2011 Best Auction Photo - I see Red: The Hocking Stuart boys - Andrew Stuart, David Wood and Michael Coen - bring a glimmer of colour to an otherwise dreary Melbourne day on July 30th. 20 Barrett St, Albert Park had no bidders but was bought after auction for $2,200,000. Sums up the year for most agents. Jen Milligan the reporter and photographer

At 6pm on Saturday, the James Clearance Rate for $M+ was 46% on the 24 auctions we attended. The Weekly Review Bidderman, our demand indicator, was 1.3.

This Weekend’s Market
It was a weekend that exemplified what 2011 has mostly been about – big enough crowds, and even spirited bidding in some cases, but ultimately a failure by many sellers to accept what buyers were prepared to pay. The overall market is definitely finishing the year on a flat note.

In fact, with the exception of two in Boroondara and one in Glen Eira, none of the properties we reported on sold under the hammer this weekend. By the end of the day, the final clearance rate for Boroondara was 47%, Port Phillip was 44%, Bayside was 36% and Stonnington 29%. To be balanced, overall it wasn’t an exciting stock weekend.

However one auction of excitement was 17 Yarraford Alphington (Andrew Simondson of Collins Simms). Our initial thoughts were $1.6m to $1.7m for value, our rating was 557/1000 and our finishing comment was “Overall a home that will attract a limited but probably very emotional audience”. The under the hammer result ended up around $400,000 away from where we initially thought and probably $300,000 over reserve (so what do we all know sometimes) as a couple of must-havers fought it out – further proof that if the property is well marketed and regarded as an A-grader, then strong prices can still happen. As 2011 draws to a close the market continues to remain two-faced; a reasonably strong one for a limited number of market priced A and B graders and another far bigger, far weaker and price falling one for overpriced A, B or C graders.

With the number of auctions dropping to next to nothing over the next couple of weeks before going into the long summer hiatus, this is our final Market News edition for 2011. This weekend’s auction reports are still available for viewing and our Buyer Advocacy office is open until December 17th.

Please read on however, for our summation of the year that was. Read on too for our James Market News Annual Awards and our revisiting of the best auctions of 2011.

2011 Table of Contents Christmas Edition

• 2011 – Year in Review
• James Market News Annual Awards
• 5 Great Auctions in 2011
• Christmas Thank Yous
• Legends’ Thoughts on 2012 will be in Buyer Masterclass over the next week.

2011 YEAR IN REVIEW

2011 has been a year some in the property market – chiefly sellers and some agents – would possibly rather forget. For buyers it’s been a little better, when there’s been a reasonable supply of good stock. But buyers’ enthusiasm has been constrained by nervousness about economic events unfolding beyond our shores. So while they’ve been out there looking, and while in many cases they’ve been keen to buy, they haven’t wanted to pay too much – certainly not as much as what many sellers are demanding. For many sellers it’s not been a happy result – and some of them will be still on the market with their now stale offerings in the new year.

Read on for our season-by-season account of how the year unfolded.

LATE SUMMER

After 2010 finished in a state we described as ‘balanced and healthy’, 2011 started with a bit of warmth, even moving into ‘hot’ for the $1 million market. On the last weekend in February, clearance rates for the auctions we attended were up at 74% and Bidderman was at 2.

But a flush of new stock slated to come on to the market in March and April would be the test of whether the warmth we saw in the last weekend of summer represented an underlying hotting up or a temporary New Year afterglow.

The story was different with the $3m+ plus market, which was dead as a doornail with very few homes changing hands. Geographically too, the trend at the Top End of the market reversed – with Bayside performing a lot better than the Inner East (in fact Brighton townhouses at the $3m level were almost walking out the door).

AUTUMN

The New Year afterglow had indeed faded by March, with buyers increasingly nervous about world events, the stock market, the government – the whole shebang. Coinciding with this buyer nervousness was a flood of new stock coming onto the market as would-be sellers also nervous about the future decided to try and sell quickly.

The surge in stock was not taken up by the market and consequently we saw declining auction clearance rates and bidder numbers, and a market groaning under the weight of stock numbers. Not only was new stock coming on that would previously have been gobbled up, but it was having to compete with an increasing backlog of pass-ins from previous weeks. This compounding rate of stock build meant price only had one way to go – and that was down. It wasn’t quite a price free fall, however, as most sellers, including those  at the $3m+ level, had the resources to ride out what they thought was just a blip of negativity.

Red Zone - Bidders under 1.5 - Falling Prices - Click to enlarge

EASTER

From around Easter the market had the first of two short periods of 2011 price spiking (September was the other). Those sellers who had the good luck or good management to be in the market at this time saw some good results – especially those with sensibly priced A grade properties. 

May 21^st was probably the high point for sellers, with the clearance rate a whopping 84% on the 37 auctions we attended and Bidderman of over 2. It was the 2011 weekend to be selling.

WINTER

However, the late autumn cheer turned out to be nothing more than a brief flare of optimism before we went into a grinding winter with little activity as the supply of good quality stock dried up, and buyers stayed home uninspired by what was on offer. It was not so much a negative as a boring market.

Prices flat-lined and even fell on lower quality homes. The exception was the rare occasion when a quality home hit the market, but overall the market was off by as much as 10% from the last peak in April 2010.

The unluckiest sellers this year were those that went to auction on August 6 the day after the stockmarket plunged by more than 4% on fears the global financial crisis was re-emerging. Just 3 of the 25 auctions we covered sold under the hammer – that’s 12% – though by the end of the day that figure had gone up to 55%.

After that weekend of panic, the rest of winter wasn’t quite the disaster that some had feared. It was more a ‘nothing’ market, with little good stock on offer, and most auctions seemed a tug of war rather than a race – even when there was solid support from buyers. Vendors refused to budge on price, and buyers weren’t prepared to pay what they saw as inflated asking prices – and the result, more often than not, was a stalemate.

Red Zone - Poor Price Matching - Falling Prices - Click to enlarge

EARLY SPRING

Early Spring saw a reprieve from the doom and gloom of winter, with the second of the year’s upwards price spikes. The $3 million plus market did particularly well. On August 27 we reported that 11 homes had sold for a total of $55 million in one week.  Clearance rates were back up over 60%. The heat stayed for most of the month of September at $3M+.

Why did this happen? It was like April – it was about buyers looking into the future and seeing not a lot of good stock coming on. The supply and price equation showed that demand was there when conditions were right – and September proved it.

But by mid-September we were back in the ‘two speed market’. This division between over-priced lower grade properties and good quality well priced properties had been going on all year, but it became more entrenched as the year went on and buyers flocked to A-grade auctions and stayed away in droves from the rest.

At the lower end it was a vicious circle of low bidder demand resulting in poor results, making sellers reluctant to put their houses on the market. Which meant little in the way of good stock around, so buyers already feeling cautious about the economy anyway weren’t bothering to go out there and bid on the little that was on offer.

Meanwhile, at that upper level, where buyers weren’t so concerned about the economy, they were snapping up whatever good quality stock was coming on to the market. All you need is couple of bidders at this level to push the price up, and even at this point we were seeing auctions with three or more.

However the up spike was short-lived. By the end of September the heat had dissipated as opportunistic sellers flooded their properties onto the market. Within a fortnight most of the good news for sellers was over. And, as it turned out, that was it for sellers in terms of good news in 2011. For buyers though, the good news has rolled on for the rest of the year with a great combination of falling prices and increased choice.

LATE SPRING

With the AFL season ending a week later than usual, the spotlight was on October 22 as the day of culmination for many auction campaigns and the biggest Super Saturday for 2011. 150 auctions were slated for the $1 million market in the Inner east and Bayside, three times as many as the previous week, and twice as many as we’d seen on any weekend since autumn.

But it was a day of pouring rain and frustrated hopes for many sellers, with a clearance rate of just 43% on the 46 auctions we attended. And many of the properties that passed in on that hopeful day sat on the market for weeks to come. Three weeks after Super Saturday our survey showed that a third of those properties still had not sold.

Even so, the market was not exactly on its knees. Yes, prices were continuing to fall and in some cases falling quite substantially. But when vendors were prepared to fall in with the market, there were bidders. In fact, if choice and falling prices are your definition of a good buyers’ market, this was an ideal buyers’ market.

2011 - Falling Prices - Click to enlarge

WHAT DOES THIS MEAN FOR 2012?

There is a lot talk going on about the market being overpriced and the bubble bursting. But the fact is the bubble has already well and truly burst. Prices right now appear to be tumbling as much as they did in the GFC. Even on some good homes they are down 5%- 10% and as much as 20% since our last high water mark (April 2010) on the weaker homes.

But markets can turn quickly. To recap on recent history, we saw this kind of price discounting through the GFC in 2008 – although, please the GFC was heavier than 2011. But we also saw prices climbing back up the next year, with  a mini boom occurring up until Anzac Day 2010. During that period some prices on some homes rose by as much as 30%. Our graphic representation to the right shows how prices have moved in the past couple of years.

And while we have seen big price drops in 2011 (on all but the best of the best), there is not the panic we saw three years ago. The market appears to be accepting these ups and downs as a normal gyration and these gyrations may well become bigger and more regular in 2012 as we all become more ‘fully informed’ through media saturation.

Our best bit of advice for 2012: The Market is Two-faced:

Look at the Bidderman stats over the last 3 weeks. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. It was the same story last week, with 17 bidders on 4 homes but only 15 bidders on the other 21 homes we reported on. This week we saw  26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. Which shows that properties that are hot, are really hot. Those that aren’t, need a good agent.

These facts should show you the importance of

• Research
• Multiple Negotiation Strategy – low and high
• Price Framing – may be $100,000s away from where you are.
• Selection in buying now determines for your future in selling.

Auctioneer of the Year – Growling Jack
It was an easy choice this year: ‘Growling’ Jack Bongiorno has been the standout auctioneer in our patch in 2011. And while it is true an auctioneer is only as good as the selling agents who support him (in this case Heather and Rae in particular), you still have to go out there and perform.

In the past we have been critical of Growling Jack’s opening waffle (it was too long) and while that has improved, there are still auctioneers with a better opening patter. So why is he our auctioneer of the year in 2011?

Simple – in the guts of the auction and at the business end he is the strongest, most effective performer out there right now. In a tough market place – and many auctions are tough right now – Growling Jack takes the audience and the bidders on. He challenges them, makes them laugh, makes them cry and most of all he keeps things going – rarely missing a beat in terms of numbers or momentum. In 2011 if you wanted to see the best, then you needed to watch a full-on Growling Jack auction – it was on many occasions a masterpiece of theatre and business combined. Hat off to you Jack!

Also on the podium are Phillip Kingston and Antony Woodley – these guys a good, bloody good and they extract money from the crowd where others can’t. Philip Kingston is still the auctioneers’ auctioneer and the most consistent performer over the last decade in our opinion. Antony Woodley is a pro – his spiel, tempo, bid retention, bid suggestion are almost faultless and his auctions should be viewed by young auctioneers as a training manual.

Agent of the Year – Marcus Chiminello
Only a few years ago Marcus was our young agent of the year; this year he seems to have really come of age. Particularly towards the end of the year, he flew home to the finishing post with some very big deals. Specialising in new homes and apartments, his years of consistent data basing and marketing have really begun to pay off and Marcus’s name was, in 2011, the name we heard the most when it came to the big deals getting done. His strengths lie in two things – his ability to match a buyer and seller and his way of doing business. We find it simple, open and straightforward. Yes he does step quote, like almost all Marshall White agents, but he is more open about it and guides buyers through the process a lot better than most (he keeps you informed and if you deserve it, he treats you with respect). There are many great agents out there in 2011 and in our opinion Marcus Chiminello was amongst the best of them. Hat off to you Marcus!

