Elsternwick, 53 Shoobra, The man with the movie star looks, Bill Stavrakis (Biggin Scott), passed in $1,775,000, 1 bidder

Key Points:

• Mixed bag around the grounds with an overall clearance rate of 58%
• Across Melbourne there were 143 reported sales over a million dollars yesterday
• Biggest auction was 16 Brooke, Eaglemont, with Damien Carter of Miles. On a quote of mid to high $2 million it was bought for just over mid $3 million

Agent Q & A:

What are stock levels looking like post Melbourne Cup Weekend?
Nathan Foley, Fletchers, Eltham: “At this stage I think we will continue to see high stock levels right up until Christmas. Demand is still high and we expect to see something of a late spring rush going right up to the end of the year.”

Eaglemont, 31 Mount St: Friendly, chatty crowd but no action. David Oster (Jellis Craig) passed in $1,850,000, no bidders.

Around the Grounds:

Elsternwick, 53 Shoobra Rd, Bill Stavrakis, Biggin Scott, Passed In, $1,775,000, 1 bidder
“Among the assembled crowd of 40 were many curious neighbours and families with young children. Auctioneer Bill Stavrakis had a clear and considered manner and described this property as being in a ‘wonderful location’. Mr Stavrakis asked for an opening bid but the crowd was silent and so an opening vendor bid of $1,750,000 started proceedings. Mr Stavrakis worked hard to entice the reserved crowd and eventually there was one bid of $1,775,000 from the assembled group. With no further interest on the day, the property was passed in at this figure.” (Kate Agnoleto)

Heidelberg, 20 Cleve Grove, David Oster, Jellis Craig, Under the Hammer, $1,325,000, 3 bidders “David Oster fielded bids from three keen parties at this Heidelberg auction. An opening bid of $1,050,000 was received from the crowd and the home was quickly on the market at $1,200,000. Bought under the hammer for $1,325,000 in front of a big Super Saturday crowd of 80 people.” (Mal James)

Northcote, 9 Tanner Grove, Tom Alexiadis, Nelson Alexander, After Auction, $1,200,000, 3 bidders
“There was a large crowd gathered, but it appeared they were mainly neighbours as this auction was a little slow to get going. After an opening vendor bid of $1,100,000, a couple of people put their hat in the ring before it was referred inside. On the auctioneer’s return there was no further movement from the crowd and the property was passed in at $1,160,000. With the crowd numbers, the expectation was greater than the actual event.” (Linder Slater)

Northcote, 9 Tanner, Tom Alexiadis, Nelson Alexander. Big crowd of 100, bought after for $1,200,000, 3 bidders

Results

National Breast Cancer Awareness Month was celebrated at the auction of 12 Sunnyside Grove, Bentleigh (Andrew Chisholm, Buxton). Elmo was on hand to watch as the home was bought under the hammer for $1,165,000, 4 bidders

Key Points

• Ascot Vale, 13 Fisher – Ray White – With views over the Maribyrnong River, this was bought for $2,000,000. Land value $2,000+ per sq metre
• 8 buys over $1m in Caulfield and Elsternwick this week, including in the heart of the Bagel belt – 31 Aroona with Rochelle Butt of TBM at $2,511,000
• Templestowe, 70B Newmans – Robert Sordello – Bought Before for over $2,000,000
• Warrandyte, 31 Oakland – Spiro Drossos – Private Sale over $1,700,000

Agent Q & A

What advice would you give a buyer wanting to purchase a property between now and Melbourne Cup Weekend?
Bill Stavrakis, Biggin Scott, Elsternwick: “My advice to any genuine buyer would be to look at purchasing a property that suits their requirements, if the price is right. Procrastination might very well lead to buyers being ‘caught out’ through the lack of new listings coming onto the market post Melbourne Cup. Stock levels seem to be nowhere near the volume of last year and this may very well result in very few buying opportunities leading up to Christmas.”
David Oster, Jellis Craig, Ivanhoe: “I would suggest to a buyer that wanted to purchase between now and Melbourne Cup… to go for it. There are (higher) stock levels and the opportunity to enjoy a more balanced market.  If you are the highest bidder and it’s passed in to you, make sure that you enter into a reasonable negototiaion. Don’t outsmart yourself.  Be flexible.  And you aren’t paying or competing with the same market as 12 months ago. Enjoy it, as the market can swing again such as it did from 2008 to 2009..and it wasn’t in a buyer’s advantage.”
James Davis, Miles Real Estate, Ivanhoe: “With rates having stabilised, it’s a good time to solidify your position and take the next step on the property ladder and upscale. As the market keeps steamrolling on, now is the perfect time to buy property…today…if not yesterday!!”

Around the grounds
Moonee Ponds, 135 Park St, Brad Teal, Bought Under the Hammer, $1,230,000, 2 bidders
“A crowd of around 60 gathered to watch Brad Teal auction 135 Park Street, Moonee Ponds. A vendor bid of $1,050,000 opened the proceedings and things progressed slowly with the half time break, which occurred after one actual bid of $1,070,000. Then the sale was fought between two parties aggressively until a final result of $1,230,000. Solid result for the vendors.” (David McMillan)

I give up! Milo Rasinac (Nelson Alexander) at 15 Jacka St, Essendon. Passed In, $2,500,000, no bidders

Essendon, 15 Jacka St, Milo Rasinac, (Nelson Alexander), Passed In, $2,500,000, no bidders
“Just as the auction started the heavens opened up on 15 Jacka Street, Essendon and despite auctioneer Milo Rasinac’s best efforts no bidders emerged from the 100 strong crowd. The property was passed in on a vendor bid of $2,500,000.”(David McMillan)

Ivanhoe, 51 Robbins St, Rod Watson, (Jellis Craig), Passed In, $1,050,000, no bidders
“By the scheduled auction time at the Robbins Street auction, only a sparse crowd was evident, obviously having been frightened off by the torrential rains earlier in the day. Just as the sun was slow to come out, so were the spectators slow to gather. Yet assemble they eventually did, to witness a largely uneventful auction, despite the quality of the property up for offer. And, despite his best efforts, auctioneer Rod Watson was unable to elicit a response from the crowd to his numerous requests for an opening bid (unless a dog casually sauntering his way through the crowd can be taken as interest!?) and the home was subsequently passed in on a vendor bid of $1,050,000, leaving the surprised crowd silently stunned.” (Nikki Hills)

Templestowe 20 Edwin: Passed In $2,600,000: 1 bidder: Auctioneer Adrian Santini:

