Well, here we are in early August – and anything that has been written about the market in the last few months has been to fill some space. Because nothing has been happening. Nothing good and nothing bad – just plain ‘ol nothing.

There’s a saying in our business that the really good agents should take the J months off: January, June and July. That certainly happened this year: most good agents have spent a fair proportion of the last eight weeks re-connecting with family, friends or their inner self. Yes, we do have all of the above, (well most of us do).

Sure, there’s been plenty of talk about tough times from the punters and press; plenty of conjecture about where prices are going from anyone who knows anything,  and from plenty who know absolutely nothing about high end Melbourne real estate. Like that other great weekend game there have been some personnel changes – and the odd betting, sorry ‘quoting’, scandal and a few boys who didn’t pass the dope test.

All in all we seemed primed for an interesting four months between Footy Finals and Santa time.

This next four months is traditionally two markets:  the early Spring market – which runs from just before Elimination Final day to Grand Final – and the late spring market which starts the week after Grand Final and runs at a frenetic pace until the Melbourne Cup break and then for another month before winding down into Christmas.

We’re likely to see some ‘Super Saturdays’ at the end of August, on preliminary final day and the weekend before the Cup. And then, depending on the early Spring market, perhaps also the last week in November and the first fortnight of December.

The almost guaranteed Super Saturday will be the last week before the Melbourne Cup – although with the Grand Final running a week later this year sellers will need to start their four week campaign on that holiest of days, the Grand Final, to get in before the horses leap from the stalls at Flemington.

So what should home hunters be looking for? A good start is to look at the thickness of their Weekly Review over the next few weeks. Seriously. If the Review is like a phone book prior to Grand Final, then we’ll have some choice and prices may not run away on the good quality homes. But if it is as thin as a dry cleaning brochure, buyers are going to have to compete hard on the limited quality stock presented.

Which is what has been happening since May. There has been so little on offer that is quality. Which means any quality, well-priced home has attracted considerably more interest than you’d expect reading the gloom and doom headlines. That’s because this market is not a weak market caused by lack of demand – any weakness or negativity is due to a severe quality contraction of supply of well priced quality homes.

Our company went to 28 auctions the weekend before last and a third had 3 bidders or more – with three $1 million plus auctions attracting 5, 7 and 9 bidders That included a 5 bidder auction at 3 Irymple Ave, Glen Iris (Iain Carmichael and $3,000,000 Bought); a 7 bidder at 42 Guildford Rd, Surrey Hills (Antony Woodley and $1,381,000 Bought) and a 9 bidder, at 28 Montclair Ave, Brighton (Peter Kennett and $1,820,000 Bought).

So it’s all about the sellers. The late spring market post Grand Final will be in part determined by the headlines in marketnews.com.au and the newspapers over the next two months. If August and September is all negative headlines and low clearance rates and talk of falling prices then anyone who doesn’t have to sell will again be reluctant to market their homes – and that will again  impact on buyers.

So what are buyers hoping for in this new home hunting season? Choice. Firstly they want some thick property mags in August or September; they want to see some positive headlines in the papers in the lead up to Grand Final; and then they want more thick magazines between Grand Final and Melbourne Cup. If that happens the world should be a wonderful place for Melbourne homebuyers. If not well ….. let’s wait and see.

Published each week in The Weekly Review – Melbourne’s million-plus property magazine.

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

Picture of concentration: Tim Fletcher (Fletchers) at 2 Barnsbury Rd, Balwyn. Bought after auction $2,585,000, 1 bidder

Key Points:

• Crowds smaller and less bidders with a clearance rate at 62% – lowish for Boroondara, however there were around 50 auctions over $1 million.
• Hottest market is for the $1,200,000 to $1,600,000 double fronted timber home in need of some work with a market price tag on it.
• Scott Patterson MD of Jellis Craig: Clearance Rate expected around the mid 60% level, but that is normal for this time of the year. The Asian community is complaining about the high Aussie dollar and their market is tracking down. Well credentialed and well-priced homes are going, but those vendors priced a little bit too high are simply not selling. A high ask strategy is nowhere near as successful now as it was this time last year or even earlier this year.

