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)

Anyone? Lachie Fraser-Smith does his utmost to drum up some bidding at 86 Park St, South Yarra, but to no avail. Passed in on a vendor bid of $1,700,000, no bidders and small crowd of 20

Key Points:

• I personally went to 8 auctions in Stonnington today – five were bought. Bidderman at the auctions I went to (7, 3, 7, 0, 4, 0, 4, 3)
• Agent chatter has been more upbeat this week than at any other time this Spring
• 376 Glenferrie Road Malvern with Iain Carmichael of Benmac – bought on Sunday morning for $4,415,000

Good Karma: Karl Fitch (Noel Jones) at 19 Karma Ave, Malvern East. Bought under the hammer for $1,241,000 and a whopping 5 bidders

Key Points:

• Of the eight Stonnington auctions we attended, only two were bought under the hammer – 19 Karma Ave, Malvern East (Karl Fitch, Noel Jones), for $1,241,000, and 1 Nareeb Crt, Toorak, (Jeremy Fox, RT Edgar), for $2,710,000.
• Karma Ave had five bidders, but there were only five bidders in total across the remaining seven auctions we attended.
• Biggest sale of the day was 1 Nareeb Crt, Toorak (see details below)

Biggest sale, Toorak, 1 Nareeb Crt, Jeremy Fox, RT Edgar, Under the Hammer, $2,710,000, 2 bidders
“It had been raining all night and there wasn’t much hope that any auctions this weekend would be conducted outside. But, in what was probably an omen, as soon as Jeremy Fox commenced the auction at 1 Nareeb Court Toorak the clouds parted and the sun came out. Two bidders emerged to compete for this 60s home and after two breaks and some 18 bids, the property was for bought for $2,710,000.” (Guy Angwin)

BidderBuzz Auction of the Day: Malvern East, 19 Karma Ave, Karl Fitch, Noel Jones, Under the Hammer, $1,241,000, 5 bidders
“Often before auctions people come up to me and ask me what I am doing and as a result we begin a conversation. On this particular occasion, as it turned out, I had a conversation with a lady who was well connected with the home. Her father had built the home back in 1929/1930 as a family home for her (6 months old at time) and her mother to move in to. She was sad to see the home go but was philosophical about the need to move on. From that time on I had an empathy with the home and its outcome. And what an outcome it was – some 30 bids and five bidders who worked with the auctioneer, the lucky bidder purchasing the home for $1,241,000 to start their own history in this much loved home.” (Guy Angwin)

Biggest Off Market & Private Sales

• 98 Finch St, Malvern East, Nicole Gleeson, Kay & Burton, undisclosed – click here to see our $3m+ section for more details
• 20 Howitt St, South Yarra, Tim Wilson, RT Edgar, undisclosed- click here to see our our $3m+ section for more details

Agent Q & A

What advice would you give a buyer wanting to purchase a property between now and Melbourne Cup Weekend?
Justin Long, Marshall White, Armadale:“Enjoy the opportunity to select from a wider range of properties than has been available for some time. Be selective but if you find a home you really want, go for it. Don’t risk losing it for a couple of percent. The current “supply dream” will turn very quickly into a drought within the next 6 weeks and you may need to wait until next year to purchase.”
Brad Fleming, JP Dixon, Toorak:”Buyers who are wanting to purchase a property, between now and the Melbourne Cup, need to be ready to make a quick decision – especially with Private Treaty.  This is the time when an additional group of buyers travel to Melbourne with one purpose only: to buy a property for either investment, job relocation and university enrolments. And they leave only once have secured their property.  These buyers are well researched from the use of the internet, and they make appointments to inspect properties prior to arriving in Melbourne. So all they have to do is to choose a suitable property then buy immediately – with limited time being the greatest motivation.”
Mark Wridgway, RT Edgar, Toorak:”The same advice I would give any buyer: if the property suits your requirements (that is, if you can tick 7 out of 10 boxes) then you should buy it. Stock levels are at their highest now and heading towards Cup weekend, so maximum choice for the year is now. If you can’t tick 7 out of 10, then wait. Good Luck.”
Daniel Wheeler, Marshall White, Toorak:”If you’re looking to secure a property over the coming weeks, do so with confidence. Housing prices stem from consumer confidence and simple economics, and both factors are indicating that it’s time to act. With the current level of property available and the immediate lack of properties for sale beyond Melbourne Cup weekend (compared with previous Spring markets), the next two weeks are certainly an opportune time to buy.  Buyer sentiment is not the same as it was last month, or even earlier this year. That’s a good thing; you will see that properties prices will be ‘fair’. Why wait until stock levels drop? – as there will still be the same amount of buyers; just more competition.”

Armadale 5 Glassford: Justin Long of Marshall White: 3 bidders and bought under the hammer for $2,350,000.