Templestowe, 20 Edwin: Adrian Santini of Barry Plant: Passed In for $2,600,000, 1 bidder:
They breed ‘em tough out Templestowe way. This was a knock down, drag it out affair and I was exhausted just watching it. Forty minutes – seven or more vendor bids and one genuine bid. Adrian Santini passed in this home at $2,600,000, having started it at $2,000,000 with a vendor bid. One bid from the crowd at $2,300,000. Next time I’m taking a cut lunch and if it’s that cold again – a sleeping bag as well. I’ll be honest I didn’t see why it took so long to achieve the result it did. A crowd of around 50. (Mal James)

Ivanhoe 20 Robbins: David Oster and Rod Watson of Jellis Craig: Bought After Auction $1,378,750: 2 bidders

Biggest

• Clifton Hill 12 North Terrace Steve Earl of Harringtons was bought at auction for $4,115,000

Around the grounds

Alphington 6 Bennett: Peter Egan Nelson Alexander: Passed In for $1,000,000: No Bidders

It could only be described as scenes from an unfortunate comedy skit – one I’m sure auctioneer Peter Egan had not foreseen when commencing the auction of the Bennett Street property. The crowd of more than 80 onlookers bore witness to a series of natural and man-made interuptions during the proceedings. A swarm of bees passing overhead prompted Mr Egan to joke: “I’ve heard of an auction with a buzz about it but I haven’t experienced this before!” Adding to the crowd’s entertainment, and Mr Egan’s chagrin, was an animatedly barking dog and wailing baby, which was efficiently whisked away from the location. Just as all appeared to be back on track and the focus returned to the job at hand, a bus noisily pushed through and subsequently became stuck in the middle of the street, once again taking the crowd’s attention. Mr Egan valiantly pushed on, humorously making light of the obstacles and with a vendor bid of $1,000,000 attempted to secure a sale. Despite his best efforts, the property was passed in on a vendor bid. And, despite the outcome, it made for an extremely entertaining auction….one that Mr Egan could really only describe as “one of those days”! (Nikki Hills)

Ivanhoe: 20 Robbins Street: David Oster Jellis Craig: Bought After for $1,378,750: 2 bidders

A generous crowd of mainly neighbours turned out for the Robbins Street auction. A row of sensible onlookers took their seats early, perching on the brick wall opposite the action, comfortably bathed in dappled Spring sunshine. Following the opening remarks, auctioneer David Oster looked hopefully to the audience for an opening bid. Although Mr Oster wasn’t put out of his misery straight away, a strong $1,200,000 bid was eventually received from the audience to start the action. A two way tussle followed until the $1,375,000 mark, at which both bidders were keen to know if the property was in fact on the market. A brief interlude, whilst the auctioneer sought instruction inside from his vendors, allowed the crowd to catch up on their neighbourly chit chat. However with the property not yet on the market, the bidding dried up and the home was unceremoniously passed in, prompting the locals to stroll back from whence they came! Bought after for an undisclosed amount. (Nikki Hills)

Essendon 25 McCracken: Milo Rasinac Nelson Alexander: Passed In $1,625,000: No Bidders

What a beautiful afternoon this was. As auctioneer Milo Rasinac worked his theatrical magic on this medium sized crowd of 50 you might have expected that something special was about to happen. Mr Rasinac continued to toil in the afternoon sun looking for that first bid, so necessary to get the ball rolling, but this didn’t eventuate and the property was passed in. (Guy Angwin)

Clearance Rates

Results

Some of our buyer prayers have been answered

Market: Even with significantly reduced auction numbers this weekend (owing to a more important event which finally delivered a result that proved there was justice in the world), we still saw a pretty healthy market result for sellers – with a 74% Clearance Rate on the 55 $Million+ auctions we monitored. Of those 55 auctions, 9 results were not reported. But even that is not unreasonable under the circumstances of the GF Replay.

There seems little doubt that the market is on the rise. The big interest now is how the market will absorb the stock surge that will culminate in Spring/Summer’s first Super Saturday on October 23rd.

And it really is Super Saturday - with a massive 81 $M+ auctions booked for Boroondara alone, and around 200 $M+ auctions booked in our key focus $M+ areas – Bayside and Inner East. Check out the size of the Weekly Review this week (it’s as big as a phone book). By comparison this weekend saw only one quarter of that number of auctions. So if you were at an auction this weekend, those four bidders you competed against may well be spread across four homes in a couple of weeks. Well that’s the “buyer-hope” theory anyway.

This Week’s Highlights:

• Two land sales showing vastly differing land values
  a) Land at 101 River Avenue Plenty (39,500 sqm), which can be subdivided, was auctioned  by Rob Stefanovski of LJ Hooker Greensborough and  bought for $3,830,000 or $96 per sq metre
  b) A large land parcel (1,813 sqm) at 3-5 Heath St Sandringham sold after a failed auction by Bill Jowett of Buxton for $2,800,000 or $1,544 per sq metre
• The major stock inflows that took place on Monday, Tuesday and Wednesday when agents began their marketing campaigns for the next Super Saturday – October 23rd.
• The continued improvement of the $3M+ market – two examples below
  a) Off market in Black St Brighton (Peter Bourbaud and Barb Gregory) – bought for around $4 million
  b) 27 Moorhouse Armadale with Gowan Stubbings of Kay and Burton – bought after an Expression of Interest campaign for more than $5 million
• The Pies Forward Line pressure (whoops, sorry – I got distracted)

Auction Snapshot from this weekend: 133 Rathmines Fairfield: Michael Fry and Grant Leonard of Nelson Alexander. Bought under the hammer for $1,116,000. 5 bidders.
There was a buzz about this well located timber period home, which had had its quote lifted to $930,000 during the campaign. It was a surprising development given Grant’s comment that the property failed to attract any interest in the high $800s a few months ago with a quiet sale campaign. It was on the market with the first bid at $900,000. Second bid $950,000. Third bid $970,000. Fourth bid-  bang $1,000,000. Three more bidders joined in before the action stopped at $1,116,000. It was a well run auction campaign. I always enjoy a Michael Fry auction. He has a sophisticated grace about him incongruent with the fact that he is yanking the dollars from buyers’ pockets. Enjoyable to watch unless you’re an underbidder – which unfortunately this time we were.

Bumper Market Insight: We have an information packed Market Insight this week; even though there are no Market Wraps, Bidderman, reports or videos.  The footy replay threw this auction weekend into a bit of chaos, with a few auctions even changing days. But it was a very low stock weekend anyway, so no major damage. All $M results are at the end of this Market Insight. But the big news now is the next three weekends that will lead full bore into the Melbourne Cup Long Weekend.

Stock Levels and Price Assessment:
The big question the market will be asking now is: What will happen to prices on October 23rd? With this big stock influx, how is the price game of snakes and ladders going to pan out? Are we going to see the slippery snake and big price slide of May 2010 or will the market just take this in its stride, as it did this time last year, with prices climbing further up the ladder? Time will tell. Importantly as buyers you need to get yourself organised – and don’t count your chickens before they’ve hatched.

