"Is that a bid my friend" Mark Dayman of Marshall White looking for further advances on 6 Pelham Place Balwyn which was passed in for $1,925,000. 2 bidders.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 59% for the 29 auctions we attended.

Bidderman, our Demand Indicator, increased to nearly 2 bidders per auction. We’d expect this on low stock and activity levels. But, significantly, the trend seems to be up on average stock supply.

Market: Balanced, or lacking direction or, as both Carla Fetta and Andrew McCann from Benmac said this weekend, “patchy and price sensitive”? Price is definitely a factor: buyers are walking away when push comes to shove on “courageous asks“.  Many of those buyers are walking even though they don’t have other options, presumably in the belief Spring will deliver more choice.

Agent Opinions: This week we asked the Spring Stock question “Will September bring more buyer options?” The response from our selling agent brethren was mixed. Individual comments are posted within the market wraps for each council area.

Highlights – Two really good homes – one sold and one didn’t. It was the story of the day, in fact of the month – in fact it’s been the story of the winter season.

11 Moorakyne Malvern – Michael Gibson Kay and Burton It was a slow start before a well dressed bidder got the momentum happening. Once it was clear the property was on the market, the property sold relatively quickly for $4 million. Gerald Delany was the auctioneer in front of a crowd of around 70 people. 3 bidders.

Note: This property sold in 2007 for $4,005,000 – a fact courtesy of Chris Vedelago from The Age – good pick-up Chris.

36 Chrystobel Crescent Hawthorn – Jock Langley Abercrombys The auction of this beautiful Hawthorn property drew a large crowd of around 100 people on a sensational Melbourne winter’s day. Auctioneer Robert Vickers-Willis attempted to leave the bidding to the audience, with little success, before announcing a vendor bid of $3,600,000. Having waiting patiently for several minutes with no interest from the lively yet reluctant crowd, Mr. Vickers-Willis returned to his vendors for a brief discussion. Upon his return, and having received no bids from the crowd, the property was passed in and those in attendance quickly dispersed.

Big Crowd of a 100 but no action as 36 Chrystobel Hawthorn passes in on a lone vendor bid of $3,600,000. Rob Vickers-Willis of Abercrombys.

Buzz Auction of the Day – 42 Gardiner Parade Glen Iris – Anthony Reis of Marshall White – 6 bidders – bought $1,767,500
Master auctioneer Doug McLauchlan left it to the crowd for an opening bid, which came instantly from a gentleman for $1,205,000. Retaking control of the auction, Mr McLauchlan announced a vendor bid of $1,300,000. A young girl in the crowd raised her hand with her mother’s permission to reopen the bidding at $1,325,000. With a friendly and relaxed crowd atmosphere, the sun shining brightly, and the unique elevated Glen Iris property, the conditions seemed ideal for bidding – and they were. Six bidders announced their interest in the Glen Iris home, with 36 bids announced in total before the new owners were decided. The property was sold under hammer for $1,767,500.

Issue 1: While every real estate agent and buyer advocate would have been aware of the David Jones headlines during the week, the issue for us was the $3m+ market. We knew things were quiet Top End. Even the quiet sales were quiet at the Top End. But while many were on holidays things got even quieter.  There have been just 9 (or so) sales over $3m in the four 4 key councils (35 suburbs) we cover. That’s only 9 reported sales over $3m in July 2010. That’s normal, just seasonal, you might say. Well compare that figure with July 2007 when in Toorak alone there were 8 sales for over $3m.

What are the possible reasons? Could it be the holidays, could it be Julia and Kevin and Tony, could it be the fact that most of Kay and Burton went to Europe – who knows for sure? We do note that while Bayside has a lot of stale $3M+ property, Boroondara doesn’t have quite as much and a number of homes in this $3M+ price range are coming onto the market. Let’s see what happens between now and the footy finals.

Issue 2: Rarely do I venture outside the property and sport sections of papers, especially this time of the year. However my eye was caught by an article by The Age‘s economic editor Tim Colebatch highlighting Bureau of Statistic’s numbers showing a significant drop in migrants over the past year compared to previous years. We need to check whether the drop included skilled and wealthy migrants – but if that is the case and if it is the start of an ongoing trend, the market will have a significantly diminished Top End price igniter.

We wonder if Issue One and Issue Two are connected – but it’s probably too long a bow. The drop in migrants is unlikely to have impacted the market this quickly. Our best guess is that the market in May 2010 was abnormally high, which meant that anxious or opportunistic vendors brought their $3m+ sales forward.

Activity and Stock Levels – It was another quiet week as far as overall $M+ activity goes. Stock Levels received a fillip this week as you can see by the ‘Coming Onto The Market’ graph below. However the increase could be due to the election delaying the start of a few four week auction campaigns. As buyers we would need to see increased stock levels for the next few weeks before we were ready to crack open the champagne.

The graph below shows this week’s new stock levels for $M+ Melbourne within the four key council we cover in our weekly market wraps.

Courageous Craig Binnie of the Herald Sun says Apartments are Booming.

Today’s Herald Sun Headline: “Chris Binnie announces an Apartment Boom – How rising apartment prices are making buyers wealthy.” These headlines do sell papers, which is fair enough. I just hope they don’t sell you on the idea as an investor, without more research.

Lets look at three key stats Craig draws on:

1. The quarterly median price in apartments increased by 4.7% while houses went up 8.5%. Mmmmm… no good apartment news there.
2. Carlton apartments rose 77.5% in the quarter…. Well the median price may have, but Carlton apartments didn’t. In the first half of this year in Carlton a lot of $200,000+ apartments were sold in the Lygon and Swanston Street developments. This is to be expected as it’s the beginning of the university year and a lot of new student housing is required. By mid year those sales had slowed, and more expensive apartments then represented a greater proportion of the median price database, shifting the median price significantly. So while the median price was statistically on fire the market had in fact moved only marginally. In fact, if you compared two expensive apartments sold within the same expensive apartment block over the two quarterly periods, and two cheaper apartments sold within the same cheaper apartment block over the same two periods, you could argue that prices in Carlton flattened rather rose.
3. Longer term, the stats say that houses have gone up by 55.3% vs 54.4% for apartments. That is a stat that gets thrown around all the time. But while it’s a real stat, a lot of what it represents is just developers asking for more money for their new apartments. The stat also has a major skew to lower dollar value apartments –  for the $1m+ apartment market the growth is very, very different.*

Now as for Craig – we’re being harsh. We also needed a headline on a slow news day and Craig did point out a number of other relevant stats including the fact that soaring house prices are pushing people into apartments. The headline was baloney but the overall story was balanced. The point is that while apartments are moving ahead, it’s in the form of numbers – not necessarily in terms of investor growth.

James Buyer Opinion: This week our James Buyer Opinion is on “The Questions Good Negotiators Need to Ask.”

Apologies for the lateness, but there was a game to watch – are the Pies on the March? – Yes they are!

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Brighton 6 Stanley: Phew got out of that one nicely. Nick Renna aka "Respector" of Hocking Stuart. Bought for $1,460,000. 3 bidders.

39 Park Road Middle Park: Hey what's this guy doing back here with a different guernsey on? Greg Hocking formerly Captain Coach of Hocking Stuart now playing full forward for TBM. No bidders though and passed in $2,600,000. Is this a Welcome Back?

Key Points

• Market continues to be very quiet on low stock turnover but this as expected this time of the year in Port Phillip.
• Biggest sale was in Elwood – 4 Pozieres Avenue -  Leonard Persichetti - TBM – $2,345,000 – 3 bidders

Five single fronted period homes went to the market today.  They sold between  mid $900,000′s and mid $1,200,000′s

• Albert Park – 80 Moubray Street  – under the hammer
• Port Melbourne – 247 Ross Street – post auction
• Port Melbourne – 222 Ross Street – post auction
• Port Melbourne – 49 Farrell Street – passed in
• Port Melbourne – 47 Raglan Street -under the hammer

See our reports below and how each one fared – and maybe ask yourself why

• Position
• Land Size
• Floorplan
• Quality
• Campaign

Agent Comments – This week we asked if the election was affecting the market

Sam Gamon, Chisholm and Gamon: “Sellers going post election but not stopping selling; Best buying week in last 6 weeks; Prices are now becoming clearer to sellers and buyers around 5% lower than April; New buyers are coming into the market instead of last year’s buyers; Buyers are sensing opportunities now as some feel things may improve post election when everybody realizes nothing is going to change.”

Vanessa Gillon, Buxton: “For us, the election hasn’t made a difference as we do more private sales than auctions. But (overall) I haven’t heard that there has been much of an affect.”

