Last week we covered the Early Spring Market

There’s no guarantee we’ll see a lift in the housing market as we go into Spring this year. On the supply side, there’s a build-up of long term unsold properties (stales) and a compounding shortage of exciting, well priced new stock. On the demand side, buyers have had a particularly hard time of late – not so much in finding homes, but in finding homes of quality; however when those homes are found they sell well, proving there is a solid level of underlying demand.

Buyers do want to buy and they’ve been out there in good numbers most weekends. Our demand indicator Bidderman, has shown an average of two bidders an auction some weekends. But they have proven to be stubborn on homes that are not market priced.

There are actually two Spring markets: early Spring (September and October) and late Spring (November). They’re intimately connected. According to Sam Gamon of Chisholm and Gamon, what happens in late spring is always greatly influenced by the early Spring results. It’s all about confidence says his Elwood auction partner, Torsten Kasper. “A few weeks of good results in early spring may lay the platform for an increased level of homes for mid to late spring.”

On the other hand, David Hart of Buxton Brighton says there’s a strong pattern favouring a late spring recovery – at least in Bayside. “Human nature being what it is, many people wait until they are almost out of time to put their property on the market. And there are those who purchase October onwards, who need to sell their own property prior to Christmas. I expect this year will be no different.”

So what about price?

Despite the continued negativity from overseas, Buxton’s Mark Earle can’t envisage any significant changes in housing prices. “Fundamentally there is a shortage of houses in Melbourne with population growth. And Melbourne has been widely recognised as the best performing city in the country in terms of stability over recent years.” Cycles seem to be getting shorter, he points out – “take the 2008 financial crisis and the subsequent boom market of 2009” – and things can change quickly.

According to Benmac’s Iain Carmichael, given the low stock levels, prices are likely to hold. “Agents will have far less trouble achieving full results for good family homes in the $2,000,000 – $3,000,000 range. Vendors at the very top end have a tendency to feel that their property is somehow guaranteed to appreciate in the face of a steadying market. Curious really!”

Kay and Burton director Ross Savas also believes that prices will be steady. “The fundamentals of our economy are still very good and we have amazing employment levels in our country. So as long as nothing occurs out of left field I believe prices will hold in Victoria.”

So when do you buy and sell?

Peter Kennett of Hocking Stuart, says his advice to sellers is to get in early rather than late. “Late spring is when supply usually increases with more motivated sellers as they have most likely bought!!” As for buyers, David Hart, of Buxton Brighton, believes that the later in the year before Christmas, the more motivated sellers are to lock in a result. “Although you should never pass up the opportunity to purchase the right property on the assumption that if you wait, you might get an early Christmas present!”

With the mix of school holidays, horse racing weekends and the shift in the Grand Final from the last week in September to the first week in October, there are effectively only 16 Saturdays that will give a vendor the traditional four Saturday auction program,  points out Richard Winneke, of Jellis Craig. “And of these no doubt some will be more popular than others – creating super Saturdays on dates like 27th August , 24th September and 3rd December.”

For bargain hunters, late spring may be a better market than early due to vendors having to sell and time running out. However you do take the risk that what you may not be there by late Spring.

This is where patience presents a conundrum for buyers: if many of us pass on buying in early spring then the late spring surge may not happen at all. And come Christmas time we will still be in a buyers’ market but we won’t have bought. The question is then: how long are you prepared to wait?

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

ALBERT PARK, 59 Reed St: Three, two, one - sold! Michael Szulc (Cayzer) sells after auction for $1,370,000, 1 bidder

Matthew Young, Buxton (St Kilda): “The weekend of the 21^st and 28^th of May are looking to be Super Saturdays.

A few smiles were found on Saturday and here was one of them. David Hart (Buxton) with friend at 48 Regent St, Brighton East. Passed in $1,275,000, 1 bidder

At 6pm on Saturday, the James Clearance Rate for $M+ properties in Melbourne was 55% on the 29 auctions we attended. We covered around half the $M+ auctions this weekend. May is looking very lean for auctions and today was almost a non event auction wise

The Weekly Review Bidderman, our demand indicator, was 1.2 bidders per auction. Considering the low numbers on offer at auction this was not a good sign for sellers going forward.

The Perils of Emotional Bidding
The big auction issue for me this weekend was how bidders were bidding. I went to three auctions with a total of  nine bidders and saw some very surprising and costly bidding.

One example was the auction at 48 Emo Road, Malvern East. This is a lovely little single fronted in one of my favourite family and investment areas, the Ardrie Park precinct in Malvern East. Middle of the road quality, not bad for those just starting out in the home ownership stakes – plenty of space inside and outside and good flow. Good feel.

Anyway the auction is about to start and a nice healthy crowd of around 100 has gathered to hear the pearls from a not-so-old stager who rarely auctions these days – Peter Bennison.

Peter calls for an opening bid, to which one very enthusiastic bidder responds with a strong and emotional bid of $950,000. With repeated calls for further $10,000 rises unsuccessful, Peter takes a strategic half time break. On returning, he unsurprisingly declares that the property will be passed-in to the lone bidder if no further bidding. After a second bidder pipes in offering that elusive $10,000 rise, the original bidder responds emotionally and strongly with a crowd hushing $1,000,000. Perhaps the bidder should have asked the “Is it on the market?” question – because this was well above the original quote of $890,000 to $950,000.