With this apparent largess of choice, perhaps you don’t need brilliant home-seeking skills right at this moment. But you will need first class assessment procedures (e.g. sorting the goodies from the baddies in terms of capital growth prospects, and working out which one is best from a “happy wife = happy life” point of view). You will also need good negotiation strategies – because while you may have more choice, you will also have competition. Remember, our bidders per auction indicator Bidderman was strong on lower numbers in September, especially on good homes. On the flipside, some sellers expectations may be disappointed, so planning good negotiation strategies will improve your chances of grabbing a bargain when it presents.

Have a look at our Forward Auction Booking graphs below to get an idea of what is ahead of you: (click on a graph to enlarge)

There are also some exciting trophy homes on offer through private sale and off market – especially in the $3m+ segment.

Have a look at the New Stock Graph at the top of Market Insight – which compares the last week in September to the last week in June, (private sale and auction weekly new stock numbers are combined).

Special Report on the $3m Market

The $3m+ is back, after the self induced May hiccup that led to a very quiet winter.

There have been over 50 buys in the month of September at this level, with buyers coming from all quarters. Let’s pick one of the segments – around $4million. We have bought 3 homes at this specific level in the last few weeks. All were classic period homes with land of over 1000 square metres. Two were bought post auction (eg after a pass-in) and one was off market (Black St Brighton). However, the interesting thing were the buyer profiles. One buyer was a change of life family, one was a growing family that needed more space, and one was an expat family returning from overseas. This is a fairly accurate representation of the range of people we look for homes for. Of the last case – expats returning from overseas -Brighton high end agent Peter Bourbaud believes “this group will push the market along for the next few years, after a couple of very quiet years from the expat community”. We concur. Last year we conducted very little in business terms last year for expats. However in 2010 there has been a distinct pick up in action from expats returning home.

The James September $3m+ Report with all reported $3m+ boughts and solds can be viewed from the Home Page (next to Market Insight and below Buyer Masterclass) or click here

If you are new to the $3m market you may find the charts below (using 2007 to 2010 Valuer General, REIV and our own James Databases) of some value, as they help to show how the overall $3m+ market works. Note particularly that:

• The two powerhouse $3m+ suburbs are Brighton and Toorak (see 2009 results graphed below). However these two suburbs behave quiet differently from each other (see median graph). More on that another time.
• More $3m+ is bought later in the year than early. (2009 graphed below)
• There are some real name streets around and there are some falsies (where if you pay top dollar you will stand out like a beacon)
• Less than a quarter (25%) of $3m+ homes sell under the hammer at auction (click on September Graph below)
• A lot more activity is off market (not advertised) at this $3m+ level than any other price point, e.g. sub $3m.

Click on any of the graphs below to bring them up to full size

Agent Comments on the current $3m+ market

• “Prior to the school holiday period there was some renewed strength in $3m+ market due to things stabilising after the election and to the shortage of good quality homes. With the spring market in full swing it will be very interesting to see what happens with the increase of volume. But if the enquiry rates are anything to go by, October will be a strong month of sales.” Andrew Hayne of Marshall White Malvern
• “The $3 million plus market is strong, and we are expecting a big finish to spring in this market for good family homes.” Nick Johnstone of JP Dixon Brighton
  
• “There seems to have been a resurgence of buyer enquiry for the upper end properties recently.  It will be interesting to see if this follows through once we see increased stock levels after the school holidays and round 2 of the Grand Final.” Julian Augustini of Hodges Brighton
• Andrew Baynes from Kay and Burton South Yarra “Last Monday was the busiest auction sign up day for me in 10 years.”

Media Monitor: Domain – The Age 2/10/10. Headlined: “Hands up if you don’t have a clue” by Josh Jennings. Basically a solid article – but Josh, how many homes has Dr Damien Eldridge, Economics Lecturer from La Trobe University, bought using his quoted bidding advice this year? Would it have been 5 or 10 or 50? Going by his auction comments we were unclear as to whether you were holding him out as an expert – or simply providing supporting evidence to your headline.

We are not all brickbats here for the mainstream press. Congratulations to Chris Vedelago from The Age who this year has been consistently reporting the market as it really is and who actually seems to get out of the ivory tower (that so many property reporters are stuck in) and goes to auctions and talks to agents. We mightn’t always agree with you Chris, but we respect your work. Keep it up and keep getting out into the market.

Market News TV: On Tuesday of this week we ask the question: Is the ACCC or CAV the right watchdog for the real estate industry? Check out our Agent Opinion Videos.

Buyer Masterclass: We conclude our Negotiation Masterclass series with an article on Backward Bidding. From next week until Christmas we will be looking at “Pricing and Values” in Million Dollar Melbourne

Reported Results:

Investing in your family home means you can avoid, perfectly legally, the tax the government wants you to pay on an investment property.

“Why not live in your money?” one wily auctioneer suggested at a crisp winter morning auction in Melbourne recently.

Why not indeed?

As a buyers’ agent of million-dollar-plus homes in Melbourne, I see people buying and selling some very nice homes in some very nice suburbs.

One thing I often wonder is why, when someone has made money out of one of those very nice family homes, either by design or by accident, their first thought is often to draw on that money to invest in something completely different.

Why would you invest $400,000 in a house in Seaford or an off-the plan apartment on Queensland’s Sunshine Coast when you have made your money in a $2 million home in Eaglemont or Hawthorn?

The family home can be put to work to store and to create wealth. Photo: Justin McManus

Why would you put money you made buying land in inner Melbourne into oil futures or Russian uranium?

Family homes can be the cornerstones for wealth creation and wealth storage.

Suburbs such as Toorak, Port Melbourne, Albert Park, Balwyn and Kew offer plenty of proof that family homes bought in good suburbs can create and store wealth.

Following this logic, then why not invest in something that works – why not think about trading up on your current home as your next investment strategy instead of pulling out $400,000 and buying another investment with very different characteristics from the one that made you good money in the first place?

Why not put some of your superannuation ideas or your new Porsche research effort into something you and your whole family can actually enjoy right now and for a long time to come?

Why not think laterally about what the tax office calls your principal place of residence – your home?

Yes, negative gearing gives you a tax deduction, but by investing in your family home, you can avoid, perfectly legally, the land and capital gains tax the government wants you to pay on an investment property.

And you get to improve your own lifestyle at the same time instead of letting a tenant and an investment scheme salesman enjoy your investment while you live in a less than satisfactory home.