Agency of the Year –Kay and Burton
In 2011 Kay and Burton’s performance in a tough market at the Top End set them apart. In their specialty, the Ultra Top End, they have made their mark with some very substantial sales and they have done it consistently. They have gained a first rate performer in Scott Patterson to head up their Hawthorn Office and unfortunately lost a doyen in Gerald, who has retired. All through this, under Mike Gibson, they haven’t missed a beat. What separates them from their main rivals, besides their consistent professionalism, is they have not attracted anywhere near the level of negative comment about their quoting from buyers we deal with. Kay and Burton are a first rate company and this year in our opinion they have been the best we have come across. Hat off to you Michael!

Innovation of the Year – The Kay and Burton Report
Sure others do it – but nobody does it as well and the first few minutes of this report are compulsive viewing each time it comes out. It’s slick, informative and is looks solid – a great marketing tool that lifts the bar for all of us. Hat off to you Tracey.

Young Agent of the Year – Campbell Ward
Honesty and Decency are the two words we associate with Jellis Craig’s Campbell Ward when it comes to real estate. In fact Campbell is very much NOT how many of you may think about selling agents – he is quiet, polite and generally low key. With his partner and mentor Peter Batrouney they form one the more effective teams in Boroondara. Campbell we hope you never change and we also hope that more and more young agents see that you can park you ego to the side, you can be open and honest with buyers and sellers and you can have a very successful real estate career. Hat off to you Campbell and may many others follow in your real estate footsteps.

Raspberry of the Year

Step Quoting – when it’s done inappropriately, (and not all step quoting is illegal or immoral),  it is the biggest negative to our industry and we urge buyers not to tolerate blatant lying around what an agent expects a property to go for. Report them, put in claims for your expenses such as building and pest reports, hassle them, ask them for a comparable sale to justify their attempt to treat you with contempt. Sellers – when your agent lies for or to you in this market, you may actually end up with a lower price than if your agent has been truthful. Buyers are not idiots, they will pay you back after a pass-in, if they feel you have not negotiated in good faith.

The Bayside Market – we are not sure what’s in the water in Bayside. But it has clearly affected some vendors and some agents there. The Bayside Market is actually a lot healthier than it may appear in terms of would-be buyers; but as long as sellers and agents remain so far apart when it comes to asking price versus market price,  the market will continue to operate on lower levels than it needs to.

2011 Auction Report of the Year – Reporter Daniel Ehrenreich
Super Saturday – October 22nd  – 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders

Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

September 3rd – 29 Rose St, Armadale, John Bongiorno (Marshall White); Under the hammer $3,030,000, 9 bidders

Well here we are with the MW trifecta – Jack, Rae and Heather. The monkey and the two organ grinders some unkind people may say. The crowd is big, but not unexpected (125) and they are here to watch the theatrics and possible fireworks as this home was only bought and sold 3 years ago for a tad under $2,500,000. There is talk the current owners want a fair bit more than their money back. We get the usual start from Jack – solid and professional and then to the real theatre. $2,000,000 bid from Bidder One is refused/half taken and a vendor bid at $2,250,000 is slammed back – geez Jack is in an aggressive mood. A second bidder chimes in at $2,275,000 and a 1/2 time break is taken. That was a surprise. “Get on with it” Jack barks out at the crowd upon his return. Bidder Three tries $10,000 – “No” screams back Jack. He has obviously been well prepped about big interest by Heather and Rae, but nonetheless it’s still very aggressive bid refusals. Two more bidders take it up to $2,425,000 and we have some momentum – some real momentum. Jack says there is no reserve – and he issues the challenge bid or you’ll  “get overrun” at the pass-in. Boy, is he sticking it up the crowd – Jack is at his petulant best and it seems to be paying off. Please this is not gay abandon – Heather and Rae must have briefed him there were multiple bidders. Bidder 5 – $2,500,000. Bidder 6 – $2,600,000. Jack has won the crowd over with his self deprecating humor intertwined with a certain downright arrogance that he has in spades today. Lots of bidding and we are at $2,800,000  – Bidder 7. $2,875,000 and a couple of bidders rightfully push hard for an answer to the question.  “Is it on the market Jack?” they repeatedly ask and belatedly and smartly Jack retreats back inside for an answer – this was a time for concession, empathy, not bravado and Jack read it perfectly. On his return – wait for it “Yes it’s on the market” he fires into the main “on the market” enquirer and Jack adds “now bid – no pressure but we’re all watching you”. $2,925,000 – Bidder 8. Straight through $3m with a new bidder – that’s 9 in total. Bought under the hammer for $3,030,000. Wow! And the market is dead for all homes – NOT. Not sure who should take a bow for this – certainly Rae and Heather – and the home, the sellers, the market, Jack, the bidders. Why don’t you all take a bow. Bloody ripper auction.

August 13th – 4 Glan Avon, Hawthorn, James Tostevin (Marshall White); Under the hammer $2,815,000, 3 bidders
Enchanting riverside parcel of land with a couple of possible development issues, sees a large crowd of 130 in attendance wondering what this rarity will bring. James Tostevin is our auctioneer and the centrepoint to his opening spiel is a letter from council saying basically no heritage overlay. This is why James is a great agent – attention to detail and he powerfully makes his case that you can build what you want (STCA). To the uninitiated most would not realise just how powerful this presentation was by James. It’s rare you see a commanding performance before the bidding even begins, but his delivery was strong and persuasive – obviously this has been a issue and he buried it firmly, leaving bidders in no doubt and free to raise their hands. I dare say he was also the catalyst in getting this letter – many agents would simply not have bothered by saying – “make your own enquiries”. Anyway to the bidding – Bidder one opens at $2,000,000 and an immediate vendor bid at $2,200,000 is placed on top. Bidder 2 at $2,250,000. Bidder 1 – $2,300,000. Bidder 3 – $2,400,000. We move between bidders in $50,000’s to $2,550,000 and then in $25,000’s and then less. A word back on the auctioneer – James has always been highly regarded as an auctioneer by us – but I suppose because he is such a good agent we have always seen him as that first and auctioneer second. Today his bidder suggestions, pace and pathos were near faultless. This was turning into a truly command performance. After a small momentum drop we arrive at $2,625,000 and James calls a half –time break. This no doubt is to seek vendor instructions, but it is also because he too feels a drop in momentum and a break is called for so as he can return and revitalize his dueling bidders. We get to $2,700,000 and then $2,710,000 and it’s still not on the market: James suggests a bid to $2,750,000 which gets the nod and immediately it’s announced it on the market. Well done we are playing fair rules today not the bulldust pass-in and Claytons reserve. As we begin to slow James eeeks out every last bid with good humour and a certain intangible feeling which gets the hand of the underbidder up a few more times than perhaps he wanted to. It looks like it’s gone at $2,810,000 but a final $5,000 and the other bidder has it – exhausted and delighted all at the same time. Really a near faultless performance with no referral to notes – and people think anybody can be an agent or auctioneer – bravo James a brilliant, powerful 20 minutes and in the Top 10 of all auctions I have seen.

May 21st – 17 Murchison, St Kilda East, Phillip Kingston (Gary Peer); After Auction Just under $1,700,000, 2 bidders
Nice little home this one, well thought out with unusual entry but it works for me. Quote is $1,600,000 to $1,760,000 and while car parking is not brilliant, it is an above average typical quirky St. Kilda East home and should have interest. At this price, the quote seems full, well let’s wait and see. Just about to start and Phillip says he is holding it inside. Good idea it’s cozy by the fire. Down to business; we like Phillip Kingston. You know – he is one of Melbourne’s Dons when it comes to auctions. This crowd of around 40 is in for a treat as the rear is a great amphitheatre for this sure to be entertaining auction. Phillip would have been a stand up in a previous life or a politician – he is simply the most powerful story teller that operates on Melbourne auction weekends and today with emotion and genuine passion he leads the crowd into a place where they all want to be and that place is here. A nice little interim joke, the crowd laughs gently as Phillip calls for bids. Nothing arrives and a vendor bid is placed at $1,600,000. A few jokes about his fellow agents and Phillip reminds any potential bidders that bid now or face a non transparent post auction process. No action and first call, second call, half-time and zippo. Just before Phillip closes the auction, a ripper question is asked. “Phillip can I can bid lower than $1,600,000”. “No” – politely comes the reply. And finally $1,605,000 comes and a second bidder in at $1,610,000. Game on at the death – or is it. It’s like drawing teeth and surprisingly that’s all she wrote. Passed In at $1,610,000, a surprising first act to this two act play. If Phillip couldn’t get another $5,000 then there wasn’t another. We await the final installment. Postscript: sold after within the range – believed to be under $1,700,000.

February 26th – 33 Middle Crescent, Brighton, Jason Swift (Hodges); Bought under the hammer, $4,300,000, 3 bidders
“Hey start me where you like – somebody bounce my ball” cried out the cockney accent of Jason Swift. I loved this auction; it was entertaining , bold and good ‘ol fashion fun. Jason Swift gave us piles of corn, humour, clichés and he gave the auction something else – character and the more important – momentum . At first you might think, hmmm bit strange – bloody Pom doing an auction – but mate he’s as Aussie as Jack Thompson and I loved the way he auctioned this home. The crowd was spread out – the vendor wanted a big but not ridiculous number and with good work pre-auction and a classy performance on the day, Hodges got what their client wanted. Well done Jason; I’m not sure how many people know just how good that was – bringing a crowd with you at this level is what only a few can do well. That was definitely a 2 hat performance. Opened at $3,000,000; on market at $4,200,000 concluding under the hammer at $4,300,000. Great theatre and a great way to finish the day.”

Thank Yous
Even though we are on the other side, as a group we receive mentoring and support from James Connell, Mike Gibson, Gerald Delany, James Tostevin and Richard Earle and many others and we thank them for that. Personally I find my chats with Rob Vickers-Willis, Justin Long, Scott Patterson, Hamish Tostevin, Peter Batrouney and Richard Winneke and many others very helpful and stimulating. We could not produce what we produce each week without the access of selling agency principals such as David Hart, Tim Derham, Jock Langley, Stephen Tickell, Peter Kennett, Iain Carmichael, Geoff Cayzer, Andrew Stuart, Campbell Cooney, Bill Stavrakis, Jeremy Fox and Jonathan Dixon to name but a few – so thank you. Each week we are out there sniffing around, digging things up, reporting the good and the not so good; yet rarely do we have any interference and never have we been pressured to change anything. In a world of prima donnas (supposedly) we get a very fair run and we thank almost all selling agents for that.

Buyer Advocacy has an important role to play in providing an alternative voice for buyers and we acknowledge the contribution of our main competitors in David Morrell and Chris Koren.

While we don’t agree with everything Chris Vedelago from The Age writes and no doubt vice-versa, we acknowledge his contributions as being the best overall in the mainstream press. Its amazing to us the lack of quality insights provided by the dailies into Melbourne Property. Often they are no more than a collection of dubious quotes cobbled together with no meaning or value.

We would also like to thank Eileen from the The Weekly Review who puts up our Buyer articles most weeks, even the ones that carry some controversy – thanks for staying brave.

To our own production team leaders in Simone Clarke and Jen Milligan thank you for another great year – I still don’t know how you organise what you do each auction week. To my personal editor Karin, who keeps me in check, thank you.  To our independent management advisors in Chris Farrell and  Peter Tanner thank you. To co-workers Guy, Julie and Naomi and partners Gina the Boss and Architect Adam thank you. To all our auction reporters Kate Agnoleto, Debbie McTaggart, Joshua Bong, Doug Paget, Daniel Ehrenreich, Lexie Stewart, Nikki Hills and the real old boy, David James, another great year of reporting and thank you – without you none of this would be possible. To a few of our favourites who moved onto greener pastures this year in Michael, Kris and Peter and our new IT partners Kate and Michael at Andmine thank you.