What it also means is that the auction will now be completed behind closed doors with some argy bargy instead of cleanly in the street and under the hammer, which a good question could have allowed. The final result of $1,150,000 is decided inside a few minutes later. Wow! I know the buyer saved the fee of getting professional help and normally I am against such flexible post auction reserves but really if a  buyer wants to pay then they should be allowed to – it’s a free country. For the very experienced Mr Bennison this bidder was a gift, and he knew exactly how to work this  situation to the benefit of his client, the vendor (low quality agents may not have recognized the opportunity presented).

There are a couple of things that come from this as lessons to first home buyers and DIYers:

1) As a bidder, by all means look strong to ward off other nervous buyers. But it doesn’t help to look emotional – an experienced agent will pick up on that and it will cost you money

2) In this market you have to test every step of the way. Ask questions. There was nothing wrong with the opening bid but the winning bidder’s second bid could and in fact should have been presented in a very different way. Because it wasn’t, the post auction problems snowballed from this one decision.

3) In this market, on a $890,000 to $950,000 quote, and with no proven competition above $960,000 why would you be rushing up the pole to an incredible $1,150,000? If you have to pay it then at least take a few hours of testing to get there.

There’s no doubt that it’s a good home and I certainly would have recommended buying it. And maybe the result would have been no different if a professional was managing the buying side. But I think a number of safety procedures could have been implemented prior to agreeing to that amount.

There were further interesting results along these lines at the auctions at 13 Maskell St Brighton (Peter Kennett) and 7 McClaughlin Sandringham (Mark Earle). Please see today’s auction reports for more details.

Now back to the market – Future Stock:

Auctions – May is going to be very quiet compared to May 2010, when we witnessed well in excess of 1000 $M+ sales across Melbourne. Melbourne’s Inner East and Bayside represent a majority of  Melbourne’s Million Dollar Plus sales, and predicted auction numbers in these areas for the four weeks in May are as follows: this past weekend 45, next week 43, and the last two weeks in May, 105 and 106. Even though there were five Saturdays in May 2010, there would need to be an incredible number of private sales this year to get the final numbers of solds anywhere near last year, and that is not likely to happen with the current market mood.

Off Markets – According to agents there is a strong trend towards private and off-market sales. Nick Johnstone, of JP Dixon (Brighton) says: “We are seeing a definite swing towards private and off market sales which shows a transitional phase in the market.” 

Other agent comments:

David Oster, Jellis Craig (Ivanhoe): “The 28^th May will be a Strong Saturday. It is the last clear Saturday before School holidays.”

Richard Winneke, Jellis Craig (Hawthorn): “May 21, May 28 & June 4 are 3 bigger Saturdays and then many owners will hold off selling until August.”

Melbourne Wide April Wash Up :
Volume -  Has a lot changed in Million Dollar Melbourne between April 2010 and April 2011? Well, yes and no. April 2010 had around the same number of REIV reported $1m+ sales (there may be a 10% variance with the chance of late reported April 2011 sales to bring the April 2010 and April 2011 numbers closer together) but on a count of over 500 buy/sells, not much has changed in terms of volume.

However, even though the last market turned in April 2010, May 2010 was a boom month with well over 1000 REIV reported $m+ sales throughout greater Melbourne. Therefore May 2011 will be watched to see if it can get anywhere near those sorts of numbers, however we don’t think that will happen. We are still seeing a $M+ home bought every ninety (90) minutes somewhere in Melbourne and that was with Easter taking up a fair bit of the month.

Let’s look at a couple of suburbs which we randomly selected to give a spread of Greater Melbourne $M+ reported sales for the month of April 2011 compared to April 2010.

Price – In our opinion, backed up by REIV Median price results, we feel prices are definitely flat or falling and have been for the most part of this year and a lot of last year. When we say flat or falling we don’t mean plummeting – we mean a drop by as much as 10% over the last 12 months. However we are still seeing plenty of instances of the old property truism: If it is well located and has some WOW and the right price to attract multiple bidders then it is still possible for the ultimate buyer to be paying more than you would have expected last year.

Winter is upon us and buyers and sellers alike appear in a less enthusiastic mood than even a few weeks ago. Even so, we have bought more $1M+ homes this year to date than this time last year at the same time.  And why wouldn’t you buy now, unless you know something we don’t? Price and choices have been considerably better than last year.

$3M+ Market Report:
Back from a week or two off, this market now, has a fairly clear run till Christmas, with a only brief breaks for a couple of holiday weekends.

A couple of strong results today:

• Elwood 18 Normanby (Paul Sutherland) – Bought for $3,375,000, 4 bidders – see our video auction
• Camberwell 26 Alma (Alastair Craig) – Bought After – $Over $3,000,000 at asking – no bidders – there is that strange bidding thing again

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

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

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

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

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

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

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

The Big Issue: Klarity Kris and Architect Adam discuss the big issue of the week – does this market, with prices currently dropping, have elevated risks for buyers ? See what the two have to say by clicking on the live action.