David Lack, Biggin Scott: “All our vendors have elected (pardon the pun!) to avoid auctioning on the weekend of the election, citing that they didn’t want their prospective buyers distracted. The following weekend, however, will be busy, as sellers try to get a sale in before the AFL finals begin;  Listings are down on the same time last year, and many prospective vendors are adopting a wait and see approach;  Buyer levels have dropped off by a minimum of 30% on properties priced over the magic million mark, though there are still many buyers in the $600-$800,000 range chasing well-presented 2 bedroom apartments and period-style cottages;  Family homes on reasonable blocks of 250 to 400 sq m are in huge demand, and it will be interesting to see how this segment of the market will perform in the coming weeks with 3 such properties being auctioned in Port Melbourne;  Beacon Cove pricing has held up, particularly with the apartment market, with 5 sales in the last month between $1.3m and $1.8m. Turnover in Garden City has also been steady, with 4 sales of un-renovated ex-Ministry homes all achieving in the early $800,000s to $900,000s range.”

Andrew Stuart, Hocking Stuart: “The election hasn’t been holding people back, that’s for sure; Stock levels are good – There were more than 40 properties auctioned around here today so stock levels are normal; Properties are always scarce around here as no one wants to sell or move away.”

Kaine Lanyon, Benninson Mackinnon:”Whilst there were not many auctions today, the vibe was better than the last few weeks; (Our) office sold 4 from 5 with multiple bidder at all  auctions; Perhaps some vendors may be holding back because of the election, but buyer sentiment remains positive.”

Clearance Rates and Monitor Table – always a little unreliable on such small numbers this time of the year.

Buying Activity – A significant drop off in activity – in part expected as it’s winter.

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A Grey Day across Bayside for most sellers and 12 Margarita Street Hampton was no different. 0 bidders

Key Points:

• Only two good auction sales today with 8 bidders between them:
  18 Central Avenue Black Rock – Errol Driver of Hodges – $1,147,000
  48 Mills St Hampton – Stephen Tickell of Hocking Stuart – $1,560,000
• The other 8 auctions had 5 bidders in total
• Couple of $3,000,000 pass-ins in Bayside – possibly reflective of the large stock overhang at this level in the area.
• Clearance Rates suggests Bayside is the weakest $M+ market at present.

Activity well down on a month ago

Agent Comments - This week we asked if the election was affecting the market

John Clarkson, Hocking Stuart: “Put some buyers into a holding pattern at the top end, more so than the lower end which has a negligible effect; (it’s affected) sellers, which is strange because most people are around election weekend.”

Barb Gregory, Hocking Stuart: “Not discussed; Not enough relevant policy relating to the market; Others, yes but this is a non event; Sellers aren’t changing their mind (and) we have only had one auction booked on this date that has been changed; Buyer levels are there for the season – cautious but not relating to election, due more to the May downturn. It’s also a long, grey, cold winter (and this) affects people’s persona; Personality election, not policy.”

Mark Earle, Buxton: “No talk of the election because buyers have settled, numbed to publicity; Balanced market, less bidders per auction unless overpriced; On the day it will be quiet and some sellers are waiting as listings have dropped a bit; Prices have balanced out.”

Bill Jowett, Buxton: “Seeing it as a positive as people are going to be here; Most are happy to have their property up for auction on election day, but many are preferring a pm open time; Buyers had a hiccup but the wheel has turned;  What’s changed is their numbers; Spring seems to be normal certainly not below.”

Clearance Rates and Monitor Table

Buying Activity - Considerable drop since the dizzy heights of May. Graph shows weekly sales over a $million in Bayside

Land Values

18 Central Avenue, Black Rock with Michael Cooney of Hodges sold for 1,147,500  which equates to $1830 per sq metre

82 Thomas Street, Hampton with Jenny Dwyer of Hocking Stuart hadn’t sold as of time of publishing.  Main road discount would apply.

Family Homes – Resale
12 Margarita St Hampton with Peter Alpar of Hodges was auctioned today. It last sold three years ago for $1,600,000 in early 2007
James Auction Report: James Paynter worked hard to get the small crowd motivated, but without success. Two couples appeared genuinely interested in this fine family home and in this prime location so the property should soon sell. Passed in on a vendor bid of $1,775,000.

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“

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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.

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

Malvern East 11 Deakin St: John Bongiorno is all smiles as the 3 bidders put their hands up. Passed in at $1,135,000

In Stonnington this weekend we monitored 14 properties, of which 8 were reported as bought before, at or after auction.

Bidderman was a surprising 2.3 – surprisingly good given the stock quality

This gives a clearance rate of 57%. For the corresponding week in May of this year we monitored 18 properties at auction at which 12 sold, giving a clearance rate of 66%. So while numbers were similar for the week, overall sales numbers are down considerably for the month when compared to May, as many top end agents are now just getting back from holidays.

The other noticeable difference is the dollar value of transactions. Today the only significant transaction at auction was 4 Grace Street, Malvern which sold after auction for just over $3,600,000 – Marcus Chiminello of Marshall White. See auction report and James Home Rating below.

Agent Comments – Michael Gibson of Kay and Burton

• Seasonally slow
• Election affecting the upper end – slowing marginally
• New apartments still steady
• May’s performance relates to stock market – it really was affected by consecutive downward weeks
• Bit lucky for market that we came into winter – tighter stock supply should stabilise the market
• Looking healthier than a month ago pricewise

Elliot Gill of Bennison Mackinnon

• Stock levels starting to rise
• A lot of failed auctions have sold afterwards
• My take on price: coming back up a bit to a plateau
• Correction may be over but we don’t know for sure
• Struggle street is main roads and poor aspects but even the odd one of these is still selling at a strong price – no rhyme or reason
• Seen no drop off due to election
• Supply is the still the key to price
• Yes, demand dropped off
• Overhang is all at the higher levels – not much overhang at lower levels

The properties we monitored

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Not enough pressure at an auction for you? Then why not add a Channel 7 film crew and a new TV series and it's raining and indoors in a small space and you've got Marcus Peters breathing down your neck. Mate I was scared just watching. One very brave bidder and passed in at $850,000. St Kilda - 23 Mitchell.

SUPPLY OVERHANG BUILDS
First some stats. Last Saturday’s (May 29) Auction results showed strong evidence of “auction overhang” in Port Phillip where the clearance rate was 32% clearance rate on the 22 auctions we monitored.

Seven days later the reported clearance rate had lifted from 32% to 45%, with only three of the pass-ins and unreporteds reported as having been bought. On this evidence, it seems a stretch to say that in Port Phillip Million-Dollar-Plus homes are being bought soon after auction. There is overhang elsewhere in $Million Melbourne but not as much as Port Phillip. Which suggests the chance of bargains here.

What Supply Overhang means to you, the buyer
1.  More choice, given that new stock has to compete not only with other new stock, but with old stock which hasn’t sold yet.
2.  Better pricing on all homes as there is real competition for the first time in a long while – providing of course you understand the negotiating game and know how to play it.

We genuinely believe that there is an air of bargain hunting around at the moment and if you are a little brave or a little flexible on the purchase then perhaps you may consider being a bit more aggressive on the offer. Perhaps you also may consider talking to a buyer agent to show you your real alternatives.

Stock Levels Going Forward – Unlike Boroondara stock does seem to be drying up a bit. Forward auction bookings for Port Phillip are decreasing compared to May. So a quick rebalance is possible.

Apartments
This $M+ market is still continuing to show some signs of life with 3 more reported sales in

• 576-578 St Kilda Road Melbourne at $2,200,000 with Biggin and Scott
• 48 Nelson St St Kilda for $1,300,000 with David Cutler of Century 21
• 3908/7 Riverside Quay Southbank (Eureka)  for $1,200,000 with Georgina Dakdouk of Dingles

A report from Michael Szulc of Cayzers
We had 7 auctions scheduled for today, of which we have sold 5.  1 before auction, 1 under the hammer, 3 passed in and sold shortly after.

The new trend appears  for buyers to be holding back until the last moment and not declare their interest until they have to. It is only when it appears the property will be taken away from them that they show their hand. Whilst buyers are thin on the ground just at the moment, they are still there and it is case of the agent knowing how to deal with the situation……….patience and experience is proving very important at the moment.

Buy Opportunity

Port Phillip – 11 monitored – 6 bought – 54% clearance rate (last week 32%)

Port Melbourne 65 Bridge; Gerald Betts of RT Edgar. 1 bidder and passed into them for $1,810,000

22 Ocean Road, Manly - The only property in Sydney to sell in our investigations up at in Sydney. Nice view!

As we have been up in Sydney recently we thought it might be an opportune time to bring you some news North of the border.

A couple of key difference’s when buying property up in Sydney:  Not all prestige property is auctioned with auctions representing approximately  50% of transactions. When at Auction you have to register prior and bid with a bidding card, only one Vendor bid is permitted, Auctions are held inside properties, in board rooms and public venues such as RSL’s and pubs.

The Sydney prestige market is also substantially larger than Melbourne with approximately 60 Suburbs with a median value over the million mark whilst Melbourne has approximately 20 suburbs.  In fact it’s arguable that the prestige market in Sydney is really $2 million plus.

There are also a number of factor’s that play a huge role in Sydney that only exist on a few properties in Melbourne like absolute water frontage, proximity to ocean/bay, significant slope considerations and different types of views (Ocean, Bay, Harbour, City, Neighbourhood).

