He is loud, uncompromising and highly opinionated. He is also charming, hard working and effective. He is Tostevin and he is a machine. Come with me, come with me, he demands of two $7 million bidders at 49 Harcourt Hawthorn. And they did!

Key Points:

• Of the 10 auctions we attended in Boroondara on Saturday, all but one either sold under the hammer or was bought after auction.
• Canterbury 7 from 8 over a million were bought at auction today.
• Highlight auction was 49 Harcourt Ave, Hawthorn East, James Tostevin, bought in excess of $7 million.
• Weakest areas were Balwyn and Balwyn North, with only 5 from 10 selling.
• 35 purchases over $1 million in Boroondara this week.

Celia St, Glen Iris We love watching Celia Street Glen Iris blocks sell – they are very similar,  sell regularly and show you how the market works.

Agent Comments:
Michael Ebeling,  RT Edgar: “There are still buyers there for the good quality houses, and there are one to two buyers per property. But since March it has probably leveled off. I think this is due to external factors from overseas, ie the way Europe is regarding debt levels – people are being more cautious because of this. As for offers before auction, we had maybe one per property late last year but may have had two or three (recently). Bidder numbers have thinned out a little big. For example Washington had two bidders, yet five interested parties.”

Chris Burne of Marshall White: “Market is healthy and the real shortage in Boroondara is for family homes at all price levels.”

Bidderbuzz Auction for the day, 12 Barry St, Kew, Alastair Craig, Jellis Craig. Bought under the hammer $1,925,000, 5 bidders.
“There was lots of fierce, intense competition at this auction conducted by Alastair Craig. Proceedings commenced promptly with a $1,500,000 bid coming forth from the 80 people present, and it did not take long for the property to be declared on the market at $1,650,000. At this point, the bidding stepped up a notch with two very determined bidders vying for the prize. When the price hit $1,902,000 and it appeared to all the hammer was about to fall, a last minute bidder emerged. This drew gasps of surprise and shock from the audience and pushed the final selling price to $1,925,000. Overall a very hot auction, with 5 bidders, netting a strong result for the Jellis Craig team.” (Amy Wong)

Monitor Table:

We Only Buy Homes

Despite 2 bidders and a crowd of 50, James Tostevin (Marshall White) was forced to pass in 5 Chatham Rd, Canterbury, for $1,801,000.

"Yeah this is going to turn out OK." And it did - just a casual $800,000 over reserve for David Oster of Jellis Craig of Ivanhoe. Bought for $4,300,000. 2 bidders from the opening bid of $3,300,000.

August has seen a bit more noise in the $3m+ market and deals are seemingly back on the agenda at this price level.

Jon Friedrich-designed apartment 9 Glyndon Brighton with an 812/1000 James Home Rating sold for mid $3millions this week after a long time on the market wanting a bit more. Stewart Lopez of Kay and Burton

In Ivanhoe two bidders fought it out for over a million dollars to get to the $4,300,000 result, as the above picture states  - a full $800,000 over a fair and reasonable reserve. I went through the home prior to auction and I have to say it was a unique offering with an incredible “Gone with the Wind” feel and sweeping views of much of Melbourne.

Moving southwards we get to:

896 Glenferrie Road, Hawthorn which has been on the market for an eternity, but has finally been sold this month for just under $5m through Phillip French of RT Edgar. Still with Phillip French, he reported a private sale of an apartment at 1/42 Grange Road, Toorak for in excess of $5,000,000.

Earlier this month we reported the auctions on two properties  in Moorakyne Ave, Malvern – Number 11 (Michael Gibson of Kay and Burton) and Number 4 (Justin Long of Marshall White), which sold for $4,000,000 and $3,000,000 respectively. Both had multiple bidding.

While we’re in Stonnington let’s look at a couple of sales through Marshall White’s Peter Bennison, Andrew Hayne and Justin Long.

• 6 Cross Street Malvern which was on the market longer than it takes an Independent to extract a deal for  just under $4,000,000.
• Huntingtower Road Armadale over $8,000,000
• An off market in Malvern East Gasgoine around $4,000,000

3 Wellington St Brighton with Kay and Burton - Passed in June 5th see our Auction Report - James Home Rating 702/1000. Sold this week for a bit under $4m.

Nathan Waterston of Bennison Mackinnon sold a lovely terrace home in 12 Jolimont, East Melbourne for just north of $3,000,000. His compatriot Andrew McCann got 31 Finch Malvern East away at auction for $3,360,000. As reported last week it needed a $million reno – so it was a solid price. There were multiple bidders at the auction.

We reported on 23 Chaucer, Canterbury a fortnight ago with James Tostevin of Marshall White – 3 bidders and sold just under $4,000,000. On the same day Steve Burke of Jellis Craig moved at auction 5 Callintina for $3,330,000.

But the news has been in Brighton in the last week or so.

1) John Knox House – 71 North Road. It had been on the market for a long time but it still wasn’t exactly given away – Sturt Hinton of Kay and Burton.

2&3) The Golden Mile was hot this week with two apartments at 3/9 Glyndon selling for over $3m, and 23 St Ninians, which had an initial asking price of near $5m, selling. Both were with Kay and Burton.

23 St Ninians apartment sold by Stewart Lopez of Kay and Burton for an undisclosed amount. They were asking around $5 million at the time I went through. I thought it lacked some floor plan imagination - but it had a view. James Home Rating 649/1000.

4) Also on the Golden Mile and also with Kay and Burton – Ian Jackson sold 6 Seacombe north of $4.5 million.

5&6) 3 Wellington now joins 19 Wellington as having sold recently. Both have been on the market all through the winter doldrums. It was sold by Stewart Lopez and Sturt Hinton of Kay and Burton for close to $4 million.

7&8) Gordon St, Hampton, used the unpopular Expressions of Interest method of sale to achieve a result of around $3.4million through Nick Johnstone of JP Dixon mid week. David Hart of Buxton got another away in the street (23) on Saturday, post auction, after it had been passed in at $2,725,000.

Throw in the reported $7.5million for 3 Avalon, Armadale – Ross Savas of Kay and Burton, Wattletree Road Glen Iris over $3.4million with Marshall White’s Heather Elder and Rae Tomlinson aka “Bonny and Clyde” and a few others – and it’s clear the Top End is not completely dead and buried.

But we do need to keep some perspective – we are a long way off Autumn’s deluge where back in May we saw 50 homes reported as having sold for over $3,000,000.

6 Seacombe Grove Brighton - sold for over $4.5m - Ian Jackson of Kay and Burton. Top 10 Melbourne Street and a James Home Rating of 733/1000.

Why is this happening?

Because buyers are there.

Why now?

The best guess is that buyers never left, but we needed some vendor price adjustments and they are now being made. If this is the case it may simply be a statistical coincidence as opposed to a market change – but it also may bring on some more quality stock, which may or may not give the market a more sustained lift. September is going to be quiet due to Election interference , so October will be the telling month to see if this market is trending back or remaining flat.

