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

Key Points:

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

In terms of ongoing stock levels -

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

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

Like many auctions this weekend, a lot of standing around, not doing much. MALVERN EAST, 9 Lewes Drive: Passed-in at $2,500,000 with two bidders. Anthony Grimwade (RT Edgar)

At 6pm on Saturday the James Clearance rate for $M+ was 57% on the 30 auctions we attended. That was well down on last week’s cameo of excitement, but understandable giving the quality change between this week and last week at the Top End.

Bidderman, our demand indicator, was 1.5 bidders per auction. However the quality of the offerings was one of the lowest this year.

While there were a few volcanoes (4 or more bidders), what was more interesting was that 1 in 3 homes were ducks meaning they didn’t get a bid a all. We think that was a confirmation of the market reaction to this weekend’s lack of Top End quality.

In fact, only 1 in 5 of $M+ homes monitored this weekend sold under the hammer.  The rest sold before or soon after – or didn’t sell at all. That’s an Under the Hammer Clearance Rate of 20%.

What that means is that in this current market buyers need a lot more than just a ‘hand up in the air and hope’ strategy to buy homes well.

Market Summary:

There were plenty of auctions at the lower levels, e.g. at or around a million dollars, but many lacked any WOW factor.

A number of the key selling agents were off this weekend on holidays and, as with many buyers, they seem to have turned their attention to pursuits other than buying and selling.

It was hard to find a property over $2 million up for auction. The only $3 million plus auction we saw in Toorak was at 68 Hopetoun Road with Steve Abbott of Jellis Craig – an art deco that seems to get sold every 12 months (see report below).

The REIV median prices came out this week and rightly confirmed what the market has been saying for some time: Prices are weaker.

This year to date has been a positive one for buyers with reduced competition, more choice and lower prices. On the flip side the buying opportunities are only such if you take them (a Steve Abbott auction line).

Next week, there are almost no auctions and not too much the week after.

Post Easter, as we said last week, may or may not be a different story. But our feeling is that quality choice will dry up and the big issue will become finding a rose amongst the thorns, the pass-ins and the stales. If those roses are hard to find then prices for them will firm as new quality drops with discretionary vendors adopting a wait and see strategy.

What Sold Well – Volcanoes with 4 or more bidders

• Albert Park, 62 Barrett St – Peter Simmons – Nicely renovated Period Home – $1,575,000
• Hawthorn, 23 Falmouth St – Hamish Tostevin – Nicely renovated Period Home – $1,330,000
• Hawthorn, 11 College St – Richard Earle – Nicely renovated Period Home – $1,409,000
• Kew, 36 Maitland Ave – David Oster – Land site – $1,345,000
• Toorak, 80 Grange Rd – Rodney Morley – Nicely renovated Period Town Residence – $1,500,000

$3M+ market: Overall, the high end at $3 million+ appears as weak as it has been for 12 months. Although  a shortage of new quality stock post Easter has put some zing back into the market as some buyers are forced to act.  Growing kids, divorce, lifestyle, whatever cannot wait for everyone indefinitely. Go to our $3m+ report to see most of the last weeks’ 10+ sales.

Michael Armstrong, Kay & Burton, South Yarra: “I think we can expect a fairly normal market post Easter.  Market conditions are settled and stock levels looking forward to May/June are lighter than what we’ve experienced in the past couple of months.  Vendors have had to adjust their expectations in recent times and buyers with long term views have realised that the past few weeks have presented them with good opportunities. The better quality offerings will continue to attract competition and alternatively  buyers will continue to deal harshly with those vendors (and agents) who price properties incorrectly.”

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

Biggest Sale we covered: 68 Hopetoun Rd, Toorak, Steve Abbott (Jellis Craig); after auction, $3,050,000, 3 bidders
“This art deco property with Heritage One (HO1) overlay was looking for a committed buyer to make it a home. A vendor bid of $2,800,000 got the proceedings underway and the first bidder entered the race with a bid of $2,850,000. A second vendor bid of $2,900,000 signalled that the bidding was still some way off from the desired sale price. Auctioneer Steven Abbott wouldn’t entertain an increment of $5,000, demanding at least $10,000 to stay in the race. Despite keen bidding, this property was passed in at $3,020,000 but this was just the start of the negotiations. Bought after for $3,050,000.” (Debbie McTaggart)

Biggest Pass In we covered: 12 Dudley Pde, Canterbury, Doug McLauchlan (Marshall White); passed in $2,000,000, no bidders
“Doug McLauchlan took centre stage in the very big, leafy backyard of this great property and looked ready for action. Assisted by his Marshall White team, Mr McLauchlan explained that the circa 1923 home had been in the same family for a massive 72 years. But even the sentimentalists amongst us in the crowd weren’t ready to put their hands in the air and bid. Mr McLauchlan opened and closed on a vendor bid of $2,000,000.” (Jen Milligan)

Auction Video: Architect Adam heads to sunny Hawthorn this week to witness a ripper auction at 23 Falmouth St, a Marshall White property with auctioneer Hamish Tostevin.  Click on the live action.

Big Issue and Weekend Reflections: Coming back after the Easter holidays.

Two Weeks Off: Marketnews will be on holiday for two weeks with our next Marketnews on the 7th of May. A number of agents are talking up the 21st and 28th of May as possible Super Saturdays (as buyers let’s hope so). For James Buyer Advocates it will be business as usual.

We Only Buy Homes and have a safe Easter break:

Job Advertisement:

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

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

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

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

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

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

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

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

Scott "Pretty Boy" Patterson (Jellis Craig) fields bids from five bidders before 60 First Ave, Kew, is bought under the hammer for $1,205,000. Check out our video on this auction.

Key Points:

• We covered nine auctions, three bought under the hammer, 2 post auction and 4 passed in
• Jellis Craig had an 80% Clearance Rate today
• Big numbers of $M+ auctions today – 42 monitored
• Bidderman is over 2 on a day when we monitored over 40 $M+ auctions in Boroondara. That’s “strongish.”
• Surprisingly Camberwell only 4 from 10 and some that passed in were good offerings eg 8 Canterbury and 46 Brinsley
• Hawthorn and Hawthorn East 7 from 8 bought.

Agent Comments: The election question

Steve Burke, Jellis Craig, Hawthorn: “A large number of vendors have waited for the election to be over on August 21 and unfortunately as we know there has still been no resolution as yet. Those currently selling now have timed it well because there isn’t the usual volume of stock in the Boroondara market that there usually is this time of year and less competition creates a greater concentration of buyers at the auction and higher selling prices on the day. We saw this last weekend at 56 Manningtree Road Hawthorn where we had 5 bidders, 2 investors and 3 owner-occupiers. We are expecting that the Spring market will start later once things have settled down and the Federal government has been decided and continue right through to Christmas.”

Tom Ryan, Jellis Craig, Hawthorn: “While on our car runs, viewing new stock I have been pleasantly surprised by the amount and quality of homes about to hit the market in Spring and in particular there have been a number of good quality family homes.”

Hamish Tostevin, Marshall White, Hawthorn: “In regard to the election, there has been nothing in last couple of days – no different to the last couple of weeks. Open numbers were the same as previous weeks around 10 to 20 but Melville St had 50. The election will not do that much. Volume  may be back a little already and uncertainty (with government) will not help or have an impact on (the market).”

Chloe Quinn, Jellis Craig, Hawthorn: “Certainly people will raise that concern (that the election has effected the market) but to be honest we had high numbers of people at our open for inspections and auctions last weekend on the day of the election. Because of the election, people are actually in Melbourne. If people want to buy a home then the potential change of political parties isn’t going to effect them getting their house, they’ll make it happen.”

BidderBuzz Auction: 60 First Avenue Kew; Scott Patterson Under Hammer $1,205,000  5 Bidders
A fantastic auction from Auctioneer Scott Patterson and the Jellis Craig crew – Richard Winneke and Chloe Quinn. Mr Patterson commenced with a vendor bid of $980,000 as the crowd of 50 stood silently. Only one bidder piped up before half time. A little rain, a little break and the crowd were fired up. Five bidders in total, the selling price was called at $1,090,000 and the property was bought under the hammer to the enthusiastic buyers at $1,205,000. Great vibe, great auction. 