In the last few weeks we have visited 9 Auctions predominately in the Northern coastal suburbs of Sydney including;  Mosman, Manly, Fairlight, Balgowlah, Willoughby, Cammeray, Cremorne & Seaforth. All the auctions we attended were $1.5 million plus and surprisingly 8 out of 9 passed in. Crowd numbers were around 13 people per auction and things seem a lot more dire up in Sydney than they do in Melbourne.

The pass ins were in alignment with a recent Australian Property Monitors report which indicated that the average marketing time for Sydney prestige property has double from 85 days to 173 days. This is a dramatic increase when you look at the 6 week average turnaround time for prestige Melbourne property.

Lachlan Campbell of LJ Hooker Manly has indicated it’s a mixed market at the moment with a shortage of quality homes and an oversupply of prestige apartments.  Mr Campbell added that quality homes between $2 –$5 million are rarely coming onto the market in the Manly area and as such demand is exceptionally high. Mr Campbell said “on the whole the median price in Manly is fast approaching $2 million due to the demand for house and land” and “it couldn’t be more the opposite with quality apartments as there is an oversupply and falling prices”

Prices for prestige apartments in the Manly area have fallen by approximately 10% – 15% according to Mr Campbell.  It is not surprising then that the most common form of sale for apartments $2 million plus is private sale whilst houses $2 million plus are all being register for Auction (unless sold prior)

Nick Broadhurst of Knight Frank has indicated that the Sydney market has definitely softened in the last few months. Mr Broadhurst who predominately works in the $5 million plus Sydney market said “it is quite hard to attribute the slowdown to any one factor with the Europe debt crisis, increasing interest rates , currency & share market volatility all having some affect”. Mr Broadhurst added that quality properties with unique attributes were still performing well and the most common form of sale for property under $10M is still auction.

Indoor auctions and an average of 13 people in attendance.... hmmmm very different to how things are done in Melbourne.

Below is a summary of the auction we attended, Bidderman is at .2 – Yes that is right of the 9 auctions we attended there was 2 bidders in total. Obviously we have not captured a large proportion of the market so the bidderman statistic can not be used with the same conviction as the Melbourne bidderman, none the less it is a very surprising result. In addition and as previously mention crowd numbers are exceptionally low in comparison to Melbourne, the most that attended any one auction was 25 people and there was an average of 13 people at each auction.

15 Ellalong Street, Cremorne

Interested neighbours, agents and buyers entered this immaculate property as twilight brought more rain. While shoes were left at the door, feet were soon warmed by the under floor heating. High standards and quality living were clear in the eyes of all inspecting. Hugh Rainger of McGrath Real Estate urged the crowd forward before delivering a healthy introduction, detailing the property’s exceptional characteristics to satisfy any buyer’s remorse from potential bidders. The opening offer of $2,100,000 could have been a clever ploy or seen as insulting, Mr Rainger preferred the later and quickly disregarded it. A vendor bid was required to raise the bar to $3,150,000 and then the auction fell silent. Property passed in $3,150,000, no further bidding.

15 Vista Avenue, Balgowlah Heights

This was the first opportunity to purchase this property in 31 years and long term owners had kept pace with style to present a beautifully modern family home. Offers under the reserve had been received during the week encouraging a competitive auction and sale. Glen Wirth’s of Richardson and Wrench surprise was clear when he started the proceedings to a crowd of 8 people. It was clear no-one present was ready to bid and the call for opening offer fell on deaf ears. The vendor opened the bidding with the highest offer received during the week at $1,950,000. Mr Wirth followed Auction protocol in the hope bidders were late or hiding. This auction Passed in duly with Agents scratching heads and preparing for a week of negotiations.

33 Lucknow Street, Willoughby

This private oasis cleverly set behind a plain and leafy entrance was a pleasant surprise for all – agents, nosy neighbours and interested parties alike. Yet this spaciously quirky family home complete with an enormous home office, cottage garden and hot tub delivered another auction non-event. Hugh Rainger of McGrath Real Estate delivered a concise and compelling introduction to the property, though as expected by the agents, no bites from the crowd. With no registered bidders, the home was passed in with the vendor bid of $1,795,000, though expected to sell in the next couple of weeks when the market lifts according to McGrath Real Estate.

22 Ocean Road, Manly

Despite the drizzly weather, a buzz of interest for this superbly located property drew a curious crowd of 25. Yet with three registered bidders it was clear only one was there to do business on the day. Brad Cole of LJ Hooker opened the auction confidently with a formal and fast introduction that fell quickly into silence from the crowd. Mr Cole crackled a few jokes and after a slow start the warm humming of the gas fired place soon lit the first bid of $1,800,000 from the lady intent on buying. Mr Cole highlighted that the property was worth far more with the semi next door selling recently for $2,500,000. The confident bidder then retorted that was the sunny side! A long stall and some more jokes forced the vendor to bid $2,050,000. The same bidder lifted hers to meet the $2,075,000 and after more conferring with the vendor was raised again to $2,100,000, which finally brought the hammer down. Clearly the desire to own this property outweighed financial concern as a more astute bidder could have exchanged for less by letting the property pass in. Exchanged under Reserve.

2 Cabban Street, Mosman - no registered bidders, no actual bidders and not surprisingly no real auction.

2 Cabban Street, Mosman

The agents from McGrath Real Estate expected some bidders and it was with disappointment Simon Cotter informed the crowd that the property was to be removed from the Auction Market at the vendor’s request.  Mr Cotter advised that the reserve of $3 million has not been met by pre-auction offers and the Vendor was not in any rush and may decide to wait until Sydney’s high end market ignites again.

2 The Boulevarde, Cammeray

The rain made no apology for dampening the ground and Auctioneer Hugh Rainger of McGrath Real Estate found it hard to excuse buyers who watched this hidden gem silently pass in. With a reserve of $1,500,000 and one seriously interested party sitting quiet on offer of $1,350,000, the early pass in opened opportunity for negotiations behind closed doors. A little rough around the edges, this home displayed amazing potential with expansive cottage gardens, character filled stained glass windows and detailed ceilings. Most of all, the glass living space with the magical rainforest vista will guarantee a surprise if this property is still listed next weekend.

34 Grandview Grove, Seaforth

The welcoming entrance, sprawling layout and tranquil lifestyle offered by this property deserved a grander auction. Despite no registered bidders, Auctioneer Glen Wirth’s best efforts to seduce the crowds interest did not ease to the hesitant state of the Sydney’s high end over the last few weeks. A vendor bid of $2,150,000 opened the bidding with hope of encouraging interest. “A fair price”, Mr Wirth pointed out given good company of higher price tags in the neighbourhood. A number of quietly interested buyers present did not choose to play the bidding game and appeared happy to satisfy agent confidence of a sale behind closed doors.

The boys from McGrath Real Estate in action trying to sell 34 Grandview Grove, Seaforth.

2/59 Lauderdale Avenue, Fairlight

There were two bidding cards issued at this auction and it felt for a moment that this auction could have a positive result. This simple modern unit pleased the eye to all present but did not satisfy registered bidders requirements once an opening vendor bid of $2,700,000 was placed. The Auctioneer Simon Cotter of McGrath Real Estate highlighted obvious features of this 3-bedder designed by Ian Moore however this did not resiniate with the registered bidders and thus an opening vendor bid of $2,700,000 was placed and the property subsequently passed in.

2/101 Bower Street, Manly

This was the 3rd auction outing for this property and it received the same result – Auction Dismissed. All attending shared curiosity and appreciation of the sun drenched view of Shelly beach but no serious intent to bid. Mr. Hennessy representing LJ Hooker kindly discussed reasons for no auction, highlighted options and stating law that Auction conditions remain until midnight tonight – Interested bidders should be wary of opening Vendor bid of 3,300,000. Reduced from $4m Reserve at last Auction attempt, time may see this property drop price again.

Brighton 3 Keith Court: Ian Jackson and Stewart Lopez of Kay and Burton show us there is nothing wrong with good land and a view. 4 bidders and a sold sticker at $2,900,000.

Six out of seven in Brighton East were bought at auction today but at expected levels, not ridiculous prices. The highlight for me being that after a flurry of $2m offerings in previous weeks; you can still find some reasonable $1m to $1.5m buying in Carrington, Grant, Griffin, Rogers, Plunket and Margaret Streets as evidenced today.

Land sale at 26 Bright Street – Halli Moore Buxton. On first glance you may say land is dropping below $2000 per sq metre; but closer inspection would show you its south facing and a difficult triangular block. No, prices are not dropping overall right now – they are stabilizing or not going up as quickly.

The rest a Bayside was a mixed bag with Black Rock and Beaumaris passing in 3 out of 4 reported auctions. Brighton had 11 auctions but they were not all top of the pops with just over half sold restoring our belief that buyers can, when not running scared, make good decisions.

While in Brighton I notice 17 Albert St was bought for just under $4million - Justin Follett from Kay and Burton – I liked this home, great spot, been with several agents –surprised it took so long to sell.