Highlights:

• Kew, 50 Charles, Paul Keane of Jellis Craig – going nowhere for some time then some interest, then – bang: a boardroom auction and a result well north of $4,200,000 was achieved on the night.
• Hawthorn 41 Wattle Road – good home on the market for some time. Bought for well over $5,000,000 also through Paul Keane Jellis Craig
• Balwyn 6 Ropley Laurence Murphy of Hocking Stuart – brand new French provincial believed to be over $3,000,000. The Aussie dollar may be hurting but the market still has a passion for these sorts of homes.

$3m+ not so highlights:

• Hawthorn 5 Yarra: Passed In $4,500,000: Zero Bidders
• Canterbury 35 Logan: Passed In for $2,860,000: Zero bidders

Agent Q & A: In terms of real estate, what has happened this year and what do you expect to happen next year?
Scott Patterson, Jellis Craig, Hawthorn:“2010 started very strongly with healthy demand in February and March.  Sellers realised that this might be their last chance to capitalise on a rising market so they flooded the market in May and June.  Increased volume had an adverse affect on auction clearance rates and we started to see a softening in the market by about June.  School holidays interrupted July and then we had the Federal Election in August which was unresolved for several weeks – again adding to the uncertainty.  Clearance rates dropped back to around 70% compared to 85% in 2009.  September/October saw two football grand finals play out, which meant the predictions of a late Spring were correct.  An interest rate rise on Cup Day and the threat of further increases has dampened enthusiasm and we now see clearance rates hovering around 60% compared to 80% for the corresponding period last year.  On a positive note, properties in quality locations are still attracting strong interest – however it is fair to say that we are noticing less desperation amongst buyers.  Vendors now need to revise their expectations if they are serious about selling this side of Christmas, otherwise the market will go to sleep from December 24 – January 18.  Next year will be ‘steady as she goes’ in my opinion.  We are predicting slow growth rather than the dramatic price increases we have seen in previous years.  A lot will depend on interest rate rises next year as a series of rises tends to affect buyer confidence.”

Tim Wilson and Jeremy Fox get ready to do battle at 2 Bromley Toorak, but in the end there were not in the trenches and they stood there as generals and watched 3 bidders slug it out to $5,600,000 - $800,000 over reserve.

Week Ending November 27th:

The high end ($3m+) which like the proverbial brides nightie (not sure if I can say that) is up and down at the drop of a hat. A fortnight ago it was up and last week it was down – this week it was up and in a big way – below are some of the results.

Highlights:

• Toorak 2 Bromley with Jeremy Fox of RT Edgar for 5,600,000 – 3 bidders (see report)
• Hampton 3 Lorraine for over $3,000,000 with Nick Johnstone of JP Dixon (Expression of Interest)
• Armadale Adelaide (Off Market)
• Hawthorn 41 Wattle Road – good home on the market for some time bought for well over $5,000,000 through Paul Keane Jellis Craig
• South Yarra 2/155 Domain Road Marcus Chiminello of Marshall White bought for in excess of $7,500,000 or $20,000 per square metre  (Off Market)
• Toorak 88 Mathoura Road for $6,500,000 bought before – also Marcus Chiminello
• Armadale 12 Munro with Tim Derham, passed in at auction last weekend at $3,000,000 and has been bought afterwards.

$3m+ not so highlights:

• Brighton 12a Manor: Passed In $3,800,000: Zero Bidders
• Hawthorn 5 Yarra: Passed In $4,500,000: Zero Bidders
• South Yarra 16 William: Passed In $4,200,000: Zero Bidders
• Canterbury 35 Logan: Passed In for $2,860,000: Zero bidders

South Melbourne 9 Anderson: An exciting auction which had a buzz from the crowd, trams, birds and sounds of people playing sport down the street at the Melbourne Sports And Aquatic Centre. Geoff Cayzer was auctioneer and, although soft spoken, he was very entertaining with his humour and pre-auction speech. This lightened the atmosphere and allowed two bidders to fight it out after Mr Cayzer's opening bid of $2,850,000. The battle wasn't long though as after some 5 bids the hammer was brought down and the property sold for $3,250,000, which brought cheers and jubilation from the winning bidder's party. A great, fun and entertaining auction to watch.