Clearance Rates & Monitor Table:

Mark "Lama" Dayman (Marshall White) does his best to drum up some interest from the crowd at 51 Leura Grove, Hawthorn East, but with only one bidder is forced to pass the property in at $1,725,000.

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.

Mark Dayman: They call him the "Deli Lama": Why? Because of his pearls of wisdom at sales training and his culinary expertise (eating that is). We like him too and today so did his vendors: Hawthorn 29 Hill: Bought under the hammer: $1,685,000: 2 bidders.

A solid day today in Boroondara – or so it felt.

Of the 8 auctions we covered,  5 sold and 3 passed-in giving a 63% clearance rate. Bidderman was at 1.75 which is still quite good (for what it is worth we did see  8 vendor bids - these are starting to come into play more now as buyer depth thins out).

Of the reported auctions it was 21 from 33 or 64% for $1m+ auctions.

The market is weakening but is that because of stock overload or overall weakening demand? The big question for the next month or so! The true answer determines the length and depth of easing. Supply issues – shorter term and not as dramatic. Demand issues – probably longer term and more dramatic.

There is still plenty happening outside auctions – three $6m+ Hawthorn properties selling in Grace Park, Shakespeare Grove and Berkeley Street during the week. James Scarff and Sam Wilkinson from Kay and Burton.

But let’s give the stats a rest this weekend – what about some opinions.

While there have been huge stock numbers evidenced by record months for Jellis Craig in May and June and Kay and Burton are now reporting big results, there is still no doubt prices have fallen across the board. We asked Paul Keane of Jellis Craig for his thoughts at his 28^th Hawthorn Grove property he has put on the market (No 50). Even arch rivals would have to concede he is the Hawthorn Grove specialist – but I digress. Paul said it’s all numbers. Demand and Supply “You bloody buyers have choice Mal”  – said in complete jest, but the meaning was understood. Paul added if we go back to lower stock levels come late winter then prices may well rise. He finished by noting that now may well be a good time to buy. It may be his is right!

The take from other selling agents -

Glen Coutinho (Hocking Stuart) – “Buyers are more cautious and the market has retracted – this is probably more like a ‘normal’ market and in some ways a healthier market.”

Geoff Hall (Noel Jones) – “Presently it is hard work selling property, given good stock levels and cautious buyers. The days of regular multiple-bidder auctions seems over for now. Vendors more and more are coming in to line and are in touch with the market.” Interestingly Geoff notes there are presently 12  two bedroom units for sale in Surrey Hills alone – he can’t ever remember that happening before.

Hamish Tostevin (Marshall White) – “Pass-ins are much more prevalent now, yet the deals generally happen on the day.”

Jellis Craig’s Scott Patterson: “Some buyers think the market is in free-fall – well they will remain lookers until they realise its has only dipped. Some vendors still have their heads in the April market and this is May/June. For them they will remain owners rather than sellers.

Another big weekend coming up in terms of auction numbers and most agencies have plenty happening in June. Interesting times ahead.

Design Smart.

Maurice "The Crooner" Di Mazio clarifying the position in getting away the thrice recently offered and now finally sold 48 Melville Hawthorn for $1,605,000. Under the hammer. 2 bidders.

Middle Park 61 Mills St. Single fronter under a million - admittedly with an issue or two - but only ten people showed up and then there was a vendor bid at $920,000. Silence. Andrew Stuart is a quality auctioneer and Hocking Stuart Albert Park is a dominant performer, so no issue there. It's the market and it seems to be changing very quickly.

1) Its 6.00 pm on Saturday and the James Clearance Rate for the 32 auctions we attended was 47%. May of course rise overnight as more results are reported.

2) Bidderman – now at 1.5 and falling. Significant change from a month ago.

3) This weekend is the weakest of the Big 5 auction weekends in May as far as quality and numbers go; so the next two weeks may prove our headlines and assertions as just that, headlines and assertions, not actual facts or they may confirm once and for all – things have changed in 2010.

4) Of the 32 auctions we attended today.

• 4 were bought before
• 8 were bought under the hammer
• 3 were reported as sold after auction
• 17 remain unreported or passed-in as of 6.00pm

That is very different to a month ago.

5) All agents in the Big 4 $M+ areas (Boroondara, Stonnington, Bayside and Port Phillip) are now reporting a drop in attendances at opens, bidder numbers and sold at auction results.

6) Prices are easing. Why is this happening? A combination of a sustained increase in stock levels (supply) which February, March and April did not allow due to the holiday interruptions and a very noticeable decrease in buyers (demand) best evidenced by Bidderman falling to a low 1.5 and almost all agents reporting lower OFI and auction attendances. Supply up and Demand down means lower prices.

By areas:

7) Inner Melbourne is still a strong market and so is Hawthorn, Kew, Camberwell, Balwyn although bidder numbers are waning in the latter areas – but there are huge stock numbers on offer.

Bayside and Glen Eira showed some resilience this week, mopping up a lot of what was a bad selling day last weekend with a number of post auction sales. And hey, there has still been a $1m sale in Brighton every day this May!

9) Toorak and South Yarra are quickly giving the impression they are an auction basket case – and all in a few short weeks. Stay tuned are we missing something?

What will happen from here? The market will be unsettled for some time unless the next two weeks produce a weekend like March 27 (pre Easter) which slaps the markets back in the face and says I’m not ready to fall yet. We don’t think that will happen. While these next two weeks are chockers with good homes, we are now starting to see an overhang of unsold homes (in some areas and the first time since mid 2009) ; lower bidder numbers on existing auctions and a general mood swing that seems more negative and more sustained than the little price drop blips of post Melbourne Cup 2009 and post Labour Day 2010.

The market has had an incredible run since May 2009 and in particular November  2009 till Easter 2010 where it went skywards like an out of control machine but that bubble of invincibility has been pricked. Pricked by the 3G’s

• Greeks or
• Glenn at the Reserve Bank or the
• Guy who pressed the wrong button which effected the Dow last week.

Whoever or whatever or a combination of all and more has created a market with a mood change now more than a one weekend anomaly.

From here we see an unsettled period as buyers (who you think would love a falling market but in fact don’t) shrink into their shell a bit. It’s Catch 22 – you need a falling market to make buyers happy but if they then acted on that happiness it wouldn’t be a falling market.

We are now in times where that $2 million home worth $2.2m last month is now still worth $2.2 million  (competitive auction) or $1.95m (weak buyer expressions and a keen vendor). Interesting!

Diary of a Buyer Agent:

I love my job as a buyer advocate/agent and I hope more people will join the industry as buyers begin to see value in what a good advocate has to offer, be it with us or another good company (like Morrell and Koren; JPP or Wakelin’s to name a few). If I had a dollar for every time someone asked me “But what do you actually do?”  I would be able to retire. So here is a typical workload week for me at James Buyer Advocates; which hopefully shows the breadth and depth of the work we do. Its as love story rather than a war story.

Saturday, 1 May

This weekend we have five properties to bid at on Saturday and one on Sunday. I call clients and /or advocates in the morning to check their anxiety levels and then drive to my first auction at 112 Edgevale Road Kew. I have my fingers crossed for our clients on this one, as I think we won’t have enough money to buy it. Agent Hamish Tostevin of Marshall White is quoting $1.3-$1.4 million but I believe it will go for at least $1.6 million. There is strong bidding against us and eventually it is sold to another determined bidder for $1.66 million. 5 bidders

After a commiserating phone call to our client, it’s onto the next auction at 3 Keith Court Brighton. Fellow advocate Kristen Hatt calls to tell me we missed out at 16 Merton Street Albert Park (Andrew Turner of Cayzers) on at the same time. The property sold for our control price figure of around $1.4 million but we were never a real chance after the pest and building inspection had (rightfully) lowered our client’s limit. 3 bidders

We haven’t had a great start to the day and I hope the news gets better.

