaching and the world as we knew it is about to end, then, by all means, don’t buy – and in fact sell (and please give us a ring if you have a good home to sell).

If you feel Julia (Gillard) won’t be changing the legitimate immigration numbers any time soon (demand) and Justin (Madden) won’t be able to release large numbers of housing blocks in Inner Melbourne because they are not there (supply), you may wish to ignore the doomsayers and take advantage of this current price breather combined with good stock offering. The GFC lasted less than a year  (for us) and in July 2010 Melbourne $M+ home prices are still 20 to 30 per cent above 2008 GFC home prices. Remember the 2008 ‘bulls**t’ rumour of the year, which said the NAB and other banks were about to foreclose on 200 homes in Toorak alone – it never happened. Yes we are biased and make a living by encouraging buyers to buy – but the facts are still very positive for buyers.

Stock Quality Going Forward
Spring quality and auction numbers are the variables we don’t have a clear handle on as yet. Right here and now in July, we have a market with excellent stock numbers for buyers – if you know where to look and you actually act correctly (please see the following paragraph on methods of sale). We also think the quality is good. Going forward, quality stock levels are not clear to us, because traditionally when quality sellers see a declining market they are loathe to put their home on the market on a speculative basis (in that, if they don’t have to sell, they won’t). This obviously leads to less stock on the market, which may affect price but, more importantly, it affects choice. Good buying decisions are more likely when, along with good advice, you, the buyer, have good choice.  You have that now.

Method of Sale
As we said, there is choice now if you know where to look, whom to ask and how to deal. Look at the above private sale table – there are some good homes there. We keep overhang lists (stales and unsolds) and there are also a number of off-markets and quiet pre-releases available. Granted, some of the vendors are still in their price cocoons but  quality sellers who have adjusted their price expectations may have homes worth considering. The off-market (unadvertised properties) may well be the market of choice for a number of buyers and sellers in the next few months.  But, please note buyers, you will have to sharpen your negotiation strategies to take advantage of all that is on offer.

Risk v Reward
To digress – Risk v Reward is where Masterchef’s Adam and Claire had it all over Jono. While Jono was going for the big dish on every occasion – and you have to admire him for that – he wasn’t playing the game to the best of his abilities. Adam is the quiet master at the Masterchef game. He sees a situation and says: “Yeah, I want to try and make a dish that will impress the judges and maybe get me a shot at immunity – the reward – but I don’t want to push the boundaries that far that I risk getting in the elimination round if I fail.” Good Home Buying and Negotiation is absolutely the same as this. Why is that? Because in the first instance the strategy should be to get yourself into a strong position and not risk all for the pot of gold. Once you are in that strong position, then you can make a run for the prize. Another analogy is acclimatising at base camp before you make the assault on the Everest summit. This is Risk v Reward.

A full James Buyer Opinion on Risk v Reward in today’s Market will be published here on Tuesday – so look out for it this week. At the moment you will find our biggest ever ‘clicked on’ James Buyer Opinion article – The Learning Fee - right next to this article.

It’s good to be back

We Only Buy Homes

Mal

Balwyn North 23 Sunburst. Big Crowd for Doug McLauchlan of Marshall White - 125 in fact. Seven bidders. Bought under the hammer for $1,567,000.

Glen Iris 18 Clyde: "The Boss" John Morrisby letting the 3 bidders know they are a bit short at $1,385,000. Passed In but sure to be dealt with soon if the vendor knows the new market.

Stonnington was surprisingly strong with Park St South Yarra (Warwick Anderson of RT Edgar) going well past $3,900,000 on multiple bidding; 81 Clendon Road Toorak (Gerald Delany of Kay and Burton) selling post auction north of $7,350,000 and 64 Burke Road Malvern East selling before for 3,320,000 or $1366 per sqm for main road land.

The clearance rate was back to almost 70% and our recent frosty forecast for the next month in Toorak and South Yarra now seems as reliable as a weatherman in Melbourne’s spring.

No, no, no Toorak is not on fire – it’s just not quite as cold as we thought. And while sounding like a Kay and Burton salesman, please tell me how you ignore a claimed 80 sales at around $250,000,000 for the month. Either Michael’s having me on or the market has some real hidden strength, notwithstanding at less frenzied prices (that’s agent code for slight dip).

Why the auction turnaround – price adjustments. The vendors of late May have proven they can read and don’t wish to experience the early May vendors pain; so they have swallowed the price pill to become sellers and avoid remaining owners.

The market, the agents and the jungle drums have worked. What happens now becomes a function of stock levels going forward as some demand (for now) has been proven to be there.

Other interesting sales and (almosts)

• At an auction in Clarendon St Armadale (Madeline Kennedy and Andrew Hayne of Marshall White) where a nice little Edwardian single-fronted was bought for just over $1.2 million, and its twin sold earlier this month for $50,000 less. Hard to argue against that fact although it is only one fact.
• 12 Chesterfield Malvern (Rob Vickers-Willis of Abercromby’s and RT Edgar’s Will Cooper) which has been on the market longer than it takes to get an apology from a selling agent seems to  have some post auction momentum and should sell north of $3 million or over $3000 per sqm and a free house (which we like James Rating 667/1000)

All in all a humbling week or so for this Top End predictor.

