Monday 28th November – 57 Cole Brighton ( Peter Kennett of Hocking Stuart). A family home with some floor plan issues that has been on the market for sometime, has been bought after a few interested parties were gathered together in an Expressions of Interest Campaign and one person popped up over $3,000,000. We rated the home 757/1000 mainly on its position and land characteristics.

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

End of Spring Market Summary

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

Clearance Rates: Basically on auction day you have a 50/50 chance of selling – although demand for $3m+ properties has weakened in last fortnight.

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

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

The Top 3 things buyers can do to take advantage of what is on offer before Christmas.

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

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

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

Saturday 26th November Weekend Auction Results

Bought

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

Passed-In

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

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

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

Wednesday 23rd November – 58 Glyndon Rd, Camberwell (Jock Langley) Private Auction  BOUGHT over $3,300,000: Attended this mid week private auction  just in case a bargain was to be had. No bargain, with a very healthy Tim Derham – Abercromby’s auction – 3 bidders and passed in for $3,300,000 and bit – deal was negotiated after wards in excess of that figure. Strong result – this is still outer Camberwell!
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

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

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

Saturday 19th November: At auction only two out of ten were reported as sold at the $3m+ level.

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

Pass-Ins at

• 47 York St, Kilda West – $3,800,000
• 24 Monaro Rd, Kooyong – $3,500,000
• 25 Montalto Ave, Toorak – $3,450,000
• 9 Berry St, East Melbourne – $3,200,000
• 11 Victor Ave, Kew – $3,000,000
• 2 Snooks Crt, Brighton – $3,000,000
• 26 Stawell St, Kew – $2,950,000
• 6-8 Myrtle St Brighton – undisclosed

Overall quite a weak day – although having been through many of those pass-ins I can say that a number were not the most exciting of offerings.

Friday 18th November: The Christmas Stock Flood has really gained some momentum in the last week with a large influx of homes coming onto the market right now – especially at the Top End (look at our stock graphs in Market News). This has to be good for buyers. Where in recent times our main role has been finding quality homes – the bulk or our work has moved to assessment and negotiation. Price is such a movable beast right now and it’s good, as a buyer, to have an open mind and strategies (within your acceptable risk v reward parameters) to take advantage of the lay of the land. Please that is not to say that all the goodies are being given away – far from it – but once a home falls into that certain category (eg stale, overpriced or a B grader) then significant discounts are possible – if the vendor wants to sell. Yes you need to know what to do, how to do it and when to do it – but professional advice can fill that knowledge gap for you. Two properties purchased in the last fortnight or so $700,000+ off the original asking price and that was a $3m home and $300,000+ off the original asking price and that was a $2,000,000 home. The market is operating normally – however now, more so than at any other time this year, it is a true buyers’ market – Great Choice and Negotiable Prices. Buy Well.

Wednesday 15th November: 4 Kiers Court Caulfield North (Phillip French)  one of the more distinctive homes I have seen this year is now reported as sold in excess of $3,000,000. Our James Home Rating was 684/1000 (see below) and what the owners did with a difficult block was in my opinion, amazing and the price was solid. Also a huge block at 181 Gipps St East Melbourne (Sarah Case) over 1000 sqm was bought undisclosed (over $5,000,000) and finally to complete the RT Edgar trifecta 29 Loch St, St Kilda West (Anthony Grimwade) almost 1000 sqm plus period home was bought for $3,800,000.

Tuesday 14th November: 3/61 Nepean Highway Aspendale (Rowan Thompson) which we reported as passed-in on the weekend, has now been bought for $3,150,000.

TOORAK 49 Mathoura Road, Justin Long, 4 Bidders, $5,220,000

Saturday 12th November: 3 biggies – 2 bought and 1 passed in.

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

49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders
Justin Long is a very experienced and capable auctioneer and he needed to be today as he was put under pressure by bidders constantly trying to reduce the bids he was calling for. He held firm time and time again, and in the end the vendors would have to think (whether they were happy with the price or not) that without Justin’s skill and endeavours, this property might not have been sold this weekend. Five bidders all with their own individual strategies locked horns for 45 minutes involving breaks and multiple “is it on the market?” questions. The opening bid was $4,000,000, the property declared on the market at $4,950,000 and eventually bought under the hammer for $5,220,000.

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

Friday 11th November: This is a typical week at the Top End for me. I have been through the following homes, given them a James Home Ratings (not for public display), calculated buyer value and price ranges and noted a few negotiation strategy issues each home may present when attempting to maximise buyer outcomes:

PRICE: $3,000,000+ (Agent Quote)
POSITION: 7 Linacre Road, Hampton, (Jenny Dwyer)
PROPERTY: James Home Rating Excerpt: Complex family home with water views (quality ones of Yacht Club), multiple living areas, 5 bedrooms on one level, dual staircases, basement and all on 635 sqm in one of Melbourne best inner seaside precincts. Price – that will be interesting as will the method of sale – both rare birds for this part of the world right now.

PRICE: $5,250,000 (Asking Price)
POSITION: 29 Seymour Grove, Brighton (Ian Jackson)
PROPERTY: James Home Rating Excerpt: North-facing rear, brand-new build on a big block around 1,000 sqm. Upstairs is very good, perhaps a lift was needed at this price. It’s to a formula and one that always sells when buyer meets seller or vice versa on price – that meeting price – well that is the big question? I remember going to the land auction around the start of the GFC (early 2008) and it was bought quite well at $2,100 per sqm – bought quiet well, considering what other knockdowns in this street and Wolseley had gone for, a short time before this auction.

PRICE: $8,000,000 ish (Agent Quote)
POSITION: 18 Fitzroy St, Kilda (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Has already received a lot of publicity due to its current owner and the facade photograph is wonderfully enticing. A home of pluses and minuses for different family types. One of the real pluses for some families would be the rooftop pool – spectacular is an understatement. Location is also smack bang in the middle of the action. Building was an advertising agency office in a previous life – although much of the work was already done when this last sold (twice in 2004 between $3,000,000 and $4,000,000) .

PRICE: $6,500,000 plus (Agent Quote)
POSITION: 21 Isabella Grove, Hawthorn (Scott Patterson)
PROPERTY: James Home Rating Excerpt: It’s a trip back in time. The entrance really looks like a movie set from Charles Dickens (love the dome). One of the most powerful views for me was actually through the kitchen window of what would have been servant’s quarters – the form the steps take going back up across the road stick in my mind. The home itself is obviously one for specific tastes and you will have a few issues to get your head around if you are going to be the buyer – but that could be well worth the mental effort.

PRICE: Circle $10m to $12m (Agent Quote)
POSITION: 1 Harcourt St, Hawthorn East (James Tostevin)
PROPERTY: James Home Rating Excerpt: Most “in the trade” would describe this as a big thumper and the agent quote estimate says you are going to need a big wallet to match. Valuing this would require an open mind and purchasing well, would require a firm base on goals and a flexible strategy to test on many levels. The house – well – it’s not about the house, there are bones to work with. No, in my opinion it is all about is the land and more to the point the shape of the land and where the home sits and what you want and can do within its limitations. So is the land worth the $sqm of  say no 49 Harcourt which had two bidders at auction and went for over $7,200,000 last year or is there a discount involved? Challenges for all parties if this is to be a deal.

PRICE: In the picture you can see next door which was also subject to a similar campaign recently at a similar asking price tag ($20,000,000 to $30,000,000). The price –  if it does indeed sell – will be a source of conjecture, supposition and innuendo for months to come just like Shakespeare Grove was last year and just like when this home was so famously bought and sold last time (a decade ag0).
POSITION: 1 Towers Rd, Toorak (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Wow – if you can work out a way to get through this home you should. An art deco masterpiece with pool, tennis court, contemplative gardens all on a Toorak acre. The entrance and view from the kitchen are very powerful. At this price level, there are many more questions, but it always comes back to one final one, when the others have been answered – How can I buy this for the best possible price? Your answer may well be determined by the relationships you keep.

PRICE: Around $3million is Agent Jock’s quote
POSITION: 58 Glyndon Rd, Camberwell (Jock Langley)
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

PRICE: Around $4,500,000 (Agent Quote)
POSITION: 68 Molesworth St, Kew (Hamish Tostevin)
PROPERTY: James Home Rating Excerpt: This is a home of thought and quality – and with a price tag quoted over $4.5m if you are going to be the buyer you are going to have to put some thought and quality into how to go about this – such as, what is this home really worth? It is a very specific home – big in size, lifts, views, a lot of WOW. Attention to detail is obvious. But what about heating and cooling and sun with all that glass. Land value is not hard but home value – is this a $1.5m or a $2.5m build and will that matter? One of those buys where process is so very important if you want to buy well. A rare offering for the modern home buyer and worthy of serious consideration.

Grand Sale Land Sale in Kew - Tender Closing Today (Friday 11th November). It will be interesting to see what happens at 6-12 Madden Grove Kew on this mini-subdivision of 4 blocks around 600 sqm each. Mark Dayman and Antony Woodley taking in the offers and have expectations above $2,000 per square metre.

Thursday 10th November: Another three strongish Toorak buys in the last week.