Auction Video: This week Cafe Guy heads to Elwood on what was a big auction day for the Port Phillip area. Watch  the auction video of  18 Normandy Rd (Sutherland Farrelly) by clicking on the live action.

Buyer Masterclass: Double-fronter or two storey, single-fronted cottage? Architect Adam explores this dilemma in this week’s Buyer Masterclass. It’s a great article check it out!

We Only Buy Homes and Happy Mothers Day Mum and in fact to all Mums – we love you all!

ST KILDA, 2 Marine Pde: On what was a bit of a rollercoaster day auction-wise, it was apt that the backdrop of this Claudio Perruzza (Biggin Scott) auction was the Scenic Railway at Luna Park. Passed in $1,850,000, no bidders

St Kilda, 367 Beaconsfield, a ripper property, finally sold with Andrew Macmillan for about half the initial very ambitious asking price after a long time on the market, with a number of different campaigns and agents.

Albert Park, 62 Barrett St (Peter Simmons) a  three bedroom Victorian single fronted with parking, showed that if the quality is there and the price is right, $1,575,000, then the bidders will come. There were 4 bidders at this auction. See report below.

St Kilda West, 10 Loch St with John Holdsworth sold for $3,650,000 at Private Sale after auction.

Damian O’Sullivan, Marshall White, Albert Park: “Post Easter, both buyers and sellers should expect to see greater sales activity. This has historically been the case over the years when the market briefly pauses for Easter and school holidays. The weekend of April 30 and beyond will see greater auction volume as a direct result. Typically, this will be the case until winter really sets in, but prospective sellers should see winter as an opportune time to contemplate selling as fewer properties will be offered for sale.”

Lets hope that with the interruptions of the past month behind us, we will see a bit more stock coming onto the market, post Easter. Traditionally that tends not to happen until Spring. But we can always hope.

Have a safe Easter – Guy.

ELWOOD, 107 Mitford St: Small crowd and only a vendor bid at this Rob Watson (Century 21 Wilson) auction. Passed in, $1,300,000

BRIGHTON EAST, 6 Northern Ave: Leigh Hallamore (Buxton) gets the ball rolling and finds two bidders in the crowd. Bought under the hammer for $1,290,000

Quiet day for us all this weekend at the million dollar level. Has been a great year for buyers so far, long may it continue. Have a safe and happy Easter and enjoy the time with your family – Kristen.

John Clarkson, Hocking Stuart, Brighton: “Certainly buyers will not feel as dominant post Easter due to stock levels decreasing to a normal level. There has been a fair bit of choice in the first quarter for the market post Christmas. That rush or backlog has disappeared as a result of being sold or withdrawn from the market. There will be a fair balance post Easter. For all the dooms-dayers who are waiting for the market to fall in a hole, they will be disappointed. Bayside sellers can have confidence that as long as schools, Church St shopping, transport and the beach don’t disappear, there will always be demand. For local buyers waiting for a good time to buy competition will continue to come from the leafy suburbs of Albert Park, Middle Park and Elwood. The infrastructure, amenities and family lifestyle will continue to keep demand at a very healthy level for Bayside. Whilst I don’t see a huge spike in prices if buyers see a property that is 7 out of 10, they should consider it very closely. If they are waiting for the market to implode they may regret sitting on their hands!”

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

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

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

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

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

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

This Weekend’s Market Summary:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The message for buyers

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

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

Media Monitor: Are Melbourne homes overpriced?

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

Rob Brooker head of economics from the NAB

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

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

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

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

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

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

Biggest Sales we can report:

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

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

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

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

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

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

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

Copyright: Mouldy Bread Picture from ChemistryWorldBlog.

We Only Buy Homes

ELWOOD, 44 Broadway: Sam Gamon (Chisholm & Gamon) looking a little concerned. Passed in $1,370,000, no bidders.

Agent Q & A: Has the market changed since before Labour Day weekend?
Kaine Lanyon, Marshall White, Albert Park: “We haven’t noticed or sensed any change in the market since prior to the Labour Day weekend.  The overall market appears to be quite well balanced. That is, well and fairly priced property is transacting consistently, however the over priced property is passing on and only transacting once the vendor aligns their expectations with where the market is actually at.  The fact remains that smart sellers are meeting the market and achieving very good results.”
Sam Gamon, Chisholm & Gamon, Elwood: “The results since before Labour Day weekend have been consistent with the preceding weeks in the lead-up.  This weekend will tell the story in terms of clearance rates and we remain extremely positive as several properties have attracted prior offers & demand is strong providing the fundamentals and selling strategies are correct. Properties priced correctly and supported with clever marketing are attracting competition. It’s imperative vendors choose to work with agents who thoroughly research price and provide justifications and reasoning. Presentation also plays a key role & buyers will always look for a point of difference.”

If you're looking for something that doesn’t need a thing done to it, you could have done a lot worse than the house at 109 Willis St, Hampton, which sold recently for $1.88 million

The inner suburbs of Bayside, such as Elwood, Albert Park and Port Melbourne, are great places to live when you are footloose and child-free. But what if you’ve got plans to have kids down the track?