Stonnington Auctions – 26 monitored – 18 bought – 69% clearance rate

 Make Good Decisions

Toorak 81 Clendon Road: Listen to Gerald's gospel my sons, bid now or bid afterwards; either way the vendor is getting your money. Gerald Delany, Mike Gibson and Ross Savas - K&B's true believers. Bought afterwards for over $7,350,000.

South Yarra 7 Kensington: A lot of standing around on a beautiful autumn morning - but that is not meant to be the entire auction script for Kay and Burton. No bidders. No action. Nice day though.

Of the 11 Stonnington auctions we attended today, four properties sold under the hammer, one before with the balance passed in (one of those six has since been reported as sold).

Of the pass ins, five were passed in with no bids (apart from a vendor bid).

So are vendors getting ahead of themselves?

Let’s first look at what was bought.
The stand-out sale was 32 Grandview Grove Prahran East, which Justin Long of Marshall White sold under the hammer for $4,410,000. The property was the previous gallery of Dr Joseph Brown, the well known artist and collector. It’s not often that Prahran East will record the highest price sale in Stonnington, but this is a rare house and although it will take a large budget to restore it to it’s former glory the challenge may well be worth it.

Abercromby’s Rob Vickers-Willis had two of the next best with 2 Willis Street, Prahran selling for a bullish $2,111,000 (3 bidders) and 14 Wheatland Road Malvern going post auction for an undisclosed amount in excess of $2,250,000. An impressive 6 bidders from a crowd of a 100.

Marshall White chipped in the 67 Emo Road Malvern East which sold for $1,381,000 through Phil De Fegely and John Bongiorno managed a smallish crowd but with 3 bidders to an “under the hammer result” of $2,245,000 at 94 Claremont Avenue Malvern.

The lack of bids for some of the pass-ins could not be put down to the quality of the property. For example the two South Yarra terraces which went to auction, at Kensington Road and Davis Avenue, had both undergone extensive and quality renovations with very few if any negative comments on their quality and style. Neither street would be classified as South Yarra’s best but they were both quality houses.

Equally, 5 Hopetoun Road Toorak was renovated to a very high standard and sitting on about 1000 square metres of land.

So why no bids?

Well, price is about the last remaining variable-  it is not going to be the strength of the marketing campaign or auctioneer as a number were handled by the Kay & Burton “A” team.

If there is a message for vendors: to sell, you need a willing buyer and a willing seller – and agreement on price.

Prices do not keep rising every week and your house may not be seen as 15% better than your neighbour’s house just because it comes onto the market a month later.

Make Good Decisions

Abercromby's Rob Vickers-Willis in fine form at 14 Wheatland Road Malvern with a big crowd of a 100 producing 6 bidders and a post auction result in excess of $2,250,000. Photo: Julia Atkinson

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 36 Auctions we attended today was a solid  75 per cent on good stock numbers.

The “frenzy” feel has left the highest of the higher end market for now as the new age businessman and establishment money, who determine the Toorak market, reconsider after

(1)    looking at their business’s forward estimate balance sheets.
AND
(2)    looking at the prices being asked.

While we are indicating we think the market has cooled in the last fortnight, we are not saying prices are dropping – they are just leveling a bit as buyers say; no more – nope – that’s enough – I don’t wish to afford anymore. Consequently at the TOP END there are now fewer occasions when there are multiple extreme bidders pushing prices 10% beyond the previous week’s experiences. This in effect has produced a leveling of demand at the $2m+ mark and consequently vendors are selling at market expectations in line with last months performances or they are not selling.

The price surge since November 2009 on top of the unending climb since March 2009 may well be showing some light at the end of the tunnel for distressed buyers.

But please . We felt this cooling about a month ago and then the pre-Easter weekend slapped us in the face and said: “No buddy you’re wrong – no market leveling here”. That same cooling feeling or perhaps better described as less frenzied feeling is flowing freely throughout the Top End of the market today as buyers simply say. No.

No – I’m not scared anymore – I need to be sensible and if I can’t buy it at that; then I need to move on and find one I can.

This could become the May 2010 buyer mantra as we have good stock levels for the next 4 weeks. How long will it last? Personally I think it is a thought of some substance and we may see an extended period of buyer caution.  We are saying buyer caution not buyer inaction.

Many (not all) of the buyers who have a few million and then some to spend on a home understand money. They understand balance sheets; they work and/or mix in positions where they observe what is happening in business. And businesses right here and now are asking questions of the future.

So while buyers are not panicking in any shape or form – they are still around in very strong numbers – they as a collective seem to have taken a more circumspect view of what a home is worth to them. Buyers seem happy to leave it to those that must have it (bullish buyers or unrealistic sellers) and move on in search of a home that is good quality and sensibly priced.

Let’s hope this is the case because no one, bar an opportunist, loves operating in a boom and bust market. And if we keep booming then we are going to bust.