Off Markets:

There is no doubt off markets are on the increase in Bayside at present with JP Dixon and Kay and Burton  getting a few away on the Golden Mile and surrounds such as another one in Albert St area recently. Off markets are an interesting phenomenon and seem to take the house to a new level for some buyers just because it is “off- market”. We do buy them – especially at the $3m+ level and one thing we try and emphasize to buyers is great, they are off market and secret, but they still need normal due diligence carried out on them including paperwork checks, pest and building and the all important fair value test. When you find an off market it’s not naturally better; it’s just a home with a different method of sale.

Apartments and Townhouses:

Enquiry for these is on the rise as well. A well positioned one selling in Sussex St mid week for just under $3million through Regina Schmidt and David Hart of Buxton and Buxton also getting another apartment away in the big multi development site in Well Street just out the back of the Church St shops – the price was $2,300,000.

Some further highlights:

Mark Earle of Buxton sold 9 and 11 Myrtle Road Sandringham with a combined 7 bidders for just over $3,000,000. The thing I found of interest in these two auctions within the same hour, is how two very different homes side by side can end up close to each other in value. You couldn’t have two more dissimilar homes – read our auction reviews and ratings below – smaller land and great little home versus bigger land and very basic home.

3 Keith Court Brighton – Ian Jackson and Gail Pullen. Just how much is a view worth. No value in the house except as a building footprint. $2,900,000 was the result at an auction, where one of the four bidders seemed way too young to be having that sort of money, however for  the 580 sqms it worked out at $5000 per sq metre exactly. Good – keep forever views.

Line that up against 12 Young street (passed in yesterday) – similar distance from water – 100 metres but no views and their 689 sqm couldn’t get a bid at $2,000,000 or $3,000 per sqm. When they say Brighton has $million dollar views I guess this proves it.

Happy Wife Happy Life

South Melbourne 69 Napier: Bought under the hammer for $1,425,000: 3 bidders. Checking their scripts Geoff Cayzer and Michael Szulc seemed to be in sync as the result shows.

Port Phillip seems to be firing along on all cylinders with 16 properties sold over a million since our last report just before Easter. You know how we said land in the good parts of Elwood was around $3000 per sq metre before Easter. Well that was before Easter now it’s after Easter and land is also rising into the heavens (for vendors). 92 Ruskin St Elwood sold for $1,400,000 for 408 sqm or $3431 sqm. Torsten Kasper of Chisholm and Gamon handled two very strong bidders to this price. This was one of five sales over a million in this Easter fortnight.

Three $2million plus sales reported were:

(1)    36 Wave St Elwood also with Chisholm and Gamon (Sam) after auction which confirms land north of $3400 for the right block in the best bits of Elwood except on today’s land result at 43 Foam St  $1,600,000 for 566 sqm which shows the negative power of being overshadowed by flats.

(2)    47 Reed Street Albert Park with Michael Coen of Hocking Stuart was sold for around $2,200,000 (post auction).

(3)    502/430 St Kilda Road with Peter Kudelka of Kay and Burton –another one in the Lucient Towers reported sold for around the magic number.

Speaking of Apartments they are continuing to show major improvements – at least in turnover (the jury is still out on recent capital growth) with 5 apartment sales over a million in Port Phillip in the Easter fortnight including 2 reported at 505 St Kilda Road through Icon properties.

During a long conversation with Sam Gamon from Chisholm and Gamon after their 4 out of 4 auction result today he said his company felt the market was still continuing to rise which is in line with the REIV quarterly median price increases as well. Up from $1.2m to around $1.35m. Sam added that stock levels were OK except for the cheaper 2BR flats which are in short supply.

Nothing unexpected happened today with 7 sales but as we said up front the big story was the amount of homes sold since Easter. By the way 2 of those 7 sold at auction today were $m+ apartments – enquiry is definitely increasing significantly in this previously very flat market segment.

The Median Price Chart, courtesy of the REIV, confirms our views that the Bayside markets started to improve ahead of the leafy green suburbs market and you can clearly see the ship started to turn to an upwards price direction about a year ago.

Buy Happy 

Balwyn North: 60 Tuxen Street; Toby Parker of Hocking Stuart trying to see all the bids from a crowd of over 300. The story of the day. Huge crowds. Very strong Bidderman. Bought for $4,300,000

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 39 Auctions we attended today was 77 per cent and we have no late REIV results so could be higher.

Bidderman was well up at 3 bidders per auction and any talk from us of the last two weeks looking a bit soft has been well and truly proven as wishful thinking. 

The market of today is showing no signs of any weakness as proven by Bidderman and the $m+ clearance rate.

As a buying group we had nine auctions/buys on today and in my opinion we had an element of luck to buy the five that we did. 

Market Mood

The market according to Gerald Delany from Kay and Burton was astounding today. Rock solid says John Bongiorno from Marshall White. Scott Patterson from Jellis Craig expanded even further with these facts and comments

Strongest day he has ever seen in his 20 years of real estate with 62 of Jellis Craig’s scheduled 75 auctions selling under the hammer or shortly after. Easily their biggest day in real estate dollar wise – ever. In fact at Jellis Craig 88 million dollars of real estate exchanged hands during the past week including around $7 million for Paterson St Hawthorn (Nick Elmore/Tom Aylward) and 5 Moore St Hawthorn (Paul Keane/Alastair Craig) was bought under the hammer for $6,435,000 with 6 bidders. This is 2007 bidder strength.  I think Scott made another salient point when he said it was local not overseas buying strength today.

We mentioned that the last two weeks were down in terms of Bidderman and that it may have been a turn or it maybe due to stock quality. Today seems to have proved it was stock quality. Today was as strong as the other 2010 Super Saturday (February 27 th), as strong as late last year and as strong as the December 2007 peak. It was all about quality and buyer depth and local not overseas buyers.

For every buyer there were two who missed out. Best evidenced by our  trips in the last fortnight to The Boulevard Aberfeldie for no result. 110 The Boulevard,  on the Maribynong river, was sold last week for $1.77m on a $1.2m+ quote with no recent sales to give any guidance. This week a similar knockdown 118 The Boulevard (Fabian Rosin of Nelson Alexander) which may have sold for a tad less actually had 4 bidders over $2 million to eventually  be bought by a most determined bidder for $2,189,500. 4 bidders over $2 million and 20% or $400,000 more than last week’s benchmark. It re-emphasizes the incredible power and momentum of the market on properties that are considered quality.

Stonnington the same – 16 Mercer Road Armadale (John Bongiorno Marshall White). $6,240,000. 4 bidders.

Bayside and Port Phillip was no different. Buy after buy. $2mllion, $3 million. 3 or 4 bidders.

Easter Reflections: You’re young and you maybe panicking. Please don’t give up!

Now that the Easter break is upon us, and the temporary madness of two Super Saturdays (wedged between Australia Day and Good Friday) is abating, it it a good time to have a quiet moment and reflect where you, as a buyer, are at. Even the most balanced and resolute buyers can be thrown off-track by the highs and lows of this year’s property market: it’s overwhelming (when lots of new stock comes onto the market); it’s intense (Super Saturday auctions on February 27 and March 27); and it’s emotional (especially the let-down feeling if you miss out at auction).

This piece aims to (to use the word of the moment) “recalibrate” your thinking back to where, for many, it perhaps should be. In particular I have focused on the young.

I want a home with solar heating – I want a home with no renos – I want a home with a courtyard – I want a home with a nice kitchen and pine floorboards. I want a home next to my latte shop. Fair enough.

But if I can shake your thoughts up a bit, that’s small beer and perhaps overly focused on a narrow set that may lead to a short-term fix but a longer-term problem or it may, in fact, lead to nothing at all – meaning, in this current market, you don’t buy.

Our question to our clients is the same on each property. It’s the same at the start of the process and it doesn’t change as we work through every one of our  pre-auction  and private sale meetings. That question is: what will make you and your family truly happy now and also truly happy in the longer term? What financial and emotional outcomes do you want to achieve when buying a home?

Since Christmas, we have had at least 10 families come and see us to help their kids get a leg into the housing market. Housing is the new private school fees; the new club membership that you introduce your child to. For many, if you don’t help your child into home ownership, then they ain’t getting into it anything short of Bairnsdale East and 2025. And please don’t sit there and say “I did it, why can’t they?” The current state of your wealth – most of it in your home – is one of the reasons you are wealthy but it’s also the main reason your children can’t easily get into the housing market without help.  But I digress. 

Buying any home at any level is PPP: Price, Property and Position. They are the three choice levers you, as a buyer, have some control over. How much, type of home and where? Price, Property, Position. 

You buy a home for emotional and financial happiness. Whether you think through it consciously or not, all your outcomes relate back to financial or emotional happiness. 

What should you buy? What makes you truly happy. It’s the Christian, Buddha, Muslim home philosophy all rolled into one. What really makes you truly happy now and in the future?

When buying a home, two things make you truly happy: good decisions and land.

Good decisions come from luck and goals (financially and emotionally). Bad decisions come from the same places: luck (lack of) and goals (or lack of).