Being able to walk to the local Turtle cafe in Elwood and take a short tram ride on No 79 through Richmond to St Kilda may be worth the sacrifice of a tiny backyard, or having to walk up three flights of stairs, or parking out in a busy street. But when you’ve got a tiny baby or toddlers to think about, that inner urban environment mightn’t seem quite so charming. And once those littlies turn into teenagers, your main desire might be to put as much room between them and you as you can.

Does that mean you have to move right out to the ‘burbs though? After all, you’ve established a life in your suburb, you’ve probably got friends there and maybe family nearby, as well as shops and other facilities you’re familiar with. And those inner suburbs are always going to be in demand, so a house there may well be a good investment.

Inner-city family living depends how much you’ve got to spend and what you’re prepared to trade off. Family homes on a decent-sized block come at a premium in places like Richardson St, Middle Park, Chomley St, Prahran and Addison St, Elwood precincts. So if you want to stay close in, you may need to make a compromise between land size or quality: between a house on a family-sized block that needs work to get to a liveable standard, or a better quality house on a smaller block.

Each option has its drawbacks – living through a renovation can be stressful, especially when children are in the picture; and what might seem cosy when the kids are small could become unbearably cramped when they grow into teenagers. Relocating is another option, but that can be expensive and unsettling too.

Then there’s the question of whether you’d be better off with double storey single-fronter or a single storey double-fronter. For young children, a single-level double-fronted probably works best – but once you’ve got hormonal teenagers, you might crave the bedroom separation of a double-storey home.

Even if it seems years ahead, you might also want to be thinking about schools. Living near your children’s schools has the benefit not just of reducing their travelling time to school, it also means they are going to be nearer their friends and after-school activities. As a parent, especially if you’re both working, the last thing you want to be doing is forever taxi-ing your kids halfway across the city. This is one of the reasons why suburbs like Brighton and Malvern and Camberwell are popular family suburbs – generous land sizes, pleasant quiet streets, good public transport and close to schools.

So let’s say you’ve got $2 million to spend and you want a family home – what are your options?

112 Ruskin Street ELWOOD | James Home Rating (718/1000)

If you definitely wanted to stay somewhere like Elwood, for under $2 million you’d be looking at a place like one we rated recently on James Home Ratings. 112 Ruskin Street was in a great position on one of Elwood’s premier canal streets, and on a good sized block for the area at 507sq metres. It came in at $1.75 million. The house needed a bit of tarting up, but after that it could work okay for a few years with a small family. If you wanted to expand, you’d probably need to go upstairs, unless you’re prepared to lose a lot of that backyard. But that could work well for dealing with the teenage years.

Then again if you were prepared to leave the buzz and lights of the inner city behind, say to Brighton or Hampton, you could see that $2 million go a lot further.

39 Regent Street BRIGHTON EAST | James Home Rating (749/1000)

Take a house like that at 39 Regent Street, Brighton East which sold for just on $2 million late last year. On a north-facing block of 900 square metres, and set on one of Brighton East’s premier streets, one house down from the park, this was a well-laid out family home with a huge backyard and pool. All the living areas looked out over the backyard, great for when you’ve got littlies, but the layout of the house – with the bedrooms up the front – means it will also be handy for when the kids get older and you need some separation. This place will work for some years, and, if you decide to do the big renovation, you’ve got a lot of space to work with.

If you’re looking for something that doesn’t need a thing done to it, you could have done a lot worse than the house at 109 Willis St, Hampton, which sold recently for $1.88 million.

109 Willis Street HAMPTON | James Home Rating (780/1000)

This was a beautifully renovated, family size period home, close to the action of Hampton Street, schools and transport. The backyard wasn’t huge, but the house was fantastic for kids – from littlies through to teenagers – with four big bedrooms, a good separate kids wing upstairs, complete with rumpus room.

So under $2 million does give you plenty of choices. Whether you stay in closer to town, or move out a suburb or two, the important thing is to understand the trade-offs, and what they may cost you and your family over the long term – in terms of money, time and happiness. Go in with your eyes open and you’ll make decisions you’re less likely to regret.

ST KILDA WEST, 54 York St: Jeff Cayzer (Cayzer) looks for bids but has no luck. Passed in $1,775,000.

Key Points:

• Port Phillip the star performer today and especially solid in that early one million bracket
• Bidder depth would be best described as shallow except for the Volcano (4+ bidder auction) at 76 Blessington St St Kilda with Greg Hocking – see report below