We only buy homes

It was game, set and match at 23 Chaucer Crescent today. Holding proceedings from the tennis court in front of a crowd of 100 people, James Tostevin accepted an opening bid of $3,500,000 and the game was on. Three bidders took the price steadily to $3,800,000 before Mr Tostevin referred to his vendor. Not yet on the market, the bidding continued until it reached $3,850,000. The property was passed in, but bought after for an undisclosed amount. Great atmosphere with three bidders over $3,800,000 - a strong result.

70 people turned up to 31 Lambeth Avenue Armadale - did nothing and went home again. A typical Stonnington auction.

Key Points: We covered 7 auctions across Stonnington today. Four had 3 bidders or more and 3 had none. This is a true reflection of Stonnington now: good stuff gets support but there is precious little of it on offer.

Analysis: Our view is that demand is there – and this is supported by our buyer agent enquiry stats covering the $2 million to $6 million price range. The clearance rates and auction action or lack thereof is, in our opinion, a direct reflection of nervous sellers who are not putting quality homes onto the market. The market data in Stonnington is not reflective of an underlying, unsatisfied, stronger-than-indicated $M+ market. We refer to our key auction photo above - plenty of people but no action. If you look at our James Home Rating of the home in question you’ll notice it has a 501/1000 rating, i.e. borderline quality. If it was a goodie it would be attracting bids.

Bidderbuzz Auction: 31 Hawksburn South Yarra – Tom McCarthy – 5 bidders – Bought $1,957,000
Are there signs that the winter hibernation is over? That might well be the case judging by this auction where five bidders fought hammer and tongs to secure this two storey Victorian Terrace with the unusual luxury of rear off-street parking. Auctioneer Tom McCarthy managed the bidders with skill, keeping them all in the game. But alas there was only one winner with the eventual purchase price of $1,957,000.

A personal observation: The only reason we tend to focus on the big agencies is because they have the most homes on offer (ok, plus we like them). However, there is a niche double act making some noise at the moment: Tom McCarthy and his partner Philip Moore both of Biggin and Scott are producing very consistent multiple bidder auctions. I like their style and I think right now they are giving both buyers and sellers a fair shake. Well done. Between $1m and $2m in the Prahran to South Yarra precinct they are one of the hotter games in town, if you want a fair dinkum result.

Agent Comments:

Andrew McCann, Benmac, Armadale : “Not much juicy stock (although) we are seeing more mid-range than high-end. Big homes are affected by footy finals and holidays.  I don’t think the election is a factor.  Any volumes look like being in October rather than the next six weeks.”

Jeremy Fox, RT Edgar, Toorak: “There is a little bit of indecision at the moment because of the election. There are a lot of people out there who are frustrated as they are all ready to buy, but there are not a lot of good, quality properties out there. Hopefully the uncertainty about the election will soon pass and stock levels will change.” Jeremy we 100% agree with you – there’s a first!

Clearance Rates & Monitor Table:

We Only Buy Homes

Rainy day but good result for Iain Carmichael (BenMac) at 12 Albert St, Malvern East. Bought under the hammer, with four bidders and crowd of 60.

Canterbury 23 Chaucer: James Tostevin of Marshall White: Great atmosphere with three bidders over $3,800,000 - a strong result. Bought after; undisclosed price.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 50% for the 38 auctions we attended. Of note is the fact that only 1 in 4 sold under the hammer.

On Sunday the post-auction clearance rate rose to 66% on all 61 monitored properties. That tells us that the market is right on the brink, but still limping over the line. We’ve been seeing these kinds of significant differences between “under the hammer” and “post auction” clearance rates for a few weeks now (see last week as well), a very different situation from earlier this year. As buyer agents, and for you as buyers, that tells us a number of things about post auction and private sale negotiations.

Bidderman, our Demand Indicator, has dropped significantly to only 1.2 bidders per auction. Almost 1 in 3 auctions had no bidders at all. This was our most significant stat of the weekend and a key indicator  going forward – let’s see if it bounces back in two weeks.

Market: The REIV clearance rates might not show it – but the market was soft this weekend. Many agents and reporters described a real hesitancy amongst buyers and the $M+ Clearance Rate and Bidderman confirms that. Now is possibly the start of another downward price trend, especially with stock numbers on the rise. Possibly it’s an election slowdown or maybe buyers are seeing more choice coming into Spring and are acting accordingly with reservation and only when it makes sense. Wow! September has more excitement on offer than just Collingwood.

But conditions are varying widely across the different council areas. If you are in Bayside, for instance you may be thinking that very few buyers bid at auction any more. You would also be seeing plenty of stock around, some which has been there for a long time (especially over $2m). So with plenty of new homes coming on, you are probably thinking prices are likely to be weak in Spring in Bayside.

If you are in Boroondara you are probably seeing some heat building up in the market, with good stock attracting good competition and most things selling on the day or soon after. You can see more stock coming on but you know you are probably in for a fight. But you can also remember May and you know if too much comes on it could well be a buyers market in Boroondara this Spring.

If you are a buyer in Port Phillip you may be thinking that the market is still a bit sleepy and hasn’t started any sort of Spring run – either in auction numbers or new stock.

Finally, those of you in Stonnington are probably a bit confused – some things are selling that shouldn’t and some aren’t that should. You are likely aware that the market is very price sensitive but you haven’t as yet seen the Spring stock surge start and like all of us you are not sure if and when it will.

Agent Opinions: This week we followed up on the $3m+ market asking agents: “Where is it?” Their full answers are in the Market wraps, but here is a sample of what agents are saying:

Richard Winneke, Jellis Craig: “Three auctions this weekend all over $3m – that will be a true indicator  – if only one or two sell then sellers will be cautious putting property on the market. Buyers out there at that level, but they are also cautious. Market at lower level is very different. Not seeing a great amount coming on in the higher level – 8 properties over $2m in September for Jellis Craig which is not huge, at least a third down in terms of numbers compared to last year.”

Activity and Stock Levels – The graph below shows New Stock ($million+) in Boroondara, Stonnington, Bayside and Port Phillip. To note:

• Consistent big stock levels until end of May
• Big drop in mid June stock levels
• Steady build from mid July

Highlights and Lowlights

• No bidders in Sandringham today at the three auctions we attended. At one of them Steve Tickell, of Hocking Stuart, curiously said he was testing the market by not offering an opening bid, or any vendor bids…and passed the property in without announcing any amount at all… Stephen, what did we all learn here?
• The biggest result was at 23 Chaucer Canterbury with Marshall White’s James Tostevin firing up 3 bidders to reach over $3,800,000.
• Check out the video auction of John Bongiorno at 10 Walerna Glen Iris in the Auction Reviews Section.
• Credit where credit is due: Auctioneer Kaine Lanyon of Bennison Mackinnon deserves mention today for achieving a great result for his clients while keeping the crowd well entertained at 76 Spring Street, Port Melbourne. He did so with a combination of wit, charm and humor that only a skilled auctioneer can execute. In my opinion he did affect the outcome and I am sure many people left the auction convinced he single-handedly pushed at least one of the parties over and above what they intended to spend – Author David McMillan.

BidderBuzz Auction of the Day

64 Maud St Balwyn North – Julian Tonkin, Jellis Craig – 4 bidders, sold under the hammer – $2,015,000 Maybe it was auctioneer Richard Earle’s comprehensive preamble, or maybe it was the comfort of an indoor auction. Whatever it was, this auction got off to a flying start with a genuine opening bid of $1,800,000 from the 60 people present. Two more bidders joined in, resulting in an intense three horse race. When it seemed to all that the property was going to be bought at $2,000,000, a fourth bidder jumped in out of nowhere to be the successful buyer at $2,015,000. A strong result.