We are not bidding on 3 Keith Court Brighton (Ian Jackson of Kay and Burton) but I wanted to see bidder strength, particularly as it is similar to a Golden Mile property that has a closing Expressions of Interest campaign, with the same agent, in a few days. It’s a strong auction, with 4 bidders, and sells for just under $3 million.

I head back to Kew for a 2pm auction. On the way back fellow advocate David McMillan calls to tell me our client, who we are bidding for on a Richmond Hill property (Chris Murphy of Hocking Stuart), has increased their budget. As it turned out this additional pre-auction work by David was crucial, as it moved the client from unsuccessful bidder to successful buyer – the final result was above their original budget but within their revised limit – 5 bidders.

This successful result helps set the tone for the rest of the afternoon. The Kew auction is quiet – justifiably so, as this block has some issues and appeals only to a specific buyer. The property is passed into us (1 bidder) and we negotiate with Bruce Severns of Noel Jones a price acceptable to both parties.

These post-auction negotiations took an hour, and then it’s off to Hawthorn East for my final auction of the day. This property is also passed into us, and so begin negotiations, which finally conclude three hours later – the Tostevin brothers Marshall White presiding. 1 bidder.

After some more client phone calls and a drink of Champers with one client,  it’s time for bed as I’m getting old and standing in the cold for those long hours at the final auction meant no discoing for me tonight.

Sunday, 2 May

After posting our Market News wrap, and cheering at my son’s footy match – go Vampires! – I meet with fellow advocates Kristen Hatt and Ralph Doubell at a St Kilda Auction (Tony Pride – Pride Real Estate). This was a difficult auction for us for a variety of reasons and, in the end, we were lucky to get the chocolates at a strong, but not unexpected, price. 3 bidders

Monday, 3 May

I had a meeting with agent Ross Savas of Kay and Burton to discuss what may happen at close of business today for the Expressions of Interest campaign in Brighton. There are no set rules with Expressions of Interest campaigns – it’s like meeting a girl at a dance. It’s hard to know how to ask, hard to know what to say and, in many cases, actually when your dance is going to be. The rest of day was reading and lunching with wife Janet and then evening with the family. You need to stay fresh after a full weekend.

Tuesday, 4 May

All advocates, from both our offices, meet to discuss what is happening, what is in negotiations and what issues and trends we should be across. We also film our videos for our website. It’s good to catch up with Advocates Adam, Kris, Ralph, David and Stephen and a few other Rangers.

I finish the day with a meeting of the REIV Ethics Committee. Robust discussions occur each month and we are seeing results – over the past year we have made good progress in offering written guidelines for REIV members for Expressions of Interest campaigns. This committee is well led by Andrew Boyce of Hodges and Peter Lowenstern of the REIV. We cop criticism, some of which we deserve but I do believe genuine attempts are being made to set things in the right direction and I find there is a lot more acceptance of buyers agents from selling agents and the REIV than there was ten years ago.

Wednesday, 5 May

Wednesdays are often busy with Bayside and Port Phillip OFI’s but I cancel all discretionary appointments to meet with my clients to prepare for a Boardroom Auction connected with the Brighton Expressions of Interest campaign. I check with Adam Woledge (our Hawthorn office) who is also an architect on a council issue.  We’ve bought for these clients before, and I’ve worked with Kay and Burton on many deals, so I feel some comfort but you still need to prepare on what may lie in wait for those that don’t prepare. It’s a tough Boardroom auction but we finish with the result and a happy client.

Thursday, 6 May

On Thursdays, we usually hold pre-auction meetings with our clients. Today we have three as we are bidding on three homes this weekend. I also have a number of OFI’s to go to.

In the morning it’s looking at two nice blocks in Alphington and a chat to David Oster from Jellis Craig. Hawthorn and Camberwell  OFI’s and lunch and late afternoon I look at 3 ripper off markets.

Scotch Hill Hawthorn – a wonderful Victorian with pool and tennis court and an asking price of $7.5m. Looking at it I first wonder if they have missed the market as it seems to be easing but really this is a good home on big land in a prime school location so it should sell well if its meets the market. It’s with Antony Woodley of Marshall White if you don’t want an advocate and wish to explore further.

St Kilda and one of the more quirky homes you will see. I love the artwork on the walls just as much as the home itself which is over 4 levels. The rooms have great views and large proportions with a wonderful staircase and there is rear off street parking. The number asked is $10 million and Nicole Gleeson of Kay and Burton was kind enough to show me through.

Finally I get a sniff and a driveby of another Brighton Golden Mile opportunity around $15million. Not sure how for sale it is but I suppose anything is, at the right price. A very enjoyable few hours to cap off a substantial day.

Friday, 7 May

I write draft articles for the weekend’s Market News wrap and for a new publication, the Weekly Review. I finish the morning with follow-up calls, chats with agents and brainstorming auction strategies for tomorrow’s auctions. It will be another big day so the rest of Friday is relax.

Postscript Saturday 8th May till Friday 14th May:  We have since bought for the people who missed on Edgevale Road Kew in Glen Iris through Andrew James of Hocking Stuart (pre auction offer) and to show you life is not all roses and chocolates we had a less than stellar day on the 8th with 1 in 3 auctions going our clients way, however we have since bought a property we hadn’t planned on from a pass-in that one of our eagle eye property searchers noticed..

There are 12 properties that I had direct involvement in over a million dollars in the 10 days I was asked to keep a detailed diary. There were others under a million that I did not mention as my involvement was minimal. All properties below had final results between $1million and $5million. We bought 8 and unfortunately missed 4.

We acted for clients who bought
Lyndhurst Hawthorn East
Selbourne Kew
Dickmann Richmond
Irymple  St Kilda
Golden Mile Brighton
Leopold Glen Iris
Nicol  Highett
Werona Bentleigh

We acted for clients who missed
Merton Albert Park
Edgevale Kew
Victoria Hawthorn East
Bethell  Ormond

It’s a great job and hopefully this will encourage younger agents to consider this as a career going forward. Contact the REIV or write to buyer agent companies from time to time.

Buy happy

Mal

The Mills St Middle Park auction crowd – 10. The train has left the station. The tram has left the stop. The buyers have left the building. Today's market is very different to Easter's and today’s results continue to confirm there is a fall in price caused by a significant drop in declared buyer interest.

Kew 112 Edgevale Road: Hamish Tostevin with a smile emerging as he collects bids from 6, collect cash from one at $1,660,000 and collects happiness from another satisfied vendor.

Boroondara was solid again and although Bidderman is not at the stellar 3 of a month or so ago – at 2.3 bidders per auction in Boroondara – it is still strong. There was only one sale around the $3m mark this week; so its hard to say the TOP END market is better than Toorak/South Yarra whose upper end is more like $4M+. Nonetheless an interesting stat is that all auctions above $1.6m were reported as bought yesterday and that was at least a dozen.

Results Reporting – most auction results are being publicly reported and a quick check of the main suburbs proved that – so there is no hidden clearance rate like there was 18 months ago.

Clearance Rates: Glen Iris ( 6 from 7 bought); Camberwell (5 from 8 bought); Hawthorn (6 from 7 bought) and Kew (5 from 7 bought) – that is for an overall Saturday 6pm clearance rate of 75%. Solid – very solid.

Some people’s thoughts – its easy to say agents are all bas…. – it is just not true. We have had good dealings with these people below recently:

Off Markets (not advertised): We are seeing solid activity in this segment by example was a couple of Grace Park properties in Mary St being sold very quietly last weekend, both in the high 2m’s. Jellis Craig were the agents and we find the best off market contacts are Al Craig, Paul Keane, Tim Picken, Richard Winneke, Peter Vigano and Tom Aylward – that’s if you don’t think a high quality buyer advocate company can help you – no names of course.

The Tostevin brothers (James and Hamish) from Marshall White are everywhere at the moment and getting a lot of deals done. They can be in your face at times – one more than the other but they are really good negotiators, hard workers and ethical dealers – possibly an argument that one is a conservative public quoter. Good to deal with.

