As we come to the end of February most of the work we are involved in at this price level is off market or pre market – meaning not advertised or not yet advertised (and may not be). However two really good properties, currently beginning public selling campaigns (we have been through and rated), should provide a very good indication of where the market is at to the general public are:

• Hawthorn – 29 Kooyongkoot Road – asking $6m plus with Michael Armstrong of Kay and Burton. James Home Rating 842/1000
• Malvern East – 11 Bates Street – asking $6m plus with Jeff Gole and Tim Derham of Abercromby’s. James Home Rating 838/1000

If you have any interest in these properties we have far more detailed notes and pricing which is not up on our public Ratings site.

Click on picture go to rating

Click on picture go to rating

February 25th the day everything big passed-in

2 bidders to $3,900,000 at 2 Laurel Court Hawthorn East - but that still wasn’t enough!

Despite the rest of the market having some bounce it was very flat at the Top End with the Top 8 Sales all passing-in

• Hawthorn East – 2 Laurel Court – passed-in $3,900,000
• East Melbourne – 125 Gipps St – passed-in $3,850,000
• Williamstown – 27 The Strand – passed-in $3,000,000
• Toorak – 24 Heyington – passed-in $2,900,000
• Hawthorn – 54 Glen – passed-in $2,800,000
• Canterbury – 29 Hopetoun – passed-in $2,650,000
• Camberwell – 123 Wattle Valley – passed-in $2,650,000
• Malvern – 119 Stanhope – passed-in $2,600,000

A few biggies that were cleaned up this week (but at lower prices than initially offered):

• 3 Park St Brighton (Jason Gill) – Wrapped up this week at just under $3m after being on the market for a fair while.
• 47-49 Victoria St Sandringham (Julian Augustini) – Big parcel of land, on the market since late last year and sold in the mid $3ms.
• 324 Beaconsfield Parade St Kilda West (Shane Siemers) – Went to auction last year at over $5m and sold, we believe, in the sub $4m range this week.
• 51 Isabella Grove Hawthorn (Jeremy Fox) – been on the market a long time and sold at a second campaign for over $5,500,000. Initial ask was over $6m.

All smiles are David Wood and Michael Coen who get 2012's first $3m+ under the hammer property away. Albert Park, 148 Beaconsfield Parade and a strong 4 bidders

2011 was a year of falling prices with the exceptions of the months of May, September and December. Yes, we finished the year off OK – but it was more a case or arresting the fall rather than any lighting of price rockets.

Last year we saw large drops in market values of homes that started too high on price, with owners who then had to sell. This was particularly the case with properties that were of inferior quality and also those in poor positions. In many cases these drops were 20% and more off the Anzac Day 2010 high. A lot of that fall in value happened in the last quarter of 2011.

Demand being OK can be further supported by our Stale and Stalemate results.

As we went into Christmas we had four key $2m to $3m negotiations in Stalemate in that the Vendor was fixed at X and our buyer was fixed at Y. It was a stalemate as opposed to a momentum negotiation because the vendor felt no compulsion to lower their price and our buyer had no proof as to why they had to increase their bid.

10 weeks later, the results on those negotiations are:

1. Burke Road Malvern – Marshall White’s Maddie Kennedy got a surprising near $3m from another buyer. This was a really good home but in a difficult location and the auction only produced a vendor bid of $2.4m
2. Victoria St Brighton – Barb Gregory of Marshall White Brighton. Another buyer met the reserve of $3.5m. Not surprising – this was a good home and a fair price.
3. Moffat Brighton – Bought after some argy-bargy with Chris Bevan of JP Dixon. This was a brilliant design and build and had been on the market for over a year.
4. Camberwell -still in a stalemate negotiation and with other blocks nearby also unsold. It’s hard to tell when or even if something may happen on this.

Early 2012 Private Sales

• Brighton East, 181 Were St – Kate Strickland – Over $3m – Cutting edge home – Big price for East Brighton
• Brighton, 10 Victoria – Barb Gregory – Over $3.5m – Modern 7 yo family home near the water
• Brighton, 17 Huntingfield – Regina Schmidt and Brian Devlin – Over $3.3m – Big family home
• Brighton 2 Collins Brighton– Regina Schmidt and Brian Devlin – Over $3m – Townhouse, one of a pair
• Brighton 26 Moffat Brighton – Chris Bevan – Cutting edge family home
• Balwyn, 15 Boston – Mark Rathgeber – $3,300,000 – Big family home
• Hawthorn, 58 Kooyongkoot – Scott Patterson – Over $3m – Family home
• Prahran, 22 Murray – Tim Wilson – Over $3m – Big land
• Kew, 65 Stevenson – Paul Richards – Bekdon Richards – $3,000,000 – Big period home

25 Campbell Road Balwyn - Peter Mitchell - Under the hammer - $3,000,000 - 5 bidders

Week 4 September 24th: Overall market interest is down this week, best evidenced by the fact we had 30% less Marketnews readers on the Monday of  this week than the past two month average (alternatively we may be just getting boring). While some new AFL coaches bobbed up, so have some interesting homes and it may be worth your while to revisit your contacts to see what new offerings are on the horizon. The internet portals are showing more homes in the Upper End than they have for a while and this is due to the agents planning an extended campaign to manage arrange the Grand Final while still trying to get the home done and dusted prior to the Melbourne Cup. So this week may have been more interesting than you thought but soon it will be back to “quiet and low new stock” as far as listings go until the second week of November post Melbourne Cup (hopefully).

Biggest Sale: 2 Albert St, Brighton, Leigh Hallamore (Buxton); after auction, in excess of $3,100,000, 3 bidders
With a relatively big crowd of 60 lining both sides of Albert St, there was a feeling in the air that this auction would be an exciting one. And, although he had to open on a vendor bid of $2,500,000 to kick-start proceedings, auctioneer Leigh Hallamore soon had a tightly contested battle between three parties on his hands. Bidding was strong and constant with bidder 3 eventually earning the right to negotiate after the property was passed in at $3,120,000. Bought after for an undisclosed amount. (Jen Milligan)

Biggest Pass In: 324 Beaconsfield Pde, St Kilda West, Andrew Stuart (Hocking Stuart); Passed in, $5,000,000, no bidders
Auction Andrew Stuart took great pleasure in explaining to the crowd how the under-ground car lift and turning circle worked – with a  practical demonstration. Demonstrations over, Andrew asked for a bid somewhere near the lower end of the quoted range. No one offered a bid and  a vendor bid of $5,000,000 was made – still no interest and half time was called. Half time was short and sweet. The property was reoffered again and surprise, surprise – no bids and the property was passed in at $5,000,000. It has been a long time since a property on Beaonsfield Parade has sold under the hammer. Sales are being transacted its just taking some time for vendor and buyer to reach that all important middle ground. (Guy Angwin)

Bidderbuzz Auction: 25 Campbell Rd, Balwyn, Antony Woodley (Marhsall White); under the hammer, $3,000,000, 5 bidders
Antony Woodley took the helm and fielded bids from 5 parties before the hammer fell at $3,000,000; after being on the market around $2,700,000. Around 70 people attended this auction. Full report in Market News (Adam Woledge)

Some clean ups from previous auctions and another few off markets and quiet results for the month.

• 34 Tormey St Balwyn North – James Tostevin – after auction for around $3,000,000
• Brighton 12 North Road – Jonathan Dixon – off market – over $5,000,000
• Toorak 67 Lansell Road – Andrew Harlock – after auction – over $3,500,000
• Toorak 1 Sargood – Lachlan and Paul Castran – Expressions of Interest – new home – undisclosed
• Balwyn 49 Metung St – John Bradbury – Expressions of Interest – new home – undisclosed
• Kew 26 Dean St – James and Hamish Tostevin – Expressions of Interest – new home – over $4,000,000

Not everything sells at the top - 111 Walsh South Yarra - Passed-In $3,250,000

Week 3 September 17th: Good quality Top End (around $3m and above) continues to change hands in strong numbers.

• 40 Balwyn Canterbury Peter Dixon over $3,000,000
• 37 Fairview Hawthorn Jeff Gole just under $3,000,000
• 3 Gardiner Hawthorn Hamish and James Tostevin – 5 bidders $3,850,000
• 41 Drummond Carlton James Keenan – $3,160,000
• There were $3m pass-ins at 111 Walsh South Yarra and 2-4 Sandown in Brighton.

During the week these $3M+ were bought

• 48 Hampden Road Armadale Andrew Baines over $6,500,000
• 45 Martin Brighton Ian Jackson just under $4,000,000
• 42 Matlock Canterbury Sam Wilkinson just over $3,000,000
• 198 The Esplanade Stewart Lopez – were quoting in excess of $6,000,000 – undisclosed

This September, to date, we are aware of 26+ sales in the is $3m and above price range – see our $3Million Plus report. If you look at our $3Million Plus market report for last year, September 2010, we got to 46 boughts by months end – http://marketnews.com.au/2010/09/two-9-million-homes-bought-on-monday/ and that was pretty much a solid activity time in the market. The Top End has some ooomph just now.

Michael Gibson and Justin Follett of Kay and Burton were both a bit chipper when I spoke to them this weekend and assured me that while the market may seem a little boring until the end of the school holidays, there are some good homes coming on after that. Hopefully post Melbourne Cup as well. Michael added that vendor moods have improved with the Top End good news of recent times. We hope he is right as that will mean more choice for buyers.

78 Blessington St Kilda - John Bongiorno - 6 bidders - Under the Hammer for $3,400,000

Week Two September 10: With the third week in a row of significant competition on A grade Top End homes there is little doubt we are now firmly in the midst of  an activity spike due to significant stock shortages of “ready to move in family period and new homes” in the $2m to $6m range.