Week Ending November 20th:

This market seems clear as mud in terms of short term directional pointers. Some good ones sold, some good ones didn’t and all on a turnover down on this time last year and down on September of this year. But the market hasn’t stopped completely in its tracks eg 50 Charles Kew with Paul Keane of Jellis Craig – going nowhere for some time then some interest, then bang a boardroom auction and well north of $4,200,000 was achieved on the night. On the quiet side, a second off market north of $13,000,000 in recent times – actually it was over $15million and in establishment Toorak – Mike Gibson from Kay and Burton the selling agent.

$3M+ Highlights

• Malvern 116 Stanhope: Paul Keane of Jellis Craig. Bought for just under $3,500,000
• South Melbourne 9 Anderson: Geoff Cayzer. Bought under the hammer for $3,250,000: 2 bidders
• Ivanhoe 9 Nyorie: David Oster of Jellis Craig. Bought after auction for $3,100,000: 2 bidders

$3M+ not so Highlights:

• East Melbourne 105 George: Passed In on a vendor bid for $4,500,000
• Malvern 1 Wilks: Passed In on a vendor bid for $3,000,000
• Armadale 12 Munro: Passed In on a vendor bid for $3,000,000

Great Expectations but in the end it was more like Bleak House as 50 Hotham Melbourne East failed to sell under the hammer. Passed In for $7,000,000. Glen Coutinho of Hocking Stuart

Week Ending November 13th:

………But this new state of affairs does not apply so much to the $3m+ market which was a little less shiny today after shining like a beacon 7 days ago. In fact there were a number of significant pass-ins at this level this weekend.

So in a nutshell: last week’s doom and gloom on low quality stock and a negative feel mid-week at open-for-inspections was followed by a bit of a bounce-back this weekend – with more homes selling than expected. But that’s not to say it’s a strong sellers market by any stretch of the imagination. At present the market is, in our opinion, between cool and warm, depending on the quality of the stock. We await with interest next week’s instalment as to where our late Spring market is heading.

Highlights

• 32 Linlithgow, Toorak (Jeremy Fox of RT Edgar) was the biggest sale of the day (see report below)
• 4 Snowden, Canterbury (James Tostevin and Duane Wolowiec of Marshall White), Bought after at an undisclosed price of more than $3,000,000.
• 35 Cole St Brighton (Ian Jackson of Kay and Burton), Bought at auction for a shade over $3,500,000 – after not selling at an Expressions of Interest campaign earlier in the year

Lowlights

• The weather
• Biggest Pass-In was at 50 Hotham East Melbourne, a great home with an 800+ James Rating. It failed to attract any bidding near the reserve and was passed in at $7,000,000
• $3M+ pass-ins at 188 The Esplanade Brighton, 3 Buley Hawthorn East, 18 Heyington and 12 Merriwee Toorak

Camberwell 18 Currajong: 3 bidders, 3 advocates and one great auction: Maurice Di Marzio: Bought under the hammer for $3,375,000

Week Ending November 6th:

What a difference a month and some increased stock levels make. If you have a look at our $3m section in October and compare it to our September report you will see a big difference in activity, especially when you consider the market had a clean run in October with no election and limited footy interruptions, and had five

Click on video to see $3m auctions live

auction Saturdays. This market is as fickle as the horse race we love to watch. In Winter this market was down, in September it definitely perked up and now the $3m+ and off-markets would appear to be edging downwards again. But again the statistics are hiding the full story: there were in fact a few sales over this level we have been asked not to report on, and we ourselves have purchased four off-markets over $1million in the last month, in Brighton, Clifton Hill, Hawthorn and Caulfield. Plus look at this weekend’s $3m+ results! The fact is, there is still plenty of activity – just not as public as in September. There are good homes available for sale off market if you know where to look.