Talking with possibly the best young turk going around – Paul Richards from Hocking Stuart – he feels things are leveling a bit, but that overall the market has strength at all levels. While on the subject of Paul Richards we should say that we have had successful and unsuccessful dealings with him over the last 3 or so years and we wish all agents were like him. He has got a self belief but not an unpleasant ego; he goes out of his way to get us access to homes thus helping his vendors; he is accurate on his price assessment and when a property is likely to sell; and he gets a surprising number of really high end and off market deals done despite the fact he does not appear all that long in the tooth. No ulterior reason to give him a big wrap – he has done us no special favours – of what we have seen of him it would be good to see aspiring young buying and selling agents hold him up as a role model on how to conduct yourself inside the real estate business. Just our opinion and we don’t know him outside real estate.

Adam is back from New York next week so no doubt you will see a flurry of land values and renovation options in the next Boroondara wrap; in the meantime some really good auction reports and home ratings below to fill you in on what is really happening out on the Boroondara auction dance floors.  Apologies for the lateness in this report going up.

Design Smart

Much like an intimate garden party, a group of 50 gathered in a circle around this lovely rose garden. Auctioneer Al Craig got things started with a vendor bid of $2,500,000 at 10a Monomeath Avenue Canterbury before being bought post auction for $2,670,000.

Camberwell: 16 Green: Bought $1,400,000. Bidderman 3. Doug McLauchlan, Marshall White about to bring the hammer down.

After a week or two off for serious buyers and sellers, the market in Boroondara keeps on keeping on, with clearance rates for most agencies around the 85 per cent-plus mark.

The weather in Melbourne was perfect today – perhaps the last breath of summer – and there were good people numbers at  auctions and at ‘opens’ enjoying the sun – two properties in particular of note – 42 Berkeley Street on Hawthorn’s Scotch Hill (James Scarff, Kay and Burton) and 55 The Ridge Canterbury (Daniel Bradd, Jellis Craig). Both big family homes in well known streets. Our ratings will be up in the next few days.

Land sales remain strong  – two of interest and both sold by Noel Jones Agencies were-

• 5 Ross Street Kew – 814m2 (John Cokalis) sold for$2,260m (or $2780/m2) – 6 bidders
• 151 Wattle Valley Road Camberwell- 1598m2 (Geoff Inglis) sold for around $2.6m (or around $1630/m2) – 5 bidders

While these properties were not vacant sites, most buyers would see a new home project down the track. Developers seem back in  full flight – there does seem to be an enormous lot of building sites out there and of the builders I talk to there is certainly no shortage of work.

No real surprises in the key auctions we attended -

• 22 Bellett Street Camberwell (Anne Mackie, Hocking Stuart) sold for $1,770,000 – 2 bidders
• 16 Green Street Canberwell (Kathy Malcolm, Marshall White) sold for $1.400,000 – 3 bidders
• 28 Lennox Street Hawthorn (Hamish Tostevin, Marshall White) sold for $1,305,000 – 4 bidders
• 44 Mary Street, Kew (Walter Dodich, Marshall White) sold for  $1,524,000 – 3 bidders

Add to this some big ones selling before – 108 Harcourt Street Hawthorn East (James Tostevin, Marshall White / Jock Langley, Abercromby’s ) sold for a figure  just over $4,500,000 and 17 Wentworth Avenue Canterbury (Peter Smith, Jellis Craig) sold for $2,150,000.

Overall confidence remains high from both buyers and sellers alike.  Some insights from Top End selling agents -

• Richard Winneke from Jellis Craig believes the market continues to remain strong – their company sold 23 from 27 today – the four did not sell were less than perfect properties which would struggle in any market.
• James Tostevin sold all of the five he auctioned today and believes the market is ‘flying’.
• Jason Scillio from Kay and Burton believed this type of activity could go on for ‘another 2-3 years!’
• Richard Earle from Jellis Craig also could not see any real end in sight, claiming that maybe a ‘flatting off of the market’ would be the best buyers could hope to expect for.

Not everything selling however – 52 Athestan Road Camberwell passed-in and 8 Stanhope Grove Camberwell has been withdrawn from sale. Both of these properties were ‘less than perfect’ at least that is what the market thought.

The median price trend chart, courtesy of the REIV, represents what we think is happening in $M+ Boroondara despite these charts being for all (above and below $M) member sales in the area. Prices have been going up dramatically. WOW look at the government’s law change (FIRB) permitting foreign nationals to buy land which came into effect and we reported on around March of last year (Mar 2009). Look at Kew.

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

What about Canterbury it looks like a wounded walrus – we guarantee you its statistical shortcomings – too few sales to give meaningful data.

Two biggish weekends coming up May 1 and May 8. We are almost half way through 2010 and no real slump seems in sight, at least in the foreseeable future. Even more reason to make good decisions and…

Design Smart

Brighton: 10 Kent Avenue: Nick Johnstone of JP Dixon. Bought afterwards for over $2,100,000; a 16% increase on last year. But for some sellers the 2010 jig maybe up. Next week looming as a real test - are we turning a corner or are we as buyers dreaming?

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 27 Auctions we attended today was 65 per cent.

Bidderman remained steady at 2 bidders per auction. However 1 in 3 of the auctions we attended today had no bidders. 33% of auctions (on OK James rated homes) had no bidders under the hammer today!!

If you look at the REIV auctions reported you would see a more buoyant story than we show, because a  number of the auctions that were passed in, were not reported.

Having said that some of the $2.5m to $5m market seemed quite strong this week; highlighted in the north west by 2 strong sales at 36 Ardmillan St Moonee Ponds (Matthew Febey Nelson Alexander) bought for $4,650,000 and 110 the Boulevard Aberfeldie (David Vaughan also of Nelson Alexander) also bought under the hammer  strongly for $1,770,000 and most would be looking to put an additional million into a rebuild.

The Inner East was also strong in the $3m range. All these sold before today’s Auctions.

• 28 Coleridge Street Kew (Hamish Tostevin/James Tostevin, Marshall White),
• 14 Royal Crescent Camberwell (Peter Batrouney / Campbell Ward, Jellis Craig),
• 94 Argyle Road Kew (Stuart Evans / James Tostevin),
• 18 Callantina Road Hawthorn (Joanna Nairn / James Tostevin, Marshall White),
• and a quiet off-market property in Raheen Drive Kew (Scott Patterson, Jellis Craig).

Bayside was buoyant in most ranges above a million. It’s big $3million sale was an old car museum on less than 374 sq metres of land out the back of Church St Brighton for $3,367,000. Matt Nichols of Nichols Crowder, who runs a really good commercial Bayside selling agency told us there were 6 bidders on this mid week auction.

Port Phillip also strong (except a few misses in Elwood).

Stonnington Top End seems to be a different story with a large number of pass-ins in this range. They may be bought over the next few days - lets wait and see.

Nonetheless across all these markets Bidderman has dropped from 3 weeks ago; even though we just rattled off 8 or so $3 million plus sales in the last week and that’s the conundrum right now.

Strong results but a falling Bidderman.

Feel and Mood
Those that are good homes with an asking price within reasonable expectations are still selling incredibly well and have a strong Bidderman;  but if you have a home that

1)       Is priced above the market view

2)      Has Issues

Then as a seller you may have a home that is not being bought in a frenzy under the hammer at auction – a different story to a month ago or late last year when almost everything was frenzied selling.

A number of credible agents (Andrew McCann of Bennison Mackinnon; John Bongiorno, James Tostevin and Heather Elder of Marshall White) are saying a bit of the gloss of late last year and early this year has come off in the last fortnight. This they feel is in part due to vendors getting ahead of themselves and/or buyers refusing to continue the climb the increasingly dizzy heights on homes regarded as less than the best. We agree with this assessment.