The Inner Melbourne Median Market say $1million to $1.5million is a completely different animal and this is to be expected. At this level discretion is not an option – you need to house the family. They are getting bigger or you are moving here or you are leaving home. Buyers need to buy and they still are in strong numbers. Nope. This market is still giving the impression it is well and truly unsatisfied and still has an incredible appetite for the markets offerings at this price level.

Some of today’s (Saturday May 1^st) stats on the auctions we covered

Over $2million – Bidderman 1.9. Clearance Rate 60%

Under $2million – Bidderman 3. Clearance Rate 82%

The market is not going backwards, it is just rejecting those who are still on the rise and rejecting those agents who have promised the world and then some, run a campaign accordingly and looked around at auction time surprised it’s not 15% over last week’s best result.

However buyers the market is not weak; it is still very strong at the right price for the right home.

Buy happy

Mal

Malvern 14 Wheatland Road auction crowd in excess of 100.

Chris O'Shaughnessy and Edward Hobbs of Biggin and Scott in the middle of battle at 43 Laity Street, Richmond.

Its been a few weeks since our last update and despite the recent interest rate rises the market broadly is still where we left off – moving upwards.

Starting at the Top End of Town in East Melbourne a crowd of 60 strong witness 50 Berry Street pass in on an opening vendor bid of $1.9 million. Rob Vickers-Will of Abercromby’s gave the crowd every opportunity to bid but no one emerged. Things were slightly different at Albert Street where the penthouse with excellent views of the Fitzroy gardens was aggressively pursued by 4 bidders. The property sold well above reserve at $1,355,000 – solid result for Andrew Macmillan of Bennison Mackinnon

Richmond is still  strong with 2 bedroom dwellings like 17 Reid Street, 149 Lennox Street, 125 Brighton Street, 15 Bendigo Street & 21 Type Street all selling around the $ 900,000 mark with multiple bidders at all auctions. The depth of bidders indicates that well located 2 bedroom dwellings in Richmond are moving closer and closer to $1,000,000 – indicating significant market movement from 2009 where high $700,000′s was the norm.

Craig Shearn of Jellis Craig indicated that the Clifton Hill office had a 100% clearance rate with prices well above reserve anywhere from 5% – 15%. Mr Shearn noted that ” limited stock is still the main contributing factor behind the high clearance rates” and that “the recent interest rise appears to have had no affect on prices as the majority of purchases have already factored rises into there budgets”. Most importantly Mr Shearn noted that in his 26 years of real estate he has never seen  the market continually surged as it has in 2010.

Stefan Dzanovski of Collins Simms has also commented on the market strength with company clearance rates being between 97% – 100% in 2010. Also adding that open’s have been very well attended specifically double storey terrace’s in Carlton North, Carlton and Fitzroy.

Things are also hot in Essendon with 28 Schofield Street selling under the hammer and well above reserve – basically a land sale there were 4 bidders in total, one of them the next door neighbour. Solid result for the vendors and complements to Milo Rasinac of Nelson Alexander for an entertaining auction. At $1,267,000 this buy says land is valued around $1500 per sqm for the Salmon Reserve Green Belt.

The month of May has been talked about amongst many agents as a month of good stock levels and we concur, seeing May 1st shaping up to be a big weekend.

We are sure buyers would appreciate any kind of relief coming into the market as evidenced by the rising median price indicators courtesy of the REIV. While there are anomalies caused by small number of sales in some quarters this chart clearly shows prices have been on the march since the start of last year and circumstances seem such that it is likely to continue.

Know your Market

Camberwell: 16 Green: Bought $1,400,000. Bidderman 3. Doug McLauchlan, Marshall White about to bring the hammer down.

After a week or two off for serious buyers and sellers, the market in Boroondara keeps on keeping on, with clearance rates for most agencies around the 85 per cent-plus mark.

The weather in Melbourne was perfect today – perhaps the last breath of summer – and there were good people numbers at  auctions and at ‘opens’ enjoying the sun – two properties in particular of note – 42 Berkeley Street on Hawthorn’s Scotch Hill (James Scarff, Kay and Burton) and 55 The Ridge Canterbury (Daniel Bradd, Jellis Craig). Both big family homes in well known streets. Our ratings will be up in the next few days.

Land sales remain strong  – two of interest and both sold by Noel Jones Agencies were-

• 5 Ross Street Kew – 814m2 (John Cokalis) sold for$2,260m (or $2780/m2) – 6 bidders
• 151 Wattle Valley Road Camberwell- 1598m2 (Geoff Inglis) sold for around $2.6m (or around $1630/m2) – 5 bidders

While these properties were not vacant sites, most buyers would see a new home project down the track. Developers seem back in  full flight – there does seem to be an enormous lot of building sites out there and of the builders I talk to there is certainly no shortage of work.

