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

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

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

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

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

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

This Weekend’s Market Summary:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The message for buyers

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

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

Media Monitor: Are Melbourne homes overpriced?

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

Rob Brooker head of economics from the NAB

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

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

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

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

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

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

Biggest Sales we can report:

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

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

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

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

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

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

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

Copyright: Mouldy Bread Picture from ChemistryWorldBlog.

We Only Buy Homes

BRIGHTON, 6 Bolton Ave: Steve Tickell (Hocking Stuart) studies the crowd before passing the property in on a vendor bid of $3,200,000.

Key Points:

• Little movement on a lot of the recent auction pass-ins
• Brighton 32 Bay, Regina Schmidt and Brian Devlin – the unit site cnr of Bay and St Kilda was bought for $2,875,000 – before auction.
• Brighton 50 Martin with Nick Johnstone of JP Dixon, sold mid week
• Brighton 6 Bolton Avenue broke that Hampton Golden Triangle run of big auction results in the area – but stay tuned

Agent Q & A: Has the market changed since before Labour Day weekend?
John Clarkson, Hocking Stuart, Brighton:“We are  currently operating in normal market conditions. It is certainly not boom or bust conditions with properties achieving not runaway but realistic results. It is a price driven market for buyers. If vendors are not on the same page, quite simply, the buying market is prepared to walk away. The last three auction weekends have been full of activity . Two of the three weekends have been very positive with last week in Bayside being flat. Stock levels are manageable at this stage . It is unlikely to increase significantly prior to Easter. Buyer enquiry remains steady. It is interesting that for the first time for an extended time, economic forecasters are predicting a potential fall in interest rates next month. That would be a significant influence on activity as we are operating in an interest rate sensitive market.  The $2 million plus market is a tad more reserved. Good properties near local attractions and amenities, schools, shopping and the beach are still attracting a high level of enquiry. However, the buzz word still remains with offers on properties. Many times the  purchaser’s first offer is often the best.  There are some high profile vendors who are still bemoaning the fact they have let a ripper offer go South. The next  party (second highest interested party) is often daylight away.  That is something buyers and vendors are becoming increasingly aware of.  Since Labour Day weekend the message is clear. If you are realistically priced you have a very good chance of selling . If you are above market perception enquiry is reduced to at trickle.”
Stan Fisher, Biggin & Scott, Brighton:“I think it is a bit flukey at the moment. At one point, it didn’t matter if a property had something slightly wrong with it. For example if it was near a train line or had an unusual floor plan. But now that’s really not the case. I mean properties right next to the beach will always sell, but at the top end – between $2.5-$5million, there’s a lot of houses that have been on the market for a while now.”

BENTLEIGH, 7 Eddys Grove: Nick Renna (Hocking Stuart) searches for bidders and he didn't need to look far. Bought under the hammer $1,312,00, 3 bidders.

Key Point:

The Top End outside Inner East and Bayside is mainly in that $1.5m to $2.2m range and the action this month has been relatively thin on the ground with many agents reporting a lot of homes for sale but with little movement generally.

Agent Q & A: Has the market changed since before Labour Day weekend?
Aaron Silluzio, Barry Plant, Rosanna:“Since the Labour Day weekend there has been a few shudders in the residential market. This has obviously been driven by a serious decline in consumer confidence which has stemmed from the aftermath of the Christchurch Earthquake, directly after the Labour Day weekend the Japanese earthquake and tsunami and of course the Libyan situation which has also caused a flow on effect to oil and ultimately petrol prices. This break in consumer confidence has been a real shame as we personally felt that post Christmas the market had gathered a nice head of steam and was moving forward in the right direction. Having stated this, the stock market is starting to move in the right direction which indicates that consumers are willing to act and hopefully we can start to see a similar result in the property market in the not too distant future.
David Oster, Jellis Craig, Ivanhoe:“I believe the market has seen an increase in stock levels and I’m finding that we are back to being agents.  We are finding more post negotiations, pitting our skill level against a buyer, however we still have 100% success rate for 2011.”

Some of what we have seen in March outside our main $M+ areas is contained below

KEW, 36 Uvadale Grove: Alastair Craig shows some concern at this Boroondara auction as only one bidder came out to play on a relatively good home. Passed in $1,825,000, 1 bidder.

Key Points:

• Both Jellis Craig and Marshall White report very strong clearance rates into the 80s
• Stock continues to come onto the pre Easter market – the question is whether the market will be able to sustain this
• James Tostevin: “Overall a good day, the $3m+ market is hard to read and we are not getting huge numbers of bidders at many auctions;  so there is a case to say the results maybe looking healthier than the market actually is – but from a purely stats points of view (clearance rates) today was a good day.”
• Balwyn 34-36 Linckens:  (Toby Parker of Hocking Stuart) – a $3m+ auction slotted in for auction this weekend has been bought before. The quote was over $3.7m and if, as we believe, it was bought for close to $4 million then it was a strong sale.
• Kew 41 Victor Avenue: (James Tostevin) – Two strong bidders and sold under the hammer for $4,100,000.
• Canterbury 17a Alexander Avenue: Passed In $3,200,000. No bidders
• Kew 22 Stawell: Passed In $3,000,000. No bidders

Agent Q & A: “What is your take on the Economist’s article that Australian house prices are overvalued by 56%?”
Jeremy Desmier, Fletchers, Balwyn North:”Views of economists vary widely and most will recall that in the past predictions made by highly regarded members of this industry have proven wrong.  For every pundit who is talking a bubble and predicting a collapse of significant magnitude, there will be another talking about population growth fuelling demand, and a  lack of new building approvals contributing to the already short supply of homes, resulting in continued price growth.  It must be remembered that Australia is diverse, so in assessing the performance of the real estate market it needs to be broken down into regions.  Areas that will continue to do well or at least maintain prices are those supported by good infrastructure and job opportunities rather than the more remote areas that rely on overseas income for tourism and are directly affected by the current world economy. At the coal face, we as local agents are observing continued confidence and strong demand in the Melbourne market.  Although prices in general are not surging, most agree that a booming market, with prices rising rapidly as they did during 2009/2010, would be neither sustainable nor healthy in the long term.  What we are observing now is a more balanced marketplace. When the Global financial crisis hit in 2008, many of those who had predicted doom and gloom for years, and had stated that the market was over-valued, claimed vindication.  Interestingly the local market only faltered for a short time, before entering another growth cycle of 12-18 months, where the highs of 2007 have now been well and truly been surpassed. With the strength of our natural resources boom underpinning the Australian economy, and continued strong employment leading to disposable income, in my opinion  there is no reason to consider that there will be any significant change in the immediate future.”

Steve Burke, Jellis Craig, Hawthorn:“Our housing prices are obviously in the higher range in relation to other countries and the statistics mentioned by The Economist article support this. However we live in a country with a relatively stable political landscape and operate in a resources led economy where interest rates have remained relatively low for many years making money fairly cheap to borrow. In recent decades Australians have moved to double income families with both parents generally working and earning healthy incomes enabling people to purchase property at a higher level and thus have the income capacity to service their debt. We also have consistent strong immigration levels resulting in a shortage of housing and thus pushing pricing up across the board. Property prices have risen considerably in the prestigious and affluent ‘school belt’ suburbs of Brighton, Toorak, Camberwell, Hawthorn, etc where the demand outstrips the supply and the higher valued demographic families can afford to pay the higher prices and this is not likely to change. The other thing we must also take into account in the equation of whether our market is over priced is the large size of the land generally associated with our housing purchases in Australia as compared to other countries that operate on higher density living models. We expect the housing market and prices to remain relatively stable over the next few years and believe the resources economy is robust enough to support this. Remember people have been predicting a property bubble for many years and if you took that advice and have been waiting for the market to collapse the affordability gap due to consistent strong capital growth will have left you way behind.”