Agent Q & A:“What is your take on the Economist’s article that Australian house prices are overvalued by 56%?”
Matthew Young, Buxton, St Kilda:”The question that needs to be asked when reading this article is, are you a pessimist or an optimist? - as your attitude on life and or investment strategies will directly reflect your opinion and outlook. Isn’t there an age old adage “property prices double on average every 7 to 10 years”? This saying has been around well before the late 1990’s when it was suggested by Mr Minack that the bubble had started to inflate. We all know and accept that the market provides no guarantees with financial returns but we are still willing to invest.  Why is that?   Facts don’t lie, some things just don’t need to be overanalysed and simply accepted for what they are.  For as long as I know or care to remember, regardless of any peaks or troughs that the market may provide that it rebounds in time.  Always seek out professional when looking to invest, do so wisely and understand that there are always risks involved. If you read this article with a pessimists approach the only place you would invest your money would be under your pillow……”
Karl Gillon, Buxton, Albert Park:”I recently heard Michael Blyth (Chief Economist for CommBank) speak at a conference where he indicated that some could analyse the data that way. However, debt ratios are higher than in previous years and that’s not concerning as more people are used to living with bigger debts nowadays. I think the way we live now is much different to how they lived in previous generations. Look I think if we’ve weathered the storm of the GFC, all the economic fundamentals are in place and demand for property in Australia is strong so I think we’re in a good position.”
Torsten Kasper, Chisholm & Gamon, Elwood, Black Rock & Port Melbourne:“It is our opinion that the recent statement, that property prices are 56% over priced, appears not to take into account that the growth that the Melbourne market  has had in recent years has been consistent with long term trends. The last five years have shown that growth in the apartment and housing sector has sat between 50-61% respectively since 2006. On an annualised base, this growth is reflective of far longer property trends and simply represents a growth rate of between 10-12.2%. In this time, there have been quarterly adjustments of spikes and declines reflecting appropriate responses to the confidence of the market at any given point in time as a result of  interest rate and economic forecasts. Given that Melbourne is experiencing a housing approvals boom, it would not be surprising to see some mild softening in some sectors and suburbs in the short term. Our belief is that the market has become more predictable in most segments and those properties priced correctly are still generating competition. The old adage is even more relevant – it is wise to buy and sell in the same market. From the longer term prospective, despite migration numbers slowing ,the figures are still historically high. The demand  based on the  new arrivals and localised demand for inner suburban property gives us confidence that the outlook  for Bayside property should remain positive in the medium to long term.”

ALBERT PARK, 64 Kerferd Rd: The sun was shining in Albert Park, but the bidders were nowhere to be found. David Lack (Biggin & Scott) passes in for $1,950,000 in front of a crowd of 60.

Key Points:

• The overpriced are as cold as ice in Port Phillip right now. No bites, no action – as evidenced by the pass-ins of yesterday and the first two weeks of this market.
• Overall the year has started better than anticipated but pass-in vendors will need to adjust if they want to attract buyers.
• I went to a Beaconsfield auction yesterday – the offering slightly less than perfect but still a great spot – however the start was a $4million vendor bid and then a $4,250,000 vendor bid. I may have to eat humble pie when the result comes in but for me the 4 sales on this strip over $4m last year seemed different offerings.
• 49 Howe Crescent advertised in an Expressions of Interest campaign for later this month sold last week well over its $5m+ guideline for over $6m (we believe). A very rare large land size at 915 sqm with a double fronted Victorian on it – shows the pulling power of large land so close to the CBD in that St Vincent Garden precinct (or just off it). Michael Coen of Hocking Stuart the dealmaker on this one. Good job.
• Elwood – some action at the top end with 338 Barkly selling for $2,400,000 and 46 Goldsmith selling after last weekend’s pass-in both with Torsten Kasper of Chisholm and Gamon. 102 Tennyson passed in for $1,700,000.
• Land sale in Elwood at 49 Ormond Road sees land still around $3,000 per sq metre.

Agent Q & A

How are stock levels and what will they be like leading up to Easter?

Nick Yannopoulos and Gerald Betts, RT Edgar, Albert Park: “2011 has so far seen healthy stock levels and buyer activity. The Port Phillip district continues to perform strongly, particularly in the $2 million and under price bracket where stock is consistently in high demand and under supply. The current market activity levels suggest the area will continue to perform well right through to the Easter holiday period.”

Damian O’Sullivan, Marshall White, Albert Park: “Stock levels have been very healthy thus far in 2011. Despite this, success rates have remained particularly high and in doing so encouraging many would-be sellers to consider listing their home for sale sooner rather than later. Many home owners seem inclined to want to sell prior to Easter and the ensuing winter chill when activity typically slows. We, too, are advising people to contemplate this and take advantage of what we believe is a vendor-biased market”

Kaine Lanyon, Marshall White, Albert Park: “Stock levels appear very healthy at present and will continue to be leading right the way up to Easter if the very recent activity & enquiry we have seen is any indicator. We feel that the market so far has performed better than what most people were expecting it do thus far and as a result the confidence appears to be flowing on from that.”

ELWOOD, 6 Dickens St: Adam Guest (Century 21) finds one bidder in the crowd of 90, but passes the property in for $3,460,000.

The sun was out and so were the spectators - but the bidders were nowhere to be seen. Andrew Stuart (Hocking Stuart) at 280 Beaconsfield Pde, Middle Park. Passed in $4,400,000, crowd of around 80, no bidders

Key Points:

• A big day auction-wise in Port Phillip with more than 20 $m+ properties up for grabs.
• We reported on seven – four of those were bought under the hammer and one shortly after auction.
• The biggest sale was at 107 Richardson St, Albert Park (Oliver Bruce, BenMac) which sold under the hammer for $2,322,000, with 5 bidders.
• The biggest pass in was at 280 Beaconsfield Pde, Middle Park (Andrew Stuart, Hocking Stuart), $4,400,000, no bidders.