• 16 Kenley Court Toorak (Michael Gibson of Kay and Burton) – Bought for over $12 million for nearly 2000 sqm of land a very substantial home. James Home Rating 779/1000. Excerpt from James Home Rating:

The big pluses for me are the court location, the look from the street and the gardens – tranquil, serene, sanctuary – all those words that are antonyms to stress. This is what the gardens are, and for me they are the major selling point to 16 Kenley. The home, well for most of us (i.e. those who can’t afford it) it’s a rare and magnificent home. However for buyers at this level I think they will find some issues with the floorplan – especially the position and connection between the kitchen and living area  and the front staircase so close to the front door. This seems an afterthought and does detract a little from the majesty of the entrance. Walking through the home I keep thinking of the gardens, the location and the land size more so than the building. However if you can afford 16 Kenley then you can afford to make the changes you want. And so, like almost offerings at this level in Toorak, it comes back to: when do you want to buy, what is available, what is the right exchange price and how best do you go about the process?

• 24-26 Balmerino Ave, Toorak (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land inc tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and was bought immediately afterwards for an undisclosed amount. As I went through this home it felt mostly about the land and the sweeping views, however I suppose that is the way with almost all Toorak homes. The end result was $3,800 per sqm approx.
• 4 Lisbuoy Court Toorak (Nicole Gleeson and Michael Gibson) – Townhouse with some land, bought for over $4,000,000.

Greg Costello and Tim Wilson in full swing on the Brighton Golden Mile - continuing to sell at $10,000 per sqm. See report below

Week Ending November 5th: Has the action returned after the September excitement was followed by an early October siesta? We think yes – it is back. People do have cash and they are parting with it when they find the right home. In the last 10 days at least 9 homes over $4 million have been bought and sold.

Some Auction Results this weekend

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

• Other Brighton Golden Mile Results: 2 Mytton at $6,050,000 divided by 613 sqm = $9,869 per sqm or almost identical for previous absolute beachfront sqm rates over the past year (which have maintained themselves in the last year and increased on previous high water marks). 8 Moule Avenue (David Hart) is a classic Golden Mile address (but not absolute beachfront) and sold this weekend for $2,310,000 or $3,510 per metre. On first glance that is not expensive, but it is in fact not too far off previous Golden Mile sqm rates. A third Golden Mile property 15 Dudley St (Regina and Brian) sold for in excess of its pass-in figure at $4,400,000 which, again considering the house was nothing other than a nice facade, was a very, very solid result.
• Biggest Pass In: 58 Kooyongkoot Rd, Hawthorn, Scott Patterson (Kay & Burton); passed in, $3,400,000, no bidders
  Could you find a better setting for a Melbourne Spring auction? A tranquil backyard by the pool! In front of around 60 people, auctioneer Scott Patterson gave his usual professional best to attract some crowd bidding but this was to no avail. The property passed in after two vendor bids – $3,300,000 and $3,400,000 respectively – and remains for private sale. (Adam Woledge)
• Bidderbuzz Auction: 15 Chastleton Ave, Toorak, Warwick Anderson (RT Edgar); Under the hammer, $4,135,000, 4 bidders
  Spirited bidding after a slow start was a welcome sequence at the auction of this single level home in Toorak. A crowd of 80 neighbours chatted quietly throughout the action, eagerly anticipating the value to be determined by the market. After opening on a vendor bid of $3,400,000 and the declaration that the council had valued the property at $3,700,000, auctioneer Warwick Anderson tried to keep pace with the determined 4 bidders. After the second vendor referral, Warwick announced the property on the market at $3,800,000 but the strong bidding continued, with bidder number 4 securing the home at $4,135,000. (Gina Kantzas)

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

CANTERBURY, 35 Wattle Valley Rd: A big crowd of 80 turned out to watch James Tostevin in action. Unfortunately, there wasn't much action to watch. Passed in $2,300,000, no bidders

Key Points:

• Is the dream run over for agents in Boroondara or is Post Easter going to be a very different story? Just like the market itself, there has been tremendous change within the business of real estate in Boroondara in recent times. Both the May and Winter markets could be very different to past years – it will all be determined by stock levels – the size of the overhang, how it’s mopped up and whether or not we will see nervous vendors putting their quality stock up for sale post Easter. Not writing the old girl for any length of time, not by any stretch, she has got up off the floor quickly before. For buyers, now may simply be a window and not a trend.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,000,000.
• Even if its got something to offer, if the market says it’s a bit different and not perfect then it’s not selling at auction;  evidenced by 35 Wattle Valley Road Canterbury and 6 Wharton St Surrey Hills.
• Price check 2 Kaarumba Balwyn (Michael Nolan of Noel Jones) – just out past Narrak Road, a big but difficult, irregular block of 1200+ sqm sold for just over $1100 psqm.

Chloe Quinn, Jellis Craig, Hawthorn: “We are experiencing mixed auction results at the moment. Some auctions are performing as expected and we are seeing competitive bidding, others are passing in and either selling on the day or in the week post auction. Houses that are appealing and are in sort after locations are always going to experience competitive bidding (regardless of the market conditions). There are some good opportunities for buyers looking either side of one million dollars, as there are a number of properties for sale. Due to this, price guides and results are more predictable.”

Glen Coutinho, Hocking Stuart, Camberwell/Hawthorn: “I do not believe it’s a buyers market, I think that the market is evenly balanced. The best advice I can advise is that real estate is a long term investment and there is no doubt that property prices will be higher in the next 18 months, then they are now. So they are better off too buy their property and get settled; as there are no signs of a falling market coming.”

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

PRAHRAN, 2 Westbourne St: Elliot Gill (BenMac) in action. Under the hammer, $1,080,000, 3 bidders

Key Points:

• Stock is now starting to dry up as Easter interrupts the market and with the vibe dropping since Labour Day we may well see limited stock in the discretionary upper end market coming on Post Easter.  19 Huntingfield Toorak (Justin Long) was a classic example of a limited offering that captured the markets’ attention – even allowing for building value at $2,000,000 (and that is generous) that would leave land value with a north orientation at around $5,000 per sq metre. That is not a lower than 2010 or giveaway price.
• Another good land pointer is 60 Repton Road – one of my fav areas just near Ardrie Park – a 700 sqm block sold for $1843 per sqm through Dean Gilbert of Marshall White
  

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.
• 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.

Justin Long, Marshall White, Armadale: “The way I see things at present, we are experiencing some mild upward pressure on prices but not enough to fill big gaps between market value and vendors’ expectations where those gaps have been created through over-optimism by either agent or vendor. Fairly priced properties in good locations are being competitively sought and those looking for ‘opportunities’ are, as is often the case, forced to compromise on location or suitability. Some are extremely lucky, but most in fact will ultimately pay what is required to buy the home they really like or sit on the sidelines and watch values eventually rise beyond them.”

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

See it's not all bad news! ST KILDA, 30 Crimea St: A happy couple embracing. John Carter (Hocking Stuart), under the hammer $1,450,000. 4 bidders.

At 6pm on Saturday the James Clearance Rate for the 35 $M+ auctions we covered was an almost icy 51%. Bidderman, our demand indicator showing average numbers of bidders per auction, remained at a market-cooling 1.4 bidders per auction. We seem now to be firmly in the grip of a Winter chill.

Market Summary:

March 2011 has seen a $M+ auction clearance rate averaging in the high 50s.

As the market continues in its cooler mode, an overhang of unsold homes continues to build. Two-thirds of homes passed-in are still for sale. Add to this the Expressions of Interest campaigns ending in no result and there seems little doubt we are in a softer, cooler, lower market than a month ago – especially at the high end.

Last week we produced a special report on the fate of $M+ properties that had passed in at auction this year and found that only 3 of the 26 $M+ pass-ins we monitored had since been bought a fortnight later. Seven days on from that report only a further two of those pass-ins have been reported as bought. Some of these properties went to auction 3 weeks ago. Of the 13 properties that we monitored last week as having passed-in, four have since been bought.

It seems it’s a tough gig right now for sellers whose property passes in at a price over the market.

Buyers – this is opportunity! You may think it will get worse (or better depending on your point of view). But what is likely is that after Easter sellers simply won’t put their homes on the market, creating a shortage of stock choice resulting in firming prices. We are not economists but the bad news does not seem to be anything other than transient to us right now – especially when the media are carrying credible news stories on housing shortages (supply) and increasing internal and external immigration (demand)

The $1 million to $1.5 million market is different to the rest and is still rocking along. The best description we feel is not ‘cool’, but ‘balanced’ –  leaning in fact slightly to ‘warm’ for this dollar segment. This is the ‘hottest’ market at present and still has a reasonable depth of bidders. Prices are not shrinking as much in this price range.

The one thing that differs in this market segment from this time last year is the number of volcanoes (runaway 4+ bidder auctions). Today we saw 3 volcanoes from 19 auctions on properties between $1m and $2m we covered. This time last year (March 27^th 2010) there were  9 volcanoes from 14 such auctions. That is a volcano rate of 16% today compared with 64% this time last year in that $1m to $2m range. So, even the early $1m+ market has slowed.

Back to to the Overhang or Hangover:  If you accept we are in a Buyers’ market until Easter, then the question for those who haven’t gone into mental lockdown is:

What is happening to price?

That depends on the quality of homes you are looking at. If you just took your information from the results on sales of Red Hot Homes, you could interpret we are in an improving market. These top quality homes seem to be going even better than last year, as we show in the diagram below. (Although it is important to remember that these homes are understandably the focus of the selling agents – given they are marketers).

It is possible to read positive agent news, see some red hot results and look at selected median price changes and see a different story to what is happening to a lot of the market since the Labour Day weekend.