Key Points

• Fall in Clearance Rate today
• Stock offering not as good as October 23rd
• Very little new stock in this week owing to Melbourne Cup in 4 weeks
• A lot of off market on offer
• $3m+ homes have come on in big numbers compared to winter

Biggest sale

5 Glassford St, Armadale, Justin Long, Marshall White, Under the Hammer $2,350,000
“Good solid crowd full of anticipation waited for Justin Long to start proceedings on this sun filled day. And bang straight out of the blocks with a hopeful $2million bid. Bang again 2nd bidder and we were off. This auction was a funny one – not funny ha ha – funny strange – nobody followed Justin’s bidding suggestions but things flew along anyway – especially when a third bidder joined in. This sight was a natural amphitheatre and there was a clear echo of everybody bids and Justin’s comments – sort of like a sound system out of sync. Anyway things were just warming up when the half-time break was called and to the surprise of many it was announced on the market and to everybody’s further surprise it was bought under the hammer for the same amount. The surprise was because this was a Marshall White auction and they tend to pass-in everything – however please this was the right thing to do – 3 active bidders and so market price was paid. A good fair auction.” (Mal James)

BidderBuzz auction of the day

Toorak 1/693 Toorak Road: Rodney Morley, TBM Woodards: 4 Bidders: Bought under the hammer: $1,460,000

Rocket Rodney was his usual bursting with energy self. He really does know how to make an auction zing and keep a crowd entertained . The occasional, as he puts it, politically incorrect joke combined with a couple of subtle digs to get the recalcitrant bidders moving and we more often than not have the makings of one of life’s little moments of enjoyment. 1/693 Toorak was no different – opened up at $1,200,000 and then strong bidding until it was on the market around $1,360,000 and bought for $1,460,000. 4 bidders and a good buy. Rodney is what you want in an auctioneer – flamboyant, fun and fair. Check out Rodney’s auctions – they are often better than Foxtel. (Mal James)

Agent Q & A:

October 23 is Super Saturday – What can we expect?

Gerald Delany, Kay & Burton, Toorak: “October 23 will see a big supply of property on offer. The confidence in the market will see the supply absorbed and we expect to enjoy a strong market through the spring. The economic confidence we are experiencing continues to carry through to property.”

John Bongiorno, Marshall White, Armadale: “Stock levels are a bit like a roller coaster – the following couple of weeks after Super Saturday see stock levels fall again so hence I believe it will be business as usual on the 23^rd.”

James Redfern, Marshall White, Armadale: “At this stage, compared to this time last year, we are seeing less property coming onto the Spring market….therefore I would suggest we should see good quality property still very much ‘in demand’ with buyers looking for quality homes in good locations. We might see however a late November / December rush of stock coming onto the market.”

Iain Carmichael, BenMac, Armadale:“I believe clearances should be good next weekend irrespective of the large number of properties on the market, attendance’s at open for inspections have all been good. What we will see after next weekend is a clearer picture as to where the market actual is at this point of time. Melbourne is the auction capital of the world and what an exciting weekend it will be.”

Forward Auction Bookings

Clearance Rates

Results

John "The Boss" Morrisby (Marshall White) can sense a sale in the air. 11 Evandale Rd, Malvern, bought after for an undisclosed amount over $1,550,000. Two bidders.

Key Points:

• Only two from the nine we attended were bought under the hammer, however five from the nine were bought after auction
• Big improvement on Clearance Rates on reasonable number of monitored auctions (21 $M+)

$3m+ sales this week:

• 1 Myamyn Street, Armadale – Andrew Macmillan of Bennison Mackinnon ($3,215,000)
• 6 Bonview Road, Malvern - Peter Bennison of Marshall White (0ver $3,600,000)
• 1 Hopetoun Road, Toorak – Justin Long of Marshall White (over $5,500,000)
• 15a Sorrett Avenue, Malvern (Passed In from several weeks ago) – Andrew Hayne of Marshall White (over $3,200,000)
• 19 Acland Street, South Yarra – Warwick Anderson and Greg Herman of RT Edgar ($3,600,000)
• 1a Como Ave, South Yarra – Michael Ebeling and Jeremy Fox of RT Edgar (over 6,o00,000)

A funny thing happened at an auction:
1 Hopetoun Rd, Toorak, John Bongiorno, Marshall White, Bought after, undisclosed amount:
Those that were there for the Hopetoun Road auction and left quickly would say “Hey Jack – nice suit, reasonable spiel – dud auction”. Those that hung around would say, when they heard it was bought and at a price believed to be well in excess of the vendor bid, would go “Hey Jack – nice suit, impressive post-auction manner, great result”. John Bongiorno and Justin Long, Marshall White.” (Mal James)

Agent Question: How are you finding the market?

Peter Kudelka, Kay & Burton: “People are sitting on their hands. If I hear one more time `I’ll wait and see’, then I think I’ll go mad! What are people waiting for? (Editor note: this was said with Peter’s typical dry sense of humour but it was an honest reflection – we like those that don’t spin) Buyers are out there and will make an offer, but not with the sense of desperation as per earlier in the year, and they feel if they don’t get it, then there will be another because the market is not really advancing. It has plateaued. Upper end apartments are still slow, except under a million. Investment stock is selling well. Apartment buying goes in waves and it is always interesting to see when the next wave is. The election has given people an excuse not to make decisions.”

Bidderbuzz Auction of the Day:
19 Acland St, South Yarra, Warwick Anderson, RT Edgar, 4 bidders: “After a day of pass ins and relatively low attendances, it was nice to attend an auction with multiple bidders all looking to secure a fine property in a much sort after area. Four keen bidders kept auctioneer Warwick Anderson’s attention as they showed their interest early, bidding strongly and quickly looking for that knock-out blow. It came fifteen minutes later for a price of $3,600,000.” (Guy Angwin)

Clearance Rates & Monitor Table:

We Only Buy Homes

John "Jack" Bongiorno (Marshall White) braves the wind and the rain at 6 Bonview Rd, Malvern. 3 bidders, bought after for an undisclosed amount in excess of $3,600,000.

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

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

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

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

Moving southwards we get to:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why is this happening?

Because buyers are there.

Why now?

