TOORAK, 7 Toorak Ave; Kevin Bartholomeusz (Carroll McKeddie) basks in the glorious sunshine and a successful sale. Under the hammer, $2,763,000, 2 bidders

Agent Q & A:“Do you feel there is currently a big difference in the results of sales of lower end ($1m) properties as opposed to those of higher end ($2m+) homes? Yes or no, and why?”
Brad Fleming, JP Dixon, Toorak:”Across the board the demand for properties under $1 million is and always has been stronger because of affordability for both the home owner and investors, which achieve higher rental yields and less mortgage stress. As soon as the buyer can afford properties at $2m+, normally the demand is driven by purchasers with higher incomes wanting to buy a home which suits their personal requirements, especially with families, for example, who are thinking long term with family needs as the priority. This group becomes more focused around accommodation, location including schools and school zoning if required.  Personally, l have found both markets strong thus far, however the source of buyer does change depending on situation of the given real estate environment at the time of buying.”

BALWYN NORTH, 15 Stephens St: Big, big crowd of around 300 people enjoyed the sunshine and watched Doug McLauchlan (Marshall White) in action. Passed in $3,650,000, 2 bidders

At 6.00pm Saturday, the James Clearance Rate for the 31 Million Dollar Plus Auctions we covered was 74%.  The signs are there that the market has started with a hint of warmth about it. Bidderman was at 2, the $M+ Clearance Rate was 74% and this weekend’s Hammer rate was almost one in two. That’s a market moving past warm and into “hotting up” from a stats point of view. But the stock quality overall was high and you would expect to see an elevated clearance rate this weekend. However a lot of new stock has come on this week and the market may be in for a sustained period of potential Super Saturdays in March and April. This will really test whether the warmth we saw this weekend was an underlying hotting up or some temporary New Year afterglow. Overall our read on the current early opening $M+ market: Nicely Balanced.

New Stock:
With 202 new million dollar plus homes listed this week, March and April (the pre-Easter market) is looking like it will have a few potential Super Saturdays. And as we know, large numbers cool anything but the hottest of hot markets. So overall we are still calling the early 2011 market as we did last week: healthy, nicely balanced and starting as well as you could reasonably expect.

Bidderman:
Indicating the average bidders per auction, was at 2. Although that is up on last week statistically, to us it basically says steady as she goes. Last week had lower quality homes on offer (than average across the board), while this week was above average. Bidderman at 2 says “healthy market”. Please note though that if this were to be maintained in the pre-Easter market there would be upwards pressure on price. But with increasing stock levels coming on, significant upwards price pressure in this pre-Easter time seems less than likely. Did we say this early market seems balanced?

Crowds:
All agents have reported significant increases in human traffic through their OFIs (Open for Inspections) and on Saturday we reported six auctions with over 100 people in attendance. All auctions had good numbers watching.

Hammer Rate:
Almost one in two sold under the hammer – that is strong. Well done to vendors and buyers alike – this is what auctions are all about: selling and buying.

Ducks on the Pond:
Very few no-bidder auctions this weekend and they were mainly in that $3m+ segment.

Round the Grounds – $Million+ Snapshot from our Market Reports

Bayside – Overall Clearance Rate solid for Brighton – 77%

Stonnington – Nearly everything sold in Malvern and Malvern East, but what happened in South Yarra?

Boroondara – Big crowds but there is an underlying agent nervousness in Boroondara

Port Phillip – Lacklustre on what we saw – but still at 60% Clearance Rate

Rest of Melbourne – The fringe $1 million plus market is small but active

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

A few of the biggies that were bought

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

Some of the biggies that missed the mark

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

More analysis on Bayside’s summer market can be found in our February $3m+ market report. New and old Brightonians like to buy New in Brighton- see the trend!

Are sellers missing out on Bidders and ultimately better prices because of Sargeants Conveyancing?
A number of  potential bidder’s lawyers will not allow their clients to bid on homes with unmodified Sargeants contracts. Yes this company provides cheap contracts but with completely unacceptable additional Special Condition clauses which buyers cannot agree to. Sargeants is putting not only potential buyers but their vendors into difficult positions. Sargeants are stripping away buyers’ already very limited basic property rights – but that is not good for the sellers either when buyers don’t bid. We do not bid on homes that have unmodified Sargeants contracts – not because we are on some moral crusade (hey we are buyer agents) but because our clients’ solicitors won’t let us. Sellers, our clients money is good money, this weekend we bought 4 from 4 at auction over a million dollars – maybe we didn’t bid on yours because you had an unmodified Sargeants contract.

"Rebel With a Cause" Jason Swift in Action at 33 Middle Crescent Brighton - see below

Biggest Sale: 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.”

Biggest Pass In: 50 Finch St, Malvern East, John Bongiorno (Marshall White); Passed in $4,100,000, 1 bidder
“What a turnout for this auction! It looked like the whole neighbourhood had turned up, with a crowd of 200 watching auctioneer John Bongiorno in action. However, despite the buzz and the anticipation from the crowd, you could really tell that most of them were there just to sightsee as when the time came for an opening bid all was quiet. An opening vendor bid of $4,000,000 never really got things going, while a late bid from one member of the crowd was all the action that was seen and with that the property was passed in. A lot of people stayed though, either to catch up with each other or to see whether the lone bidder was successful in post-auction negotiations.”

Bidderbuzz Auction: 35 Mason St, Hawthorn, Scott Patterson (Jellis Craig); under the hammer, in excess of $3,100,000. 4 bidders
“A big crowd of around 125 gathered for this Jellis Craig/Kay and Burton auction with Scott Patterson and Michael Armstrong managing proceedings. You could feel there were a lot of bidders ready to go and after a perfectly timed intro form Scott Patterson we were away with a $2,750,000 opening bid. On the market at $3,100,000 and bought under the hammer for an undisclosed price in excess of that. A strong auction and numerous other disappointed bidders didn’t get a look in. This is a good home and so the market is saying good properties will be well supported.”

What the key agents said about the current market:
Geoff Hall, Noel Jones, Camberwell: “Motivated vendors are good right now – we are listing well but buyers seem a little thin on the ground. We think right now there is one buyer for every home and on some homes when we find that buyer we are trying our hardest to put it away. I think last week the market started in balance.”

Tim Heavyside of Fletchers: “Most homes are selling on the day or shortly afterwards – a number are not flying – but they are selling. A lot of stock is about to hit the market in April, after sellers became a bit nervous about entering the market late last year and held their sale up. Now a number of them have decided to sell and consequently we are seeing a stock build up.”

Campbell Cooney of Hodges: “Things firmed up in the market just before Xmas with some difficult homes having price adjustments and selling.  Since January we have had double our normal numbers through OFIs, for instance a normal home where we were having 7 or 8 groups through in November is now having 15 groups through at each inspection.

Both Scott Patterson of Jellis Craig and John Bongiorno of Marshall White reported 70% approx. clearance rates on largish auction stock numbers. Both agree the market is certainly not hot – but it’s not weak either, except possibly at the higher end.

Auction Video: This week we head to sunny Brighton, where we watch Nick Johnstone in action at 2 Maher St. Click on the live action. Apologies – we are in the middle of creating a three video connection each week: Big Issue – Auction Video – Sunday Reflections. There may be some technical difficulties while we put this new automated system in over the next week.

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

Buyer Masterclass: We thought a bit of poetry was in order and while we couldn’t contact Banjo we got his relative Cal Bung to pen us some words.

We Only Buy Homes

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

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

A few of the biggies that were bought

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

Some of the biggies that missed the mark

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

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

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

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

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

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

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

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

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

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

Kooyong – 711 Toorak – $3,190,000

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

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

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

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

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

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

Continuing with February Sales:

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

New and old Brightonians like to buy New in Brighton

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

This type of offering sold well over Summer

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

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

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

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

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

Some of our buyer prayers have been answered

Market: Even with significantly reduced auction numbers this weekend (owing to a more important event which finally delivered a result that proved there was justice in the world), we still saw a pretty healthy market result for sellers – with a 74% Clearance Rate on the 55 $Million+ auctions we monitored. Of those 55 auctions, 9 results were not reported. But even that is not unreasonable under the circumstances of the GF Replay.

There seems little doubt that the market is on the rise. The big interest now is how the market will absorb the stock surge that will culminate in Spring/Summer’s first Super Saturday on October 23rd.

And it really is Super Saturday - with a massive 81 $M+ auctions booked for Boroondara alone, and around 200 $M+ auctions booked in our key focus $M+ areas – Bayside and Inner East. Check out the size of the Weekly Review this week (it’s as big as a phone book). By comparison this weekend saw only one quarter of that number of auctions. So if you were at an auction this weekend, those four bidders you competed against may well be spread across four homes in a couple of weeks. Well that’s the “buyer-hope” theory anyway.