And finally to all of you who come up to us at opens and auctions and say nice things (mostly), who write tens of  letters to us every week, asking us questions and saying nice and not so nice things (fair enough if you keep it polite) – thank you. And lastly to you, who gave us  over 500,000 visits (incredible stat from Google) during 2011, thank you all for your support. We at James hope you have a safe and happy Christmas and New Year (we are open till December 17th) and look forward to seeing you next year in 2012 to do it all over again (office opens 16th January) – our first Market News will be back in mid February 2012.

Monday 28th November – 57 Cole Brighton ( Peter Kennett of Hocking Stuart). A family home with some floor plan issues that has been on the market for sometime, has been bought after a few interested parties were gathered together in an Expressions of Interest Campaign and one person popped up over $3,000,000. We rated the home 757/1000 mainly on its position and land characteristics.

Big auction, big crowd and big bidder numbers: 98-100 Mont Albert, Canterbury, Alastair Craig (Jellis Craig), under the hammer, $3,380,000, 6 bidders

End of Spring Market Summary

Bidderman: The stats over the last 3 weeks (below) highlight in our opinion exactly what has been happening to a large extent all year. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. Last week it was the same story – 17 bidders on 4 homes auctioned and only 15 bidders combined on the other 21 homes that we reported on. This week we had 26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. If you are hot, you can be really hot and if you’re not then you need a panadol and a good agent.

Clearance Rates: Basically on auction day you have a 50/50 chance of selling – although demand for $3m+ properties has weakened in last fortnight.

Stales: (long term pass-ins) The market is acting on properties where prices have been adjusted, and continuing to pass over homes where the vendor remains committed to a price rather than a result. One month after Super Saturday a full third of the homes that went to auction still had not been sold. It is not true for agents to say they are all being cleaned up. They are not.

Expressions of Interest – are no different to auctions. At the Top End last month we nominated 8 homes to monitor as having Expressions of Interest closing dates either side of the Melbourne Cup. Of those eight, four (50%) have sold around the proposed closing time and the others remain on the market. The four that have sold were goodies and they got exceptional prices. The other four – well, they remain unattached to a buyer.

The Top 3 things buyers can do to take advantage of what is on offer before Christmas.

1)   Find: Off markets, stales, rebadgers and pass-ins. Many homes are being re-presented after failed campaigns early in the year. If they failed on price then, why pay it now? Off markets are back in season as many recent buyers would be keen to see a quiet sale before Christmas rather than wait till 2012 – there may be a bargain there. Stales – don’t give up. If it’s a home you like then revisit with a  written offer – even if the asking price is baloney. Rule One in this market: if you don’t ask, you don’t get. Man up and put the offer in!

2)  Assess Price: Use past sales carefully and change their meaning – sales of six months ago are now the ceiling prices, not the floor prices (as in previous years). The market is going backwards in price, not forwards (A graders excepted).

3)   Negotiate: As buyers if you want to negotiate to your advantage while still maintaining a reasonable level of risk in terms of buying versus missing out on the home, then you need to be able to apply the Fisherman’s Friend Wet Fish Slap on overpriced homes. You know the commercial – where she gives him an uppercut with a wet fish. If the price is baloney and you are not going to pay it, don’t walk away – you may be doing yourself and the seller a disservice, as you may in fact be the best buyer. Go and hit the seller with the Fisherman’s Friend Wet Fish Slap and then apply pain relief afterwards. This is exactly what our selling agent friends have been doing for years in post auction negotiations. They hit you hard with a big number, then they offer to relieve your pain (slightly). So if you have a sensible price, go and offer it – you may well be the seller’s best deal and if you walk away because of your timidity, then both you and the seller lose. If aFisherman’s Friend Wet Fish Slap is not your caper consider hiring a professional who can help you – it’s invigorating. And of course if it doesn’t have the desired effect – consider moving on.

Saturday 26th November Weekend Auction Results

Bought

• 98-100 Mont Albert Road Canterbury (Alastair Craig) – $3,380,000 – 6 bidders
• 25 Grange Road Kew (James Tostevin) – Around $3,000,000 – 1 bidder
• 24 Anderson Malvern East (Heather Elder) – Around $3,000,000 – 2 bidders

Passed-In

• 2 Collins St Brighton – $2,975,000 – 0 bidders
• 1022 Malvern Road Armadale – $2,800,000 – 0 bidders
• 21 Wattle Road Hawthorn – $3,050,000 – 0 bidders
• 68 Molesworth Kew – $4,600,000  – 0 bidders
• 20 McGregor Middle Park – $3,200,000 – 0 bidders

Friday 25th November – 58 Howitt Road, Caulfield North has been bought for a record Caulfield price according to the effervescent Ross Savas of Kay and Burton. The price;  well can say they were talking $6 million and the calibre of the home leads us to conclude they would have got that, so over is definitely not out of the question. This was a truly great home, our James Home Rating of 838/1000 is one of the highest we have scored this year. The market is obviously still recognising and paying for great quality.

Thursday 24th November – 25 Montalto Avenue Toorak ( Nicole Gleeson) – Basically land only for the area as the home requires a serious reno – passed-in last Saturday on a lone vendor bid of $3,450,000 was bought today for an undisclosed amount.

Wednesday 23rd November – 58 Glyndon Rd, Camberwell (Jock Langley) Private Auction  BOUGHT over $3,300,000: Attended this mid week private auction  just in case a bargain was to be had. No bargain, with a very healthy Tim Derham – Abercromby’s auction – 3 bidders and passed in for $3,300,000 and bit – deal was negotiated after wards in excess of that figure. Strong result – this is still outer Camberwell!
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

Monday 21st November – 6-8 Myrtle St Brighton (Barb Gregory). This last weekend’s biggest auction – and another private one at that, was completed at a price over the quote of $6,000,000. So another solid Golden Mile sale with land in excess of 1600 sqm plus some solid improvements and another good result for Marshall White in Brighton. While private auctions are very secretive they seem to meet the vendors requirements for privacy and a buyers liking for transparency – perhaps a way of the future for some key homes.

Subdued mood: Toorak, 25 Montalto Ave, Jason Scillio (Kay & Burton), passed-in $3,450,000, no bidders

Saturday 19th November: At auction only two out of ten were reported as sold at the $3m+ level.

• 19 Florence St, Kew (Diana Healy) – Bought for over $3,600,000
• 2 Monomeath Pl, Canterbury ( Richard Earle) – Bought after for over $3,100,000

Pass-Ins at

• 47 York St, Kilda West – $3,800,000
• 24 Monaro Rd, Kooyong – $3,500,000
• 25 Montalto Ave, Toorak – $3,450,000
• 9 Berry St, East Melbourne – $3,200,000
• 11 Victor Ave, Kew – $3,000,000
• 2 Snooks Crt, Brighton – $3,000,000
• 26 Stawell St, Kew – $2,950,000
• 6-8 Myrtle St Brighton – undisclosed

Overall quite a weak day – although having been through many of those pass-ins I can say that a number were not the most exciting of offerings.

Friday 18th November: The Christmas Stock Flood has really gained some momentum in the last week with a large influx of homes coming onto the market right now – especially at the Top End (look at our stock graphs in Market News). This has to be good for buyers. Where in recent times our main role has been finding quality homes – the bulk or our work has moved to assessment and negotiation. Price is such a movable beast right now and it’s good, as a buyer, to have an open mind and strategies (within your acceptable risk v reward parameters) to take advantage of the lay of the land. Please that is not to say that all the goodies are being given away – far from it – but once a home falls into that certain category (eg stale, overpriced or a B grader) then significant discounts are possible – if the vendor wants to sell. Yes you need to know what to do, how to do it and when to do it – but professional advice can fill that knowledge gap for you. Two properties purchased in the last fortnight or so $700,000+ off the original asking price and that was a $3m home and $300,000+ off the original asking price and that was a $2,000,000 home. The market is operating normally – however now, more so than at any other time this year, it is a true buyers’ market – Great Choice and Negotiable Prices. Buy Well.

Wednesday 15th November: 4 Kiers Court Caulfield North (Phillip French)  one of the more distinctive homes I have seen this year is now reported as sold in excess of $3,000,000. Our James Home Rating was 684/1000 (see below) and what the owners did with a difficult block was in my opinion, amazing and the price was solid. Also a huge block at 181 Gipps St East Melbourne (Sarah Case) over 1000 sqm was bought undisclosed (over $5,000,000) and finally to complete the RT Edgar trifecta 29 Loch St, St Kilda West (Anthony Grimwade) almost 1000 sqm plus period home was bought for $3,800,000.

Tuesday 14th November: 3/61 Nepean Highway Aspendale (Rowan Thompson) which we reported as passed-in on the weekend, has now been bought for $3,150,000.

TOORAK 49 Mathoura Road, Justin Long, 4 Bidders, $5,220,000

Saturday 12th November: 3 biggies – 2 bought and 1 passed in.

47 Kinkora Rd, Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders
Grace Park, north-facing rear, big land and beautiful period home. Some may say a drover’s dog could sell this on a sunny day, but that would be unfair on Peter Batrouney and Campbell Ward. This writer knows for sure we will get a first rate performance and in all likelihood a very solid result. About 120 have gathered in the back yard and we begin with a vendor bid of $5,000,000. Quickly in $50,000s between Bidder 1 and Bidder 2 we reach $5,300,000 and a half time break. Two more bidders join in and it’s on the market at $5,500,000. A few more bids and it’s all over at $5,660,000. A typical successful Peter Batrouney and Campbell Ward / Grace Park auction.

49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders
Justin Long is a very experienced and capable auctioneer and he needed to be today as he was put under pressure by bidders constantly trying to reduce the bids he was calling for. He held firm time and time again, and in the end the vendors would have to think (whether they were happy with the price or not) that without Justin’s skill and endeavours, this property might not have been sold this weekend. Five bidders all with their own individual strategies locked horns for 45 minutes involving breaks and multiple “is it on the market?” questions. The opening bid was $4,000,000, the property declared on the market at $4,950,000 and eventually bought under the hammer for $5,220,000.

Biggest Pass In: 3/61 Nepean Hwy, Aspendale, Rowan Thompson (RT Edgar); Passed in $3,000,000, 1 bidder
The excitement was in the air and the house was buzzing with people enjoying the sunshine and the stunning panoramic view of the beach literally on the doorstep.  With only 500 beach front homes in Melbourne, explained auctioneer Rowan Thompson to the large crowd of 100, the “international standard resort style property” represented  a wonderful opportunity.  Mr Thompson opened proceedings with a vendor bid of $2,800,000 and sought $100,000 rises.  With Mr Thompson’s encouragement, a bidder from the crowd obliged with a bid of $2,900,000.  A vendor bid of $3,000,000 followed and despite Mr Thomson’s best efforts, there was no further bidding on the day and the property was passed in on the vendor bid.

Friday 11th November: This is a typical week at the Top End for me. I have been through the following homes, given them a James Home Ratings (not for public display), calculated buyer value and price ranges and noted a few negotiation strategy issues each home may present when attempting to maximise buyer outcomes:

PRICE: $3,000,000+ (Agent Quote)
POSITION: 7 Linacre Road, Hampton, (Jenny Dwyer)
PROPERTY: James Home Rating Excerpt: Complex family home with water views (quality ones of Yacht Club), multiple living areas, 5 bedrooms on one level, dual staircases, basement and all on 635 sqm in one of Melbourne best inner seaside precincts. Price – that will be interesting as will the method of sale – both rare birds for this part of the world right now.

PRICE: $5,250,000 (Asking Price)
POSITION: 29 Seymour Grove, Brighton (Ian Jackson)
PROPERTY: James Home Rating Excerpt: North-facing rear, brand-new build on a big block around 1,000 sqm. Upstairs is very good, perhaps a lift was needed at this price. It’s to a formula and one that always sells when buyer meets seller or vice versa on price – that meeting price – well that is the big question? I remember going to the land auction around the start of the GFC (early 2008) and it was bought quite well at $2,100 per sqm – bought quiet well, considering what other knockdowns in this street and Wolseley had gone for, a short time before this auction.