• Elwood 45 Dickens: Jason Scillio: Under Hammer: $3,535,000:  3 bidders
  A large crowd gathered in the front garden of this magnificent property to hear Jason Scillio provide a well prepared preamble prior to inviting bids from a large crowd on this beautiful afternoon. After the usual hesitation, strong bidding emerged from three buyers and it was on the market at $3,450,000. The house was soon bought with a strong bid $3,535,000. (David James)

• Carlton North 810 Drummond:  Tom Roberts:  Under Hammer  $3,450,000:  3 bidders
  What a home. This is the best example of the saying ‘don’t judge a book by its cover’.  It is an ugly duckling from the street, but when you walk through the door you’re hit with one of the most stunning living area renovations I have seen in Inner Melbourne. The auction itself started with a pretend bid at $2,000,000 that was immediately countered by auctioneer Tom Roberts with a vendor bid at $3,000,000 and she took off from there. Three bidders and on the market at $3,300,000 before settling at $3,450,000 in front of a crowd of 125.

• Toorak 6 Benson: Gowan Stubbings: Bought around $3,000,000: 3 bidders
  A great auction to watch. Auctioneer Gowan Stubbings led the way, offering a vendor bid of $2,400,000 after a member of the crowd offered an initial bid of $2,350,000. With three bidders overall, it became a battle between two very confident, strong parties, both determined to fight it out to the very end. One bidder offered increments of $10,000 and even $100,000, while the other settled on $1000 increments each time. Ultimately, the $1000 bidder won, walking away with the property for an undisclosed amount close to $3,000,000. A very entertaining auction with a crowd of around 60. (Jen Milligan)

• Some solid results outside Saturday’s auction:
  Toorak 63 St Georges: Andrew Baines of Kay and Burton: Expression of Interest for just under $8 million. Went through this home and tennis court.It had a good feel and, just as the ad says, an exclusive street address. At around $4,000 per sqm it was a win for the buyer and seller.
  Two blocks of flats sold at mid week auctions: South Yarra 28 Tivoli ($4,825,000)  Philippe Batters: 46 Ulupna; Ormond ($3,700,000) Andrew Chisholm.
  Brighton 11 Kent Campbell Cooney was bought post auction for $4,100,000, which put south-facing, non beachfront land on the Golden Mile at $3,800 per sqm

• It was gratifying to see the number of professional advocates acting for buying clients this weekend. The Bidderbuzz auction at Currajong auction had three advocates, and there was one each on Benson, Drummond, Elwood. While the advocate didn’t win the chocolates for their clients every time, at least it shows more $1m, $2m, and $3m+ buyers are making informed decisions.

Elsternwick, 53 Shoobra, The man with the movie star looks, Bill Stavrakis (Biggin Scott), passed in $1,775,000, 1 bidder

Key Points:

• Mixed bag around the grounds with an overall clearance rate of 58%
• Across Melbourne there were 143 reported sales over a million dollars yesterday
• Biggest auction was 16 Brooke, Eaglemont, with Damien Carter of Miles. On a quote of mid to high $2 million it was bought for just over mid $3 million

Agent Q & A:

What are stock levels looking like post Melbourne Cup Weekend?
Nathan Foley, Fletchers, Eltham: “At this stage I think we will continue to see high stock levels right up until Christmas. Demand is still high and we expect to see something of a late spring rush going right up to the end of the year.”

Eaglemont, 31 Mount St: Friendly, chatty crowd but no action. David Oster (Jellis Craig) passed in $1,850,000, no bidders.