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

We only buy homes

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

I'm not having a good day am I? I've passed the property in despite there being 3 bidders and now some galoot is taking my photo. 65 Charles St Prahran - George Metax - 3 bidders. Passed In for $1,400,000

This week we have combined the council wraps. There is little to report within specific council areas, and for those who normally just read one wrap we hope you will benefit from looking at some data graphs across the council areas that confirm what we have been saying so far this year.

Hopefully, this will help you as buyers to see what you need to do to buy the right home in the next six months.

Please note: Data comes from REIV, Valuer General (Government) and our own records. There is a time lag in some of the official data.

Confirmed: This year has been a bumper year in terms of $M+ transactions.

Confirmed: It has also been abnormally high stock wise.

We have used Boroondara as an example, but the stats show the same trends across the board in Port Phillip, Stonnington and Bayside.

Confirmed: It is part of a longer term trend of increasing $M+ sales.

Only the GFC got in the way in 2008/2009, as the above graph shows. Most of us froze and stock dried up. But that stock shortage, combined with the FIRB changes and the Chinese community kick-starting the Melbourne high end market in March 2009, meant that prices didn’t stay down for long.

Ignoring for a moment the Toorak chart, which shows a flat trend (we don’t understand the Toorak chart), prices across $M+ Melbourne went up in 2007, then down in 2008, then up late 2009 and then back down again in May 2010. In our opinion the charts of Kew, Brighton etc show what is really happening. And these charts confirm our James Price Wormie (which estimates price movements in the $M+ market).

The latest statement released by the REIV show a significant market price drop in the June quarter. That again confirms our Wormie.

So what’s happening right now?

A LOT LESS THAN A MONTH AGO – look at the auction numbers below. You may have read our analysis in this weekend’s Market Insight showing that only 1 in 4 homes for private sale in our market sold during the 6 week period June 7 – July 18. With fewer auctions coming up, it’s probably good for overall market health and may allow the overhang to be mopped up.

There is a choice – it’s just hidden.

Overhang: A hundred more properties went in to the Boroondara $M+ market than went out (sold) in April to June 2010. That’s a lot. It’s similar in Bayside and less dramatic in Stonnington and Port Phillip councils (they are both smaller in size).

How that overhang is mopped up could well determine the price trend in Spring!

The next graph below confirms that you currently have a 1 in 5 chance of  buying a home at auction. This is eerily close to our stats of last year where we bought 80 homes in the $1m to $5m range and only 15 were under auction conditions within 20% of the agent’s price. Over the last few weeks things have been changing a bit – but it is an interesting stat for those that think buying a home is always just about putting your hand up at auction. You need a number of different negotiation skills and techniques – as this graph below proves.

Overall what do these lovely pictorials tell us buyers?

1. There are homes for sale out there – but you need to look
2. There may well be a reduced amount of stock coming onto the market in the next few months, so you may need to look beyond the auction alerts to find your best option.
3. Prices at auctions may improve slightly, which could lead to claims of big improvements in the market by sellers over the next few months. But that may not necessarily be the case. We acknowledge that at times perception does become reality and that the market may well improve on the back of some highlighted results. But the fact is that there is still an overhang of unsolds out there. That means that, across the board, price hikes seem unlikely when Spring comes. If we had to bet it would be on flat to falling prices for some time – although our get-out clause is that if the overhangs are mopped more quickly than anticipated then Spring could see price improvements, as long as current demand is not affected by outside influences.

Buyers: you have choice and opportunities now –  if you know where to look and how to assess and negotiate.

We only buy homes

6 bidders for Justin Long at 7 Monomeath Toorak. Bought under the hammer for $2,005,000.

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.

At 6pm Saturday the James Clearance Rate on the 42 Million-Dollar-Plus Auctions we covered was 50%.

Our Demand Indicator, Bidderman, is down to 1.1  -  which is pretty amazing considering that a few months ago it was riding high at around 3.0.

Our Highlights

• Of the 42 auctions we attended this weekend, 26 had no bidders at all. Only 38% of homes attracted one bidder or more.
• In that most troubled of price ranges – the $2million to $4million market – only four properties were bought, and as we went to press 11 had not yet been reported as sold.
• The strongest sale of the day we witnessed was 51 Murray St, Prahran, which reached $3,740,000 for a great home on 600 sqm of land in Prahran (John Bongiorno, Justin Long and Adam Jack of Marshall White). Four bidders.

• Bayside – 32 monitored – 14 bought – 44% clearance rate (previous weeks 40%/46%)
• Boroondara – 45 monitored – 26 bought – 58% clearance rate (52%/70% )
• Port Phillip – 19 monitored – 13 bought – 68% clearance rate (54%/32%)
• Stonnington – 45 monitored – 26 bought – 58% clearance rate (65%/69%)

Most agents are reporting all results. On average Kay and Burton has the most unreporteds – but it still reports. The large majority of unreporteds had been passed in.

Glen Iris results were 9 sales out of 10 auctions, or a 90% Clearance Rate.

Port Phillip (Albert Park and surrounds) had a strong day compared to the previous fortnight

Boroondara and Stonnington had unseasonally (for winter) large stock numbers up for auction (45 homes each) and their clearance rate was less than stellar; but they still got away 52 $million+ homes between them.

Across Melbourne there have been an incredible 170 $million+ sales in the last fortnight, including the Queens Birthday weekend. That is 12 sales a day, which means that every second hour somebody is paying over $1million for a home in Melbourne. Clearly the market is not down and out; it is just wilting under stock pressures.