Agent Q & A: If you were a buyer, how would you buy a house over the next two months, during the Christmas break?
Sam Gamon, Chisholm & Gamon, Elwood: “If I were a buyer wanting to buy over the Christmas period, I would make myself known to the local estate agents in the areas I want to focus on so I’m front of their mind should any new listings become available. Potentially, there might be more low-key Private Sales available as it’s unlikely we’ll see many auctions until Feb 12 & 19. Some vendors would prefer to sell in January rather than wait until February so it’s important to stay in touch with your agent and for them to keep in contact with you. It’s a two-way street and communication is the key. Start pounding the pavement. Of course, the internet is still paramount when searching for the right property so register for ‘alerts’ and keep an eye out daily. After all, that old saying about the ‘early bird’ still rings true.”

Tim Wilson and Jeremy Fox get ready to do battle at 2 Bromley Toorak, but in the end there were not in the trenches and they stood there as generals and watched 3 bidders slug it out to $5,600,000 - $800,000 over reserve.

Week Ending November 27th:

The high end ($3m+) which like the proverbial brides nightie (not sure if I can say that) is up and down at the drop of a hat. A fortnight ago it was up and last week it was down – this week it was up and in a big way – below are some of the results.

Highlights:

• Toorak 2 Bromley with Jeremy Fox of RT Edgar for 5,600,000 – 3 bidders (see report)
• Hampton 3 Lorraine for over $3,000,000 with Nick Johnstone of JP Dixon (Expression of Interest)
• Armadale Adelaide (Off Market)
• Hawthorn 41 Wattle Road – good home on the market for some time bought for well over $5,000,000 through Paul Keane Jellis Craig
• South Yarra 2/155 Domain Road Marcus Chiminello of Marshall White bought for in excess of $7,500,000 or $20,000 per square metre  (Off Market)
• Toorak 88 Mathoura Road for $6,500,000 bought before – also Marcus Chiminello
• Armadale 12 Munro with Tim Derham, passed in at auction last weekend at $3,000,000 and has been bought afterwards.

$3m+ not so highlights:

• Brighton 12a Manor: Passed In $3,800,000: Zero Bidders
• Hawthorn 5 Yarra: Passed In $4,500,000: Zero Bidders
• South Yarra 16 William: Passed In $4,200,000: Zero Bidders
• Canterbury 35 Logan: Passed In for $2,860,000: Zero bidders

South Melbourne 9 Anderson: An exciting auction which had a buzz from the crowd, trams, birds and sounds of people playing sport down the street at the Melbourne Sports And Aquatic Centre. Geoff Cayzer was auctioneer and, although soft spoken, he was very entertaining with his humour and pre-auction speech. This lightened the atmosphere and allowed two bidders to fight it out after Mr Cayzer's opening bid of $2,850,000. The battle wasn't long though as after some 5 bids the hammer was brought down and the property sold for $3,250,000, which brought cheers and jubilation from the winning bidder's party. A great, fun and entertaining auction to watch.

Week Ending November 20th:

This market seems clear as mud in terms of short term directional pointers. Some good ones sold, some good ones didn’t and all on a turnover down on this time last year and down on September of this year. But the market hasn’t stopped completely in its tracks eg 50 Charles Kew with Paul Keane of Jellis Craig – going nowhere for some time then some interest, then bang a boardroom auction and well north of $4,200,000 was achieved on the night. On the quiet side, a second off market north of $13,000,000 in recent times – actually it was over $15million and in establishment Toorak – Mike Gibson from Kay and Burton the selling agent.

$3M+ Highlights

• Malvern 116 Stanhope: Paul Keane of Jellis Craig. Bought for just under $3,500,000
• South Melbourne 9 Anderson: Geoff Cayzer. Bought under the hammer for $3,250,000: 2 bidders
• Ivanhoe 9 Nyorie: David Oster of Jellis Craig. Bought after auction for $3,100,000: 2 bidders

$3M+ not so Highlights:

• East Melbourne 105 George: Passed In on a vendor bid for $4,500,000
• Malvern 1 Wilks: Passed In on a vendor bid for $3,000,000
• Armadale 12 Munro: Passed In on a vendor bid for $3,000,000

Great Expectations but in the end it was more like Bleak House as 50 Hotham Melbourne East failed to sell under the hammer. Passed In for $7,000,000. Glen Coutinho of Hocking Stuart

Week Ending November 13th:

………But this new state of affairs does not apply so much to the $3m+ market which was a little less shiny today after shining like a beacon 7 days ago. In fact there were a number of significant pass-ins at this level this weekend.

So in a nutshell: last week’s doom and gloom on low quality stock and a negative feel mid-week at open-for-inspections was followed by a bit of a bounce-back this weekend – with more homes selling than expected. But that’s not to say it’s a strong sellers market by any stretch of the imagination. At present the market is, in our opinion, between cool and warm, depending on the quality of the stock. We await with interest next week’s instalment as to where our late Spring market is heading.