Glen Coutinho, Hocking Stuart, Kew: “Australia is the most unique country in the world in  terms of space, safety and lifestyle so it probably costs a premium to live here. There is still a strong demand  for good properties in the schoolbelt area.”

BRIGHTON EAST, 77 Comer St: It looks like every man and his dog was at this Brighton East auction; but everybody came to just watch. Stewart Lopez (Kay & Burton) passed the property in, no bids and a crowd of 65.

Key Points:

• The level of market softness outside the heart of Brighton surprised most
• Brighton 29 St Ninians: Passed in on a vendor bid of $7,300,000.
• Brighton 18A Martin: Passed In for $3,300,000. 1 bidder.
• On a buying note the Golden Mile in Brighton is still alive and well with Regina Schmidt and Brian Devlin from Buxton getting 2 Shandford away post auction for an undisclosed amount over $7 million and in fact over Shandford other $7 million sale of a few weeks ago. This home had some positives and will possibly be retained but with two blocks totaling around 1400 sqm going for nearly $15,000,000 this shows that Melbourne absolute waterfront has some of the most sought after beach front in the world on a dollar per sq metre basis.
• Another quieter one in the Golden Mile just before the long weekend – 11 Kent Avenue (Stan Fisher of Biggin and Scott) was reported as bought again for an undisclosed amount having been sold only last year for a tick over $4 million. The rest of Melbourne maybe a little quiet but Golden Mile Brighton is relatively hot for land sales (compared to previous years).

Agent Q & A:“What is your take on the Economist’s article that Australian house prices are overvalued by 56%?”
Sam Paynter, Hodges, Brighton:”There is a great report by economist Paul Bloxham called “House prices are high but we shouldn’t fear a bubble” in which he says that yes, house prices are high, but for good reason. One is that the quality of the housing stock in this country is high. Secondly, well located dwellings are in limited supply, and thirdly public transport from outer suburbs in the country’s major cities is generally of low quality, limiting the distance people live from the city and lastly that there is a lack of affordable land at the fringes of the major cities, thus increasing demand for inner city properties. He goes on to say that with strong prospects for the Australian economy we can expect housing prices to continue to grow at a modest rate and that the risk of a sharp fall in housing prices was low. I think that says it all.”
Jenny Dwyer, Hocking Stuart, Sandringham:”The view of ‘The Economist’ that house prices are overvalued by 56% may be accurate in certain geographical locations across Australia, however it does not apply to the Melbourne residential market particularly in blue chip areas such as the bayside suburbs.  The consistent pressure being bought in bear in this city in terms of migration to Melbourne reflects a high level of interest to acquire real estate that is centered around transport hubs, schools, shops and in the case of the bayside suburbs an enviable lifestyle to match. As the saying goes “they’re not making any more land” and whilst we are seeing more stable market conditions across the market place we continue to see strong buying activity across all pricing spectrums and this shows no signs of abating in the forseeable future.”

CAMBERWELL, 8 Kingsley St: Scott Patterson (Jellis Craig) was all smiles. Bought under the hammer, $2,375,000, 3 bidders

Key Points:

• Clearance Rates are definitely not as good as we are used to in Boroondara but they are still healthy in the mid 60′s and nearly 40 homes over a million were bought this week
• Stock Surge – Large amounts of $M+ stock are hitting the market for pre Easter campaigns
• 61 Bellett Camberwell has been on the market since July of last year and was sold by Sam Wilkinson of Kay and Burton mid week for $3,100,000.
• The Balwyn formula of big block, new home, big price tag seems to have come to a grinding halt – very few high end new sales. Opportunity?
• Off markets are on the increase.

Agent Q & A

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

Glen Coutinho, Hocking Stuart, Kew: “There will be a surge in stock levels with a lot of homes being booked for auction just prior to Easter which is traditionally the end of a selling season and a new group starting after the break for winter.”

Duane Wolowiec, Marshall White, Hawthorn: “With limited weekends in April due to school holidays and Easter, there are a number of vendors working overtime to have their properties ready for sale with the view to auction either on the 2^nd or 9^th of April. Some vendors may feel a little rushed to meet the deadline and may opt for a longer lead up time and expose their property as a forthcoming auction.”

BRIGHTON, 7 Yuille St: Jonathan Dixon looks for bidders and finds one. Not enough to sell under the hammer though. Passed in $2,500,000, 1 bidder

Key Points:

• Two Land Sale Volcanoes 4+ bidder auctions below:
• 11 William St Brighton with Rod Richardson of Hocking Stuart – $3,100,000 for 1383 sqm of land = $2,241 per sqm for land in central Brighton. Solid and expected result. 5 bidders.
• 5 Horton Close Brighton with Campbell Cooney of Hodges – just off the north end of the Golden Mile. – $2,055,000 for 652 sqm of land = $3,151 per sqm land for smaller parcels closer to the beach. Solid. 5 bidders.
• People do want new homes in Bayside and this is backed up by the post auction sale with Peter Kennett at 1 Hunter St Black Rock – it is what we call the almost Balwyn formula (small land and big new home) – only its not quiet as big and lavish and has a more palatable $2m price tag instead of the $3m and $4m Boroondara price tags. Black Rock $2m versus North Balwyn $3.5m -  mmmmmm
• Further supporting evidence for new homes at the right price – 91 South Road Brighton with new home package specialist Justin Follett of Kay and Burton was bought on Tuesday through an Expressions of Interest campaign for in excess of $2,600,000.

Agent Q & A

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

Robin Parker, RT Edgar, Brighton: “Stock levels for good quality family homes continue to be in short supply in the sub $2 million price bracket.”

Rod Richardson, Hocking Stuart, Brighton: “We definitely have a lot ahead of us.  I wouldn’t say stock levels have dropped at all and there is a lot more for sale in the coming weeks as we approach Easter.  The past few weeks we’ve had some good results and it looks like that’s set to continue.”

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

Key Points:

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

Agent Q & A

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

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

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

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

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

More big crowds this week, such as this one at 27 Auburn Pde, Hawthorn East, which stopped traffic! Under the hammer, $1,360,000, Peter Batrouney (Jellis Craig), 4 bidders

At 6pm on Saturday the James $M+ Clearance Rate on the 32 auctions we covered dipped to 59%. For the second week in a row there were around 150 new $M+ listings in our main coverage area of Bayside and the Inner East. Buyers have firmly said to sellers – “if it ain’t priced right we ain’t bidding, because we can see plenty of other homes coming on”. This attitude was particularly evidenced by the ‘duck’ rate (auctions with no bids and no sale afterwards) which was almost 1 in 3 this weekend  – well up on last weekend.

However there were exceptions – such as in Stonnington at the top of the Top End where there was almost no stopping the market and it made its strongest statement of the year so far.

Where is the Market At?

Last week there were indications the early $million+ market could be warming up a bit. But a second strong week of listings has taken some heat out of the market.

The strongest “take notice of me” stat was this weekend’s Bidderman dropping back to 1.5 from a more healthy 2 last week. What that tells us is that buyers are seeing stock choices going forward and the urgency has dimmed on some homes.  If Bidderman continues like this to Easter, prices are unlikely to rise.

This weekend we did see price pressure on quality homes, with quite strong bidding at a number of auctions (including several $3m+ auctions) and five ‘volcanoes’ of 4+ bidders per auction.