This Week’s Highlights:

• Two land sales showing vastly differing land values
  a) Land at 101 River Avenue Plenty (39,500 sqm), which can be subdivided, was auctioned  by Rob Stefanovski of LJ Hooker Greensborough and  bought for $3,830,000 or $96 per sq metre
  b) A large land parcel (1,813 sqm) at 3-5 Heath St Sandringham sold after a failed auction by Bill Jowett of Buxton for $2,800,000 or $1,544 per sq metre
• The major stock inflows that took place on Monday, Tuesday and Wednesday when agents began their marketing campaigns for the next Super Saturday – October 23rd.
• The continued improvement of the $3M+ market – two examples below
  a) Off market in Black St Brighton (Peter Bourbaud and Barb Gregory) – bought for around $4 million
  b) 27 Moorhouse Armadale with Gowan Stubbings of Kay and Burton – bought after an Expression of Interest campaign for more than $5 million
• The Pies Forward Line pressure (whoops, sorry – I got distracted)

Auction Snapshot from this weekend: 133 Rathmines Fairfield: Michael Fry and Grant Leonard of Nelson Alexander. Bought under the hammer for $1,116,000. 5 bidders.
There was a buzz about this well located timber period home, which had had its quote lifted to $930,000 during the campaign. It was a surprising development given Grant’s comment that the property failed to attract any interest in the high $800s a few months ago with a quiet sale campaign. It was on the market with the first bid at $900,000. Second bid $950,000. Third bid $970,000. Fourth bid-  bang $1,000,000. Three more bidders joined in before the action stopped at $1,116,000. It was a well run auction campaign. I always enjoy a Michael Fry auction. He has a sophisticated grace about him incongruent with the fact that he is yanking the dollars from buyers’ pockets. Enjoyable to watch unless you’re an underbidder – which unfortunately this time we were.

Bumper Market Insight: We have an information packed Market Insight this week; even though there are no Market Wraps, Bidderman, reports or videos.  The footy replay threw this auction weekend into a bit of chaos, with a few auctions even changing days. But it was a very low stock weekend anyway, so no major damage. All $M results are at the end of this Market Insight. But the big news now is the next three weekends that will lead full bore into the Melbourne Cup Long Weekend.

Stock Levels and Price Assessment:
The big question the market will be asking now is: What will happen to prices on October 23rd? With this big stock influx, how is the price game of snakes and ladders going to pan out? Are we going to see the slippery snake and big price slide of May 2010 or will the market just take this in its stride, as it did this time last year, with prices climbing further up the ladder? Time will tell. Importantly as buyers you need to get yourself organised – and don’t count your chickens before they’ve hatched.

With this apparent largess of choice, perhaps you don’t need brilliant home-seeking skills right at this moment. But you will need first class assessment procedures (e.g. sorting the goodies from the baddies in terms of capital growth prospects, and working out which one is best from a “happy wife = happy life” point of view). You will also need good negotiation strategies – because while you may have more choice, you will also have competition. Remember, our bidders per auction indicator Bidderman was strong on lower numbers in September, especially on good homes. On the flipside, some sellers expectations may be disappointed, so planning good negotiation strategies will improve your chances of grabbing a bargain when it presents.

Have a look at our Forward Auction Booking graphs below to get an idea of what is ahead of you: (click on a graph to enlarge)

There are also some exciting trophy homes on offer through private sale and off market – especially in the $3m+ segment.

Have a look at the New Stock Graph at the top of Market Insight – which compares the last week in September to the last week in June, (private sale and auction weekly new stock numbers are combined).

Special Report on the $3m Market

The $3m+ is back, after the self induced May hiccup that led to a very quiet winter.

There have been over 50 buys in the month of September at this level, with buyers coming from all quarters. Let’s pick one of the segments – around $4million. We have bought 3 homes at this specific level in the last few weeks. All were classic period homes with land of over 1000 square metres. Two were bought post auction (eg after a pass-in) and one was off market (Black St Brighton). However, the interesting thing were the buyer profiles. One buyer was a change of life family, one was a growing family that needed more space, and one was an expat family returning from overseas. This is a fairly accurate representation of the range of people we look for homes for. Of the last case – expats returning from overseas -Brighton high end agent Peter Bourbaud believes “this group will push the market along for the next few years, after a couple of very quiet years from the expat community”. We concur. Last year we conducted very little in business terms last year for expats. However in 2010 there has been a distinct pick up in action from expats returning home.

The James September $3m+ Report with all reported $3m+ boughts and solds can be viewed from the Home Page (next to Market Insight and below Buyer Masterclass) or click here

If you are new to the $3m market you may find the charts below (using 2007 to 2010 Valuer General, REIV and our own James Databases) of some value, as they help to show how the overall $3m+ market works. Note particularly that:

• The two powerhouse $3m+ suburbs are Brighton and Toorak (see 2009 results graphed below). However these two suburbs behave quiet differently from each other (see median graph). More on that another time.
• More $3m+ is bought later in the year than early. (2009 graphed below)
• There are some real name streets around and there are some falsies (where if you pay top dollar you will stand out like a beacon)
• Less than a quarter (25%) of $3m+ homes sell under the hammer at auction (click on September Graph below)
• A lot more activity is off market (not advertised) at this $3m+ level than any other price point, e.g. sub $3m.

Click on any of the graphs below to bring them up to full size

Agent Comments on the current $3m+ market

• “Prior to the school holiday period there was some renewed strength in $3m+ market due to things stabilising after the election and to the shortage of good quality homes. With the spring market in full swing it will be very interesting to see what happens with the increase of volume. But if the enquiry rates are anything to go by, October will be a strong month of sales.” Andrew Hayne of Marshall White Malvern
• “The $3 million plus market is strong, and we are expecting a big finish to spring in this market for good family homes.” Nick Johnstone of JP Dixon Brighton
  
• “There seems to have been a resurgence of buyer enquiry for the upper end properties recently.  It will be interesting to see if this follows through once we see increased stock levels after the school holidays and round 2 of the Grand Final.” Julian Augustini of Hodges Brighton
• Andrew Baynes from Kay and Burton South Yarra “Last Monday was the busiest auction sign up day for me in 10 years.”

Media Monitor: Domain – The Age 2/10/10. Headlined: “Hands up if you don’t have a clue” by Josh Jennings. Basically a solid article – but Josh, how many homes has Dr Damien Eldridge, Economics Lecturer from La Trobe University, bought using his quoted bidding advice this year? Would it have been 5 or 10 or 50? Going by his auction comments we were unclear as to whether you were holding him out as an expert – or simply providing supporting evidence to your headline.

We are not all brickbats here for the mainstream press. Congratulations to Chris Vedelago from The Age who this year has been consistently reporting the market as it really is and who actually seems to get out of the ivory tower (that so many property reporters are stuck in) and goes to auctions and talks to agents. We mightn’t always agree with you Chris, but we respect your work. Keep it up and keep getting out into the market.

Market News TV: On Tuesday of this week we ask the question: Is the ACCC or CAV the right watchdog for the real estate industry? Check out our Agent Opinion Videos.

Buyer Masterclass: We conclude our Negotiation Masterclass series with an article on Backward Bidding. From next week until Christmas we will be looking at “Pricing and Values” in Million Dollar Melbourne

Reported Results:

Big Crowds on Canterbury: 42 Wattle Valley. Bought After: Richard Winneke: Over $3,426,000: Photo courtesy Jellis Craig.

September Executive Summary:

Demand: Solid and increasing

• Reported Boughts: 46
• Bidderman: Substantial improvement in bidders per auction at the higher level. Random cross section of bidders. 1/3/2/1/3/1/3/2/2/3/3/3/2/1/0/0 for a month average of 1.875

Supply: New Stock Low

• Overhang from May however new stock is still light on at end of September and that which comes on at a reasaonble price is mostly being bought.

Price: Firming

• A number of stales (on market over 3 months) were purchased in Bayside reducing overhang – this will have an upwards effect on price if demand remains constant.
• Some new properties coming onto the market but new stock is still limited in Boroondara and Stonnington also encouraging price in an upwards direction.