The obvious question is, what to do when you need extra money for things such as school fees or holidays? You can’t live off the income from your family home, but you can borrow against it and down the track you can downsize, and pay the whole lot off, thus getting the school and holidays and interest paid for by others.

So how do you make sure you’ve bought well? Clearly not every family home is a good investment. When investing in anything, what you are looking for is a good financial outcome, which has three parts: growth, cash flow and risk.

How does a family home measure up?

■ Growth: Price increases come from demand and supply, and we can fairly safely assume that there will be ongoing demand for good homes in good suburbs, and that the supply of land in those suburbs is limited.

■ Cash flow: You need to be able to service the investment and minimise your expenses; your income needs to be able to service the interest on your family home. You may be better off upgrading rather than spending too much on renovations.

■ Risk: There is no replacement for homes with a backyard near a train station and shop. I don’t think shelter is on the way out as a human necessity.

Your home as your main investment is only a good idea if it has the right investment characteristics – the three P’s.

■ Position – inner city, near a central business district with an international airport, and near infrastructure.

■ Property – good land content; a land-to-value ratio of more than 66 per cent is ideal for an investment. Remember, land appreciates, while buildings depreciate. The building itself should have a good floor plan requiring minimal renovation.

■ Price – affordable within its market or better and with the right risk characteristics.

There are some great books around that expand on these points.

Try any Jan Somers book (a great Australian property writer), or The Millionaire Next Door by Thomas Stanley and William Danko. Or approach reputable selling agents.

Why not invest in your family home and, as that wily auctioneer said, live in your money? Why not indeed!

We have held over to next week the start of  9 part series on Negotiation which includes a week on Backward Bidding – A New Negotiation Technique : Look for on a Tuesday at James Buyer Opinion from next week.

This article was written in The Age, Business Day section 26^th July 2010. Author Mal James http://www.theage.com.au/business/property/the-castle-as-a-bank-vault-20100725-10qjq.html

Hmmm - no bidders. Oh well I will have to sell it afterwards. David Oster 21 Mount St Eaglemont. Passed In for $1,000,000.

The standout auction was not necessarily a residential one with a development site going for $3,160,000 or $1600 per sq metre at 20 Park St Moonee Ponds (Andrew Johnstone of Nelson Alexander)

Some good home sales

• 11 Bangalore Street in Kensington (Tony Downward of Biggin and Scott) and nice looking home  with all the bells and whistles went over reserve and was bought yesterday for $1,248,000.
• 40 Batman Aberfeldie (Fabian Rosin 0f Nelson’s) just near Clifton Park was bought for $1,187,000. Not the greatest of floorplans but plenty of accomodation and in a good location.

Northcote looking a $million
We are getting more requests to look at Northcote million dollar homes and there were two good buys yesterday with 1 Traill Northcote (John Costanzo of Chambers) in the Merri Creek Precinct going for $1,190,000 and 39 Gadd (Janine Ballantyne of Nelson Alexander) selling well over its $900,000 quote for $1,101,000. Add to these the two sold befores at 25 Beaconsfield (Michael Fry of Nelson Alexander’s) and 24 Vauxhall (Michael Divito of Barry Plant) and you can say it was a big week for $Million Northcote

Ivanhoe Land Sales
A couple of land sales in Ivanhoe and Ivanhoe East providing good market knowledge with 54 Otterington (Anthony Lapadula – Jellis Craig) selling undisclosed for around $1700 per sq metre and 50 Wilfred (Tim Picken of Jellis Craig) selling for $1,210,000 or around $1575 per sqm and 7 Central Ave (Sally Kirwan of Marshall White )in the coveted  Fairy Hills estate selling at $1,377,000 or $1765 per sq metre.

Northern Melbourne Auctions – 22 monitored – 13 bought – 59% clearance rate

Gino De Iesi of Barry Plant at 10 Plow Street, Thornbury giving us the 'ol soft shoe shuffle as he sings and dances his way to a bought result at $971,000. Bidderman an impressive 5.

In Richmond today, the auction at 501 Swan Street had 9 bidders. It felt like we were back to the start of the year in which this was a very common occurrence. Andrew Gibbons of Hocking Stuart announced the property on the market at $795,000 and that’s really when the serious bidding started with bids coming from everywhere. The property was bought for $880,000 – a very solid result for the vendor considering the main road frontage.

On the flip side 5 Thomas Street, Richmond – a 3 bedroom single fronted only had one bidder and passed in on a vendor bid of $1,380,000. Not all bad news though as Clayton Smith of Jellis Craig managed to negotiate a final result of $1,510,000. Despite this anomaly the market remains “red hot” according to Edward Hobbs of Biggin & Scott who sold 5 out of 5 today. Mr Hobbs who sold 253 Punt Road today for $904,000 added you know the market is hot when main road properties are selling for very solid results – on this point I would have to agree.

Thornbury is following Northcote’s lead and is fast approaching the million mark for basic 3 bedroom dwellings,  two sales of note today were 10 Plow Street (Gino De Iesi of Barry Plant) and 259 Raleigh Street (Michael Fry of Nelson Alexander) selling for $971,000 and 980,000 respectively. Both dwellings were renovated and well located but not without there faults. Bidder numbers were strong with an average of 4 bidders across the two auctions.

A few big land sales out in Ivanhoe; 10 Young Street, Ivanhoe (Kieran Whaley of Barry Plant) sold for $1,360,000 on 728m2 showing a rate of $1,868 psqm & 48 Marshall Street, Ivanhoe (Sue Lacey of Miles Real Estate) sold for $1,155,000 on 645m2 showing a rate of $1,790psqm. This further confirms that land in the better located parts of Ivanhoe, Ivanhoe East and Eaglemont is on its way to $2,000 psqm.

May 8th was not a huge day volume wise – looking forward to brining you more news in the coming weeks

Know Your Market!

Eaglemont: Melbourne best kept real estate secret, according to Rod Watson of Miles Real Estate.

There were hints from a number of agents that the Richmond market might be cooling. Today results showed no evidence of this with high clearance rates and seven results over the $1,000,000 mark.

Russell Cambridge of Biggin & Scott indicated that there were multiple bidders at all auctions with all properties sold and strong results across the board. Mr Cambridge said: “The run-away result of the day was 63 Charles Street, the unrenovated two bedroom had a reserve of $800,000, pushed well passed $1,000,000, finally coming to an end at $1,115,000″ – Mr Cambridge also added that he had never had a bigger hug from a vendor.

Million dollar results in Richmond include 5 Dickmann Street, 4 bidders, bought over a million undisclosed – 11 Clifton Street, 3 bidders, bought $1,867,500 – 63 Charles Street, 6 Bidders, bought $1,115,000 – 30 Wrede Place, 2 bidders, bought $1,086,000 – 103 Coppin Street, 4 bidders, bought $1,000,000. In addition to this Andrew Gibbons of Hocking Stuart indicated that two pass ins from last week have been sold within the past 48 hours being 22 Grattan Street, bought $1,300,000 and 537 Swan Street, bought $1,045,000.