Next week is looming as the big test in our minds. There is a lot of stock to be bought and as we have reported a fair proportion is good quality; so if the clearance rate and Bidderman is strong (over 70% clearance rate and say 2 for Bidderman) then this last week or two is more an aberration (influenced by stock quality) than a trend. However a lower clearance rate and/or dropping Bidderman and we will be forced to consider the possibility of a market mood change or a turning trend for the Top End.

Quoting to Buyers

Most results are being reported - except from time to time Kay and Burton’s and RT Edgar’s in South Yarra and Toorak – the Top, Top End. Fair enough if it’s tactics, but it’s good to know when looking at market trends – you don’t have all the results. Maybe things are a bit light on as this very public quoting war continues. Personally our dealings with both these agencies have been very good in recent times and we have been given accurate information and advice particularly by Kay and Burton for a long time. An increasing number of buyers are saying the quote on the phone is very different to the quote at the inspection; which is different again to the opening vendor bid and then different again to the reserve on a non buy. Hope you can reach a truce soon.

And please we are not just singling these agencies out; our company has a high level of respect for Boroondara agents; Marshall White, Jellis Craig and Fletchers and others but in a number of instances they still quote (in our opinion) inappropriately to buyers; notwithstanding they are working for sellers and the market has been hot and not always easy to predict. Why not explain in more detail the vagaries of the current market when you quote a figure to a buyer and what that figure you are quoting may represent.

Where are they getting quoting right? We think most Bayside agents have got it right at present and in particular, Hocking Stuart across the board, seems in our opinion to be making a fairly consistent effort to quote helpfully to buyers. We still strongly support Benmac’s reserve within the quote and most of the public information we have seen Buxton and Hodges put out corresponds with what we would, as buyer agents, say is generally helpful quoting.

Not easy at present and you cannot expect a perfect record in quoting – at times as buyer agents we get it “very wrong” in this type of market. All you can ask for and should expect from professionals is best efforts; not less than best efforts. An old record but a goodie and I digress.

Just another simple $3 million auction. Why would I need a buyer advocate?

As we said above the $3m market was strong this week in terms of numbers bought and sold. Specifically in the last week around this $3 million mark we bought:

• an off-market property, in the Diamond K of Brighton, for just below $3 million;
• a new home, also in Bayside, bought pre-auction, for just below $3 million; and
• a Boroondara home, bought in a boardroom auction before auction, for just over $3 million.

People often say “It’s just another simple auction. Why would I need a buyer advocate?” Well, let me share with you some of the frenetic 17-hour period that led up to a purchase of the Boroondara home yesterday, which will show you that an auction can be anything but simple and just how much planning and effort is needed to bring off a successful purchase.

Thursday, 9pm: A text message informed us that another party had put in an aggressive, but acceptable, offer for the property and it would be sold.

10.15pm: We quickly got the ball rolling, with conference calls between our clients, our architect, managing advocate and myself. Two calls to the agent (interrupting his viewing of The Footy Show), contact with a pest and building company, and emails to lawyers asking for urgent reviews.

Friday, 5.30am: A late night led into an early morning checking emails confirming pest and building and plans for all key advocates.

7.30am: On-site meeting at the property after we informed the selling agent there was a high likelihood we would compete. At the property, we confirmed land size  (we cannot understand why so many people do not measure up before purchase – the occurrence of major differences between represented amounts and actual bought land is common), looked at renovation options, rechecked our comments and ratings and talked with our clients.

8.30am: Adam Woledge prepared rough drawings of potential renovations. Adam is a very useful man to involve in short time-frame decisions because he is an architect, a licensed buyer agent and still actively involved in the processes of building and renovating – eg in 2009 he oversaw million-dollar rebuilds, new builds and renovations on behalf of our clients in suburbs as far apart as Canterbury, Brighton East and Glen Iris. Questions Adam and the clients discussed included whether there was a good chance the renovation plans would  get through council, and how heritage overlays could affect the build, setbacks and ballpark costings. These are all tough questions that need realistic advice before purchase, not post-purchase.

While talking through possible alternatives with our clients, we were also making sure that the decision (theirs) was definitely what they wanted to do and that overall it was a good decision, emotionally and financially for them to make. At this stage, very little of the talk was about money.

9.30am: Over coffee, eggs and gluten-free toast, we reached consensus with our clients that we would do battle (for want of a better word) today.

We knew this was going to be a tough fight, as the acceptable offer was strong (above the quote) and above what we would have offered pre-auction without proven competition.

10am: That consensus meant pest and building inspections (which were on standby) were completed.

11am: Last-minute preparations included legal checks; contact with council re known building applications for neighbours; opinions from other selling agents; negotiations of extended settlement terms; and the organisation of deposits, cheques, somebody to sign etc.

10.30am to 12.30pm: Our senior advocates discussed possible bidding strategies. As both clients worked full-time, we could only reach them over the phone to discuss and agree on strategies.

11am to 2.15 pm: Our lead advocate set about trying to get a handle on timing and process, both of which changed three times in as many hours.

I personally don’t know how buyers without assistance can keep focus and make good decisions while full of emotion and adrenaline. I have to bite my lip quite often and keep focussed and I’m little more than a bit player with minimal emotional involvement.

2.15pm: For whatever reason determined by the vendor or vendor’s agent, we were informed a boardroom auction would take place at 2.45pm (that’s 30 minutes time!!!) in the agent’s offices. Our client and advocates, who were in the city, Brighton and Williamstown, urgently dropped their other business and made it in time.

2.45pm: After a slightly prickly start, the auction was conducted within the stated rules; a specific strategy was applied against an aggressive, but fair, opposition and our clients were lucky and brave enough to be the purchasers.

4pm: Signatures, a champagne, a welfare check phone call and we all slipped back into our family lives. Our clients have interesting times ahead.

The point of this example is not to say we will always buy if you hire us (we don’t – the opposition may have well-prepared buyer agents representing them, or our clients don’t have, or choose to have, the firepower needed to buy). The point is to show you that there is so much more involved in a supposedly “simple auction process” than people believe.

The property mentioned was meant to be sold in a “simple auction” in a week’s time but events quickly moved ahead of that plan.

In conclusion: None of these around $3 million purchases we made this week were “simple auctions”. It’s our boring, often repeated but true, statistic: of the 68 homes we bought last year in this price bracket less than 1 in 7 were bought under the hammer within 20 per cent of the initial agent’s guide price.

Facts are facts – will you think about engaging a buyer agent afterwards or before you buy?

Buy well

Mal

Hawthorn: 14 Lyndhurst Crescent: Bought $1,511,000. Bidderman 3. Peter Batrouney and Campbell Ward. Big crowds throughout Boroondara today - seemed the strongest area over $1million.

Strong day in Boroondara today for good properties, with many homes selling under the hammer and selling strongly. However not all auction results have been reported.

Some of the auctions that we attended -

8 Moorhouse Street Camberwell (Heather Elder, Marshall White). Sold for $1,997,000 – 4 bidders

14 Lyndhurst Crescent Hawthorn (Peter Batrouney, Jellis Craig). Sold for $1,511,000 – 3 bidders

Common to all of the properties today was their intrinsic quality. As James Tostevin remarked last week, if it isn’t a good property and the vendor’s expectations are not in line with market thoughts, then the property will struggle to sell (that is not rocket science except it hasn’t been that way since November 2009).  One property that really did surprise was  7 Carlyle Street Hawthorn East. This passed in without a bid and sold afterwards for $1,546,000. Great result here for Robert Ding of Jellis Craig.  This was a basic 60′s house with multi-level flats to the rear – next door was an older  period home (which needed work)  yet did not have the same privacy issues and sold for about the same money only a  few weeks ago through a different agency.

I guess the big observation is all about the properties that did not sell at a Saturday auction this week, because they were bought in the week before.

• 28 Coleridge Street Kew (Hamish Tostevin/James Tostevin, Marshall White),
• 14 Royal Crescent Camberwell (Peter Batrouney / Campbell Ward, Jellis Craig),
• 94 Argyle Road Kew (Stuart Evans / James Tostevin),
• 18 Callantina Road Hawthorn (Joanna Nairn / James Tostevin, Marshall White),
• and a quiet off-market property in Raheen Drive Kew (Scott Patterson, Jellis Craig).