What we’re saying is that this first market period, up to Labour Day, has started healthy and balanced. But the second market (up to Easter) is no longer a shoo-in positive for would be sellers.

For buyers, this two week stock surge presents an opportunity for good prices on some good homes that the market may miss – at least until Easter. But things can change quickly – while May last year saw oodles of stock coming onto the market, that may not happen again this year. Given we’ve got such a late Easter in 2011, we may already be seeing the stock surge we saw in May last year, which could mean we don’t get strong stock levels this May.

Crowd Numbers: Again we had big crowds at many auctions, indicating a strong level of interest in results. This weekend we reported one in three auctions with 80 or more people in attendance. All others had good numbers watching.

Our $M+ Supply Indicators:

New Stock: This has been the second huge week in a row for listings with around 150 $M+ homes newly listed for sale in the Inner East and Bayside areas that we cover. There were around 200 $M+ listings across Greater Melbourne.

Actual Numbers Sold: There are solid numbers of $M+ homes changing hands, which is in part why we are not yet buying into any  cries of  a “weak market”.
Agent Market Comments:
Gerald Delaney (Kay & Burton): “I can’t see anything wrong with the market at the moment. We have seen good interest on good properties. I definitely think the market is a healthy one.”
Justin Long (Marshall White): “I feel the market has a bit of upward pressure at the moment. The well priced properties are going beyond expectations and the overpriced or not so good can be very hard work.”

James Marketnews Big Issue:
A few Expressions of Interest and Forthcoming auctions are coming back – a possible sign the pre-Easter auction market is viewed as oversupplied. Watch the discussion on Market News TV.

‘Round the Grounds Snapshots
Boroondara -  Stock Surge in Boroondara – Clearance Rates are definitely not as good as we are used to, but nearly 40 homes at $M+ were bought this week
Bayside – Bayside still shining the brightest – more stock coming on pre Easter will re-test its underlying 2011 strength
Port Phillip – So-so weekend, but stock wasn’t that exciting. Wow on Howe – Big $6m+ sale.
Stonnington – Where the big action was this weekend.
Rest of Melbourne – Just not a lot of $m+ auction action happening so we held over this week’s report
More Detailed Analysis in our Weekly Local Council Market Wraps

$3M+ Markets:
New Homes: Definitely weaker than last year particularly in the Balwyn and North Balwyn heartland.
Period Homes: Solid interest continues
More News and Specific Results can be found in $3-Million-Plus Market articles on the home page

MALVERN, 66 Claremont Ave: Iain Carmichael (BenMac) led a cracker auction - on the market at $3,300,000 and selling under the hammer $3,700,000, 3 bidders

Biggest Sale: 19 Hamilton Rd, Malvern, Justin Long (Marshall White): Under the hammer $4,357,000
The auction opened on a bid of $3,820,000, was on the market at $4,250,000 and bought under the hammer for $4,357,000. There were two bidders and a crowd of around 150. A solid result for this 1930s reproduction home on 668sqm of land.

Biggest Pass-In: 279 Beaconsfield Parade, Middle Park, Gerald Betts (RT Edgar): passed in $4,250,000
“Auctioneer Gerald Betts opened with a vendor bid of $4,000,000 and closed with a vendor bid of $4,250,000 in front of 40 seemingly uninterested observers.” (Mal James)

Bidderbuzz Auction: 11 William St, Brighton, Rod Richardson (Hocking Stuart): Under the hammer $3,100,000, 5 bidders
“The epic 45 minute auction of 11 William Street had a mix of elements to entertain those spectators watching on – intensity, drama and tension with a few awkward silences thrown in.  In the end it was a battle of the property developers for this generous block of land, in the heart of bayside Brighton.  Auctioneer Rod Richardson showed composure in the face of heckling and the patience of a saint during this long auction, working tirelessly to achieve a solid result for the vendor from the opening bid of $2,710,000 to the winning end at $3,100,000.  All in all, it was an entertaining auction to witness!” (Nikki Hills)

Auction Video: This week Architect Adam heads to Hawthorn to witness James Tostevin and the Marshall White team auction 66 Manningtree Road. Click on the live action.

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

Buyer Masterclass: A change of pace with Architect Adam telling us why we love Victorian homes – with plenty of facts and figures.

No Marketnews next week with Labour Day Long Weekend.

We Only Buy Homes

Hawthorn 35 Mason: Scott Patterson and Michael Armstrong: Bought for over $3,100,000: 4 bidders

Some interesting results to finish off the month:

• 6 Teringa Place Toorak with Andrew Macmillan and Andrew McCann of Benmac was bought Sunday for an undisclosed amount over $3,500,000. House was quite serviceable but it would have also been considered as a bulldozer job placing land just under $5000 per sq metre
• 

  49 Howe Crescent South Melbourne - bought in excess of $6,000,000. Expressions of Interest - Michael Coen Hocking Stuart

  And a very quick and smart result at 49 Howe Crescent South Melbourne with Michael Coen of Hocking Stuart – due to be sold through an Expressions of Interest Campaign completing 21st March it was snapped up within a few days of advertising on the 25th of February. The result was a strong one and is undisclosed but the  quoting was over $5,000,000 and we believe in sold for in excess of $6,000,000 to give you some perspective. We do a fair bit of work in the is Expression of Interest area and this again proves that those who wait until the stated deadline do not put themselves in the best position to buy.

• 

  290 Beach Beaumaris - Len Sharp Chisholm and Gamon - Full asking price of $2,950,000 after a previously failed selling campaign.

  Private Sale at 290 Beach Road Black Rock with Len Sharp of Chisholm and Gamon for full asking price of $2,950,000. This again supports our comments that 1) Bayside and 2) New and 3) $3m (almost) price tag are a combination that is getting some runs on the board in the late Summer of 2011.

• Caulfield 20 Langdon Road – Rochelle Butt and Rodney Morley of TBM got away 1500 sqm of land plus home in Caulfield North for an amount believed to be in excess of $4,000,000. Showing that Caulfield’s prices can be Canterbury prices when the right package is sought after.

Week Ending February 26th: If last week was the season opener for the $1m+ auction market, then  this  week  was the beginning of the $3m+ auction market and the main  focus for this weekend’s report. We don’t have all this weekend’s numbers in yet, so it’s hard to call, but it seems that this upper  market cleared at 44% of the properties under the hammer. We at  James accept a slightly lower auction clearance rate on the day in this segment as indicating balanced, warm or even hot  markets, because the air is generally thinner at this level due to the lower number of bidders available at this price point, and because the pre and post auction argy-bargy is  generally greater. Today there were quite a few $3m+ homes on offer. We  think this market segment is underwhelming at present – however if it is the right price, the right property and the right position it is still being well  received and taken up.