Quote of the month: Stewart Lopez of Kay and Burton ” In this improving Upper End market, sellers are getting back the control that they lost with the stock splurge in May”

Highlights
Over $9 million
Hawthorn 24 Coppin: Jock Langley: Around $9,000,000 Private Sale. This basic house, on an acre on the river in Hawthorn’s river precinct, has been on the market for well over a year and had quotes at $15m then 12m and then…. A number of agents have worked on this. I went through this home last year and finally Jock Langley has got a sale through under $10m. It is a great block, its only fault until today was its price tag.
Brighton 292 New: Brian Devlin and Regina Schmidt: Around $9,000,000 Private Sale. Up for sale for less than a month, this grand looking home was purchased today for around $9,000,000. A very impressive block just down from Brighton Grammar.
Over $7 million
Toorak 11 Cole: Ross Savas: Private Sale: Quote $8,000,000 plus reported as bought for above that figure
Undisclosed Rating: http://www.james.net.au/rating/11-Cole-Court-TOORAK
Hawthorn East 49 Harcourt: James Tostevin: Bought After: Over $7,200,000: Bidderman 2
James Auction Report: http://www.marketnews.com.au/auction-reviews/8661/49-Harcourt-Street-HAWTHORN_EAST/
Brighton 6 Head: Jeremy Fox: Sold well after auction: Around $7,000,000
Full Rating: http://www.james.net.au/rating/6-Head-Street-BRIGHTON

Bidderbuzz Auction of the Month
24 Somers Malvern: Jeremy Fox: Under the hammer: $6,160,000: Bidderman 3
James Auction Report and Rating: http://www.marketnews.com.au/auction-reviews/8705/24-Somers-Avenue-MALVERN/
The sunfilled courtyard was a perfect setting for the Somers Avenue auction, with the lovely weather attracting a generous crowd of interested parties and onlookers alike. Auctioneer Jeremy Fox asked the crowd for an opening bid, but was disappointed with silence. It wasn’t long before a confident bid of $5,000,000 soon had the ball rolling though. Two parties continued with strong bidding, as the crowd watched on with baited breath. It was at $5,650,000 when another bidder keenly entered the fray, enquiring if the house was in fact yet ‘on the market’. There was clear buzz of anticipation amongst the crowd, as Mr. Fox conferred with the vendors, and finally confirming in the positive. Bidding continued fast and furiously between bidders, whilst the crowd remained captivated. The final knock-out bid brought on a genuine look of relief to the successful bidder. A truly entertaining auction, as you could hear echoed amongst the departing onlookers. (Nikki Hills)

Late Entries (Not Included in Stats)
Brighton Black St: Peter Bourbaud and Barb Gregory: Off Market: James Home Rating 852/1000. Price Undisclosed
Toorak 5 Myrnong: Darren Krongold and Sally Zelman: Private Sale: Price Undisclosed
James Rating: http://www.james.net.au/rating/5-Myrnong-Crescent-TOORAK
Armadale 23 Moorhouse: Gowan Stubbings: Expressions of Interest: Price over $5,000,000
James Rating: http://www.james.net.au/rating/23-Moorhouse-Street-ARMADALE

Apartments:
East Melbourne 144 Jolimont Road: Marcus Chiminello: Penthouse $3,250,000
Melbourne 301/401 St Kilda Road: Marcus Chiminello: Lucient $3,100,000

Albert Park
Albert Park 62 Beaconsfield: Kaine Lanyon: Quote $3,500,000 to $3,750,000: James Home Rating 655/1000: At Auction: Over $3,300,000
James Rating: http://www.james.net.au/rating/62-Beaconsfield-Parade-ALBERT_PARK

Armadale
81 Rose: Tim Derham: Bought Over $3,300,000. A  terrace home that needed a fair bit of work but did have rear access and was north facing to rear. Solid result.
James Undisclosed Rating: http://www.james.net.au/rating/81-Rose-Street-ARMADALE
21 Adelaide: John Bongiorno auctioned this “bulldozer or significant rebuild” home at 4.30pm today. Bought for $3,130,000 or just over $4,000 per sqm. Bidderman 3. Heather Elder and Rae Tomlinson
James Undisclosed Rating: http://www.james.net.au/rating/21-Adelaide-Street-ARMADALE
28 Seymour: Joanna Nairn: Quote $3,500,000 plus: James Rating 682/1000: Bought After Auction: Around $3,500,000: Bidderman 1
James Auction Report: http://www.marketnews.com.au/auction-reviews/9007/28-Seymour-Avenue-ARMADALE/
1 Myamyn: Andrew Macmillan: Under the hammer: $3,215,000: Bidderman 2
James Auction Report: http://www.marketnews.com.au/auction-reviews/8670/1-Myamyn-Street-ARMADALE/
3 Avalon: Ross Savas: Bought: Reportedly over $7,000,000, but not confirmed:
James Rating: http://www.james.net.au/rating/3-Avalon-Road-ARMADALE

Balwyn
Balwyn 23 Bevan: Richard James & William Chen: Quote $3,300,000 to $3,600,000: James Home Rating 742/1000: Bought After Auction: Around $3,500,000: Bidderman 1
James Auction Report: http://www.marketnews.com.au/auction-reviews/8932/23-Bevan-Street-BALWYN/

Brighton
10 Campbell: Peter Kennett. Private Sale after a Pass-In Auction. In excess of pass-in $3,850,000.
James Undisclosed Rating: http://www.james.net.au/rating/10-Campbell-Street-BRIGHTON
20 Bent: Justin Follett. Private Sale . Within asking price range $3,800,000 – $4,000,000.
James Undisclosed Rating: http://www.james.net.au/rating/20-Bent-Street-BRIGHTON
7 St Ninians: Nick Johnstone. Private Sale. In excess of  $3,500,000.
James Undisclosed Rating: http://www.james.net.au/rating/7-St_Ninians-Court-BRIGHTON
292 New: Brian Devlin and Regina Schmidt: Around $9,000,000 Private Sale. Up for sale for less than a month, this grand looking home was purchased today for around $9,000,000. A very impressive block just down from Brighton Grammar.
James Undisclosed Rating: http://www.james.net.au/rating/292-New-Street-BRIGHTON
22 Tennyson: Marcus Gollings. Private Sale. In excess of $5,000,000.
James Undisclosed Rating: http://www.james.net.au/rating/22-Tennyson-Street-BRIGHTON
3/9 Glyndon: Stewart Lopez: Private Sale: Mid $3,000,000’s
James Rating: Click here http://www.james.net.au/rating/3/9-Glyndon-Avenue-BRIGHTON
6 Head: Jeremy Fox: bought well after auction: Around $7,000,000
Full Rating click here: http://www.james.net.au/rating/6-Head-Street-BRIGHTON
19 Wellington: Stewart Lopez and Sturt Hinton. Private Sale after Auction. Over $4,000,000
James Rating: http://www.james.net.au/rating/19-Wellington-Street-BRIGHTON
3 Wellington: Stewart Lopez and Sturt Hinton. Private Sale after Auction. Around $3,900,000
James Rating: http://www.james.net.au/rating/3-Wellington-Street-BRIGHTON
5/23 St Ninians: Stewart Lopez and Sturt Hinton. Private Sale under $5,000,000
James Rating: http://www.james.net.au/rating/5/23-St_Ninians-Road-BRIGHTON
6 Seacombe: Ian Jackson: Private Sale over $4,500,000
James Rating: http://www.james.net.au/rating/6-Seacombe-Grove-BRIGHTON

Camberwell
8 Canterbury: Peter Mitchell: bought after auction: Around $3,000,000: Bidderman 3
James Auction Report: http://www.marketnews.com.au/auction-reviews/7926/8-Canterbury-Road-CAMBERWELL/

Canterbury
42 Wattle Valley: Richard Winneke: bought after, in excess of $3,426,000: Bidderman 1
James Auction Report: http://www.marketnews.com.au/auction-reviews/8807/42-Wattle_Valley-Road-CANTERBURY/
23 Chaucer: James Tostevin: bought after over $3,850,000: Bidderman 3
James Auction Report: http://www.marketnews.com.au/auction-reviews/8221/23-Chaucer-Crescent-CANTERBURY/

Elwood
31 Ormond: Marcus Gollings: Expressions of Interest: Bought over $4,000,000
James Undisclosed Rating: http://www.james.net.au/rating/31-Ormond-Esplanade-ELWOOD

Hawthorn
2 Berkeley: Rob Vickers-Willis: Bought at Auction: Bought over $3,000,000
James Undisclosed Rating: http://www.james.net.au/rating/2-Berkeley-Street-HAWTHORN
24 Coppin: Jock Langley: Around $9,000,000 Private Sale. This basic house, on an acre on the river in Hawthorn’s river precinct, has been on the market for well over a year and had quotes at $15m then 12m and then…. A number of agents have worked on this. I went through this home last year and finally Jock Langley has got a sale through under $10m. It is a great block, its only fault until today was its price tag.
James Undisclosed Rating: http://www.james.net.au/rating/24-Coppin-Grove-HAWTHORN
36 Chrystobel: Lisa Jarrett: Private Sale after auction: In excess of $3,500,000
James Auction Report: http://www.james.net.au/rating/36-Chrystobel-Crescent-HAWTHORN

Hawthorn East
49 Harcourt: James Tostevin: Bought After, over $7,200,000: Bidderman 2
James Auction Report: http://www.marketnews.com.au/auction-reviews/8661/49-Harcourt-Street-HAWTHORN_EAST/

Ivanhoe
59 Studley: David Oster: Under the hammer: $4,300,000: Bidderman 2
James Auction Report: http://www.marketnews.com.au/auction-reviews/8989/59-Studley-Road-IVANHOE/

Kew
63 Walpole: James Tostevin: Bought Before Auction: In excess of $3,000,000.