The wind was up, their tails were up and so was the price. David Lack gets a solid result post auction - over $2,250,000. 2 bidders. Port Melbourne, 2 Swallow.

Are Special Conditions costing sellers BIG MONEY?

Sellers may be costing themselves big dollars all in the name of legal “protections” they would never agree to if the buying shoe was on the other foot.

One prominent conveyancing company claims to be protecting their selling clients with a list of clauses in their selling contracts – but in fact their efforts and attitudes are causing buyers to walk away from deals. In this market that is not a good step for sellers.

If you watched the two latest episodes of Channel 7’s “ Under the Hammer”, particularly the one about the Yarraville auction which featured one of our buyers, you’d be interested to know that the real drama wasn’t what you saw on TV but what happened behind the scenes with the 20 or more phone calls and emails between auctioneer Adrian Butera and our company just to get our buyer to the starting line. It was all about this conveyancer’s Special Conditions.

In Victoria when we buy or sell a home the paperwork we are required to agree to is made up of a number of sections. These include the particulars of sale price, settlement arrangements and chattels; normal contractual conditions governed by the REIV and the Law Institute; and Special Contractual Conditions.

With regards to the Special Conditions sections the conveyancing firm we are referring to is putting in clauses or conditions that are interpreted by our clients’ buying solicitors as meaning that:

• If the home burnt down, the buyer would still have the pay the seller the purchase price in full.
• If the seller couldn’t provide title (we thought that is what you were buying) – they would still have to pay all the money to the seller. (We’re sure the banks would love that idea – NOT!)
• Some of these special conditions may affect the buyer’s ability to insure the home they buy.
• If the buyer had a dispute with the seller, they would still have to pay the seller in full and only after could they dispute.

Back to the Yarraville auction: it took three days and all those phone calls and emails, but the sellers finally agreed to strike out the special conditions.

Even though things have been quiet, we still managed to get 5 $M+ homes over the line this last week in Malvern East(post auction), Balwyn North (off market), Malvern East (under the hammer), Port Melbourne (pre campaign) and Canterbury at auction. One of them (Port Melbourne) could have been very, very different as our client had to walk away from an acceptable deal; owing to this conveyancer’s special conditions. It was only when the seller ignored the conveyancer and crossed out these additional onerous special conditions that the deal was revisited and consummated.

We think sellers need to know about this practice because buyers’ lawyers are increasingly refusing to accept these special conditions, which means that $M+ investors are simply having to walk away from a deal – even on good properties. It’s a practice that could be costing them tens of thousands of dollars.

To illustrate, see our chart below where in Identical Auction One Bidder 3 was able to have the Special Conditions removed but in Identical Auction Two Bidder 3 was not. He did not bid, which reduced the purchase price significantly.

We are hoping to name the conveyancing company, pending legal approval.

Sellers who read this need to be made aware of these issues so they can decide whether they have hired the right conveyancer.

And buyers be aware of what you are signing up for if you come across these kinds of contracts. Make sure you get good professional advice, or you could be up for something more (or less) than you bargained for.

James Buyer Opinion: This week our James Buyer Opinion is on “Carrot and The Stick and Other Negotiation Styles.” Next week in Buyer Opinion we have a special Buyer Agent Conversation – Getting Info to Make an Offer.

Also next week, Election Saturday, we will have a reduced coverage; but there will be a Market Insight – just no wraps - owing to significantly reduced auction numbers.

We Only Buy Homes

Mal

Took this photo at an open at 59 Studley Road Ivanhoe - Liz Walker Jellis Craig - all laid out on the kitchen table. Just want buyers want - fair dinkum information. Sellers - Liz Walker and Jellis Craig Ivanhoe provide what buyers want - reasonably accurate information.

Hawthorn 2 Violet Grove: The Master has returned. Now I shouldn't say that, as it will only encourage him. James Tostevin gets 1 of 2 bidders over the line post auction at just over $1,200,000

Key Points

• Boroondara still the “healthiest” million dollar market to sell in – although impressive challenge from Stonnington today.
• A few upper end quality homes are drifting onto the market – but supply is tight.
• Current sales volume is way less than the peak one to two months ago

Agent Comments - This week we asked if the election was affecting the market

Chris Barrett, Marshall White: “Good time to sell – most people will be home in Melbourne after all. Talk of interest rate changes affect the market psyche more – and as they are unchanged for now (and no news to go up in the near future) this is a good thing.”

Nick Ptak, Marshall White: “Opportunity to get in before spring rush. Still plenty of auctions on election day. Buyers left over from May/June who sold; Market steady over spring; Good homes in Grace Park and Sackville are few and far between.”

Geordie Dixon, Marshall White: “Not at this stage, buyer wise; The election was (a concern) for one conservative vendor. They opted for a different date.”

Clearance Rates and Monitor Table

Buying Activity

Land Values

18 Lincoln Avenue, Mont Albert North – Jeremy Tyrrell of Fletchers. 926 sq metres sold for $1,020,000 or $1100 per sq metre. Nearness to freeway discount?

199 Rathmines Road, Hawthorn East – Stephen Gough of Marshall White. Passed In. Main Road discount?

We Only Buy Homes

What a funny lot we are at auction! Check out the Expressions! Malvern 4 Grace: Marcus Chiminello and Justin Long: 4 bidders, Bought After Auction

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 59% for the 31 auctions we attended.

Bidderman was at 1.5 – a more representative number than last week’s 2.2 we think. 

Main Points:

• A significant, but largely expected, drop in activity and dollar value
• 3 Longstaff Kew East – sold by Glen Coutinho of Hocking Stuart, had a crowd of 80 with 5 bidders and was bought for $1,413,000. This one was all about the renovation and not the position, home rather than location. See our report and click onto our ratings below.
• Albert Park – I got an interesting answer when I asked Michael Szulc of Cayzers why we had such huge stock levels early in the year. His response was the most original I have heard: With the GFC a number of investors took out 12 month leases. All those leases lapsed about the same time, just as we had come into a significantly better market, and were all put up for sale around the same time.

Guilty – Last Week we were harsh on The Early Million Market

The market has corrected both in terms of price and activity. However, as we put on our winter coats, we should also put our hands up and make our apologies: there is one segment of the $M+ market that seems to be exempt from our blanket market price-drop statement.

We think the market for $1 to $1.5 million-ish quality homes hasn’t really dropped as we first hoped it might have over the holidays.

Yes, there has been a major drop in demand across the Melbourne Top End. And yes, prices are off by as much as 10% since April. And yes, the gains for 2010 have dissipated in most market segments – especially for the unsolds that need to become solds. But the mounting evidence over the last week indicates that such a blanket statement is too strong when talking about quality homes in the early $1 million dollar range.

This segment still has a strong wave of demand – with new buyers taking up when other buyers drop off, albeit at lower numbers than May, but still at three and four deep. In this quieter July market, the evidence is strong (in fact it’s being pushed into our faces) that, even with the reduced stock levels, we may see prices increase faster than we thought possible even a fortnight ago in this early $1 million segment.