A few of the biggies that were bought

• Armadale 23 Wattletree Road – Justin Long – 3 bidders – $3,300,000
• Hawthorn 46 Illawarra – Mark Dayman – Bought Before – $4,250,000
• Brighton 33 Middle Crescent – Jason Swift – 3 bidders – $4,300,000
• Malvern East 8 Westgarth – Andrew Macmillan – 2 bidders – Post Auction Buy a smidge under $3,000,000
• Hawthorn 45 Mason – Scott Patterson – 4 bidders – Under  the Hammer over $3,100,000
• Malvern East 118 Finch – Bought for $3,150,000
• Kew 4 Madden – Peter Batrouney – Bought After – 1 bidder – $3,050,000
• East Melbourne – John Bongiorno – 3 bidders – $3,000,000

Some of the biggies that missed the mark

• Balwyn North 15 Stephens  – 2 bidders – Passed In for $3,650,000
• Balwyn North 59 Hosken – Passed In for $4,050,000
• Toorak 44 Verdant – Passed In for $3,750,000
• Hawthorn 23 Lisson – Passed In for $3,600,000
• Toorak 231 Kooyong – Passed In for $3,500,000
• Malvern East 50 Finch  - 1 Bidder – Passed In $4,100,000

St Kilda West 49 Mary: Passed In $4,000,000 - 0 Bidders: Andrew Stuart was not in the mood for mucking around – he had an uphill battle and he knew it. An opening vendor bid of $4,000,000 immediately hushed the vibrant crowd of 120 and that was it. Game over – a half time break for show but the gate was shut. A duck for this auction. Photos by Phoebe James

Week Ending February 19th: This market is either poor or, what is more reasonable to assume, still on holidays. Mike Gibson of Kay and Burton says that most high end sellers, as advised, are waiting. Hence the quality currently on the market is average. He expects good stock at this level to come on post Labour Day and before Easter.

To support our claims that the $3m+ market hasn’t really got going yet, look at this weekend’s Pass–Ins of $3m+ properties  –

St Kilda West – Mary St – $4,000,000 –  0 Bidders
James Auction Report: See Report Above

Camberwell – Canterbury Road – $3,801,000 – 1 Bidder
James Auction Report: An air of expectation at another James Tostevin Boroondara tennis court auction. He has almost singlehandedly made them his own over the last 2 years or thereabouts. His focus has been 20000 sq ft tennis court at $6m plus. A huge crowd, around 200 with kids trampolining, people milling and cars driving by. Everybody seems to know at least one person to give a wink or a nod to. Carnival atmosphere. Then the business started – well this time it didn’t. One auctioneer bid at $3,800,000 and then surprisingly one crowd bid for $1,000 more. Small Argument – settled with pass-in to the bidder on his $1,000 bid. Inside to do battle and last check they were still banging heads. We await the result.

"You are all very naughty schoolkids and I'm going to keep you back here somebody bids." Well no, James Tostevin didn't say that but he may have been thinking this on Saturday. Camberwell 31 Canterbury: Passed In $3,801,000: 1 bidder:

Balwyn – 12 Creswick – $3,425,000 – 3 Bidders
James Auction Report: A genuine bid of $2,000,000 opened proceedings. Auctioneer Maurice Di Marzio politely accepted the bid, suggesting it was closer to land value than a sale price, before offering a vendor bid of $3,200,000. More than 150 people watched Mr Di Marzio field bids from another two bidders before passing the property in at $3,425,000. Both interested parties headed inside after the auction for further discussions.

Albert Park – 139 Beaconsfield – $3,250,000 — 0 Bidders
James Auction Report: Auctioneer David Wood from Hocking Stuart was seriously up against the elements today as he tried to make himself heard against the traffic noise and the wind coming off Port Phillip Bay. The preamble was short and to the point, before he asked for bids. No one was prepared to open the bidding and he immediately entered a vendor bid of $3,250,000. Still no response, so half time was called. After the think music was up, the question was asked again and still no bids. The property was passed in on the vendor bid.

Gowan Stubbings of Kay and Burton successful at 29 Scott Grove Glen Iris

Kooyong – 711 Toorak – $3,190,000

In fact the only auction sale over $3,000,000 we covered was 29 Scott Grove Glen Iris (Gowan Stubbings of Kay and Burton) for $3,032,000 – 3 Bidders.
James Auction Report: A triangular battle developed right from the word go, and auctioneer Gowan Stubbings orchestrated the bidding superbly to maintain momentum throughout. Only when the $3,000,000 mark was eclipsed, did one of the bidders drop out. $32,000 later and the property was secured. Good naturedly, the two bidders shook hands to acknowledge the end of the contest. A riveting event.

However a few strong private and off-market sales show this market is not completely morbid. There is still some pulse. There were three very solid such sales in Bayside this week:

Brighton Golden Mile: Scene of 2 big sales over $10,000 per sq metre in February 2011

Shandford Avenue – Nick Johnstone of JP Dixon – $7.3m for 600sqm approx – which translates to $10,000 sqm for Golden Mile beachfront

Chatsworth Avenue – Stewart Lopez of Kay and Burton – $11m+ for 1100 sqm approx – again, $10,000 sqm for Golden Mile beachfront

Kerferd Road – Andrew Stuart of Hocking Stuart – $4.9m off market – 440 sqm approx

Continuing with February Sales:

While we have seen no sales over $3m reported in Boroondara and only the long suffering and difficult to see what you can do with it 13 Como Sth Yarra finally sold (Jeremy Fox of RT Edgar) we have seen a reasonable amount of mopping up action in Brighton – a sort of summer clean out.

New and old Brightonians like to buy New in Brighton

1 Inner Crescent Brighton with Justin Follett of Kay and Burton for an undisclosed amount – proved difficult to move and while it was an impressive residence it must have been price that proved the sticking point. Having said that line it up against a number of apartments and I thought the final result was fair value.

This type of offering sold well over Summer

2 William St Brighton – cnr St Andrews –scene of the all the helicopter noise in recent weeks saw a similar offering to 1 Inner Crescent also sell –reportedly through Kay and Burton.

2a Mulgoa also with Kay and Burton and a similar offering got a lot of it’s 50% better price basically because of its golden mile location.

Another good result  in the Golden Mile this time for the dynamic duo Regina Schmidt and Brian Devlin saw another of the Glyndon apartments (no 4) bought for $3,200,000 which continues to emphasize the demand for “retiree” offerings and it shows the selling appeal for Friedrich designs.

The Buxton duo again  – 1/188 The Esplanade with waterfront views but unlike the Golden Mile also some traffic noise – bought for $3,500,000.

And finally also Buxton in Brighton – David Hart got away a very popular 62 Dendy when we  went through it (but for us main road, south facing , tight block) for a smidge under $2,950,000. And increase of just over 28% from the depths of the GFC,  2 years ago.

Hawthorn 35 Mason: Scott Patterson and Michael Armstrong: Bought for over $3,100,000: 4 bidders

Week Ending February 26th: If last week was the season opener for the $1m+ auction market, then this week was the beginning of the $3m+ auction market and the main focus for this weekend’s report. We don’t have all this weekend’s numbers in yet, so it’s hard to call, but it seems that this upper market cleared at 44% of the properties under the hammer. We at James accept a slightly lower auction clearance rate on the day in this segment as indicating balanced, warm or even hot markets, because the air is generally thinner at this level due to the lower number of bidders available at this price point, and because the pre and post auction argy-bargy is generally greater. Today there were quite a few $3m+ homes on offer. We think this market segment is underwhelming at present – however if it is the right price, the right property and the right position it is still being well received and taken up.