No real surprises in the key auctions we attended -

• 22 Bellett Street Camberwell (Anne Mackie, Hocking Stuart) sold for $1,770,000 – 2 bidders
• 16 Green Street Canberwell (Kathy Malcolm, Marshall White) sold for $1.400,000 – 3 bidders
• 28 Lennox Street Hawthorn (Hamish Tostevin, Marshall White) sold for $1,305,000 – 4 bidders
• 44 Mary Street, Kew (Walter Dodich, Marshall White) sold for  $1,524,000 – 3 bidders

Add to this some big ones selling before – 108 Harcourt Street Hawthorn East (James Tostevin, Marshall White / Jock Langley, Abercromby’s ) sold for a figure  just over $4,500,000 and 17 Wentworth Avenue Canterbury (Peter Smith, Jellis Craig) sold for $2,150,000.

Overall confidence remains high from both buyers and sellers alike.  Some insights from Top End selling agents -

• Richard Winneke from Jellis Craig believes the market continues to remain strong – their company sold 23 from 27 today – the four did not sell were less than perfect properties which would struggle in any market.
• James Tostevin sold all of the five he auctioned today and believes the market is ‘flying’.
• Jason Scillio from Kay and Burton believed this type of activity could go on for ‘another 2-3 years!’
• Richard Earle from Jellis Craig also could not see any real end in sight, claiming that maybe a ‘flatting off of the market’ would be the best buyers could hope to expect for.

Not everything selling however – 52 Athestan Road Camberwell passed-in and 8 Stanhope Grove Camberwell has been withdrawn from sale. Both of these properties were ‘less than perfect’ at least that is what the market thought.

The median price trend chart, courtesy of the REIV, represents what we think is happening in $M+ Boroondara despite these charts being for all (above and below $M) member sales in the area. Prices have been going up dramatically. WOW look at the government’s law change (FIRB) permitting foreign nationals to buy land which came into effect and we reported on around March of last year (Mar 2009). Look at Kew.

We have added another chart below (focusing on Kew and Balwyn) to show you more clearly the effect on prices the FIRB rule changes had in March of 2009 and the leveling off that occurred when the Aussie dollar started to strengthen strongly against the US dollar (relevant to the Chinese community). With the help of Canberra, the Chinese community single handedly (a bit of exaggeration) rescued our Inner East $M+ property market and whether you like what is happening now with prices this was the beginning, one of the catalysts for the incredible price improvements right across Top End Melbourne.

What about Canterbury it looks like a wounded walrus – we guarantee you its statistical shortcomings – too few sales to give meaningful data.

Two biggish weekends coming up May 1 and May 8. We are almost half way through 2010 and no real slump seems in sight, at least in the foreseeable future. Even more reason to make good decisions and…

Design Smart

Malvern East, 20-22 Ferncroft Avenue: Majestic setting!!! Four very keen bidders. Iain Carmicheal continues his good form.

Around 15 $m+ properties sold at auction today, with the highest reported sale price at 18 Winifred Cres Toorak which sold for $4.21 million. Gerald Delany and Clive Nettlefold of Kay and Burton. Good job, considering most others at this level failed to sell today.

Although stronger this week, sellers didn’t have it all their own way, with four pass-ins in that $2.5m to $3.5m mark: 113 Kooyong, 27 Washington, 1002 Malvern and 19 Lambert.

Private Sales

An apartment at 52 Bruce St Toorak (Jock Langley of Abercromby’s) sold privately during the week for a tick over $1.4 million.

The biggest quiet sale of the week was 10 Struan St in Toorak on around 20,000 sq ft which, if the figure is correct, at a bit over $7 million, would represent $3000 a sqm for land (assuming $1m+ for home) and a close to doubling since it was bought last in 2005. Jeremy Fox of RT Edgar.

Auctions we attended today:

MALVERN EAST, 25 Epping St Bought – two bidders.
Two confident bidders fought it out after an opening vendor bid of $2 million. The property sold under the hammer for $2.39 million. Iain Carmichael was auctioneer.

ARMADALE, 6 Elgin Ave Bought – two bidders.
Seventy people attended this auction, which saw bidding from two people in a relaxed atmosphere in the backyard of the home. The property went on the market at $2.68 million and sold at that price. Auctioneer Warwick Anderson.

TOORAK, 18 Winifred Cres - Bought - three bidders.
Around 60 people braved the heat to watch this auction. Proceedings initially slow after a genuine opening bid of $3.7 million, but became quick and exciting when two more bidders joined the action. Sold under the hammer for $4.21 million. Gerald Delaney auctioneer.

MALVERN EAST, 24-26 Finch St - Bought after.
A slow start, but auction gradually gathered momentum. An opening bid of $2.65 million and four bidders, but the house failed to sell after bidding reached $3.020 million. Crowd of 80 people. Justin Long was the auctioneer. The property sold later for an undisclosed amount.

MALVERN EAST, 20-22 Ferncroft Ave Bought – four bidders.
In a magical rainforest-like setting, 60 people saw strong bidding from four people to reach a sale price of $3.33 million. Iain Carmichael was auctioneer.

ARMADALE, 26 Barkly Ave Bought – three bidders.
Exciting, rapid-fire bidding, starting with a genuine bid of $1.55 million. Auctioneer Elliott Gill kept things moving quickly and the property sold for an undisclosed figure in the high $1 millions. Three bidders and a crowd of 130 people.