On top of what we saw 2 weeks ago (11 sales at $55m with an average of 2 bidders each) and last week (7 from 8 bought over $3m) we saw solid results this weekend at:

1. Kew 20 Barry – Peter Batrouney 3 bidders, under the hammer, $3,850,000
2. St Kilda 78 Blessington – John Bongiorno $3,400,000, 6 bidders.
3. Armadale 46 Stuart – Andrew Hayne 2 bidders, after auction, over $3,300,000
4. Malvern East 58 Kerferd – John Bongiorno, 1 bidder after auction, $3,075,000
5. Malvern East – Little Como – 50 Finch – Gowan Stubbings – Expressions of Interest – It was a long battle but there is a sold sticker on the board.
6. Toorak 8 Ultimo – Justin Long – After Auction – 3 bidders – $2,900,000

Whilst the market is giving a big tick to those it likes (well priced A graders); it is marking very harshly those that is doesn’t and they are best summarized as B or C graders – homes that have issues. Some examples below

1. Toorak 32 Canberra – its old and tired – big land though.
2. Kew 2 -4 Heather – No backyard, no garage and no real interest.
3. Malvern East 4-6 Finch – 0 bidders – a big reno required and only a few metres from Dandenong Road

And then there is 22 Surrey Road Toorak – Auction was due today – converted to Expressions of Interest at the last minute. What does this mean?

Yes our focus in Marketnews seems to be all at the top of Top End ($3M+). Right now that is where the real action is. There has been an unequivocal mood change that does not seem to have been shared by the market at the lower dollar values.

Buyers are now having to answer some very real questions.

What is the real price? – Eg What is the highest other bidder prepared to pay, if indeed there is one? As a buyer am I trying to buy an A grader or a C grader – am I $300,000 below the other bidder or $300,000 above nobody!

What should my new strategy be in trying to purchase a Top End home? Extract from an MW St Kilda auction report “This market now plays to MW’s great little system and strength – shake the buyers up, show ‘em their competition, work out who is the strongest, then pass it into them and mentally torture them in post auction dealings by referring to those outside. It’s very hard to argue with it’s effectiveness, for if you don’t play the game, on a good home in this market, then there is a high chance somebody else will. This market is now spiking in the direction that will enhance MW’s reputation amongst sellers but …  um how do I say un-enhance their reputation amongst buyers.” This applies to not only Marshall White, but Jellis Craig, Kay and Burton, RT Edgar, Benmac and many of the Bayside agents. The main question for buyers is not it’s legitimacy (the sellers absolutely want this); its how do I best manage it and achieve my main goal within my buyer risk profile.

How will you manage a negotiation situation under extreme pressure – then is not the time to work out a plan. After the event is not a time to say I could have done it a lot better. The market has changed at this level, and may well change again, as a buyer have you moved with the times?

Strong Crowd at South Melbourne 210 Nelson Road - Anthony Grimwade - Under the hammer - 3 bidders

Week One September 3: My week this week. A good week with another $3M+ purchase for a satisfied client – which makes a good string of activity in the last month for our company. Overall a solid start to Spring after a less than exciting Winter (well I enjoyed Scotland with my son anyway). A magic moment for me was the home at 8 Torrington Place in Canterbury (Michael Armstrong of Kay and Burton). We will have a rating up in the next few days – but in a nutshell it’s a very brave new build home. Its Olde English for a start, which already loses most of you; but it is built to such a standard that when its attracts a suitor to its sweet offerings they will be entranced and will move to a mindset of I have to have this. The French Provincial being built next door will attract more; but this home will attract a greater intensity of interest. The price – well its asking $5million and for me the end result will be give or take a million and the sold sticker will be slapped on in an almost impossible to guess timeframe. That will depend on when the specific bee walks into this very specific honey pot. A lovely, well thought out, beautifully crafted home – go and check it out – its open mid week and weekends or google for our rating by weeks end. Please we are happy to be more specific on perhaps how best to buy it; if indeed it’s of interest to you.

My other magic moment was the 29 Rose St Armadale Auction: I really love watching Heather and Rae (Marshall White) at work – they are masters at their craft also – just like the developers of 8 Torrington. The two of them had positioned buyers on this home (last sold for around $2,500,000 in mid 2008) to get involved in the biggest shootout I have personally witnessed at an auction this year. And they lined up one of the best sheriffs to take all-comers on – Growling Jack (John Bongiorno) and boy did he fire up – to use the vernacular he stuck it right up ‘em and corralled 9 bidders into the final $3,030,000 result. It was very powerful to watch and while not reflective of the overall market right now, it did provide a pointer to the current lack of stock at the $3m+ level and a beacon for those that feel the only way forward is without hope. Sure we are all a bit nervous, but things are simply not as bad as The Age daily headlines make you think they are – well not right now in the $3m+ segment anyway.

Again the standout $ segment – granted on very low numbers ( 6 from 8 ) Yes there were some big pass-ins like 67 Lansell Road Toorak ($3,200,000 vb) but it has some challenges. Also passed-in 2 Iona Toorak ($5,000,000 vb) – postscript: was bought over the weekend.  However the ones that were bought this week showed, in the main, multiple interest.

• Toorak 2 Iona – Jeremy Fox – bought after auction $5,080,000
• Armadale 29 Rose  – see report below 9 bidders $3,030,000
• Malvern East 7 Bates – Heather Elder and Rae Tomlinson – 3 bidders – bought after for $3,500,000+
• Hawthorn 34 Coppin Grove Jack Bongiorno – 3 bidders – under the hammer – $4,110,000
• South Melbourne 210 Nelson – Anthony Grimwade – 3 bidders – under the hammer – $4,215,000
• Toorak 19 Sargood – Jeremy Fox – 2 bidders – bought after – $4,700,000.
• Balwyn 12 Creswick – William Chen – Bought Before – Undisclosed – around $3,000,000 . This was after a failed auction earlier in the year.
• Canterbury 52 Mont Albert – Karen Gornalle – Private Sale – over $3,800,000.
• Hawthorn East 5 Constance – John Chartres – After Auction – just under $3,000,000. 2 bidders.

Week 4 August 27 2011: Not a lot happened at auction in this market this weekend at $3M+, with the exception of 25 Kent Avenue – the action was all last week and it was away from the auctions.

Biggest Sale: 25 Kent Ave, Brighton, Leigh Hallamore (Buxton); After auction, $6,400,000, 4 bidders
Crowd numbers were high to witness the auction of this rare absolute beachfront property.   Auctioneer Leigh Hallamore cleverly positioned himself along the back fence in front of the beach to maximise the emotional impact of the uninterrupted beach views of the (as it turned out) 4 bidders.  With at least three beachfront properties selling recently at $6m, $7m then resold for $8m and an undisclosed price, 25 Kent  was – as expected – strong.  An opening bid of $4m was a ‘dream price’.  A second bidder quickly upped the price to $5.9m and the bidding was on, stopping at $6.35m where the property was passed in to see if there was a bit more.  And there was: a final sale price of $6,400,000 or not too far off $10,000 per sqm if you saw no value in the home. (Kristen Hatt)

Marcus Chiminello of Marshall White: “We are currently seeing great activity in the upper end of  from both buyers and sellers emerging from the depths of winter and that are now prepared to participate in the market as opposed to the past weeks and months when many were prepared to just sit and watch the market. Most of the recent high end market sales have not been an overnight success, most requiring months of dialogue between agent, buyer & vendor. As demonstrated in recent weeks, I believe the trend of discreet off market transactions will continue to grow moving forward as vendors and purchasers alike at the higher end of the market seek privacy with their real estate transactions.”

$3M+ Market Summary: Activity in this $3M+ segment has been building most of this month of August but there has been little to show for it until this past week, which has been a stellar performance by any measure. Bidderman was over 2 on the $3M+ homes purchased.

Agents are reporting that buyers have started to change their attitudes – and for once we don’t think this is spin. The interest is at least partly because the market has been starved of interesting offerings like the property at 4 Mernda Rd, Kooyong (Ross Savas and Michael Armstrong), which was a beauty and had at least 3 bidders over $6million (and would possibly have had a few more if circumstances hadn’t pushed for an early finish to the Expressions of Interest campaign).

Last week’s powerhouse result for Paul Keane and Peter Batrouney at 9 Salisbury Balwyn, where 4 bidders produced another result over $6 million, indicates that some buyers have waited long enough and are saying: “OK if it’s good, it’s priced right and it meets my needs then I’m interested.” There was another one of these on Saturday over $6 million at 25 Kent Ave, Brighton (see full auction report below).

But before you think we’ve been sent a case of Moet by our new found friends on the other side – it’s all about the price and quality of specific properties.  The market is definitely not in an upward phase in terms of price. In fact unless your property is an A grader, and “correctly priced”, it’s likely the price is falling every day you ponder over the signed offer on the table (if you can get one). Smart sellers realise this.

Just to get some balance on what’s happening in terms of price:

• The Mont Albert property sold by Michael Ebeling that we report on below, was a good result. But it sold last year for basically the same price.
• The selling price of St Georges Road, Toorak property represented a greater than 10% discount on the initial asking price. It was a great result in that sub $9million range, but it had no takers for 6 months at $10million.

So what’s to account for this past week’s activity? Partly it’s because buyers can see less choice coming on the near future, due to the Grand Final being on later this year (thus preventing a normal 4 week auction campaign between Grand Final and Melbourne Cup). Partly it’s due to some good $3M+ homes on offer right now. And partly it’s due to underlying demand that has been there for some time. A lot though is because of correct price matching.

No doubt the next few months will see an increased number of stales (long term unsolds) – repackaged, rebadged and remarketed. If they are also repriced then who knows, maybe we will be off again and back to a more normal balanced market (which is what most buyers also want).

Of course, it could all  just be a dream and we will all wake up again soon.