Prices or Vendor Expectations (to keep all agents happy) are clearly dropping as shown by the clearance rates; however, based on the number of buys, this market still has a underlying demand strength.

When supply reduces, as vendor human nature says it must, we would not be ruling out a quick price stabilisation and possible price increases – unless the demand parameters have changed.

Have Those Demand Parameters Changed?

We don’t really know for sure!

Our demand indicator Bidderman (which measures bidders per auction) was this weekend at a lowly 1.1 – but there were 141 homes up for auction in the key Albert Park, Hawthorn, Toorak, Brighton and surrounding markets. Which means you could say that this auction market has 155 bidders. If the number of homes on offer drops to say 70 and Bidderman rose to two – which is quite possible –  as a buyer, you would have less choice and a  rising market, even if  the overall market remained at around 155 bidders. When Bidderman is consistently at 2 and above we know we have a rising market.

Of course, earlier this year we had these sorts of auction numbers and Bidderman was at 3. That was mind blowing. The point is that just because Bidderman is at 1.1 that does not necessarily mean a big demand drop if we have an unseasonal quality or quantity of supply. When you see the actual number of homes bought it is unseasonal. We will know we have had a major market change when we see significant and seasonally adjusted drops in stock (supply), AND corresponding drops in demand (Bidderman). At that point you would have a a chance of prices freefalling, as occurred in late 2008. We think we have had a market supply change but our money is on this being a shorter term price correction, because solid demand is still there for now.

Price Drop – How Big?

A number of agents now publicly agree with our assessment that in the past five weeks the market has dropped between 5% and 10%, or at least lost the previous gains of 2010. This is a blanket statement which has its limitations – however we feel it is an accurate reading of market performance.

Jeremy Fox of RT Edgar feels the market has come off 10% since April.

Robert Vickers-Willis of Abercrombys feels it has dropped between 5% and 10%, and that it is simply because buyers have choice, no longer feel panicked and therefore will walk away rather than push on as they would have only a month ago.

James Connell of Marshall White and Gerald Delany of Kay and Burton feel the market has stabilised and do not believe there has been significant falls.

I think the mood is far more towards Jeremy and Robert’s view than with those agents who are saying the market is levelling. But it’s true that people like James and Gerald are very experienced selling agents.

For sellers of quality homes, there is still some strength in the market – providing you meet the new June 2010 price terms. The evidence is the fact that there were more than four bidders at a number of auctions: 77 Page St Albert Park (Andrew Stuart of Hocking Stuart); 41 Terry St Balwyn (Michael Nolan of Noel Jones ); 6 Mayrose Crescent Brighton ( Leigh Hallamore Buxton); 16 Van Ness Avenue Glen Iris (James Redfern Marshall White) and 51 Murray St Prahran (John Bongiorno Marshall White)

Price Drop – Why?

The evidence is all pointing towards this being a supply-based correction. What that means is that if the market gets back into some sort of equilibrium, it is possible for prices to rise again within a short period of time.  Supply is at record levels – this weekend saw a record number of auctions for any winter weekend and we have another one  next weekend. All this is following on from  a huge May, where many agents had record sales numbers and many buying agents  had record buys. However,  winter generally brings a cyclical decline in seasonal demand and, combined with the fact that we still have an overhang of unsold properties, a rebounding price surge does not seem imminent – even if supply does level out.

Opportunity

What does this mean for the buyer – opportunity! Opportunity to purchase at prices considerably below what you might have paid in April – and in some cases even below what you might have paid before the surge which started ramping up from November 2009.

The market is not a perfect beast – as the diagram below shows. The trendline  is in yellow. Of course all home sales are different and if you buy well in June you could have paid less than if you bought poorly in November 2009, despite the price surges (the red squiggle below represents indicative individual sale variances or market segments). On the other hand, if you are bidding against strong competition you could still be paying the same on some houses as you were a month ago. That is still a fair bit more than August 2009 and a lot more than the pits of the GFC in 2008 and more even than the peak of 2007.

GFC

Before we, as buyers, start getting into the champagne (that only our selling comrades can afford), it may be useful (or not) to remember that the impact of the GFC on the home market  lasted around a year in Bayside and Port Phillip (May 2008 to May 2009) and only six months in Boroondara (Sept 2008 to Feb 2009). If we ignore the stats for a moment, our “guts” are not telling us that is the same sort of market we saw two years ago. The drop in prices seem to be almost entirely due to excess supply, which means it may soon right itself.  That’s even though, as buyers, we might be hoping for a longer respite. But of course demand is a very fickle beast. Bad news may come tomorrow and, yes, our demand indicator Bidderman is down. But you do need to contrast that with the fact that we are seeing record sales, record auctions, record everything.

Stock Quality May Diminish

Going forward ( July to October)  the jungle drums will start beating hard and many sellers will hear: “Don’t go to market –  it’s not as good”. Those sellers who have organised lives, and these  tend to own the good homes we want to buy, will simply hold off and not put their homes on the market. This happened in Toorak and Hawthorn in late 2008. That means that the only good homes that will come on to the market will be forced sales and, unless we have a major economic change, forced sales tend to be few and far between . What does this mean? Less Supply!!  Who knows what will happen to prices then?  Especially if demand remains constant.