But for many homes where the vendors have circled $3 million as their hoped for price tag, the end result has been below rather than above $3 million.

In a slowing market with dropping prices as well as a fall in turnover (actual deals done), when the median price falls it does so in smaller doses than does the TOP of the TOP END market, because the TOP END tends to fall to the middle while the bulk of the lower end sales tend to hold up the median price. The reverse is not true when a rising price market comes with big turnover increases, because this tends to exaggerate the increases. This is not to say median prices are not useful – they are.

We are not saying the market is bad – we are saying it is good, in fact very good. You as buyers have opportunities to buy well – either by buying at a lower price or by securing a better home than you could have afforded this time last year, maybe even this time six weeks ago.

To buy better you need to be able to

1. Act not freeze.
2. Calculate correct market price ranges in this new market, i.e. when researching past prices it shouldn’t be an automatic plus 15% on last year.
3. Remain flexible if your targeted home is high quality. The market may view it as a red hot and these are still going well and selling occasionally for better prices than a year ago.
4. Adopt strategies to lower the price, or if that is too difficult for you then look for the buys that present opportunities to sell at a lower price without you asking. An alternative is to get a professional who can assist you in price strategies or take advantage of the opportunity to buy a better quality home than you thought possible.

Lower prices and choice can’t be a bad thing for buyers – even if only temporary.

If now is good news for buyers, how will the post Easter market be?

The important issue is stock supply, and to give us an idea of how this is going here are some thoughts  gleaned from our ‘Round the Grounds agent opinion about upcoming stock levels:

• There is not a lot of new stock on offer in Port Phillip due to Grand Prix interruptions. With Easter approaching it is lean times for new offerings.

• Stock in Stonnington is now starting to dry up as Easter interrupts the market. With the vibe dropping since Labour Day we may well see limited stock in the discretionary upper end market coming on post Easter.  19 Huntingfield Toorak (Justin Long) was a classic example of a limited offering that captured the market’s attention. Even allowing for building value at $2,000,000 (and that is generous) that meant that land value with a north orientation was  around $5,000 per sq metre – not exactly a giveaway price, and certainly higher than 2010.

• Peter Kennett, Hocking Stuart, Brighton, believes the window of opportunities and fair choice in Bayside won’t last long. “Currently the best opportunities for buyers are at the top end.  There are great negotiation opportunities at the top end. (But) school holidays and winter coming means less stock available for buyers… “

• In Boroondara there has been tremendous change within the business of real estate. The May and Winter markets will all be determined by stock levels – the size of the overhang, how it’s mopped up and whether or not we will see nervous vendors putting their quality stock up for sale post Easter. For buyers, now may simply be a window and not a trend.

Runaway of the Year to date:
208 Drummond Street Carlton: James Keenan of Nelson Alexander: Terrace home, quality and around 255sqm.  This was quoted and on the market at around $1.5million and two bidders fought it out until, wait for it, around $2.5 million (undisclosed final price). WOW!

$3M+ Market:
STOP PRESS: March, while not huge in numbers, did finish the month with three solid mid-week $3M+ buys – including four bidders at $7 million or better at two auctions.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8 millions
• 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.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,000,000.

A sea of umbrellas and a solid result for Justin Long (Marshall White) SOUTH YARRA, 66 Hawksburn: Under the hammer, $2,440,000, 5 bidders

Biggest Sale: $7,060,000: 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 he added Huntingfield proved that.

Bidderbuzz Auction: 66 Hawksburn Rd, South Yarra, Justin Long (Marshall White); under the hammer, $2,440,000, 5 bidders
“Despite the abysmal weather, a crowd of no less than 90 people attended this South Yarra auction. Auctioneer Justin Long did his best to entice an opening bid from the crowd, but to no avail, and instead decided to make a vendor bid of $1,800,000 to break the silence. Mr Long did not have to wait long for his first legitimate bid from the crowd, which came within moments of his vendor bid. Four other bids soon joined in the mix pushing the price past $2,000,000, then $2,100,000, and finally slowing at $2,400,000. Sensing the conclusion of the auction, Mr Long cannily attempted to extract one or two last bids from the interested parties. The home was eventually bought under hammer for $2,440,000 and applause were heard for the winning party.” (Daniel Ehrenreich)

Biggest Pass In we covered: 79a Harcourt St, Hawthorn East, Mark Dayman (Marshall White); passed in $3,300,000; no bidders
“No shoes were allowed in this property, which happens from time to time. What I wasn’t prepared for were the sixty pairs of shoes that made it difficult to access the front door! The attending crowd of over 130 surely gave auctioneer Mark Dayman some confidence that there might be a genuine buyer amongst the group.  With a succinct preamble it was now up to the crowd to play their part, however the silence led to a vendor bid of $3,300,000 . Still nothing and half time was called. After the quickest half time I have ever experienced, Mr Dayman didn’t mess around and the property was passed in.  Negotiations were commenced with interested parties.” (Guy Angwin)

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

Auction Video: Klarity Kris reports from leafy Malvern on the Jeremy Fox (RT Edgar) auction at 4 Beamsley. Click on the live action.

Buyer Masterclass: What should you look for when buying a home when there are kids in the picture? Klarity Kris discusses this scenario in this week’s Buyer Masterclass.

We Only Buy Homes

Do you know where all the bidders have gone? Sorry Nathan no! GLEN IRIS, 1/292 Tooronga Rd passes for $975,000 in front of a small crowd.

KEW, 4 Madden Grove: Peter Batrouney and his Jellis Craig team head outside to face the music after the half time break. Bought Afterwards for an undisclosed amount,1 bidder.

Key Points

• Big Numbers at almost all auctions – a crowd of 300 reported at 15 Stephens St Balwyn North
• Agents are concerned about the market – definitely not upbeat as a whole
• Lots of new stock on the market this week – Pre Easter has the potential to be a whole new market to this early season one
• The Balwyn/Nth Balwyn formula – new home on small block for over $3m – may be in trouble with two more homes, Hosken and Stephen, failing to sell. Creswick from last week is still available. Is it lack of buyers or the prices have just gone past market reality? We feel it’s the latter.

The first of the $3m sales for Boroondara are starting to happen:

• Hawthorn 46 Illawarra – Mark Dayman – Bought Before – $4,250,000
• Hawthorn 45 Mason – Scott Patterson – 4 bidders – Under  the Hammer over $3,100,000
• Kew 4 Madden – Peter Batrouney – Bought After – 1 bidder – $3,050,000
• Plus on Tuesday there was a sold sticker at 31 Canterbury Camberwell – James Tostevin for last Saturdays passed in auction – over $4,000,000

St Kilda 35 Vale St: Today with the rain, it's indoors, up close and personal. Matthew Young of Buxton firing up two bidders on the way to a bought price of $1,192,000.

At 6pm Saturday the James Million-Dollar-Plus Clearance Rate on the 35 auctions we attended was 51%. Our Demand Indicator, Bidderman, was up at 1.7 – still hanging in there.

PRICE CORRECTION
There is no doubt the market has eased, “corrected” – call it what you like. One easy word to understand  is “dropped”. On a few properties it has dropped by 10% since Anzac Day.  Some homes – mostly the higher quality ones – haven’t missed a beat. But for the majority, what seems to have occurred are minor falls – although that’s hard to prove specifically.

The statements from the selling agents seem to be leaning strongly towards a “supply based correction”. At this stage we agree. If we keep seeing large amounts of stock come onto the market in June then it’s logical that prices will continue to fall, until some balance returns.

SUMMARY CLEARANCE RATES
Overall the clearance rate was 50% for 124 auctions we monitored in Port Phillip, Boroondara, Bayside and Stonnington. That’s in line with our James Million-Dollar-Plus Clearance rates – confirming it again as an accurate measure of Million-Dollar-Plus Melbourne.

• Bayside – 35 monitored – 14 bought – 40% clearance rate (last week 46%)
• Boroondara – 46 monitored – 24 bought – 52% clearance rate (last week 70% )
• Glen Eira – 9 monitored – 5 bought –  55% clearance rate (last week 55%)
• Port Phillip – 11 monitored – 6 bought – 54% clearance rate (last week 32%)
• Stonnington – 23 monitored – 15 bought – 65% clearance rate (last week 69%)

Highlights

• While 8% were not reported, indicating a reasonably high degree of accuracy for clearance rates, the numbers of unreporteds are increasing.
• Stonnington sellers seem to have made the price adjustments that some Boroondara owners (“wannabe” sellers) have not.
• Some ripper auctions included 50 Hawthorn Grove Hawthorn (Paul Keane of Jellis Craig), 23 Ferncroft Ave Malvern East and 2 Carmyle Avenue Toorak, both with Jeremy Fox of RT Edgar. These auctions saw four or five genuine bidders (well above the 1.7 Bidderman average)
• Selling in Million-Dollar-Plus Melbourne seemed a coin toss – you had as high a chance of your property passing in, as selling on the day – the first time since 2008.

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 there.

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.

UNREPORTEDS
Practically all last week’s unreporteds were still for sale on Friday – suggesting that the REIV view that 50% of unreporteds are in fact sold does not seems to apply to the Million-Dollar-Plus  market.