There were some good Private Sales through the week and we saw a return to off market transactions, as well as two successful Expressions of Interest:

• Ross Savas and Michael Armstrong of Kay and Burton held a Boardroom Auction last Thursday for 4 Mernda Rd, Kooyong. (This had brought forward the original Expressions of Interest deadline for Tuesday of next week.) Its “on the market”  price was around $6,000,000, and it sold for between $6,000,000 and $6,500,000 with 3 bidders. See our ratings below.
• Michael Ebeling of RT Edgar got 12 Stanhope St, Mont Albert away for towards $3million – off market. This was around what it reportedly sold for last year. Not all bad news in that.
• Rob Vickers Willis and Tim Derham of Abercromby’s sold 10 William St, South Yarra under the hammer for over $5,000,000 at a Wednesday private auction. See our ratings and report below.
• Michael Cooney of Hodges sold 50 Ebden Ave, Black Rock (a two hatter with a 700+ rating) for over $3,400,000. This modern home was a goodie, but it’s been rare to see homes sold for more than $2 million in this area since 2009. So this was a good result and the best sale in Bayside we can report for the week.
• Expressions of Interest – 333 Glenferrie Rd, Malvern with Gerald Delany and Nicole Gleeson – sold for over $3,500,000.
• Post Last Week Auction Pass In 24 Hawthorn Grove, Hawthorn – Paul Keane – sold for an undisclosed amount above $3,000,000
• Off Market:4 Mathoura Rd, Toorak – Peter Bennison of Marshall White. This went to auction last year (or maybe earlier), and has now been traded for more than  $3,000,000
• Off Market:10 St Georges Rd, Toorak – Marcus Chiminello – This home has been through a few agents and while it did not achieve what we thought was an incredible asking price of $10,000,000 earlier in the year, it did actually get close to $9,000,000 in the last week or so – still an incredible price. See our home rating
• Off Market: 3 Murray St, Armadale also Marcus Chiminello. It also sold for just shy of $4,000,000 recently.

These sales represent the best or close to best numbers in this Top End $ segment this year.

Agent Survey: Why is this week’s $3M+ improved performance happening?

Paul Keane: With the stock-market on what appears a roller-coaster ride over the past month or so, people are retreating from it and investing that money in the good old “bricks and mortar”. I have spoken to several people over the past week and they believe the real estate market is off by about 10% from last year (some claim more) so if you are looking to upgrade your real estate portfolio there is so much upside….why not buy a $6m home that may have been worth $7m this time last year…..nothing much has really changed… only people’s mindsets are different.

Michael Armstrong: Some buyers are no longer getting burnt by the share market (they’re out). Some buyers have got sick of waiting. Some buyer attitudes have changed.  (Second tier homes though are continuing to drop in price.)

Mike Gibson: Definitely gained some traction in the last few weeks

9 Salisbury St, Balwyn - Peter Batrouney and Paul Keane. Competition by 4 bidders resulted in a very strong price under the hammer of $6,620,000

And now for a brief excursion back through the market of August 2011.

Week Three August 20, 2011: Whilst there was little, actually no doubt that prices were dropping across the general market and the $3M+ segment was well down on activity compared to this time last year there continued to be a tantalizing number of goings on to let those involved at this level think we may just be having something to do come Spring. Furthermore whilst we had been saying that activity off market was more talk than substance in the last week or so we were involved in and had seen a couple of deals that again confirmed that if the stock was actually for sale (meaning at market buy price not a seller dream price) then a deal could be done – as long as the buying  and selling agent were reasonable at their job and both the vendor and buyer had some patience. Boughts and solds this week

At Auction:

• 9 Salisbury St, Balwyn – Peter Batrouney and Paul Keane. 4 bidders resulting in a very strong price under the hammer of $6,620,000 ( See our auction report)
• 30 Mangarra Canterbury – James Tostevin. 4 bidders and a strong $3,210,000 under the hammer
• 24 Hawthorn Grove Hawthorn – Paul Keane – Post Auction for an undisclosed amount above $3,000,000

Kew, 49 Sackville St - James Tostevin - 4 bidders - Under the hammer $4,310,000

Week Two August 13, 2011: There was life at the Top End (even if the heartbeat was faint) as evidenced by some good Top End $3M+ results.

• South Yarra 83 Walsh – Justin Long and Peter Bennison – Bought After $4,842,950 – $5,327,750
• Kew 49 Sackville – James Tostevin – Under the hammer – 4 bidders – $4,310,000
• Camberwell 87 Broadway – Richard Winneke – Bought After – 1 bidder – $3,795,250
• Hawthorn 4 Glan Avon – James Tostevin – Under the hammer – 3 bidders – $2,815,000
• While mid week 8 Myoora Toorak (Over $10,000,000) did not sell at a Thursday auction (it’s a home that requires a very specific buyer and could be hard to sell even in a stronger market) -  8 Blackfriars Close Toorak (Justin Long) our biggest pass-in last week-end at $3,000,000 (0 bidders) did sell for $3,250,000 on Monday.
• Peninsula – in one of “the” streets – Spindrift in Flinders – we saw Marketnews favourite and nice lady Prue McLaughlin of Kay and Burton sell a home for an undisclosed amount well over $4,500,000. As well Andrew Hines got 57 Tubbarubba Merricks North (over 60 acres) away for around $3,500,000
• 19 Lovell St Hawthorn East -Modern home saw the Expressions of Interest campaign brought forward by Sam Wilkinson and Scott Patterson and a sold sticker in the mid $3m’s

Not quite $3m - which is the story of the $3M+ Market this 2011 winter - 18 Knutsford St, Balwyn, Richard Earle, Bought After for $2,730,000 on a vendor pass-in of $2,300,000.

Week One August 6, 2011: We had a few comments that we hadn’t put up a $3M+ market report since May. That was for a good reason – it would have been an almost blank sheet. However there were some sputters  of life from deep within – a sign that the top end engine could be starting to turn over again. From our own company’s point of view we were involved in 3 dealings after having been bereft of activity for most of winter at this level.

• A sale in Boroondara this last month at just over $6M – completely off market
• 24 Boxshall St, Brighton (David Hart), which has been on the market for a long time, has finally changed hands for just under $3M
• 4 Sussex St Brighton (Regina Schmidt and Brian Devlin) sold for a hard-to-believe $3,775,000. We attended that auction and the result was … well brilliant.
• and while down in Bayside, 2 Tennyson St, Brighton with Jonathan Dixon, after passing in at auction a month or so ago, just sold for around that pass-in figure and well over $3,000,000
• 12a Harrison Crescent, Hawthorn, which had a rating too low to put up on our site, was sold by Sam Wilkinson of Kay and Burton for over $3,000,000
• Along with 3 Irymple Ave, Glen Iris (Iain Carmichael); 5 Story St, Parkville (Tom Roberts) and 80 South Road, Brighton (Barb Gregory) in the last week, the Top End over $3M is trying to work its way back into some form.

Back to the Future – What’s up Ahead?

With a couple of big homes due for auction next weekend – including 49 Sackville St, Kew (James Tostevin); 7 Foote St, Brighton (Phillip French of RT Edgar) and 83 Walsh St, South Yarra (Peter Bennison and Justin Long)  - we will begin to see if there is some air at the higher altitudes as we limp into the footy finals – traditionally a key indicator for activity in the early and late Spring markets at the $3M+ level.

Roll Up, Roll Up and see if today is a horror movie or not? 40 Fordham Camberwell: David Gillham: Bought After $1,650,000+. 1 bidder

Yes it was a bit of a dog of a day for the market this weekend, but it was not an absolute shocker.  And really, what else could you have expected!

At 6pm on Saturday, the James Clearance Rate for $M+ was 52% on the 25 auctions we attended. We have seen worse.

The Weekly Review Bidderman, our demand indicator, was down at just 0.8 bidders per auction. The last time we saw that kind of number was back in 2008 – but hey did you expect a plethora of volcano auctions? Actually, there was not one volcano (4+ bidders) auction in the 25 we covered on Saturday.

We all knew buyers were not going to brave this weekend and who can blame them? This was confirmed by the fact that only 3 of the 25 auctions we covered sold under the hammer – that’s 12% or 1 in 8. Which again re-emphasises that if you do feel inclined to buy a home right now, you need to understand the processes and strategies involved in buying a home outside the auction hammer process.

The Market This Weekend

Who are the unluckiest sellers this year? I think we would all agree those who had their home on the market at 10.30 this Saturday morning. This weekend was always going to be a time of concern for the market, no matter which way you mentally packaged Friday’s stock market news.

And yes, there was some blood on the Colosseum floor. But before you move into a catatonic state about the health (or lack thereof) of Melbourne’s $M+ home market, let’s put this weekend into context.

Firstly, even without the doom and gloom we would have been most surprised to see a strong clearance rate this weekend. The choice of homes on offer was average at best, while good stock is hard to find.

Secondly, buyers, and there do seem to be a few around if you go by last week’s results, are now beginning to see some early Spring stock and some of that is more appealing than what was on offer this weekend.

Thirdly, after every ‘catastrophe’ there is a knee-jerk reaction where people, including buyers, simply find the air a little harder to breathe and things a little harder to do – especially make decisions and take even calculated sensible risks. But we do seem to all get back on the horse at some stage.

Fourthly, as we said last week, right now is pretty much a nothing market – and again this weekend, nothing much happened. But nothing much has happened for several months.

So we’re not apologising or talking it up or down – we’re just saying this weekend’s market was always going to be tough after yesterday’s financial news – and tough it was.

What will next week bring and the week after – who knows?

One thing we don’t know (for sure) is anything involving a short term time line. We can’t say if we are in for a GFC Mark II, something worse than a GFC or no real damage at all in the next six months.