161 Rose Street, Fitzroy passed in on a vendor bid of $860,000 – most surprising however was there was no bidders. This property was subsequently sold for $930,000 on Monday morning (Simon Shrimpton, Jellis Craig).

Into Eaglemont, a key land sale at 29 Hawdon Street (Rod Watson, Miles Real Estate) bought for $1,455,000 on  780 m2 showing a rate of $1865 per square metre. Hawdon Street is very attractive and tightly held, so no doubt 4 out of the 5 bidders will be very disappointed. Round the corner in Ivanhoe East, 6 Keam Street, a wonderfully renovated family home passed in for $1,725,000. Walter Dodich of Marshall White invited the lone bidders in and managed to negotiate a final result for his vendors of $2,000,000.

Looking at the inner Melbourne market from a birds-eye perspective it’s apparent that bidder numbers are reducing from the 6, 7….10 bidders we were seeing in the months past. Despite this there is still enough competition to sustain high clearance rates and solid results.

Know your market!

Abercromby's Rob Vickers-Willis in fine form at 14 Wheatland Road Malvern with a big crowd of a 100 producing 6 bidders and a post auction result in excess of $2,250,000. Photo: Julia Atkinson

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 36 Auctions we attended today was a solid  75 per cent on good stock numbers.

The “frenzy” feel has left the highest of the higher end market for now as the new age businessman and establishment money, who determine the Toorak market, reconsider after

(1)    looking at their business’s forward estimate balance sheets.
AND
(2)    looking at the prices being asked.

While we are indicating we think the market has cooled in the last fortnight, we are not saying prices are dropping – they are just leveling a bit as buyers say; no more – nope – that’s enough – I don’t wish to afford anymore. Consequently at the TOP END there are now fewer occasions when there are multiple extreme bidders pushing prices 10% beyond the previous week’s experiences. This in effect has produced a leveling of demand at the $2m+ mark and consequently vendors are selling at market expectations in line with last months performances or they are not selling.

The price surge since November 2009 on top of the unending climb since March 2009 may well be showing some light at the end of the tunnel for distressed buyers.

But please . We felt this cooling about a month ago and then the pre-Easter weekend slapped us in the face and said: “No buddy you’re wrong – no market leveling here”. That same cooling feeling or perhaps better described as less frenzied feeling is flowing freely throughout the Top End of the market today as buyers simply say. No.

No – I’m not scared anymore – I need to be sensible and if I can’t buy it at that; then I need to move on and find one I can.

This could become the May 2010 buyer mantra as we have good stock levels for the next 4 weeks. How long will it last? Personally I think it is a thought of some substance and we may see an extended period of buyer caution.  We are saying buyer caution not buyer inaction.

Many (not all) of the buyers who have a few million and then some to spend on a home understand money. They understand balance sheets; they work and/or mix in positions where they observe what is happening in business. And businesses right here and now are asking questions of the future.

So while buyers are not panicking in any shape or form – they are still around in very strong numbers – they as a collective seem to have taken a more circumspect view of what a home is worth to them. Buyers seem happy to leave it to those that must have it (bullish buyers or unrealistic sellers) and move on in search of a home that is good quality and sensibly priced.

Let’s hope this is the case because no one, bar an opportunist, loves operating in a boom and bust market. And if we keep booming then we are going to bust.

The Inner Melbourne Median Market say $1million to $1.5million is a completely different animal and this is to be expected. At this level discretion is not an option – you need to house the family. They are getting bigger or you are moving here or you are leaving home. Buyers need to buy and they still are in strong numbers. Nope. This market is still giving the impression it is well and truly unsatisfied and still has an incredible appetite for the markets offerings at this price level.

Some of today’s (Saturday May 1^st) stats on the auctions we covered

Over $2million – Bidderman 1.9. Clearance Rate 60%

Under $2million – Bidderman 3. Clearance Rate 82%

The market is not going backwards, it is just rejecting those who are still on the rise and rejecting those agents who have promised the world and then some, run a campaign accordingly and looked around at auction time surprised it’s not 15% over last week’s best result.

However buyers the market is not weak; it is still very strong at the right price for the right home.

Buy happy

Mal

Malvern 14 Wheatland Road auction crowd in excess of 100.

Strange. Very strange. Yes Glen we can see you but check out the guy to the right. I'm not sure if he was there for marketing or to revive injured buyers. Maybe he will be mandatory at all auctions soon. Camberwell: 52 Athelstan Road: Glen Coutinho. Passed In.

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 38 Auctions we attended today was 74%; basically no change on the 77% ( pre Easter Super Saturday -March 27).

Bidderman was down from to 3 to 2.3 bidders per auction but that is still very strong all things considered (stock quality and Easter holidays).

Market Mood

Today was expected to dip to reflect this being a secondary weekend for $m+auctions; but it didn’t. Many of the really top homes wouldn’t have been launched with an Easter or School holiday start and May 1 and May 22/29 are shaping up to be the next $M+ Super Saturdays (stock quality and numbers wise).

The last 2 weeks confirm the March 27 strength. Hot! Hot! Hot! You know the market is very strong when you see that REIV agent members have reported 170 properties $m+ properties as sold since that pre Easter Super Saturday. That does not include today’s auctions. So basically the large majority were private sale at a rate of 8.5 a day.

This tells you the mood far more accurately than auctions today. Some expected and some unexpected suburbs below ($m+ sales in last fortnight).

Balwyn (5); Brighton (7); Caulfield (11); Docklands (3); Eaglemont, Elsternwick and Elwood (4 each); Hawthorn East (5); Malvern (5); McKinnon (3); Melbourne (5) and how about Mounts Eliza and Martha (6 between them); Surrey Hills (4) and Williamstown (4).

Interest Rates, Population Pressures, Volcanoes  – not sure what is going to stop this speeding train but it does need to and should slow down some time ……..

FIRB rule changes and major price increases confirmed.

The REIV trend chart confirms the effect on prices the FIRB rule changes had in March of 2009 and the leveling off that occurred when the Aussie dollar started to strengthen strongly against the US dollar (relevant to the Chinese community) later in 2009. With the help of Canberra, the Chinese community single handedly (a bit of exaggeration) rescued our Inner East $M+ property market and whether you like what is happening now with prices this was the beginning, one of the catalysts for the incredible 2009 price improvements right across Top End Melbourne.

Liar Liar Pants on Fire

Hi I’m Mal James and some people think I’m a liar.