ARE METHODS OF SALE CHANGING?
Perhaps in Bayside but not yet in other areas. Look at the latest 50 homes advertised for sale on the website www.realestateview.com.au

THE SEARCH & NEGOTIATE GAME HAS CHANGED
We feel there are at least four things all buyers should be considering:

1. Most importantly – home buying is still about best meeting your needs and taking a 5-10 year longer term view
2. You need to sharpen your methods on checking all homes – especially pass- ins
3. You need to monitor stales (old unsold homes)
4. You need to reconsider offer techniques

Let’s look at point 4 in more detail:

RECONSIDER OFFER TECHNIQUES
Let’s look at a real life example in detail: one particular property we bought today was 27 Eddys Grove, Bentleigh with Chris Hassall from Buxton. It had a quote range of $975,000 to $1,050,000. We thank our client for his permission to publish these exact figures.

From the top:

1. On pre-auction Friday we were told the property was on the market at $1,150,000 and that it would be sold that day (Friday).
2. We checked the website on Friday and saw that it still had a quote of $975,000 to $1,050,000. We asked: Would we buy it if we paid $1,150,000? We were told that we could if no better bid came in.
3. We hadn’t made a bid – so we were trying to work out how it was on the market at $1,150,000.  

First Offer Technique considerations (pre auction). What would have happened if you had bid then based on that information?

Anyway it didn’t sell, and come auction day the quote on the website and in the paper remained at $975,000 to $1,050,000. At the auction there was an opening bid of $1,000,000. Another bidder joined in and so did we – making a bid for $1,040,000. From $1,100,000 onwards we asked auctioneer Craig Williamson if the property was on the market. We were told “No” – despite the fact that each time we asked we were $50,000, $60,000 and then $70,000 above the top end of the quote. (Please note we make no claim this is out of the ordinary or an illegal practice as the REIV and CAV state this behavior is fair enough).

Second Offer Technique considerations (during auction). What happens if you had not bid, bid differently, or put in a killer bid?

Eventually the property was passed in to us at $1,120,000. We stood there in the sprinkling rain for five minutes before a Buxton salesperson came to us – they were too busy talking to the underbidders and other interested parties. My client, through us, was the last person Buxton spoke to. We are sure there is a perfectly acceptable explanation for this curious behavior. But versions of this happen at many auctions.

(Let’s point out at this point that we have good relations with Buxton Brighton and less than a fortnight ago we bought another $1m+ home through the Bentleigh office and were treated well by Ivan Blow and Craig Williamson.)

This story is not about Buxton or Chris Hassall (whom we think is a solid agent) – after all they got a good price and did nothing that many on the selling side considers untoward.  No – this story is about whether you as buyers have the right offer technique and strategies to best manage your options in this changing market. It shows the importance of good offer technique pre-auction, during the auction and post auction.

Back to 27 Eddys Grove: we were eventually given the reserve of $1,150,000 – with the additional strong advice that if we did not take it, then the underbidders would immediately be given a chance to submit their offers, and that the highest offer would win. While that would have been intimidating to the uninitiated, for us it was no problem. Technically we were being given first right of refusal.

After consulting with our client, we accepted. We felt the reserve was reasonable, we felt we needed to separate ourselves from the other bidders and our client really wanted this beautiful home. It was not a time for bravado but a time for cool heads, was our recommendation.

Third Offer Technique considerations (post auction). What happens if you decline or the stated reserve is a lot higher?

The case of Eddys Grove, like many others, begs the question of why the agent wouldn’t just quote the home at the fair reserve level of $1,150,000? That’s another story and a never ending battle with many agents. But we digress – our focus is Buyer Strategy and Offer Technique.

During any auction campaign you have three very distinct offer times: Pre, During and Post. As the going gets a little tougher for sellers so it will for buyers. So, as the stakes get higher, you will need to sharpen your offer technique before you count your chickens.

OFFER TECHNIQUE – THE CLAYTONS RESERVE  (The false reserve)

1)      What happens if you don’t know how to play the pre and post auction games? Do you join in and just keep bidding against yourself in this market; given you are possibly the only bidder – or do you miss out if there really is another bidder?

2)      What is there to stop the auctioneer at a pass-in telling you the reserve is $400,000 above the quote or their real reserve - and that if you don’t pay it they will offer it to the others? What can you do to defend yourself against a Clayton’s Reserve when you are the highest bidder playing by the stated rules? What strategies do you have?

3)      If, as a buyer you are offered a property with a Clayton’s Reserve and you refuse – does that mean the auctioneer can offer the property at a different reserve to somebody else? Or do the others have to be given the same Clayton’s reserve?  Do they come back to you? How do you as the highest bidder manage this?

For now, in the interests of our clients and to discourage this illegal behavior (The Clayton’s Reserve), in cases where we have won the right to hear the reserve and we consider we have been given a Clayton’s Reserve we will now publish (if we get our client’s permission) the agent’s name and the Clayton’s reserve given to us, We will also send a note of complaint to the REIV and ACCC. If any of our behaviour is as inappropriate as the Clayton’s Reserve, then by all means return our return serve back to any of our advocates.

We have a good many excellent selling agent relationships. They are important to us personally and professionally. We are shown many courtesies and keep many confidences (as we should and will continue to do so). However we are giving fair warning to selling agents, who, by way of example, quote $2 million and then tell us, when we have won the highest bidder right at auction, that the reserve is $2.4 million.

Agents, we would much prefer to deal fairly with you. Why abuse the auction system? If you want to do that why not use Expressions of Interest or some other method of sale?

Our offer technique management, in this instance, is to return the serve right back at you as hard as we can. We will still negotiate, but our relationship on the home in question will continue beyond the buyers and sellers signatures. If you think we are bluffing a Clayton’s Reserve from you will find us both out.

Apologies if this seems a tad emotive or self serving but the Clayton Reserves are continuing and we represent buyers and think these kinds of “Reserves” are legally and morally wrong. Simple as that.

Let’s move on.

Congratulations to Andrew McCann of Bennison Mackinnon on 115 Stanhope Grove Malvern, whose company to our knowledge is still the only publicly declared Melbourne based real estate company with reserves in their quote range. We videoed their auction today – it should be up tomorrow. Their quote was $2,100,000 to $2,300,000. The property passed in at $2,150,000 and with some negotiations was bought post auction for $2,255,000 by the buyer it passed into. That seems solid agent work. Fair buyer quoting; stated reserves.

Now let’s really move on – did you hear the joke about the leprechaun …

Buy Happy

Mal

PS  No Market News next week as its Queens Birthday Weekend and Council Wraps up tomorrow (Sunday)

Toorak 2 Carmyle: Looking like an almost drowned rat - Jeremy Fox from RT Edgar firing 3 bidders up with his banter and a smile. Bought under the hammer for $3,375,000.

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

Bidders were a bit cold, a bit wet and not in the buying mood at 15 Kirkwood Sandringham. Passed In. One bidder. (Nick Johnstone, JP Dixon)

A bit of gloom maybe an understatement.  We covered 10 properties auctioned in Bayside today over $1,000,000 and saw a clearance rate of  zer0!  That’s right, nothing was bought under the hammer today.   6 bidders in total, and Park Road, Sandringham had two of them.   That’s Bidderman at 0.6. 

Properties to pass in today on vendor bids  included 3 Wellington , Brighton at $4,000,000, 5 Avondale, Hampton at $1,650,000, 66 Littlewood, Hampton at $1,220,000, 42 Holyrood, Hampton at $1,820,000, 15 Kirkwood, Sandringham at $2,400,000. (See live video of this auction on the  Market News home page).

Some of the bought properties include 28 Keats Street, Sandringham which Jenny Dwyer and auctioneer, Stephen Tickell, at Hocking Stuart bought post auction for  $100,000 above the pass-in price, for $1,650,000.   326 Beach Road, Black Rock (Mark Earle, Buxtons) was bought today for $2,450,000 and 5 Rippon Grove, Brighton which Justin Follett of Kay & Burton sold mid-week  around $3,500,000 after initially passing in at auction.

Speaking with Gail Pullen of Kay & Burton today, she thought the number of buyers around for this time of year was exceptional, but so were the number of properties currently for sale – perhaps evenly matched, and although properties may not be selling at auction, transactions were still happening.  This supports our view that alternative methods of sale in the $2,000,000 plus market will continue to increase over the next few months.

Leigh Hallamore of Buxtons still believes that the auction system brings price to a head and that vendors should consider the price at the time of auction as it may not be present when they come to the realisation that they should have taken it on the day.  He added that vendors need to recalibrate on price to comfortable levels and that some current prices are in no-man’s land whilst the market is in transition.

Clearance Rates Bayside – 35 monitored – 14 bought – 40% (last week 46%)

Expressions of Interest
Kay and Burton are the masters of this form of selling and with the current market and clearance rates it is as expected coming back into vogue. Four interesting homes that Mal has been through recently and rated highly are

• 9 Martin St Brighton (Gail Pullen and Ian Jackson) north facing golden mile land with an art deco maybe.
• 3/9 Glyndon Brighton (Alex Schiavo and Stewart Lopez) – golden mile apartment in the traditional style
• 2a Seacombe Grove (Sturt Hinton) – left field golden mile townhouse  worth a look
• 31 Martin St Brighton (Sturt Hinton and Stewart Lopez) – really good home in that Elwoody North Brighton, Beachy precinct.

Miriam Carraro of Hodges and one of Brighton’s quiet achievers says this about EOI’s. There is an increase in EOI as it suits vendors who would like to sell privately but wish to have an end date to the process (which auctions give you): the vendors selling through EOI can get the best of both worlds using this method. 

If as a buyer, you would like to know more about how to work your way through the EOI method of sale, please give us a ring.

Happy Wife Happy Life

Indoor Auctions were the order of the day. Stephen Tickell and Jenny Dwyer pass in and sell after for $1,650,000. 1 bidder.

Camberwell 26 Alma Road: Bought $1,615,000. Bang! 5 bidders. Richard Jellis. Good to see the 'ol tiger back prowling around.

In contrast to last week, we saw all 9 properties we covered over $1,000,000 today, sell.   Three sold before auction, 3 sold under the hammer and 3 were bought after.  That’s a 100% clearance rate and Bidderman was back up to two.

Five of the nine properties had two or more bidders.  Richard Jellis of Jellis Craig had 5 bidders at 26 Alma Road Camberwell.  3 Bristol Street Surrey Hills (Antony Woodley Marshall White) also had good bidding strength, with three bidders taking the price to tick over $2,000,000.  Steve Burke of Jellis Craig sold  71 Broadway in Camberwell with a strong result just over $3,700,000.  Sure it needed a bit of work, but had very good land content.  12 Lorne Grove  Camberwell (Peter Batrouney and Campbell Ward) next weekend will be interesting.

24 Kingsley Camberwell with Jellis Craig’s  Richard Winneke passed in for  $2,100,000 but sold afterwards for $2,150,000 (resold from late last year when purchased for $2,000,000)..

27 Harcourt Hawthorn East with Rob and Tim Fletcher of Fletchers was bought for $2,300,000 after passing in at $2,125,000.  Both were good blocks about the same land size (700-800 sqm) with a home that needed some work but was livable .  Tim went onto say he thought this market pause was all about the huge stock levels available and claimed his company had sold 13 from 14 today. He did state he felt the market dynamics had changed in 3 weeks.

40 Kinkora Road Hawthorn (Richard Earle Jellis Craig)  was bought after auction for $2,650,000.  This was  similar to number 28 which sold last week but needed work.   The price reflected this.

Marshall White & Jellis Craig both had a good weekend.  Marshall White’s Justin Long said they had 38 auctions and about 80% clearance rate, and Richard Jellis of Jellis Craig advised they had 48 auctions with around 80% as well.

Boroondara Auction Results – 46 monitored – 32 bought – 70% clearance rate

Design Smart

Surrey Hills: 3 Bristol Street: An auction of the year contender for Antony Woodley of Marshall White: 3 bidders and bought for $2,050,000.

We know what is happening in the market, but can you tell us why Scotty? Canterbury: 19 Margaret: Passed In. Scott Patterson Jellis Craig.

Its 6.00 pm Saturday and the James $Million+ Clearance Rate on the 36 auctions we attended was 64%.

Interestingly, 20 of the auctions initially passed in. Therefore we witnessed an under the hammer clearance rate of 41% – obviously a number were bought almost immediately afterwards.

Bidderman is up from 1.5 last week to 1.8 bidders per auction this week supporting the clearance rate improvement also interestingly in an environment of increased choice.

The market can’t be all that bad when Kay and Burton is just about to tell you they have sold 69 properties worth over $200 million in May. With a rival agent confirming that 3 of those Kay and Burton properties worth a combined $20 million have been bought in Hawthorn in the last few days. Shakespeare Grove, Scotch Hill and Grace Park (Sam Wilkinson and James Scarff). This is an amazing set of numbers when you look at Kay and Burton’s and other agents less than stellar Toorak “at auction” clearance rate in May.

So what is happening?

The market has changed and has eased on the Top End properties. No doubt.

So why has it happened?

Well we are less clear after today than we were last week. Is the easing just a normal ebb and flow caused by an increase in supply (record numbers of auctions) or is it something deeper and longer term such a weakening of demand caused by external influences. To be honest we can’t really tell.

Why do we need to know?

Is this temporary or the start of longer term buying opportunity like 2008?

While no selling agent has argued the toss with us re our market change headlines; many seem to genuinely believe the market is still pretty healthy. And those we respect acknowledge that while buyers mindsets have changed, they also add that this could be in part due to unseasonal and large amounts of quality stock on the market. In their words now maybe nothing more than a brief buying opportunity on the way to market normality.

There are two agency directors we really like at Market News – Scott Patterson of Jellis Craig and Mike Gibson of Kay and Burton. We like them because come rain or shine, doom or gloom they will take your call and give you an honest assessment – no party lines with them. Both state the market has changed since last month but both think there is still a certain underlying health to the market. Michael feels the poor auction results in South Yarra and Toorak will see the auction method questioned as the best way to market high end properties going forward and in fact feels the Expressions of Interest method is usurping the “best method” mantle as every day goes by. Scott says it’s too early to tell if this market has been severely effected by outside influences and feels that even if we see more pass ins that may simply be vendors not adjusting to life’s ebb and flow realities more than any sinister market undercurrents of long term demand reductions.

We think there is truth in the above comments and feel the current market is best summed up like this

1. Buyers you have significant opportunities – to say those opportunities will remain over the next few months is more a guess than a guarantee.
2. Auctions are not all-conquering as they were last month and as buyers you should rethink the blitzkrieg of fear approach and perhaps replace it with a more balanced one – and that includes before, during and post auction negotiations. You need to get ready for an increase in `Expressions of Interest’ and you will need different buying strategies.
3. Traditionally as the stock market implodes we see a strengthening in the property market – its called a flight to quality. So unless we see catastrophic stock collapses you may in fact at the $1m level see rising prices again quite soon – once supply drops and the overhang (which maybe less than we thought last week) is mopped up. You may of course not see price rises if in fact this current market mood worsens (lower demand rather than a more balanced supply being the real issue).
4. When I was twenty, property was a cyclical thing – and we talked in years, even decades. Now property is still in cycles but we are in a “ipodean” era; meaning weekly or monthly. Long term is …  is ….. is….. are two words seldom mentioned. So next month the market could be different again. The power of instant information.

In summary today was more market alive than last week – some numbers coming through from Kay and Burton are significant market positives when you add them to record months for Jellis Craig in May and record June sign ups ahead. But its not just Boroondara and Stonnington – talking with Ivan Blow of Buxton in Bentleigh mid week, they too have had an incredible month for auctions (record) as has many other firms.

The informed comment saying the jury is still out on a sustained downturn has credence, although no respected selling agent denies there has not been a strong market leveling in the last three weeks. For now runaway prices have runaway and good sales results now require a vendor at market and a sales method suited to the property before a buyer will consummate.

Many of today’s and the last two week’s results were partly set in stone by buyers’ perceptions pre this current market leveling – so it’s what happens in June and July that will either confirm or deny all the theories.

Stay Tuned!

Fight Back against the Clayton’s Reserve

Two weeks ago, we discussed the issue of Clayton’s Reserve – the reserve an agent states when they are not stating the real reserve. As promised, here are some suggestions for how to deal with this dubious practice. The crux of the problem is that sellers and selling agents are not playing by their rules – the rules they lay down at auction.

To refresh your memory, a Clayton’s Reserve is not a real reserve. It is a figure the auctioneer gives after a home has been passed in to you and is usually very different to what the true reserve was 15 minutes ago. The Clayton’s Reserve is an opportunistic grab for cash (in isolation, we would be cool with that) but, more importantly, it is an immoral, and possibly illegal, action as you, the buyer, have engaged in an auction in good faith. You have been the highest bidder and, according to the rules read out by the auctioneer at the start of the auction, you should be entitled to hear the genuine reserve so you can accept or refuse, as is your right.

Now we offer some FIGHT-BACK suggestions. (Please we are not advocating disrupting behaviour at auctions. We are totally against poor buyer behaviour, agent abuse etc. It’s no good for you if you lose it. Don’t get mad – get even. Think Gandhi and all that sort of stuff. You need to keep your cool as buyers, but don’t just stand there like a rabbit in a headlight or a stunned mullet.)

1. Perhaps don’t bid yourself

Perhaps don’t bid yourself or don’t stand with your buying agent as it only identifies who you are and, if you’re not successful, then watch at your next auction how it miraculously passes in to you or your agent and the reserve is miraculously at or above your previous unsuccessful bid.

A selling agent’s job is to know your “hurt level” but you don’t need to help them in that job. We buy many different properties each month and it is our policy not to reveal to agents who we are working for (where we can avoid this). This is not to be difficult or to treat agents with a lack of respect; it is to reduce a selling agent having certainty.

Buyers who think that they can better negotiate from a position on an emotional buy, such as a family home, at $2.8 million when the agent is aware that you have previously bid $3.3 million just do not understand how real estate works, especially when you are up against professional high-quality selling agents.

It’s just a help – the agent not knowing is not a cure-all.

2. Ask if the property is on the market

All buyers should be asking at ALL times when you are above the quote range or at a fair level: “Is it on the market, Mr Auctioneer?” You need to keep asking that question if you want to minimise a chance of a Clayton’s pass-in to you. Please don’t be put off by the auctioneer saying “I will tell you” and implying that you are being a smart alec. When the reserve is not declared pre-auction, it’s a perfectly reasonable question to ask. Keep asking it. Don’t be put off. Of course, in some cases, it won’t work, especially with a ridiculous reserve, or a rude or unreasonable auctioneer, but it can reduce the number of Clayton’s pass-ins. It is your right to ask a sensible question during the auction.

DO IT AND CONTINUE TO DO IT (when it is fair and reasonable to do so). Buyers and fellow bidders should be supporting other bidders and buyers who are asking this reasonable question. Sure, the other buyer is a competitor, but when it’s not on the market you have another competitor – the Clayton’s Reserve. Think of it as a Masterchef Challenge – you need to avoid the elimination or pressure test by working together. Then, when it’s on the market, you can fairly and openly compete against each other.

It’s just a help – asking the on the market question is not a cure-all.

3. Negotiate in an open forum rather than behind closed doors

Why not do as we do during an auction: ask that if I bid “such and such”, will it be on the market? You need to really know what you are doing here, but it is also a fair question. If you choose this option, then you need to be knowledgeable in your values, experienced in your auction timing and, if you are ethical, be prepared to bid that amount if the auctioneer says “yes”.

It’s just a help -  not a cure-all.

4. Back up and lower your bids after a pass-in.

What you can do is bid backwards after the pass-in. Please read this with caution as, in certain circumstances, it’s disastrous and you will lose the property. But it can refocus an unrealistic vendor. For instance, if you are buying an investment property and you are prepared to take some risks, we advocate that you can sometimes bid backwards at pass-ins. For example: a property is passed in at $2.2 million. The agent gives you a Clayton’s Reserve of $2.7 million. Our next offer may BACK UP from $2.2 million to $2.175 million. Caution: this strategy can be a disaster if you think you know what you are doing but you actually don’t. Talk to us, or your professional buyer agent, about the risks versus rewards before doing it. But it can work in the right circumstances. And it is ethical, fair and reasonable. Be ready for the auctioneer to either give some agro, express some dismay, or claim you are not playing by the rules – we almost choke when this line comes out. We’ve entered into an auction on behalf of our client, bid sensibly, had it passed into us, the agent has simply made up some figure and not given us the true reserve and he claims we are not playing by the rules. When an agent is acting unethically, don’t just sit there and get walked all over.

It’s just a help – backing up is not a cure-all and please this is a high risk strategy (meaning lose deal) in the hands of the inexperienced.

Please respect a decent and ethical agent involved in fair dealings. If it’s a good home, you do have to pay for it, and possibly even pay a slight premium, even in this changing market. These comments above are not about fair dealings; these suggestions are for unfair dealers and dealings. Don’t be naive. If they’re playing hard or stupid or unethically, you need to return serve and then some – but also please remember this is theory and, in practice, you may be best advised to get some assistance, rather than get involved in a higher risk strategy such as backing up.

There are many more Clayton’s or dual reserve management techniques but this is not the place to discuss them and it would be a lot better if the practice was outlawed. It’s better to have fixed reserves stated on auction day. This gives time for market movements during a campaign, which are fair to the seller, and the buyers know what they need to do at auction to buy the home.

Selling agents, many of whom we respect and admire, we truly hope you can see your way clear and agree to something like a stated reserve at the start of the auction (no, not during the campaign) before legislation comes to pass that may be far more onerous and detrimental to your clients (eg fixed reserve from start of campaign) and may even limit the beautiful auction system we could have.

As we said, Melbourne Storm and Carlton are great teams and involved in great games, but they felt a need to play outside the rules, thus not only damaging themselves but the game they loved to play. We had dummy bidding now we have dummy reserves – not good enough!

Buy happy

Mal

Michael it's easing now, but is this a short or long term phenomenon and why? Toorak: 216 Kooyong: Passed In $2,310,000: 1 bidder: Mike Gibson, Kay and Burton.

Hawthorn: 14 Lyndhurst Crescent: Bought $1,511,000. Bidderman 3. Peter Batrouney and Campbell Ward. Big crowds throughout Boroondara today - seemed the strongest area over $1million.

Strong day in Boroondara today for good properties, with many homes selling under the hammer and selling strongly. However not all auction results have been reported.

Some of the auctions that we attended -

8 Moorhouse Street Camberwell (Heather Elder, Marshall White). Sold for $1,997,000 – 4 bidders

14 Lyndhurst Crescent Hawthorn (Peter Batrouney, Jellis Craig). Sold for $1,511,000 – 3 bidders

Common to all of the properties today was their intrinsic quality. As James Tostevin remarked last week, if it isn’t a good property and the vendor’s expectations are not in line with market thoughts, then the property will struggle to sell (that is not rocket science except it hasn’t been that way since November 2009).  One property that really did surprise was  7 Carlyle Street Hawthorn East. This passed in without a bid and sold afterwards for $1,546,000. Great result here for Robert Ding of Jellis Craig.  This was a basic 60′s house with multi-level flats to the rear – next door was an older  period home (which needed work)  yet did not have the same privacy issues and sold for about the same money only a  few weeks ago through a different agency.

I guess the big observation is all about the properties that did not sell at a Saturday auction this week, because they were bought in the week before.

• 28 Coleridge Street Kew (Hamish Tostevin/James Tostevin, Marshall White),
• 14 Royal Crescent Camberwell (Peter Batrouney / Campbell Ward, Jellis Craig),
• 94 Argyle Road Kew (Stuart Evans / James Tostevin),
• 18 Callantina Road Hawthorn (Joanna Nairn / James Tostevin, Marshall White),
• and a quiet off-market property in Raheen Drive Kew (Scott Patterson, Jellis Craig).

All of these were solid properties and sold strongly for around the $3m mark. Obviously by this number the market (for quality homes) at this level remains strong.

Talking to Alastair Craig from Jellis Craig he believed that the clearance rate was around 85% for properties which his agency auctioned today – a big improvement on last week (around 70%).  Perhaps last week was just a blip – just like it was last year for the week after the Melbourne Cup weekend. Time will tell.

Couple of land values for the stats guys. Havelock Road Hawthorn East (Campbell Ward Jellis Craig) around $2000 sqm. Rubens Grove Canterbury (Tom Ryan of Jellis Craig) $2200 per sqm.

Following up a couple of recent pass-ins in that little fringe pocket of Hawthorn – near the river – south of the tram depot. 24 Elm St (Antony Woodley Marshall White) was bought for we believe a tad under $2 million and 21 Oak remains on the market.

Big  numbers for scheduled auctions for most Boroondara agencies next week – and there is fair bit else happening, namely the Grand Prix and the first round of AFL footy – lets see how the market performs  and next week go Doggies. (and Pies)

Design Smart

Canterbury: 28 Victoria Avenue: Passed In $4,025,000 - Bidderman 1. Gerald Delany works a huge crowd for minimal response. Many of his fellow auctioneers experienced the same throughout Boroondara today.

Interesting day in Boroondara today, with a few properties flying out the door with 5 or more bidders and also a number passing in quietly without much crowd interest. Scott Patterson from Jellis Craig thought the market was patchy – yet probably understandable. Scott thought the company’s clearance rate probably dropped back to around 70% today. This was in line with other agencies in Boroondara, we would say.

Of the 25 reported auction results 11 were still reported unsold at 6.00 pm or an on the day clearance rate of 56%. Having said that Glen Iris was still rock solid with 5 from 6 selling at auction and the only miss was a main road property.

A few of the properties that flew -

10 Dookuna Avenue in Camberwell (Mark Fletcher, Fletchers) – 669 m2 – here the house had little or no value (could not even inspect it) and therefore land is worth $1880/m2 in this precinct – 5 bidders.

72 Walpole Street in Kew (Richard Winneke, Jellis Craig) – single level small house  – figure believed to be over $1.7m – 5 bidders.

But there were more that did not fly – 28 Victoria Ave Canterbury, 8 Stanhope Grove Camberwell, 20 Mowbray Street Hawthorn East and 24 Elm Street Hawthorn.

Talking to few agents today and a similar message of the market easing (even just a fraction) kept coming back. Geoff Hall from the Camberwell Noel Jones office  believes that over the last ten days or so a lot of buyers were getting a little concerned with the heat in the market and simply opting out of the process (at least for a short while). James Tostevin (Marshall White, Hawthorn) believes that there are signs that the edge of the market is coming off and expectations of many vendors were too high to meet – unless the property was a good one (ie well positioned and /or having a functional house).  Paul Williamson (Jellis Craig, Glen Iris)  agrees with this also – particularly for properties on busy roads.

With so many auctions on March 27 (around 150 in the next two weeks over $1m – what stock shortage), it could be a good time to buy as there is just so much to choose from and obviously people cannot be in more than one place at once. This was suggested by Tim Picken from Jellis Craig. We would agree here. It certainly will be a very important time to be on the ball and understand property value. Of course a good buying strategy (or two or three or four) will be handy also. Just going back on that point 150 auctions – that is 3 times what is on offer in Bayside over the next fortnight.

In closing for a bit of real WOW go and check out 10  Barton Street Hawthorn. This is listed by Maurice Di Marzio of Jellis Craig and is scheduled to auction at 11am on March 27. Very clever rear extension here and the way the property literally opens up onto Mason Street Reserve is impressive.

Design Smart.

Canterbury, 19 Rubens: Would you believe it? Missed by that much. Actually Richard James of Jellis Craig does not miss all that often. Four bidders. Bought for $3.301 million. Good result for agent Daniel Bradd as well.

It is 6pm Saturday and the James Auction Clearance Rate on the 32 $1m+ properties we attended and reported on today was 72 per cent.

The REIV’s clearance rate was declared at 82 per cent but they are missing around 200 auction results and our guess is the clearance rate has dropped below 80 per cent for the first time in a long time.

But, hey, there were 1000 auctions – it’s the Grand Final, the Melbourne Cup and the Masters of 2009 all rolled into one for selling agents. This is it – the big one; and things went pretty well for sellers and not so good for buyers who didn’t buy and were hoping for a little sign of decline.

What’s Hot x 2

• Family Homes in Boroondara and Stonnington in $1m to $3m range.
• 166 Mont Albert Road Canterbury - seven bidders – $4.01 million.
  James Auction Report: James Tostevin started slowly, taking a $2.95 million opening bid in front of a big crowd of around 80, all nicely spaced out around the tennis court. Seven bidders later, in what seemed like an eternity on the last few bids, saw the hammer come down a bit gingerly at $10,000 over $4 million.
• 20 Callantina Road Hawthorn- five bidders – $6.125 million.
  James Auction Report: About 130 people saw this auction open with a genuine bid of $4.9 million. There were five bidders and the property was on the market at $5.65 million. The eventual buyer was a determined bidder who stayed strong throughout the auction process and bought the property for $6.125 million.

What’s Not Hot

• This weekend: surprisingly, Malvern East’s Gasgoine Estate was dead as a doornail today, with three pass-ins from three homes (0 per cent clearance); as was Toorak, with only one from five selling, or 20 per cent clearance rate, but everywhere else in Stonnington was very strong.
• Bayside was definitely weaker than Stonnington or Boroondara. In Bayside, six out of 11 $1 million-plus auctions we attended sold, or 54 per cent clearance rate. In Stonnington and Boroondara, it was 16 out of 20, or 80 per cent for $1 million-plus homes.
• There are still some cheaper homes in Bayside. Hampton is cheap compared to Kew and Hawthorn.
• PPP (Price, Property, Position) ADVICE from our AUCTION REPORTERS
  If you hate the beach, love traffic and have got plenty of money, stay looking for your double-fronteds in Armadale and Hawthorn. The only trouble is the coffee shops are full in between open times with fellow depressed non-buyers; oh and Maserati dealers looking for selling agents (that was unfair). No, no, no, young men go south and take your woman with you – show her a good time at the Brown Cow at Hampton and, while you are gazing into her eyes nodding that, yes, you really do get “Happy Wife – Happy Life”, drift off into the clouds and dream about your mortgage lender’s expression when he realises you’re not going near your borrowing limit to buy your dream home.

De Ja Vu – Not Really – 2008 and 2009

19 Chatsworth Avenue Brighton auctioned pre-Melbourne Cup Weekend 2008 and then again today.

James Auction Report 2008: “Energetic comments from Leigh Hallimore didn’t draw any bids, despite his offer to take any bids prior to his opening and closing vendor bids.” Quote was $3,2 million. Sold sometime later for around $2.5 million.
James Auction Report 2009: Two bidders joined in on top of the opening vendor bid of $2.6 million from Jason Gill of Hodges. Passed in at $2.89 million and sold after at $2.95 million. Almost a $500,000 improvement on when it sold late last year.

As this is the big one for 2009, we have focused this edition on results, results, results. What is really happening out there in the trenches? From that, you should be able to work out what will happen in the run-up to Christmas. Here are our auction reporter summaries and these are their stories.

Gina – Bayside (attended auctions in Prahran, Albert Park and South Melbourne)

• Very quiet and quite flat atmosphere at auctions.
• None of these auctions sold and there were few bids (one bidder made one bid at Prahran, none at Albert Park and one bidder made one bid at South Melbourne).
• Most of the crowd at all three auctions seemed to be neighbours – most came on foot and didn’t hang around to see auction results.
• No Chinese bidders at any of these auctions.

Annette (four auctions – Hawthorn, Malvern, Malvern and St Kilda West)

• Good crowds – 70, 80, 100, 130.
• Good numbers of bidders – 6, 5, 5 (but just one bidder and one bid at St Kilda West).
• One Asian bidder at Claremont (but wasn’t the buyer). Largest presence of Asian people at these auctions was at Callantina but they were not involved in the bidding.
• Crowd at Park St, St Kilda West was a “younger crowd” but it also had least atmosphere – quite sombre, people were keeping hands in pockets.
• Crowd chatty and strong bidding and crowd interest at Claremont and Stanhope. Also big crowd interest at Callantina but it did sell for $6 million.

Jenny (two auctions – Beaumaris and Sandringham)

• Mixed atmosphere and results. Beaumaris had a chatty crowd but no bids. Lovely setting – held around the pool, people in crowd commented that they thought sunny weather and lovely setting would put people in the mood but it didn’t appear to. Passed in on the vendor bid.
• Sandringham – first time this house had been offered in 50 years, so generated a lot of interest. Crowd seemed buzzy and genuinely happy when family bought the house. Two bidders.

David (Bayside – Brighton and Hampton)

• Five auctions, plus one sold before.
• Four passed in.
• Small crowds.
• Flat overall.

Julia (five auctions – Hawthorn East x 2, Canterbury, Malvern East, Malvern)

• Big crowds – 125, 60, 100+, 130, 200.
• Not huge numbers of bidders - one at Victoria Rd, four at Rubens Grove, three at Finch St, none at Central Park Rd and one at Deanlea Court.
• Of the four bidders at Rubens Grove, two were Asian and they were the final two bidders after the other two dropped out. The bidding got quite aggressive between these two and one bidder (who was eventual buyer) was very keen to buy it.
• With the other auctions, all felt buzzy at the start and like they would build into something big but then never did. There were four pass-ins and only Rubens Grove sold under the hammer.

Adam (three auctions – Balwyn North x 2, Hawthorn)

• Big crowds – 80 at each.
• Bidders – not many but they were quick-fire auctions. There were probably more bidders there than bid but they didn’t get a chance to get their hands up.
• Didn’t see any Asian bidders
• An anecdote: because it was such a big auction day today, all of the Marshall White crew and team working were supplied with bottles of water and snack packs to keep their energy up throughout the day.

Tom (two auctions – Toorak and Elsternwick – a tale of two cities)

• No real interest at Toorak but seven bidders at Elsternwick.
• Summary from Tom: “On Saturdays, I do auction reporting to get out in the fresh air and see the buzz of different parts of Melbourne, the people, the houses, the streets. I have always had an interest in houses and have a special interest in Californian Bungalows and 1930s Art Deco. Since March, the property market has been on fire with prices that defy my bookkeeper’s conservatism. The market seems to be back where it was in the last half of 2007 and I am surprised at how competitive it is at auctions these days. Well located family homes in the inner suburbs under $2 million is a very strong market – they never seem to go out of fashion.”

MORE ADVICE from our AUCTION REPORTERS
17 Regent St Elsternwick Renovator - great spot and great bones.
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2008025585
James Auction Report: In front of 80 people, an optimistic bid of $800,000 started this auction. Lots of bidding and lots of entertainment here – seven bidders and the property sold for $1.39 million. In Hawthorn, this would have pushed $1.8 to $1.9 million.

HISTORY LESSON – rewind one year to same pre-Melbourne Cup weekend 2008

James Market Insight, 25 October 2008:
At 5pm Saturday, just two of the 13 auctions we attended today have sold under the hammer, with another two or three expected to be sold overnight.

Here are three quality home auctions from 25 October 2008 – they would have all sold well today.

85 St Vincent Place Albert Park:
James Auction Report 25 Oct 2008: Biggest crowd I’ve seen this year to hear auctioneer Andrew Macmillan put on his first-rate routine: he starts quietly, forcing the crowd across the road to move to him, and he made some very humorous comments. So I, as usual, enjoyed the show, as did everybody else, except, at time of leaving, the owner. Class property, class auctioneer – no result yet.

28 Thanet St Malvern
James Auction Report 25 Oct 25th: “The opening bid from the crowd was well below the quote. Another bidder made one bid and then another offered a smaller increase, which wasn’t accepted. The property was passed in to the highest bidder – not sure this will sell unless there is major movement from either buyer or seller.”

1 Fairlie Court South Yarra
James Auction Report 25 Oct 2008: “Auctioneer Jeremy Fox started by saying this home was worth $5 million and then called out a $4.5 million opening vendor bid. There was no response from the crowd.”

Lots more detail below on each auction in our Market Wraps and NO MARKET NEWS NEXT WEEK on the Melbourne Cup Long Weekend. We return the week after for the run to Christmas.

Buy Well

Mal

Thank you for a huge effort today from many people:

A big thank you to all our auction reporters and auction and sale coordinators Melinda Brown and Simone Clarke – it is not easy dealing with grumpy advocates each week and getting a wide coverage of million-dollar-plus auctions up in a timely manner on a Saturday night. But you do it and do it well. Thank you.

Thank you also for the continuing support we receive from selling agents Marshall White, Benmac, Kay and Burton, RT Edgar, Hocking Stuart, Noel Jones, Biggin and Scott, JP Dixon, Jellis Craig to name a few. We published a strong article last week, which we 100 per cent stand by and we were challenged on a number of points during the week,. It was robust but polite discussion and no agent pressured us to stop writing opinion pieces and no agent stopped us reporting their results (good or bad) today. Thank you.

Elsternwick, 7 Seymour: Bill Stavrakis at his mercurial best. Bought $1.66 million.