You’re in your late 20′s and early 30′s and you need a home. Relationship pressures are usually the spur – your parents may be helping a bit and you have a good job.

Your name is Freddy and you are sitting down for a coffee with me, because your dad told you to.  

Freddy: I’ve got $500,000 and I want to buy a home in Hawthorn.

Mal: Nice meeting you, Freddy. Waiter. Bill, please.

Freddy: What are you doing?

Mal: I’m leaving because I can’t help you.

Freddy: I could buy an apartment

Mal: But you are getting married and said you wanted some kids. Space, Freddy, space!

Freddy: OK, what about going further out?

Mal: What to Officer or Coolaroo or Tecoma? Freddy, you don’t even know how to use your sat nav.

Freddy: You’re a snob and a very rude man, Mal. My father was right.

Mal: Freddy, homebuying is not about me, it’s about you. Today in 2010 you need to find $900,000. Sell your car; get your wife to get a second job; hold back on the kids and get that big-noting dad of yours to throw in a few bucks and show me the money. Freddy, your life is in Hawthorn or inner Melbourne; your friends are here, you’re happy here and, if you move out to Pakenham, then I’m afraid you may never come back. And I’m also afraid that is not where you want to be. Freddy, I’m telling you what you need to do. You need to fight, scrounge, cajole, weasel and push, push, push with all your might and you need to get as much money as you can manage together and you need to do it now.

Freddy: You’re an old fart, Mal. I don’t want those pressures. I don’t want to encroach on my lifestyle. I would rather be among the trees and without the pressures of an all-consuming mortgage.

Mal: Then, Freddy, that’s fine. If that is truly what you want, then, as Nick Renna says at all his auctions: I respect that and good for you.

Freddy: Who’s Nick Renna?

Mal: Don’t worry. Hey, Freddy. Does your wife Christine want to live in Upper Ferntree Gully among the trees? It’s a beautiful place.

Freddy: No, she wants to live in the inner city and she is applying the pressure to me big time. She wants kids, she wants culture and she wants Hawthorn. The only thing I’m not sure she wants is me! I hate this pressure.

Mal: This is good.

Freddy: Good? – are you a sadist as well, Mal?

Mal: It’s good because it shows you are getting some clarity on what you want and what your family wants. Now we need to be smart. Do you really want to live in Outer Melbourne?

Freddy: Not really and not because I don’t like the areas. It’s just it’s a long way out from work and it’s away from my friends and family and it’s not where Christine feels comfortable.

Mal: OK, well, we have one P worked out and that is Position (sort of). Only I think it’s not going to be Hawthorn, initially,  because we agree an apartment is not a goer with kids on the horizon and we don’t have the cash for land and a home there. What is important for now and your future is that we look for as much land in an area we can afford.

Freddy: What, like a knockdown?

Mal: Well, not really, because quite often that can be overcapitalising financially. Have a look at this diagram – you should have bought either of the renovated ones for a little bit more.

Freddy: So we go for big land?

Mal: No, it’s quality land – size isn’t everything, Freddy. See good land in Albert Park can be 180 sqm and conversely bad land in Swan Hill can be 1500 sqm. Quality land is about the combination of position and size.

Freddy: But in Hawthorn a good block costs $1.6 million and I’ve only got $500,000.

Mal: Actually, right now it is more but, in time, if Hawthorn, Grace Park, the Urquhart Estate or Scotch Hill is what you want then you will be able to get it, but you need to start right. Let’s look at Alphington – only 10 minutes from Hawthorn (outside peak); you said Christine’s favourite sister lives there; it has a really good cosmopolitan feel and has a number of period homes that have that good land content. 

Freddy: I get what you said about land quality but not land content. What do you mean by land content?

Mal: See this chart. All three of these homes have land but only the period home on the right has good land content. Land (the capital growth driver) is a lot less in new homes than older homes and even less in apartments – this example assumes you buy at market value all at the same price of say $900,000. But it’s also true at $2,000,000 even $5,000,000.

Freddy: And as you keep saying, they don’t fight wars over homes, they fight wars over land.

Mal: True. Land goes up and buildings go down.  It’s all about demand and supply. That is where growth comes from and another real pointer to show where demand is, is the Chinese.

Freddy: The Chinese!

Mal: When the FIRB rules restricted overseas buyers to new apartments, they bought new apartments as they had no choice. Now last year with the FIRB rules changing and Chinese nationals having choices as to what they can buy in Australia, many are choosing land over apartments and that is evidenced by apartment prices remaining lackluster and land prices, especially in your Hawthorn area, going through the roof. The price increases must surely be giving many people a message. Quality Land is a world language.

Freddy: So I’m getting the second P (Property) worked out. Type of home? Should have as much land content as possible.  What about the final P? Price. I’ve only got $500,000. That’s all the banks will lend and you reckon I need a million.

Mal: Freddy. You can do it. Make the lifestyle changes; get Dad and Mum to lend you some. Talk to the bank about a restructure and let’s see if we can’t find something a bit under a million and you put some sweat into the property – not a major reno but you fix it up a bit. I do think you can make $900,000 work if you want to.

Freddy: It’s a big ask. I want to go on holidays and my new Merc and ……..

Mal: You have choices. The choices you make now are what sets you up in your life. A new car and a holiday and its Frankston South or Aspendale and granite benchtops or none of these; hard yards and Alphington. One of these two has proven financial growth and for you emotional happiness, which you need for choices going forward eg better home, near better schools, a culture you prefer and seem comfortable with and the ol chestnut a happy wife = a happy life – the other has a two strikes policy.

Freddy: Two strikes?

Mal: If you are young and you buy a McMansion as home 1 and then home 2 in an  outer area new estate, then we feel that is where you will live for the rest of your life. Home 1 and Home 2 has to be on the ladder upwards if where you want to get to is where you are dreaming of now.

Freddy: I still think you’re rude and prejudiced but how will I convince the wife of this land content stuff?

Mal: Don’t worry, Freddy, my fourth wife said I was an expert on women and relationships. You start by telling them this …………………

Next market news in 3 weeks (school holidays and Easter)

Buy Well

Mal

Malvern: 39 Horace: Sold under the hammer for $1,670,000. Bidderman 5. Andrew Hayne asking the bidders to speak up over the crowd noise. Solid Result.

Fitzroy North: 407 Rae Street: Bought for $1,430,000. 2 bidders. Craig Shearn of Jellis Craig auctioneer. Crowd over 100.

Easter is a week away and its the first break since the start of 2010 for most frantic home buyers (unless you have bought).

A great time from reflection, no doubt there will be those who have purchased who will be thinking what I have done, whilst some will be thinking thank God we have bought before the market climbs even higher. On the flip side some of those who have failed to purchase will think its all too hard and give up whilst others will remain focused on securing there piece of Melbourne.

Whatever the case it is important to reflect as sometimes we do get caught up in the rush of excitement, or conversely frustration, and forget to take a measured approached when buying what for most will big one of the biggest financial assets of our life.

The big sale today was 15 Erin Street Richmond (Edward Hobbs of Biggin and Scott) being bought for $2,510,000 at auction.

Richmond: 15 Erin: Edward Hobbs. Bought for $2,510,000 today

Russell Cambridge, of Biggin and Scott Richmond, has indicated that the market in 2010 had been fantastic. Mr Cambridge said “buyers out there were afraid that they are going to miss the market as the increases in migration take their toll on prices” and “at the moment there is not enough real estate to go around and everyone knows it”. In 2009/2010 Mr Cambridge has noticed a shift of first home buyers moving away from un-renovated single fronted terrace houses into more affordable apartments and studios which was the traditional stomping ground of investors.

Moving back to today…

18 St Hubert Road, Ivanhoe East (Rod Watson, Miles Real Estate) sold well under the hammer for $1.38 million with 3 bidders – effectively a land sale this shows a rate of $1,533 a square metre. This is in contrast to the land sale at 46 York Avenue, Ivanhoe East ,(Feb, 2010) which had a rate of just over $2,200 per square metre,. York Avenue was also approximately 200m2 smaller, however no doubt a premium was paid for the position being North of Lower Heidelberg Road.

A rather small crowd for 2010 of 50 gathered to watch 353 Canning Street, Carlton North being auctioned by Scott McElroy of Hocking Stuart. Mr McElroy struggle with only 1 bidder placing 1 bid of $1.45 million and the property was passed in shortly there after. This is a good indication that the market for a renovated 3 bedroom single fronted dwelling in Carlton North at $1.2 million is very strong however once we move north of $1.4 million the market seems a bit thinner.

Antony Woodley (Marshall White) was down in Clifton Hill today auctioning 7 O’Grady Street, again in front of an uncharacteristically small crowd of 50. 4 bidders this time all of them prepared to pay over $900,000 with the property finally being purchased with a bid of $960,000. I think a strong result even in the current market for a Clifton Hill south facing 2 bedroom period home.

Some interesting results around Eaglemont with 7 Cumberland Drive (James Home Rating 624/1000) selling for $1,520,000 but one of my favourites – position wise – 645 The Boulevard (725/1000) being passed in. Both were with David Oster and Liz Walker of Jellis Craig.