Malvern
24 Somers: Jeremy Fox: Under the hammer: $6,160,000: Bidderman 3
James Auction Report: http://www.marketnews.com.au/auction-reviews/8705/24-Somers-Avenue-MALVERN/
15 A Sorrett: Andrew Hayne: Week or so after Auction: Over $3,500,000
James Auction Report: http://www.james.net.au/rating/15a-Sorrett-Avenue-MALVERN
Elizabeth: Marcus Chiminello Off the plan $3,300,000
6 Bonview: John Bongiorno: Bought Afterwards in excess of $3,600,000: Bidderman 3
James Video Auction Report: http://www.marketnews.com.au/video/?vid=305
11 Moorakyne: Michael Gibson: Under the Hammer: $4,000,000: Bidderman: 3
James Rating and Auction Report: http://www.james.net.au/rating/11-Moorakyne-Avenue-MALVERN
17 Thanet: Mark Wridgway: Before Auction: Bought over $3,500,000.
James Home Rating: http://www.james.net.au/rating/17-Thanet-Street-MALVERN

Malvern East
31 Finch St: Andrew McCann: Under the Hammer: $3,360,000: Bidderman 2
James Auction Report: http://www.marketnews.com.au/auction-reviews/8376/31-Finch-Street-MALVERN_EAST/

South Yarra
38 Park: Warwick Anderson: Quote $3,500,000 plus: James Rating 725/1000: Bought After Auction: Above $3,000,000: Bidderman 1
James Auction Report: http://www.marketnews.com.au/auction-reviews/8476/38-Park-Place-SOUTH_YARRA/
19 Acland: Greg Herman: 4 bidders: Bought under the hammer: $3,600,000
James Auction Report: http://www.marketnews.com.au/auction-reviews/6886/19-Acland-Street-SOUTH_YARRA/

St Kilda
Two Block of Flats:
4 Church: Claudio Perruzza: Bought at Auction $3,400,000
16 Charnwood: Adam Joske: Bought at Auction $6,060,000

Toorak
11 Cole: Ross Savas: Private Sale: Quote $8,000,000 plus reported as bought for above that figure
Undisclosed Rating: http://www.james.net.au/rating/11-Cole-Court-TOORAK
2/23 Tintern: Ross Savas: Private Sale: Quote $5,000,000 plus reported as bought for above that figure
Undisclosed Rating: http://www.james.net.au/rating/2/23-Tintern-Avenue-TOORAK
8 Macquarie: Jeremy Fox: Private Sale after auction. $6,400,000.
James Rating: http://www.james.net.au/rating/8-Macquarie-Road-TOORAK
4 Forrest Court: Peter Kudelka and James Scarff: Bought after auction $4,050,000: Bidderman 0
James Auction Report: Click here http://www.marketnews.com.au/auction-reviews/8829/4-Forrest-Court-TOORAK
1 Hopetoun: Justin Long: Bought after auction: Over $5,500,000: Bidderman 0
James Auction Report: http://www.marketnews.com.au/auction-reviews/8671/1-Hopetoun-Road-TOORAK/
803 Orrong: Warwick Anderson: Private Sale $4,500,000
Undisclosed Rating: http://www.james.net.au/rating/803-Orrong-Road-TOORAK
1a Como: Greg Herman: Private Sale: Over $6,400,000

Please Note: The $3m+ market can be a very shadowy one at times with regards to what is bought, if indeed it was actually bought and what price (cash and/or otherwise) was paid. At all times the prices we outline are never truly confirmed until they can be viewed six to nine months later at the Government stamp duties office – however we don’t publish without feeling there is a high degree of truth. This is why as buyer agents when pricing homes we never make decisions on one buy alone and why true land and building values plus an overall knowledge of all buys is vital in calculating correct market value.  At this price level it is also a very private world and we respect that when trying to balance market transparency v individual privacy. We accept we don’t get it right every time but we do try. We never discuss buyer/seller personalities; we do not reveal intimate details to the wider press and we do not disclose full details publicly where the source has asked us not to. Our sources are not just the selling agent, but underbidders, our own advocates, REIV, our auction reporters and other agents not connected with the sale/buy. If you aware of an error or omission please email mal@james.net.au and we will adjust – you will be treated confidentially if you wish.

Andrew Hayne (Marshall White) basks in the Spring sunshine - and the sale of 24 Netherlee St, Glen Iris. Bought under the hammer, $2,660,000, five bidders.

Key Points:

• We covered seven auctions in Stonnington on Saturday. Of those, four sold under the hammer and two after auction.
• Big crowds across the board, all auctions had in excess of 50 people.

Biggest Auction of the Day: 24 Somers Ave, Malvern, Jeremy Fox, RT Edgar, Under the Hammer, $6,160,000.
“The sunfilled courtyard seemed a perfect setting for the Somers Avenue auction, with the lovely weather attracting a generous crowd of interested parties and onlookers alike. No initial bids when asked.  Auctioneer Jeremy Fox went inside to check with his vendors on two occasions. There was a feeling of anticipation amongst the crowd, until the property was declared ‘on the market’ at $5,650,000.  A real buzz.  Fast and furious bidding between two bidders to the end.  The look of relief was evident on the face of the successful bidder! An exciting end.  A truly impressive auction result!” (Nikki Hills)

Bidderbuzz Auction of the Day: 24 Netherlee St, Glen Iris, Andrew Hayne, Marshall White, Bought Under the Hammer, $2,660,000, 5 bidders
“With the sun poking through on this mild Saturday morning, auctioneer Andrew Hayne kicked off proceedings with a vendor bid of $1,800,000. Within seconds, two bidders began battling for the property and they were joined by several more moments later. There was a jovial atmosphere in the crowd of around 100 people as Mr. Hayne poked fun at the bidders. The bidding came down to two parties who went back and forth, and who alone raised the price by $400,000. There were 5 bidding parties, but only two at the end. The Property was sold for $2,660,000 under hammer, which appeared to be above expectations. The gentleman with the final bid received rousing applause from the crowd and congratulations from his main rival.” (Daniel Ehrenreich)

Agent Q & A: What are your views on pricing?

Andrew Hayne, Marshall White, Armadale:“My view is that across the board all homes have to be competitively priced in order to gain maximum interest from as many buyers as possible. The more buyers that are interested in the property, the greater the opportunity of getting a better price.”

John Bongiorno, Marshall White:“Good family homes always sell well – floor plans can be fixed. It provides exciting opportunities. Always boils down to the position of the property, orientation and workability. People nowadays have a lot of imagination. A lot of houses get rid of the small rooms and now have extended living areas, such as kitchens and family rooms. People aren’t afraid to do the renovations. So long as location is good, people are willing to buy and are happy to renovate if necessary.”

James Connell, Marshall White : “Still good demand for quality positions. If the property has a poor plan and poor location, the market judges it harshly.”

Clearance Rates & Monitor Table:

Forward Auction Bookings:

We only buy homes

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

Key Points:

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

$3m+ sales this week:

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

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

Agent Question: How are you finding the market?

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

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

Clearance Rates & Monitor Table:

We Only Buy Homes

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

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

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

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

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

Moving southwards we get to:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why is this happening?

Because buyers are there.

Why now?

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

We only buy homes

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

70 people turned up to 31 Lambeth Avenue Armadale - did nothing and went home again. A typical Stonnington auction.

Key Points: We covered 7 auctions across Stonnington today. Four had 3 bidders or more and 3 had none. This is a true reflection of Stonnington now: good stuff gets support but there is precious little of it on offer.

Analysis: Our view is that demand is there – and this is supported by our buyer agent enquiry stats covering the $2 million to $6 million price range. The clearance rates and auction action or lack thereof is, in our opinion, a direct reflection of nervous sellers who are not putting quality homes onto the market. The market data in Stonnington is not reflective of an underlying, unsatisfied, stronger-than-indicated $M+ market. We refer to our key auction photo above - plenty of people but no action. If you look at our James Home Rating of the home in question you’ll notice it has a 501/1000 rating, i.e. borderline quality. If it was a goodie it would be attracting bids.