Longer Term Thoughts

Underlying demand still comes from population pressures such as migration and wealth pressures such as investing or buying for your children. To get a sense of that demand, don’t just look at  the stats. Hop in a car on a Friday night and go to Bay St, Brighton or to the Rivoli Camberwell or Chapel St or the City: it’s a gridlock and it’s getting worse. In the 1990s when we had demand reductions it took five and a bit years to recover –  but not now. Between 1990 to 1996 we were like a bowl of rising dough that rose from one third to two thirds of the bowl.  We had plenty of supply – plenty of inner city land, for instance, to redevelop. Improving demand put some pressure on supply without pushing the price lid off. But Melbourne in June 2010 is now a lot more developed. It’s like a full bowl of rising dough that’s had a nick taken out and the price lid squeezed back on. It won’t take long for that nick of dough to be taken up and price pressures to reignite and push the lid off.

Alternative Opinions

We have been very lucky to get agreement from Gerald Delany to give buyers a once or twice monthly opinion on what is happening at the Top End from a selling agent’s point of view. Its called G-E-R-A-L-D and you can view the first video in the right hand column on our marketnews home page. Please bear with me. In future I will be asking tougher questions and Gerald has assured me he will answer them going forward but I was feeling my way on this first one. There will be another one within a fortnight.

If we as buyers don’t or can’t listen to quality selling agents and take their comments for what they are – information and mostly good information – then we will reduce the chances of buying well.

We are also lucky to have talking to us two top Bayside agents (Jenny Dwyer and Barb Gregory), who happen to be female and happen to both work for Hocking Stuart. They, along with our own Kristen Hatt, will report once or twice a month on females dealing with men in real estate and what is happening in Bayside. Again it’s our first effort so be patient with us please. However any constructive feedback to kristen@james.net.au is welcome

We have a younger person’s video and two sparring auctioneers in the pipeline. This will be on this screen some time very soon.

The Rules Have Changed
This is the title of our new Advertising piece on the top right corner of the Market News Homepage. Although it’s a hard sell on why you might think about using us, it does make some salient points about Expressions of Interest and “Learning Fees” in real estate. If you need some extra reading to get to sleep then this may help; click in the top right hand corner title of the marketnews homepage – The Rules Have Changed.

A little bit of a different market insight this week – have had a few heavy ones on the Clayton Reserve so thought we all needed a breather.

We only buy homes

Mal

Prahran 51 Murray Street: The market gloom was no match for this home which got the highest rating for the year (926/1000). $2.9m+ quote - 4 bidders - on the market at $3,600,000 and bought under the hammer at $3,740,000. A very strong but not completely unexpected result for John Bongiorno and Justin Long of Marshall White.

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

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

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

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

Our evidence

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

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

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

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

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

So what to make of it?

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

What Are Your Needs?

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

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

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

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

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

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

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

Clearance Rates

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

Buy happy

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

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

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

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

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

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

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

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

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

Design Smart

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

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

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

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

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

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

So why have we eased?

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

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

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

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

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

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

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

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

Make Good Decisions 

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

South Yarra 7 Kensington: A lot of standing around on a beautiful autumn morning - but that is not meant to be the entire auction script for Kay and Burton. No bidders. No action. Nice day though.

Of the 11 Stonnington auctions we attended today, four properties sold under the hammer, one before with the balance passed in (one of those six has since been reported as sold).

Of the pass ins, five were passed in with no bids (apart from a vendor bid).

So are vendors getting ahead of themselves?

Let’s first look at what was bought.
The stand-out sale was 32 Grandview Grove Prahran East, which Justin Long of Marshall White sold under the hammer for $4,410,000. The property was the previous gallery of Dr Joseph Brown, the well known artist and collector. It’s not often that Prahran East will record the highest price sale in Stonnington, but this is a rare house and although it will take a large budget to restore it to it’s former glory the challenge may well be worth it.

Abercromby’s Rob Vickers-Willis had two of the next best with 2 Willis Street, Prahran selling for a bullish $2,111,000 (3 bidders) and 14 Wheatland Road Malvern going post auction for an undisclosed amount in excess of $2,250,000. An impressive 6 bidders from a crowd of a 100.

Marshall White chipped in the 67 Emo Road Malvern East which sold for $1,381,000 through Phil De Fegely and John Bongiorno managed a smallish crowd but with 3 bidders to an “under the hammer result” of $2,245,000 at 94 Claremont Avenue Malvern.

The lack of bids for some of the pass-ins could not be put down to the quality of the property. For example the two South Yarra terraces which went to auction, at Kensington Road and Davis Avenue, had both undergone extensive and quality renovations with very few if any negative comments on their quality and style. Neither street would be classified as South Yarra’s best but they were both quality houses.

Equally, 5 Hopetoun Road Toorak was renovated to a very high standard and sitting on about 1000 square metres of land.

So why no bids?

Well, price is about the last remaining variable-  it is not going to be the strength of the marketing campaign or auctioneer as a number were handled by the Kay & Burton “A” team.

If there is a message for vendors: to sell, you need a willing buyer and a willing seller – and agreement on price.

Prices do not keep rising every week and your house may not be seen as 15% better than your neighbour’s house just because it comes onto the market a month later.

Make Good Decisions

Toorak: 7 Teringa Place: Bought for $4,105,000. Bidderman 6 -Wow. John Bongiorno back from holidays and applying THE LOOK as strong as ever.

If the vendor and/or the vendor’s agent get a touch  aggressive concerning the price of a property in this market, the property is more likely to be passed in – and the only way to sell it is to meet the market. Andrew McCann of Ben Mac stills believes there is plenty of demand out there but some vendors have not taken their rose coloured glasses off and he even suggests that some (other) agents may be over promising on prices.