PRICE: $8,000,000 ish (Agent Quote)
POSITION: 18 Fitzroy St, Kilda (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Has already received a lot of publicity due to its current owner and the facade photograph is wonderfully enticing. A home of pluses and minuses for different family types. One of the real pluses for some families would be the rooftop pool – spectacular is an understatement. Location is also smack bang in the middle of the action. Building was an advertising agency office in a previous life – although much of the work was already done when this last sold (twice in 2004 between $3,000,000 and $4,000,000) .

PRICE: $6,500,000 plus (Agent Quote)
POSITION: 21 Isabella Grove, Hawthorn (Scott Patterson)
PROPERTY: James Home Rating Excerpt: It’s a trip back in time. The entrance really looks like a movie set from Charles Dickens (love the dome). One of the most powerful views for me was actually through the kitchen window of what would have been servant’s quarters – the form the steps take going back up across the road stick in my mind. The home itself is obviously one for specific tastes and you will have a few issues to get your head around if you are going to be the buyer – but that could be well worth the mental effort.

PRICE: Circle $10m to $12m (Agent Quote)
POSITION: 1 Harcourt St, Hawthorn East (James Tostevin)
PROPERTY: James Home Rating Excerpt: Most “in the trade” would describe this as a big thumper and the agent quote estimate says you are going to need a big wallet to match. Valuing this would require an open mind and purchasing well, would require a firm base on goals and a flexible strategy to test on many levels. The house – well – it’s not about the house, there are bones to work with. No, in my opinion it is all about is the land and more to the point the shape of the land and where the home sits and what you want and can do within its limitations. So is the land worth the $sqm of  say no 49 Harcourt which had two bidders at auction and went for over $7,200,000 last year or is there a discount involved? Challenges for all parties if this is to be a deal.

PRICE: In the picture you can see next door which was also subject to a similar campaign recently at a similar asking price tag ($20,000,000 to $30,000,000). The price –  if it does indeed sell – will be a source of conjecture, supposition and innuendo for months to come just like Shakespeare Grove was last year and just like when this home was so famously bought and sold last time (a decade ag0).
POSITION: 1 Towers Rd, Toorak (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Wow – if you can work out a way to get through this home you should. An art deco masterpiece with pool, tennis court, contemplative gardens all on a Toorak acre. The entrance and view from the kitchen are very powerful. At this price level, there are many more questions, but it always comes back to one final one, when the others have been answered – How can I buy this for the best possible price? Your answer may well be determined by the relationships you keep.

PRICE: Around $3million is Agent Jock’s quote
POSITION: 58 Glyndon Rd, Camberwell (Jock Langley)
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

PRICE: Around $4,500,000 (Agent Quote)
POSITION: 68 Molesworth St, Kew (Hamish Tostevin)
PROPERTY: James Home Rating Excerpt: This is a home of thought and quality – and with a price tag quoted over $4.5m if you are going to be the buyer you are going to have to put some thought and quality into how to go about this – such as, what is this home really worth? It is a very specific home – big in size, lifts, views, a lot of WOW. Attention to detail is obvious. But what about heating and cooling and sun with all that glass. Land value is not hard but home value – is this a $1.5m or a $2.5m build and will that matter? One of those buys where process is so very important if you want to buy well. A rare offering for the modern home buyer and worthy of serious consideration.

Grand Sale Land Sale in Kew - Tender Closing Today (Friday 11th November). It will be interesting to see what happens at 6-12 Madden Grove Kew on this mini-subdivision of 4 blocks around 600 sqm each. Mark Dayman and Antony Woodley taking in the offers and have expectations above $2,000 per square metre.

Thursday 10th November: Another three strongish Toorak buys in the last week.

• 16 Kenley Court Toorak (Michael Gibson of Kay and Burton) – Bought for over $12 million for nearly 2000 sqm of land a very substantial home. James Home Rating 779/1000. Excerpt from James Home Rating:

The big pluses for me are the court location, the look from the street and the gardens – tranquil, serene, sanctuary – all those words that are antonyms to stress. This is what the gardens are, and for me they are the major selling point to 16 Kenley. The home, well for most of us (i.e. those who can’t afford it) it’s a rare and magnificent home. However for buyers at this level I think they will find some issues with the floorplan – especially the position and connection between the kitchen and living area  and the front staircase so close to the front door. This seems an afterthought and does detract a little from the majesty of the entrance. Walking through the home I keep thinking of the gardens, the location and the land size more so than the building. However if you can afford 16 Kenley then you can afford to make the changes you want. And so, like almost offerings at this level in Toorak, it comes back to: when do you want to buy, what is available, what is the right exchange price and how best do you go about the process?

• 24-26 Balmerino Ave, Toorak (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land inc tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and was bought immediately afterwards for an undisclosed amount. As I went through this home it felt mostly about the land and the sweeping views, however I suppose that is the way with almost all Toorak homes. The end result was $3,800 per sqm approx.
• 4 Lisbuoy Court Toorak (Nicole Gleeson and Michael Gibson) – Townhouse with some land, bought for over $4,000,000.

Greg Costello and Tim Wilson in full swing on the Brighton Golden Mile - continuing to sell at $10,000 per sqm. See report below

Week Ending November 5th: Has the action returned after the September excitement was followed by an early October siesta? We think yes – it is back. People do have cash and they are parting with it when they find the right home. In the last 10 days at least 9 homes over $4 million have been bought and sold.

Some Auction Results this weekend

• Biggest Sale: 2 Mytton Grove, Brighton, Greg Costello (RT Edgar); Under the hammer $6,050,000, 2 bidders
  Brighton Golden Mile Beachfront – these are four words that mean money. In recent times that has meant $8000 to $10,000 per sqm – at least at the northern end. A question our auctioneer Greg Costello asked in his opening spiel was “is this southern part of the Golden Mile more highly regarded than the northern part due to the activity on the beachfront?” Personally, as I run past here every day I think yes, but the auction result will tell us for sure. With the blue sea as our backdrop I’m expecting an exciting auction – irrespective of the market this stuff always sells. Greg Costello is conducting proceedings in front of a small crowd of 30. We start with an opening bid of $4,850,000 from Bidder one. $5,000,000 comes in from Bidder two strongly – solid bid. $5,100,000 from a third bidder – who as it turns out was with Bidder one – so we don’t count him – strange strategy that one. Anyway with a fair bit of action we move up to $5,600,000 in various amounts and then to $5,750,000. At all times Bidder two looks in control and is bidding very well and with some intimidation without being over the top. Normally Greg Costello is in excellent form but today was not his best day with bid retention and there are a number of confusing referrals back to his penciller for clarification. At $5,900,000 the “is it on the market?” question was asked, and after a quick referral, an affirmative answer is returned. There are two more decisive bids from Bidder two and its all his at $6,050,000. Loved the winning bidder’s style – aggressive and sensible and much better than his opponent and also many so called professionals that I have witnessed recently – well done sir – we have a job for you here if you care to apply. (Mal James)

• Other Brighton Golden Mile Results: 2 Mytton at $6,050,000 divided by 613 sqm = $9,869 per sqm or almost identical for previous absolute beachfront sqm rates over the past year (which have maintained themselves in the last year and increased on previous high water marks). 8 Moule Avenue (David Hart) is a classic Golden Mile address (but not absolute beachfront) and sold this weekend for $2,310,000 or $3,510 per metre. On first glance that is not expensive, but it is in fact not too far off previous Golden Mile sqm rates. A third Golden Mile property 15 Dudley St (Regina and Brian) sold for in excess of its pass-in figure at $4,400,000 which, again considering the house was nothing other than a nice facade, was a very, very solid result.
• Biggest Pass In: 58 Kooyongkoot Rd, Hawthorn, Scott Patterson (Kay & Burton); passed in, $3,400,000, no bidders
  Could you find a better setting for a Melbourne Spring auction? A tranquil backyard by the pool! In front of around 60 people, auctioneer Scott Patterson gave his usual professional best to attract some crowd bidding but this was to no avail. The property passed in after two vendor bids – $3,300,000 and $3,400,000 respectively – and remains for private sale. (Adam Woledge)
• Bidderbuzz Auction: 15 Chastleton Ave, Toorak, Warwick Anderson (RT Edgar); Under the hammer, $4,135,000, 4 bidders
  Spirited bidding after a slow start was a welcome sequence at the auction of this single level home in Toorak. A crowd of 80 neighbours chatted quietly throughout the action, eagerly anticipating the value to be determined by the market. After opening on a vendor bid of $3,400,000 and the declaration that the council had valued the property at $3,700,000, auctioneer Warwick Anderson tried to keep pace with the determined 4 bidders. After the second vendor referral, Warwick announced the property on the market at $3,800,000 but the strong bidding continued, with bidder number 4 securing the home at $4,135,000. (Gina Kantzas)

RT Edgar: Has had a pretty solid time with 8 properties selling over $2 million in less than a week, including an off market at 68 Walsh St believed to be around $4 million, not mentioned in above dispatches.

Week 4 August 27 2011: Not a lot happened at auction in this market this weekend at $3M+, with the exception of 25 Kent Avenue – the action was all last week and it was away from the auctions.

Biggest Sale: 25 Kent Ave, Brighton, Leigh Hallamore (Buxton); After auction, $6,400,000, 4 bidders
Crowd numbers were high to witness the auction of this rare absolute beachfront property.   Auctioneer Leigh Hallamore cleverly positioned himself along the back fence in front of the beach to maximise the emotional impact of the uninterrupted beach views of the (as it turned out) 4 bidders.  With at least three beachfront properties selling recently at $6m, $7m then resold for $8m and an undisclosed price, 25 Kent  was – as expected – strong.  An opening bid of $4m was a ‘dream price’.  A second bidder quickly upped the price to $5.9m and the bidding was on, stopping at $6.35m where the property was passed in to see if there was a bit more.  And there was: a final sale price of $6,400,000 or not too far off $10,000 per sqm if you saw no value in the home. (Kristen Hatt)

Marcus Chiminello of Marshall White: “We are currently seeing great activity in the upper end of  from both buyers and sellers emerging from the depths of winter and that are now prepared to participate in the market as opposed to the past weeks and months when many were prepared to just sit and watch the market. Most of the recent high end market sales have not been an overnight success, most requiring months of dialogue between agent, buyer & vendor. As demonstrated in recent weeks, I believe the trend of discreet off market transactions will continue to grow moving forward as vendors and purchasers alike at the higher end of the market seek privacy with their real estate transactions.”

$3M+ Market Summary: Activity in this $3M+ segment has been building most of this month of August but there has been little to show for it until this past week, which has been a stellar performance by any measure. Bidderman was over 2 on the $3M+ homes purchased.

Agents are reporting that buyers have started to change their attitudes – and for once we don’t think this is spin. The interest is at least partly because the market has been starved of interesting offerings like the property at 4 Mernda Rd, Kooyong (Ross Savas and Michael Armstrong), which was a beauty and had at least 3 bidders over $6million (and would possibly have had a few more if circumstances hadn’t pushed for an early finish to the Expressions of Interest campaign).

Last week’s powerhouse result for Paul Keane and Peter Batrouney at 9 Salisbury Balwyn, where 4 bidders produced another result over $6 million, indicates that some buyers have waited long enough and are saying: “OK if it’s good, it’s priced right and it meets my needs then I’m interested.” There was another one of these on Saturday over $6 million at 25 Kent Ave, Brighton (see full auction report below).

But before you think we’ve been sent a case of Moet by our new found friends on the other side – it’s all about the price and quality of specific properties.  The market is definitely not in an upward phase in terms of price. In fact unless your property is an A grader, and “correctly priced”, it’s likely the price is falling every day you ponder over the signed offer on the table (if you can get one). Smart sellers realise this.