So, after a polite battering from some avid selling agent readers, as well as some of our own unsuccessful auctions and some relooking at sales and private sale basket lists, we’ve reworked our blanket statements to:

Reduced activity and price that started from late April, up to now and possibly continuing into Spring for:

1.  Poorer quality million dollar homes (weak 3Ps – price, property and position characteristics)

2.  Many homes over $2 million-ish

But this does not apply to the early $1 millions price segment for good homes. That market has survived the significant market adjustment better than we implied last week.

With the benefit of six more auctions under our belt this week, we’re already thinking that nirvana may be shorter lived than we initially hoped. But it is winter, and we are dealing in a lot smaller numbers stock wise. Even so, the mood at this level is positive and seems to be rebuilding quite quickly.

Our overall last week auction strike rate was 3 from 6 in this $1 to $1.5 million dollar quality homes range. Bidders have been 1-6-2-3-3-3 respectively.

The above $2 million market

The market above $2 million is, as we stated last week and in previous reports, solid on a few good properties and limited on the rest. There are large numbers of stales and unsolds in this range, and it seems that most of the limited demand is for new and quality auction stock, which is itself limited.

The last two weeks has shown little improvement in this area, particularly as you go further up the food chain dollar-wise – unless of course it’s for a first rate home.

Sales at $2m and above (not all are reported) were running at three (3) a day in May 2010. In July they are reported at being down to one (1) a day.

Compare this to the $1m – $2m range in Boroondara, Bayside, Port Phillip and Stonnington. These were at eleven (11) a day in May and while they are down, they are still up at five (5) a day in July.

Of the more than 140 sales over $1 million in those four markets this month, 5 out of 6 are mopping up the early $1 million overhang and new auctions, while just 1 in 6 are mopping up the over $2 million overhang.

Activity is down across all sectors or segments of the market (to be expected, given it is winter) but things are holding up far better in the quality $1million range than in the $2 million+ range – due to significantly stronger bidder depth. This is leading to less overhang than we may have implied through last week’s blanket statements.

Glad to have cleared that up.

166 Bank St South Melbourne. Crowd of 60 saw Gerald Betts Pass In at $1,330,000

We love auctions

Enjoyable auction No 1

Antony Woodley and Peter Mitchell of Marshall White – well done. The three bidders – well done. For me this is how you run an auction: a bit of argy-bargy and a bit of old fashioned fair play.

The quote during the campaign had been conservative, and when the first bidder opened with $1,700,000, at the quote, he asked: is it on the market? “No”, was the agent’s answer, “and I’ll take $25,000s”. A second bidder bumped it up another $100,000. Wow! The first bidder repeated the question to the auctioneer and Antony’s reply was ditto, requesting $25,000 bids. Again, bang, from a third bidder this time – another $100,000 rise. Now with the price up at $1,900,000, all three bidders asked the question: was the property on the market? The second bidder said he had more, but refused to bid unless it was on the market. In the spirit of auction it was put on the market. Another $10,000 and then the third bidder said $2,000,000. Wow – who says “on the market” doesn’t work? It was a great bid, which could not be matched – and the home was knocked down at $2,000,000.

That’s how an auction should be run: three bidders, five bold bids. It was a pleasure to report on. More power to buyers who work together to get a property on the market so they can battle it out fairly. And more power to auctioneers who respect those buyers playing the game.

Enjoyable Auction No 2

This was a boardroom auction with a James Market News’ favourite, Lachie Fraser Smith, and took place on Tuesday night at Bennison Mackinnon’s boardroom. Over the previous 48 hours Lachie had informed a number of buyers that a home going for around $1 million in Glen Iris had received an acceptable offer and that all interested parties were invited to attend an auction where the reserve was set at $1,050,000 and that the property was on the market. Sitting around drinking water, six (6) bidders fought it out pleasantly, with the property selling for about $100,000 more. Gee, it’s amazing what buyers will do when they are told the truth: a stated reserve and the property on the market with the first bid –  and six bidders still turn up.  Bennison Mackinnon continues to sets the ethical standards for inner Melbourne auctioneering.

We only buy homes

Mal

Brighton East 8 Carrington: Auctioneer Danielle Martin. Passed In on a Vendor Bid at $1,000,000

Balwyn North 12 Ajana: 'Mmmm - it is quiet today.' Toby Parker. Passed In $1,600,000, No bidders

Not much happening today, with one of the quietest non-holiday Boroondara auction weeks I can remember. There were 11 auctions and seven sold. In May we were running at four times this almost every week. Very few private sales either.

Bidderman was irrelevant on such small numbers. The highlights were:

3 Longstaff Kew East – Glen Coutinho of Hocking Stuart which had a crowd of 80 and 5 bidders and was bought for $1,413,000. This one was all about the renovation and not the position. It really was a matter of home over location. See our report and click onto our ratings below.

39 Denham Street Hawthorn – Peter Mitchell of Marshall White was perhaps a symptom of lack of stock. It had rock solid potential but there were effectively only 4 bids from 3 bidders: $1.7m – $1.8m – $1.9m – on market – $2.0m – Gone. See our report in Market News and below.

Selling Agent Thoughts

Peter Mitchell of Marshall White

• May 2010 was a vendor-driven stock glut scared off by the GFC in the past and the upcoming election
• Not much stock around
• Prices are flat
• Normal spring

Doug McLauchlan of Marshall White

• Stock is drying up fast
• Prices have plateaued
• Normal spring

Scott Patterson of Jellis Craig

• Listing well for September – should be a solid spring
• Didn’t see a lot of strength in the market today, but the offerings were varied.
• One good result in Eglinton St Kew, yet quiet at Alta Street Canterbury
• Busy at opens – most had 20+ groups

Tim Fletcher of Fletchers

• Should be more on offer in spring this year, compared to other years.
• We are seeing a healthier market now  – it has softened. Buyers are still paying top dollar for good property – even record prices, yet for properties with issues buyers are becoming more and more discerning.
• I was really concerned when the Melbourne property clearance rate for property was in the early to mid 80% range for a number of weeks on end. This was not a normal market – it was overheated. If it had continued this would have put increased pressure on interest rates – which would not have been good for the economy as a whole.

Monitored Auctions

We are looking at 20  auctions next week, so auction numbers are increasing.

We only buy homes

Malvern East 11 Deakin St: John Bongiorno is all smiles as the 3 bidders put their hands up. Passed in at $1,135,000

In Stonnington this weekend we monitored 14 properties, of which 8 were reported as bought before, at or after auction.

Bidderman was a surprising 2.3 – surprisingly good given the stock quality

This gives a clearance rate of 57%. For the corresponding week in May of this year we monitored 18 properties at auction at which 12 sold, giving a clearance rate of 66%. So while numbers were similar for the week, overall sales numbers are down considerably for the month when compared to May, as many top end agents are now just getting back from holidays.

The other noticeable difference is the dollar value of transactions. Today the only significant transaction at auction was 4 Grace Street, Malvern which sold after auction for just over $3,600,000 – Marcus Chiminello of Marshall White. See auction report and James Home Rating below.