Today in Toorak, South Yarra, Kooyong and Malvern we attended 9 auctions. At 5:30 pm,  the results were seven pass- ins while two, 7 Teringa Place, Toorak (James Redfern Marshall White)  and 16 Belson St Malvern East ( both proxies for land value) sold well.  This ratio is a bit different to the REIV numbers where they report 4 pass- ins from 18 auctions.

Activity over the next week especially at the weekend will give a better idea of where the market is heading for the first half or the year.

The Belson Street auction (Ian McLennan and Danielle Waterton of Benmac) was interesting with 6 bidders making close to 100 bids for an ungraded property  on the Gascoigne Estate. The activity was increased by the presence of what appeared to be a couple of developers. If we fully discount any value for the house  then the land was priced at  approx $2650 psm- about what we would expect for this area.

Similarly Teringa Place could also be viewed as a proxy for land values. It was bought for $4770 psm, not quite as strong as the  $6000 psm achieved on Montrose Court just before Christmas, although both Courts are similarly positioned off major Toorak boulevards and the houses were of a similar vintage.

Of the pass-ins 263 Domain Road South Yarra (Anthony Cantor of Kay and Burton)  could also be viewed as land value. This site is 394 square metres and passed in on vendor bid of$2,000,000 or $5050 psm. What we would expect for the area.

Most results are being reported - except mainly South Yarra and Toorak – the Top End.

One that has been a long time on the market were bought this week. 14 Gillman St Malvern East with Mark Lawson of Jellis Craig was bought for an undisclosed but very solid price of around $2.2 million. Hats off to his patience on that fringe Gasgoine home – we didn’t think he would get that.

So if you are buying let us help you with the numbers – and be patient. Then strike!

Make good decisions

Auctioneer Anthony Grimwade and agent Tim Wilson (RT Edgar) reluctantly open with a vendor bid at $1,350,000 to a motionless crowd of 50. However there was action afterwards with a bought price of $1,510,000. 1 bidder.

At the end of last year there were a couple of auctions in Toorak which serve as benchmarks for land value – at least for normal Stonnington properties.

The first sale was at 44 St Georges Road. This 600 square metres of land – with a knockdown house on it, sold at auction through Gowan Stubbings of Kay & Burton for $2,710,000 equivalent to $4516 psm.

The second sale was at 4 Montrose Crt of 815 square metres of land plus a knockdown house through Justin Long of Marshall White. The price achieved has not been disclosed but strong rumour is that the property sold for close to $5.o million. If that is correct, the price psm is close to $6000.

If we use these prices as a starting point when looking at the prices achieved by the trophy properties which sold late last year a number of interesting trends emerge – including the emotional factor in house prices.

For example 13 Albany Road sold for a reputed $18.5 million. This house is on 2400 square metres. So if we construct a matrix of bought price less land value the balance is house value ( including emotion).

Land Value-psm Total Land      House Value

$4000                    $9,600,000     $8,900,000

$5000                   $12,000,000   $6,500,000

$6000                    $14,400,000   $4,100,000

On these land values, the house value probably looks OK.  Land on Albany Road is probably higher than St Georges Road  and lower than Montrose Court so if we accept $5000 psm the house was valued at around $6.5 million.

We understand Robert Mills was engaged to undertake the renovations so spending an additional$3-4 million may not be out of the question.

When added to the original value of the house these figures seem to  hang together.

Does the  sale of Miegunyah on Orrong road conveniently fall into the same rational basis?

It reportedly sold for $23 million.

Total land size was 8800 square metres so if we construct the same matrix it looks like this.

Land Value- psm       Total Land                House Value

$4000                       $35,200,000            – $12,200,000

$3000                       $26,400,000            – $3,400,000

$2000                        $17600000                 $5,400,000

Hardly convincing – but was Albany such a good sale that defied logic or was Miegunyah a snap at $23 million? No- it was more likely the historical overlay on Miegunyah which restricts any subdivision restricted the value.

To another trophy property: Dunraven, at 55 Clendon Road (land is 2684 square metres)  at say $5000 psm and gives an indicated price  in the region of $13.5 million plus value of existing house. Not far from the asking price of around $15 million+.

Bona Vista at 59 Kensington Road has reportedly been sold by Jeremy Fox at R.T.Edgar for an undisclosed amount – but the asking price was in the $13 – $15 million range. Do the numbers work here? Well land is 4463 square metres and at say $3500 psm – Kensington Road is not Albany road or St Georges Road- the total land value is $15.6 million. At $3000 psm the land value is $13.4 million – so it looks as though the asking price ( with a potentially great house included) is within reasonable  limits.

So when buying, think about what you are buying and what drives the price. Always start with land and ask  several agents  what they think land is valued at in that region or even street.

Looking forward there will be a number of sales which may confirm these prices – but in the lower stratospheres. The first is at 23 Adelaide Street in Armadale which sold last Saturday for, we believe, close to the top of the Benmac range of $2.7 – $3.0 million. I rated this as land value only and I think the agent Richard McKinnon of Bennison MacKinnon would not disagree. Land size is 806 square metres. That puts land value at around$3500 psm which looks similar to a number of sales close by in the neighbourhood.

Another sale coming up is on 3 Wannon Crt. Toorak also through Bennison McKinnon. This time Eliot Gill is handling the sale. Land is 602 square metres and the indicated price is $2.1 – $2.3 million. So land is being priced at approx $3600 psm. This is a good block of land in a quiet court but the shape of the land will be the limiting factor as the street frontage is pretty narrow as it then widens out but not with much depth.