Highlights

• 32 Linlithgow, Toorak (Jeremy Fox of RT Edgar) was the biggest sale of the day (see report below)
• 4 Snowden, Canterbury (James Tostevin and Duane Wolowiec of Marshall White), Bought after at an undisclosed price of more than $3,000,000.
• 35 Cole St Brighton (Ian Jackson of Kay and Burton), Bought at auction for a shade over $3,500,000 – after not selling at an Expressions of Interest campaign earlier in the year

Lowlights

• The weather
• Biggest Pass-In was at 50 Hotham East Melbourne, a great home with an 800+ James Rating. It failed to attract any bidding near the reserve and was passed in at $7,000,000
• $3M+ pass-ins at 188 The Esplanade Brighton, 3 Buley Hawthorn East, 18 Heyington and 12 Merriwee Toorak

Camberwell 18 Currajong: 3 bidders, 3 advocates and one great auction: Maurice Di Marzio: Bought under the hammer for $3,375,000

Week Ending November 6th:

What a difference a month and some increased stock levels make. If you have a look at our $3m section in October and compare it to our September report you will see a big difference in activity, especially when you consider the market had a clean run in October with no election and limited footy interruptions, and had five

Click on video to see $3m auctions live

auction Saturdays. This market is as fickle as the horse race we love to watch. In Winter this market was down, in September it definitely perked up and now the $3m+ and off-markets would appear to be edging downwards again. But again the statistics are hiding the full story: there were in fact a few sales over this level we have been asked not to report on, and we ourselves have purchased four off-markets over $1million in the last month, in Brighton, Clifton Hill, Hawthorn and Caulfield. Plus look at this weekend’s $3m+ results! The fact is, there is still plenty of activity – just not as public as in September. There are good homes available for sale off market if you know where to look.

• Elwood 45 Dickens: Jason Scillio: Under Hammer: $3,535,000:  3 bidders
  A large crowd gathered in the front garden of this magnificent property to hear Jason Scillio provide a well prepared preamble prior to inviting bids from a large crowd on this beautiful afternoon. After the usual hesitation, strong bidding emerged from three buyers and it was on the market at $3,450,000. The house was soon bought with a strong bid $3,535,000. (David James)

• Carlton North 810 Drummond:  Tom Roberts:  Under Hammer  $3,450,000:  3 bidders
  What a home. This is the best example of the saying ‘don’t judge a book by its cover’.  It is an ugly duckling from the street, but when you walk through the door you’re hit with one of the most stunning living area renovations I have seen in Inner Melbourne. The auction itself started with a pretend bid at $2,000,000 that was immediately countered by auctioneer Tom Roberts with a vendor bid at $3,000,000 and she took off from there. Three bidders and on the market at $3,300,000 before settling at $3,450,000 in front of a crowd of 125.

• Toorak 6 Benson: Gowan Stubbings: Bought around $3,000,000: 3 bidders
  A great auction to watch. Auctioneer Gowan Stubbings led the way, offering a vendor bid of $2,400,000 after a member of the crowd offered an initial bid of $2,350,000. With three bidders overall, it became a battle between two very confident, strong parties, both determined to fight it out to the very end. One bidder offered increments of $10,000 and even $100,000, while the other settled on $1000 increments each time. Ultimately, the $1000 bidder won, walking away with the property for an undisclosed amount close to $3,000,000. A very entertaining auction with a crowd of around 60. (Jen Milligan)

• Some solid results outside Saturday’s auction:
  Toorak 63 St Georges: Andrew Baines of Kay and Burton: Expression of Interest for just under $8 million. Went through this home and tennis court.It had a good feel and, just as the ad says, an exclusive street address. At around $4,000 per sqm it was a win for the buyer and seller.
  Two blocks of flats sold at mid week auctions: South Yarra 28 Tivoli ($4,825,000)  Philippe Batters: 46 Ulupna; Ormond ($3,700,000) Andrew Chisholm.
  Brighton 11 Kent Campbell Cooney was bought post auction for $4,100,000, which put south-facing, non beachfront land on the Golden Mile at $3,800 per sqm

• It was gratifying to see the number of professional advocates acting for buying clients this weekend. The Bidderbuzz auction at Currajong auction had three advocates, and there was one each on Benson, Drummond, Elwood. While the advocate didn’t win the chocolates for their clients every time, at least it shows more $1m, $2m, and $3m+ buyers are making informed decisions.

John Carter of Hocking Stuart in action at 49 Dickens Street, ELWOOD: Passed in $1,650,000 - 1 Bidder

Key Points: Port Phillip Clearance rate of 25% on the 6 properties we monitored over $1-million dollars, with 2 of those results not reported. Of the 2 auctions that we attended, only 1 was bought under the hammer.

Elwood, 45 Dickens, Jason Scillio (Kay & Burton): The biggest auction we attended in Port Phillip on Saturday. Bought under the Hammer, $3,535,000, 3 bidders and a big crowd of 80.

Key Point

• There were three bidders at both hammer auctions and none at the two pass ins.