Agent Comments – Michael Gibson of Kay and Burton

• Seasonally slow
• Election affecting the upper end – slowing marginally
• New apartments still steady
• May’s performance relates to stock market – it really was affected by consecutive downward weeks
• Bit lucky for market that we came into winter – tighter stock supply should stabilise the market
• Looking healthier than a month ago pricewise

Elliot Gill of Bennison Mackinnon

• Stock levels starting to rise
• A lot of failed auctions have sold afterwards
• My take on price: coming back up a bit to a plateau
• Correction may be over but we don’t know for sure
• Struggle street is main roads and poor aspects but even the odd one of these is still selling at a strong price – no rhyme or reason
• Seen no drop off due to election
• Supply is the still the key to price
• Yes, demand dropped off
• Overhang is all at the higher levels – not much overhang at lower levels

The properties we monitored

We only buy homes

What is it with redheads? They're running the country - and now they're taking over the auctions. We counted six in this photo in amongst auctioneer Phillip Kingston from Gary Peer. 7A Nightingale St Kilda East. Bought After $1,200,000. 1 bidder.

At 6pm Saturday the James Clearance Rate on the 22 $M+ Auctions we covered was 59%.

Our Demand Indicator Bidderman was 2.2.  Hmmm – an interesting increase but it was off a very low turnover.

Today’s Highlights

1)      Bidders were present at 18 of the 22 auctions we covered –  and at three auctions there were 6+bidders

• 23 Sunburst Avenue Balwyn North (Doug McLauchlan of Marshall White)
• 12 Lennox St Hawthorn (Russell Turner of Christopher Russell)
• 7 Monomeath Avenue Toorak (Justin Long of Marshall White)

2)      The Pies are top of the ladder – and the election is on

We couldn’t find many $M+ auctions worth covering and only one of the auctions we covered went over $2m this weekend. So with the small numbers – just coming out of  the winter hiatus – it was like a first back training run before we get into the winter season proper over the next few weeks.

Agent Quotes

Scott Patterson of Jellis Craig: “Sold 12 from 16 today throughout the company. Opens and auctions were well attended…those who wish to sell in next month or two could enjoy quite solid results due to lack of supply, because demand seems reasonable… August 28 is looming as big weekend, particularly as it is now the week after the election…only thing is that Hawthorn vs Collingwood might affect crowd numbers etc…’

Hamish Tostevin of Marshall White: ”Opens were steady without being over-run with buyers. Certainly a lack of property at the moment in terms of supply. Should be a solid spring, particularly when the election is out of the way.”

Now, where were we before we were so rudely interrupted (by the school holidays)?

It has been a month since we last reported, and we have seen more Top End activity at Tullamarine than in any other suburb. Was it sales? No. It was our selling agent brethren jetting off to Europe to recharge their batteries. This poor humble buyer agent can only give you a travelogue on the Dubbo Zoo so I won’t bore you with tales of kids and a 12-hour car drive or the fact it ain’t a patch on the Werribee Zoo.

The world is a different place since our last report: back then Kevin ’07 was in charge, Masterchef was still a competition to find the best amateur chef in Australia, not the luckiest cook as it is now, and our $M+ market had prices cooling quicker than a Melbourne winter, after a blistering start to the year (although there were still an incredibly high number of buys).

A month ago we reported that the early 2010 gains had evaporated in the five auction weeks of May due to the sheer number of listings. May’s record supply finally stopped what had, since March 2009, been a rising market, driven initially by international buyer demand and then solid local demand.

So what is happening in our Winter Market (June to August) right now?

To be frank we don’t know for sure yet. But here are some of our thoughts.

1. Prices Now
2. Stock Quality Now
3. Method of Sale Now
4. Risk v Reward Now

Prices Now
Selling agents love to use the ‘p’ word plateau (rather than the four letter ‘f’ word)  to reflect on, or deflect away, thoughts of a declining price market. Right now, we actually agree with the ‘p’ word – especially if you accept that prices fell significantly in May and June. (By the way, the ‘f’ word that selling agents don’t like to use is fall.)

Some reasons prices may be plateuaing are:

• Seasonally reduced action (winter)
• An election on the horizon –  so some buyers and would-be sellers will pause to wait for the result.
• We had a big price fall in May and  for most of us market watchers the way forward is still unclear. Will we see more price drops or …. who knows? Like many, we are waiting for a sign.

Demand in Relation to Price

• This weekend Bidderman was at 2.2 – but, please note, this is based on very low auction volumes and therefore statistical distortions are possible.
• As a buying company,  we have had commitments from a significant number of new clients over the past few weeks.
• We feel it’s better to reflect overall demand as more cautious rather than dropping – however another month or two may tell us a different story.
• Right now, buyers still do have the rare luxury of having their cake and eating it too – if they choose to. Prices have fallen in May/June, and in July we are in a market of reasonable choice. Hooray for buyers!

Private Sale Clearance Rate – the number of Proven Sales is only 11 from 50 – or 22% – over the past six weeks.

Six weeks ago we randomly selected a basket of 50 higher end Private Sale and Expression of Interest properties, right across our $M+ Melbourne market. We did this with the aim of  checking  what was bought 6 weeks later (roughly the same time as a “go to whoa” auction campaign), and to therefore calculate the clearance rates  to see how Private Sales and Expressions of Interest were really going.

We thought this snapshot would provide the best reflection of private sale market activity and confirm or question comments by some selling agents that: “Oh yes, auctions were not as good as March, but we are selling a heap via private sale”. The results proved that while in May agents were selling a heap, it wasn’t so much the case in late June to early July. However,  it could have just been that many agents were away.

• We have made an effort to contact those that were withdrawn without a sale price, and we may have missed a few sales – but overall the non-auction homes are NOT running out the door any faster than the auctions. In fact you could make a strong argument that, as an effective method of sale, auctions are still outperforming private sales in many cases – despite the declining clearance rates, given that only 1 in 4 private sale properties have been bought in 6 weeks.
• These figures must surely help smart buyers put together an offering strategy. It’s certainly prompted us here at James Buyer Advocates to change how we buy in the last two months.

Today’s final word on price – are you a glass half empty of half full person?

If you feel the double-dip recession is fast approaching and the world as we knew it is about to end, then, by all means, don’t buy – and in fact sell (and please give us a ring if you have a good home to sell).

If you feel Julia (Gillard) won’t be changing the legitimate immigration numbers any time soon (demand) and Justin (Madden) won’t be able to release large numbers of housing blocks in Inner Melbourne because they are not there (supply), you may wish to ignore the doomsayers and take advantage of this current price breather combined with good stock offering. The GFC lasted less than a year  (for us) and in July 2010 Melbourne $M+ home prices are still 20 to 30 per cent above 2008 GFC home prices. Remember the 2008 ‘bulls**t’ rumour of the year, which said the NAB and other banks were about to foreclose on 200 homes in Toorak alone – it never happened. Yes we are biased and make a living by encouraging buyers to buy – but the facts are still very positive for buyers.