MALVERN, 33 Valetta St - Bought – five bidders.
A good crowd of around 100 attended this auction. Five bidders and good steady bidding for a home in good proximity to Glenferrie Rd. A late, first-up bid clinched the deal at $1.527 million. Auctioneer James Tostevin for Marshall White.

Make good decisions

Robert Vickers-Willis of Abercrombys getting 41 Henry St over the line at $1.036 million

TooraK 10 Irving Road. Sold $3.575m. Kevin Sheehan enticing a lazy $7771 per sq metre

Spoke to Bennison Mackinnon’s Iain Carmichael this afternoon – tell Mal you won’t find me saying I can see a lull that you may have implied a few weeks ago. Very strong is my read of our and other company’s selling results and don’t worry I was about a million out on 10 Irving Road as well. Incredible!

Some very strong results again with almost all properties selling and selling well – some incredibly well highlighted by

10 Irving Road Toorak – Kevin Sheehan of Kevin Sheehan Property

James Home Rating 644 out of 1000. Location, location – really good spot for a townhouse, small house development. This should fly if at market.

James Control Price: Dirt $2,300,000 + House $0= $2,300,000 Is the market going to pay a strong price for a smaller block in a prime position – is the market right now as strong as $5000 per sq metre for a townhouse block?

James Auction Report: This auction opened with a genuine bid of $1.8 million and four bidders from the crowd of 70 joined in to push this to a sold price of $3.575 million, however there were two main bidders from $2.2m. Auctioneer Kevin Sheehan

James Post Sale Examination: Wow we were only a million out and as Kevin said post game – the power of a good old fashioned auction where two people wanted it badly and had the resources to get it. Kevin also stated he thought anything over $2.2m was a buyer premium. This is $7771 per sq metre but we are not adjusting our sqm rates on this alone – exceptional circumstances another Lambeth Armadale – Urquhart Hawthorn – Heathfield Brighton all rolled into one and so we have a new legend auction 10 Irving Road Toorak. This property because of its desirable location shows the power of inner Toorak and may well have achieved this result even in a flat market.

74 Mary St Richmond – Chris Murphy of Hocking Stuart

James Home Rating 681 out of 1000. This pretty double-fronted Victorian cottage has been renovated well and has a great feel. Location is good - Mary Street is one of Richmond’s better streets and close to everything. Some may not like the position of the bathroom and there is no ensuite here. Secure off-street parking is a big plus and the way natural light is brought into the living areas via the private northern courtyard area is quite smart.

James Control Price: Dirt $672,000 + House $300,000= $972,000

James Auction Report: Crowd of around 50 saw auctioneer Chris Murphy open take an opening bid from the crowd of $900,000. Three bidders, quick and good auction, on the market at $1.05m and sold under the hammer at $1.106m. Good result for Mat Pape of Hocking Stuart.

James Post Sale Examination: Strong result and symptomatic of the day.

4 Armadale St Armadale – Dean Gilbert of Marshall White

James Home Rating 803 out of 1000. A lot to like about this home. It has a good facade, land size and the position is good Armadale, with perhaps a bit of tram noise being its only positional negative. Car access is to the rear/side but the laneway is useable and the garage is big. Anyway, that is outside; inside is where the home shines. It’s an excellent marrying of period to new. Ceiling height and Victorian features ,combined with a bit of glitz that, while slightly old, is not really dated, gives this a homey and exciting feel all at once. For me, the big plus is rooms: there are plenty of them, key rooms are a good size and there is good separation of master from children bedrooms, with the master also being on ground level and with ensuite. Few steps, so for older people this is a great home. Should go very well and well over the initial quote of the agents.

James Control Price: Dirt $1,265,000 + House $1,100,000= $2,365,000 The hard thing to estimate was how would close to Wattletree Road be viewed – eg would there be a land discount and the home we thought was move in as is and therefore was a $1m to replace plus pool etc.

James Auction Report: Just two bidders from the crowd of 70 at this auction but it was enough. Opening with a genuine bid of $2.1 million, this was on the market for $2.35 million and sold for $2.37 million.

James Post Sale Examination: Exactly as expected

19 Thanet St Malvern with Justin Long of Marshall White

James Home Rating 720 out of 1000: There is a real market for these types of half houses that are brilliantly located, affordable and nicely renovated and those markets are older couples and single women. It has the necessary two bathrooms, although one is well located to entertaining but not for guests. Garaging is not as secure as it may need to be. Overall the renovation and indoor/outdoor flow works well. The neighbour to the North shouldn’t worry after a while and there seems to be enough space for good light. Up to a price this should sell well and should also resale well if this is an interim step for you.

James Control Price: Dirt $796,400 + House $500,000 = $1,296,400. We put land at $2200 per sq metre based on a number of recent sales and did not discount and we put the value at estimated replacement cost on a stand alone single fronted rebuild.

James Auction Report: Better Thanet looks from the outside … a tasteful renovation attracted 90 people to watch Justin Long take 27 bids from just two steady bidders. Opening with a vendor bid of $1 million, a good outcome saw this on the market for $1.23 million and sold for $1.267 million.

James Post Sale Examination: We were interested in this sale to see how period 1/2 homes were going and this sale went pretty well exactly as expected.