Bidderbuzz Auction: 31 Hawksburn South Yarra – Tom McCarthy – 5 bidders – Bought $1,957,000
Are there signs that the winter hibernation is over? That might well be the case judging by this auction where five bidders fought hammer and tongs to secure this two storey Victorian Terrace with the unusual luxury of rear off-street parking. Auctioneer Tom McCarthy managed the bidders with skill, keeping them all in the game. But alas there was only one winner with the eventual purchase price of $1,957,000.

A personal observation: The only reason we tend to focus on the big agencies is because they have the most homes on offer (ok, plus we like them). However, there is a niche double act making some noise at the moment: Tom McCarthy and his partner Philip Moore both of Biggin and Scott are producing very consistent multiple bidder auctions. I like their style and I think right now they are giving both buyers and sellers a fair shake. Well done. Between $1m and $2m in the Prahran to South Yarra precinct they are one of the hotter games in town, if you want a fair dinkum result.

Agent Comments:

Andrew McCann, Benmac, Armadale : “Not much juicy stock (although) we are seeing more mid-range than high-end. Big homes are affected by footy finals and holidays.  I don’t think the election is a factor.  Any volumes look like being in October rather than the next six weeks.”

Jeremy Fox, RT Edgar, Toorak: “There is a little bit of indecision at the moment because of the election. There are a lot of people out there who are frustrated as they are all ready to buy, but there are not a lot of good, quality properties out there. Hopefully the uncertainty about the election will soon pass and stock levels will change.” Jeremy we 100% agree with you – there’s a first!

Clearance Rates & Monitor Table:

We Only Buy Homes

Rainy day but good result for Iain Carmichael (BenMac) at 12 Albert St, Malvern East. Bought under the hammer, with four bidders and crowd of 60.

Canterbury 23 Chaucer: James Tostevin of Marshall White: Great atmosphere with three bidders over $3,800,000 - a strong result. Bought after; undisclosed price.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 50% for the 38 auctions we attended. Of note is the fact that only 1 in 4 sold under the hammer.

On Sunday the post-auction clearance rate rose to 66% on all 61 monitored properties. That tells us that the market is right on the brink, but still limping over the line. We’ve been seeing these kinds of significant differences between “under the hammer” and “post auction” clearance rates for a few weeks now (see last week as well), a very different situation from earlier this year. As buyer agents, and for you as buyers, that tells us a number of things about post auction and private sale negotiations.

Bidderman, our Demand Indicator, has dropped significantly to only 1.2 bidders per auction. Almost 1 in 3 auctions had no bidders at all. This was our most significant stat of the weekend and a key indicator  going forward – let’s see if it bounces back in two weeks.

Market: The REIV clearance rates might not show it – but the market was soft this weekend. Many agents and reporters described a real hesitancy amongst buyers and the $M+ Clearance Rate and Bidderman confirms that. Now is possibly the start of another downward price trend, especially with stock numbers on the rise. Possibly it’s an election slowdown or maybe buyers are seeing more choice coming into Spring and are acting accordingly with reservation and only when it makes sense. Wow! September has more excitement on offer than just Collingwood.

But conditions are varying widely across the different council areas. If you are in Bayside, for instance you may be thinking that very few buyers bid at auction any more. You would also be seeing plenty of stock around, some which has been there for a long time (especially over $2m). So with plenty of new homes coming on, you are probably thinking prices are likely to be weak in Spring in Bayside.

If you are in Boroondara you are probably seeing some heat building up in the market, with good stock attracting good competition and most things selling on the day or soon after. You can see more stock coming on but you know you are probably in for a fight. But you can also remember May and you know if too much comes on it could well be a buyers market in Boroondara this Spring.

If you are a buyer in Port Phillip you may be thinking that the market is still a bit sleepy and hasn’t started any sort of Spring run – either in auction numbers or new stock.

Finally, those of you in Stonnington are probably a bit confused – some things are selling that shouldn’t and some aren’t that should. You are likely aware that the market is very price sensitive but you haven’t as yet seen the Spring stock surge start and like all of us you are not sure if and when it will.

Agent Opinions: This week we followed up on the $3m+ market asking agents: “Where is it?” Their full answers are in the Market wraps, but here is a sample of what agents are saying:

Richard Winneke, Jellis Craig: “Three auctions this weekend all over $3m – that will be a true indicator  – if only one or two sell then sellers will be cautious putting property on the market. Buyers out there at that level, but they are also cautious. Market at lower level is very different. Not seeing a great amount coming on in the higher level – 8 properties over $2m in September for Jellis Craig which is not huge, at least a third down in terms of numbers compared to last year.”

Activity and Stock Levels – The graph below shows New Stock ($million+) in Boroondara, Stonnington, Bayside and Port Phillip. To note:

• Consistent big stock levels until end of May
• Big drop in mid June stock levels
• Steady build from mid July

Highlights and Lowlights

• No bidders in Sandringham today at the three auctions we attended. At one of them Steve Tickell, of Hocking Stuart, curiously said he was testing the market by not offering an opening bid, or any vendor bids…and passed the property in without announcing any amount at all… Stephen, what did we all learn here?
• The biggest result was at 23 Chaucer Canterbury with Marshall White’s James Tostevin firing up 3 bidders to reach over $3,800,000.
• Check out the video auction of John Bongiorno at 10 Walerna Glen Iris in the Auction Reviews Section.
• Credit where credit is due: Auctioneer Kaine Lanyon of Bennison Mackinnon deserves mention today for achieving a great result for his clients while keeping the crowd well entertained at 76 Spring Street, Port Melbourne. He did so with a combination of wit, charm and humor that only a skilled auctioneer can execute. In my opinion he did affect the outcome and I am sure many people left the auction convinced he single-handedly pushed at least one of the parties over and above what they intended to spend – Author David McMillan.

BidderBuzz Auction of the Day

64 Maud St Balwyn North – Julian Tonkin, Jellis Craig – 4 bidders, sold under the hammer – $2,015,000 Maybe it was auctioneer Richard Earle’s comprehensive preamble, or maybe it was the comfort of an indoor auction. Whatever it was, this auction got off to a flying start with a genuine opening bid of $1,800,000 from the 60 people present. Two more bidders joined in, resulting in an intense three horse race. When it seemed to all that the property was going to be bought at $2,000,000, a fourth bidder jumped in out of nowhere to be the successful buyer at $2,015,000. A strong result.

The wind was up, their tails were up and so was the price. David Lack gets a solid result post auction - over $2,250,000. 2 bidders. Port Melbourne, 2 Swallow.

Are Special Conditions costing sellers BIG MONEY?

Sellers may be costing themselves big dollars all in the name of legal “protections” they would never agree to if the buying shoe was on the other foot.

One prominent conveyancing company claims to be protecting their selling clients with a list of clauses in their selling contracts – but in fact their efforts and attitudes are causing buyers to walk away from deals. In this market that is not a good step for sellers.

If you watched the two latest episodes of Channel 7’s “ Under the Hammer”, particularly the one about the Yarraville auction which featured one of our buyers, you’d be interested to know that the real drama wasn’t what you saw on TV but what happened behind the scenes with the 20 or more phone calls and emails between auctioneer Adrian Butera and our company just to get our buyer to the starting line. It was all about this conveyancer’s Special Conditions.

In Victoria when we buy or sell a home the paperwork we are required to agree to is made up of a number of sections. These include the particulars of sale price, settlement arrangements and chattels; normal contractual conditions governed by the REIV and the Law Institute; and Special Contractual Conditions.

With regards to the Special Conditions sections the conveyancing firm we are referring to is putting in clauses or conditions that are interpreted by our clients’ buying solicitors as meaning that:

• If the home burnt down, the buyer would still have the pay the seller the purchase price in full.
• If the seller couldn’t provide title (we thought that is what you were buying) – they would still have to pay all the money to the seller. (We’re sure the banks would love that idea – NOT!)
• Some of these special conditions may affect the buyer’s ability to insure the home they buy.
• If the buyer had a dispute with the seller, they would still have to pay the seller in full and only after could they dispute.

Back to the Yarraville auction: it took three days and all those phone calls and emails, but the sellers finally agreed to strike out the special conditions.

Even though things have been quiet, we still managed to get 5 $M+ homes over the line this last week in Malvern East(post auction), Balwyn North (off market), Malvern East (under the hammer), Port Melbourne (pre campaign) and Canterbury at auction. One of them (Port Melbourne) could have been very, very different as our client had to walk away from an acceptable deal; owing to this conveyancer’s special conditions. It was only when the seller ignored the conveyancer and crossed out these additional onerous special conditions that the deal was revisited and consummated.

We think sellers need to know about this practice because buyers’ lawyers are increasingly refusing to accept these special conditions, which means that $M+ investors are simply having to walk away from a deal – even on good properties. It’s a practice that could be costing them tens of thousands of dollars.