Stock Quality Going Forward
Spring quality and auction numbers are the variables we don’t have a clear handle on as yet. Right here and now in July, we have a market with excellent stock numbers for buyers – if you know where to look and you actually act correctly (please see the following paragraph on methods of sale). We also think the quality is good. Going forward, quality stock levels are not clear to us, because traditionally when quality sellers see a declining market they are loathe to put their home on the market on a speculative basis (in that, if they don’t have to sell, they won’t). This obviously leads to less stock on the market, which may affect price but, more importantly, it affects choice. Good buying decisions are more likely when, along with good advice, you, the buyer, have good choice.  You have that now.

Method of Sale
As we said, there is choice now if you know where to look, whom to ask and how to deal. Look at the above private sale table – there are some good homes there. We keep overhang lists (stales and unsolds) and there are also a number of off-markets and quiet pre-releases available. Granted, some of the vendors are still in their price cocoons but  quality sellers who have adjusted their price expectations may have homes worth considering. The off-market (unadvertised properties) may well be the market of choice for a number of buyers and sellers in the next few months.  But, please note buyers, you will have to sharpen your negotiation strategies to take advantage of all that is on offer.

Risk v Reward
To digress – Risk v Reward is where Masterchef’s Adam and Claire had it all over Jono. While Jono was going for the big dish on every occasion – and you have to admire him for that – he wasn’t playing the game to the best of his abilities. Adam is the quiet master at the Masterchef game. He sees a situation and says: “Yeah, I want to try and make a dish that will impress the judges and maybe get me a shot at immunity – the reward – but I don’t want to push the boundaries that far that I risk getting in the elimination round if I fail.” Good Home Buying and Negotiation is absolutely the same as this. Why is that? Because in the first instance the strategy should be to get yourself into a strong position and not risk all for the pot of gold. Once you are in that strong position, then you can make a run for the prize. Another analogy is acclimatising at base camp before you make the assault on the Everest summit. This is Risk v Reward.

A full James Buyer Opinion on Risk v Reward in today’s Market will be published here on Tuesday – so look out for it this week. At the moment you will find our biggest ever ‘clicked on’ James Buyer Opinion article – The Learning Fee - right next to this article.

It’s good to be back

We Only Buy Homes

Mal

Balwyn North 23 Sunburst. Big Crowd for Doug McLauchlan of Marshall White - 125 in fact. Seven bidders. Bought under the hammer for $1,567,000.

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

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

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

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

Our evidence

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

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

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

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

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

So what to make of it?

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

What Are Your Needs?

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

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

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

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

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

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

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

Clearance Rates

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

Buy happy

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

Hawthorn 18 Melville: With the sun in his eyes, auctioneer Alastair Craig took the helm on this crisp, sunny morning in Melbourne. There was a strong atmosphere in the crowd. With three bidders, it was passed in at $1,605,000 and was bought afterwards well above this figure.

As we approach the shortest day of the year, we saw a record number of auctions in Boroondara on Saturday (compared to equivalent weekends in past years). Given the large supply, the market seems to have  some resilience. In fact, there is so much going on that  many key agents are delaying their traditional mid-year holiday by a few weeks.

Of the 11 auctions we featured, two were bought under the hammer, six were passed-in,  one was bought after and two were bought before. Our demand indicator, Bidderman, was 1.4 for the weekend.

The word from some of the selling agents we respect:

Richard Winneke (Jellis Craig) – “The market is patchy right now. There is certainly a lot of stock on the market. Jellis Craig’s clearance rate for the day was around the 65% mark. Hawthorn appears to be holding up quite well.”

Geoff Hall (Noel Jones) – “Good results for the company with 6 out of 7 selling. The one that didn’t sell should sell soon. Not listing too many to sell in the immediate future. There should be some good buying opportunities in the next 6-8 weeks. Then, as property levels dry up going into spring, the market (and bidders and clearance rates) will probably rise back up.”

Paul Keane (Jellis Craig) – “Strong results in Glen Iris, with three sales at the mid-to-late million dollar levels.  Market seems to be steady, yet is struggling a little under the sheer weight of numbers. Glen Iris represents a good option for family buyers in the sub-$2 million bracket – as opposed to Camberwell and Hawthorn East where the same demographic of buyer needs over $2 million to buy.”

James Tostevin (Marshall White) – “The company had a clearance rate of 77% rate which, given numbers for this time of the year, was very good. Most vendors are coming into line with the market.  Australians as a rule are resilient and, despite what is happening elsewhere (and written in the media), are fighting through. Mid August through to late September looks to be an interesting period in terms of market activity”.

A tale of two auction reports - both surprises.

16 VAN NESS AVENUE, GLEN IRIS 577sqm Doug McLauchlan.  Strong Vibe Crowd of 50. Bought Under Hammer at $1,580,000.  6 bidders 19 Jun 2:30pm
Doug McLauchlan, Anthony Reis and James Redfern had a good home here with some unusual features – a lift in the almost ‘burbs and a piano player warming us up prior to the auction. Before half-time it was like pulling hens teeth from the three bidders. However after half-time (when I left –  thanks to James Redfern, who finished the report) it was a very different story – especially once the home was on the market at $1,480,000. Three more bidders emerged and the home was bought for $1,580,000 – something of a surprise. Mal James Reporting

49 PARKHILL ROAD, KEW 810sqm Maurice Di Marzio. Quiet Vibe Crowd of 80. Passed In at $3,200,000. 1 bidder 19 Jun 11:00am
The auction started positively as auctioneer Maurice Di Marzio commented on the size of the crowd (about 80) and the good level level of interest this luxury home had attracted during the marketing campaign. But that interest did not follow through, with most of the crowd preferring to keep their hands firmly in their pockets. Mr Di Marzio opened with a vendor bid of $3,100,000, followed by another of $3,150,000. Mr Di Marzio’s announcement that there would be no further vendor bids was successful in eliciting one genuine bid. The property was passed in to that single bidder at $3,200,000. Overall a very quiet auction. Amy Wong Reporting

Auction Clearance Rates

45 monitored – 26 bought – 58% clearance rate ( last week 52%/week before 70% )

Design Smart

Kew 49 Parkhill: Big crowd - a new home that a few months ago would have had some legs. Passed In $3,200,000. 1 bidder.

Hmmm - things are changing and right now it's not for the better. One of Hawthorn's top selling agents Richard P. Winneke fails to get a bid at 90 Walpole St Kew. Passed In $2,100,000

Today was a watershed day for the Boroondara market – a day when the market could no longer gorge the incredible amount it has been gorging (for the last six months). Today was a real (excuse me, while I burp) I just can’t fit in anymore kind of day. Today the Boroondara market which has been the strongest of the four big $m+ markets (Stonnington, Bayside and Port Phillip) showed the white flag and said I’m no different to the rest of you. At 52% it was literally a flip of the coin to see if the home sold on the day.

Going forward what will happen? That is all a matter of supply – there is simply too much stock on the market for this level of demand and therefore price cannot remain stagnant, let alone rise.

Price has fallen and will continue to do so until the market rebalances again – which may only be a matter of a month or so or it may take a fair while longer if demand shifts downwards during this transition period.

For buyers this is good news providing you understand the new rules and the tougher playing conditions the selling agents will require you to play under. While there are fewer buyers, those that are around at this level and who want to buy good homes, will face a more rigorous test than put your hand up and take it at a low price – the vendors simply won’t allow that.