Useful land value sales in Lauriston Precinct. 15 Adelaide St Armadale $2,710,000 for 685 sq metres = $4000 sq metre approx. 60 Adelaide St at 813 sq metres got $3,005,000 or $3700 sq metre. Does this mean Tim Bennison of Bennison Mackinnon is a better seller than Rae Tomlinson of Marshall White, well no, not unless you speak to Tim (only joking) - because they are both excellent salespeople. What it means is that the market still values each block on it’s merits (and we did no major due diligence on either block) and land values (plus building) while the best guide we know are still not an exact science.

Adam

Toorak, 657 Toorak Road: 60 people. Five bidders. Sold for $2.59 million. A fairytale ending for the buyer of this fairy-like castle from the fairy-loving auctioneer Andrew Macmillan. That is a misprint, should read from the fun-loving auctioneer.

Armadale, 25 Glassford St: Auctioneer Iain Carmichael opened with a vendor bid of $2.8 million. Three bidders joined in. On the market at $3.3 million and sold under-the-hammer for $3.584 million.

As much action as we have seen in Stonnington for many a day with 14 sales over a million dollars and four pass-ins. Three substantial sales were 25 Glassford St Armadale with Susan McGlashan and Iain Carmichael of Bennison Mackinnon – see our auction report. If you said the home was $1.2 million, then that would put land around $2800 per sq metre. If you said the home was worth $1 million, then land was $3065 a metre and north-facing land at that. We have had this discussion a few times and land seems to be approaching or around $3000 per sq metre and significant value is still placed in period homes in this area.

Another big sale was 15 Sargood St Toorak at $3.87 million. http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007923669

This does have a floorplan you could update but it is also a bulldozer job for many buyers as well. North-facing rear and in a good spot but one that at times has struggled to get the huge dollars of nearby Clendon and Irving Road areas. If the buyer bulldozes, then they placed value at $5528 per square metre. Nobody can say that was a steal.  Tim Derham and Lisa Jarrett of Abercromby’s were the agents on this property.

A similar sale to this was today’s auction at 4 Chastleton Toorak with Peter Bennison of JP Dixon. $3.02 million for 650 sqm of south-facing rear, buy and bulldoze land - that is $4646 per sq metre.

657 Toorak Road Toorak

James Home Rating was 518 out of 1000. From an emotional point of view, the home is charming and we really like the feel. It has a homey feel and it is a real “fairy at the bottom of the garden” house.

There are other issues that you need to be comfortable with:

• Road noise is substantial.
• Second storey house slope.
• Back garden is impractical except to look at.
• The position is not as ideal as it may seem with regards to walking to shops.
• Exiting and entering premises in peak hour.

James Control Price: Dirt $2,210,000 + Building $200,000 = $2,410,000. Based land on sales such as 2 Selwyn Court, which sold a few weeks ago and was a difficult block as this one is because of its sloping rear and the street it is on.

James Auction Report: About 60 people attended this auction and there were five bidders. It opened with a genuine bid of $2.1 million, which was followed by a vendor bid of $2.3 million and eventually sold for $2.59 million. A fairytale ending for the successful purchaser of this fairy-like castle.

James Post-Auction Examination: House is an iconic home by 1930s architect Geoffrey Sommers, with garden attributed to Edna Walling (got that from the selling brochure). The level of bidding did surprise us a smidgeon and really showed the market placed significant value in this home and, by logic, maybe less value in the land than we thought. It’s hard to put a figure on it but $500,000 seems the right number for the home now. Perhaps we at James should never underestimate the value of something a bit special.

The agent quote and reading of buyers was spot on. Well done to Andrew Macmillan, Chris Stoupas and Mark Harris of Bennison Mackinnon.

33 Hunter St Malvern

James Home Rating was 726 out of 1000. This property has a very appealing facade with wide street frontage leading to a simple, workable floorplan. Fine to live in now, but provides the opportunity to update and extend in the future. Consideration needs to be made regarding off-street parking. There is access from the ROW from the rear, but a car at the back will affect land available for living. There may be a possibility for cars in the front yard, as there is room. There is no ensuite to the main bedroom, and this could be an issue for some if not wanting to extend/renovate. With most Malvern period homes in brick, this is a weatherboard, as is much of the street, and, as such, may not appeal to some buyers in this area.

James Control Price: Dirt $1,162,800 + Building $500,000 = $1,662,800. Houses that were looked at were 21 Valentine Grove Armadale, which is also timber, and 28 Llaneast St, also timber, and a finished home like 20 Viva St Glen Iris ($2.3m+) on what you might be with a good reno.

James Auction Report: Sold before in a Boardroom Auction for an undisclosed price, believed to be in excess of $1.6 million.

James Post-Auction Examination: Pretty well as expected. Good interest and strong result.

The agent quote was conservative and agents were John Morrisby and Heather Elder from Marshall White.

Design Smart

Malvern East: 55 Ardrie Road. Lovely day for a quiet auction. Trouble was 120 people showed up with six bidders and it sold for $1.21 million against an $850,000+ quote. Tim Derham of Abercrombys was directing traffic.