It’s a bold statement. Is it grounded in truth? Initially, when representing a client, if I do not know the other side well, I instinctively hold information back. I offer information in a structured way, which helps me in assessing the objective and subjective connection to whatever information I perceive they control. If I am asked a direct question, but I believe that it is not in my client’s best interest to give up that information, then, at times, I will make a statement that may not disclose the whole picture or may allow confusion. Eg Privacy of a client’s identity or limits.

So, to some people, I am therefore a liar. That’s fair enough – you can call me what you like, some people do. I also assume that, at any time, I may be lied to – not always to deceive but I assume that some people are communicating to me in a way that, if I want to jump in over my head, then they will let me do that.

What is a liar?

Is it one who makes false statements? False is a most interesting word with a myriad of meanings and powerful consequences, depending on the interpretation applied in each and every specific instance.

On the definition of making false statements is Channel 7 weatherman David Brown a liar when he tells me tomorrow will be sunny and it’s not? Is Eddie McGuire a liar when he says Collingwood will win and they don’t (it seems he could be an infrequent liar this year) or is your bank manager a liar when she promises something will happen by next week and it doesn’t?

In real estate, is Low Bidders Real Estate’s Artina Deco a liar when she says a property should go for $X and it sells well above reasonable expectations, meaning she is 12 per cent out? Is Top Drawer’s Eddy Wardian a liar if he says a house will be on the market at $Y, the vendor changes their mind and it’s not? Is Victor Rian of Home Sweet Home  a liar if he says Z will be sold by tomorrow and that doesn’t happen, because a previously trustworthy buyer recants?

Are any, or all, or none of the above liars?

You may say lying depends on intent. In the end, does that really make any difference to you?

Is it important?  It was rainy, Collingwood lost, the loan didn’t go through or you missed the property.

Is it the lie itself that is of importance or the rules you apply and your reaction to the lie?

The community views deliberate and accidental “lies” very differently in law, despite in many cases the consequences to the “victim” being the same.

Let’s forget the word semantics. Let’s say an agent told you the reserve on a property is $2.45 million when, in fact, he knew it would not be sold for under $2.7 million, or, conversely, it could be sold to you at $2 million. Is it the deliberate lie or what you do with it – and how you react to it – that is the issue? Or does the lie itself determine the end result?

A deeper question is how should a lie affect you?

That may lie (excuse the pun) in the rules you apply to the circumstance.

If you perceive buying a home as being like a relationship, then you will probably react very differently to a lie or liar than if you perceive buying a home as like a business transaction.

What is the right way to react to a lie?

For me, truth or lies are mostly varying shades of grey – even the ones that seem black and white have shades of grey. To be honest, in business, I prefer truth but I’m not fazed that much, if at all, by a lie. In my personal life I take a very different stance. You may have an alternative take and fair enough, but if that different take involves an emotional response that doesn’t maximise your outcomes then …..

Is lying right or is it wrong?

1.  Is wrong related to unacceptable behaviour or self-interest or the greater good?

2. Unacceptable behaviour usually revolves around

• community self-interest (standards, laws etc) and/or
• individual self-interest (your opinion).

3. If it’s right for you but wrong for other guy – is it right or wrong?

Your self-interest opinion may be different to mine, in turn different to the seller’s, the seller’s agent and different again from community expectations. A current real estate and lying conundrum is notional propriety and the disparate self-interests of underquoting.

So, is a lie always right or wrong? You know, truthfully, I’m not exactly sure. We are taught that, morally, a lie is always wrong. I think a lie that kills a soldier is wrong but, if it saves 100 others, maybe it is right to tell a lie in those circumstances. A less dramatic situation is whether a lie is wrong that gets two parties together on a $2.5 million deal, which would not have happened but for the lie and the fact that the deal is in the best interests of both the buyer and seller.

Does a lie really matter?

Let’s return again to the example of a house quoted at $2.45 million, when, in fact, it can be bought at either $2 million or $2.7 million. Is the real issue the lie of $2.45 million? Or is the real issue the fact that you might get it at a different price if you know how? Is the issue that the lie is a danger to you or is it that you don’t have a lie detector process that is the real danger to you.

If you have a tried and true process – in other words a certain set of self-interest rules (such as the CAN process that we use) then is a lie a big deal?

If you have a process such as the CAN process,  then no matter what is presented, you or your advisers will break it down and look into it in an organised and beneficial self-interest manner. You will save flair and risk for the last little leap of faith when the agreement gap is small and all other elements of the deal have been explored and confirmed. Your procedural disciplines will discourage reactions that can be dangerous for you in the event of a lie.

In real estate, when you have such a process, liars are just interesting people you meet along the way that present opportunities to you rather than dangers.

If, however, you do not have a solid set of rules such as the Clarity-Assess-Negotiate process, then liars are Melbourne Real Estate dangers to you.

Is the issue in home-buying the lie or the process required to obtain the truth?

Finally sometimes the liar is within

Yes, some liars are faceless agents representing their clients. However, for some buyers, a far more dangerous liar is part of the inner sanctum.

He says to his family. “It’s just bad luck” that he keeps missing out. He is constantly surprised by the actions of agents, the process of real estate purchasing, the sold prices compared to the quotes. He has missed numerous times on homes his family wanted to –and should have – bought.

Or it’s a she: one who expects history to not repeat itself, just for her, and reacts badly when it does. She ignores that her emotional world of buying a home has collided head-on with the unemotional world of selling agents. She has taken no action, and made no change to her modus-operandi to cope with the emotional/unemotional disparity.

These liars take a “she’ll be right” attitude and say to their family “Let’s move further away” and accept less than they have to, or they say “Let’s look again in five years time, when prices will be cheaper.” Furthermore they take the identity of a victim, a victim with a family and worthy of pity, but a victim without a family home.

In real estate, and in life, some lies are very wrong and can hurt deeply. We have all seen and experienced that. However, lies can allow beautiful things to happen. As truth does; lies save and destroy. Truth and lies are a part of life. Your level of understanding, management and reaction to lies will ultimately determine your short and longer term property outcomes.

Buy happy

Mal

Footnote: Clarity on my position: I personally think truth adds considerable value to the home buying process. The best agents, deal makers and negotiators know how to use both lies and truths to maximise their client’s position and most do so with little emotion. Most experienced negotiators realise truth often bridges gaps that lies cannot. Please, for all my talk of lies, most of the deals James Buyer Advocates are involved in with high-quality selling agents are often win-win and with a high degree of truth. Truth and lies are why again and again we outline the benefit of professional buyer and seller agent relationships.

Rocket Rodney Morley and Marvelous Mike Gibson; Real Estate’s dynamic duo usually playing on opposite sides - this time K&B and TBM were working together to extract a lazy $10,000,000 plus from the market. Toorak: 4 Trawalla and next door: Sold $10,450,000. 4 bidders.