On the flipside, yes it’s true that long term we have good job prospects, solid immigration and a healthy economy etc BUT……

….BUT, as buyers we all want to buy well and at the best time. We would have preferred to have bought a home at November 2008 prices instead of November 2007 prices or July 2011 prices instead of July 2010 prices. However taking that argument down another line, as buyers we would have preferred to buy homes in 2008 at market price rather than 2009 or 2010 at market price.

And you could feel that price was top of mind with almost every bidder or non-bidder this weekend. Is this the right time to buy? Can we get it cheaper? How cheap can we get it?

This almost overpowering mindfog was evident at almost all auctions this weekend and explains why the hammer rate was so poor, at 1 in 8.

So is it OK to buy now? Is this a window of opportunity or the start of the slippery slope?

It’s human nature as buyers to be wanting to get a great deal at any time. We as buyers want to make the best decisions on our needs and maximise our individual long-term emotional and financial outcomes for our family – just as sellers do. But there is wanting and there is making it happen.

Going forward, what will happen is that:

1. Some buyers will panic - We are all a bit circumspect and nervous, but if we become a panicked buyer we are a danger to our family.  The best way to avoid panic is to be clear on what it is that you, as the breadwinner or decision maker, are trying to achieve. What do you want for your family? A home with 4 bedrooms, a good backyard near schools and with a good floorplan in Boroondara or Bayside. Good – well stick to it. The condition of the Greek economy shouldn’t make you now think you want a 2 bedroom home in Epping with no backyard because that is somehow less risky than Hampton or Glen Iris.
2. Some buyers will not learn from history – Think what happened during and post the GFC, during the 90s drop, and during the 70s –  if you are as old as me. If you understand what is happening now you may be able to take advantage of it – even in little ways. It all adds up.
3. Some buyers will act – You can only take advantage of an opportunity if you act. Those that appear to be the wisest of men who pass on everything in life are not that. You can’t look after your family on inaction. Your spouse can’t sleep in your concern and your kids can’t play in your risk avoidance strategies.

Good things to think about when you realise you still need to do something:

Take your time as most sensible buyers have this year. If you see something you like then look at its characteristics: are they what you want and are they any good? If not move on – prices seem unlikely to be going north in a hurry.

Elevate your risk taking in negotiations and go harder on price. Especially if it’s been passed-in for longer than a few days. Providing you don’t have to have it at any cost, push a little harder. It’s not immoral to try for a good deal.

Aim higher – especially if you are above $2m. If you can stomach a bit more debt, then now may be the perfect time to look for something a bit better than what you could have afforded last year.

Marry a doctor or a somebody with equally good cash-flow because over the next few months some bargains may appear and cash flow kings will be able to take advantage of the debt bunnies.

We admit we have a complete bias towards property, so maybe our thoughts are not quite balanced. But maybe that’s why we feel some comfort right now. If the kitchen in stocks is a bit too hot maybe nervous investors could come over and try the relatively stable inner Melbourne housing market. Sure, it’s a bit rough around the edges, but it is solid inside.

The rest of this year is an opportunity for us all – and for some that opportunity will be a time for action, for others a time for reflection and for a few a time for panic.

Each of us is different. Good luck

$3M+ Market
We’ve had a few comments that we haven’t put up a $3M+ market report since May. That’s  been for a good reason – it would have been an almost blank sheet. However there have been some sputters of life from deep within and this could be a sign that the top-end engine is starting to turnover again. From our own company’s point of view we are now involved in 3 dealings after having been bereft of activity for most of winter at this level. Other recent notable sales at this level are:

• A sale in Boroondara this last month at just over $6M – completely off market
• 24 Boxshall St, Brighton (Sam Paynter of Hodges), which has been on the market for a long time and has finally changed hands just under $3M
• 4 Sussex St, Brighton (Regina Schmidt and Brian Devlin) sold for a hard to believe $3,775,000. We attended that auction and the result was … well brilliant.
• and while down in Bayside, 2 Tennyson St, Brighton with Jonathan Dixon, after passing in at auction a month or so ago, has just sold for around that pass-in figure and well over $3,000,000
• 12a Harrison Crescent, Hawthorn, which had a rating too low to put up on our site, was sold by Sam Wilkinson of Kay and Burton for over $3,000,000
• Along with 3 Irymple Ave, Glen Iris (Iain Carmichael); 5 Story St, Parkville (Tom Roberts) and 80 South Road, Brighton (Barb Gregory) in the last week, the Top End over $3M is trying to work its way back into some form.

With a couple of big homes due to go to auction next weekend – amongst them 49 Sackville St Kew (James Tostevin); 7 Foote St Brighton (Phillip French of RT Edgar) and 83 Walsh St South Yarra (Peter Bennison and Justin Long) – we will begin to see if there is some air at the higher altitudes as we limp into the footy finals, traditionally a key indicator for activity in the early and late Spring markets at the $3M+ level.

Not everybody was stressed about life. 8 Blackfriars Toorak: Justin Long: Passed In $3,000,000. 0 bidders

Biggest Sale: 80 South Road Brighton: 1 bidder: Bought Afterwards $3,000,000.
On the market just a couple of years ago, this classic, well built modern home was back on the block for auction today. The main road would be an issue but other than that, it is hard to fault. They wanted and got a big ticket last time, and they are wanting towards $3m again. So I’m wondering firstly if it will sell and secondly if there will have been any appreciable price movement since last time. Jack Bongiorno is our master of ceremonies auctioning for the newly created Brighton MW team with Barb Gregory and Kate Strickland. Hebegins in front of a solid crowd of almost 90 and all packed into the front yard. Proceedings are started with a $2,700,000 vendor bid and bidder one joins in at $2,750,000. Half-time break comes and goes and there is no further bidding and so it’s passed in. $3,000,000 Bought after – good result. Just shy of a 10% increase in 2 years. (Mal James)

• 1/23 Washington St, Toorak: Hugh Hardy of Benmac: 2 bidders: Bought for $2,870,000
• 18 Knutsford, Balwyn: Richard Earle; 0 bidders: Bought After $2,730,000

Biggest Pass In: 8 Blackfriars Close, Toorak: Justin Long of Marshall White: Passed in $3,000,000: 0 bidders
Auctioneer Justin Long had a commanding presence as he addressed the group of 45 in attendance.  In his preamble, Mr Long spoke passionately, describing it as a “wonderful, wonderful property” and explained its history.  Mr Long opened with a vendor bid of $3,000,000 and requested $50,000 rises.  Despite his best efforts to entice bidding, all those in attendance stood as spectators and the property was passed in at $3,000,000. (Kate Agnoleto)

Bidderbuzz Auction: 35 Nelson Road, Camberwell: Michael Hingston of Jellis Craig: Bought $1,665,000: 3 bidders.
This was always going to be an interesting auction, and I was looking forward to it. The property is quite a good one – north facing rear, on good land size within close proximity to Camberwell Junction. Fortunately the rained stayed away and Michael Hingston (backed up by Steven Abbott) did a good job directing traffic in front of around 70 people – and you could sense there were a buzz here. Opening on a vendor bid of $1,350,000 it did not take too long for the crowd to get involved and two bidders fought things out in $10,000 increments to see the property on the market at $1,460,000 – a good reserve I thought. Bidder 3 entered the fray and all of sudden this auction was off and running. At $1,600,000 the auction seemed like it was coming to end yet two bidders (one on the phone, that often looked out of the running a number of times and in the end finally ran out of patience and/or money – how often do we see that?) went tit-for-tat and the auction finished at $1,665,000. Good result for the vendor here and a professionally run campaign by Michael Hingston. (Adam Woledge)

Buyer Masterclass: What to look for to see if you are going to have choice. Also reprinted  in Melbourne’s Million Dollar magazine The Weekly Review.

We only buy (good) homes

Yes they still sell homes at $3,000,000. 80 South Road Brighton: Jack Bongiorno, Maddie Kennedy and Barb Gregory: Bought After $3,000,000. 1 bidder

In the first of 2 part major report this week on The Big Spring Predictions we cover the Early Spring Market

Home market predictions are like footy predictions in many ways – a bit of fun, not to be taken too seriously and to be treated on the basis of past results.

Sometimes we agents get it right and sometimes we don’t. So why do we do it? We do it for the same reasons that footy fills up just as many pages at the end of the week as it does at the start – because buyers, sellers and market watchers like to read our opinions and insights and they do so in just as great a numbers as those who watch a blockbuster footy game every auction Saturday.

With Spring only a short time away, the musings, the theories and the rumours are surfacing again. Hence we called all the big guns into a Roman Toga type gathering to ask them what will happen in both the early and late Spring markets in the run up till Santa comes.

“Love is in the Air and there is no home more beautiful than one being auctioned on the perfect sun-drenched Spring day with the fence painted, the light streaming in and the garden looking stunning” says Marshall White’s Justin Long – with some poetry and just a little bias.

Historically though, over the last decades Melbourne buyers and sellers have agreed with this statement.  John Clarkson of Hocking Stuart says the market swells by as much as 200% even 300% in terms of activity in Spring months when compared to the winter ones.

However, while every agent assumes the supply of stock is sure to increase on what we have now, there is also a thinking that this increase will be less this year than what we’ve seen on average over the past 10 years. There is universal agreement at the moment that we will not see stock levels approaching what we saw last year. 2010 was a big year at the beginning, in the middle and at the end in terms of activity. So far 2011 has not been – and it will not be.

Why is Spring looking to have new stock shortages? According to Kay and Burton director Ross Savas, it’s because vendors are perceiving that the market is under pressure, so they are holding off placing their homes on the market till conditions improve.

Benmac’s Iain Carmichael agrees: “Unlike last year there are few opportunistic sellers thinking, ‘Wow, our home is now worth a mint – let’s go!’. So the only driving forces are the traditional sellers such as upscalers, downsizers, and job relocators.”

