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

Malvern 61 Wheatland: Andrew Hayne and Maddie Kennedy of Marshall White - spruiking the spruik on a crisp but gorgeous winter's day: Bought Afterwards in the very early $2ms: No bidders

Talking with James Connell of Marshall White as he scoots off for a bit of a break, he tells me the market is sound with no real price drops. When you get the figure of 140 sales in May for Marshall White, it’s hard to argue with that.

It’s also hard to argue when Kay and Burton’s Gerald Delany (also off on a break soon) backs up everything James Connell says.  (You can see Gerald voicing his thoughts on our new monthly buyers’ video called G-E-R-A-L-D on our marketnews home page.) In May 2010 K & B handled 80 properties and nearly $250million in sales.

In fact, with more than 25 sales at over a million dollars in Stonnington since our last report (June 6), it’s hard to argue the market is floundering. It seems more accurate to say that the market is finding its equilibrium – even if in our mind it seems as if prices, in many cases, have fallen substantially.

Our evidence

We went to 10 auctions today -  two were bought under the hammer and two more were bought quickly afterwards, leaving 6 unsold without a bid. On that evidence  it doesn’t appear that the market has reached its equilibrium.

Let’s look at Kay and Burton’s three auctions we attended:

1 ELDENE COURT, TOORAK Gerald Delany Passed In $2,400,000 – No bidders
With the wind picking up and the temperature dropping, the cold winter’s afternoon seemed to have a distinct effect on the 40 or so people in the crowd. Auctioneer Gerald Delany attempted to raise some interest in the Toorak property, but no bids were forthcoming. He announced a vendor bid of $2,400,000, which did little to change the mood of the crowd and failed to extract an opening bid. The property was passed in at $2,400,000.

6 AVOCA STREET, SOUTH YARRA Gerald Delany Passed In $4,000,000 – No bidders
This was certainly the biggest auction I have reported on. Close to 180 people were watching on in anticipation. Auctioneer Gerald Delany’s projected voice could be heard from either end of Toorak Road as he endeavoured to extract a bid from the enormous crowd. With no bids forthcoming, Delany put in a vendor bid of $4,000,000. This had little effect on the lively mob of onlookers. After consulting with the vendors, Delany returned to give the crowd one more opportunity to make a bid for this unique and beautiful South Yarra home. However, there were no parties interested in bidding at the auction. With no bids offered, the property was passed in.

23 MAYFIELD AVENUE, MALVERN Jason Scillio Passed In - No bidders
With a very small crowd of less than 40, auctioneer Jason Scillio attempted to raise some interest in this beautiful home in Malvern. Having received no assistance from the crowd, he opened the auction with a vendor bid of $3,000,000. No further bids were forthcoming and the property was subsequently passed in. This was a very lacklustre auction, which was surprising considering the property’s stunning design and stature.

So what to make of it?

Price and Strategy: You need to know both if you are to buy well at this time. There are certainly bargains to be had as long as you, the buyer, have the bottle and the vendor has the need.

What Are Your Needs?

South Yarra v Prahran – a difference of $1.2 million, and the cheaper one was in South Yarra.

• 49 Fitzgerald St, South Yarra (Hugh Hardy Benmac) James Home Rating 806/1000, sold for $2,520,000 post auction. Great home. See our auction report and full rating in this week’s auction reports
• 51 Murray St Prahran (Justin Long and Adam Jack Marshall White) James Home Rating 926/1000, sold for $3,740,000. See our auction report and full rating in this week’s auction reports

Glen Iris – 9 from 10 at auction today – Very Solid

Gasgoine
The market was not exactly full of excitement for us on Saturday in terms of quality.  Malvern’s Gasgoine and nearby had three auctions of less than spectacular homes – all three passed in and one sold post auction at the lower end of the range.