James Buyer Advocates

James Buyer Advocates welcomes your comments and questions. For any enquiry, please contact us by phone or email. Our contact details are provided below.

Brighton Office: 9 Hillcrest Avenue, Brighton, Victoria, 3186
Hawthorn Office: 737 Burwood Rd, Hawthorn East, Victoria, 3123

Telephone: 03 9596 8822 (international +61 3 9596 8822)

Facsimile: 03 9596 0622 (international +61 3 9591 0299)

Email: enquiry@james.net.au

James Home Ratings / James Market News

Malvern Office: 313 Glenferrie Road, Malvern, Victoria, 3144
Eaglemont Office: 12 Durham Street, Eaglemont, Victoria, 3084

Telephone: 03 9804 3133 (international +61 3 9804 3133)

Facsimile: 03 9596 0622 (international +61 3 9591 0299)

Email: enquiry@james.net.au

Andrew Gibbons (Hocking Stuart) had his work cut out for him today: Grattan Pl Richmond passed in on a vendor bid.

Another strong week of Auctions putting to rest any doubt that a seller’s market has not started with a bang.

Out in Eaglemont Andrew Sein of Duncan McIntyre was reportedly stopping traffic with over 150 people attending the auction at 22 Waldemar Road – 7 bidders emerged from the crowd and the property sold  for $1.37 million . The property is a development site on a moderately sloping block with multi street frontage (976m2) showing $1,403 per square meter – This is in contrast to the sale at 46 York Avenue which sold on the 13th of February for over $2,100 per square meter – obviously a premium being paid for the Ivanhoe East location and level topography.

Another strong result for Anthony Lapadula of Jellis Craig in Coburg with the sale of 13 Strathern Avenue selling for $711,500 against a reserve of $625,000. Coburg at the moment is really struggling for quality stock so that may have proved a slight windfall for the vendors in this instance. A good result in Richmond for Liz Walker also of Jellis Craig with 6/659 Victoria Street, Abbotsford being bought for $875,000 against a reserve of $800,000 – There were 6 bidders at this auction who no doubt fell in love with the intimate views of the Yarra river.

With the market moving it also appears some vendors are getting slightly ahead of themselves - at 24 Campbell Street, Collingwood on an asking price $520,000 – $570,000 the property passed in at $631,000… With over 100 people at the auction and several bidders in the crowd I am sure there will be some questioning as to how far do you have to be over an asking price before a property is actually for sale.

Despite all the strong results there are still some patches in the market…  5 Carlyle Jackson Lane, Eaglemont – passed in at $1.45 million on a vendor bid. 1068 Heidelberg Road, Ivanhoe – very slow auction, 3 bidders – finally passing in at $1.16 million (main road location). 17 Grattan Pace, Richmond – not a single bid passing in with a vendor bid of $870,000 – that are not selling.

Know Your Market!

Toorak, 78 Clendon Road: $4.35 million. Paul Castran as the buyer would see him!

It’s 7pm on Saturday and our James Clearance Rate is 82 per cent on the 22 auctions we attended and reported on. Need we say any more – the market continues its strength and subsequent price rising, despite being in an increasing stock level environment.

Flashback: our report from 22 November 2008: Today, only two of the 13 auctions we attended sold under the hammer. The weakest market is the $1 million to $4 million market. What a difference a year makes. In September 2009, the strongest segment at present is this same $1 million to $4 million market.

Summary of today’s Market Insight:

1. The James Connell State of the Market Interview.
2. Repeating 2007 and The Chinese Influence.
3. Buyer Stress.
4. Re-think rather than Give Up.
5. Control Price – Neighboring Properties Discount.

James Connell, Managing Director of Marshall White, one of the two dominant selling agencies in Boroondara and Stonnington, talks to Market Insight this week. James has 30 years in real estate (a slow learner) and has co-owned Marshall White, with John Bongiorno, since 1993. The water-cooler talk within our industry is that he has respect among his troops and his support is very hands-on, even when it was a bit tough. He has given our company solid helpful advice over the years and, while buying off Marshall White is never overly easy, we have always found their salesman quality runs to the bottom and this must ultimately be a reflection, in part, of his leadership.

Mal: Where is the Boroondara/Stonnington market going?

James Connell: Under $1 million, I think the market has peaked. The $1 to $4 million market, I think, hasn’t peaked and there is some steam left. Over $4 million, the air is pretty thin and still minimal activity.

Mal: Anything else?

James Connell: Most secondary properties, eg main roads, next to commercial, have, up till recently, taken a pounding; however, they are now gaining momentum again, along with the rest of the market.

What are you saying?

There are times to buy secondary properties – that time has passed. Buy quality – you will need to wait for the next downturn to again buy most secondary properties well.

Anything else?

Period homes in that $1 to $4 million market (which, in your past Market News’ articles, Mal, you have correctly identified as slow last year and hot this year) are very, very strong and, in a natural cyclic movement, we are finding Armadale is going better than Malvern.

What do you expect until the end of the year?

No change in the current strength of the market. Our company’s auctions are 20 per cent down on the 2007 peak (120 to 100) but, looking positively, we are 20 per cent up on last year.

What about bidding? What are you seeing?

Most of the same ol’ same ol’. People who don’t normally do it are taking advice from people who did it once 10 years ago. Giving your company a plug, Mal, and other professional buyer advocates – I really don’t know why people don’t pay your fee and hire some expertise. It is not as easy as people think and, under pressure, people make mistakes. However, the auction system, when run well, is still the most transparent and fair way to buy/sell a home.

What should buyers do if they are going to do it themselves?

Pre-determined figure. Actually bid and then buy it or walk away at a pre-determined figure (or maybe a little bit more).

Both laugh.

What about quoting: I have always thought you guys were wimps not putting some sort of figures out there.

It is not in the vendor’s best interests to do so, Mal. We think quoting puts artificial ceilings on homes. Also, as you well know with your Control Prices, you don’t get it right all the time and, in fact, in this market, we have media lag times for advertising of at least 14 days and things can change a lot during that period.

But you say at the door what the price may be?

That is buyer interest and we can change it and explain it.

Aren’t you alienating some buyers who simply won’t bother if they can’t work out price?

I firmly believe in this market that we are not missing any serious buyer enquiry.

Chinese buyers?

Major, major effect on our market. 25 per cent of our sales in Boroondara and 12 per cent in Stonnington. And I think Chinese money is here to stay. Chinese buyers are not scared to pay what they need to and, with government changes, it looks like this solid migration will continue. Mal, Chinese people have effectively kick-started our economy and underpinned all our housing values in inner Melbourne. We have a lot to be thankful for and I believe their influence on price has been around 10 per cent. Chinese people are buying $1 to $4 million homes, well positioned and good land and, with the FIRB changes, they have moved from buying apartments (which is very quiet – nowhere near 2007) to land.