Is this just false spin to get sellers to act? We don’t think so. Richard Winneke of Jellis Craig for instance reports that most agents are admitting to a 25% volume reduction of high end stock being transacted between this year and last. Balwyn and Kew are down around 20% in overall transactions (not just the high end).

In Bayside Jason Gill paints a similar picture of diminishing turnover but uses a different measurement: “In Brighton in July 2009, 2010 and 2011 we have seen stock on the market go from to 92 to 125 to 150 meaning older overpriced stock is simply not selling.”  What this means, he adds, “is that the stock that comes on in Spring will need to be of good quality and be priced correctly, rather than more of the same, if it is to excite the market.”

In our opinion, with the type of market contraction (turnover more so than price) we have had in 2011 we are going to need some excitement to kick start the market in the way that it took the Chinese community in 2009 to lead us from the GFC.

Sellers want prices and while buyers do as well, they also want good quality at the upper end levels. More of the same will only compound the problems of this market for both buyers and sellers.

For vendors who are prepared to swim against the tide, there could be rewards, says Steve Burke of Jellis Craig says, and sure we know he’s biased but he’s right on this occasion. “Forget about when the roses bloom in the garden, it is all about the demand and supply equation. As we are currently in a market place of perceived negative conditions I believe that there will be a real shortage of stock at the start of Spring. This will definitely favor the brave vendors who will be able to capture a market place where there is little competition.”

Next we look at Stales, Price and The Late Spring Market.

Printed each week in The Weekly Review – Melbourne’s Million Plus property magazine

The big talk on the property market is auction clearance rates: the fact they are well below last year (true) and that they are perhaps even lower than what agents are claiming (maybe).

Last year auction clearance rates across Melbourne were regularly in the 70s percentage-wise. This year they are in the 50s – so it is fair to conclude that this year fewer buyers and sellers agree on price and therefore the market is regarded as weaker than 2010.

But while some journalists and publications are arguing that the ‘true’ clearance rate may in fact be lower because agents do not report every unsold auction, some agents  are arguing that the emphasis on a Melbourne-wide clearance rate is also misleading.

Jack Bongiorno from Marshall White, for instance, argues that while papers like The Age are reporting clearance rates in the 50s, his company has seen clearance rates in the 70s throughout May and June . Andrew James of Hocking Stuart Armadale agrees, saying his office is also seeing clearance rates in the 70s all year.

So The Age is saying one thing and agents another. Well there’s nothing new there.

Who is right and who is wrong – and does it really matter?

Well,  they are both right. And as for whether it really matters, the answer is yes – and no. Is that a splinter I can feel in my bottom from sitting on the fence? Well no, in fact this goes to the crux of what clearance rates can and cannot tell buyers.

According to Andrew McCann of BenMac, clearance rates measure across a very broad number of suburbs, price bands and demographics. “The reality is,” he says, “that some parts of the market will always perform better than others so it is not unrealistic to think that while some areas are soft, others are strong. A good case in point is that our firm sold 11 from 12 Auctions last weekend, while the market returned 56%.”

Scott Patterson of Kay and Burton supports this: “The clearance rate in The Age of 59% is a general rate for the whole of Melbourne and does not reflect what is going on in certain areas.”  Hawthorn for instance has had a clearance rate of 80% for the year so far, which seems a different picture from the outskirts of Melbourne.”

This makes it important for buyers to take Melbourne-wide clearance rates with a grain of salt.

Brad Pearce of Miles in Ivanhoe says that as a buyer you need to be area-specific on clearance rates to ensure you are in line with your market. “Buyers can become too confident with the lower Melbourne wide clearance rates and miss opportunities to buy in their area, where in fact properties are still selling well.”

Hawthorn and Kew, for instance, are currently shining with clearance rates in the 70s and 80s, according to Richard Winneke of Jellis Craig. But next door, Camberwell, Canterbury and Balwyn North have had clearance rates in the 50s so far this year, he points out.

Clearance Rates are wonderful things for analysts and journalists, says Steve Abbott of Jellis Craig, “but they are only part of the story for buyers and sellers.” Kay & Burton’s Michael Gibson reminds us too that clearance rates only represent a few hours within the selling week.

And according to BenMac’s Iain Carmichael: “Some weeks we have shockers and the next it’s a dream, so clearance rates are area specific, very cyclical and not always predictable.”

As a buyer, along with clearance rates, you also need to look at stats on areas, on specific agencies, on different types of homes, price ranges, stock level indicators, Bidderman (number of bidders per auction) and a variety of other measures.

Indeed, while $M+ Melbourne may be down on turnover this year, of the last 10 homes we as buyer agents went after in the last two weeks of May, all were sold quickly (and not all to us). So to our mind,  the late May 2011 “good home” index (describing the kinds of home we go after) had a clearance rate of 100%

The buyer message in terms of Melbourne-wide clearance rates is to understand what they represent and to not limit your research to the changing weekly auction headline number when determining your individual buying strategy.

Printed each week in The Weekly Review – Melbourne’s Million Dollar Plus Magazine

BALWYN, 21 Kerry Pde: A smiling Hamish Tostevin (Marshall White) sells the property under the hammer, $1,670,000, 2 bidders and a big crowd of 80

Key Points:

• Canterbury 126 Mont Albert Road – Jeremy Fox of RT Edgar – bought for over $5,300,000
• Balwyn 1 Parkside Avenue - Alastair Craig of Jellis Craig – sold well at auction his weekend for over $3,000,000. I thought it was a solid result for what it was.
• Numbers out at opens and auctions seems normal.
• Clearance Rate this weekend OK, but on low numbers
• Two solid weekends of auctions ahead – but overall stock quality is not stellar

In terms of ongoing stock levels -

• Hamish Tostevin (Marshall White, Hawthorn) believes that stock levels coming in to June are similar to this time last year.
• Both Richard Winneke (Jellis Craig, Hawthorn ) and Maurice Di Marzio (Hocking Stuart, Balwyn) think things are down about thirty percent.
• Over the past three weeks I have seen quite a number of off-markets, some are over-priced and have serious adjoining development proposals upcoming, but others are good value, in the scheme of things.

Talking with Kevin O’Brien at Jellis Craig:  “The number of people coming in to Melbourne each week is steady and interest rates are low compared to the early 90s (when fixing in at 15% was a good move!)”

“No way mate - this market is fighting back– taking no prisoners today (April 9th).” John Bongiorno. Malvern 54 Stanhope. Bought $3,170,000. 3 bidders.

Week Ending 30th April: Back from a week or two off, this market now, has a fairly clear run till Christmas, with a only brief breaks for a couple of holiday weekends.

Over the next four to six weeks we should see more choice and some reasonable activity (although not expected anywhere near the levels of last year), as the May market is a traditional agent preferred selling time. Why? Well there is a good stretch of time until Queens Birthday weekend to run an uninterrupted campaign. Stock Quality is the unknown.

Come July things will be relatively quiet as there is a general sellers’ feeling (rightly or wrongly) that good homes do not look their best at this time of the year and accordingly a number of high end selling agents take winter holidays in Europe and therefore do not program campaigns to be run in their absence.

In the post Easter week or so there have been ten or more high end sales including the representative  half dozen below

• 15 St Ninians in Brighton for between $8m and $9m – perhaps not a lot more than what is was sold for less than 2 years ago (need to look up sale time to be absolutely sure of date) – Justin Follett of Kay and Burton
• 255 New Brighton for between $5.5m and $6m – Regina Schmidt and Brian Devlin of Buxton
• 50 Hotham St East Melbourne which had been on the market for at least 6 months for $7million – Paul Richards of Hocking Stuart – on the market for a fair bit of last year and also a failed auction. Nonetheless a reasonable price – not everything the sellers wanted – but more than had been offered at times in the past by buyers. A good result for both parties.
• 150 Clarendon East Melbourne – the Salta apartments saw Anton Wongtrakun deliver another big sale at $5,200,000 for Unit No 4
• Out to the paddocks of Lower Plenty with a Marketnews favourite Rocco Montanaro of Morrison Kleemand who achieved close to $3m on an Expressions of Interest Campaign for a good home on 7 acres at 75 Cleveland.
• And we round up our selection of high end Easter Sales with a $6M+ sale at Mount Eliza 15 Freemans Road – Michelle Skoglund of Aqua

In summary over Easter the market at this level has not been dead, but definitely subdued – there is increasingly a dampening mood in terms of both buyer and seller confidence. Time will tell if this is a short or longer term phenomenon. Price will play a important part going forward as we seemingly move into more uncertain market conditions – i.e. ones that are not as clear as they have been in the past 2 years since we awoke from the GFC. Overall the market now and in fact all of 2011 has not been strong at the $3m+ level – but there are still enough transactions (especially in Bayside) of sufficient value to avoid holding a wake just yet.

With winter approaching and a fair amount of stock available we think it is a buyers’ market and the future is best described as – “uncertain times”.

Finishing on a positive note our James Investment Division has seen some solid interest with investors coming back into the market (rentals are improving) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Finishing on a positive note our Investment Division has seen some solid interest with investors coming back into the market (improving rentals as well) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Week Ending 16th April:The $3m action this week was away from auctions.

The drought in the Balwyn Formula – big price, small land, new home – was broken again with Maurice Di Marzio getting 59 Hosken Street, Balwyn North away in the high $3 millions. That’s the third in a week on the back of the two biggies reported last weekend.

Canterbury, 11 Chaucer Close, with Boroondara doyen Peter Mitchell of Marshall White, got the same sort of high $3 millions price.