Biggest Sale: Elwood 45 Dickens St:  Jason Scillio (Kay & Burton) Under the Hammer, $3,535,000, 3 bidders
“A large crowd gathered in the front garden of this magnificent property to hear Jason Scillio provide a well prepared preamble prior to inviting bids from a large crowd on this beautiful afternoon. After the usual hesitation, strong bidding emerged from three buyers and it was on the market at $3,450,000. The house was soon bought with a strong bid $3,535,000.” (David James)

Bidderbuzz Auction: Elwood 69 Ruskin:  Sam Gamon (Chisholm & Gamon) Under the Hammer, $1,600,000, 3 bidders
“An opening bid of $1,000,000 was quickly surpassed by the effervescent Sam Gamon, who offered a vendor bid of $1,350,000. This produced brisk bidding from three buyers with a fourth entering a little later. The property was declared to be on the market at $1,500,000 and, with a strong knockout bid of $1,600,000, was successful in obtaining this well located house.” (David James)

Biggest Pass In: St Kilda 94 Wellington:  Jason Scillio (Kay & Burton) Passed In, $1,700,000, zero bidders
“Following a brief but well prepared preamble, Jason Scillio invited bids for this magnificent two storey period home, a really sumptuous residence just so close to every amenity. Unfortunately his appeals failed to produce a response and the property was passed in on a Vendor Bid of $1,700,000.” (David James)

Agent Q & A: How do you value a home?
Matthew Young, Buxton, St Kilda:“When valuing a property there are two forms: a market appraisal which is what most agents conduct and a valuation that only a sworn valuer is licensed to carry out. As a licensed estate agent, the most important aspect when appraising property is to look at comparable sales. That is, what other properties have sold for in a similar area, the market conditions, the property’s size, features and importantly quality. It is almost impossible to find an exact match so adjustments will need to be made.  This is where experience and local area knowledge play a vital role. We also need to look at a several properties to eliminate any irregularities such as buyer emotion or a freakish result. When buying property don’t hesitate to lean on the experts for professional advice, be it buyer advocates or estate agents.”

Damian O’Sullivan, BenMac, Albert Park:”In order to accurately value a home, comparable sales evidence is of utmost importance. Relying on factual data, rather than guess work is imperative. In particular, our due diligence is based around researching recent sales of a similar / relevant nature in the immediate vicinity of the home being appraised. The research compares homes that are similar in style as well as taking into account the land size, the orientation, the condition they are in, the streetscape and more. We feel that home owners not only deserve a transparent and realistic approach to valuing property but advice they can actually rely on.”

Sam Gamon, Chisholm & Gamon, Elwood:“When we appraise a home, we adhere to certain consistent guidelines in order to ensure we take a scientific approach and provide our clients with a logical estimate, based upon recent sales of like properties. In the event there are no direct comparable sales, we assess properties which might have less features or more features and then add or subtract depending on the perceived value of those attributes. Our first port of call when appraising a home is the “walk-through”. We like to do an internal inspection so we can get a feel for size, light, floor plan, etc. All of these factors weigh into a buyer’s decision making when they’re comparing one home to the next. We then step away from the property and undertake extensive research on comparable sales within the area before we make some judgements on the final appraisal range…and submit our client with their free marketing appraisal report. We take every care to ensure the accuracy of the estimate we’re giving is fair and reasonable.”

Michael Szulc (Cayzer) rejected a low bid of $1m to kick start the auction at 77 Heath St, Port Melbourne. The property later passed in for $1,370,000 on a vendor bid. No bidders

Key Points

• 284 Albert South Melbourne bought at auction for $2,170,000 Nick Yannopoulos of RT Edgar
• Many homes on offer today failed to attract any interest
• Two good $2m+ homes in Park St. St Kilda West  failed to attract a bid

BidderBuzz auction of the day

229 Page St, Middle Park, Andrew Stuart, Hocking Stuart, Under the Hammer $1,620,000, 2 bidders
“I like Andrew Stuart – he is ripper, no nonsense auctioneer and this was another one of his specialties. Bit of humour, bit of pressure, bit of bidding. Opened up around where it sold for less than a year ago at $1,450,000 and two bidders pushed it along under Andrew’s cajoling until it was on the market (officially) and bought at $1,620,000. Sorry the market is faltering – you’ve heard. Not right now on the good stuff – it ain’t. $170,000 above the November 2009 sale figure.”

Agent Q & A:

October 23 is Super Saturday – What can we expect?

Kaine Lanyon, BenMac, Albert Park: “As always Super Saturday is the busiest auction weekend of the year and we expect the clearance rates for that day to be in line with the last number of weekends. The volume so far for spring hasn’t been up at the high levels we have seen from previous years, meaning the market is far from flooded which should keep prices pretty consistent. In summary “Steady as she goes”. Still severely lacking listings in the $2-4m bracket.”

Damian O’Sullivan, BenMac, Albert Park: “A particularly busy weekend for all concerned. We have 27 auctions scheduled and the early signs are promising for our vendors. That said, we’re sure that the buyers will be excited by the volume of property being offered because sadly they have been comparatively starved for some time now. This pent up demand should theoretically see clearance rates in the mid 70% range across Melbourne which would be a reasonable outcome.”

Sam Gamon, Chisholm & Gamon, Elwood:”Super Saturday should be about Super Sales! We have several investors wanting to purchaser for their Super Funds, lots of raving Bayside fans feeling positive now the sun is out & the RBA’s decision has put a smile on everyone’s face.”

Forward Auction Bookings

Some auctions in our forward booking estimates failed to get near $1m – hence discrepancy with results below

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: