It’s 5pm Saturday and we are looking at a 47% clearance rate on the 19 $1 million-plus auctions we attended and reported on today. Following on from a seven-day clearance rate from last Saturday’s auctions of 64% with Nelson Road South Melbourne, Beaconsfield Parade Middle Park and Inverness Way Balwyn North selling post-last week’s auction, we feel we can say that March, to date, has shown a slight softening in buyer strength in the $1-$2 million dollar range. When we say slight, we mean slight, as buyer strength is still considerably higher than last year, owing to vendor price adjustments and improvements in buyer confidence.

The non-auction market above $2 million is stronger than 2008 and this is evidenced below in a detailed piece written about off-markets and the upper, upper end segment (more than, say, $2.5 million).

There is also a feeling of more quality stock coming onto the market; however, our advice is not to assume a change (lots more stock forever) is occurring, as agents are trying to get their homes to market and sold in the run before Easter. If this leads to buyers holding off a little, as they feel more may be around the corner - which results in price drops - then non-forced sellers will again exit the market, thus tightening stock levels even further.

At present, we do have a small window of overall market price stability after a 10% to 40% drop last year and a 0% to 5% rise this year in the $1 million-plus market.

Adam’s article on acoustics is worth a read and, this week, we would like to thank Scott Hamilton from Buxton for his pearls of wisdom in an interview that took place at Brown Cow a week or so ago.

Buy Well

Auctioneer Alastair Craig working hard - we await a definitive result on Argyle Road Kew

At 5pm Saturday, as the James Weekly News Report is being published with live Auction Results from 20 auctions across Inner Million-Dollar Melbourne, we are seeing a slight lift in buyer sentiment from last week. The clearance rate is 50%, or 1 in 2.

Footnote by 8.00am Sunday that clearance rate had increased to 60% on James Home Ratings attended auctions which is the best that the author can remember this year. Confirmed by REIV clearance rate of 68% which is the also the highest for some time.

It should be noted that the clearance rate for properties sub-$1 million in good condition and well priced has been accurately reported and is still considerably higher than the $1 million-plus auctions. This clearance rate stood at a healthy 65% (approx) clearance rate before this weekend compared to $1m plus homes being below 50% clearance rate.

This week has also seen an increase in multiple bidder $million dollar auctions reported on by the James Home Ratings. We witnessed 4 and 5 bidders at Glen Iris, Toorak, Middle Park and Caulfield, showing that if the home is capturing buyers’ imaginations then strong “almost 2007 prices” are still achievable.

However, it is not our job to talk up the market. There are still many quality high-end properties not achieving last year’s results (off by between 10% and 25%). In fact, there are still many high-quality family homes not achieving any results – no interest and are remaining on the unsold, then withdrawn, lists for months.

As indicated by our headline – and contrary to what is being reported in the popular press – we are finding the Top End is where the real hurt is in terms of price drops (if no interest is shown), not the sub-million-dollar price category (if well marketed and of good quality).

No doubt there is one common theme across the board – Nervousness; for sellers, buyers and agents alike. Spring 2008 will be an adventure for all and a focus will need to be maintained if big mistakes on either the buying or selling side are to be avoided.

Finally, and hopefully of some value, will be the following comments when it comes to considering what to do in this market. Nothing has really changed with regards to the quality of the properties. Some are still on main roads; others still have great views with north-facing rear yards. Some are next to difficult neighbours and some have great floor plans and others still have great gardens.

Whether homes are a bit cheaper now or in fact still a bit overpriced, they are still the same from a characteristic or James Home Ratings point of view.

Is the home right for you now and in 5 years’ time? Is it any good from a capital growth point of view? Is it a home that is overcapitalised? Are there better ones around? These, in our opinion, are the big issues, not just ‘saving money’ – although it’s a nice thing to do as well.

Good Buying and Go Pies (again)

Sunday Footnote: Went to see the Pies lose but all is not lost. The papers are full of good news with homes selling and buyers buying. We like to see people happy and confident however we need another month or two to see if Saturday was a positive bleep in a downward trend or in fact the trend is now upwards.

The reason more $1m plus homes are selling in Inner Melbourne may be because of interest rates but it is also because sellers have started to accept the very different price market we have been in since March 2008 compared to 2007.

Weekend one of the school holidays and as expected a very slow auction weekend at the top end of town. Across the board, the lowest number of auctions for this year was on offer with 395 and a good clearance rate of 66%.

It is also important to look at the number of private sales each week. Looking at auction results only does not give us a balanced view of what is happening in the market. This week there was a massive 660 properties sold privately. This indicates a huge amount of activity which is positive.

11 Jennings Street, a stunning home in Sandringham, was to be auctioned on Saturday however it sold prior to auction. I rated the home 913/1000 and it has been www.james.net.au top rated property for the past 2 weeks. Hocking Stuart’s quote for the home was $1.850 – $2.050mil and sold for the figure we anticipated at $2 million. Jenny Dwyer, a Director of Hocking Stuart Sandringham, needs to be commended once again for the accuracy of her quote ranges.

The home has an interesting sales history, according to Valuer General Data the home was sold in February 1997 by Buxton for $395,000. Then in February 2003 it sold for $802,500 by Hocking Stuart. The new owners were responsible for the amazing renovation you see today.

It went from this:

To this:

…and sold in November 2005 by Century 21 for $1.712mil.
Hocking Stuart sold 11 Jennings during this week for $2 million. This is the fourth time the property has been sold since 1997. It is believed the current owner, originally from Texas, is sad to be leaving and is selling their home because they are being relocated to The United Kingdom.