Albert Park, 41 Cardigan Street: Geoff Cayzer entertains a big crowd. Bought for $2.7 million.

Approaching 80 per cent of the 18 reported auction results for Bayside this weekend – that is as strong as it has been all year.

25 Orchard Street Brighton - Trudy Biggin of Biggin and Scott

James Home Rating and Comments: 577 out of 1000. Land only, or is there some value in this home on this small Brighton north-facing block?

James Control Price: Dirt $1,125,000 + House $200,000 = $1,325,000.

James Auction Report: Three bidders from the crowd of 60 were interested in this property. Opening with a genuine bid of $850,000, this property was on the market at $1 million and quickly sold for $1.035 million.

James Post-Sale Examination: No value placed in the house – we were too strong. With three bidders, and on the market through a good agent, the market is saying the land was worth $2300 and the home nothing, or the home was worth a bit and the land at, say, $2000 per sq metre. I think land is getting stronger and stronger in Bayside and the market judged the home to be of minimal value.

50 Service St Hampton - Halli Moore of Buxton

James Home Rating and Comments: 760 out of 1000. Great Sandringham/Hampton timber home. Really good spot – light is still pretty good, even though south-facing rear and not the biggest back yard. Good flow and quality throughout. If they price this at market, it will have very solid interest. Ready to move in and has lots of WOW.

James Control Price: Dirt $1,133,900 + House $1,000,000 = $2,133,900.

James Auction Report: A large crowd of 100 people gathered here for this auction. It opened with a $1.9 million genuine bid and two bidders joined in but there was no result, with the property passed in at $2 million. Sold afterwards for $2.2 million.

James Post-Sale Examination: Spot on and this represents a 24 per cent increase since it last sold in early 2006. Is land in Service St Hampton approaching $1800 per sq metre? Yes, if the home value is put at $1 million. This still is a good result for agent Halli Moore of Buxton.

41 Cardigan Place Albert Park – Michael Szulc of Cayzer

James Home Rating and Comments: 665 out of 1000. She is a beautiful lady in need of a serious internal facelift – stairs and bathrooms. But stick with the old girl, as she is worth it – good rear light and car access and sensational location. It’s hard to overcapitalise and, if you can handle the stairs, then this is the place to buy to be near absolutely everything. Price-wise this will be interesting: is land worth $6000 a sqm in these parts and what does the market value this building at?

James Control Price: Dirt $2,172,000 + House $400,000 = $2,572,900. Terraces go in and out of popularity, so not sure there will be a host of bidders here on Saturday – not because there is a problem with this but because there are usually only one or two bidders. Let’s see what the market says. James Control Price: points of reference were 35 Vincent St on smaller land, 333 Montague St, 348 Montague St and 353 Montague St Albert Park.

James Auction Report: A crowd of 150 watched Geoff Cayzer kick this off with a vendor bid at the $2.2 million quote. With three bidders in the contest, two fought it out to a healthy $2.7 million result for this gracious old beauty (the house, not Geoff).

James Post-Sale Examination: Spot on for bidders and price. Good result for agent Michael Szulc – whom we think is a good agent and we like to talk to. So is land valued at $6000 per sq metre and the terrace home (which needed an update) around $900,000 or is the land valued at $7600 per sq metre and the home $400,000? This is where the market does seem to be consistent on like-with-like sales and you do have a number of homes with similar characteristics. When “valuing” yourself, it is important to consider these sales. As for land value in Albert Park – because of the small sizes, few vacant land sales and high prices – the only consistency in land prices here is their inconsistency.

Happy Wife Happy Life

There is definitely more housing stock coming onto the off-market part of the market; however:

1. it’s not across all geographical markets and dollar market levels; and

2. it’s not necessarily the home you must buy; ie the price and quality is mixed.

Specific off-market properties that we have heard about, driven by, or looked at this week include:

Camberwell $1.3 million
A drrive-by (took some pics) revealed this as a really nice mid-one-million ask. It has both Victorian and Edwardian characteristics in it). The land size is good and, if the floor plan matches (we haven’t been through it), then this is something that needs serious consideration. It’s in a really good part of Camberwell bounded by Stanhope, the railway line, Riversdale and Prospect Hill Roads

Canterbury $2.5 million
These are the agent’s comments, not ours: impressive Spanish Mission-style four bedroom, two bathroom brick family residence set on a magnificent allotment of 14,176 square feet (1317 SQM), presented in excellent condition, yet offering some scope to further enhance if desired. Highlighted by beautifully proportioned formal rooms, a beautiful established garden and a coveted position in one of Canterbury’s finest streets.

Flinders $5 million
Good views but some distance off. It has vineyards, a dam and a basic but presentable ’60s home. Have been through and indicative rating only.

Hawthorn $4.5 million
Drive-by only. It has big land and a lovely looking renovated Victorian. The townhouses next door let it down a bit, as does the road, but it has a north-facing rear and is in a great area. Indicative rating only.

Surrey Hills $1.8 million
Agent’s words: two-storey fully renovated Edwardian four/five bedroom residence featuring first-class presentation, superb family floor plan incorporating separate rumpus/theatre room and a stunning open plan kitchen/family/meals area of very generous proportions leading to a covered timber sun-deck (ideal for entertaining) and the established rear garden complete with in-ground pool. This house is in between Whitehorse Road and Mont Albert Road, so is close to transport etc.

Balwyn $2.3 million
Haven’t been through yet and this may well be sold before I do get through, as the agent is good, the price is market and the position is not a long way from Camberwell Grammar.

Kew $2.5 million
Period home that needs work. It’s in the Sackville Road area and has biggish land and a south-facing rear.

Brighton $10 million
This has sold a few times recently and may have already been resold again as we go to press.

Brighton $2m
Apartment in Church St prencinct – completed not off plan.

The upper end of the market has had some sales of note recently outside the auction system.

I was having a coffee with Ian Jackson of JP Dixon this week and he casually mentioned that, in the past six weeks, his company had sold more than $50 million worth of real estate. I didn’t feel he was boasting but just giving me a reference point that the ultra-top-end in Bayside has some legs. I was aware of a few sales - Leslie Grove around $8 million; two on the Esplanade  (78 and 142); 6 Mytton Grove under $4 million and 15 North Road last week at auction at $4.6 million - but the $50 million figure surprised me. Peter Bennison from JP Dixon Toorak mentioned the same figure to me in a separate conversation. Either they are well rehearsed or, as the buys above suggest, there is a fair amount of truth in what they’re saying.

We also asked Ian and Nic Johnstone if there was more off-market stock coming on in Bayside. Both answered that it was minimal. Both Ian and Nic stated that there are a few forced sellers who wanted to remain private, but not the dozens we continually read about in the newspapers and neither could give me an example of an off-market in Brighton’s Golden Mile. There is, of course, the Glyndon Avenue property that is being sold publicly.

Barb Gregory of Hocking Stuart Brighton stated there were a few off markets she was aware of coming up, but she had not completed a lot of off markets recently. Jenny Dwyer from Hocking Stuart Sandringham stated that she knew of little off-market activity around her.

There has been a bit of a run of off markets in Bayside recently.

Boroondara and Stonnington are showing a definite increase in market stock levels and John Bongiorno from Marshall White was saying things were looking better for auction stock in April compared to last week, this week and a bit of next week’s very lean times (stock-wise) for Marshall White. However this increased auction stock level seems to be focused under a million and around the $1 million to $2.5 million range.

Please note that all agencies, such as Jellis Craig, Kay and Burton, RT Edgar, Bennison Mackinnon and Hocking Stuart etc, have said that their stock levels are very low in this upper market.

Killing some time in a post auction negotiation today I asked Alastair Craig about his recent off market experiences and I felt he was genuine in his responses nominating around $10m in activity with a $4m sale off Burke Road and a $2m+ sale in Canterbury’s Golden Mile by Robert Ding to an overseas buyer sight unseen as his highlights.

$5 million-plus activity

When speaking with Peter Kudelka, director of Kay and Burton, and Jeremy Fox, principal of RT Edgar, both could point to isolated $5 million-plus buys in recent weeks but nothing of the quantity mentioned above in Bayside. “There are buyers at $5 million-plus but no stock.” From our business knowledge, we know this is true; for example, we have had consistent enquiry at this level; and there were three bidders on Maple Grove, which sold for more than $5 million, and so on.

Overall, the off-market and market above $5 million is quieter than 2007 but stronger than 2008.The would perhaps be more noise if there was more available stock as there does seem to be some buyer depth. Bayside proves that, when property comes onto the market that is well priced and is of good quality, it will be bought.

The Mornington Peninsula also proves this point. There was a very big buy recently, completely off-market and well north of $5 million for a block of land with a great view. If you have the home, the buyers, unlike 2008, seem to be there in 2009.

$2.5 million to $5 million activity

Auction results and private sales in the $2.5 million to $5 million range in all areas are proving that, to date, there is also buyer demand to keep the market stable. However, stock levels look like they are marginally increasing in this range and time will tell if price can be sustained. Please refer back to our comments in Market Insight following up last week’s easing from February of the $1 million-plus clearance rate.

We have a separate section for our off-market and quiet buying clients. Our clients do have the addresses of off-market properties made available to them and, in some cases, photos. So, if we can help you, please look at our off-market section at www.james.net.au and please contact James Buyer Advocates on 9804 3133 if you feel the way forward may be with a buyer agent helping you.

Good Hunting!