However if prices adjust quickly the market may kick along again sooner rather than later. There is still a lot of hidden demand – waiting… waiting…..

The standout auction of the day was Paul Keane’s 50 Hawthorn Grove, Hawthorn, which was on the market at $3,300,000 and fell under the hammer at $3,510,000. 4 bidders.

Some words from the two dominant companies.

Marshall White – James Tostevin

‘” A real mixed bag today for the company – clearance rate around the 63% mark. Good homes as popular as ever, yet some vendor are not in line with market sentiment.”

Jellis Craig – Richard Earle

” 59% clearance rate for the company. A damp day weather–wise and a damp auction vibe overall for the market. Telling factors – upcoming election, rising interest rates, unsettlement in Europe and of  course  generous stock levels affecting the buyer’s psyche’.

Land is Gold! Gold! and Still Gold!

In a day of transition we took a look a Balwyn (and surrounds) Land – four key indicator auctions. This time last year (2009) these blocks were starting to fly with the onset of the FIRB rule changes – we revist exaclty one year on and find nothing, absolutely nothing has changed. Land is still Gold.

54 Stroud St Balwyn (Michael Nolan of Noel Jones) It was a cold, foggy start for auctioneer Michael Nolan today. In front of a small crowd of 30 – including the neighbours who watched from their premier balcony box seats – Mr Nolan kicked off with a vendor bid of $1,000,000. The bidding started slowly in $2,000 rises, but as the fog lifted so did the speed of proceedings. The emergence of 3 bidders helped push the property to be declared on market at $1,151,000. After a final knock out bid of $1,155,000 the property was bought to a round of applause from the audience.   Amy Wong reporting

5 Yongala St Balwyn (Michael Nolan of Noel Jones) Both sides knew what they wanted today and little time was wasted in getting to the end result. Auctioneer Michael Nolan was keen to start and opened the auction with a vendor bid of $1,300,000. So efficient was the first bidder that he did not even bother to leave the car, calling his bids from the front window. Four other bidders drove the price upwards and the property was declared on market at $1,425,000. The property was bought for $1,510,000. Good auction with confident bidding.  Amy Wong reporting

27 Regent St Camberwell (Michael Hingston of Jellis Craig) The cold, drizzly weather encouraged a brisk, fast paced auction. The auction started with a genuine bid of $1,100,000 which was followed by a vendor bid by auctioneer Michael Hingston. This helped move proceedings along and the emergence of another two bidders saw the property declared on market at $1,220,000 and bought for $1,270,000. Amy Wong reporting

7 Almond St Balwyn North (Scott Patterson of Jellis Craig) Hi Mal, 4 bidders, on the market at 1.25m and sold for $1.37m. A strong result. It had potential views and a 75ft frontage. Land seems to be selling well in Boroondara depending on orientation and location. Supply has increased but demand is still quite good.  Cheers,   Scott

Design Smart

Booroondara Auctions – 46 monitored – 24 bought – 52% clearance rate (last week 70% )

THE NEW BOROONDARA POST AUCTION RITUAL?

11.05 am

11.10am

11.15 am

Sorry did you say 5 bidders! This is June not April. A great Jeremy Fox RT Edgar auction took place at this home 23 Ferncroft Avenue Malvern East. Bought under the hammer for $3,560,000

Stonnington seems to have got itself back into the game with a second “OK, sort of – almost normal” auction week in the 60’s clearance rate wise. We monitored 23 homes of which 15 were bought; that’s a 65% clearance rate (last week 69%). Of the auctions we  attended 7 of the 10 were bought.

What’s happening? Price reduction is happening. The buyers are there!  Buyers got hit early May with a lot of stock and could see a lot more coming and they paused. That meant things didn’t sell as easily as April, pass-ins occurred and prices dropped. Stonnington sellers have had two more weeks than those in Boroondara to face the “new order” and they have used those two weeks to price adjust and things are now beginning to move again at auction. Welcome back sellers – lets see what happens from here.

High Noon for K&B

It was a case of Toorak High Noon for Kay and Burton today with 3 substantial properties for sale around midday. One sold before (3 Cleeve with Andrew Baines) and two failed to attract any auction bidding interest (9 Kenley and 10 Moonga). The thing of interest is Kay and Burton’s new style of auctioning.

1)      Run the campaign and gather intelligence but give little way

2)      Tell everybody the ball park figure on Auction Day via a Vendor Bid and then shut it down quickly.

3)      Deal with the brave and inquisitive under pressure afterwards.

For the most part we thought this was not working early May – early June I’ve become a believer for now. It’s a well thought strategy. Early July let’s see …… Kay and Burton is a very strategic company; they run campaigns in waves – feeding off each other, regrouping and then going again. It was no coincidence that May was a stellar of stellar months for their vendors and themselves - they had obviously been planning it since Christmas. K&B appeared to lose their way for a short time when they focused on others; but the generals have pulled hard and the well oiled Millionaire Machine is back in full swing.

EOI

They are back and moving along. We have just assessed a really interesting home at 3 Avalon Road Armadale (Ross Savas of Kay and Burton). We have a rating on it and price thoughts. If we can help you through the EOI maze please give us a call.

Andrew McCann of Bennison Mackinnon’s thoughts on EOI to the question, “do you think EOI are increasing and working at the Top End”?

We don’t deal in a lot of EOI campaigns and as a company we don’t think they work as well as the Auction method so they are rarely suggested. Buyers tend to find them confusing and prefer to either know an asking price for a Private Sale or bid in a transparent and open environment which an Auction allows for. They do have a place at the “very top end” of the market and for some “unique” properties however from the more recent EOI campaigns we have seen they don’t seem to be working.

Twoday.com.au

Marshall White – the ever innovative have launched a new under a million, new age, internet savvy, younger persons company (I think I got that right). The main aim is to give a focus to this very important market while still allowing Marshall White to keep its exclusive high end identity. Darren Saunderson heads it up and while it is not our market, we will watch with interest. Good Luck with the new venture. 

Its not million dollar news but intersestingly South Yarra produced 18 results for a 78% clearance rate today however not one of  the sales was over $1million. Below are the results around and over a $million.

Make Good Decisions

Looking good Lachie! One of our favourites Lachlan Fraser-Smith ably assisted by Simon Dale gets four bidders zinging to an "under the hammer price" of $1,672,000. Prahran 1 York Place.

Glen Iris 18 Clyde: "The Boss" John Morrisby letting the 3 bidders know they are a bit short at $1,385,000. Passed In but sure to be dealt with soon if the vendor knows the new market.

Stonnington was surprisingly strong with Park St South Yarra (Warwick Anderson of RT Edgar) going well past $3,900,000 on multiple bidding; 81 Clendon Road Toorak (Gerald Delany of Kay and Burton) selling post auction north of $7,350,000 and 64 Burke Road Malvern East selling before for 3,320,000 or $1366 per sqm for main road land.

The clearance rate was back to almost 70% and our recent frosty forecast for the next month in Toorak and South Yarra now seems as reliable as a weatherman in Melbourne’s spring.

No, no, no Toorak is not on fire – it’s just not quite as cold as we thought. And while sounding like a Kay and Burton salesman, please tell me how you ignore a claimed 80 sales at around $250,000,000 for the month. Either Michael’s having me on or the market has some real hidden strength, notwithstanding at less frenzied prices (that’s agent code for slight dip).