The landscape of the market has changed dramatically since the start of 2010, people have had to shift their boundaries in order to purchase & some have brought well and some have bought …….. -  the main difference between these purchases…. Luck? Knowledge? Strategy? well maybe a combination of all three.

Hope you all have a wonderful break with family and friends – looking forward to reviewing the market once the Easter bunny has come and gone!

Know your market!

It is of concern to me that this type thinking is so ingrained into people’s minds that you cannot even suggest an alternative view.

What I am here to tell you is  that land does NOT go up faster than apartments in all instances.

I would like to make my first point very quickly. If you have the chance to buy an apartment or a house (land) in the same suburb, then, in most cases, you are better off buying a house, from a pure capital appreciation perspective.

As shown in the below diagram, if you invested $50,000 in  a house or apartment in 1980 in Hawthorn, Elwood or Box Hill, you would have been financially better off if you bought a house.

People say that land appreciates and buildings depreciate   … and this makes complete logical sense.

However, it does not change the fact that you have an apartment footprint of 100m2 that is capable of having two beds, a bathroom, kitchen  and lounge. Is this not the same as having a 100m2 dwelling with no backyard?

Ask yourself this question – do most houses get renovated or demolished?

And why do we renovate? Well, the cost of building and materials also increases, doesn’t it ?

So, is a 100m2 house with no backyard as good as the same sized apartment? It’s a good question and the answer in most instances is NO. The reason  is Supply and Demand.

As we begin to build up houses (land), become more scarce and thus there is increased demand. Remember, with no possible additional supply, the demand will constantly increase.

Therefore, in almost all cases – and I stress  almost all – houses will go up faster than units but ONLY if they are located in the same area.

So what causes property to appreciate? Is it land?  No, it’s demand.

While the demand for an inner-city apartment is not as high as an inner-city house , the demand for an inner-city apartment has good potential to be higher than those houses in suburbs further away from the CBD.

Let’s look at the suburb of South Yarra, which has almost reached development capacity. Is an apartment in South Yarra in more demand than a house in Doncaster, Deer Park, Glen Waverley or Cranbourne ?

Well let’s  pretend we invested  $50,000 in 1980 in a South Yarra Apartment and a house in Doncaster, Deer Park, Glen Waverley  and  Cranbourne , and let the results speak for themselves.

In almost all instances, South Yarra units outperformed houses in the outer suburban areas – behind this graph, in the raw data, are numerous examples  that show a very clear trend that  the further away from the CBD, the lower appreciation; therefore inner-city units or apartments have a greater chance of appreciating faster than  houses in the outer suburbs.

Whether buying a property to live in, or for an investment, it is important to be as informed as possible. It is essential to establish your financial and emotional objectives before every purchase and then make good decisions based on the correct information.

To say land appreciates and buildings depreciate is fine but remember that building costs increase and a footprint is a footprint.

Middle Park: 64 Nimmo St: Changing of the Guard: Young bull Michael Szulc directing traffic as the old bull - Geoff Cayzer looks on. 7 bidders. Bought for $3,155,000

Just another quiet week (not) in Brighton with 13 reported sales over $1m.

Big increase in Bidderman at auction: 2.6

Some follow up to previous weekend’s passed in auctions – two sold privately during the week; the first at 49 William St, Brighton (Phillip Mellody Buxton), where they seemed to be thinking $3.5m, had a vendor bid of $2.95m last weekend and sold mid week for well north of $3m but not $3.5m. The second was 32 Cosham St, Brighton (David Wilson of JP Dixon) – we reported the auction a few weeks ago – only vendor bids – sold mid week for just under $3m.

Another hot Hocking Stuart Ferrars Place sale in Albert Park on the back of last weeks $4m+ one. 21 Ferrars – Michael Coen – 274 sqm land + townhouse was bought for $2.25m (quoted under $2m). This little section of the world – the crescents of Howe, Martin and Ferrars is rivaling St Vincents place and the Domain in South Yarra.

Black Rock – 4 out of 4 homes over a million reported sold at auction today as apposed to Brighton East 1 out 4. But look at the homes – in Brighton East the non sales were main roads or near main roads.

Brighton Land Value Update
4 Vaucluse (Carole Laird Hodges) - South facing rear – 553 sq metres sold before for $1,280,000 or $2300 per sq metre.
106 Carpenter (Trudy Biggin Biggin and Scott) – Backs onto railway line (almost) – 504 sq metres sold for $930,000 or $1845 sq metre today. 116 Carpenter, also backs onto railway sold for around the same (some minor value in the house)a few weeks ago.

Main road or railway line discount for land seems to be a minimum 15% and can be 25% against good blocks nearby.

What Didn’t Sell?
13 Wellington (Bert Stewart Buxton) didn’t run out the door. The home is tired and if you wanted to start again then at a $3,500,000 vendor bid that makes the asking price for land north of $4400 – the Diamond K as we call this precinct between the Brighton Beach and Church St is good but is it north of $4000 sqm – stay tuned.
13 Baxter St Elsternwick (Bill Stavrakis Biggin and Scott) – great little single fronter inside but outside – no car park. See our rating.
There were 4 apartments  (Black Rock, Southbank and Port Melbourne 2) in that tricky just over a million range and all passed in today. But to balance this there were 4 private sales during the week of apartments in this range.

James Auctions we attended today

CAULFIELD SOUTH, 19 Flowers St – Passed in – no bidders (Biggin Scott)
It was a day for window shopping at the auction of this Caulfield South property, with auctioneer Bill Stavrakis failing to attract any bids from the crowd of around 70 people.  Mr Stavrakis opened proceedings with a vendor bid of $2m, and despite a persuasive speech on the value and quality of the property, could not get any bids from the crowd. The property was passed in on a second vendor bid of $2.1m.

BEAUMARIS, 4 Scarborough Grove – Bought – two bidders (Buxton)
Not a single car drove by during this auction, a detail auctioneer Mark Earle was quick to point out in his pitch – the peace and quiet only disrupted by the singing birds in the many trees. A genuine bid of $1.2m opened proceedings and was quickly countered by a second bidder. Rapid, confident bidding between the two parties followed and the house sold shortly after for $1.355m. An average crowd of around 40 people lined both sides of the street to catch the action.

BRIGHTON, 13 Wellington St – Passed in – one bidder (Buxton)
With a grand piano in the foyer and Pachelbel’s Canon playing in the background, there was a feeling of grandeur at this auction. Buxton’s Leigh Hallamore led the way and opened proceedings with two vendor bids of $3m and $3.25m. One genuine bidder jumped in but the property was passed in at $3.5m. Around 60 people lined the streets to watch the auction, an eclectic gathering of the young and the not so young.

MIDDLE PARK, 64 Nimmo St – Bought – seven bidders (Cayzer)
A big and noisy crowd of 120+ came to witness this auction, and many were there to bid as well, about 7 bidders getting involved. It began with a knocked back bid at $1.5m followed by a vendor bid at $2.4m to officially open. Auctioneer Michael Szulc and the Cayzer crew got spun in all directions picking out the bidders and seemed to be just as awe-struck as the crowd when bidding shot past the selling price at $2.8m and sold for $3.155m.  Crowd members walked off shaking their heads in disbelief of the selling price.

ELWOOD, 19 Beach Ave – Bought – two bidders (Chisholm & Gamon)
A large crowd of 90+ scatter around this windy scene just off Beach Road. Auctioneer Torsten Kasper keeps grounded in the breeze, opening with a vendor bid of $2m and rounds up two bidders to join in. The property is on the market at $2.2m and sells for $2.230m. Another strong result.

BRIGHTON, 106 Carpenter St – Bought – three bidders (Biggin & Scott)
The hammer came down with a thud within minutes at this auction! Auctioneer Marcus Peters led the way, taking an opening bid of $800,000 from the crowd of 50 onlookers. Two more bidders entered the fray and the property was quickly on the market at $880,000, selling minutes later for $930,000.

ELSTERNWICK, 13 Baxter St – Passed in – three bidders (Biggin & Scott)
Strong, fast bidding at this auction but despite interest from three parties, the property failed to sell. Auctioneer Bill Stavrakis accepted an opening bid of $900,000 from the crowd of around 50 people. Bidding was quick and soon reached $1.123m, but was passed in at this amount.

Happy Wife Happy Life

Malvern East: 10 Kerferd: Andrew Hayne bringing the hammer down at $2.315,000. 5 bidders.

There are a huge number of auctions and private sales in Stonnington this week and next week. The most dominating number is 3.875 – that is the average bidders at auctions we reported on below. 31 bidders at 8 auctions. Stock has increased and bidders numbers have actually risen substantially.

Glen Iris: 30 Great Valley Road: Mark Wridgway. Passed In $1.4m. No bidders

Here are a sample of our Auction Reports – these in the most part are randomly chosen.