And what else have you seen in the market?

The complete collapse, due to lack of success,  of Expressions of Interest Campaigns.

Why?

No standard rules, in fact no rules, and agents are just as confused as the public. That is our fault. Also, it’s human nature for people to only offer what they want to, not what they have to.

Please expand.

An expression of interest or auction is only a conduit, not a solution. The solution is good agent work. However, as a conduit, Expressions of Interest is not working and not allowing a good agent solution. Buyers don’t understand it (as many agents don’t) and buyers certainly don’t trust it.

What makes a good auctioneer?

Empathy with crowd – one with the crowd – can settle buyers and raise their excitement at appropriate times.

Premiership?

My team is your team – the Pies and Dane Swan for Brownlow.

Thank you, James.

My pleasure and good luck tomorrow.

(This interview was on Friday)

Continuing on with James Market Insight – Repeating the Past of 2007:

Flashback: October 2007 James Market Insight: …These large increases as per most of the rest of the world are largely confined to inner suburban quality properties. Land itself, meaning land where homes can be pulled down, is particularly well sought after in all Melbourne Bayside and inner eastern suburbs. What is driving the market? It is being driven by overseas buyers, stock market wealthy buyers, buyers who have seen large increases in their own properties and buyers who are confident in their future.

Back to now in September 2009:

The question I get asked the most. Why is our market so strong? It was initiated by demand from Chinese buyers. It started as a trickle in April and now the floodgates are opening, as evidenced by such comments as those from Pat Dennis of Jellis Craig, who, when we were on the phone, said his last 13 sales in Balwyn and Kew had been to Asian/Chinese buyers. Both Jellis Craig and Marshall White – the two dominant Boroondara agents – state that around 25 per cent of all their sales are to Chinese/Asian buyers. The market stock levels are reducing further, as most Chinese buyers do not have homes to sell – or do not wish to put other homes back into the market for sale.

I’m not saying this is a concern; I’m simply saying that this is a fact. It is government policy that is encouraging Chinese people to buy up large amounts of land here. Good on them – in many ways, while there may be some concerns now and in the future re price increases and stock tightening, if it wasn’t for Chinese money earlier this year, we may now be in a far worst state economically than what we seem to be.

However, we are a micro society compared to the wealth of China and maybe some thought needs to be given to the long-term effects of such amounts of money coming into the local housing economy.

Boroondara’s activity has placed price pressures on the nearby Stonnington suburbs of Malvern, Armadale, Toorak and South Yarra and prices have continued a steady rise, as more Chinese buyers buy more properties.

Bayside suburbs have not yet experienced the Chinese influence to the same extent and, consequently, have not had as sharp an increase in housing prices.

The biggest issue out there at the moment is increasing BUYER STRESS or panic or feeling of hopelessness.

If the market continues like this, then you the buyer have PPP adjustments to make or else you will not meet the market on Price, Property or Position.

While we encourage the buying of quality properties only, we don’t encourage paying more and more and more. There comes a time where you can either stop, (we have never found that a successful strategy, as most who stop are often too late restarting and miss the market again) or re-think. What we think works is a re-think. Adjust your Property or Position while still being a bit flexible on Price, but, if you can’t keep up with the market, then firmly focus on Position or Property adjustments. Rule of thumb; it is usually (but not always) preferable (long-term financially and emotionally) to adjust Property (land + building) rather than Position.

In September 2009, if you have $1.5 to $2.5 million in Hawthorn and you are looking for a family home, then prices like Urquhart Street say you have a lot of friends also looking for a home but little to choose from. If you can’t afford the $600,000 jump, then why not consider Eaglemont or Kew or Glen Iris? If that Positional change does not excite you, then why not consider a 1980s home or a period home that is a bit dated rather than a new home now.

Your mortgage levels need to be considered. If interest rates are about to be increased, then bigger mortgages at higher rates will soon take the gloss off your new home joy. Buying rubbish is not a suggested solution either, as we have often talked about the GAP LAW – time does not heal bad buying decisions. And James Connell confirmed above that the time for smart rubbish buying may well have passed.

So, if you can’t stop or get bigger mortgages or buy rubbish and be happy, what can you do?

Why not consider smaller land size and a smaller home (if that is possible)? It still makes sense if you keep Land Content to Value Ratio in the 70-plus percent range - even on some smaller block sizes. Albert Park (block sizes around 150-200 sq metres) as a whole is testament to this. You do have choices rather than give up or kill yourself with a huge mortgage – you can rethink.

In summary, some “rethink” observations:

1. Stopping or panicking usually isn’t a long-term solution.
2. Be careful with major positional rethinks. For example, do you really want to live in that area or have you just found a house you can afford? We feel yes, connect with the PROPERTY, but you still need to connect with the POSITION.
3. In property, it is position first, then go for a home with good bones, even if you can’t afford the “skin” right now.
4. PRICE is important as to paying market and your ongoing affordability.
5. And if all else fails, you can always get a new spouse with more money!

Now, a word on our James Control Price performances. Got a few “right” today and also a few “wrong” Another “wrong” by a million today and this time the agent was right. Happy to politely bag Jeremy Fox at times, but this time he was spot on and I got it very wrong. I used the James Control Price to say land at 6 Kensington should be worth $4500 per sq metre, or around $4 million for the dirt and $1 million for the home = $5 million. Jeremy said I was “on drugs” with that price, as the adjoining flats were hurting this home. He was right. It sold around $4 million. No excuses – he was a lot more on the money than our Control Price.

This neighbouring property discount was further backed up by 78 Clendon Road Toorak, which also had an incredibly dominating block of flats as a neighbour (you can see it in the marketing picture). 1143 sq metres x $4500 per sq metre plus $600,000 for the home (it needed major refurbishment) equals $5.7 million. Today, under the hammer, it sold for $4.35 million. So is the land worth less or do we keep the land the same and apply a negative emotion discount? Either way, just like irregular blocks or main roads, neighbouring properties with serious issues can present significant discounts to the end result.

But, please, I am not saying every block of flats presents an issue. We recently bought a beautiful period home that was next to a block of flats but those flats did not present an overriding privacy issue that it seemed to in both of today’s examples.

Finally, on this matter, as we keep saying, the air is still thin at $5 million, despite the pumping along at $1 to $4 million. Here the buyers do have more choice and they demand “perfection” or they discount or don’t buy.

Lead Photo today was a brilliant one by photographer Tom Wilson.

Buy well and make good decisions

Mal