Make Good Decisions

Malvern East: 74 Central Park: John Bongiorno of Marshall White schmoozing the crowd at a Park Auction: Passed In.

Surprisingly Malvern East’s Gasgoine Estate was dead as a doornail today with 3 pass-ins from 3 homes (0% clearance); as was Toorak with only 1 from 5 selling or 20% clearance rate but everywhere else was very strong.

Oliver Bruce of Bennison Mackinnon - a star on the way up. Watch this space!

Overall Stonnington which covers Armadale, Malvern, Malvern East, South Yarra, Toorak and we include Prahran was 68% on the 28 auctions we looked at.

Bidderman was  2.6 – which was still strongish considering the properties.

James Auction Reports

36 Peel St Prahran – Bought Afterwards – One bidder
About 60 people attended this auction, which opened with a vendor bid of $1.05 million. The sole bidder made a bid of $1.06 million but there were no further bids from the crowd or vendor and the property passed in at that price. Damien Davis auctioneer.

117 Peel St Prahran – Bought Afterwards – Two bidders
A genuine bid of $1.37 million opened proceedings here. Two bidders from the crowd of 30 people joined in and the property was passed in for $1.44 million. It sold afterwards for an undisclosed figure. Robert Vickers-Willis auctioneer

105 Stanhope St Malvern – Bought – 5 bidders
A bidder from the 80-strong crowd opened proceedings here with a $1.7 million bid. Five bidders bid strongly here, with the bids climbing quickly. On the market at $2.175 million, the property sold under the hammer for $2.4 million. Auctioneer Andrew Hayne

109 Claremont Avenue Malvern – Bought – 6 bidders
In front of 70 people, auctioneer John Bongiorno opened with a vendor bid of $1.8 million. Six parties joined in, bidding strongly and steadily to see this property on the market for $2.2 million and sold under the hammer for $2.31 million. Auctioneer John Bongiorno

6 Cross Toorak – Passed In – One bidder
A quiet auction here, with 40 people watching and just one bidder. Opened on a vendor bid of $4 million and the sole bidder added $20,000 to that figure. The property passed in and remains unsold at the time of writing. Auctioneer Jason Scillio

112 Charles St Prahran – Bought Before

47 Finch St Malvern East – 3 bidders
Just over 130 people at this auction, which opened with a vendor bid of $2.1 million. Three bidders joined it but it was not enough and the property passed in at $2.3 million. Auctioneer Justin Long

3 Forrest Court Toorak – Sold Before

74 Central Park Malvern East – No bidders
This auction was held across the street in Central Park, giving proceedings a festive, summery air. About 200 people enjoyed the warm weather and park setting but this did not translate into bids. Auctioneer John Bongiorno opened with a vendor bid of $2.6 million but there were no bids and the property passed in at that price.

Buy Well and Make Good Decisions

Armadale: 8 Alleyne: Crowd of 90: 4 bidders; Bought for $1,515,000. Justin Long directing proceedings

Well done, Iain Carmichael. Well done, Richard Mackinnon. Well done to all directors of Bennison Mackinnon Armadale.

Toorak: 9 Millicent: Sold last night for around $4m. Jeremy Fox must be gettng camera shy at auction: Thats 2 pre auction sales in 2 weeks.

Have you noticed a change in the air in Stonnington, have you noticed the new hot Armadale company to sell your home through? Bennison Mackinnon. They have taken a stance on buyer respect and it seems to be paying off in spades. They do seem to have more listings we want to buy.

Early days, I know, and fingers crossed that they do not somehow snatch defeat from the jaws of victory. But they have recognised that buying a home is about win-win. A win for the seller and a win for the buyer.

They have started quoting sensibly and, seemingly on the homes they do provide a written quote for, then the reserve is within the quote range.

Over the past decade, I have found all my dealings with Iain Carmichael, Andrew Macmillan, Elliot Gill, Mark Stobart, Tim Bennison and Andrew McCann to name a few to be straightforward and I now trust them (I hope this does not come back to haunt me) that when they put a written quote on the property on the internet I now actually believe the reserve is within that range, if they confirm it to me when I ring.

Sure, we understand that things change, so we check the internet regularly to see if the quote has changed but there seems to be a genuine attempt to get quoting right or at least better.

We sincerely hope they continue. Of course our company has an agenda – really what is it? We do not receive commissions from Bennison Mackinnon – ever (or from any company for that matter). We cannot ever tell you a time when we found post-auction or private sale negotiations any easier than with Marshall White or Jellis Craig or Kay and Burton.

Here is how their new policy is working practically.

We bought this home yesterday. 2 Beaver St Malvern East.

James Home Rating 703 out of 1000: Classic Gascoigne home with most original features in good order. Good land size and car access to the rear and house has such a wonderful street presence. A fair bit of work ahead here but very hard to go wrong. South-facing rear is a concern in terms of passive solar gain in winter, yet with a smart rear renovation, this issue can be addressed in some way. The other concern is that its close to Tooronga Road. Rated as land only here – could easily rate well into the 800s when renovated.

James Control Price: Dirt ($2,006,000) + House ($400,000) = $2,406,000. Multiple sales in area to show land price eg 25 Central Park Road. Land content 83 per cent.

James Auction Report: As expected, given the offering, a good crowd of 70 people saw auctioneer Iain Carmichael open here with a $2 million vendor bid. Two bidders joined in and quick bidding ensured a result. Announced on the market between $2.1 and $2.15 million, this property sold above the reserve and under the hammer. Not an unexpected result: this prime Gascoigne Estate property, ready for renovation, was worth fighting for. Bought for $2.42 million.