Expressions of Interest – Closed 17^th June – 3 Avalon Road Armadale – Ross Savas of Kay and Burton

James Home Rating 922/1000: “This is the Hampden Road precinct and for big homes in Armadale this is the place to be, as you are in amongst some truly great homes in size and architectural quality and this street is one of the best of those. The look from the street in my opinion does not do this home justice in terms of what is inside. I’m not going to do the salesman job any more than to say the only person who wouldn’t like this home is the bathroom cleaner – there are a lot. For me the highlight is the back garden – the space between indoor living and outdoor garden and then back to an indoor but completely open gymnasium with 1/2 full sized basketball court is a very powerful one. The children who grow up here will remember this for the rest of their lives. The garage, with its entrance from Barnato, seems to defy gravity. But it is separate, unobtrusive and works for me. I think this home is hard to quantify in numbers – the land is north of the 3 and a half million and the house is ……..  Faults – well I’ve got the rose coloured glasses on with this one and I couldn’t find one.”

We will be interested to see this result from a price and a method of sale point of view.

Clearance Rates

45 monitored – 26 bought – 58% clearance rate (last week 65/ week before 69)

Buy happy

Prahran 51 Murray: We loved - we tried - we failed to get. Great home - James Home Rating 926/1000. Bought under the hammer for $3,740,000. 4 bidders. John Bongiorno Marshall White

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

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

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

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

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

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

Highlights

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

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

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

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

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

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

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

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

Let’s look at point 4 in more detail:

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

From the top:

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

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

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

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

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

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

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

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

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

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

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

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

OFFER TECHNIQUE – THE CLAYTONS RESERVE  (The false reserve)

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

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

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

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

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

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

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

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

Let’s move on.

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

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

Buy Happy

Mal

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

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

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

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

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

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

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

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

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

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

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

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

Buy Opportunity

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

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

Albert Park: 81 Vincent St: Good Crowd (70) but no action; Passed In on multiple vendor bids for $1,670,000

Not a lot on offer today and despite our headline a few were put away albeit on lower interest levels than last month. Of the reported sales we saw 7 from 13 go under the hammer or sell soon after for a 54% clearance rate. The standout auction was 65 Beacon Vista Port Melbourne with David Lack of Biggin and Scott. In front of a big crowd of 150, 2 bidders fought it out from $2,500,000 to $3,135,000. A strong result by anyone’s standards.

Some Opinions

Michael Szulc from Cayzers believes “the market has dropped right back – peaked back at the end of February”.

Kaine Lanyon of Bennison Mackinnon thinks things have dropped off a lot also.

To quote Damien O’Sullivan of Bennison Mackinnon: “Buyers are perhaps not acting in their best interests”. Implying there are some bargains not being taken up.

Is it demand or supply? At this stage there are a number of single fronted homes in Albert Park, Middle Park and South Melbourne – all around the 900K mark so it maybe supply and lack of qualty, just as much as it maybe buyer caution caused by outside influences.

St Kilda West and 24 York St had a sold result last Sunday just under $2million through Andrew Turner of Cayzers. Again reinforces quality land is anything up to $6,000 sqm with York selling for over $4,500 per sqm with a wide frontage and good redevelopment possibilities.

Dropping further down the bay we see Elwood finding plenty to put onto the market with 5 sales and an off market in the early to mid $1’s being bought. However once the number approaches or exceeds

 $2million it’s a different story. There are few bidders and homes take longer to sell (as a general rule). Cases in point are 2 Kendall and 11 Addison but granted 57 Dickens with Torsten Kasper of Chisholm and Gamon did sell. And what’s with Addison St – I’ve never seen so many homes for sale in this prized stretch before.

Another big week coming with 23 scheduled auctions over a $m. The big question is it lack of quality, quantity of supply (choice) or buyer mood changes from external sources that are currently affecting the market? What will this mean going forward? Lots still happening just in a diferent manner, at a different pace and on a different level to last month!

Buy Opportunity

Port Melbourne: 65 Beacon Vista: BANG: Bought under the hammer for $3,135,000: 2 bidders: Biggin and Scott's David Lack in charge!

Richard Earle at Vista Avenue Kew, in full flight for his vendor and Jellis Craig

On Saturday at 5pm, we have a James clearance rate of 47% on the 19 auctions we attended – by Sunday this has moved to a very strong 79% (our highest in 2 years). On first blush, it doesn’t necessarily say the market is moving ahead positively (for sellers) but, in fairness, it may say that it is no longer moving backwards either.

However it’s only one weekend albeit it was a lot stronger clearance rate than any of us (buying or selling agents) would have expected before Christmas and further evidence of a shift in buyer and seller sentiment that started 2 weeks ago.