Andrew McCann of Bennison Mackinnon says we are now very close to 2007 prices.

Apartments
Sam Wilkinson and Tim Blackett of Kay and Burton got 2-4 Lansell Road Toorak away pre-auction. It was a $2 million-plus sale but the apartment market at the Top End really does appear to be non-existent right now. Unless this offer was considered a stand out, it was sold because they felt the auction may have proved embarrassing. Chastleton in Toorak, asking $4 million and one of the best apartments we have seen this year, still hasn’t attracted a suitor, despite Peter Kudelka’s best efforts. We may look stupid some time soon, but we really don’t think there is a $2 million-plus apartment low rise market (now ), of course there will be one in the future. Also with Asian buyers now being able to purchase land, we think a driving force in high-end high-rise may have also moved on.

Big Sales
1 Horsburgh Grove Armadale: As a postscript to last week’s auction, during this week, the sellers took the antidote to “40Lambethitis” and accepted the top bidders’ very good offer of $2.3 million. Eventually, most people come to their senses. Well done to James Redfern of Marshall White for a good result.

55 Ardrie Malvern East: The Ardrie Park area is a precinct to watch. We remember buying a little single-fronted in Repton Road (around the corner) post-auction for $600,000 only a few years ago. Today, we saw five bidders fight it out to more than $1.2 million for a double-fronted home that needed a big reno. But the buyers were smart. North-facing rear, good feel to home, across the road is an almost completed French Provincial (worth north of $2.5 million?), the tram is 100 metres away and access to the fantastic Ardrie Park just across the road. Speaking of roads, what a beautiful olde English type street Ardrie is. Don’t worry about the price, this was a great buy – well done to whoever it was. Tim and Michael Derham of Abercrombys managed the sale and managed it well – except the usual courageous quote. We required two quick visits on the same day and they accommodated at short notice – good agent work. 55 Ardrie confirms to us the young renovator yuppie market has returned and is now a force to be reckoned with.

68a Clendon Toorak: Nicolas Day home. Auction report: ”A huge crowd of 150 people turned up to this auction but just one bidder was prepared to play. The bidder opened proceedings with a $5.6 million bid but, with no further bids eventuating, the property was passed in.” This auction was to tell us if the jury is still out on $5 million-plus homes. It still is out.

Stock levels are the issue in Stonnington.

Jeremy Fox, director of RT Edgar, says he has almost nothing in his forward auction book for the 8^th, 15^th and 22^nd of August weekends. He says the Top End $5 million-plus market is still not moving like other markets but there are both buyers and sellers, so it’s not interest but price discrepancies that are holding things up. He re-emphasised buyer frustrations: do you go now or wait and is waiting going to mean lower prices? Jeremy says no, because there is little stock coming on.

Andrew McCann, director of Bennison Mackinnon says there is no pressure for sellers to sell and August auctions are looking very quiet. He says sellers are still watching the market. Finally he doesn’t see Spring homes flooding the market and dropping prices and, even if there is an increase in stock, there is enough pent-up buyer demand to soak up increased stock levels without a noticeable price drop.

Next auction weekend seems to be a renovators auction week.

We think the renovators and developers are coming back. Here are two of a number of sales that will tell us one way or the other. See our ratings on:

33 Murray St Prahran – Guy St Leger of Biggin and Scott – great area – love the Flying Duck pub.

25 Central Park Road Malvern East – Andrew James of Hocking Stuart – how much will the $4 million renovated version across the road affect things?

Pricing

Wormy’s not seeing a lot of action in the Stonnington area, so we need to be careful predicting any medium-term trends but pricing action to date seems upwards.

Brighton, 36 Whyte Street: Auctioneer David Hart licking his lips as he conducts the classic auction in front of a large Bayside crowd. Sensible quote, set the tone, vendor bid, two bidders, pass-in and negotiate higher.

The James Clearance rate stands at 83 per cent on the 23 auctions of million-dollar-plus properties we attended today.

Please note James Market News is now translated into Chinese by Su who now works with us and can be viewed by clicking button to the right of this column.

This weekend, we thought you may be interested to read part of our initial draft for the James Million-Dollar-Plus Residential Homes Half-Year Report, due out at the end of June. Of course, things may change over the next month, but this is how we are reading things to date.

We feel the 2009 Melbourne million-dollar-plus market has risen by around 10 per cent this year. In context, that same market had fallen between 10 per cent and up to 40 per cent (in extreme cases) from its 2007 peaks by December 2008.

Good properties have risen in price since a turn in late January. Prices stabilised in February 2009 and gathered momentum, resulting in increases for high-quality homes, in the past six weeks (April to May 2009). It is also worthy of note that weaker properties have now become sellable, although, in many cases, still 10 to 25 per cent lower than the peak reached in Port Phillip and Bayside in late 2007, and the peaks reached in Stonnington and Boroondara in early 2008. The James Price Worm, showing our anecdotal thoughts on the market, is to the right of this article.

From what we have witnessed, million-dollar-plus Boroondara is the strongest area, then million-dollar-plus Stonnington and then the Bayside million-dollar-plus market.