All of these were solid properties and sold strongly for around the $3m mark. Obviously by this number the market (for quality homes) at this level remains strong.

Talking to Alastair Craig from Jellis Craig he believed that the clearance rate was around 85% for properties which his agency auctioned today – a big improvement on last week (around 70%).  Perhaps last week was just a blip – just like it was last year for the week after the Melbourne Cup weekend. Time will tell.

Couple of land values for the stats guys. Havelock Road Hawthorn East (Campbell Ward Jellis Craig) around $2000 sqm. Rubens Grove Canterbury (Tom Ryan of Jellis Craig) $2200 per sqm.

Following up a couple of recent pass-ins in that little fringe pocket of Hawthorn – near the river – south of the tram depot. 24 Elm St (Antony Woodley Marshall White) was bought for we believe a tad under $2 million and 21 Oak remains on the market.

Big  numbers for scheduled auctions for most Boroondara agencies next week – and there is fair bit else happening, namely the Grand Prix and the first round of AFL footy – lets see how the market performs  and next week go Doggies. (and Pies)

Design Smart

Hawthorn: 24 York St: Did we say Peter Batrouney and Campbell Ward get the homes for big crowds? 100 in fact. Bidderman was only 2 (2 very determined ones though) but that didn’t stop this top quality double fronted Victorian rocking past $2m and onto being bought at $2,260,000.

Well the market in Boroondara picked up where it left off at the end of last year with most properties selling and selling well under the hammer.

Why is this – put simply buyers (and there are great numbers of these, at least 100 people attending the three auctions I witnessed) far outweigh the properties on offer for sale. Interest rates have remained constant, and we have had 6-8 weeks of basically nothing happening, so strong activity was expected as some buyers become anxious.

Speaking to Scott Patterson at the end of today,” Jellis Craig performed well, selling about 80 % of the properties they auctioned and this be would in line with the market clearance rate”, he claimed.  (And he was right on the money) Scott went on to say buyer depth is the key to all of this with Bidderman 5, 6 even 7 at many auctions. Even auctions which had 2 bidders could easily have had a lot more, people just didn’t get the chance to put their hand up.

Hamish Tostevin from Marshall White sold 5 from 5 today – this is telling – and older brother James had a strong auction at 10.30am in the morning at 9 Burton Ave, selling $100,000 over reserve (Bidderman 6).

Compare all of this to our first big auction day back last year – February 14. Admittedly this was a week after Black Saturday but there was really nothing to sell and really no buyers. At James we had a clearance rate of 20% for the auctions we attended.  I remember watching Jellis Craig’s Damien Davis pass-in 13 Hillcrest Rd in Glen Iris without a bid in front of 40 people for $880K (yes that was Glen Iris, and well under $1million). Also that same day a pretty double-fronted Victorian cottage ay 15 Invermay Grove Hawthorn East passed in too for $1.03million . Compare that to 24 York Street Hawthorn  today – again a renovated double-fronted Victorian cottage (better overall) selling in front of a huge crowd for a price well over $2.2m . Great result and campaign for Peter Batrouney and Campbell Ward of Jellis Craig here – they certainly know how to get a big result and plenty of people in the industry were talking about that today (some other good results -10 Talbot in Balwyn and 52 Hartington in Kew).

Next week we will see the auction numbers up again and March 27 is looming as a very big weekend (most of the big agents are almost booked out for that one already). Certainly a tough time for buyers – even more reason right now to have your strategies in place.

Design Smart

Adam

Canterbury: 29 Wattle Valley Road: Another big Damian Davis auction with 3 bidders from the 200 strong crowd. Bought $3.65m. Photo: Julia Atkinson

Where the market liked the property they went at it hard. Bidderman 3

Boroondara’s reported $m+ clearance rate on all suburbs except Glen Iris was 77% on 26 auctions. The highlights being the big 3 over 3 by Jellis Craig. Dean St Kew ($3.99m), Wattle Valley Rd Canterbury ($3.65m) and Stoke St Kew ($3.5m). Another notable was 52 Kinkora Rd Hawthorn (Hamish Tostevin) which sold before – good block size, but south facing - needed work. It confirms the $2.72m paid for 49 Chrystobel at auction was market and is now the entry mark for this iconic estate.

But Glen Iris – WOW – we talked about it in market news last week – but what are they putting in the water there – 16 – yes 16 reported campaigns in Glen Iris this week with all bar 2 selling. Since 1 October there have been 39 sales over a million. 39 – 39 – yep 39 over a million.

Sunnyside Estate Camberwell -we talked about good and bad land values getting back to their discounts and premiums and we highlighted it a week ago with the Davis St Sale (bottom of Sunnyside and south facing rear) at around $1750 per sq metre. Well 42 Sunnyside with Peter Batrouney of Jellis Craig (top of Sunnyside and south facing rear) confirmed that at just over $2100 per sq metre at today’s auction.

Kew: 31 Fitzwilliam Street: Scott Patterson keeping an eye on all 4 bidders. Bought for $1.405m

We also spoke to Scott Patterson of Jellis Craig and he said 80% of their 44 auctions sold today with 29 Wattle Valley Road Canterbury $450,000 over reserve at $3.65m and 24-26 Dean St Kew selling for $800,000+ over reserve. Strong numbers and bidders at most auctions according to Scott with the next 3 weeks being huge and in fact December 12^th is a company record for auctions on one day – ever at Jellis Craig. Scott thinks that there is an underlying strength in buyer demand and if December 12^th finishes positive then next year should start the same. At present he can see no cracks

Auctions we attended today:

BALWYN, 24 Clapham St – Passed in – one bidder
Deadish Auction, property passes in with just one bidder. 30 people slowly gathered throughout auction duration. Auctioneer James Batemen spoke of the peaceful, quiet setting and that it was. It felt like being out bush, trees sheltering, birds singing and distant sound of a violin playing in a neighbouring home. ‘You could hear a pin drop’ Batemen comments hoping for someone to ‘talk back to him’ after three vendor bids at 1.4mill, 1.425 and the 1.450. Thankfully one bidder came in at 1.455, saving the silence. The reserve was apparently very realistic and not far off the final bid, wait to see what happens post auction.

HAWTHORN EAST, 20 Caroline St – Bought – three bidders
Auctioneer Scott Patterson was polished and poised at this fast moving auction. Bidding opened at $1.2m and was on the market at $1.410m. There was keen bidding between two parties (three bidders overall) and the property sold for $1.480m. A good crowd of 55 people.

CANTERBURY, 29 Wattle Valley Rd – Bought – three bidders
Presidential address or auction? People flock from every corner – biggest crowd of the day – 200. Damien Davis does his best to speak over the dominating traffic with the air of a softly spoken president, the huge crowd gathers on small street corner to hear and get involved. 3 bidders, strong vibe starting from the word go with the crowd bid of 2.9mill, on the market at 3.2 and sells at 3.65m Chaotic, loud and good energy, mission accomplished. – Julia

GLEN IRIS, 18 Bourne Rd – Bought – five bidders
Auctioneer Paul Williamson stuggled to get an opening bid, but after one bid and a subsequent consultation with the vendor, the bidders came out of the shadows. The property was on the market at $1.22m, five bidders fought it out to reach the final figure of $1.46m.

CAMBERWELL, 17 Crellin Grove – Passed in – two bidders
A talented auctioneer and yodeller to boot, Antony Woodley managed to entertain the 100 strong crowd as he oversaw proceedings. A very multi-cultural crowd – many Asian and European buyers – attended this auction, which was held in the rear garden. There were two bidders and bidding started at $1.9m. The property failed to sell and was passed in at $2.07m. Later sold for $2.1m

KEW, 31 Fitzwilliam St – Bought – four bidders
Scott Patterson greets bidders like friends and he finds a few to play with – 4 bidders, bidding opens from crowd at 1.2 and sells at 1.405. 4 bidders joining in, real mixed crowd. Built to a buzz. The turn out + no of bidders spoke for the strong interest vibe felt for this home. 120 people.