Just to get some balance on what’s happening in terms of price:

• The Mont Albert property sold by Michael Ebeling that we report on below, was a good result. But it sold last year for basically the same price.
• The selling price of St Georges Road, Toorak property represented a greater than 10% discount on the initial asking price. It was a great result in that sub $9million range, but it had no takers for 6 months at $10million.

So what’s to account for this past week’s activity? Partly it’s because buyers can see less choice coming on the near future, due to the Grand Final being on later this year (thus preventing a normal 4 week auction campaign between Grand Final and Melbourne Cup). Partly it’s due to some good $3M+ homes on offer right now. And partly it’s due to underlying demand that has been there for some time. A lot though is because of correct price matching.

No doubt the next few months will see an increased number of stales (long term unsolds) – repackaged, rebadged and remarketed. If they are also repriced then who knows, maybe we will be off again and back to a more normal balanced market (which is what most buyers also want).

Of course, it could all  just be a dream and we will all wake up again soon.

There were some good Private Sales through the week and we saw a return to off market transactions, as well as two successful Expressions of Interest:

• Ross Savas and Michael Armstrong of Kay and Burton held a Boardroom Auction last Thursday for 4 Mernda Rd, Kooyong. (This had brought forward the original Expressions of Interest deadline for Tuesday of next week.) Its “on the market”  price was around $6,000,000, and it sold for between $6,000,000 and $6,500,000 with 3 bidders. See our ratings below.
• Michael Ebeling of RT Edgar got 12 Stanhope St, Mont Albert away for towards $3million – off market. This was around what it reportedly sold for last year. Not all bad news in that.
• Rob Vickers Willis and Tim Derham of Abercromby’s sold 10 William St, South Yarra under the hammer for over $5,000,000 at a Wednesday private auction. See our ratings and report below.
• Michael Cooney of Hodges sold 50 Ebden Ave, Black Rock (a two hatter with a 700+ rating) for over $3,400,000. This modern home was a goodie, but it’s been rare to see homes sold for more than $2 million in this area since 2009. So this was a good result and the best sale in Bayside we can report for the week.
• Expressions of Interest – 333 Glenferrie Rd, Malvern with Gerald Delany and Nicole Gleeson – sold for over $3,500,000.
• Post Last Week Auction Pass In 24 Hawthorn Grove, Hawthorn – Paul Keane – sold for an undisclosed amount above $3,000,000
• Off Market:4 Mathoura Rd, Toorak – Peter Bennison of Marshall White. This went to auction last year (or maybe earlier), and has now been traded for more than  $3,000,000
• Off Market:10 St Georges Rd, Toorak – Marcus Chiminello – This home has been through a few agents and while it did not achieve what we thought was an incredible asking price of $10,000,000 earlier in the year, it did actually get close to $9,000,000 in the last week or so – still an incredible price. See our home rating
• Off Market: 3 Murray St, Armadale also Marcus Chiminello. It also sold for just shy of $4,000,000 recently.

These sales represent the best or close to best numbers in this Top End $ segment this year.

Agent Survey: Why is this week’s $3M+ improved performance happening?

Paul Keane: With the stock-market on what appears a roller-coaster ride over the past month or so, people are retreating from it and investing that money in the good old “bricks and mortar”. I have spoken to several people over the past week and they believe the real estate market is off by about 10% from last year (some claim more) so if you are looking to upgrade your real estate portfolio there is so much upside….why not buy a $6m home that may have been worth $7m this time last year…..nothing much has really changed… only people’s mindsets are different.

Michael Armstrong: Some buyers are no longer getting burnt by the share market (they’re out). Some buyers have got sick of waiting. Some buyer attitudes have changed.  (Second tier homes though are continuing to drop in price.)

Mike Gibson: Definitely gained some traction in the last few weeks

9 Salisbury St, Balwyn - Peter Batrouney and Paul Keane. Competition by 4 bidders resulted in a very strong price under the hammer of $6,620,000

And now for a brief excursion back through the market of August 2011.

Week Three August 20, 2011: Whilst there was little, actually no doubt that prices were dropping across the general market and the $3M+ segment was well down on activity compared to this time last year there continued to be a tantalizing number of goings on to let those involved at this level think we may just be having something to do come Spring. Furthermore whilst we had been saying that activity off market was more talk than substance in the last week or so we were involved in and had seen a couple of deals that again confirmed that if the stock was actually for sale (meaning at market buy price not a seller dream price) then a deal could be done – as long as the buying  and selling agent were reasonable at their job and both the vendor and buyer had some patience. Boughts and solds this week

At Auction:

• 9 Salisbury St, Balwyn – Peter Batrouney and Paul Keane. 4 bidders resulting in a very strong price under the hammer of $6,620,000 ( See our auction report)
• 30 Mangarra Canterbury – James Tostevin. 4 bidders and a strong $3,210,000 under the hammer
• 24 Hawthorn Grove Hawthorn – Paul Keane – Post Auction for an undisclosed amount above $3,000,000

Kew, 49 Sackville St - James Tostevin - 4 bidders - Under the hammer $4,310,000

Week Two August 13, 2011: There was life at the Top End (even if the heartbeat was faint) as evidenced by some good Top End $3M+ results.

• South Yarra 83 Walsh – Justin Long and Peter Bennison – Bought After $4,842,950 – $5,327,750
• Kew 49 Sackville – James Tostevin – Under the hammer – 4 bidders – $4,310,000
• Camberwell 87 Broadway – Richard Winneke – Bought After – 1 bidder – $3,795,250
• Hawthorn 4 Glan Avon – James Tostevin – Under the hammer – 3 bidders – $2,815,000
• While mid week 8 Myoora Toorak (Over $10,000,000) did not sell at a Thursday auction (it’s a home that requires a very specific buyer and could be hard to sell even in a stronger market) -  8 Blackfriars Close Toorak (Justin Long) our biggest pass-in last week-end at $3,000,000 (0 bidders) did sell for $3,250,000 on Monday.
• Peninsula – in one of “the” streets – Spindrift in Flinders – we saw Marketnews favourite and nice lady Prue McLaughlin of Kay and Burton sell a home for an undisclosed amount well over $4,500,000. As well Andrew Hines got 57 Tubbarubba Merricks North (over 60 acres) away for around $3,500,000
• 19 Lovell St Hawthorn East -Modern home saw the Expressions of Interest campaign brought forward by Sam Wilkinson and Scott Patterson and a sold sticker in the mid $3m’s

Not quite $3m - which is the story of the $3M+ Market this 2011 winter - 18 Knutsford St, Balwyn, Richard Earle, Bought After for $2,730,000 on a vendor pass-in of $2,300,000.

Week One August 6, 2011: We had a few comments that we hadn’t put up a $3M+ market report since May. That was for a good reason – it would have been an almost blank sheet. However there were some sputters  of life from deep within – a sign that the top end engine could be starting to turn over again. From our own company’s point of view we were involved in 3 dealings after having been bereft of activity for most of winter at this level.

• A sale in Boroondara this last month at just over $6M – completely off market
• 24 Boxshall St, Brighton (David Hart), which has been on the market for a long time, has finally changed hands for just under $3M
• 4 Sussex St Brighton (Regina Schmidt and Brian Devlin) sold for a hard-to-believe $3,775,000. We attended that auction and the result was … well brilliant.
• and while down in Bayside, 2 Tennyson St, Brighton with Jonathan Dixon, after passing in at auction a month or so ago, just sold for around that pass-in figure and well over $3,000,000
• 12a Harrison Crescent, Hawthorn, which had a rating too low to put up on our site, was sold by Sam Wilkinson of Kay and Burton for over $3,000,000
• Along with 3 Irymple Ave, Glen Iris (Iain Carmichael); 5 Story St, Parkville (Tom Roberts) and 80 South Road, Brighton (Barb Gregory) in the last week, the Top End over $3M is trying to work its way back into some form.

Back to the Future – What’s up Ahead?

With a couple of big homes due for auction next weekend – including 49 Sackville St, Kew (James Tostevin); 7 Foote St, Brighton (Phillip French of RT Edgar) and 83 Walsh St, South Yarra (Peter Bennison and Justin Long)  - we will begin to see if there is some air at the higher altitudes as we limp into the footy finals – traditionally a key indicator for activity in the early and late Spring markets at the $3M+ level.

Last week we covered the Early Spring Market

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

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

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

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

So what about price?

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

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

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

So when do you buy and sell?

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

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

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

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

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

In the first of 2 part major report this week on The Big Spring Predictions we cover the Early Spring Market

Home market predictions are like footy predictions in many ways – a bit of fun, not to be taken too seriously and to be treated on the basis of past results.

Sometimes we agents get it right and sometimes we don’t. So why do we do it? We do it for the same reasons that footy fills up just as many pages at the end of the week as it does at the start – because buyers, sellers and market watchers like to read our opinions and insights and they do so in just as great a numbers as those who watch a blockbuster footy game every auction Saturday.

With Spring only a short time away, the musings, the theories and the rumours are surfacing again. Hence we called all the big guns into a Roman Toga type gathering to ask them what will happen in both the early and late Spring markets in the run up till Santa comes.

“Love is in the Air and there is no home more beautiful than one being auctioned on the perfect sun-drenched Spring day with the fence painted, the light streaming in and the garden looking stunning” says Marshall White’s Justin Long – with some poetry and just a little bias.

Historically though, over the last decades Melbourne buyers and sellers have agreed with this statement.  John Clarkson of Hocking Stuart says the market swells by as much as 200% even 300% in terms of activity in Spring months when compared to the winter ones.

However, while every agent assumes the supply of stock is sure to increase on what we have now, there is also a thinking that this increase will be less this year than what we’ve seen on average over the past 10 years. There is universal agreement at the moment that we will not see stock levels approaching what we saw last year. 2010 was a big year at the beginning, in the middle and at the end in terms of activity. So far 2011 has not been – and it will not be.

Why is Spring looking to have new stock shortages? According to Kay and Burton director Ross Savas, it’s because vendors are perceiving that the market is under pressure, so they are holding off placing their homes on the market till conditions improve.

Benmac’s Iain Carmichael agrees: “Unlike last year there are few opportunistic sellers thinking, ‘Wow, our home is now worth a mint – let’s go!’. So the only driving forces are the traditional sellers such as upscalers, downsizers, and job relocators.”

Is this just false spin to get sellers to act? We don’t think so. Richard Winneke of Jellis Craig for instance reports that most agents are admitting to a 25% volume reduction of high end stock being transacted between this year and last. Balwyn and Kew are down around 20% in overall transactions (not just the high end).

In Bayside Jason Gill paints a similar picture of diminishing turnover but uses a different measurement: “In Brighton in July 2009, 2010 and 2011 we have seen stock on the market go from to 92 to 125 to 150 meaning older overpriced stock is simply not selling.”  What this means, he adds, “is that the stock that comes on in Spring will need to be of good quality and be priced correctly, rather than more of the same, if it is to excite the market.”

In our opinion, with the type of market contraction (turnover more so than price) we have had in 2011 we are going to need some excitement to kick start the market in the way that it took the Chinese community in 2009 to lead us from the GFC.

Sellers want prices and while buyers do as well, they also want good quality at the upper end levels. More of the same will only compound the problems of this market for both buyers and sellers.

For vendors who are prepared to swim against the tide, there could be rewards, says Steve Burke of Jellis Craig says, and sure we know he’s biased but he’s right on this occasion. “Forget about when the roses bloom in the garden, it is all about the demand and supply equation. As we are currently in a market place of perceived negative conditions I believe that there will be a real shortage of stock at the start of Spring. This will definitely favor the brave vendors who will be able to capture a market place where there is little competition.”

Next we look at Stales, Price and The Late Spring Market.