A few of the biggies that were bought

• Armadale 23 Wattletree Road – Justin Long – 3 bidders – $3,300,000
• Hawthorn 46 Illawarra – Mark Dayman – Bought Before – $4,250,000
• Brighton 33 Middle Crescent – Jason Swift – 3 bidders – $4,300,000
• Malvern East 8 Westgarth – Andrew Macmillan – 2 bidders – Post Auction Buy a smidge under $3,000,000
• Hawthorn 45 Mason – Scott Patterson – 4 bidders – Under  the Hammer over $3,100,000
• Malvern East 118 Finch – Bought for $3,150,000
• Kew 4 Madden – Peter Batrouney – Bought After – 1 bidder – $3,050,000
• East Melbourne – John Bongiorno – 3 bidders – $3,000,000

Some of the biggies that missed the mark

• Balwyn North 15 Stephens  – 2 bidders – Passed In for $3,650,000
• Balwyn North 59 Hosken – Passed In for $4,050,000
• Toorak 44 Verdant – Passed In for $3,750,000
• Hawthorn 23 Lisson – Passed In for $3,600,000
• Toorak 231 Kooyong – Passed In for $3,500,000
• Malvern East 50 Finch  - 1 Bidder – Passed In $4,100,000

St Kilda West 49 Mary: Passed In $4,000,000 - 0 Bidders: Andrew Stuart was not in the mood for mucking around – he had an uphill battle and he knew it. An opening vendor bid of $4,000,000 immediately hushed the vibrant crowd of 120 and that was it. Game over – a half time break for show but the gate was shut. A duck for this auction. Photos by Phoebe James

Week Ending February 19th: This market is either poor or, what is more reasonable to assume, still on holidays. Mike Gibson of Kay and Burton says that most high end sellers, as advised, are waiting. Hence the quality currently on the market is average. He expects good stock at this level to come on post Labour Day and before Easter.

To support our claims that the $3m+ market hasn’t really got going yet, look at this weekend’s Pass–Ins of $3m+ properties  –

St Kilda West – Mary St – $4,000,000 –  0 Bidders
James Auction Report: See Report Above

Camberwell – Canterbury Road – $3,801,000 – 1 Bidder
James Auction Report: An air of expectation at another James Tostevin Boroondara tennis court auction. He has almost singlehandedly made them his own over the last 2 years or thereabouts. His focus has been 20000 sq ft tennis court at $6m plus. A huge crowd, around 200 with kids trampolining, people milling and cars driving by. Everybody seems to know at least one person to give a wink or a nod to. Carnival atmosphere. Then the business started – well this time it didn’t. One auctioneer bid at $3,800,000 and then surprisingly one crowd bid for $1,000 more. Small Argument – settled with pass-in to the bidder on his $1,000 bid. Inside to do battle and last check they were still banging heads. We await the result.

"You are all very naughty schoolkids and I'm going to keep you back here somebody bids." Well no, James Tostevin didn't say that but he may have been thinking this on Saturday. Camberwell 31 Canterbury: Passed In $3,801,000: 1 bidder:

Balwyn – 12 Creswick – $3,425,000 – 3 Bidders
James Auction Report: A genuine bid of $2,000,000 opened proceedings. Auctioneer Maurice Di Marzio politely accepted the bid, suggesting it was closer to land value than a sale price, before offering a vendor bid of $3,200,000. More than 150 people watched Mr Di Marzio field bids from another two bidders before passing the property in at $3,425,000. Both interested parties headed inside after the auction for further discussions.

Albert Park – 139 Beaconsfield – $3,250,000 — 0 Bidders
James Auction Report: Auctioneer David Wood from Hocking Stuart was seriously up against the elements today as he tried to make himself heard against the traffic noise and the wind coming off Port Phillip Bay. The preamble was short and to the point, before he asked for bids. No one was prepared to open the bidding and he immediately entered a vendor bid of $3,250,000. Still no response, so half time was called. After the think music was up, the question was asked again and still no bids. The property was passed in on the vendor bid.

Gowan Stubbings of Kay and Burton successful at 29 Scott Grove Glen Iris

Kooyong – 711 Toorak – $3,190,000

In fact the only auction sale over $3,000,000 we covered was 29 Scott Grove Glen Iris (Gowan Stubbings of Kay and Burton) for $3,032,000 – 3 Bidders.
James Auction Report: A triangular battle developed right from the word go, and auctioneer Gowan Stubbings orchestrated the bidding superbly to maintain momentum throughout. Only when the $3,000,000 mark was eclipsed, did one of the bidders drop out. $32,000 later and the property was secured. Good naturedly, the two bidders shook hands to acknowledge the end of the contest. A riveting event.

However a few strong private and off-market sales show this market is not completely morbid. There is still some pulse. There were three very solid such sales in Bayside this week:

Brighton Golden Mile: Scene of 2 big sales over $10,000 per sq metre in February 2011

Shandford Avenue – Nick Johnstone of JP Dixon – $7.3m for 600sqm approx – which translates to $10,000 sqm for Golden Mile beachfront

Chatsworth Avenue – Stewart Lopez of Kay and Burton – $11m+ for 1100 sqm approx – again, $10,000 sqm for Golden Mile beachfront

Kerferd Road – Andrew Stuart of Hocking Stuart – $4.9m off market – 440 sqm approx

Continuing with February Sales:

While we have seen no sales over $3m reported in Boroondara and only the long suffering and difficult to see what you can do with it 13 Como Sth Yarra finally sold (Jeremy Fox of RT Edgar) we have seen a reasonable amount of mopping up action in Brighton – a sort of summer clean out.

New and old Brightonians like to buy New in Brighton

1 Inner Crescent Brighton with Justin Follett of Kay and Burton for an undisclosed amount – proved difficult to move and while it was an impressive residence it must have been price that proved the sticking point. Having said that line it up against a number of apartments and I thought the final result was fair value.

This type of offering sold well over Summer

2 William St Brighton – cnr St Andrews –scene of the all the helicopter noise in recent weeks saw a similar offering to 1 Inner Crescent also sell –reportedly through Kay and Burton.

2a Mulgoa also with Kay and Burton and a similar offering got a lot of it’s 50% better price basically because of its golden mile location.

Another good result  in the Golden Mile this time for the dynamic duo Regina Schmidt and Brian Devlin saw another of the Glyndon apartments (no 4) bought for $3,200,000 which continues to emphasize the demand for “retiree” offerings and it shows the selling appeal for Friedrich designs.

The Buxton duo again  – 1/188 The Esplanade with waterfront views but unlike the Golden Mile also some traffic noise – bought for $3,500,000.

And finally also Buxton in Brighton – David Hart got away a very popular 62 Dendy when we  went through it (but for us main road, south facing , tight block) for a smidge under $2,950,000. And increase of just over 28% from the depths of the GFC,  2 years ago.

BRIGHTON EAST, 47 Grant St: Stewart Lopez (Kay & Burton) looks for bidders, but to no avail. Passed in $1,600,000, no bidders

Key Points:

• 75% clearance rate (9 from 12) was more than satisfactory, first day back
• Most on offer, if not all, were in the early to mid $1m range and sold well
• Two solid auction weeks ahead will give us clarity on the market

Agent Q & A: How have you found non-auction sales so far this year?
John Clarkson, Hocking Stuart, Brighton:“Buyer enquiry has been good with many new buyers coming into the market for 2011 . However buyers have been a little subdued and this hasn’t translated to a huge number of off-market sales. Many buyers are waiting for the auction market to kick off commencing from this weekend. Many have been adopting a ‘wait and see’ approach which is surprising. It is interesting to note in  regards to Brighton from a lifestyle viewpoint that if they move Church St shopping , the beach and the schools we will all be in trouble! Seriously though, now is as good a time as ever for buyers in the Bayside area. Whilst I don’t believe there will be a huge spike in prices  in the next couple of months, if buyers can achieve a 7 out of 10 on their wish list they should be having a very close look at properties coming onto the market.”