Around the Grounds:

Elsternwick, 53 Shoobra Rd, Bill Stavrakis, Biggin Scott, Passed In, $1,775,000, 1 bidder
“Among the assembled crowd of 40 were many curious neighbours and families with young children. Auctioneer Bill Stavrakis had a clear and considered manner and described this property as being in a ‘wonderful location’. Mr Stavrakis asked for an opening bid but the crowd was silent and so an opening vendor bid of $1,750,000 started proceedings. Mr Stavrakis worked hard to entice the reserved crowd and eventually there was one bid of $1,775,000 from the assembled group. With no further interest on the day, the property was passed in at this figure.” (Kate Agnoleto)

Heidelberg, 20 Cleve Grove, David Oster, Jellis Craig, Under the Hammer, $1,325,000, 3 bidders “David Oster fielded bids from three keen parties at this Heidelberg auction. An opening bid of $1,050,000 was received from the crowd and the home was quickly on the market at $1,200,000. Bought under the hammer for $1,325,000 in front of a big Super Saturday crowd of 80 people.” (Mal James)

Northcote, 9 Tanner Grove, Tom Alexiadis, Nelson Alexander, After Auction, $1,200,000, 3 bidders
“There was a large crowd gathered, but it appeared they were mainly neighbours as this auction was a little slow to get going. After an opening vendor bid of $1,100,000, a couple of people put their hat in the ring before it was referred inside. On the auctioneer’s return there was no further movement from the crowd and the property was passed in at $1,160,000. With the crowd numbers, the expectation was greater than the actual event.” (Linder Slater)

Northcote, 9 Tanner, Tom Alexiadis, Nelson Alexander. Big crowd of 100, bought after for $1,200,000, 3 bidders

Results

South Yarra: 7 Motherwell, Andrew Macmillan (BenMac) was the only Stonnington auction we attended on Super Saturday that actually sold. Bought after $2,050,000, one bidder

Key Points:

• 7 of the 9 Stonnington auctions we attended had no bidders at all, while the remaining two had only one bidder each and this was on a good quality stock day.
• While there were 18 buys over $1 million, remember that $1 million is entry level here.

Why is the Stonnington market so poor?

Our left-field and unscientific opinion is that this is the most mistrusted $M+ market in Melbourne, and that buyers have had enough of the deceit when it comes to how a property is represented in terms of price. Some serious malcontent between buyers and selling agents won’t be helping either. (We will except Benmac on these grounds, who do quote and play fairly.) Contrast this situation with that in Boroondara, where Jellis Craig under Scott Patterson, Richard James and Richard Earle have re-engaged with the buying public in a significant way, post GFC, with great results. So there may be a lesson here for Stonnington agents. We would advise Stonnington sellers to check out how many bids you have on the table under your current quoting regime.

Biggest Buy we covered: South Yarra, 7 Motherwell, Andrew MacMillan, BenMac, Bought After Auction, $2,050,000, 1 bidder

“The small crowd gathered and the neighbours peeked out of their flats to watch the auction at 7 Motherwell Street. Auctioneer Andrew Macmillan attempted to extract an opening bid by suggesting to the crowd that in order to keep warm they needed to raise their hands and put in a bid. However this failed to warm anyone up and he was forced to put in a vendor bid of $1,950,000. This was met by a positive response from one member of the crowd who put in a bid of $1,970,000. However this was all the action for the day, and the property was passed in to the lone bidder. The property was bought afterwards for $2,050,000.” (Joshua Bong)

Biggest Pass In: Toorak, 3 Kingsley, Jeremy Fox, RT Edgar, Passed In $4,000,000, no bidders
“There is no doubt that this is one of the quietest and most sought after courts in Toorak. However, as auctioneer Jeremy Fox found out, clearly not appealing enough to sell at auction on Saturday. Mr Fox was quick to make a vendor bid of $4,000,000 which failed to ignite any interest and the property was passed in. Afterwards, a neighbour offered a gin and tonic – they certainly are civilised in Toorak.” (Guy Angwin)

Agent Q & A:

What are stock levels like post Melbourne Cup Weekend?

Brad Fleming, JP Dixon, Toorak: “I believe stock levels have increased in the past few weeks. Buyer demand for quality properties outweighs the properties actually listed and currently advertised.  It is important as a buyer to understand that many of us agents have ‘quiet’ listings that have not yet been advertised for sale, therefore calling agents directly would be recommended.”