Why the auction turnaround – price adjustments. The vendors of late May have proven they can read and don’t wish to experience the early May vendors pain; so they have swallowed the price pill to become sellers and avoid remaining owners.

The market, the agents and the jungle drums have worked. What happens now becomes a function of stock levels going forward as some demand (for now) has been proven to be there.

Other interesting sales and (almosts)

• At an auction in Clarendon St Armadale (Madeline Kennedy and Andrew Hayne of Marshall White) where a nice little Edwardian single-fronted was bought for just over $1.2 million, and its twin sold earlier this month for $50,000 less. Hard to argue against that fact although it is only one fact.
• 12 Chesterfield Malvern (Rob Vickers-Willis of Abercromby’s and RT Edgar’s Will Cooper) which has been on the market longer than it takes to get an apology from a selling agent seems to  have some post auction momentum and should sell north of $3 million or over $3000 per sqm and a free house (which we like James Rating 667/1000)

All in all a humbling week or so for this Top End predictor.

Stonnington Auctions – 26 monitored – 18 bought – 69% clearance rate

 Make Good Decisions

Toorak 81 Clendon Road: Listen to Gerald's gospel my sons, bid now or bid afterwards; either way the vendor is getting your money. Gerald Delany, Mike Gibson and Ross Savas - K&B's true believers. Bought afterwards for over $7,350,000.

Camberwell 26 Alma Road: Bought $1,615,000. Bang! 5 bidders. Richard Jellis. Good to see the 'ol tiger back prowling around.

In contrast to last week, we saw all 9 properties we covered over $1,000,000 today, sell.   Three sold before auction, 3 sold under the hammer and 3 were bought after.  That’s a 100% clearance rate and Bidderman was back up to two.

Five of the nine properties had two or more bidders.  Richard Jellis of Jellis Craig had 5 bidders at 26 Alma Road Camberwell.  3 Bristol Street Surrey Hills (Antony Woodley Marshall White) also had good bidding strength, with three bidders taking the price to tick over $2,000,000.  Steve Burke of Jellis Craig sold  71 Broadway in Camberwell with a strong result just over $3,700,000.  Sure it needed a bit of work, but had very good land content.  12 Lorne Grove  Camberwell (Peter Batrouney and Campbell Ward) next weekend will be interesting.

24 Kingsley Camberwell with Jellis Craig’s  Richard Winneke passed in for  $2,100,000 but sold afterwards for $2,150,000 (resold from late last year when purchased for $2,000,000)..

27 Harcourt Hawthorn East with Rob and Tim Fletcher of Fletchers was bought for $2,300,000 after passing in at $2,125,000.  Both were good blocks about the same land size (700-800 sqm) with a home that needed some work but was livable .  Tim went onto say he thought this market pause was all about the huge stock levels available and claimed his company had sold 13 from 14 today. He did state he felt the market dynamics had changed in 3 weeks.

40 Kinkora Road Hawthorn (Richard Earle Jellis Craig)  was bought after auction for $2,650,000.  This was  similar to number 28 which sold last week but needed work.   The price reflected this.

Marshall White & Jellis Craig both had a good weekend.  Marshall White’s Justin Long said they had 38 auctions and about 80% clearance rate, and Richard Jellis of Jellis Craig advised they had 48 auctions with around 80% as well.

Boroondara Auction Results – 46 monitored – 32 bought – 70% clearance rate

Design Smart

Surrey Hills: 3 Bristol Street: An auction of the year contender for Antony Woodley of Marshall White: 3 bidders and bought for $2,050,000.

Lined up like ducks; but the ducks didn't perform. Prahran 32 Harvey St: Passed In $875,000: 2 ducks, I mean bidders: John Manton of Marshall White (to the left) was the duck hunter.

In Toorak and South Yarra it was 50% at auctions today – which actually wasn’t that bad when compared to the last few weeks. Stonnington today had a reported clearance rate including Glen Iris over $1m of 66% (12 from 18). Not a lot to be taken from specific results today except to say that some average properties on main roads got some bidding interest; cases in point Williams and Orrong results. We reported on 7 and only one property – 48 Park Place South Yarra failed to register a bidder.

For those that had awell priced property and an agent who could get it on the market seemed to get a  good result. Case in point: 19a Tintern Avenue Toorak – John Bongiorno Marshall White

James Auction Report: A high action, fast-paced auction was the scene from 19a Tintern Avenue, Toorak this afternoon. Under the glorious Melbourne sunshine, John Bongiorno started off proceedings with a modest vendor bid of $1,700,000. The first bidder announced themselves after a moment of hesitation from the 70 plus crowd. After several bids back and forth, one party declared themselves out of the race which brought about a flurry of fresh aggressive bidding from a new party. Back and forth between the new and original bidders, twenty or so times, brought the price up to $2,380,000 at which point the original bidder waved the white flag and accepted defeat. Having declared the property to be on the market at $1,825,000, the vendors would undoubtedly be thrilled with the result, selling the property under hammer for $2,380,000. A strong atmosphere in the crowd produced three bidders on the day.    

Above does not happen that often in a completely down market.

So why have we eased?

We had lengthy interviews with Justin Long and James Connell of Marshall White and this is a synopsis of their takes on the market:

• Market still has strength evidenced by MW’s clearance rate in the 70’s per cent wise and as Justin put if 644 Orrong can get two bidders and a sold sticker on a $2,000,000 reserve then we will still be feeding our families for a month of two
• Properties must be priced appropriately as buyers have choice. Choice is the reason we have seen the disappearance of the ridiculous price paid.
• The market is in better shape than the press are saying and the proof may well be in the pudding as stock levels pull back going into the winter depths.

We had another discussion with Gowan Stubbings and Andrew Baines of Kay and Burton while waiting for the 58 Llaneast Auction. A summation of their comments are as follows

• $11 million sale in Flinders
• 4 Elgin Armadale which we reported on at auction last weekend – sold after a pass-in.
• Previous 80% Auction clearance rates have spoilt us but the times have changed. We (meaning selling agents) need to work differently. Expressions of Interest are now the way to go.
• There is sale after sale happening and unlike a month ago no result looked surprising – meaning too high.
• Buyer urgency has definitely dropped

Our take on the events of South Yarra, Toorak and Malvern in recent times

• Get ready for Expressions of Interest and if you don’t know how to play this game then you will learn at your peril. Get some help. Why will EOI’s happen? Simple; many auctions are not working  well in this market.
• The Kay and Burton claimed results can’t be ignored despite the pathetic South Yarra, Toorak auction clearance rates of the past few weeks. The market is not in freefall.

If we all agree yes the market has turned; then the interesting question to ask now is why?

 The real truth will mean different medium term outcomes for buyers.

Make Good Decisions 

He's happy. Lachlan Fraser-Smith aka Uncle F. of Bennison Mackinnon. He truly is one of Saturday's great auction characters; right up there with Marshall White's Disney twins. Go watch Lachie at an auction near you; it's an emotional experience and more the point it's usually a success. Malvern 15 Winter: Bought under the hammer: $2,010,000: 2 bidders.