Our main focus this weekend has been getting out there and reporting what is really happening at auctions.

Big numbers of people are turning up at auctions; big numbers are going through opens; multiple bidder auctions over a million. There are more positive vibes from selling agents and deals are getting done. This is what is happening in the million-dollar-plus market in the past 10 days- whether it lasts – time will tell.

Why is this happening? In our opinion, there are six reasons.

1. Shortage of good stock. There’s still plenty of rubbish that wasn’t bought last year and still plenty of overpriced homes (although this number is diminishing), but not many new and exciting homes are coming to market. And why would you sell, unless you had to or you have traded. It’s not champagne and caviar for sellers – more like beer and vegemite – well not until the last 10 days.

2. Mood shift. There has definitely been a mood shift in the past two weeks by buyers who now feel the Grim Reaper is still there but he may not be as all-conquering as previously thought.

3. Interest rates. Investors can’t ignore cash-flow-neutral or better situations forever.

4. Vendors. Some are definitely getting instructions from nervous spouses, banks or friends to deal and they are. Don’t underestimate that a reason more deals are getting done is that more vendors are understanding that past glories have gone (well at least for the moment)

5. Quality selling agents. Many sellers turned to the “bulltishing selling agents” when prices started to drop in 2008 – hoping or believing their place would be different. As those agents leave the industry and the more professional remain, sellers are returning to selling agents that won’t tell them “pie in the sky” but will tell them reality and these sellers are actually selling their homes.

6. Some buyers and sellers who had put their life on hold in 2008 have decided to get on with it in 2009, as time is precious.

Is there a trend or a prediction from us? Nope. Let’s wait and see what the next two weeks of results bring before we can say maybe this or that is changing.

A huge auction at 21 Finch St Malvern East of a really great property resulted in a buy just under $4 million by a lucky family (I assume it was a family). 250 people (pictured above) at this auction saw John Bongiorno run a very strong auction with three bidders. Three bidders over $3.5 million in the Gasgoine Estate Malvern East is a sign of a healthy market.

Just down the road in Maitland St Glen Iris saw three bidders again bid strongly, resulting in a buy above $1.1 million, as expected, despite the quote.

An exceptional result is rumoured to have occurred in Bayview Crescent in Black Rock – exceptional for the seller that is – in a pre -auction bidding frenzy conducted by Jenny Dwyer of Hocking Stuart.

Just round the corner in Iona St Black Rock, Bert Geraerts of Buxton achieved a good result on one of the better townhouses in that area. It sold for more than $1.6 million.

In Hawthorn, 10 Connell Street was bought beforehand at an undisclosed price through James Tostevin. Properties are being bought in the past 10 days.

All main selling agencies have, in discussions with our advocates, stated that multiple million-dollar-plus buys have occurred in the past two weeks and there’s also been increased buyer enquiries. We can corroborate this through what is happening in our business – we have made more purchases in the last two weeks than we have in the past two months.

However, let’s see what happens from here – if stock levels or overpriced homes suddenly shoot up again or we see some more and consistent bad news headlines then this weekend may have been a bleep on the radar. But as of Sunday it’s a bleep that we as $1m+ buyers need to monitor.

Good property buying is more like a marathon than a sprint. One result, one weekend, does not require a complete mental re-engineer.

Can I recommend an interesting article below on a new trend – lifts – from our in-house architect Adam Woledge, who is now managing million-dollar new builds and major refurbishings on behalf of our buying clients in Boroondara, Bayside and Stonnington.

Buy Well

Mal

Sundays Reflections: Wow it was a positive day for the market yesterday and it maybe an indication of the bottom but it is still very early days. Four things stick in my mind and why as buyers a little bit of circumspection doesn’t hurt.

1.Stock Levels are at the lowest we can remember (new stock that is – still a fair bit of last years)

2.Vendors are listening to good selling agents if they really want to sell. The heady days of 2007 were just that; the heady days of 2007; we are now in 2009. Many vendors have accepted this and therefore they are selling.

3.We reported on ten $1m auctions last week and two sold on the day – since then only a further 2 have sold (that we are aware of) and both were good homes – Invermay (Hawthorn East ) and Head (Brighton). So there is still 6 that remain from last weekend. 2 of those that remain unsold in Hillcrest (Glen Iris) and Cowper (Brighton) were bought and sold last year and they cannot now (2009) get near the prices paid then (2008).