NORTHCOTE, 8 Jessie St: Peter Egan (Nelson Alexander) fields bids from 2 bidders in front of a crowd of 60. Bought under the hammer $1,300,000

Agent Q & A: How have you found non-auction sales so far this year?
David Oster, Jellis Craig, Ivanhoe:“I’ve found non- auction sales still a little grey. Not as much transparency or buyer  comments such as “why hasn’t it gone to auction?”or “when did it pass in?” Whereas at auctions, we have found that they may have only one buyer or may have a strong post auction negotiation. The start of 2011 has been strong with reasonably small stock levels but with (high) demand, i.e. 22 Beauview parade Ivanhoe sold for $1.2m, reserve $1.1m (last week).”
Luke Sacco, Nelson Alexander, Carlton:”We have pretty much sold all our surplus properties from December, however buyers are still cautious as they are waiting to see what condition the market is in for the start of 2011. So it will be interesting to see what results we get today and next week as they will determine what buyers are going to do.”
Peter Egan, Nelson Alexander, Northcote: “We generally sell our houses through auctions however having said that we have sold all our pass-ins from December and are looking forward to seeing the results we get today and next week as they will set the direction the market will take.”

BENTLEIGH, 2 Evelyn St: Ian Whiteside (Hocking Stuart) brings down the hammer at $1,137,000 in front of a crowd of around 80 people. 3 bidders

Around the Grounds
2 Evelyn St, Bentleigh, Ian Whiteside (Hocking Stuart); Bought under the hammer, $1,137,000, 3 bidders
“A large crowd of 80+ people listened attentively to Ian Whiteside’s preamble as he described the merits of this potential development site. Three bidders soon got things going but one dropped out as the price rose quickly. The remaining two fought it out in very small increments until it became obvious that one bidder was very determined to acquire the property. The sale price was $1,137,000, a good result.”

ALBERT PARK, 139 Beaconsfield Pde: David Wood (Hocking Stuart) rubs his hands together in anticipation, but it was a quiet day at on Beaconsfield Pde. Passed in, $3,250,000, no bidders

Key Points:

• The two big ones over $3m didn’t get a bid – Mary St and Beaconsfield Pde, and the $2m Mary St only had one bidder
• Off Market – Andrew Stuart gets a big one away in Kerferd Rd for $4,900,000

Agent Q & A: How have you found non-auction sales so far this year?
Matt Young, Buxton, St Kilda:“Sales in general, be it non-auction or via auction, have been far more difficult than throughout 2010.  In short, the basics don’t change.  You need to closely match the potential buyers requirements with the right home.  In a softening market this is a far more difficult prospect, buyers requirements aren’t as easily flexed as they have the luxury of choice.  In an upswinging market the opposite is in effect, many potential buyers simply don’t have the choice and are restricted to what they can afford to buy rather than meeting their ideal requirements. With regards to non-auction sales specifically, it’s a common misconception that the auction process is less successful in a soft market.  Vendors may be concerned their home may not sell on the day, they hear many negative reports about auction clearance rates falling and fear what may happen to them.  On the contrary though, non-auction sales avoid much of this negativity due to their being no specific reporting measures available of their success rate.  In actual fact, I would suggest to most that the failure to sell ratio would be far higher through non-auction sales than via auction. Understanding your market place, knowing your buyers and having world class buyer management strategies are all now more important than ever before.  Failure to do this is quite literally guaranteeing a negative outcome for your vendors.   It’s been a terrific start to 2011.  So far this year, we have found the market to have returned earlier than usual as the volume of properties available is higher than normal presenting many potential buyers with great opportunities.”

Will we see last year's crowd numbers return for the opening of the 2011 auction season this weekend? Find out at marketnews.com.au on February 19th at 6pm.

Welcome to Million Dollar Melbourne in 2011

With the Auction Season Opener hitting us between the eyes on February 19, we know that the big question for buyers, sellers and agents is: What is going to happen in 2011?

The feeling in late 2010 was that the market was cooling and we shared that view on price – but we did not share that view on activity. The December market finished quite strongly activity wise.

What’s been happening so far in 2011?

During the last week in Jan, I personally went to 10 homes over $1million in Boroondara (Kew, Hawthorn, Balwyn, Canterbury etc). I was a little surprised at the solid numbers of people inspecting at all opens.

This past weekend (the first full one in February) I focused on Bayside, mainly Brighton, and it was very quiet, very different – with very few people.  The exceptions were 62 Dendy St (David Hart) – a new home on a busy street; a big home at 33 Middle Crescent (Campbell Cooney) and a great little home at 26 Moffat  (David Wilson). Why this last one hasn’t flown out the door yet I don’t know – we gave it a rating over 800. The other seven opens were poorly attended.

Flooding may have been one reason for the reduced activity in Bayside – this was only a few hours after that incredible rain. There were a number of cancelled opens due to inundation (a word we are hearing all too often at the moment) of garages.

Even so there is still plenty happening at Bayside’s Top End. 33 Chatsworth Brighton with 1300 sqm of absolute beachfront has just sold (with Stewart Lopez and Ian Jackson of Kay and Burton) for an undisclosed sum (we reckon around $12 million). And another property on the Golden Mile beachfront at Shandford Ave, with about 600 sqm, reportedly sold for north of $7 million with Nick Johnstone of JP Dixon. So  Bayside Top End is not exactly dead yet.

Next week we have a full book of inspections at quality homes on and off market in Stonnington. Look out for our reports.

So back to the season opener on February 19. This will be the first real public test of the auction market. What sort of stock numbers are out there at the moment?

Last year we used 100 auctions as the definition of a big Saturday. We had four of them in a row at the end of the year, after a very slow start to Spring caused by the election and then the election result uncertainty.

This February 19 sees 74 auctions scheduled – a solid start without setting the world on fire. It is February 26 that provides us with our first real 2011 benchmark with over 120 homes under the hammer. We think that weekend will be the first of about a dozen benchmark auction days we will have through 2011..

So what are the results we are looking at and what will they mean?

Bidderman, our bidders per auction indicator, is an important guide of demand. With Bidderman dropping to around 1 late last year we saw prices drop. A similar number on the first Super Saturday will not be a good sign for sellers especially because there is good stock quality on both auction days (hence no excuses), so a low Bidderman will indicate a genuine lack of interest. If that were to continue we would definitely see a drop in prices. Of course it will be a different result if Bidderman averages more than 2 bidders per auction.

The other important measure is clearance rates. These strengthened towards the end of last year –  not because buyers went berserk but because sellers were forced to meet the diminished market conditions. We had a “strongish” late market because of seller flexibility.

What will the clearance rate numbers mean? If the clearance rates at for these two auction Saturdays are in the 50% range we would consider the market to be soft, marking the beginning of a buyers’ market. If clearance rates are between 60 and 70% for both weekends then it’s fairly balanced. If the clearance rate is around or more than70% then the market noise would be strong and, depending on stock levels going forward, prices may move upwards.

CAV slackens off on Conflict Of Interest issue

One item of news that has snuck under the radar is Consumer Affairs slackening off of the old Section 55 of the Estate Agents Act. This set out a rigorous process in cases where agents want to buy vendors’ homes that are being handled by their own agency, for instance where a Hocking Stuart agent is buying a Hocking Stuart advertised property. Consumer Affairs has severely diluted the strength of the legislation by saying it no longer requires an independent valuation and that an unqualified representative can sign off like a lawyer or an accountant.

This dilution is dangerous and is being driven by either ignorance or laziness on the part of CAV. Selling agents are not asking for it; in fact many ethical agents abhor CAV actions in this matter. We all need checks and balances.

The Consumer watchdog has abrogated its responsibilities, leaving vulnerable old ladies and others to be taken for a ride.

We don’t think agents should be allowed to buy a property handled by the agency they work for at all – there is just too much conflict of interest. But if the law and CAV allows this to continue there MUST be rigorous checks and balances in place to protect the vulnerable.