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

What is happening this spring after the winter holidays? Hey Mark, c'mon mate! Cheer up -You did sell 27 Rathmines Road Hawthorn East under the hammer with 2 bidders.

At 6pm on Saturday, the James Clearance Rate for $M+ was 48% on the 25 auctions we attended. The Weekly Review Bidderman, our demand indicator, was 1.3 bidders per auction.

This is our last Marketnews summary and auction reporting until Saturday July 30^th. We normally take a fortnight break at this time of the year due to the Winter school holidays, but we have extended it to three weeks due to minimal action in the $M+ Inner East and Bayside market.

Accordingly we have produced our bumper half-year insight on what has happened year to date and what we envisage may happen between now and Santa coming down the chimney.

What has happened on the markets so far this year?

February 19. With clearance rates at 63%, we were thinking this was looking like a healthy balanced market. The $1 million+ was actually looking hottish. But there was little activity on the $3 million+ market, and an increasing number of duck auctions  with no bidders. Overall stock quality wasn’t great and that has been the story all year really.

March 26. Clearance rates dropped to 58%, the first indication that we were moving into a buyer’s market – possibly until Easter and possibly until Spring we suggested. Well, we were right there. The other big issue that portended the future market was the lack of take-up of passed-in auctions from the previous two weekends – just 3 out of 26 had sold over the next couple of weeks.

May 21 saw a surprising lift in the market, with a clearance rate of 84% on the 37 auctions we attended. We certainly didn’t see it coming, but the big difference was the high quality of stock on offer. And buyers snapped it up. As we said though, one swallow doesn’t make a summer. And it didn’t.

June 4. This was the weekend we recognised that this down market was different to last year’s. Last year prices may have been down but there was still lots of activity with buyers and sellers agreeing either at auction or sometime after on a price that was possibly lower. This year the market has been characterised by numerous pass-ins and lots of stales (long term unsolds).

June 18. The wheels of supply really seemed to be grinding to a halt. Clearance rates were 38% but the biggest problems were lack of quality and sellers holding out for unrealistic prices – rather than lack of demand.

June 25. Last weekend saw an uptick in the clearance rate of 58% as an increasing number of sellers dropped their heads back down from the clouds. But, as we saw, it was back down to 48% as we head into the thick of winter.

Consistent Themes of the 2011 Market so far

1. This is a buyers’ market – and basically has been since April last year, 2010.
2. There has been a major contraction of turnover in the $M+ market this year to last year. The A+ sellers have withdrawn and so have the “we also need to buy” sellers. They have become nervous that if they sell now, there will be no good homes to buy.
3. Effectively the market has wound down to a much lower transaction level than last year, initially led by sellers asking prices higher than market, thus reducing turnover. Then as the year has gone on, prospective sellers with A+ homes decided the current market is not for them, reducing turnover further.
4. The underlying market demand is stronger than the stats headlines show. Almost every time we have good stock weekends our demand indicator Bidderman increased (see chart below). Look at the weekends 26 February, 9 April, 21 May and 25 June.
5. Stock overall has been a lot poorer in quality from the beginning of 2011 compared to last year.
6. The key characteristic of price this year has been the stubbornness of both buyers and sellers with regards to movement.
7. Prices continue to improve on selective high quality, well priced homes (yes, it’s true). But this is a very small segment in the market. For many, prices have flat-lined and for lower quality homes the market price has fallen. Overall the market is off by as much as 10% from the last peak in April 2010.
8. Above-market prices are rarely being achieved. So when sellers pass their property in then more often than not they are having to drop their price, wait a long time and go through pain to sell. And even then there is a high chance they won’t sell. In 2011 there is a real risk in sellers going for a big number and not getting any number at all.
9. Stales (long term unsolds) have been building all year. There are hundreds of homes out there that remain unsold and have the potential to negatively affect the market going forward.
10. Selling agents have correctly predicted stock shortages, price corrections and the market gap between good well priced stock and inferior overpriced stock. The market has in fact been predictable if you know how to read the signs.

Buyer Demand weaker, but still there when Quality to be had

 Average numbers of bidders per auction, as shown by our Bidderman indicator above, rarely went above 2 this year. But when stock was of high quality, the bidders were out in force. Clearance rates (below) further supported the argument that there is underlying demand when we have good stock and/or well priced weekends.

On most, but not all, good stock weekends where the sellers have let the market set the prices there has been solid activity. However these figures support the fact, very strongly, that we are in buyers market not a balanced one.

What will happen in Spring?

After a mediocre early Winter market, the question on the minds of buyers and sellers alike is will the market fire back up in Spring?

We asked some quality selling agents to give their predictions.

A number of agents are predicting that we’re likely to have stock shortages again this Spring. Why is that? According to Kay and Burton director Ross Savas, it’s because vendors are perceiving that the market is under pressure, so they are holding off placing their homes on the market till conditions improve.

Is this just false spin to get sellers to act? We don’t think so. Richard Winneke of Jellis Craig for instance reports that most agents are admitting to a 25% volume reduction of high end stock being transacted between this year and last. Balwyn and Kew are down around 20% in overall transactions (not just the high end).

In Bayside Jason Gill paints a similar picture of diminishing turnover but uses a different measurement: “In Brighton in July 2009, 2010 and 2011 we have seen stock on the market go from to 92 to 125 to 150 meaning older overpriced stock is simply not selling.”  What this means, he adds, “is that the stock that comes on in Spring will need to be of good quality and be priced correctly, rather than more of the same, if it is to excite the market.”

As during the GFC, the market has primarily ground to a halt on lack of action and lack of confidence. As with the GFC it will need a kick start of some note (eg Australian Dollar dropping bringing expats and overseas buyers back) to entice WOW and discretionary  sellers back into the market place, thus lifting turnover.

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

For a full wrap of opinions on the Early and late Spring Markets read our Buyer Article section throughout July in Melbourne’s Premier $M+ Home Magazine – The Weekly Review.

So what does this all mean to you the buyer

Smart Buying RIGHT NOW involves:

1. New strategies: You need new bidding strategies at auction. Putting your hand up until you run out can work in a hot sellers’  market, but in a buyer’s market it just means that you are burning cash.
2. Realising that not all sales are at auction:  There are an increasing number of homes sold off-market, prior to auction, as expressions of interest and so-on. You need to have a strategy to keep ahead of what’s out there. And then you need to know how to wheel and deal in these methods of sale – not just to pay the right price but to actually get it, if you want it.
3. Knowing that in this kind of market, you as a buyer may need a new modus operandi. In a hot sellers’ market most buyers are reactive, while in a buyers’ market the best buyers are often proactive. Good homes are still selling well -so when a home is sought after, you may still have to compete as strongly as 2009.
4. Understanding what the Real Value is:  Most genuine buyers are getting the best service they have ever received from selling agents in terms of being told what is out there. How much for all these opportunities? Is 10% on the auction quote or 10% off the sale price the right start point? Well maybe, but there may also be daylight between you and the next buyer.
5. Recognising that Patience is Needed. Patience is the forgotten buyer skill. We are not talking about procrastination, but the ability to wait until you have found the right home that meets your family needs. Just because you can buy now and it’s ‘cheap’, doesn’t necessarily make it your family’s best fit.

IVANHOE EAST, 12 Ravenswood Ave: Going, going gone! Rod Watson (Jellis Craig), under the hammer, $1,059,000, 2 bidders

Biggest Sale: Balwyn, 30 Walsh St, Steven Abbott (Jellis Craig); Under the hammer, $1,992,500, 5 bidders
“An entertaining auction, in a fine setting. Auctioneer Steven Abbott looked for an opening bid but none were forthcoming. Mr Abbott then offered a vendor bid of $1,750,000 to get things underway. The auction did not take too long to get started and there was solid bidding between four parties. The property was on the market at the $1,915,000 mark, and bidding looked almost over at  $1,950,000, when a new bidder came into play. The property was eventually bought under the hammer for $1,992,500.   A good result for vendor and agent alike – this property had been around for some time and although the floor plan itself had some concerns, the Reid Estate positioning underpinned value and ultimately buyer interest here.” (Adam Woledge)

Biggest Pass In: Kew, 34 Macartney Ave, Walter Dodich (Marshall White); Passed in, $3,925,000, 1 bidder
“A sense of deja-vu here at Macartney Avenue: about 3 months ago, auctioneer Walter Dodich auctioned No.21 and today it was No.34′s turn. Both properties fine, modern new homes with all the bells and whistles, built by the same builder. In front of a good crowd of around 120 people, a vendor bid of $3,900,000 was placed and just when you thought this was going to be quick auction, a crowd bid of $3,925,000 was offered. There was no further bidding and the property was passed in at this figure.” (Adam Woledge)

Bidderbuzz Auction: 7 Heathfield Rd, Brighton East, Nick Renna (Hocking Stuart); Under the hammer, $1,625,000, 4 bidders
“Another great Nick Renna auction with fierce bidding, big crowds and a great sale price. A genuine bid kicked off proceedings at $1,000,000 and, while low, it was accepted by Mr Renna before he offered a vendor bid of $1,280,000 (which was closer to the quoted price). Two bidders entered the fray and the price quickly rose to $1,405,000 where it was declared on the market. Bidding continued strongly when, out of the blue a third, strong bidder entered into the competition. The price continued to rise and Mr Renna fielded bids from all three parties before bringing the hammer down at $1,625,000. A great, entertaining auction and a strong result for the Hocking Stuart team and vendor alike.” (Jen Milligan)

We only buy homes

KEW, 34 Macartney Ave: A big crowd of 120 people turned out to watch Walter Dodich (Marshall White) in action. Passed in, $3,925,000, 1 bidder

The big talk on the property market is auction clearance rates: the fact they are well below last year (true) and that they are perhaps even lower than what agents are claiming (maybe).

Last year auction clearance rates across Melbourne were regularly in the 70s percentage-wise. This year they are in the 50s – so it is fair to conclude that this year fewer buyers and sellers agree on price and therefore the market is regarded as weaker than 2010.

But while some journalists and publications are arguing that the ‘true’ clearance rate may in fact be lower because agents do not report every unsold auction, some agents  are arguing that the emphasis on a Melbourne-wide clearance rate is also misleading.

Jack Bongiorno from Marshall White, for instance, argues that while papers like The Age are reporting clearance rates in the 50s, his company has seen clearance rates in the 70s throughout May and June . Andrew James of Hocking Stuart Armadale agrees, saying his office is also seeing clearance rates in the 70s all year.

So The Age is saying one thing and agents another. Well there’s nothing new there.

Who is right and who is wrong – and does it really matter?

Well,  they are both right. And as for whether it really matters, the answer is yes – and no. Is that a splinter I can feel in my bottom from sitting on the fence? Well no, in fact this goes to the crux of what clearance rates can and cannot tell buyers.

According to Andrew McCann of BenMac, clearance rates measure across a very broad number of suburbs, price bands and demographics. “The reality is,” he says, “that some parts of the market will always perform better than others so it is not unrealistic to think that while some areas are soft, others are strong. A good case in point is that our firm sold 11 from 12 Auctions last weekend, while the market returned 56%.”

Scott Patterson of Kay and Burton supports this: “The clearance rate in The Age of 59% is a general rate for the whole of Melbourne and does not reflect what is going on in certain areas.”  Hawthorn for instance has had a clearance rate of 80% for the year so far, which seems a different picture from the outskirts of Melbourne.”

This makes it important for buyers to take Melbourne-wide clearance rates with a grain of salt.

Brad Pearce of Miles in Ivanhoe says that as a buyer you need to be area-specific on clearance rates to ensure you are in line with your market. “Buyers can become too confident with the lower Melbourne wide clearance rates and miss opportunities to buy in their area, where in fact properties are still selling well.”

Hawthorn and Kew, for instance, are currently shining with clearance rates in the 70s and 80s, according to Richard Winneke of Jellis Craig. But next door, Camberwell, Canterbury and Balwyn North have had clearance rates in the 50s so far this year, he points out.