James Post-Auction Examination: As expected if there was competition. The quote was $2 to $2.1 million, and the reserve was within the quote. The owner wanted to sell and was straighforward about his needs and he got it sold. For the record 2 Beaver last sold with no improvements at the peak in late 2007 for $2.1m. The sale of today represents a 15% increase during that time.

We did not buy this Benmac home below two weeks ago and it remains unsold:

17 Hunter St Malvern: In this instance, we had two prices, one for on the market and one for pass-in.  We were notified of a signifcant reserve change – we bid – but only up to a level our client indicated as fair. There were other bidders but it was not declared on the market, so no sale. Of course, they may get they price – but one suspects it may be lower than what would have been paid under auction market conditions.

You may think this is some con – fair enough – OK – your business. If quoting gets under control in Stonnington and Boroondara (like it is, last time we bought, with say Nelson Alexander in Carlton or Hodges in Bayside or Hocking Stuart in Bentleigh to name a few) – which it can through the leadership of Bennison Mackinnon and Marshall White, Jellis Craig, Kay and Burton and RT Edgar, then, as James Buyer Advocates, we will lose a percentage of our business from clients who hire us simply because they do not trust agent quotes. What is our secret agenda then please?

Real life yesterday: I was under the pump yesterday: had an auction to go to in Rosanna, a meeting and then the Beaver St auction and then a family commitment. I also had a new client in Malvern that I needed to give some feedback to. Hand on heart, I went to four Bennison Mackinnon properties because I felt I would not be wasting my time, as I knew roughly where the thoughts of the vendor were.

Sellers – more buyers will come to your home when buyers know a sensible guide price for it and they trust the agent. We paid $300,000 more than the reserve yesterday on Beaver St and we were happy, the client was happy, Bennison Mackinnon were happy and the seller was happy.

On some occasions, we have a two price strategy. One price for on the market and one price for pass-ins – guess which price is higher? When you think about listing with an agent, think about an agent who can get more buyers through your door – the agent that will do that will be the one that buyers can trust and have trustworthy price indications. As a buyer, if you have 20 homes to look at on a Saturday and five have known, believable price guides within your range, which five will you look at?

This is not to say that, on some properties in this current market, that no quote is not the right thing. High-end homes; quirky homes; runaway demand homes - no quote is advisable and sensible. I mean look how wrong we are on some homes with James Control Prices. As a vendor, you have the right to have any or no reserve – but, on some homes, to exercise that right, you may be paying a very big price when you do not get qualified buyers to look at your home.

Sellers, we are not saying that across the board Bennison Mackinnon agents are better negotiators than Marshall White or Jellis Craig or Kay and Burton agents. What we are saying is that by putting a quote that represents your price wishes, adjusting it along the way to reflect buyer/agent feedback and advising a reserve prior to will get more buyers through your door than if you did not advertise a credible price reserve (eg. unless your reserve is well above market – which you rarely get and, more often than not, torpedo your selling campaign).

Sellers, can we also add that over the years, despite what you may be told, that many buyers will pay a higher price for surety – eg when buying they know the price they have to pay rather than some wishy washy crap about my vendor has a buying range.

Sellers you have a real choice now – a company like Bennison Mackinnon will put out sensible price guides with your reserve in it if you so desire and we as a buyer agent are going to support that company by directing as many buyers and clients to their homes as we can - and we will actively support any other company within Stonnington, Bayside and Boroondara where they are making a genuine attempt to inform and not mislead. Not expecting perfection just integrity. Of course for our clients we will still look at all homes – it is just Ben Mac homes will be first cabs off the rank if they are the only ones with price guides with integrity. Life is short.

We as a company have the utmost respect for the people at Marshall White and Jellis Craig and Kay and Burton and so on and what we say here may only hurt our relationships with them – please we do not wish to – we really do respect many of the agents that work there. As a whole they are great agencies. But this is too important. If we as an industry can get quoting right and maintain the integrity of the auction system then we will have the best, fairest and MOST RESPECTED (through its transparency) system for selling homes in the world. And that has to be a good thing.

Surely agencies are smart enough to come up with a system that maximises the interests of their clients and buyers. Agents should talk price.

We support our competitor; David Morrell of Morrell and Koren on this issue and his aggressive stance. Low or misleading quoting is counterproductive and very damaging to our industry. Maybe it is not up to the regulators, maybe it is up to our industry to get its house in order.

Bennison Mackinnon seems to be genuine and trying and we trust Iain Carmichael and we are sticking our necks out here to support them so blatantly.

We at James Buyer Advocates have a new policy for Bennison Mackinnon if their reserve is within their quote range - with our clients permission we will adopt a far more transparent bidding modus operandi at Bennison Mackinnon auctions and any others that care to show buyers respect.

Apologies if we are over the top. Buying a home should be an enjoyable meaningful experience (to quote Trudy Biggin) – one that does not have to be full of mistrust – one where you can focus on the home and not the personality of the buying or selling agent.

Like umpires; the less you notice about us (buying and selling agents) and the more your see of the game (homes) the better for you (seller and buyer). It should not be about us.

Thank you directors of Benmac Armadale, a breath of fresh air. Please continue.

Stonnington had a strong weekend with most of the 10+ auction selling before or at auction. The other strong sale was 9 Millicent Toorak with Jeremy Fox of RT Edgar, selling the night before believed to be over $4m and if you said house value was $800,000 then land ended up $3600 per sq metre continuing the strong run of the last few weeks of this area.

Buy Well

Mal