4.Let’s look at 2 auctions of yesterday – 21 Finch St Malvern East – by any test that was a stellar result for the seller- this year, last year, even in 2007 that was a big price (please no criticism of buyer, we would have recommended paying that price on that house under those circumstances) – however 23 Maitland St Glen Iris also got a price well above quote ($230,000 above quote) at $1,130,000 and it was a great home with huge interest – we had over 60 people (unique visitors)on the public version of our James Home Rating – however in our opinion in 2007 this would have been over $1.3 million.

Our point re above – yes we have had a flurry of activity this last week or so and if you are buying something specific then you may need to recognise that individual markets shift on a daily basis and maybe a buy requires a few more dollars more than it did a few days ago but we have not yet seen enough consistent evidence to show what some of our “selling cousins” may be shouting from the rooftops on Monday – the boom has returned and you have to pay whatever we say.

Buyers the bargains are there – how long for – the next six months? Yes. After that! Don’t know!

Stay tuned, let’s see what happens next week and next month – then we will really start to get a 2009 feel.

The New Game in Town – Best Offer in buy 6.00 pm on Deadline Day. No Rules – Written or Otherwise No Guidelines from REIV or Law What Price – When is enough actually enough – when is it too much? The Buyers Dilemma – Are you trying to buy a Price or buy a Property? The Sellers Dilemma – Are they getting a buyers best offer! Fear of loss in many cases is overtaken in a conservative buyer’s mind by fear of paying too much or fear of process or fear of selling agents. Not all bad – play your cards right and you may also get some real bargains here!

It was only a matter of time, although it took longer than expected for a number of high quality selling agencies to move away from blanket auctioning to other alternative methods of sale such as Range and Deadline Private Sale or Expressions of Interest.

These are not new methods – buying $5 and $10 million homes with some regularity we have experienced these methods of sales for years. It’s just now they are becoming more widespread at lower levels.

Blanket auctioning was/is destroying agent reputations, seller confidences and in a bizarre twist buyer confidences as well. Something had to give and it seems like it is the auction system itself which is no longer seen as the inner city cure for selling all homes.

Auctioning is not dead and it will return; because in a rising market, overall nothing works better than auctions for sellers.

However we are not in a rising market and especially so in the million dollar plus market!

How do Expressions of Interest and Range Private Sales work?

THEY ARE IN FACT BLIND AUCTIONS.

Step 1 – Selling Agent puts a sign Home for Sale.

Step 2 – Buyers know a very rough suggested price.
Step 3 – Call for submissions by a date.
Step 4 – Open for Inspections or Private Appointments.
Step 5 – Buyer submissions come in – no standard way.
Step 6 – No Written Rules from Seller on how it works.
Step 7 – How much do you write in on you submission – do you in fact write a number?
Step 8 – Selling Agents assess interest and discuss with seller.
Step 9 – Who knows what’s next – well it depends. How long does it take – well it depends. Do you get a call – well it depends.
Step 10 – What is the competition – the vendor or other buyers? Who knows?
Step 11 – Some form of smokes and mirrors takes place and a “winner” is found
Step 12 – Property is sold – maybe.

It should be obvious but there are a number of “holes” here for buyers to fall into.
Step 5,6 and 7 – You really need to know how to do this? Too low or too little interest shown and you are left out of the process. Too high or too much interest shown and you will buy the property but with many auction reserves dropping by $500,000 in a week you can easily pay too much.

Step 9,10 and 11. – With auctions you could see the whites of their eyes or lack of them. You were told it’s on the market. You knew a reserve at some point. With Expressions of Interest and Range Private Sales you do not know that so you need techniques and a plan to manage this particular part of the process.

As much as some buyers struggle with auctions when they are working properly there are transparent. Nothing can be less transparent than selling agents speaking to you over the phone claiming this and that. No complaints from us – it is their job and they are working for the vendor not you the buyer. If you have complaints they will fall on deaf ears, so it’s best to get yourselves prepared to manage this ever increasing way to do business on Melbourne’s more expensive homes.