Brad Cooper, Jellis Craig, Glen Iris: “It’s definitely picking up at the moment.  Both the 27th November and 4th December are shaping up to be really big days.”

Jeremy Fox, RT Edgar, Toorak: ”What we expect up until Melbourne Cup is lots of sales, as this high level of stock we are now seeing is going to disappear very quickly. At the moment we only have one auction listed  in December, consequently anyone looking for a home will have to wait until Feb and March of next year for more stock to become available.”

Results:

Paul McDonald moving things along nicely at 98 Primrose, Essendon: 3 bidders: Bought under the hammer for $1,312,500

The rest of $M Melbourne Melbourne slipped a cog this weekend with a 64% clearance rate on 25 $M+ reported auctions – a fair way down from last week’s stellar 83% on our 30 monitored $M+ auctions.

Some Highlights

• In Yarra (Richmond to Fitzroy) there were six properties up for auction at around a $million, and six were bought
• Elsternwick 9 Gladstone – Bill Stavrakis - bought at around $2,500,000. Land in that area is pushing $2000 per sq metre if you presume you’d bulldoze 5 Gisborne Elsternwick, which was bought yesterday for $1,505,000 (750 sqm) – Daniel Ashton of Biggin and Scott
• Caulfield saw three from three $M+ bought at auction on Sunday – all with Gary Peer: 7 Palm with Eyal Malka, 22 Pental with Daniel Rees and 53 Bundeera with Darren Krongold
• Williamstown 2 Hannan – a nice little double-fronted, bought this week for $1,720,000 – Michael Harvey of Williams

Agent Questions: Stock Level and Premierships

David Oster, Jellis Craig, Ivanhoe: “Stock levels are looking very good after a soft September. It will be a late Spring.”

Stewart Oldmeadow, Miles Real Estate in Ivanhoe: “We’re finding numbers pretty strong at the moment in this area.  I think it’ll hold at this level through to Christmas now.  People have seen that the sky is not falling in, so emotion alone will determine if it has hit the apex or not. And I think Collingwood will win this year.  To win, St. Kilda would need Riewoldt to do something amazing, whereas with Collingwood each man does his own thing on the team.  I think that’ll win it for them”

Paul Anderson and Paul Anderson Real Estate Essendon: “Stock levels are low for the general Essendon area and we are hoping, and that is all at this stage, that stock levels will pick up towards the end of October”

Around the Grounds - Auction  Flavour

Elsternwick 5 Gisborne: Daniel Ashton; 3 bidders, Bought After $1,505,000
Bill “I love every street in Elsternwick – but this particular one I’m auctioning today just that little bit more” Stavrakis, of Biggin and Scott, gave his usual entertaining and polished performance extracting bids between $1,300,000 and $1,440,000 from 3 bidders within a crowd of 50, before a strategic pass-in took place at $1,440,000. Feels like it was going to sell soon afterwards for a bit more. Bought after for $1,505,000. (Mal James)

Essendon 98 Primrose: Paul McDonald: $1,312,500; 3 bidders, Bought under the hammer
Paul McDonald is one of your quieter auctioneers – he starts things on time, moves through the rules and proceedings at a good pace and gently brings the bidders into the start position. Unlike many others he doesn’t yell and scream and dance – he just tells you where things are at – consistently, firmly and without agro. I found it a refreshing change. The first bidder started things at $1,200,000 and the third bidder finished it under the hammer at $1,312,500. Solid. (Mal James)

Alphington 22 Yarraford Avenue: Craig Shearn: $1,390,000: 3 bidders, Bought under the hammer.
This peaceful, tree-lined street was the picture-perfect setting for an entertaining auction. With an air of anticipation within the crowd, Craig Shearn was surprised and delighted when offered a decisive opening bid of $1,000,000 right off the bat. Whilst two other bidders bravely entered the fray at times during the auction, there remained little question as to whom the successful party would be. Each rising increment offered by other bidders was immediately thwarted with a confident and definitive increased bid. The knock-out bid came at $1,390,000, which brought spontaneous applause from the crowd as the happy couple marked the momentous occasion with a warm embrace! (Nikki Hills)