Strong demand properties:

• Rectangle house blocks around 750 m2 and more.
• New homes with “wow” and good floor plans.
• Renovated period homes with good floor plans.

Weaker demand properties:

• Single-fronted period homes, especially in need of repair.
• Over-quoted or higher than market-priced homes.
• Difficult floor plan homes that require serious renovation.

Short-term factors driving current million-dollar-plus prices:

• Shortage of stock.
• Overseas demand from Asia with Foreign Investment Review Board rule changes.
• Locals have decided to get on with life. They understand the global financial crisis but have found that its just not affecting them as much as the papers are implying (for now anyway).

Short-term factors restricting current million-dollar-plus prices:

• Banks’ tighter lending policies.
• General nervousness among 20-35-year-olds, who do not have the asset base of older people. This has been played out in the significant drop in single-fronted period home prices and the weakening of the sub-million-dollar apartment market.

Key long-term demand drivers:

• Overseas people after schools for their children.
• Overseas people after political stability and safe money havens.
• Local population growth.

Key long-term supply drivers:

• They’re not making any more land in Inner Melbourne.
• The contracting of the development market in mid-to-late 2008, which will be felt even harder around late 2009 and early 2010. There will be a 12-to-18 month lag after developers re-enter the market.

Some key James statistical evidence:

15 November to 6 December 2008 (four auction weeks): James $1m+ clearance rate: 35% on 53 auctions. Average bidders per auction: 0.8.

April-May 2009 (last four auction weeks): James $1m+ clearance rate: 75% on 80 auctions. Average bidders per auction: 1.875.

James Auction Success rates (eg what we actually buy vs what we bid on):
In the peak of the market (2007), our auction clearance rates dropped as low as 20 per cent. It’s a bit hard to recommend that your clients go even crazier than the market. By late 2008, our auction clearance rate had moved to almost 100 per cent. We were, in many cases, the only bidder; granted we had very few completed jobs. By April 2009, our Auction Success Rate was declining again and was around 35 per cent, in other words, if we attended three auctions on a Saturday to buy, we bought one. We have since taken a more aggressive line pre-auction, as you can see below, and our Auction Success rate has now moved to more than 50 per cent.

Real life anecdotes: in the past week, we have bought before auction:

• Boroondara home, agent quote $1.5m+
• Stonnington home, agent quote $2m+
• Boroondara home, agent quote $1.5m+
• Malvern East home, agent quote $800,000+

In the past month, we have missed at auction:

• Hawthorn home, more than $1.5m (3 bidders)
• Boroondara home, more than $1.4m (3 bidders)
• Kew home, private boardroom auction, more than $3m (3 bidders)
• Prahran townhouse, more than $2m (4 bidders)
• Brighton land, more than $1.4m (8 bidders)
• As well, we have seen Expression of Interest campaigns not go our way.

If the market changes next week, we will write that up as well.

Finally, we have had conversations at opens and over coffee with Al Craig of Jellis Craig, James Redfern of Marshall White, Jock Langley of Abercromby’s, Ian Jackson from JP Dixon, David Gillham from Noel Jones, John Bongiorno from Marshall White, Andrew McCann of Bennison Mackinnon, Barb Gregory of Hocking Stuart and Peter Kudelka from Kay and Burton, to name a few, and (accepting that selling agents’ views have some self-interest bias, as do ours, on wanting the market to be good), there is no denying that a significant majority of selling agents genuinely think the Melbourne million-dollar-plus market is improving (price-wise).

How long will it last? We’re sticking our neck out here and saying that it will last at least until next week! After that, we will have to wait and see.

Buy Well

Mal

This week, we would like to thank Madeline Kennedy of Marshall White for her efforts in the Another Point of View article.

We have had strong positive feedback from our Video Before the Auctions Segment (live every Tuesday) and a number of suggestions – thank you!

And Architect Adam shows us how we can improve 7 Parslow St Malvern, due for auction next weekend.

Agent Quoting is covered in a Million Dollar Melbourne Article below.

OFF MARKET – QUIET SALES – In our comments we feel it important to respect privacy hence some of our vagueness.

Current Off Markets and Quiet Sales that we feel are genuinely for sale over $1m
Booroondara – 8
Stonnington – 4
Bayside – 5
Port Phillip – 2
Glen Eira – 1
Other Councils – 3

In the last week a number of quiet and off market sales took place.

Monomeath Avenue Canterbury – Large land, modern house but with floor plan and flow issues – sold to an overseas buyer at $9,000,000 for 33,000 sq feet for an average of $270 per sq foot including improvements. This property had been on the market with a number of different agents for many months and last year the asking price was considerably higher. Tim Derham of Abercrombys was the selling agent.

Scotch Hill Hawthorn – 22,000 sq feet with a very solid Federation/Edwardian period home in need of substantial renovation sold end at the end of last week for a price believed to be over $6million. This was a strongish result as this sort of price would have been expected last year – however it was a good property in a good position and these kinds of properties always attract interest. Michael Armstrong and Michael Gibson of Kay and Burton were the selling agents.