Hawthorn, Harcourt St, was a hot place to be this week with Nick Ptak getting 79a away for just under $3.4 million (we think) and one of the results of recent times. Peter Vigano of Jellis Craig  got $3.625 million for 42 (we did not see that price coming)

Speaking of good results, Marcus Chiminello got a price in the high $3 millions for 2/264 Walsh St, South Yarra. It’s not our job to talk agents up but in a slow apartment market Marcus has got a number of solid results.

St Kilda West, 10 Loch St, with John Holdsworth sold for $3,650,000.

Andrew McMillan from Benmac got 367 Beaconsfield St, Kilda West away in the $4m to $5m range after a very lengthy campaign (probably due to previous asking prices).

At Auction today 68 Hopetoun Rd,  Toorak with Jellis Craig’s Steve Abbott, sold afterwards for $3.05 million. That was up a few hundred thousand dollars on the last time it sold around a year ago.

Week Ending 9th April: The strongest week this year for the $3m+ Top End market:

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Well over the $12,000,000 quote range making Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court.

While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were.

But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies.

The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few strong sales as well with 29 Bay Street Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000 and the final result put north facing (no view) Golden Mile land over $3,200 per sq metre. That is a steady as she goes price similar to last year Golden mile (no view) buys. And another $3m+ sale with a strange twist (all non bidders asked to leave) at 40 Drake Brighton (Ian Jackson).

While on land sales 1073 Malvern Road Toorak (Justin Long) passed in at $3,225,000 and a reserve was offered – not taken up – two new bidders appeared and a second auction took place resulting in a sale well over the pass in figure.

Why all this activity? Pass-ins are still languishing in large numbers without much interest. However its all about quality and new stock and buyer confidence. All three things happened this week -

1. buyers felt better in themselves (confidence);
2. buyers felt this week had some real quality offerings (quality)
3. and buyers couldn’t see a lot of stock coming one (limited new stock)

Post Easter is no Buyer lay down misere after today’s results.

KEW, 19 Stirling St: The crowd was there but the bidders weren't. Richard Earle (Jellis Craig), passed in $1,700,000, no bidders

To be frank I wasn’t that excited about running around to auctions today (which is very unusual for me). We videoed the 23 Falmouth St, Hawthorn auction with one of my favourite agents Hamish Tostevin and 4 bidders. But after that I cleaned up my paperwork and looked forward to a week off.

Although this has been the best buyers’ market for over two years with choice and falling prices, one thing that as buyers we should consider over the Easter break is the amount of stock that was bought at auction and privately in May and June of last year. Early winter last year there was a concerted agent mopping up campaign of stales and pass-ins. I remember looking at some stats on actual sales at that time and thinking “impressive, more than I thought”. If that happens this year and new stock tightens then, as with last year, late winter and early spring will not be as good a time to buy as you think. Anyway, despite many agents implying they are 24/7, I’m not. I’m away for a week and then I’ll be back on board full bore immediately after Easter. Have a good break with your family. Life’s short. Take care, Adam.

Week Ending 16th April:The $3m action this week was away from auctions.

The drought in the Balwyn Formula – big price, small land, new home – was broken again with Maurice Di Marzio getting 59 Hosken Street, Balwyn North away in the high $3 millions. That’s the third in a week on the back of the two biggies reported last weekend.

Canterbury, 11 Chaucer Close, with Boroondara doyen – Peter Mitchell of Marshall White got the same sort of high $3 millions price.

Hawthorn, Harcourt St, was a hot place to be this week with Nick Ptak getting 79a away for just under $3.4 million (we think) and one of the results of recent times. Peter Vigano of Jellis Craig  got $3.625 million for 42 (we did not see that price coming)

Richard Winneke, Jellis Craig, Hawthorn: “We expect a busy May. Buyers will notice a lot more property coming onto the market. In the meantime, over the next two  weeks, there will be very little to choose from except passed in properties from March and February. “

“Oh Yeah Sure Buddy - you are joking, aren't you?” Sold for an undisclosed amount, $500,000 over reserve. 4 bidders. Ivanhoe East 32 Warncliffe. David Oster.

At 6pm on Saturday the James Clearance rate for $M+ was 71% on the 34 auctions we attended. WOW – 71%, a big change from last month.

Bidderman, our demand indicator of bidders per auction, was at 1.8. So on our biggest $M+ auction weekend so far this year, when you would expect buyers to thin out and Bidderman to drop, it actually went up on the trend of the last few weeks.

It may be just one day but it was strong out there this weekend. For the first time since late February our advocates reported feeling feeling genuine price pressures whilst bidding.

Market Summary: The big question is whether this is a statistical blip or whether we are a seeing the trend return towards a balanced market. If so, why?

1. Buyers feel a little better than they did last month and confidence came back into the market as a result. Our enquiry rates are certainly up.
2. The overall quality of homes on offer was up on previous weeks and they were plentiful in number. We saw lots of 700+ James Home Rating (quality) homes go to auction this weekend.
3. Last week as buyers looked into the future they saw that the cupboard of  post Easter offerings was bare – and so they adjusted their game plan accordingly.

Whether this is a blip or a trend change will largely be determined by what discretionary sellers do in May. If they are encouraged by this weekend’s results to put their properties onto the market, then prices may stay softer than last year. If those sellers stay out and demand continues as is, then the overhang of stales will begin to be mopped up and the good buying conditions of the last months (price and choice) will dissipate.

This weekend, again, we saw the overall power of the Melbourne market and the power of demand and supply. There is an underlying strength in Melbourne homebuying (based in immigration and lack of homes), that has slackened off in recent times as buyers become more circumspect with concerns about overseas events, jobs, and who knows what exactly. As well there has been plenty of choice. BUT as soon as there is a hint of a quality stock shortage the market responds, particularly with regards to well-located quality family homes, on land and of a period flavour. And it responds strongly.

More insights

• It wasn’t just the consistent $1m to $1.5m range holding up its end in isolation, this was also the strongest single week this year for $3m+ buys.
• It was the second strongest clearance rate of the year, despite an almost Super Saturday (140 $M+ Auctions – Inner East and Bayside)
• We saw consistent bidding across the board, with over 75% of monitored auctions having at least one bidder.
• The big question going forward after our Easter market break is whether nervous sellers will re-enter the market on one week’s good showing.
• Prices are generally down on this time last year (there are exceptions), so good homes are attractive right now. And while new choice may become limited,  some existing choice (overhang) still remains.
• Top End rentals are getting considerably more rent than expected as supply in relation to demand is tightening. This observation from two agents needs more examination at a later date. We’re interested in how widespread this may be, why it is happening and what effects it may have on the buying market. (Are borderline investors perhaps re-entering the Top End?).

Wild and Wooly - the weather that is, not Rob Vickers-Willis. Toorak 3 Denham. Passed In $2,010,000. 2 bidders.

The $3m+ Market’s strongest 2011 week so far (some examples):

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Bought well over the $12,000,000 quote range, putting Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: Over $7,000,000 on Scotch Hill for a good home with tennis court that needs some floor plan reworking.

While still in Hawthorn, Mr Nice Guy and the Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (modern home in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period home in Grace Park) for $2,800,000. Both prices were a little down on ambitious asks but they were nonetheless solid prices for what they were.

Kew – Was it us who cried out the death of the Balwyn formula – i.e. new build, small block and overpriced? Well technically we are still credible, because these were in neighbouring Kew: with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million-ish, the death of this market may be a little exaggerated. It was only two sales, but they were biggies.

Malvern and Canterbury -  50 Wattle Valley, Canterbury (Duane Wolowiec and James Tostevin) sold under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few $3M+ sales as well, with 29 Bay Street, Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000. The final result put north-facing Golden Mile land (no view) at more than $3,200 per sq metre. That is a “steady as she goes price” similar to last year’s Golden mile (no view) buys. Another $3m+ sale with a strange twist (all non bidders asked to leave auction) was at 40 Drake Brighton (Ian Jackson of Kay and Burton).

Toorak While on land sales, 1073 Malvern Road (Justin Long) passed in at $3,225,000 and a reserve was offered which was not taken up by the pass-in bidder. Two new bidders appeared and a second auction took place resulting in a sale well over the pass-in figure.

For full details each week of what is happening in the Top End $M+ market see our regular $3-Million-Plus Market Reports.

Round the Grounds – Price this year v last year and a word on Post Easter stock levels.

Malvern John Bongiorno, Marshall White: “Price is a little softer on certain homes but on high quality homes they are still rocking, granted buyers are more discerning. Stock levels are not as strong as last year. Rentals at the top end are exploding in the middle and top end market. Big news is rents have increased, possibly making investments more attractive at the higher end. There is such a shortage of homes to rent.”

Caulfield Rodney Morley, Woodards: “I think the negativity means less stock is coming on in May and Winter. Everybody wants records that are not coming at the moment. The market is definitely softer than this time last year in price. Buyers (then) were buying anything. Right now, buyers do not feel that urgency. No question that the market is softer.”

Brighton Bert Stewart, Buxton: “I think the market is around 10% down on some top end homes. Stock levels and therefore buyer choice after Easter are not looking good.”

Camberwell Geoff Hall, Noel Jones: ”Prices are down around 10% on this time last year, with some exceptions for quality homes, and stock post Easter is just not coming on like it did last year.”

Hawthorn Richard Winneke, Jellis Craig: “Big drop in new buyer enquiry this week. Probably due to the holiday factor but it was a noticeable drop. Rentals are definitely getting more than I expected price-wise and this may stimulate investment into Top End homes. East of Burke Road (Camberwell and Canterbury) has not performed as well as Hawthorn and Kew this year to date. I think prices are still relatively solid around that early million dollar mark but softer higher up.”

Carlton Tom Roberts, Nelson Alexander:  ”Stock levels Post Easter are tightening with only the sellers that need to sell going to market. Good homes still going exceptionally well but those results are in amongst the not so good going not quiet so well as last year. Prices are down a smidgen.”