Clearance Rates are wonderful things for analysts and journalists, says Steve Abbott of Jellis Craig, “but they are only part of the story for buyers and sellers.” Kay & Burton’s Michael Gibson reminds us too that clearance rates only represent a few hours within the selling week.

And according to BenMac’s Iain Carmichael: “Some weeks we have shockers and the next it’s a dream, so clearance rates are area specific, very cyclical and not always predictable.”

As a buyer, along with clearance rates, you also need to look at stats on areas, on specific agencies, on different types of homes, price ranges, stock level indicators, Bidderman (number of bidders per auction) and a variety of other measures.

Indeed, while $M+ Melbourne may be down on turnover this year, of the last 10 homes we as buyer agents went after in the last two weeks of May, all were sold quickly (and not all to us). So to our mind,  the late May 2011 “good home” index (describing the kinds of home we go after) had a clearance rate of 100%

The buyer message in terms of Melbourne-wide clearance rates is to understand what they represent and to not limit your research to the changing weekly auction headline number when determining your individual buying strategy.

Printed each week in The Weekly Review – Melbourne’s Million Dollar Plus Magazine

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Now back to the market – Future Stock:

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

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

Other agent comments:

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

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

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

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

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

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

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

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

A couple of strong results today:

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

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

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

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

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

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

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

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

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

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

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

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

“No way mate - this market is fighting back– taking no prisoners today (April 9th).” John Bongiorno. Malvern 54 Stanhope. Bought $3,170,000. 3 bidders.

Week Ending 30th April: Back from a week or two off, this market now, has a fairly clear run till Christmas, with a only brief breaks for a couple of holiday weekends.

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

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

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

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

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

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

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

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

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

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

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

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

Speaking of good results, Marcus Chiminello got a price in the high $3 millions for 2/264 Walsh St, South Yarra. It’s not our job to talk agents up but in a slow apartment market Marcus has got a number of solid results.

St Kilda West, 10 Loch St, with John Holdsworth sold for $3,650,000.

Andrew McMillan from Benmac got 367 Beaconsfield St, Kilda West away in the $4m to $5m range after a very lengthy campaign (probably due to previous asking prices).

At Auction today 68 Hopetoun Rd,  Toorak with Jellis Craig’s Steve Abbott, sold afterwards for $3.05 million. That was up a few hundred thousand dollars on the last time it sold around a year ago.

Week Ending 9th April: The strongest week this year for the $3m+ Top End market:

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Well over the $12,000,000 quote range making Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court.

While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were.

But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies.

The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few strong sales as well with 29 Bay Street Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000 and the final result put north facing (no view) Golden Mile land over $3,200 per sq metre. That is a steady as she goes price similar to last year Golden mile (no view) buys. And another $3m+ sale with a strange twist (all non bidders asked to leave) at 40 Drake Brighton (Ian Jackson).

While on land sales 1073 Malvern Road Toorak (Justin Long) passed in at $3,225,000 and a reserve was offered – not taken up – two new bidders appeared and a second auction took place resulting in a sale well over the pass in figure.

Why all this activity? Pass-ins are still languishing in large numbers without much interest. However its all about quality and new stock and buyer confidence. All three things happened this week -

1. buyers felt better in themselves (confidence);
2. buyers felt this week had some real quality offerings (quality)
3. and buyers couldn’t see a lot of stock coming one (limited new stock)

Post Easter is no Buyer lay down misere after today’s results.

“Oh Yeah Sure Buddy - you are joking, aren't you?” Sold for an undisclosed amount, $500,000 over reserve. 4 bidders. Ivanhoe East 32 Warncliffe. David Oster.

At 6pm on Saturday the James Clearance rate for $M+ was 71% on the 34 auctions we attended. WOW – 71%, a big change from last month.

Bidderman, our demand indicator of bidders per auction, was at 1.8. So on our biggest $M+ auction weekend so far this year, when you would expect buyers to thin out and Bidderman to drop, it actually went up on the trend of the last few weeks.

It may be just one day but it was strong out there this weekend. For the first time since late February our advocates reported feeling feeling genuine price pressures whilst bidding.

Market Summary: The big question is whether this is a statistical blip or whether we are a seeing the trend return towards a balanced market. If so, why?

1. Buyers feel a little better than they did last month and confidence came back into the market as a result. Our enquiry rates are certainly up.
2. The overall quality of homes on offer was up on previous weeks and they were plentiful in number. We saw lots of 700+ James Home Rating (quality) homes go to auction this weekend.
3. Last week as buyers looked into the future they saw that the cupboard of  post Easter offerings was bare – and so they adjusted their game plan accordingly.

Whether this is a blip or a trend change will largely be determined by what discretionary sellers do in May. If they are encouraged by this weekend’s results to put their properties onto the market, then prices may stay softer than last year. If those sellers stay out and demand continues as is, then the overhang of stales will begin to be mopped up and the good buying conditions of the last months (price and choice) will dissipate.

This weekend, again, we saw the overall power of the Melbourne market and the power of demand and supply. There is an underlying strength in Melbourne homebuying (based in immigration and lack of homes), that has slackened off in recent times as buyers become more circumspect with concerns about overseas events, jobs, and who knows what exactly. As well there has been plenty of choice. BUT as soon as there is a hint of a quality stock shortage the market responds, particularly with regards to well-located quality family homes, on land and of a period flavour. And it responds strongly.

More insights

• It wasn’t just the consistent $1m to $1.5m range holding up its end in isolation, this was also the strongest single week this year for $3m+ buys.
• It was the second strongest clearance rate of the year, despite an almost Super Saturday (140 $M+ Auctions – Inner East and Bayside)
• We saw consistent bidding across the board, with over 75% of monitored auctions having at least one bidder.
• The big question going forward after our Easter market break is whether nervous sellers will re-enter the market on one week’s good showing.
• Prices are generally down on this time last year (there are exceptions), so good homes are attractive right now. And while new choice may become limited,  some existing choice (overhang) still remains.
• Top End rentals are getting considerably more rent than expected as supply in relation to demand is tightening. This observation from two agents needs more examination at a later date. We’re interested in how widespread this may be, why it is happening and what effects it may have on the buying market. (Are borderline investors perhaps re-entering the Top End?).

Wild and Wooly - the weather that is, not Rob Vickers-Willis. Toorak 3 Denham. Passed In $2,010,000. 2 bidders.

The $3m+ Market’s strongest 2011 week so far (some examples):

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Bought well over the $12,000,000 quote range, putting Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: Over $7,000,000 on Scotch Hill for a good home with tennis court that needs some floor plan reworking.

While still in Hawthorn, Mr Nice Guy and the Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (modern home in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period home in Grace Park) for $2,800,000. Both prices were a little down on ambitious asks but they were nonetheless solid prices for what they were.

Kew – Was it us who cried out the death of the Balwyn formula – i.e. new build, small block and overpriced? Well technically we are still credible, because these were in neighbouring Kew: with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million-ish, the death of this market may be a little exaggerated. It was only two sales, but they were biggies.

Malvern and Canterbury -  50 Wattle Valley, Canterbury (Duane Wolowiec and James Tostevin) sold under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few $3M+ sales as well, with 29 Bay Street, Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000. The final result put north-facing Golden Mile land (no view) at more than $3,200 per sq metre. That is a “steady as she goes price” similar to last year’s Golden mile (no view) buys. Another $3m+ sale with a strange twist (all non bidders asked to leave auction) was at 40 Drake Brighton (Ian Jackson of Kay and Burton).

Toorak While on land sales, 1073 Malvern Road (Justin Long) passed in at $3,225,000 and a reserve was offered which was not taken up by the pass-in bidder. Two new bidders appeared and a second auction took place resulting in a sale well over the pass-in figure.

For full details each week of what is happening in the Top End $M+ market see our regular $3-Million-Plus Market Reports.

Round the Grounds – Price this year v last year and a word on Post Easter stock levels.

Malvern John Bongiorno, Marshall White: “Price is a little softer on certain homes but on high quality homes they are still rocking, granted buyers are more discerning. Stock levels are not as strong as last year. Rentals at the top end are exploding in the middle and top end market. Big news is rents have increased, possibly making investments more attractive at the higher end. There is such a shortage of homes to rent.”

Caulfield Rodney Morley, Woodards: “I think the negativity means less stock is coming on in May and Winter. Everybody wants records that are not coming at the moment. The market is definitely softer than this time last year in price. Buyers (then) were buying anything. Right now, buyers do not feel that urgency. No question that the market is softer.”

Brighton Bert Stewart, Buxton: “I think the market is around 10% down on some top end homes. Stock levels and therefore buyer choice after Easter are not looking good.”

Camberwell Geoff Hall, Noel Jones: ”Prices are down around 10% on this time last year, with some exceptions for quality homes, and stock post Easter is just not coming on like it did last year.”

Hawthorn Richard Winneke, Jellis Craig: “Big drop in new buyer enquiry this week. Probably due to the holiday factor but it was a noticeable drop. Rentals are definitely getting more than I expected price-wise and this may stimulate investment into Top End homes. East of Burke Road (Camberwell and Canterbury) has not performed as well as Hawthorn and Kew this year to date. I think prices are still relatively solid around that early million dollar mark but softer higher up.”

Carlton Tom Roberts, Nelson Alexander:  ”Stock levels Post Easter are tightening with only the sellers that need to sell going to market. Good homes still going exceptionally well but those results are in amongst the not so good going not quiet so well as last year. Prices are down a smidgen.”

Playing for Keeps here. Big 150 plus crowd. 29 McKinnon, Carlton. 3 bidders. Bought for a whopping $1,417,000 (462 sqm). We thought it was justified, but it was still big. Nick Renna, Peter Sinclair and Melissa Ryan of Hocking Stuart

Biggest Sale we covered: 21 Macartney Ave, Kew; Walter Dodich (Marshall White): After auction, undisclosed around $4,000,000
“Being in the coveted Sackville area this auction attracted a large crowd of about 100. The crowd were well spread out and even blocked the road in front of the property as they heard auctioneer Walter Dodich open proceedings. The auction began in Mr Dodich’s own words with a ‘traditional’ vendor bid at $3,700,000 as no one was willing to start things off. However this was the trigger that allowed two bidders to start the battle off for the property. Initially there were meant to be three bidders however the third bidder couldn’t get his bid in as he always cut off by the other two. When he finally got one in there was applause from the crowd and a cry of joy from the bidder. As the auction went on, the climax built and the crowd held their breath as the price rose and rose yet there was still no indication from Mr Dodich about whether the property was on the market or not. At $4,000,000 Mr Dodich passed the property in and after lengthy negotiations the property was bought after for an undisclosed amount.” (Josh Bong)

Biggest Pass in we covered: 72 Kerferd St, Malvern East, John Bongiorno (Marshall White); Passed in, $2,800,000, no bidders
“With 300 people having viewed this property and 100 or so crowded into the garden of this Gascoigne Estate home, auctioneer John Bongiorno was confident of a sale. But it was not to be with a vendor bid of $2,800,000 the only one of the day and the property passed in. However, with one interested party heading inside, it may not be long before this stunning property is sporting a ‘sold’ sign.” (Debbie McTaggart)

The Big Issue: Architect Adam and Klarity Kris discuss whether they believe buying conditions will be as good post-Easter as they are now.

Auction Video: This week Jen Milligan, our Market News Co-ordinator, fills in for our advocates who were busy with other auction commitments. 15 Epping St, Malvern East, a BenMac auction with Iain Carmichael. Click on the live action auction video.

Buyer Masterclass: Conditions are great for homebuyers – so where are they?