Ivanhoe East  489 The Boulevard: Stewart Oldmeadow: $1,740,000: 2 bidders: Bought under the hammer
The chance to snap up a home overlooking the Yarra Flats was enough to attract a good crowd to this auction. When Stewart Oldmeadow’s request for audience participation brought silence from the crowd, he commenced proceedings with a vendor bid of $1,400,000. It had the desired effect and what continued was a two-horse race, with strong and steady bidding from both parties until the final bid of $1,740,000, which took it across the finish line to victory. (Nikki Hills)

Monitored Auctions

We only buy homes

Alphington 22 Yarraford: Craig Shearn of Jellis Craig: 3 bidders and bought under the hammer for $1,390,000

Bill Jowett (Buxton) basks in the sunshine and the successful sale of 4 Susan St, Sandringham. Three bidders, bought under the hammer for $1,400,000.

Key Points:

• We attended nine auctions across Bayside this weekend. Of those, only two were bought under the hammer.
• While Brighton was very average at auction today, it was the stellar performer for stales (long term unsolds) over $3m+ this week. Behind closed doors at Kay and Burton, there was plenty of action.
• We have a special report for you on Monday on $3m+ homes. The upshot is that we should see more new stock coming onto the market over $3m, while new sellers of homes around $2m are becoming less inclined to dip their toe in the water
• Three apartments/townhouses in the Golden Mile were sold by Kay and Burton over $3,000,000 each - Justin Follett of Kay and Burton
• Both the Wellington St, Brighton properties that had been on the market for a long time, recently sold for over $3,000,000 – Ian Jackson and Stewart Lopez of Kay and Burton
• Knox House in North Road was bought – Stewart Lopez of Kay and Burton
• Gordon St Hampton was the hot street in town with Nick Johnstone of JP Dixon selling No. 34 through an Expression of Interest for around $3,400,000 and David Hart selling No. 23 post auction today for a bit over the pass-in figure of $2,725,000.
• 94 Dendy St Brighton defied the trend, selling for an undisclosed amount under the hammer of around $1,400,000. That was a $250,000 increase on its last sale in December,  placing land at $2300 per sq metre. Miriam Carraro of Hodges

Campbell Cooney of Hodges motivates 2 bidders from within a small crowd to pay over $1,470,000. 94 Dendy St Brighton.

Analysis: Why is this happening? Because buyers are there at the $3m+ level.

Why now? Our best guess is that buyers never left, but that we needed some vendor price adjustments and that they are now being made. If this is the case then this may simply be a statistical coincidence as opposed to a market change. But it may also bring on additional quality stock which may or may not give the market a more sustained lift.

September is going to be quiet due to Election interference – so October will be the telling month to see if this market is trending back or remaining flat.

Why is it not happening at the $2m level? There is simply too much stock and no vendor adjustments.

Agent Comments:

Nick Johnstone, JP Dixon, Brighton: “We are seeing a cross-section of stock at the moment.  I’m finding the strong demand is for homes under $1m at the moment.  The biggest shortage for Middle Brighton is the $2-3m family home. My feeling is the election has made a slight impact , it is a bit like being in a church at a wedding and everyone is just waiting for the bride to arrive. Once we have a resolution we are away.”

Jenny Dwyer, Hocking Stuart, Sandringham: “I think we’ll find we will have a late spring market with school holidays, election, football finals etc. In terms of the election, we found there were still a lot of people out and about on election day and the open houses were well attended….I think the fence-sitting we saw during the (election) campaign will continue whilst there is no outcome.”

Bidderbizz Auction – 4 Susan Sandringham – Bill Jowett Buxton – Bought $1,400,000 -  3 bidders
A warm buzz was evident in the 70 strong crowd as they awaited the commencement of the auction and it did not disappoint. Auctioneer Bill Jowett of Buxton was in fine form as he took the opening bid of $1,000,000 quickly followed by a vendor bid of $1,200,000. Three bidders were determined in their approach and seemed very familiar with the auction process. Mr Jowett announced the property on the market at $1,300,000 and it was bought soon after for $1,400,000. The successful bidder punched the air with his fist in victory as the crowd applauded. (Sue Agnoleto)

Check out the Auction Video of 42 Foote St Brighton with JP Dixon.