Playing for Keeps here. Big 150 plus crowd. 29 McKinnon, Carlton. 3 bidders. Bought for a whopping $1,417,000 (462 sqm). We thought it was justified, but it was still big. Nick Renna, Peter Sinclair and Melissa Ryan of Hocking Stuart

Biggest Sale we covered: 21 Macartney Ave, Kew; Walter Dodich (Marshall White): After auction, undisclosed around $4,000,000
“Being in the coveted Sackville area this auction attracted a large crowd of about 100. The crowd were well spread out and even blocked the road in front of the property as they heard auctioneer Walter Dodich open proceedings. The auction began in Mr Dodich’s own words with a ‘traditional’ vendor bid at $3,700,000 as no one was willing to start things off. However this was the trigger that allowed two bidders to start the battle off for the property. Initially there were meant to be three bidders however the third bidder couldn’t get his bid in as he always cut off by the other two. When he finally got one in there was applause from the crowd and a cry of joy from the bidder. As the auction went on, the climax built and the crowd held their breath as the price rose and rose yet there was still no indication from Mr Dodich about whether the property was on the market or not. At $4,000,000 Mr Dodich passed the property in and after lengthy negotiations the property was bought after for an undisclosed amount.” (Josh Bong)

Biggest Pass in we covered: 72 Kerferd St, Malvern East, John Bongiorno (Marshall White); Passed in, $2,800,000, no bidders
“With 300 people having viewed this property and 100 or so crowded into the garden of this Gascoigne Estate home, auctioneer John Bongiorno was confident of a sale. But it was not to be with a vendor bid of $2,800,000 the only one of the day and the property passed in. However, with one interested party heading inside, it may not be long before this stunning property is sporting a ‘sold’ sign.” (Debbie McTaggart)

The Big Issue: Architect Adam and Klarity Kris discuss whether they believe buying conditions will be as good post-Easter as they are now.

Auction Video: This week Jen Milligan, our Market News Co-ordinator, fills in for our advocates who were busy with other auction commitments. 15 Epping St, Malvern East, a BenMac auction with Iain Carmichael. Click on the live action auction video.

Buyer Masterclass: Conditions are great for homebuyers – so where are they?

We Only Buy Homes

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CAMBERWELL, 8 Stanhope Grove: James Tostevin (Marshall White) is a picture of concentration. Bought under the hammer, $2,400,000, two bidders

We mainly focus on the better quality homes, however 10 from 10 was still a surprise. This stat varies dramatically from our overall monitored auctions stat of just over 50% – similar to last week.

It was a Super Saturday in Boroondara with over 50 auctions at $M+ and over 30 sales reported as being above a million dollars.

So what was bought and what wasn’t

Bought

• Hawthorn 51 Berkeley St with Tim Blackett Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court – Expressions of Interest Campaign.
• While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were. Both Private Sales.
• But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies. Both at auction.
• The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Passed-In – the difficult ones

• 16 Glenroy Hawthorn Passed in $3,000,000 on a vendor bid. – Difficult for see how to reno easily?
• 16 Burton Hawthorn Passed in $3,150,000 on a vendor bid. – Price versus land content?
• 256 Riversdale Hawthorn $2,020,000 – Difficult position?
• 44 Harcourt Hawthorn East $2,000,000 – Family home but no real backyard?
• Plenty of homes passed in just below a million in that $900,000 range – $million is still a real mental barrier for many buyers?

Agent Q & A : How does current pricing compare with the same time last year?

Tim Heavyside, Fletchers, Canterbury: “Property prices were slightly higher back then than now.”

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.”

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

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

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

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

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

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

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

Week Ending 19th March:

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

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

In Boroondara:

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

In Stonnington:

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

In Bayside:

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

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

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

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

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

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

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

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

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

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

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

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

Actual Boughts in Stonnington:

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

Bayside: A Key land Indicator

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

Boroondara: Action at the Top End almost non-existent

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

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

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

What are you talking about? - course the market's OK! St Kilda East 239 Alma Road: Phillip Kingston: Bought for $1,500,000: 3 bidders (Photo Kate Agnoleto)

At 6pm on Saturday, the James Clearance Rate on the 31 auctions we covered was 58%.

Bidderman, our demand indicator of average bidders per auction, had a small rise to 1.6 bidders per auction, in part due to four volcanoes (strong auctions) including one 7 bidder auction in 28 Barrington St Kew.

These figures indicate that the market has now cooled – not frozen or falling apart, just cooled. That means we have moved into a buyers’ market, perhaps until Easter and possibly until Spring.

Well-priced homes are still selling. And there have been some surprising above-expectation results, such as 28 Barrington Kew (Glen Coutinho) which sold for $2,230,000 and, last week,Victor Road Kew (James Tostevin) at $4.1 million. But if the market doesn’t agree with initial pricing then it’s a slow, torturous journey to get a result. See our special Pass-Ins and Stales Report below.

This week we also look at the returns of serve on The Economist’s article as the ‘Experts’ hit back against the “Overpriced” headlines of last week.

This Weekend’s Market Summary:

This weekend in most places, except Boroondara, there was limited $M+ stock on offer at auction. The individual council clearance rates we report on in our market wraps could be distorted due to a) lack of auctions and b) lack of overall quality in those auctions. But this is not to imply a lack of stock in general – there are high levels of $M+ stock available across the board and Boroondara in particular is almost awash with homes on the market.

Looking specifically for a moment at Boroondara (Kew, Hawthorn, Canterbury and Camberwell), while this market may be a little out of kilter with the rest of Melbourne in terms of auction numbers, in the past few years it is a market that has shown the strongest resilience against negativity. It was affected by the GST for the shortest time, and has had the biggest price increases since. This weekend too it seemed to have a little oomph and we expect the clearance rate for Boorondara $M+ homes to be in the high 50s to low 60s.

But it does have a fight on its hands right now, with the main demand drivers (overseas buyers) reducing greatly in activity and supply to the market continuing to arrive week after week. Which means that buyers who can look beyond the headlines will find opportunities, and with the right strategies you should be in a position to push back a little against the seemingly never ending sellers’ market.

The next few weeks will be better in terms of auction quality in the top of the Top End in Boroondara. As long as those properties sell and the clearance rates stay stable, and if new stock reduces post Easter, we could move back to a balanced market. But if stock continues to come on in big numbers then the market will almost certainly remain cool with a significant change in demand sentiment.

Most of the $M+ homes on offer that sold this weekend were in the early $1 million range.

Bayside, Port Phillip, Stonnington have been quiet, with only a handful of sales in the post auction wash up from March 19th  and likewise at auction this weekend. In Port Phillip this is understandable as the Grand Prix completely extinguishes the market for almost a month. Why auction numbers are down in Brighton, Toorak and Malvern is not completely obvious – well not to us anyway. April 9th is shaping up as a Super Saturday of some sorts with almost 120 auctions in Boroondara and Stonnington combined. $M+ auctions in Bayside are still light on at the top of the Top End with mainly $1 million to $2 million homes on offer for the next few weeks leading into Easter. Most of the top of the Top End in Bayside is not going to auction.

Agent thoughts: Has the market changed since before the Labour Day weekend?
Chris Barrett, Marshall White, Hawthorn:“There have been a lot of people in the media talking about a negative change in the market since Labour day weekend, I however have found this to be unsubstantiated. As long as vendors prices are realistic and the property is presented well vendors can expect solid interest in their home.”
John Clarkson, Hocking Stuart, Brighton:“Good properties near local attractions and amenities, schools, shopping and the beach are still attracting a high level of enquiry.  Since Labour Day weekend the message is clear: If you are realistically priced you have a very good chance of selling . If you are above market perception, enquiry is reduced to a trickle.”  * For John’s full comments please see the Bayside weekly wrap.

James Special Report: Pass-Ins and Stales – The Autumn overhang build up.

We went back and re-examined all the auctions we reported on this year in 2011 and we revisited all the pass-ins, using still advertised on the net to determine their still for sale status. Please note that the table below is only connected with PASS-INS, not the homes we reported as bought before, at or just after auction on the day.

The table does make for interesting reading on the fate of a home that the market does not consider to be priced correctly at auction.

The table below shows Adjusted Clearance Rates comparing”On the Day” Clearance Rates with “On the Day plus Bought since”. Back in February 19 and 26 Pass-ins were taken up fairly quickly. However the most interesting stat is the lack of take up on Passed-in homes over the last two weeks of auctions: only 3 in 26.

• 1 of the 13 unsolds from the March 5th pass-ins and
• 2 of the 13 from the March 19th pass-ins.

This we feel confirms the view that the $M+ market started the year as balanced, but around Labour Day took a cooling direction.

What's happening Nick? Bentleigh 7 Eddys: Bought $1,312,500: 3 bidders. (Photo: David James)

James Big Issue: Agents claiming there are 100% Clearance rates in this market are just as misleading as saying the market is in freefall – both are far from the truth. Klarity Kris and Architect Adam cover it in the James Big Issue Video. Here is a summary of what they say.

• Still some surprising results. Two in particular, both in Boroondara, that stand out are Victor Avenue in Kew with James Tostevin – which sold for a hard to believe $4,100,000. Nic Franzman, Mark Dayman and Nic Ptak also from Marshall White’s result at 22 Stawell St Kew for $3,300,000. That was also a most surprising result
• We are hearing from agents 100% clearance rates – mainly due to agents feeling they need to respond to the Negativity of The Economist’s article and the Earthquakes, which for the moment have contributed to dampening demand.
• An interesting stat is that only 3 of the 26 homes we reported as passed in after auction in the last two weeks of auctions have since sold.
• We could say that 3 from 26 is reflective of the market strength – a far cry from the 100% Clearance Rate stats, BUT 3 from 26 while true, is also misrepresenting the market just as is reporting 100% clearance rates
• The market was in a balanced state pre Labour Day and as expected it is now going into a cooling phase until Easter due to increased stock levels and drop in demand intensity.