Imagine if the police weakened their stance on fraud because they wanted to streamline their paperwork. This is not good enough CAV.

On a lighter note, over this year 2011 we will be bringing you even more information, more sold results, more stats, and more detailed analysis.

We will also be back to the job we love most – buying great properties for our clients. After one week back, we’ve already made our first client home purchase for a property in Thomas St Hampton. After six weeks away with the kids  - we need to get our sanity back. So bring on those auctions.

Buy Well.

THE LEOPARD: Auctioneer Jason Scillio watching, thinking, testing, watching. 1 Stawell Kew bought afterwards for an undisclosed amount. 2 bidders.

At 6pm on Saturday the final James $M+ Clearance rate for the year on the 35 auctions we covered was 69%. You may be interested to remember that back in our first Marketnews report for 2010 it was 83%. Those figures point to the year that was.

Bidderman, our demand indicator, was a strong 2.1 bidders per auction – which only confirms what those in the market know: we have had a bounce and that while the hot market has continued to cool, it has not lost all its warmth on the good homes. Our first market news in February 2010 had Bidderman at 3.0.

This Weekend’s Market:
This weekend the market continued its bounce which began two weeks ago. Bidders were there to meet those sellers who chose to meet the market. They were even prepared to fight a little harder than they were in October. Maybe it’s the need for buyers to be in a home by Christmas or maybe it’s the need for sellers to have money in the bank at Santa time – or probably a bit of both, which is normal for this time of the year. The market was in a bit of trouble a few weeks ago following Super Saturday and something had to give. And something has: sellers have given. Which is why the market has bounced in the last fortnight and is looking healthier. Sellers are now pricing their homes to meet the market. They are listening to their selling agents and they are getting the job done. In return buyers are responding, especially when a good home is placed on the market at a reasonable price. Yes, that reasonable price is 5% below September’s reasonable price and maybe 10% below April’s. But it’s still about the same as this time last year and that is how the market works. It goes up and it goes down and it does that every week on every type of property in every type of market. It’s just the median price stats and some media commentators which encourage the uninitiated to think property is a slow moving beast. It’s not. Footnote: over the long term the property market goes up more than it goes down.

Meet the market – what does that mean?
While our focus is homes over $1 million, many of our purchases are over $2 and $3 million. We also have an investment division – headed up by Valuer David McMillan. This weekend we witnessed a great example of a product that met the market and one that didn’t. They were a kilometre apart and finished around the same price – circa $850,000. Both had competent agents managing their campaigns, both have 2 bedrooms.

• Home 1: 1/45 Thanet Street Malvern with Tim Bennison, had 7 bidders and sold for $880,750.
• Home 2: 102 Sutherland Road Armadale, had no bidders and passed in on a lone vendor bid at $850,000.

The market embraced one home and completely rejected the other.

What to do now?
With basically one weekend of auctions left and two weeks of private sales and off-markets, you basically have around ten more sleeps to find what you want – or sit back, relax and wait till just after Australia Day 2011 for a burst of new stock (hopefully).

Try and make good decisions not emotional ones. If you have to rent then so be it, it’s better to rent than buy badly. But good decisions also involve reading the market and it has stepped up a bit so we do not recommend being too cute on price. Sure, don’t overpay, but don’t be too cute either.

We have bought eight homes in the past eight days – five of them outside the auction hammer. Highlights include the purchase of Munro St Armadale post auction, Kyarra Street Sandringham off-market, and Avenue Road Camberwell before auction. As well we have had solid new enquiry. So internally and externally we are seeing market indicators that point to a bounce. As we at Marketnews leave you for the year we think the market could well be in a healthier and more sustainable shape than it was when we first reported to you in 2010, just 10 short months ago. Let’s hope that is good news for 2011.

Auction in a Garden: Tim Derham, a rose amongst the thorns, passes in to the third bidder for $2,970,000, 4 Mathoura Toorak.

$3m+ market

While the highlights point to a number of successes in the $3m+ market there have also been a number of pass-ins. Which suggests that this market too is cooling or cooled and now seems balanced and healthy and this week has a bit of pep again.

This Weekend’s Highlights:

• Brighton 4/23 St Ninians, Stewart Lopez  Bought at auction for $4,825,000
• Balwyn 32 Stephens, Maurice Di Marzio, Bought under the hammer for $3,800,000 – 4 bidders
• Armadale 17 Denbigh, Justin Long, Bought under the hammer for $3,890,000 – 4 bidders
• Balwyn 12 Knutsford, Tim Derham, Bought under the hammer for $3,520,000 – 4 bidders
• Kew 1 Stawell, Gowan Stubbings, undisclosed Bought after – 2 bidders
• Kew 3-5 Rimington, Scott Patterson, Bought After above $3,650,000 -  2 bidders
• Malvern 376 Glenferrie, Iain Carmichael of Benmac passed in $4,300,000 and bought after $4,415,000 – 0 bidders

Off Market

• Hawthorn 26 Fordholm, Michael Armstrong, Over $5,000,000

Not so Highlights:

• Canterbury 34 Maling, passed in $4,600,000
• Brighton 29 Sussex (this seems to be for sale each year), passed in for $3,350,000 – 0 bidders
• Middle Park 280 Beaconsfield, passed in $4,400,000 – 0 bidders
• Toorak 83 Clendon, passed in – 0 bidders

*For more $3m+ results please go to our weekly updated $3m+ section

Bidderbuzz Auction: 43 Motherwell St, South Yarra, Joseph Allan (Chisholm & Gamon); Bought under the hammer, $1,860,000, 7 bidders
“As I rocked up you could feel a number of people had come to play – and play they did under Joseph Allan’s direction. On the market at $1,400,000. 7 bidders, all with a variety of techniques and wallet sizes provided some sparkling entertainment until there was only one left at $1,860,000. This home needed some serious work. Sorry – did I hear somebody say the market was gone?” (Mal James)

Biggest Sale: 17 Denbigh Rd, Armadale, Justin Long (Marshall White); Bought under the hammer, $3,890,000, 4 bidders
“On a magnificent day in Melbourne, auctioneer Justin Long left it to the energetic crowd for a starting bid. Within a few seconds an opening bid was made from a gentleman in the crowd for $3,300,000, which was quickly followed by a bid $25,000 higher. With four separate parties vying for the Armadale home, the price flew past $3,500,000, then $3,600,000, then $3,700,000, and finally slowed at $3,850,000. Mr. Long extracted the maximum from the bidding parties, managing to squeeze out a final bid of $3,890,000 from one very interested gentleman, and the property was sold at that price. All in all, a very well conducted auction with 80 or so people in attendance, and all participating parties walking away very satisfied.” (Daniel Ehrenreich)

Biggest Pass In:280 Beaconsfield Pde, Middle Park, Andrew Stuart (Hocking Stuart); $4,400,000; no bidders
“A large crowd of 80 sought refuge from the hot sun under the shade of the trees scattered on the nature strip.  In his preamble, auctioneer Andrew Stuart spoke enthusiastically about the property, the ‘outstanding lifestyle’ and it being in ‘Melbourne’s greatest location’.  Mr Stuart looked to the group for an opening bid, but all remained silent, so he opened with a vendor bid of $4,400,000.  Despite Mr Stuart’s best efforts there was no bidding on the day and the property was passed in at $4,400,000.” (Kate Agnoleto)

Market News TV
This week’s video auctions are at 25 Bateman St, Hampton with James Paynter (Hodges) and 19 Ferrars Place, South Melbourne with David Wood (Hocking Stuart). This week Gina, whom many of you would know as she co-ordinates all our new clients, and Jen, our Market News Co-ordinator, step in for Klarity Kris and Adam the Architect – click on the live action this Sunday.