Design Smart

Middle Park, 51 Mcgregor: three bidders: Bought: $2.27 million. Auctioneer Andrew Stuart, Mr Albert Park, is like a classic rock star, passionately belting out another number for the crowd.

It is 6pm Saturday and the James Clearance Rate for million-dollar-plus auctions is 74 per cent on the 19 auctions we attended and reported on today.

What effect did the interest rates have this weekend? Nil. The only thing we noticed was a few more bought befores, maybe meaning a couple of nervous vendors.

We saw 51 bidders for the 19 auctions. Bidderman is at 2.3 bidders per auction, which it has been steady at all through September. Two auctions had six bidders or more; both in the $1 million price bracket. We saw a Rosanna home sell for more than $1.4 million. Suburbs such as Caulfield South, Carnegie, Bentleigh (mortgage belt testers), which were $1 million ghost towns during 2008, are now back into $1 million-plus deals fairly regularly. So, in summary, we saw no real change from September today and right here and now the market is still hot. Most of pass-ins from today were because of vendor price, not lack of demand at a level.

The Chinese times are a-changing

We have talked ad nauseum recently about the Chinese factor. Why? Because it has been the single most dominant reason as to why the market has done what it has done for $1 million-plus homes in 2009. You can have limited supply but you still need demand to buy that limited supply. And that demand and our recovery was led by Chinese homebuyers.

The FIRB rule changes did not bar people from Iceland or America from also buying, but they were not. Up until recently, 25 per cent of homes in Boroondara were being bought by Chinese people and it was a huge factor to manage around as buyer agents.

However, will the China-led recovery continue? What happens if Chinese nationals move out of the $1 million-plus market? We have definitely felt a drop-off at the higher level in Chinese interest and this recently has allowed us to buy some properties that we thought we would miss (and, in fact, a few months ago we would have missed them).

Why is that and why is it important? Well, first, if Chinese interest is, or has, dropped off, then it is very important – to use a new buzzword – to recalibrate our thoughts on land prices and, even more importantly, to not overestimate the nature of our competition in pre- and post-auction negotiations.

Are you still really surrounded by competitors at a pre-auction best offer in sale?

Maybe the fear generated by a selling agent saying We have Chinese interest in this home will be not quite as frequent (or even believable) when you look at the sums one of our clients supplied to us. And please note that Chinese fear is only money-related. Chinese, American, Norwegian – bring their skills in – we are a multicultural society and far better for being so.

But things are changing – we thank our client, Adrian, for supplying these notes to us for Market News.

Mal, some numbers to demonstrate what I think will happen with the Chinese effect on Sackville Ward Kew and other Melbourne prestige properties:

April 2009: $4 million house purchased costs Chinese buyer US$2.75 million (AUD$1 = US$0.65-0.70).

October 2009: Identical house next door sells for $4.65 million as market moved upwards and costs Chinese buyer US$4.25 million (AUD$1 = US$0.91, up 30 per cent), as the dollar has also moved upwards.

Many of us would struggle to accept a US$1.5 million increase in six months.

Also, the buyer of the house in April is:

• happy, because he has a paper profit of US$1.5 million; or
• thinking of trousering the US$1.5 million.

Chinese buyers of land are now also facing building cost issues.

The buyer of a block in Sackville Ward such as Ross St and Mountain Grove may be thinking twice about their earlier actions.  Many Chinese buyers have been buying land in the Sackville Ward and a block-buyer who paid $1.5 million for the land may have also signed on for a AUD$2.5 million build in April thinking it was going to cost him or her US$1.65 million. Not having paid anything to the builder yet, it is now up to US$2.25 million and he or she has not even enjoyed the variations stage of building. The build costs may run US$1-1.5 million over expected costs.

The rise of the AU$ will dampen some Chinese demand, just like the fall from US$0.98 to US$0.64 fuelled that demand when the FIRB opened the gates.  At AUD$1 = US$0.91, the new Chinese interest will suffer as, in US$ terms, our property market is now expensive.

My thoughts only, but, in my business, I deal with a lot of Chinese people and they, like us all, dislike price hikes!

Alternatively, if the pull to buying a home near a childrens school is not quite as strong as April, especially with the rising building cost scenario, then maybe we will see homes coming back onto the market as a canny or lucky Chinese buyer sees a 30 per cent profit in US dollars in six months.

No, markets never stay the same.

Negotiation 101

Here are some thoughts and tactics of some people:

• Hey you! Take this offer or stick it up your jumper.
• Na, it is my final offer. I have got no more, now get lost.
• You are a slimeball and I have not got any time for you. Do not ring me.

These are three brilliant negotiation lines to use with those bastard selling agents – not.

Pricing – look, do not worry about other sales or due diligence. Some people find the best way to work out value is to get the agents true price – you know, the one they only whisper to you, and then take off $25,000 or add 18 per cent or something.

Rapport – who needs rapport? He or she is just an agent. Why bother wasting your time getting to know them, why listen to what he or she has to say? After all, they are just there to sell the home. I have got a stack of other things to do, like look on the internet.

No, just go straight in on your first million-dollar deal and offer a strong amount, say $150,000 over the ask (you have read the market is hot on all properties and Uncle John told you that as well), and see if that rattles the bones of a Rae Tomlinson of Marshall White or Ross Savas of Kay and Burton. You know; see if that scares them. And save your $7 and 30 minutes of your time by buying Damian Davis from Jellis Craig a coffee: just shout your $2.275 million offer down the phone to Jeremy Fox of RT Edgar when you ring up without any warning.

Better still, demand to buy it beforehand and scare Geoff Hall from Noel Jones with a two-hour deadline threat! He will never have heard that one before.

You have got be tough with these pricks, some books and news articles say. Show em who is boss, eg try that with John Holdsworth from Hocking Stuart or Justin Long from Marshall White and, while you know they have done this for years and sold to many people, how hard can it be? Anybody can pull off a deal. It is like … like cooking – we have all got abilities to make a meal. Anybody can be a masterchef!

Here is some more Negotiation 101 good advice: I think the biggest thing to remember when dealing with people is that these selling guys are not like real people and that personally as a buyer agent I am always happy to go that extra yard for the guy that not only hates my guts but tells me that as well – so I am sure this strategy would also work for selling agents. I am sure that would be a real winner with James or Hamish Tostevin – not.

We do not understand why some people take this approach with good quality agents like Bert Stewart of Buxton or Jenny Dwyer of Hocking Stuart – it just does not work. Agents are people and should be treated with respect, just as buyers are people and should be treated with respect by agents. Sure, some agents do not get it, just like some buyers do not; but have you ever noticed that many of the $1 million-plus homes that are high quality and  sensibly priced - you know, good homes that you want to buy - seem to be listed with mainly one or two key agents in each precinct? Hmmmm – better get to know them, maybe even listen to them.

If you have just told an agent you hate agents and then ask for their help in buying a property, why would they go out of their way? Many quality agents actually still do, but not because you have scared them. They do it because they are professional, work for the vendor and feel you sound like a wood-duck (overpayer, poor people skills or bad decision-maker). However, it must get harder each time you profess your complete disdain for them.

Selling agents have been in this game a lot longer than many buyers, so it is pretty difficult to put one over them, despite what some people might think. Do you really think you are going to outsmart Gerald Delany of Kay and Burton or Peter Bennison from JP Dixon.

But, sure, keep trying to win instead of buying. Eventually, you will win but probably not on the home you should have bought. Footy trade week is a classic – there are clubs there trying to only WIN on the trades; even to the point of missing out on a player that they really needed. Many homebuyers are like that.

If you think buying homes is at all times mutually exclusive from personal relationships then ………actually we wont waste our time.

We still truly believe that most dealmaking happens through:

• a personal connection,
• some level of truth, and
• some form of win-win

but maybe we are naïve – maybe we have fallen into their cunning trap.