Clearance Rates & Monitor Table:

We Only Buy Homes

John Clarkson (Hocking Stuart) throws himself into the auction of 100 Were St, Brighton. Unfortunately, none of the 30 or so spectators took his lead and the property passed in for $1,950,000. One bidder.

Indicative Market Movements

At 5pm Saturday, just two of the 13 auctions we attended today have sold under the hammer, with another two or three expected to be sold overnight.

The market is speaking on two levels – at median Melbourne, the results are weakening slightly but overall the market hasn’t taken anywhere near as big a hit as the top end has.

The diagram above is to show you indicatively where we think the market is going.

It is no exaggeration to state that the million-dollar-plus market is currently experiencing some of the serious woes that the financial sector is also facing. This market did drop 0% to 10% in early 2008; then, around mid-year, there was another easing, as we reported.

The Spring influx of homes for sale has currently not been matched with equivalent buyer interest and consequently we have seen the biggest drop since the early 90s in almost all upper-end bracket homes.

Some exceptions, however: in our opinion, the $1 million to $4 million market is down between 10% and 30% in 2008 from late Spring 2007.

Last month’s, last week’s and today’s results have only confirmed what selling insiders have known for some time: if you don’t get some interest early in the campaign and you have to sell (frankly, if you are on the market today, then you have to sell), then you could be seeing a large price drop from Spring 2007′s expectations.

That is the market that we deal in today.

Some balance. First, we are aware of four $10 million-plus sales this month. This is as good as October 2007. While 25 Cosham St Brighton did not sell (we rated and wrote about it two weeks ago – it’s now on the market for more than $6 million), 14 Grange Road Kew did sell for a figure believed to be well in excess of the $5.5 million quote, which is a good result for Jellis Craig’s selling client.

Some more balance. While many properties did not attract any interest,among the negativity, you can see the results of a well-run campaign, such as that run by Madeline Kennedy and Andrew Hayne of Marshall White, which saw 1 Parslow Malvern flying at auction with a final result well in excess of where we thought a good result (bearing in mind position) would be.

And more balance: even a 20% drop for some properties represents less than half of their 2007 gains and none of their 2006 or 2001 to 2005 gains. So longer term……

Some more positives: if you are a buyer and you can hold your bottle or you are trading up (this is the best time since the late 1990s, as the gap between the rich and the not-so-rich has shrunk), then there are some serious opportunities out there to buy. There will be more opportunities before Christmas and then again in early 2009.

But what to buy? Buy what you really want and please still buy for the long term.

It is still about the quality of your decision – your ability to match your longer-term financial and emotional outcomes with the home you end up purchasing. That is the key to good home buying.

The best buy we made (to date) was a little $400,000 buy in 1994 that was cash-flow-positive from day one and went up five- to six-fold before it was sold in 2005 to fund other property purchases. This is not said for any other reason than to point out that the market you are in can have plusses.

If this market is showing you anything, then, hopefully, it’s showing you the rule is NOT HOW YOU BUY (eg you beat the agent or you bid well) but that the rule is it’s WHAT YOU BUY. Your long-term wealth and happiness will not be created by fancy selling campaigns (at the back end); it will be created by smart buying of quality homes in great positions at under value in the first place. I mean, look at what is selling now and what is on the nose and can’t be given away.

You have opportunities, in fact, we all do – the trick is to recognise them, act on them and avoid the false gifts along the way. We think, as buyers in the million-dollar-plus Melbourne market, that you have at least until March 2009 in this currently declining market (due to supply exceeding demand and reduced buyer confidence). We will make comment on the months after March 2009 as we get closer. For Median Melbourne (eg $500,000 plus), we cannot see the fundamentals pointing to any significant price drops.

Buy well and good hunting.

Mal