As we said in the executive summary, Expressions of Interest are not all bad; because it’s a process that even fewer buyers have confidence in than auctions. If you know how to play the game, then you can buy homes against other buyers who in fact would have beaten you at auction, because they have more money but less “smarts”.

Buy Well

Mal

Today, Saturday the 25th, was the second-hardest auction day of the year, whether you were a buyer or seller. The last Saturday in November will be the toughest, as higher stock levels will be coupled with large amounts of unsold homes left over from the early 2008 and earlier Spring campaigns and also from today.

Why is it hard for both buyer and seller? Well, sellers who still expect everything to sell like clockwork at prices above expectations face disappointment, and, for buyers unused to such choice, it is hard to judge what price to pay and which property to buy.

Now, much more so than five or 10 years ago, it is about the quality of the decision you make and, in many cases, the quality of decision you make under pressure.

Over the next 12 months, if you buy right, you can set you and your family up for life or, at the very least, you can make a decision that will help you retire in a lot better financial shape.

If you buy poorly, you can miss an opportunity that for many years you will look back on with some angst.

Similarly, if you sell poorly under pressure or panic and your circumstances were such that the home was a key part of your longer-term financial outcomes, then you may not have enough firepower to get back into the market as it moves ahead in future times; or you may deplete your assets to such an extent that you simply have nothing left to appreciate. Good debt is still okay.

It is all about good decisions and nothing is so critical in Melbourne’s median-priced ($500,000 to $800,000) market today. By good decisions, we are not talking about an agent’s commission rate being cut back if you are selling – getting the right agent is the key “now” decision (of course, still well behind what you actually bought in the first place). By good decisions, we are not talking about knocking off ten grand in a pre-auction bid if you are buying; we are talking about buying the right home in the right position at the right price.

We cannot emphasise enough that if you are in your 30s or 40s and really only just getting into property, or your family is expanding or you are just looking for a change of scene, that time you spend on getting your next move right will be worth much more than all the time you spend analysing your super fund returns, your Harvey Norman catalogue and your newspaper car guide combined.

It is all about Price, Property and Position. Today, in October 2008, while many sellers are nervous and prone to knee-jerk reactions, there are bargains around.

Positive advice:

Financial Good Decision One: Don’t buy a McMansion in an outer Melbourne new estate. Buy a smaller home (possibly in need of a scrub-up) near infrastructure, closer to the CBD and in an established suburb.

Financial Good Decision Two: Don’t get sucked in by kitchen bench tops (girls) or stamp duty/investment savings (boys) on a glitzy townhouse with nothing else going for it. If you buy glitz and nothing else, in 10 years (when it’s gone), what attracts the next buyer to your home? Nothing, and therefore your selling price drops. Please buy land content (position – next to infrastructure such as shops and rail lines – and land size such as yard space, car access etc).

Financial Good Decision Three: Don’t buy a block to build the dream and don’t buy a renovator’s delight unless you delight in renovating. Why? Building costs on top of your purchase price completely change your land-to-price ratio. If you can buy somebody else’s dream already completed and buy at a price close to land value and then make a few cosmetic modifications to get it right, you will be miles in front (on the long-term growth stakes). In other words, buy a well-located, sound building with a good floor plan in need of minor changes to meet your requirements – but of course get it at the right price.

Emotional outcomes are also important and the other “thing” involved in buying a home – so we accept that most times it’s not all a financial decision. What we mean is, if you’re a bloke and you buy financially well but your wife is not happy, then good luck with your future. Happy Wife – Happy Life still overrides all the money in the world (I can’t believe we wrote this). Make your nirvana a balance between financial and emotional considerations – but still ensure that you get the financial basics right.

In summary, if your emotional needs are being met, then financially always: Buy Position over Property; Property over Price; Built over Unbuilt: Good Floorplan over Glitzy Appliances.

Our advice, as always, is to get a professional buying agent to assist you to clarify your needs; hunt for on and off markets; assess value and then negotiate to your advantage. Of course, we would say that – but it’s true.

You have such a huge opportunity in the next year to set yourself up.

Do it if it feels right.

Good Luck and Good Decision Making

At 5pm Saturday, of the 15 million dollar auctions we attended today, only three had sold under the hammer.

We do expect a few of these to sell by tomorrow. However, there is no doubt we are in a state of uncertainty with regards to the future million-dollar-plus property market and that, of course, tends to make all of us nervous, which, in turn, means fewer transactions as buyers “shut up shop” a bit.