We Only Buy Homes

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MALVERN EAST, 72 Kerferd St: A large crowd gathered for the auction of this Gascoigne Estate home, but there was no sale. John Bongiorno (Marshall White), passed in, $2,800,000, no bidders

Key Points:

• A lot on offer in Stonnington today with 42 auctions monitored over a $m with 22 homes over a million bought.
• Although there was a lot on offer – it was a mixed bag quality wise.
• If there is such a thing the good home clearance rate index would have shown a better result than the stats.
• It was a case of a lot of the good stuff sold, some of the good stuff didn’t and much of the overpriced and/or rubbish got what it deserved – zilch.

What sold well

• South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Well over the $12,000,000 quote range making Domain Precinct land values at $8,000 per sqm for the bigger blocks. Private Sale mid week
• 54 Stanhope Malvern with Rae Tomlinson under the hammer for $3,170,000.
• 1073 Malvern Road Toorak (Justin Long) passed in at $3,225,000 and a reserve was offered – not taken up – two new bidders appeared and a second auction took place resulting in a sale well over the pass in figure.
• Malvern East – 13 Chanak with Maddie Kennedy and John Manton of Marshall White – great “feel” home but tougher location being fringe Gascoine to get the $2m plus number – it got it.
• Toorak – 3 May – Richard Hornidge of RT Edgar – a bit of a dog single fronted needing a reno but was priced sensibly – bought for $1,055,000.
• Toorak – 1a Nareeb Court  – Matthew Wassylko of Marshall White – 0 bidders last year, this year 3 bidders and was bought for $2,940,000.

What didn’t sell well

• Luxury Apartments seem to have ground to a halt – one big exception 2701/368 St Kilda Road Melbourne $3,410,000 – Marcus Chiminello – No real capital growth there, but at least it sold.
• Toorak – 3 Denham – Courageous price expectations?
• Malvern – 225 Tooronga – Difficult location?
• South Yarra -  3 Shipley – Good home and garden but some Punt Road noise and some overlooking?

CAMBERWELL, 8 Stanhope Grove: James Tostevin (Marshall White) is a picture of concentration. Bought under the hammer, $2,400,000, two bidders

We mainly focus on the better quality homes, however 10 from 10 was still a surprise. This stat varies dramatically from our overall monitored auctions stat of just over 50% – similar to last week.

It was a Super Saturday in Boroondara with over 50 auctions at $M+ and over 30 sales reported as being above a million dollars.

So what was bought and what wasn’t

Bought

• Hawthorn 51 Berkeley St with Tim Blackett Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court – Expressions of Interest Campaign.
• While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were. Both Private Sales.
• But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies. Both at auction.
• The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Passed-In – the difficult ones

• 16 Glenroy Hawthorn Passed in $3,000,000 on a vendor bid. – Difficult for see how to reno easily?
• 16 Burton Hawthorn Passed in $3,150,000 on a vendor bid. – Price versus land content?
• 256 Riversdale Hawthorn $2,020,000 – Difficult position?
• 44 Harcourt Hawthorn East $2,000,000 – Family home but no real backyard?
• Plenty of homes passed in just below a million in that $900,000 range – $million is still a real mental barrier for many buyers?

Agent Q & A : How does current pricing compare with the same time last year?

Tim Heavyside, Fletchers, Canterbury: “Property prices were slightly higher back then than now.”

PRAHRAN, 2 Westbourne St: Elliot Gill (BenMac) in action. Under the hammer, $1,080,000, 3 bidders

Key Points:

• Stock is now starting to dry up as Easter interrupts the market and with the vibe dropping since Labour Day we may well see limited stock in the discretionary upper end market coming on Post Easter.  19 Huntingfield Toorak (Justin Long) was a classic example of a limited offering that captured the markets’ attention – even allowing for building value at $2,000,000 (and that is generous) that would leave land value with a north orientation at around $5,000 per sq metre. That is not a lower than 2010 or giveaway price.
• Another good land pointer is 60 Repton Road – one of my fav areas just near Ardrie Park – a 700 sqm block sold for $1843 per sqm through Dean Gilbert of Marshall White
  

STOP PRESS: March, while not huge in numbers, did finish the month with 3 solid mid week $3M+ buys – including 4 bidders at $7 million or better at 2 of them.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8m’s
• Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – mid week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000. James Connell said afterwards that this market was not all bad news and Huntingfield supported that.
• South Yarra – The Caroline Coachhouse – they were looking for $3m ish for a very long time (eg in the years) and now Mike Gibson – Kay and Burton has got it away.

Justin Long, Marshall White, Armadale: “The way I see things at present, we are experiencing some mild upward pressure on prices but not enough to fill big gaps between market value and vendors’ expectations where those gaps have been created through over-optimism by either agent or vendor. Fairly priced properties in good locations are being competitively sought and those looking for ‘opportunities’ are, as is often the case, forced to compromise on location or suitability. Some are extremely lucky, but most in fact will ultimately pay what is required to buy the home they really like or sit on the sidelines and watch values eventually rise beyond them.”

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STOP PRESS: March, while not huge in numbers, did finish the month with 3 solid mid week $3M+ buys – including 4 bidders at $7 million or better at 2 of them.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8m’s
• Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – mid week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000. James Connell said afterwards that this market was not all bad news and Huntingfield supported that.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,200,000
• South Yarra – The Caroline Coachhouse – they were looking for $3m ish for a very long time (eg in the years) and now Mike Gibson – Kay and Burton has got it away.

South Yarra 17 Acland St: Gerald Delany. Fairly typical of the market for the slightly overpriced or slightly less than perfect. Passed-In with no bidders and now for sale at POA.

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Week Ending 26th March: The Market at this level was fairly quiet this week with the good sales, price wise but not too many of them.

• 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 and selling for circle mid $3′s

Armadale 1026 Malvern Road: The recipe was there for a good auction - quality period home on big land - however the market is a different beast from some time ago at this price level and a quiet auction took place with Jack Bongiorno in charge. Opened on a bid of $3,400,000, passed in to that bidder and was bought after for an undisclosed amount. Crowd of 40.

Week Ending 19th March:

Off Markets, Forthcoming Auctions and Expressions of Interest are increasing as market stock levels begin to rise dramatically. However some big sales including a $13,000,000+ in Toorak and a $7,000,000+ in Brighton along with a few other $3m+ buys indicate the market hadn’t completely gone to sleep .

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 may be looking healthier than the market actually is – but from a purely stats points of view (clearance rates) today was a good day.”

In Boroondara:

• 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. 0 bidders.

In Stonnington:

• 19 Kingston St, Malvern East, Iain Carmichael (BenMac); After auction in excess of $4,600,000
  “Auctioneer Iain Carmichael was in charge of proceedings for this picture perfect home.  A large crowd of over 80 packed in to the beautiful mature gardens surrounding the house, as the sun shone to show this property at its very best.  The initial vendor bid of $4,250,000 didn’t seem over the top given the location of this park-adjacent idyll.  Despite the auctioneer being confident of a sale, no further bids were forthcoming and, after referral to the vendor, the property was passed in. (Debbie McTaggart)
  Footnote: Nobody bid at auction at $4,250,000 but 2 bidders emerged post auction and fought it out afterwards to a price well in excess of the reserve and well in excess of $4,600,000. Go figure.
• Armadale 1026 Malvern: James Redfern of Marshall White: Passed in $3,400,000 and bought afterwards. 1 bidder.

In Bayside:

• Brighton 29 St Ninians: As always, auctioneer Jonathan Dixon opened proceedings right on time and the preliminaries were soon completed. This property has a supreme and uninterrupted view of the Bay from the City to Royal Brighton Yacht Club and the potential for future development was clearly explained by Mr Dixon. Nevertheless, no bids were forthcoming and the property was passed in on a vendor bid of $7,300,000.
• Brighton 18A Martin: Passed In for $3,300,000. 1 bidder.

Labour Day Weekend March 12th: As expected minimal activity over the weekend; well no auctions that is – a heap of new stock was listed to go onto an already over supplied market.

Brighton 2 Shandford: Bought Post Auction for over $7 million or in around $10,000 per sq metre - meaning Melbourne absolute waterfront is amongst the most sought after land in the world. Regina Schmidt and Brian Devlin from Buxton.

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’s 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 may be a little quiet, but Golden Mile Brighton is relatively hot for land sales (compared to previous years).

In the heart of the Bagel Belt at 85 Lumeah Road Caulfield North (Gowan Stubbings of Kay and Burton) a large block of land (around 1800 sqm) with a tired home on it was sold for an undisclosed amount for over $4 million, under the hammer, having been on the market at $3.5 million – 3 bidders. That makes it number two along with Langdon Road at or over $4m in the last fortnight in Caulfield.

In Stonnington 20 St Georges has been bought for an undisclosed amount. The property had been quietly on the market for some time before a more public campaign this year. The asking price estimate was $12,000,000 to $15,000,000 and it is believed to have been sold in the middle. Andrew Tolson of TBM was the selling agent. We went through it a few times on behalf of different clients and found it to be a home of some class with good light and a nice flowing floor plan – slight negatives were a less than full-sized tennis court and some overlooking at the rear (although it was not significant and, if you lost the tennis court, planting could remedy that). Being St Georges it commanded a premium – although to date its “little brother” down the road at No 10 hasn’t sold at an already passed Expressions of Interest deadline. However, considering the home’s characteristics, it would be hats off to the agents if it got near their $10,000,000 ask, even if it is St Georges.

Also went through 14 Bruce St Toorak late last month –  it has been bought for a reasonable margin over $3,000,000. Again showing the power of good architects and in particular Wayne Gillespie. Difficult block and orientation and a market place that has competition for supply, so this was a good result for an Expressions of Interest campaign and the man that sells a number of these very quietly – Marcus Chiminello.

‘Hoping for $3m in a different market but didn’t quite get there’ stories: In Port Phillip, 7 Pilley Street in St Kilda East, which was originally marketed at an ambitious around $3 million, has been bought for around $2.6 million - Jeremy Fox of RT Edgar. All things considered, this was still a very good result for the area. In Malvern, 5 Gaynor Court with Rob Vickers-Willis got to $2.73 million and a three storey terrace home in Carlton with Anthony Gattuso of AG Property got around the same amount. All solid results.

Overall still a lot of properties on the market at this $3m+ price level that have completed normal auction and Expression of Interest with no result.

Malvern 66 Claremont: Iain Carmichael: Bought for $3,700,000: 3 bidders: At this point, someone yelled "is it on the market?" and the BenMac team hastily retreated inside to speak to the vendor. Upon his return, Mr Carmichael said yes indeed it was on the market and it was here that the bidding really took off. After the price hit $3,625,000, one of the bidders went bang - $3,700,000 - and knocked everyone else out of the competition. A great finish to a great auction

Week Ending 5th March: All the bigger deals were basically in one spot, Stonnington.

Actual Boughts in Stonnington:

• Malvern 19 Hamilton – Justin Long – At Auction – $4,357,000
• Malvern 66 Claremont – Iain Carmichael – At Auction – $3,700,000
• Toorak 9 Ross – Justin Long – Auction – over $3,600,000
• Toorak – 3 Teringa – Andrew(s) McCann and Macmillan of Benmac – post last weeks auction – over $3,500,000 – nearly $5000 per sqm for rear south facing land
• Toorak – 611 Toorak Road – Expressions of Interest – Greg Herman of RT Edgar – $3,500,000
• Toorak – 231 Kooyong Road – James Redfern – Post last Saturday’s auction – over $3,500,000
• Malvern East – 127 Finch St – Rob Vickers-Willis – $3,300,000

Bayside: A Key land Indicator

• 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.

Boroondara: Action at the Top End almost non-existent

• 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.

Port Phillip: 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.

• 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 four sales on this strip over $4m last year seemed different offerings.
• 49 Howe Crescent, which was advertised in an Expressions of Interest campaign for later this month, sold last week well over its $5m+ guideline for more than $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 the St Vincent Garden precinct (or just off it). Michael Coen of Hocking Stuart was the dealmaker on this one. Good job.

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

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.”