ARMADALE, 2a Denbigh Road – 4 bidders
Auctioneer: Mark Stobart. A quick auction lasting about 10 minutes saw 4 bidders competing for this well renovated Edwardian. Bidding started with a genuine offer of $1,500,000 with increments of $10000 and $20,000 taking it $1,700,000 when it was announced to be on the market. Twelve more bids took it to the selling price of $1,756,000

ARMADALE, 24 Hume Street – 5 bidders
Good campaigning by Tim Brown to claim 5 bidders, solid performance by Paul Castran and “voila” this hidden gem is polished off with a sale at $1,135,000.

MALVERN, 23 Elizabeth Street – 6 Bidders
Auctioneer Mark Stobart, Bennison Mackinnon. Opening bid $1.45m Actual. On the market $1.6m last bid and sold $1.776m. Crowd 60. Bidders 6. Auction Vibe Steady, Auctioneer worked hard, progressive $1k bids between 2 bidders.

MALVERN EAST, 10 Kerferd Street – 5 bidders
Opened $1.8m and very slow off the mark again, finally picking up pace and bidders – five in total and a great result $2,315,000. Andrew Hayne of Marshall White was the auctioneer.

PRAHRAN, 56 Perth Street – 3 bidders
Lee Pellizzer ran a spirited auction with 3 bidders from a crowd of 60 to achieve a healthy $1,275,000 for this solid, well situated investment. ”

SOUTH YARRA, 6 Cromwell Road – 1 bidder – What only one!!!!
Small crowd of 30 people watched Phillipe Batters of Williams Batters place a vendor bid of 2.4m and then take a real bid of $2.45m at which point it was passed in.

SOUTH YARRA, 2 Walter Street – 4 bidders
Auctioneer: Paul Castran. Vibe good. Crowd 50. Bid start $900,000. On market $1,080,000. Bidders 4. Sold @ $1,135,000

SOUTH YARRA, 67 Darling Street - 5 bidders
Five bidders from a crowd of 30 made close on 80 bids to buy these three apartments (with an indicated annual rental of $90,000) on the slopes of Murphy Street for the very healthy price of $2,512,000 well above the indicated range of $1.8 – $2.2 million. Andrew McMillan launched the auction (his first of 5 for the day) with a Vendor Bid of $1,800,000. The ultimate buyer joined in with an offer of $1,820,000 and spirited bidding took the price to $2,000,000 – when a break was taken. Although the property was not on the market at this stage it quickly reached the reserve of $2,050,000 and then a new bidder joined in at $2.090.000. With further increments of $1,000, $2500, $5,000 and $10,000 the bidding raced to a great outcome for the vendor, auctioneer and buyer. ”
Buy Well

Elsternwick: 48 College: Stand Up comedian and auctioneer Bill Stavrakis entertains the 90 strong crowd and 4 bidders to a bought price of $1,238,000.

Overall Bayside looked pretty solid this week and the next two weeks will either confirm its strength or show some signs of minor distress as we have a lot of auctions coming up.

Brighton: 116 Carpenter St. Jason Gill of Hodges a prolific Bayside $1m seller gets this way away with 3 bidders at $1,170,000

This week

15 Well St Brighton which was 1000 sq metres with permits for apartments right in the middle of the Church St precinct sold through Brian Devlin of Buxton for a very strong $3500 per sq metre+

116 Carpenter St Brighton which was a difficult back – near a funeral parlour and backing onto a railway line still sold through Jason Gill of Hodges.

James Auction Report: A bid of $950,000 from the crowd of 35 people started off this auction. There were three bidders in total, with the property on the market at $1.04 million and sold for $1.17 million.

This has either been bought by somebody keen to get into Brighton at this $1m price point and made sacrifices or a developer who sees putting a glitz and glam home on it and reselling north of $2m or of course I could be completely wrong.

4 out of 5 sold over a million at auction in Brighton East - Curley, Canberra, Glencairn, Lubrano and only Milliara missing out

Down the bay a bit Julian Augustini of Hodges was again in form selling one at auction and one quietly.

70 Holyrood Hampton (auction) – at $1.51 for 811 sq metres and a serious renovation and quietly a similar land size in Littlewood St Hampton for just under $1.5m. Assuming little value in the homes that is putting land around $1600 to 1700 per sq metre if it is a good block in the Golden Triangle of Hampton for prime Middle Hampton.

James Auction Report: In front of 50 people, auctioneer Julian Augustini opened this auction with a vendor bid of $1.35 million. Three bidders joined in and the property eventually sold for $1.51 million.

51 McGregor Middle Park was a strong sale at $2.27m for John Holdsworth of Hocking Stuart – who like British Paints just keeps on keeping on. Land is hard to estimate but it looks to be well north of $5000 per sq metre if we saw house value in its unrenovated form at $450,000. This time last year nobody would have turned up let alone bid on this even under $2m. Not because it is not good but because that was the market then.

James Auction Report: This corner property was buzzing with a crowd of 110 gathering from all angles. Andrew Stuart got things rolling with a vendor bid of $1.7 million and three bidders joined in. The property was on the market at $2.15 million and sold at $2.27 million.

Happy Wife Happy Life

Bentleigh: 22 Yawla. Nick Renna - Mr Dynamo firing up a huge crowd of 100 to a 4 bidder final result of $1,065,000.

It’s 6pm Saturday and the James Clearance Rate for million-dollar-plus auctions is 68 per cent on the 19 auctions we attended today.

In this week’s Market Wraps, we are most appreciative of the time and effort Scott Patterson of Jellis Craig (Boroondara), Iain Carmichael of Bennison Mackinnon (Stonnington) and David Hart of Buxton (Bayside) put into answering our Market Wrap questions. As this weekend is a quieter weekend, with weaker homes and land sales and smaller turnover, we thought the focus should be on a Q&A with quality, key agents on what to expect between now and Christmas.

Please note Chinese translation pdf to the right of this article.

But onto our Market Insight. Buyers – a time to perhaps keep your head?

We think the hot topic of today is definitely buyer panic. You can see it at auctions, you can hear it in buyer voices at opens and you can feel selling agents are thinking we are back to 2007 buyer mindsets.

As a buyer, you can panic if you wish; that is your prerogative, but there is no need to do it and there is no value add for you, the buyer, while you are in that state of mind.

Yes, the market has moved and, yes, it is still rising and, yes, it is hot. Many credible agents have been advising for some time that “now” was a good time to buy – that “now” was last year and early this year – that “now” was five years ago. We are at another “now” – now. So is it a good time to buy or should we throw up our arms and say it’s all too hard?

Look, why not throw up your arms and give up? Or why not just go and buy something – anything – just something to get off the treadmill of inspections, bid and miss.

Why not? Because such a decision could lead to a lesser, unhappier life for you and your family.

When the pressure’s on, when – to use sporting parlance – you are in the premiership quarter or, if you are a golfer, when you are on the back nine on Sunday, or, if you run marathons, when you hit the wall at the 36km mark, when the real pressure is on, do you achieve anything by giving up? No. The “winners” are those that can keep their head and make good decisions under pressure.

And there is no doubt that buyers in the $1 million to $4 million range in Inner Melbourne are under considerable pressure right now.

So let’s look at the pressures. Let’s examine what is happening in the market and then let’s look at some practical solutions.

Pressure No 1: Overseas Demand: Scott Patterson from Jellis Craig (the full interview, full of interesting insights, is in our Boroondara Wrap below) pointed out broadcaster Neil Mitchell’s article in the Herald Sun examining our population increase as reported by the Bureau of Statistics. (It was a good article: http://www.heraldsun.com.au/opinion/how-many-is-too-many/story-e6frfhqf-1225780951508). But let’s move on from the article’s point as to whether we should be encouraging population increases. The fact is that we are actually having migration increases, have been having them for a long time and, from all reports, we will continue to do so for decades. Population is the key to Demand and Migration is the key to major price shifts (new ideas, new money, new price levels). So what evidence can we see of this in the market? The clearest evidence is at auctions (if you attend them) and statements from Marshall White and Jellis Craig that 25 per cent of their sales over a million dollars in Boroondara (Hawthorn, Kew, Canterbury) are to Chinese or Asian buyers.

Pressure No 1a: Local Demand: We are experiencing a mini baby boom, more family homes now, and, in 20 years’ time and beyond. That will put more pressure into the housing market. But, right here and now, local demand is very strong and that is best evidenced by the fact that, despite the world being in the greatest recession/depression since the last depression/recession, there is genuine talk of interest rate rises in Australia from Glenn Stevens of the Reserve Bank. This, in our opinion, proves that people are feeling good, acting on it and this is shown locally in, say, Bayside (Brighton) where there are some overseas buyers but nowhere near the same extent as in Boroondara (Kew, Balwyn etc); however the Bayside market is buoyant and also rising steadily and, while not at the same level as Inner Eastern, is fast approaching the 2007 price peaks and will, in all likelihood, surpass them before Christmas. Bayside demand is still largely driven by local buyers.