To illustrate, see our chart below where in Identical Auction One Bidder 3 was able to have the Special Conditions removed but in Identical Auction Two Bidder 3 was not. He did not bid, which reduced the purchase price significantly.

We are hoping to name the conveyancing company, pending legal approval.

Sellers who read this need to be made aware of these issues so they can decide whether they have hired the right conveyancer.

And buyers be aware of what you are signing up for if you come across these kinds of contracts. Make sure you get good professional advice, or you could be up for something more (or less) than you bargained for.

James Buyer Opinion: This week our James Buyer Opinion is on “Carrot and The Stick and Other Negotiation Styles.” Next week in Buyer Opinion we have a special Buyer Agent Conversation – Getting Info to Make an Offer.

Also next week, Election Saturday, we will have a reduced coverage; but there will be a Market Insight – just no wraps - owing to significantly reduced auction numbers.

We Only Buy Homes

Mal

Took this photo at an open at 59 Studley Road Ivanhoe - Liz Walker Jellis Craig - all laid out on the kitchen table. Just want buyers want - fair dinkum information. Sellers - Liz Walker and Jellis Craig Ivanhoe provide what buyers want - reasonably accurate information.

Hampton 48 Mills: Stephen Tickell straining everything to get that last drop of cash from the auction. 3 bidders. Bought for $1,560,000.

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 49% for the 37 auctions we attended. By 8pm it was 62% (seemingly a balanced result between buyer and seller).

Bidderman, our Demand Indicator, was at 1.6 – a level we feel continues to be a good representation of current demand: borderline – a  market that may be in balance but is on an edge.

Issues
This weekend was the first solid and uninterrupted auction market test since we all stopped for school holidays at the end of June. At that time we were seeing prices falling on big stock numbers. Since then the market has mopped up more than we expected. However the last few weeks have been very quiet. Saturday was no different – quiet – despite the largest auction offering for a month. With good stock tightening and an election interruption coming, it is looking more and more likely that the market will continue to flounder and gyrate until Spring.

A fortnight ago we thought prices had more chance of falling than rising, however to be completely frank it’s not as clear to us any more. The opposite is also possible. And next week we may have a different opinion.

Yes, good stock is selling, but good stock sells even during a depression. Most homes around a million dollars are selling. For the rest of the $M+market, there seems to be no clear direction at present. We are in balance but it does not appear a stable balance.

Highlights

• Everything sold in Stonnington - 12 from 12. Prahran was particularly impressive, with 6 bought out of 6
• There were two 5 bidder auctions – both by Tom McCarthy and Philip Moore of Biggin and Scott -  14 Green Prahran – $1,653,000 and 13 Hornby Street - $1,476,000.
• Prahran was hot – it had the second highest sale at 41 Closeburn, Prahran with Andrew Macmillan of Benmac – $2,586,000
• The top sale we witnessed this weekend was with Mark Wridgway and Michael Ebeling of RT Edgar at 58 Washington St Toorak – $3,350,000 post auction (for land buyers in the area that added up to $3900 per square metre).
• Flinders Caravan Park was reported as sold during the week for around $6 million. Stay tuned for subdivision plans and possibly a rare Flinders township land release.
• In Port Melbourne/Albert Park there were five single fronteds for sale in various different guises. One sold, four passed in, but three have since sold after. There were 7 bidders in total.
• There were a couple of $3,000,000 pass-ins in Bayside – possibly reflecting the large stock overhang at this level in the area.

Activity Levels – just look at the graph below to confirm what we are saying about large drops in activity levels for $M+ sales. It shows sales for the week ending June 26th v the week ending July 30th. The reasons for the drop in sales are partly seasonal, but also partly unusual – and it’s worth remembering that a number of those May/June 2010 buyers will have to become Spring 2010 sellers sometime.

Agent Comments - This week we asked if the election was affecting the market. The market wraps contain some very boring answers. (The agents aren’t boring – the election is.)

Mark Wridgway from RT Edgar: “The Election is having no effect in Top End Melbourne which is mostly pro conservative. People figure from the property angle that Labour should win so the choices are: as is (which is regarded as OK) if Labour wins or slightly better if the Libs win. As opposed to  2007  when incumbent Liberal Government looked like they were on the way out and therefore conservative sellers held off as 2007 Labour was an unknown. Fewer people act in times of unknowns.”

Family Homes – Not all family homes go up

7 Ardrie Road Malvern East

This home was bought in 2000 for $410,000 and resold again in 2007 for $1,995,000 by James Redfern of Marshall White. It was a great result at the time. For whatever reason the new owners decided to move after two and a half years and it was sold by Abercromby’s Robert Vickers Willis earlier this year in the mid $1.9 millions or slightly less than the 2007 price. The market was strong in February but unfortunately come May the deal had fallen through. We reported the re-auction last weekend.

James Auction Report: With the weather taking a turn for the worse, auctioneer Tim Derham opened the auction with a vendor bid of $1,650,000. With the umbrellas opening in the crowd and the atmosphere souring, no bids were made for the Malvern East property. Derham did all he could to extract a bid from the reluctant crowd before returning to discuss the situation with the vendor. Upon his return, he suffered an equal amount of bad luck. There were no bids made for the property and it was eventually passed in. The property has since been sold by Robert for a tad over $1,700,000.

What to learn from this? – and please no smarty pants here – I lost money on my first marital home 25 years ago. What we can learn is:

• Good properties do perform well over a longer period
• Properties that have to be sold over a shorter period of time have an added risk of being subject to short term market fluctuations
• Properties that are above the median price for the precinct are particularly susceptible to market movements
• Agents can get very strong prices from buyers – e.g. both James Redfern and Robert Vickers Willis got above-market prices which came back to the buyer at resale time.
• The market moves down as well as up in home buying.

What could be done to reduce the risk when buying a good home? After all, this home had a very good James Home Rating of 792/1000

1. Consider land to value ratios – the lower they are, the more susceptible you are to a reduced growth result.
2. Be clear as to why you are buying – Clarity. Then buy for the long term.
3. Buying homes well above the normal precinct price attract greater risk, especially when this is combined with point 1 – lower land to value ratios.

Apartments
Good insight from Gerry Gordon of Hocking Stuart (Peter you need to buy Gerry a new tie): “Sweet spot in apartments is when size matches price point. Many apartment buyers are attracted to a price. Price point people are being attracted to Bayside. Healthy apartment market below a million. Getting 5% return.”

Stock Levels
This week we trawled through old stock lists, off markets, stales and unsolds. The stock we trawled through was mainly unfinished or rubbish apart from the Top of the Top End – where there are good quality unsolds. We thought a few weeks ago (as we came back from holidays) that there was more good stock around than there actually was. What happened? More good stock got mopped up in the flurry pre school holiday break than we first thought (examine our Buyer Activity graphs in the Market Wraps). Around the traps, the word is that Spring seems to be shaping up OK for both buyers and sellers. Up until then you can see the reduced new stock levels  (graph below). Prices are holding at present.

Wormie - the chart below represents our best guess on what $M+ prices are doing right now.

James Buyer Opinion: This week we have reprinted our opinion article that was published in Business Age last week. We update our opinion piece every Wednesday and next week is we will start a 9 week series on Negotiation. Our first article is: “How to ask the “On the Market?” question – without being a smart aleck”.

Thank you for your continued support of our company in ratings, news and advocacy. Over the next month or two you will hopefully witness major improvements in the video quality as we improve our technical capabilities to match the incredible numbers of people now watching them.

We Only Buy Homes

Mal

Balwyn 80 City Road: A good crowd turned up to see not much happen - a common occurrence across Million Dollar Melbourne today.

Malvern East 11 Deakin St: John Bongiorno is all smiles as the 3 bidders put their hands up. Passed in at $1,135,000

In Stonnington this weekend we monitored 14 properties, of which 8 were reported as bought before, at or after auction.

Bidderman was a surprising 2.3 – surprisingly good given the stock quality

This gives a clearance rate of 57%. For the corresponding week in May of this year we monitored 18 properties at auction at which 12 sold, giving a clearance rate of 66%. So while numbers were similar for the week, overall sales numbers are down considerably for the month when compared to May, as many top end agents are now just getting back from holidays.

The other noticeable difference is the dollar value of transactions. Today the only significant transaction at auction was 4 Grace Street, Malvern which sold after auction for just over $3,600,000 – Marcus Chiminello of Marshall White. See auction report and James Home Rating below.