A contrarian sees opportunity – but let’s not be smart for a while. People are hurting, mainly sellers, and we do feel for the pain it is causing. However, we are buyer representatives and our job is to advise our clients of the true positions – the market has fallen and at present is falling further. The public clearance rates you see are skewed towards lower prices, as less than 4% of transactions in last year’s boom 100,000+ sales were more than $1 million and nowhere near what is actually happening in the upper end of the market.

Yes, properties are selling – some because they are so good that they do have multiple interest, while others are selling because the vendors have to and they have become cognisant with the Spring 2008 price regimes. Many sellers have now become conditioned by newspaper reports, selling agents and market gossip to set their price range at lower levels.

We think the three properties at Illawarra Road, Hawthorn, that were all up for auction today give a true reflection of just how far the more-than-a-million-dollar market has fallen. Last year, you would have expected them to sell under the hammer and average $1.8m to $2.1 million. Today, none sold under the hammer – in fact, there were no bids.

The market has already fallen, as stated in our previous reports, by 10-30% on homes around a million dollars and above and eased downwards between 0-10% on properties around $500,000.

So, it’s not a matter of will prices fall from last year; they actually have fallen and are continuing to fall with this current uncertainty. Where will they stop? Not exactly sure – all we know is history. It shows that, in the early 1990s, the largest and most substantial falls were in the higher-end suburbs; while the average Melbourne home price, which in 1990 was around $120,000, stayed the same until about 1996 before almost doubling by early 2001 and then increasing substantially each year until a short time ago.

For blue-chip suburbs, the variations in prices were far greater. Why? At these levels, the good properties owned by owners with good cash flow were simply not put on the market. Those that were on the market and had to be sold did not have the same demand underpinning them as they previously had, or what the lower-priced properties of the day had, and so prices fell dramatically. This is exactly what is happening today.

Some homes which were $1.2 million last year had interest from buyers who could borrow money and were keen to get in as prices rose sharply. This year, with fewer buyers per property, it is possible to see no buyers for that $1.2 million home. With no multiple buyers until, say, $950,000, a sale may result at under a million dollars if the vendor has to sell.

A few of these low offers get accepted on lower quality properties and, all of a sudden, the fear that was with buyers in a rising market of 2007 is replaced by fear from MANY sellers in a falling market this year. It’s human nature and this is what is happening now.

It’s probably not the time but those suburbs are also the first to recover and then go on and have the biggest increases. Some of the good properties are being “tarred with the bad property feather”. These are the true bargains when you find a vendor that has to sell. But please don’t buy crap.

It’s probably not the time but those suburbs are also the first to recover and then go on and have the biggest increases. This leads us onto:

As much as the talk is about money in 2008, it should, in our opinion, not be all about money. We still think it should be about quality decisions leading to good long-term financial and emotional outcomes.

Look at the graph and, yes, see the big drops in the early 1990s but, after your fear fix is met, look again at the graph and see where prices went from 2000 to 2007; eg Toorak median vs Melbourne median. Quality rises ahead of all others over the longer term.

We can all wait for a better price and, frankly, next year will probably see better buying prices on a number of homes. However, while the upside of waiting for a better price is obvious, the downside is sometimes forgotten: your life is moving on and dream homes don’t come up every day.

If your children are young, they will not be that way forever, and, if you are downsizing, your life may not stand still while the world is firstly in turmoil and then flat for the next few years. And of course that home you really like may not be on the market next year or the year after.

Balance is always a good thing and this is perhaps what is required now and in the future. Perhaps we also need a slight refocus back to the long-term game and the long term fundamentals: happy families, good location, manageable mortgages, good land content, light and a home with a wonderful feel.

If you can see that dream home and are not sure what it is worth or need help finding it in the first place then consider getting a hand from a professional buyer agent to make sure you do actually get it and also to make sure you get it at a price reflective of the market.

We live in interesting times but at least we are still living and at least it’s still interesting.

Buy well.

Sunday morning: The million dollar clearance rate we calculate at 50% and the clearance rate of auctions we attended yesterday is now 40%. We believe the REIV clearance overall 57% is accurate with few results not reported.