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

June 2010: Our favourite Pic for 2010: Susan McGlashan (right) of Bennison Mackinnon leads some very happy buyers inside for the sign up of 2/9 Shipley South Yarra. Bought under the hammer $2,195,000. 2 bidders. Strong.

Summary of 2010

Early 2010 started where 2009 left off, with sellers successfully getting buyers to accept their courageous asking prices, and buyers only too happy to hop on board the train, no matter the price.

Why was that?  After the 2008 Global Financial Crisis many buyers had feared further falls. Instead, by the end of 2009 the market had recovered what it lost in the GFC – and then some. And it seems buyers who missed out in 2009 were putting their hands up at auction with a sense of urgency and even panic, determined to get on the train this year.

For sellers this meant champagne and truffles, a situation that continued until Anzac Day when the market turned sharply downwards. It seems that both buyers and sellers realised that while the property market was booming, the economy – and especially the world economy – wasn’t. The Greek economy was in collapse, the Dow Jones went into a slide, and here interest rates started rising. Sellers decided it was time to rush their home onto the market to make hay while the sun still shone. But buyers were already taking a more guarded approach and were no longer prepared to pay big prices.

Properties were increasingly being passed in, adding to an already substantial overhang of stale unsolds. Where previously the market had been feeding on buyer panic, now it began to slip down on buyer apathy. The market increases of November 2009 to April 2010 were wiped off within a fortnight or so, cutting prices by around 10%.

April 2010: Strange. Very strange. Yes Glen we can see you, but check out the guy to the right. I'm not sure if he was there for marketing or to revive injured buyers. Maybe he will be mandatory at all auctions soon. Camberwell: 52 Athelstan Road: Glen Coutinho. Passed In.

A chilly winter saw a shortage of good quality homes, with only those selling who had to. And even when a good home arrived on the market, it had to compete with a growing overhang of stales (unsolds) that had been building up since May.  But people still need to buy homes, and the shortage now fueled buyer demand, which led to a bounce in early spring. It was surprising  because there were distractions – the August federal election and subsequent postulations and the footy and Collingwood’s replay victory (got it in) The first days of Spring brought out the instinctual buyers who need to move nests as the sun warms their hearts.  The sun also loosened their wallets, creating a small fillip on quality stock. But it only lasted the month.

And it wasn’t strong enough to absorb the surge of 200+ $ million plus properties going to market on October 23rd’s Super Saturday. In the weeks following, rather than risk passing-in their property to the unsolds list where they might wait weeks for a buyer, vendors initially tried to hold their prices. However, after a few weeks of denial and a Melbourne Cup interest rate jolt they finally began to revise their prices downwards. By end November clearance rates were back at a healthy, if unspectacular 65%.

And so we end 2010 almost where we started in terms of price, but vastly different in terms of what we expect for the start of next season. The heat of last summer is over, but it is still warm in parts. (Inner city quality homes are particularly still in high demand). Overall it’s a more healthy balanced market. For now. Stay tuned for next year.

2010 Awards
Most of our year-end efforts have gone into our 2010 yearbook due out before Christmas (downloadable from this site). Our legend section and their pearls of wisdom are contained within this 2010 marketnews yearbook. The two inductees into the Marketnews Legends Hall of Fame are Alastair Craig and Rodney Morley. However as this is our last 2010 marketnews it is customary to put up our 2010 awards. Consider them like Mike Sheahan’s footy awards – a bit of fun.

Auctioneers: we chose who we chose because we saw these auctioneers consistently quote sensibly (well 6 of 7 anyway), give buyers and sellers a fair go at auction, provide great entertainment and handle the sticky situations well. Other three hat auctioneers were Marshall White’s John Bongiorno, Andrew Hayne and Justin Long, Kay and Burton’s “Hollywoods” Jason Scillio and Gowan Stubbings, RT Edgar’s Jeremy Fox and Abercromby’s Tim Derham, all of whom we really enjoyed watching under pressure, who are brilliant at their job, but had a number of quote malfunctions – a Stonnington malaise for much of the year. Jeremy Desmier and Tim Heavyside are ones to watch and if Fletchers could be less conservative in their high-end auction quotes they would be right up there. Phillip Kingston mainly works the day we like to take off but when we see him we like what we see. We think Mark Earle and Craig Williamson of Buxton, Glen Coutinho, Peter Kennett, Andrew Stuart, Andrew James and Nick Renna of Hocking Stuart, Rodney Morley of TBM, David Oster, Damien Davis, Peter Batrouney and Richard Earle of Jellis Craig, Lachie Fraser-Smith of Benmac and Tom McCarthy of Biggin and Scott all put in two/three hat performances during the year.

Agents: These are the standouts for us – agents who are particularly strong in their market segment. Off market we think Marcus Chiminello from Marshall White is the one to watch.

Young agents: we dropped this segment because they are getting older.

Agency: Jellis Craig was a unanimous choice. Their comparable sales system, their attitude to buyers and general respect for all parties meant for us in 2010 they were our agency of the year.

Each year it’s a different format and each year we offend everybody we leave out – so please try not to take it too seriously.

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Thank yous
I would like to thank my fellow co-workers Adam the Architect, Klarity Kris, Value Dave, Cafe Guy and earlier in the year Ralph and Stephen and our market news co-ordinators Jen, Julia, Sim and Peter. A big thank you to our editors Karin and Melinda, organizer Gina and Michael our MD. You’re a champ Michael.  Thank you to our behind the scenes people in Peter, Dan, Julie, Jason and Naomi and our Board; Peter, Adam, David and Chrisso. Thank you to Phil for your insights as well.

I also would like to thank all the selling agents who despite being on the “other side” allow access to almost all results and auctions, assist with quotes and smooth over ruffled buyer and seller feathers which occasionally happen. There are a few agents who are extra helpful friends of Marketnews and our advocacy business. In no particular order Mike Gibson of Kay and Burton; Rob Vickers-Willis of Abercrombys; Mark “Lama” Dayman, James Tostevin and John Bongiorno of Marshall White; Iain Carmichael, Kaine Lanyon and Elliot Gill of Benmac; David Oster, the Richard(s) James, Winneke and Earle of Jellis Craig; Tom Roberts of Nelson Alexander; Ladies in Red – Jenny Dwyer and Barb Gregory and Andrew Stuart of Hocking Stuart and Geoff Cayzer – thank you. Thank you to the agents at Marshall White who let us join some of their open training sessions – it is most appreciated. There are others and I apologise for leaving you out. Three agents who have helped us a great deal and whom we would like to single out are G-E-R-A-L-D Delany of Kay and Burton, James Connell of Marshall White and Scott “Pretty Boy” Patterson of Jellis Craig. An extra big thank you.

Thanks to our trusty reporters and photographers who come rain, hail or shine are out there in their jackets – ducking and weaving, listening and recording. Thank you to Amy, Daniel, David, Doug, Sue, Kate, Tom, Linda, Nikki, Dustin and Joshua – see you all for a great lunch in a week or so and well done.

We also wish our competitors at Morrell and Koren seasons greetings – enjoyed the battle.

Thanks to our readers and the people who come up at opens and auctions and say G’day.

Finally a big thank you to all our clients who have supported us during the year.

Have a safe and happy Christmas holidays period.

Until next year then (our office closes on December 17th and re-opens Monday January 17th)