Agent Comments – Michael Gibson of Kay and Burton

• Seasonally slow
• Election affecting the upper end – slowing marginally
• New apartments still steady
• May’s performance relates to stock market – it really was affected by consecutive downward weeks
• Bit lucky for market that we came into winter – tighter stock supply should stabilise the market
• Looking healthier than a month ago pricewise

Elliot Gill of Bennison Mackinnon

• Stock levels starting to rise
• A lot of failed auctions have sold afterwards
• My take on price: coming back up a bit to a plateau
• Correction may be over but we don’t know for sure
• Struggle street is main roads and poor aspects but even the odd one of these is still selling at a strong price – no rhyme or reason
• Seen no drop off due to election
• Supply is the still the key to price
• Yes, demand dropped off
• Overhang is all at the higher levels – not much overhang at lower levels

The properties we monitored

We only buy homes

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

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

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

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

Our evidence

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

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

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

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

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

So what to make of it?

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

What Are Your Needs?

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

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

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

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

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

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

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

Clearance Rates

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

Buy happy

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

St Kilda 35 Vale St: Today with the rain, it's indoors, up close and personal. Matthew Young of Buxton firing up two bidders on the way to a bought price of $1,192,000.

At 6pm Saturday the James Million-Dollar-Plus Clearance Rate on the 35 auctions we attended was 51%. Our Demand Indicator, Bidderman, was up at 1.7 – still hanging in there.

PRICE CORRECTION
There is no doubt the market has eased, “corrected” – call it what you like. One easy word to understand  is “dropped”. On a few properties it has dropped by 10% since Anzac Day.  Some homes – mostly the higher quality ones – haven’t missed a beat. But for the majority, what seems to have occurred are minor falls – although that’s hard to prove specifically.

The statements from the selling agents seem to be leaning strongly towards a “supply based correction”. At this stage we agree. If we keep seeing large amounts of stock come onto the market in June then it’s logical that prices will continue to fall, until some balance returns.

SUMMARY CLEARANCE RATES
Overall the clearance rate was 50% for 124 auctions we monitored in Port Phillip, Boroondara, Bayside and Stonnington. That’s in line with our James Million-Dollar-Plus Clearance rates – confirming it again as an accurate measure of Million-Dollar-Plus Melbourne.

• Bayside – 35 monitored – 14 bought – 40% clearance rate (last week 46%)
• Boroondara – 46 monitored – 24 bought – 52% clearance rate (last week 70% )
• Glen Eira – 9 monitored – 5 bought –  55% clearance rate (last week 55%)
• Port Phillip – 11 monitored – 6 bought – 54% clearance rate (last week 32%)
• Stonnington – 23 monitored – 15 bought – 65% clearance rate (last week 69%)

Highlights

• While 8% were not reported, indicating a reasonably high degree of accuracy for clearance rates, the numbers of unreporteds are increasing.
• Stonnington sellers seem to have made the price adjustments that some Boroondara owners (“wannabe” sellers) have not.
• Some ripper auctions included 50 Hawthorn Grove Hawthorn (Paul Keane of Jellis Craig), 23 Ferncroft Ave Malvern East and 2 Carmyle Avenue Toorak, both with Jeremy Fox of RT Edgar. These auctions saw four or five genuine bidders (well above the 1.7 Bidderman average)
• Selling in Million-Dollar-Plus Melbourne seemed a coin toss – you had as high a chance of your property passing in, as selling on the day – the first time since 2008.

SUPPLY OVERHANG BUILDS
First some stats. Last Saturday’s (May 29) Auction results showed strong evidence of “auction overhang” in Port Phillip where the clearance rate was 32% clearance rate on the 22 auctions we monitored.

Seven days later the reported clearance rate had lifted from 32% to 45%, with only three of the pass-ins and unreporteds reported as having been bought. On this evidence, it seems a stretch to say that in Port Phillip Million-Dollar-Plus homes are being bought soon after auction. There is overhang elsewhere in $Million Melbourne but not as much as Port Phillip. Which suggests the chance of bargains there.

What Supply Overhang means to you, the buyer
1. More choice, given that new stock has to compete not only with other new stock, but with old stock which hasn’t sold yet.
2.  Better pricing on all homes as there is real competition for the first time in a long while – providing of course you understand the negotiating game and know how to play it.

UNREPORTEDS
Practically all last week’s unreporteds were still for sale on Friday – suggesting that the REIV view that 50% of unreporteds are in fact sold does not seems to apply to the Million-Dollar-Plus  market.

ARE METHODS OF SALE CHANGING?
Perhaps in Bayside but not yet in other areas. Look at the latest 50 homes advertised for sale on the website www.realestateview.com.au

THE SEARCH & NEGOTIATE GAME HAS CHANGED
We feel there are at least four things all buyers should be considering:

1. Most importantly – home buying is still about best meeting your needs and taking a 5-10 year longer term view
2. You need to sharpen your methods on checking all homes – especially pass- ins
3. You need to monitor stales (old unsold homes)
4. You need to reconsider offer techniques

Let’s look at point 4 in more detail:

RECONSIDER OFFER TECHNIQUES
Let’s look at a real life example in detail: one particular property we bought today was 27 Eddys Grove, Bentleigh with Chris Hassall from Buxton. It had a quote range of $975,000 to $1,050,000. We thank our client for his permission to publish these exact figures.

From the top:

1. On pre-auction Friday we were told the property was on the market at $1,150,000 and that it would be sold that day (Friday).
2. We checked the website on Friday and saw that it still had a quote of $975,000 to $1,050,000. We asked: Would we buy it if we paid $1,150,000? We were told that we could if no better bid came in.
3. We hadn’t made a bid – so we were trying to work out how it was on the market at $1,150,000.  

First Offer Technique considerations (pre auction). What would have happened if you had bid then based on that information?

Anyway it didn’t sell, and come auction day the quote on the website and in the paper remained at $975,000 to $1,050,000. At the auction there was an opening bid of $1,000,000. Another bidder joined in and so did we – making a bid for $1,040,000. From $1,100,000 onwards we asked auctioneer Craig Williamson if the property was on the market. We were told “No” – despite the fact that each time we asked we were $50,000, $60,000 and then $70,000 above the top end of the quote. (Please note we make no claim this is out of the ordinary or an illegal practice as the REIV and CAV state this behavior is fair enough).

Second Offer Technique considerations (during auction). What happens if you had not bid, bid differently, or put in a killer bid?

Eventually the property was passed in to us at $1,120,000. We stood there in the sprinkling rain for five minutes before a Buxton salesperson came to us – they were too busy talking to the underbidders and other interested parties. My client, through us, was the last person Buxton spoke to. We are sure there is a perfectly acceptable explanation for this curious behavior. But versions of this happen at many auctions.

(Let’s point out at this point that we have good relations with Buxton Brighton and less than a fortnight ago we bought another $1m+ home through the Bentleigh office and were treated well by Ivan Blow and Craig Williamson.)

This story is not about Buxton or Chris Hassall (whom we think is a solid agent) – after all they got a good price and did nothing that many on the selling side considers untoward.  No – this story is about whether you as buyers have the right offer technique and strategies to best manage your options in this changing market. It shows the importance of good offer technique pre-auction, during the auction and post auction.

Back to 27 Eddys Grove: we were eventually given the reserve of $1,150,000 – with the additional strong advice that if we did not take it, then the underbidders would immediately be given a chance to submit their offers, and that the highest offer would win. While that would have been intimidating to the uninitiated, for us it was no problem. Technically we were being given first right of refusal.

After consulting with our client, we accepted. We felt the reserve was reasonable, we felt we needed to separate ourselves from the other bidders and our client really wanted this beautiful home. It was not a time for bravado but a time for cool heads, was our recommendation.

Third Offer Technique considerations (post auction). What happens if you decline or the stated reserve is a lot higher?

The case of Eddys Grove, like many others, begs the question of why the agent wouldn’t just quote the home at the fair reserve level of $1,150,000? That’s another story and a never ending battle with many agents. But we digress – our focus is Buyer Strategy and Offer Technique.

During any auction campaign you have three very distinct offer times: Pre, During and Post. As the going gets a little tougher for sellers so it will for buyers. So, as the stakes get higher, you will need to sharpen your offer technique before you count your chickens.

OFFER TECHNIQUE – THE CLAYTONS RESERVE  (The false reserve)

1)      What happens if you don’t know how to play the pre and post auction games? Do you join in and just keep bidding against yourself in this market; given you are possibly the only bidder – or do you miss out if there really is another bidder?

2)      What is there to stop the auctioneer at a pass-in telling you the reserve is $400,000 above the quote or their real reserve - and that if you don’t pay it they will offer it to the others? What can you do to defend yourself against a Clayton’s Reserve when you are the highest bidder playing by the stated rules? What strategies do you have?

3)      If, as a buyer you are offered a property with a Clayton’s Reserve and you refuse – does that mean the auctioneer can offer the property at a different reserve to somebody else? Or do the others have to be given the same Clayton’s reserve?  Do they come back to you? How do you as the highest bidder manage this?