So if the clearance rate at auction for million dollar homes is now between 30% at auction and 50% within a few days after auction then what is the clearance rates a few weeks after auction? Is it true that a number of properties are selling after auction or do buyers have forever to make a decisions?

The simple answers are yes and no. No if the home is good, a buyer doesn’t have forever due to expected competition. Yes a buyer has plenty of time if the home is poor due to expected lack of competition.

Some Stats:

September’s Clearance rate now, (ie today), for the auctions we attended is 72%. You can see by looking back over our September Auctions in our market news. Of the 57 auctions we attended – 28 sold on the day; 10 we can confirm have sold after, 6 we have no data on (we assume 50% withdrawn and 50% sold quietly) leaving 18 remaining on the market.

Let’s have a look at why those 18 haven’t sold.

To us, the answer is the Quality of Offering. If you look at the James Home Ratings on all but two unsold properties have a James Q rating score of under 700. In this market if you are just OK (we are not saying bad), overpriced and unsold at auction, then as a seller you maybe in trouble.

So please note – only two September properties we rated at over 700 on the James Q score remain unsold.

Some finishing thoughts.

Point One
Balance is required; having one eye on the present but keep the other eye on the long term future. As buyers, the news is a better now than last year (few runaways and lower prices than late 2007) however good homes are still selling (7 out of 10) at or within a few weeks of auction; more to the point in our opinion within one month after auction the clearance rate is over 90%. But at lower than Spring 2007 prices in many but not all cases.

Point Two
Prices have come off overall but the ones with the biggest drops are in almost all cases the ones you shouldn’t and we wouldn’t recommend you to buy. The biggest drops are generally for rubbish.
Good family homes with good land content (location and size), good light, good floor plan and good feel have even in this turbulent financial world, as of mid October, lost only part of their 2007 gains and none of their 2000- 2006 gains. Yes we work for buyers but these are the facts as we see them.

So prices are better than the agent’s asking price in many circumstances but it is not a giveaway and good homes are still selling like they used to just not like they did in 2006/2007.

Point Three
If you are looking to invest under $1m then even today you will still have competition as the clearance rates are still solid. Anecdotically each of the investment type properties we have bought in the last month (3) between $500,000 and $700,000 have had multiple bidders. History of the 70′s, 80′s and 90′s show that significant drops should not be expected next year at the lower levels, but instead a time of flatness. However please note we are not saying this will definitely happen next year as unlike Japan, certain parts of America and the UK we have a solid economy, increasing skilled migration, increased population, good banking system and a shortage of homes right now.

Of course things change, they just haven’t yet.

Hope this helps and if we can help you buy a good quality home for the long term please contact us at our Brighton or Malvern office.

At 6pm Saturday, the clearance rate from the 15 auctions we attended was 40 per cent, with a few more expected to sell overnight.

The week has been a traumatic one for many whose lives are connected with world finances.

In property, this week has been the culmination of a very quiet month. Perhaps quiet is not the right word – more like stressed.

Should I or shouldn’t I?

In the million-dollar-plus stakes, many sellers have seen deal after deal fall through and agents will tell you that, even though it’s footy finals time, it’s still the quietest and most difficult time they can remember.

For us on the buying side, the news is no different – a lower enquiry rate, more nerves and fewer purchases.

What this means going forward – who knows, except it will find its balance again. In the meantime, families still have to live somewhere and children are born and people get married and divorced. Life goes on.

Under a million dollars, the news is different – the buyer enquiry rate is reasonable and people are transacting. If the home, position and price are good, then buyers are there, and even a few smarter investors. We have also bought several $700,000 investment properties recently.

Buying properties for a long time, I still find it a little funny to see why people struggle to pay 20-30 per cent LESS than last year on a house that, in 2007, would have had people fighting like crazy to get it.

But that is human nature.

If you can hold your nerve and get some good advice (about the right properties), then logic tells us that there has to be some bargains out there for those trading up or buying in for the first time or even investing.

No market news next week, as it’s the grand final so, until then, good buying.

Sunday Footnote: REIV still reported a healthy 65% clearance rate on 613 auctions. This shows the lower end of the market is still holding up. Despite last weeks positive bubble we cannot yet see the million dollar plus market moving upwards in price or buyer interest.