Buy well

Mal

EXECUTIVE SUMMARY
Nothing fazes Hamish (well, he doesn’t show it). We’ve never seen him lose his cool under pressure. If you need to know something in his specific Boroondara area, then ring Hamish, as he almost always knows the answer. A conservative buyer quoter of homes and a big seller, Hamish is pleasant, friendly and accommodating for inspections such as pest and building and revisits out of hours. Now a director at Marshall White and deservedly so, as he’s a good bloke and a good agent.

Mal: Family status and where do you live?
Hamish: Married with two girls, and living in Moama Road, Malvern East.

Mal: How long have you been in real estate and what is the company you work for?
Hamish: 10 years – Marshall White Hawthorn

Where do you mainly work (area) and what types of homes do you specialise in?
City of Boroondara – and I tend to handle all sorts of homes; however, a client of  mine did say to me the other day that he always flicks open the Melbourne Weekly to see what is coming through and he always sees my name on pretty single-fronted and double-fronted Victorian and Edwardian homes!

What makes a good investment?
A good balance of both return and capital appreciation – but if you can secure a property that you can add some cosmetic improvements – this will only help this.

What makes a good family home?
A decent-sized family room – and a good rear garden for entertaining family/friends.

What makes a good buying decision?
Keeping to a budget and doing the appropriate homework on values.

Best investment decision you made?
Bought my first house in Prahran at the age of 23.

Worst investment decision you made?
Buying into a share of a racehorse!!

What are the top 3 precincts in your area, how big is an average block, what type/style of home, what is the dirt price and how much for a renovated home today?

1. Hawthorn /Grace Park – period homes predominately, 700-800sqm blocks, 800sqm worth $1.8-$2mill for the land, a good renovated home could be worth $3-$3.5mill.
2. Camberwell/Tara Estate – period homes predominately, 700-800sqm blocks, same pricing as the Grace Park.
3. Kew/Sackville Ward – mix of period/modern, 800sqm blocks, worth $1.7-1.8mill for the land, a good renovated home could be worth $2.5-$3mill.

Three underrated streets in your area for family home buying (where, price, type and style, would they have to renovate)?

1. Empress Road, Surrey Hills for its convenience.
2. Ropley Avenue Balwyn for its parkland back-drop.
3. College Street, Hawthorn for its location  parks/city/village.

What would you say to a young couple with $800,000 looking for a family home specifically in your area – eg (where, type and style, would they have to renovate)?
Camberwell/Surrey Hills are ideal – follow train lines for CBD access, buy a period home, even if it looks a bit daggy, get as much land as you can – lock in and give it a good paint job inside and out, carpet, change lighting, door handles etc and it is amazing how it can change the feel of a home!!!

What would you say to  a downsizing couple with $1.5m specifically in your area (where, type and style, would they have to renovate)?
Limited selection of good quality town residences – I would still aim at Hawthorn or Hawthorn East/Kew, single level hard to find, try and get one that is side by side, rather than in larger development.

Buyer Agents yes or no?
Yes – very good people to deal with.

Apartments or Houses?
Houses definitely.

Auction or Private Sale?
Auction – sets the deadline for the buyers to perform.

How can a seller maximise their value at sale?
Definitely getting an Interior Decorator to improve the presentation, really work hard to make sure the home has a great feel.

What are the do’s and don’ts for buyers when dealing with selling agents?
Ask them lots of questions – some agents are very helpful in providing good comparables, still allow for some flexibility on their quote prices, and make sure you get them to keep you posted if you are interested in the home.

What do you think are the opportunities now with us?
People must make the most of the market being slightly down – this is a great time to purchase!!

Where is the market going in 2009 in your area?
In my view, it will be steady for the first six months and may get tougher in the second half of the year, dependent on the volume of property on  the market.

Who will win this year’s premiership and why?
Geelong – will be even more determined after last year’s Grand Final effort.

If a potential seller would like an appraisal or wishes to sell their home, how is it best to contact you and what are your details!
My mobile – always available!! 0408 004 766  hamish.tostevin@marshallwhite.com.au

At 6pm Saturday, the James Auction $m+ Auction Clearance Rate stands at a strong-for-sellers 78% of the 23 auctions we attended today.

Today, four clear messages came out of the results:

• The market is very fickle at the moment – up one week and down the next.
• If the market perceives the property is good, there are multiple buyers and a good price will be paid.
• The market in Stonnington today was bordering on white-hot.
• Right now, the higher you go the stronger it is (ceteris paribus).

Let’s look at some results:

15-17 Irving Road – 950 sq metre of land with a bulldozer home.  It was a who’s who of selling agents (Jock Langley, Andrew Hayne, Justin Long and Richard Mackinnon), Toorak land identities (Peter Gibson and crew) and many interested onlookers. Auctioneer Warwick Anderson from RT Edgar “kind of” repeated the result of Jeremy Fox from RT Edgar (Oct 08 – 23 Irving Road – 860 sqm  - five bidders – $4.9 million), with 15 Irving selling for $4.6 million with four bidders. Talking with Richard Mackinnon from Bennison Mackinnon afterwards, he pointed out that both were bulldozable homes and Oct land was auction-valued at $5703 per sq metre, whereas today land was auction-valued at $4842 per sq metre. So, yes, the market seems to be hotting up in the ultra top-end (eg $2.5 million-plus); however, prices have still come off again since last year in a number of cases.

An hour later, 3a Irving Road was re-auctioned by Castran and Gilbert, having failed at auction last year at $3.3 million reserve and it was sold post-auction at a tad under last year’s reserve by Tim Brown.

Ordering in a coffee and then moving another few hundred metres, we saw 9 St James, a great little cul-de-sac property, attract a big crowd but some strange auction tactics with a low pass-in and eventual sale believed to be around $4 million or $4926 per sq metre; again, a strongish - but not as high as might have been expected – result. Rae Tomlinson was the managing agent and conducted a strong post-auction negotiation process.

Taking a breather and some lunch, I was able to ring around colleagues, some who were bidding and some who were watching, and the same comment rang true. If the market liked it, there was multiple bidding, including nine bidders at Field St McKinnon,  four bidders at Benson Street Richmond, five bidders at Tooronga Road Malvern, three bidders at Mernda Road Kooyong, five bidders at Kardinia Road Glen Iris and 78 bids from five bidders at 21 Lambeth Ave Armadale.

I finished the day witnessing a throwback to 2007 days with seven bidders “going crazy” and paying $1.655 million for 36 McKinley Malvern. I’m not saying the buyer was crazy, just the strength and depth of the bidding was very strong. This house did need a $500,000-plus renovation and, after the price paid, that makes this a $2.2 million home in McKinley, which is in excess of sales in previously stronger years of completed, fully renovated Victorians. Still, the sellers are extremely nice and decent people and deserved a break to go their way.

That was Stonnington and that was the upper end. Bayside and Boroondara didn’t have as many high-end auctions and, from what we could see buying homes in those areas, was slightly easier than Stonnington. So, is Toorak leading the charge back? Only a scallywag would say that but the past two weeks of slightly quieter results have been given a real jolt and we are now back in February 2009 days as far as strength is concerned.

Of course, stock levels and quality are still the key. What was good has now been bought and, with precious little coming on beyond next week with Passover and Easter, buyers will need to be patient for a month or so if they haven’t found their dream home.

Apartments are really making me think at the moment and we have completed a specialist article below on what is really happening at the top end of the apartment market.

Adam reviews a Nonda Katsalidis house in Balwyn North in his architecture spot and this week we put Hamish Tostevin of Marshall White under the microscope and hit him around with a wet flannel. Some of you have given feedback saying why not ask some hard questions about quoting and expressions of interest shenanigans. We will, and we already have agreement from some of the key agency directors in Melbourne to answer the tougher questions around the middle of this year – again unedited. However, our plan for the next few months is to continue to show what we think we all can learn from quality selling agents. While there are certain things all buyers must be careful of when dealing with selling agents, there is still solid information that selling agents can provide that is not related to a property they are representing the seller on.

Buy Well