For now, in the interests of our clients and to discourage this illegal behavior (The Clayton’s Reserve), in cases where we have won the right to hear the reserve and we consider we have been given a Clayton’s Reserve we will now publish (if we get our client’s permission) the agent’s name and the Clayton’s reserve given to us, We will also send a note of complaint to the REIV and ACCC. If any of our behaviour is as inappropriate as the Clayton’s Reserve, then by all means return our return serve back to any of our advocates.

We have a good many excellent selling agent relationships. They are important to us personally and professionally. We are shown many courtesies and keep many confidences (as we should and will continue to do so). However we are giving fair warning to selling agents, who, by way of example, quote $2 million and then tell us, when we have won the highest bidder right at auction, that the reserve is $2.4 million.

Agents, we would much prefer to deal fairly with you. Why abuse the auction system? If you want to do that why not use Expressions of Interest or some other method of sale?

Our offer technique management, in this instance, is to return the serve right back at you as hard as we can. We will still negotiate, but our relationship on the home in question will continue beyond the buyers and sellers signatures. If you think we are bluffing a Clayton’s Reserve from you will find us both out.

Apologies if this seems a tad emotive or self serving but the Clayton Reserves are continuing and we represent buyers and think these kinds of “Reserves” are legally and morally wrong. Simple as that.

Let’s move on.

Congratulations to Andrew McCann of Bennison Mackinnon on 115 Stanhope Grove Malvern, whose company to our knowledge is still the only publicly declared Melbourne based real estate company with reserves in their quote range. We videoed their auction today – it should be up tomorrow. Their quote was $2,100,000 to $2,300,000. The property passed in at $2,150,000 and with some negotiations was bought post auction for $2,255,000 by the buyer it passed into. That seems solid agent work. Fair buyer quoting; stated reserves.

Now let’s really move on – did you hear the joke about the leprechaun …

Buy Happy

Mal

PS  No Market News next week as its Queens Birthday Weekend and Council Wraps up tomorrow (Sunday)

Toorak 2 Carmyle: Looking like an almost drowned rat - Jeremy Fox from RT Edgar firing 3 bidders up with his banter and a smile. Bought under the hammer for $3,375,000.

Sorry did you say 5 bidders! This is June not April. A great Jeremy Fox RT Edgar auction took place at this home 23 Ferncroft Avenue Malvern East. Bought under the hammer for $3,560,000

Stonnington seems to have got itself back into the game with a second “OK, sort of – almost normal” auction week in the 60’s clearance rate wise. We monitored 23 homes of which 15 were bought; that’s a 65% clearance rate (last week 69%). Of the auctions we  attended 7 of the 10 were bought.

What’s happening? Price reduction is happening. The buyers are there!  Buyers got hit early May with a lot of stock and could see a lot more coming and they paused. That meant things didn’t sell as easily as April, pass-ins occurred and prices dropped. Stonnington sellers have had two more weeks than those in Boroondara to face the “new order” and they have used those two weeks to price adjust and things are now beginning to move again at auction. Welcome back sellers – lets see what happens from here.

High Noon for K&B

It was a case of Toorak High Noon for Kay and Burton today with 3 substantial properties for sale around midday. One sold before (3 Cleeve with Andrew Baines) and two failed to attract any auction bidding interest (9 Kenley and 10 Moonga). The thing of interest is Kay and Burton’s new style of auctioning.

1)      Run the campaign and gather intelligence but give little way

2)      Tell everybody the ball park figure on Auction Day via a Vendor Bid and then shut it down quickly.

3)      Deal with the brave and inquisitive under pressure afterwards.

For the most part we thought this was not working early May – early June I’ve become a believer for now. It’s a well thought strategy. Early July let’s see …… Kay and Burton is a very strategic company; they run campaigns in waves – feeding off each other, regrouping and then going again. It was no coincidence that May was a stellar of stellar months for their vendors and themselves - they had obviously been planning it since Christmas. K&B appeared to lose their way for a short time when they focused on others; but the generals have pulled hard and the well oiled Millionaire Machine is back in full swing.

EOI

They are back and moving along. We have just assessed a really interesting home at 3 Avalon Road Armadale (Ross Savas of Kay and Burton). We have a rating on it and price thoughts. If we can help you through the EOI maze please give us a call.

Andrew McCann of Bennison Mackinnon’s thoughts on EOI to the question, “do you think EOI are increasing and working at the Top End”?

We don’t deal in a lot of EOI campaigns and as a company we don’t think they work as well as the Auction method so they are rarely suggested. Buyers tend to find them confusing and prefer to either know an asking price for a Private Sale or bid in a transparent and open environment which an Auction allows for. They do have a place at the “very top end” of the market and for some “unique” properties however from the more recent EOI campaigns we have seen they don’t seem to be working.

Twoday.com.au

Marshall White – the ever innovative have launched a new under a million, new age, internet savvy, younger persons company (I think I got that right). The main aim is to give a focus to this very important market while still allowing Marshall White to keep its exclusive high end identity. Darren Saunderson heads it up and while it is not our market, we will watch with interest. Good Luck with the new venture. 

Its not million dollar news but intersestingly South Yarra produced 18 results for a 78% clearance rate today however not one of  the sales was over $1million. Below are the results around and over a $million.

Make Good Decisions

Looking good Lachie! One of our favourites Lachlan Fraser-Smith ably assisted by Simon Dale gets four bidders zinging to an "under the hammer price" of $1,672,000. Prahran 1 York Place.

Nathan Waterson – Focusing on Stonnington

Nathan Waterson of Bennison Mackinnon

Kristen: Hi Nathan.

Nathan: Hi Kristen. How are you?

Kristen: Good thank you. I’m here today with Nathan Waterson one of the partners at Bennison Mackinnon, he’s been there for five years now. We are just going to have a bit of a chat about the market and what’s been happening. The first thing I think would be Clearance Rates, how have they been going so far this year?

Nathan: Look there’s no doubt we’ve seen a leveling in the market right across the board, but as a company we’ve still been transacting on or before the day at about 87 per cent, so a little bit down on the 94 (per cent) that we were tracking at last year.

Kristen: Okay and if we look at land prices – I mean we look at Armadale – you look at land prices there at what sort of price range at the moment, per square metre?

Nathan: Per square metre – generally in the better suburbs and probably the bigger blocks of land they’re tracking at about $3500 a metre, for the smaller properties at a little bit less than that at the moment.

Kristen: So if we jump across Glenferrie Road, perhaps to the Haverbrack area, what sort of price ranges do we find there?

Nathan: It’s been a little while since something has transacted in that sort of precinct, whether it be Haverbrack or into the Stonnington State. But they’re generally at a similar sort of price around $3500 (per sqm) maybe a little bit more for a home that you’re not going to see come to the market too often.

Kristen: Okay. Now Prahran’s been pretty strong this year, your thoughts there?

Nathan: I think it’s been driven largely by the fact that we haven’t had a huge amount of property to offer out into Prahran this year. It’s been quiet on the front of the single-fronted cottages where they’ve been creeping into that $1,000,000 to $1,300,000, $1,400,000 price point – if they’ve got parking.

Kristen: And then the buyers, where are they coming from do you find?

Nathan: The buyers into that Prahran market on those sorts of cottage type homes are generally trading up within the suburb or a couple of suburbs surrounding. Or they are downsizing coming the other way back from suburbs such as Malvern – where they’ve been on a double fronted home with a pool and the kids have maybe already grown up and moved out.

Kristen: So if we look forward to the future. The listings that you’ve got coming up, I know that stock levels at the moment have been pretty strong we’ve found across the board.

Nathan: They have been, absolutely.

Kristen: What are you finding for the future months?

Nathan: We’ve got really strong numbers of listings up for the 19th and 20th of June already, and then we’ve got a little bit of a break over the school holiday period.  And we are already starting to list very strongly for that period of the 31st of July and beginning of August. And we’ll see pretty good numbers coming up just prior to spring.

Kristen: And we’ve seen a lot of properties selling on main roads. Are you still getting those sorts listing? Are they still selling well?

Nathan: We’re probably not carrying any just at the moment and the ones that we have seen go up this year have probably been the harder type of properties to sell as they always are. But while the market was good they were moving like everything else. It’s now that we’re starting to see those just thin out like the rest of the market place.

Kristen: Okay. And if we finish up with your predictions for the market, what are your thoughts there?

Nathan: I think the market will probably track along pretty similar to the way it is at the moment, where we’re seeing 1 -1.5 buyers at most of our auctions whether it be on the day or before – as we’re starting to see more sales come about that way. So I think you’ll just see a pattern that continues like it is.

Kristen: All right, well thanks Nathan. Thank you for coming in.

Nathan: My pleasure. Thank you very much.

Kristen: That’s Nathan Waterson from Bennison Mackinnon.