Pressure No 2: Supply: While right here and now in early October 2009 we are seeing some good supply, this, according to the best advice from selling agents, is a small window created by the Melbourne sporting and religious calendar. In Spring, there are three key weeks for stock: the first week in September (to get it sold before Grand Final), the first week in October, after Grand Final (to get it sold before Melbourne Cup), and the first week in November, after Melbourne Cup (to get it sold before December and Christmas). This week, we have experienced the second of the three one-week bursts and there were literally hundreds of homes brought onto the market in the past week. However, there will not be that number next week or the week after. We are in an overall low stock environment right now and that is confirmed by figures such as from Scott Patterson of Jellis Craig: year to date Jellis Craig in 2007 – 909 auctions; YTD in 2008 – 794 auctions and YTD in 2009 – 700 auctions. Marshall White, the other dominant Boroondara agent, reports similar drops in activity. It is the same in Stonnington (Toorak, Malvern etc) and Bayside (Brighton to Albert Park).

Why is this happening?

Three key reasons:

1. Overseas buyers find it easier to buy than last year and do not have another home to onsell. Increased demand and reduced supply.
2. Local buyers are buying homes for their future generations. Increased demand and reduced supply.
3. We are an increasingly wealthy society and homes are seen as a store of wealth and many can afford to hold multiple homes as investments. Increased demand and reduced supply.

As an aside, reasons one and three are actually encouraged by government through FIRB changes and the negative gearing tax regime.

Adam Smith, in his book Wealth of Nations back in the 1700s, said, and we, as agents, witness this every day; when demand goes up and supply goes down, then price, without artificial interference, will also go up and the stronger the demand and the weaker the supply, then the greater the price increases across the board.

So, for buyers, the pressures are very real. But you know that.

On top of these pressures, buyers who read and listen may also be influenced by commentary, some of which is not necessarily well informed. These comments, while well meaning, can also spook “panicked” buyers into changing course.

Remember the doomsayers of last year? Well, the world didn’t end.

Equally worrying can be seemingly well-informed commentary such as an article I read recently by Tim Lawless from the respected RPData. It stated “That capital growth apartments are virtually on par with detached houses … This puts to bed the myth that houses appreciate at a faster rate than units.” (See http://www.realestate.com.au/doc/Resources/News/tim-lawless-units-versus-houses.htm).

While by some statistical twist this may appear true, in practical terms we strongly disagree that this is a helpful or relevant comment in Inner Melbourne. And these sorts of statements may encourage the wrong buying action.

Across the board in Inner Melbourne, the above statement is not true and, in fairness to Tim, he may not have meant it to be read in such context. Also in fairness when you look at the reported $15m paid for the Melburnian Penthouse this week through Ross Savas of Kay and Burton, or you just look at the incredible growth in some bottom rung 1 and 2 bedroom apartments in say Hawthorn recently, you may correctly argue that some apartments are money spinners. And finally it is fair to say that a small number of investors dealing in multiple apartment purchases with very sophisticated purchase and “flip-on” or purchase and hold strategies have made excellent returns. But overall if the article was meant to imply that apartment buying was the almost the same as home buying in terms of capital growth ceteris paribus (with other factors being equal) then we find the article not helpful and therefore we feel these sort of blanket comments, around one selected statistic should be qualified a lot more than what they are.

Labouring the point a little, yes it is true that there are some well performing apartments (yes, we buy apartments) particularly in the suburbs, particularly low rise and particularly brilliantly located ones. So, yes, some apartments have performed very well BUT there are vast numbers of apartments out there that have been investment dogs (for all except the developer) and, if these sorts of articles encourage younger people (who can afford to buy either land or apartments) to buy apartments instead of well-located land as their new family home, then it is doing a great disservice to those people if longer term financial outcomes are important in their considerations. I will leave this for another day, but I ask the question: what about resales v new apartments in the RPData figures? What about Docklands, St Kilda Road, half of Port Melbourne (eg the big blocks not on the beach)? What about suburb by suburb comparisons, such as below?

Government – Valuer General Median Prices:

Hawthorn

2003 Homes $662,250; 2003 Apartments $313,700

2008 Homes $1,292,500; 2008 Apartments $372,000

Five-year increase homes – 95%.

Five year increase in apartments – 18%.

Toorak

2003 Homes $1,450,000; 2003 Apartments $430,000

2008 Homes $2,600,000; 2008 Apartments $560,000

Five-year increase homes -  79%.

Five year increase in apartments – 30%.

Brighton

2003 Homes $886,000; 2003 Apartments $475,000

2008 Homes $1,550,000; 2008 Apartments $590,000

Five-year increase homes -75%.

Five year increase in apartments – 24%.

Port Melbourne

2003 Homes $560,000; 2003 Apartments $475,000

2008 Homes $775,000; 2008 Apartments $478,500

Five-year increase homes – 38%.

Five year increase in apartments -1%.

Do these figures prove we are right and Tim is wrong? No, we respect the work of RPData, and we use their stats. What this proves is that figures can be made to say anything. Practically speaking, and all things being equal, we would encourage all young buyers to think position first, land second and building (apartments) third. Of course, with spousal approval being even more important than position. If your buy is more than emotional, consider land before apartments, if you can afford it.

Wars are not fought over apartments; they are fought over land. And finally with any data analysis (including ours), if you throw enough ingredients into every different soup, then they all taste the same.

Please don’t panic and change course or just react to a headline because you are under pressure!

But I digress. Continuing with Buyer Pressures which are real and increasing. Do you give up or make poor decisions? Is your case hopeless?

Practically, let’s look at a sample of what we have bought in the past month of September. These homes are worth a million dollars or more.

Northcote (Jellis Craig): couple who wished to move from Outer Melbourne, considered Kew etc and then decided the Fairfield area was more affordable. Great purchase at auction: a lovely renovated period home, with good land content, near shops and Fairfield station. Over a million.

Toorak (Marshall White): Over $2 million, this home had been sitting around for months and months with several agents as well. With $300,000 spent on cosmetic renovations, this home will be simply stunning and will have made up for any market movement in the six months it took to find. Land content more than 70 per cent of the price. We love quality stale properties when the market meets the asking price.

Sandringham (Biggin and Scott): Lovely family home bought at the second attempt to buy for around a million dollars. Good position, street, land content and north-facing rear.

Brighton (Kay and Burton): Family home twice offered, bought after four weeks of negotiations for a fair price to both buyer and seller. Good selling agent work. Over $2million.

Canterbury (Marshall White): More than $3 million. Block of land in Canterbury’s Golden Mile bought after two previous attempts for this client. Great land.

Balaclava (Beller): Off-market: Great initiative by buyer who found the home with a letterbox drop and then asked us to negotiate with the appointed selling agents. Robust but pleasant negotiations and a fair price to both parties. Great land and well done to buyers who did something different but then were smart, not cute, when it came to doing a deal. More than a million dollars.

Hawthorn (Jellis Craig): Off-market: Boardroom auction. Flexible buyers who had tried with us to buy three homes before – kept their nerve – adjusted their PPP (Price, Property and Position) and still bought in a good location with a reduced budget and it’s still a good solution for an expanding family. Over a million.

Hampton (Hodges/JP Dixon): Over $2 million. These clients had been looking for more than two years (with us). Saw it and we bought it pre-auction. In one of Melbourne’s great locations (Hampton Beach, Railway, Shops and Brown Cow). Good land and a brilliantly designed and built home.

South Yarra (Hocking Stuart): Over $1 million. This was the clients’ second attempt with us, but they stayed true to what they wanted and could afford and just shifted suburbs a little. Good land content.

But, please, we are not claiming a perfect strike rate – a sample of where we missed at auctions. Richmond, Camberwell, Surrey Hills, Glen Iris, Mont Albert and Malvern during September in various $1m to $4m price brackets.

Our point is that the successful buyers didn’t give up (not even after two years) and still bought sensible (yes some strongly priced) well located, good land content, workable floor plan properties.

It’s not the price now (within some parameters), it’s the quality of what you buy that will protect you into the future.

Please for young people in particular (if you haven’t nodded off) all of this is to encourage you not to panic, but to stay your course and to not jump at shadows. The market will not be easier in the future; it will be harder – act now (if it makes sense – if not keep looking till it does). When you act do so with streetsmarts. Don’t bury your head or just buy or, worse still, buy crap. Think!

1. Understand clearly what you want emotionally (room for future children?) and financially (growth for your next purchase?) both now and in five to 10 years.
2. Make a plan and, in that plan, understand the value of land content, happy wife and happy life, floor plan flexibility and position.
3. Act on that plan with an accurate assessment of your needs match and values.
4. Negotiate to buy well, not buy poorly or just keep missing out.
5. While understanding that selling agents work for the vendor (always), we would still encourage you to listen to quality selling agents that do tell  truths. We learn more off them than any other group of property professionals.

Finally, we know you are under pressure. While it is almost always better to miss an opportunity than make a mistake, sometimes continually missing good opportunities becomes a mistake.

If all else fails, ring us.  We may be able to help you achieve your dream.

Apologies if it’s sounding like a lecture – we are genuinely trying to help.

Stay cool, buy well and be brave (at the right time).

Mal

PS We all really enjoy the people that come up to us at auctions and open for inspections. It’s good to meet you.