The message for buyers

• You have choice in the $3m+ range but there are still a few surprisingly strong results
• You will still have to compete relatively strongly if the home is good and well priced in that $1m to $1.5m range
• And the middle range say circle $2m to $2.5m is a bit of moving beast – the trend is not crystal clear to us at this stage.

Click on the JAMES BIG ISSUE video with Architect Adam and Klarity Kris in the middle of the home page

Media Monitor: Are Melbourne homes overpriced?

The case for being overpriced arose from The Economist’s article – which we reported on last week.  And now this week the case against those seemingly extreme overpriced by 56% headlines.

Rob Brooker head of economics from the NAB

1. Current events such as floods and Japan are affecting Melbourne short term, but long term our fundamentals are very strong.
2. Not suggesting prices are going to increase rapidly as affordability is hard pressed right now but we do have a shortage of housing stock.

His comments can be found in the excellent Kay and Burton report – sure it’s a selling tool but we listen to the expert commentary each time it’s on It’s well produced, they have credible experts and it’s relevant to our high end Melbourne market. Check it out, at least the expert comment stuff. The home fluff afterwards is up to you: http://www.kayburton.com.au/kayburtonreport

Paul Bloxham – HSBC’s chief economist for Australia and New Zealand, and a former RBA economist savages The Economist’s article stating “it’s too naive to be useful”. His main points in the Business Spectator are

1. We have an undersupply in inner city areas (totally agree with this comment)
2. Our stock is very high quality and has improved considerably over the last 20 years contributing to the increases in price paid (totally agree with this comment)
3. Very strong and improving economy (beyond our level of expertise but sounds good)

For the full article http://www.businessspectator.com.au/bs.nsf/Article/Australian-property-prices-housing-bubble-pd20110317-F24WP?OpenDocument&src=sph This was supplied by Al Craig of Jellis Craig – thank you.

‘Round the Grounds Headlines:
Boroondara- Some solid results but the trend is down under weight of stock numbers.
Bayside- Little movement on a lot of the recent Auction pass-ins
Stonnington- Small numbers of $M+ auctions today – although plenty of Top End non auction stock available
Port Phillip-With the Grand Prix – only 4 key $M+ auctions – 3 sold
More detailed analysis on our Weekly Local Council Market Wraps

Biggest Sales we can report:

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

Biggest Sale we covered after auction: 44 Mary St Hawthorn, Antony Woodley of Marshall White. Above $2,700,000 (Undisclosed): Bought after auction, 1 bidder

Biggest Sale we covered under the hammer: 28 Barrington Ave, Kew, Glen Coutinho (Hocking Stuart), Under the hammer $2,230,000, 7 bidders (WOW)
“This Kew property did attract a crowd of 80 people, with quite a few potential buyers in the mix. The auctioneer, Glen Countinho, had to field bids from a whopping seven different bidders! Despite the light rain, the flow of the auction was quite amazing and reached the final amount of $2,230,000 before the hammer came down.” (Sonia Matmati)

Biggest Pass In: 68 Studley Park Rd, Kew, Passed in, $3,700,000
“A very pretty setting for an auction. Standing on an elevated embankment, auctioneer Richard Earle literally oversaw proceedings. He began by highlighting the virtues of this property with energy and detail. No bids came forth, however, so it was passed in for $3,700,000.”

Auction Video: This week i’ts down to Brighton with Klarity Kris at 22 Oakwood Ave, a Hocking Stuart auction with Peter Kennett. Click on the live action.

Please Note: we always ask permission to film and we always show respect at each auction. We also never video at an auction we are bidding at. If you are at an auction and don’t wish to be videoed, there are designated no-video zones. See our co-workers or ask the auctioneer.

Buyer Master Class: Klarity Kris discusses what’s necessary when buying a home when there are kids in the picture. Is it double storey single fronted or single storey double fronted!

Copyright: Mouldy Bread Picture from ChemistryWorldBlog.

We Only Buy Homes

CAMBERWELL, 6 Tyne St: Jason Scillio (Kay & Burton) does his best to sell "the big home on the big block" but to no avail. Passed in, $1,800,000, no bidders.

Key Points:

• Boroondara has a lot of stock on the market and waves are continuing to arrive each week – the indicators do clearly show a dampening of market demand under weight of numbers, almost identical to May of last year. However these results do not show the market is significantly dropping or without some strong results.
• Surrey Hills was a great place to be a seller this weekend with 6 from 6 bought over a million dollars.
• 28 Barrington Kew – Glen Coutinho was huge (in our mind) drawing out $300,000 more than our best guess with 7 bidders – so what do we know. Wow.
• 23 Lisson Grove Hawthorn was reported as bought mid week for in excess of $3,600,000. Michael Lui of Marshall White
• Our Video Auction of last week at 36 Uvadale Kew with Richard Winneke has been sold post auction for $1,940,000
• Many passed-in properties are struggling in the weeks after auction.

Agent Q & A: Has the market changed since before Labour Day weekend?
Duane Wolowiec, Marshall White, Hawthorn:“The market seems relatively active in terms of overall numbers at opens and auctions. Having said that, I feel buyers are still a little cautious during the auction itself. Some are preferring to approach us post auction to discuss their further interest in the property if the property is in a pass-in situation.”
Jeremy Tyrrell, Fletchers, Balwyn North:“(Since Labour Day), clearance rates are very healthy in view of increased stock levels.”
Tim Heavyside, Fletchers, Canterbury:”The market is a bit of a ‘roller coaster’ ride for vendors at the moment.  With the volume of properties available prior to Easter, the buyers have a fair amount to select from. Hence we are starting to see a tougher market.”

KEW, 36 Uvadale Grove: Alastair Craig shows some concern at this Boroondara auction as only one bidder came out to play on a relatively good home. Passed in $1,825,000, 1 bidder.

Key Points:

• Both Jellis Craig and Marshall White report very strong clearance rates into the 80s
• Stock continues to come onto the pre Easter market – the question is whether the market will be able to sustain this
• James Tostevin: “Overall a good day, the $3m+ market is hard to read and we are not getting huge numbers of bidders at many auctions;  so there is a case to say the results maybe looking healthier than the market actually is – but from a purely stats points of view (clearance rates) today was a good day.”
• Balwyn 34-36 Linckens:  (Toby Parker of Hocking Stuart) – a $3m+ auction slotted in for auction this weekend has been bought before. The quote was over $3.7m and if, as we believe, it was bought for close to $4 million then it was a strong sale.
• Kew 41 Victor Avenue: (James Tostevin) – Two strong bidders and sold under the hammer for $4,100,000.
• Canterbury 17a Alexander Avenue: Passed In $3,200,000. No bidders
• Kew 22 Stawell: Passed In $3,000,000. No bidders

Agent Q & A: “What is your take on the Economist’s article that Australian house prices are overvalued by 56%?”
Jeremy Desmier, Fletchers, Balwyn North:”Views of economists vary widely and most will recall that in the past predictions made by highly regarded members of this industry have proven wrong.  For every pundit who is talking a bubble and predicting a collapse of significant magnitude, there will be another talking about population growth fuelling demand, and a  lack of new building approvals contributing to the already short supply of homes, resulting in continued price growth.  It must be remembered that Australia is diverse, so in assessing the performance of the real estate market it needs to be broken down into regions.  Areas that will continue to do well or at least maintain prices are those supported by good infrastructure and job opportunities rather than the more remote areas that rely on overseas income for tourism and are directly affected by the current world economy. At the coal face, we as local agents are observing continued confidence and strong demand in the Melbourne market.  Although prices in general are not surging, most agree that a booming market, with prices rising rapidly as they did during 2009/2010, would be neither sustainable nor healthy in the long term.  What we are observing now is a more balanced marketplace. When the Global financial crisis hit in 2008, many of those who had predicted doom and gloom for years, and had stated that the market was over-valued, claimed vindication.  Interestingly the local market only faltered for a short time, before entering another growth cycle of 12-18 months, where the highs of 2007 have now been well and truly been surpassed. With the strength of our natural resources boom underpinning the Australian economy, and continued strong employment leading to disposable income, in my opinion  there is no reason to consider that there will be any significant change in the immediate future.”

Steve Burke, Jellis Craig, Hawthorn:“Our housing prices are obviously in the higher range in relation to other countries and the statistics mentioned by The Economist article support this. However we live in a country with a relatively stable political landscape and operate in a resources led economy where interest rates have remained relatively low for many years making money fairly cheap to borrow. In recent decades Australians have moved to double income families with both parents generally working and earning healthy incomes enabling people to purchase property at a higher level and thus have the income capacity to service their debt. We also have consistent strong immigration levels resulting in a shortage of housing and thus pushing pricing up across the board. Property prices have risen considerably in the prestigious and affluent ‘school belt’ suburbs of Brighton, Toorak, Camberwell, Hawthorn, etc where the demand outstrips the supply and the higher valued demographic families can afford to pay the higher prices and this is not likely to change. The other thing we must also take into account in the equation of whether our market is over priced is the large size of the land generally associated with our housing purchases in Australia as compared to other countries that operate on higher density living models. We expect the housing market and prices to remain relatively stable over the next few years and believe the resources economy is robust enough to support this. Remember people have been predicting a property bubble for many years and if you took that advice and have been waiting for the market to collapse the affordability gap due to consistent strong capital growth will have left you way behind.”

Glen Coutinho, Hocking Stuart, Kew: “Australia is the most unique country in the world in  terms of space, safety and lifestyle so it probably costs a premium to live here. There is still a strong demand  for good properties in the schoolbelt area.”