October 29th: Excerpt from October 15th James Marketnews: Want a home with a Tennis Court in Toorak? Got around $6 million dollars? In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts.

The Question: After Super Saturday would these 3 not sell, sell lower or would the Mexican Wave** (see explanation below) kick in and they all sell once one had gone.
The Answer: The Jungle Drums beat loudly and the Mexican Wave kicked in with all three selling within 24 hours of each other. All three had quotes of $5m to $6m during their campaigns. Scotsburn was bought after a weekend pass-in (believed to be around $5m), Montalto was for most of its campaign a private sale (but finished in a Boardroom Auction at just over $7m) and Scott Grove was an Expressions of Interest closing Wednesday (reportedly 3 interested parties and sold 2 hours after the deadline for well over $6m).

October 29th: 54 Hanby St Brighton (above) (Kevin O’Brien) – The only auction I came out for today. Damian Davis – a bit out of his normal territory started up the engines with a solid opening spiel in front of a crowd of around 50. After he had finished his coverage on the home’s flow, light and feel, he asked for $3,300,000 from the crowd. Nothing was forthcoming, so a vendor bid at $3,300,000. Another vendor bid at $3,350,000 and a half time break did nothing to excite and so the words pass in brought an end to the proceedings on this lovely home that has a vendor at one level and potential buyers seemingly at another.

October 25th: 25 Scott Grove Glen Iris (Rae Tomlinson and James Connell): Bought within 2 hours of close of play for well in excess of the $6m+ price tag. This was a very good home on a very big parcel of land and the result was deserved and expected for a quality A grader – we rated it at almost 3 hats or 791/1000 (see our rating below). And a good night for Marshall White overall with 34 Chatsworth Prahran being sold through Madeleine Kennedy for $3,137,000.

October 24th: The collection of Expressions of Interest campaigns finishing in late October/Early November will be watched by many. There are some great homes, but the results this last weekend indicate they may not sell as strongly as September results suggested they might. We are monitoring a geographically widespread sample – all over $3m and will bring you the results as they come. Lets see if the K&B Mexican Wave** is in play for the Top End buyers or have taken their bat and ball and gone home.

**K&B’s Mexican Wave: It is possible that the above marketing campaigns could in fact produce higher results if we see more marketing campaigns in the style of Kay and Burton’s Mexican Wave effect. It’s just like at the MCG: Kay and Burton brings a group of homes together and push and prod till they get one buyer to perform and then uses that result to get other buyers to put their hands up on other homes. This is planned months beforehand, it’s totally legitimate, it’s brilliant in concept and it’s why people like Ross Savas and Mike Gibson are worth their fees and then some. Other Mexican Wave agents who plan and execute well are Marcus Chiminello, Rae Tomlinson, Heather Elder, Justin Long and Peter Bennison of Marshall White to name a few. However K&B are the absolute masters at the Mexican Wave.

Alastair Craig and Richard Winneke maneuver 3 bidders to a bought price of $2,855,000. This is where some of last spring's $3M plus action is right now at $3M minus.

October 22nd: During 2011 the $3M+ market has been as fickle as we can remember: it disappeared for most of the year, came back with a vengeance in September and has now seemingly run away lost again.
To demonstrate the point, only two homes out of 150+ scheduled $M+ auctions reported a sale price over $3 million today.  Yes two – that’s not many.

They were 34 Stevenson St, Kew with James Tostevin, which sold after auction and 7 Barrington Ave, also in Kew, with Scott Patterson, which sold before auction.

Mid- Week Apartment Auction: 3002/368 St Kilda Road (Marcus Chiminello) – Thursday night auction @ 7.00 pm. A similar property in the same building on the same side, same square metres, same décor, sold for $3.3m a short time ago. Quoting $3.3m plus then $3.5m plus. Surprising to have an auction in St Kilda Road but Marcus Chiminello and Nicole French (the new Batman and Robin) lined up auctioneer Growling Jack Bongiorno and 3 bidders fought it out past the last sale sales, past the first quote and the last quote and all the way up to $3,800,000.

Why did it sell so well? Demand exceeding Supply for North orientation; 315 sqm size with car parking on the 1st floor (no dizziness getting in and getting out) and Shrine views. Well marketed by one of the best in the business at this stuff.

Price: Has been gently improving in some key blocks on some key apartments – but it’s all about the apartment characteristics. There are literally hundreds of apartments above a million that have no buyers at all, because they have nothing unique to offer except a very cheap price.

Biggest Sale: 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders
Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

Biggest Pass In: 11 Scotsburn Grove, Toorak, Jeremy Fox (RT Edgar); Passed in, $5,000,000, 1 bidder
A small crowd of around 40 and half are Toorak agents just looking. Jeremy Fox gives us a good solid spiel and we are away. Or are we? Jeremy calls for a $5,000,000 opening bid and gets nothing but silence. He goes inside for his half time break and leaves us all in the rain – actually he was pretty quick to return. I’m typing in Passed in on my Ipad and – whoops no – there was a genuine bid and $5,000,000 is taken up. Then it is passed in to the lone bidder. We await the outcome. (Mal James)

October 15th: Quality Stock Levels have improved for Buyers:
Good levels of good stock came into the market late September and buyers began to take deeper breaths and relax a little.  Angst dissipated somewhat as quality buyer saw more quality homes they could buy, diminishing the spectre of missing out on a home, leading to a drop in buyer urgency and ultimately price.

This Quality Supply Increase is best demonstrated at the Top End.

Want a home with a Tennis Court in Toorak? Got around $6 million dollars?

In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts. So even if there are 10 buyers for tennis courts at this price level, there’s a fair bit a choice there. If normal market forces prevail and the buyers have good representation, then the prices on all three could be lower than if there was only one of these homes on offer. That’s unless, of course, one home is more strongly favoured than the others by a significant number of those 10 buyers – or if the Mexican Wave effect happens (see below).

Similarly in the last week we have been through some really good new home offerings at over $6 million, including 14 Kilsyth Toorak (Michael Armstrong); 15 Vista Toorak (Nicole Gleeson) and 33 Coppin Grove Hawthorn ( Scott Patterson) – see our ratings over the coming week.

These are just some examples. And in fact, quality stock levels have improved at all price levels. This is good news for Top End buyers and the reason we think October 2011 and hopefully November 2011 will be better months for buyers than were Winter 2011 and September 2011 in terms of:

1. More choice

2. Less chance of the runaway prices.

This price segment is all about either side of the Melbourne Cup – as a number of Expressions of Interest, Private Sale and Auction campaigns are scheduled for some sort of conclusion at that time. We anticipate publicly reporting in  early November as to market movements since September’s price and activity spiking.

The Block was great entertainment – but for me it was also the best reality TV show in a decade because it showed the harsh reality of what happens when you break all the rules in the property investment book.

I took the opportunity to go through each property a few weeks before the auctions and assessed them according to our James Home Ratings criteria. What stood out most, apart from the fact that it was a hugely popular show that captured everyone’s imagination, was how many rules were broken. Breaking those rules has led almost inevitably to the end result, where only one of the properties sold under the hammer at auction. Sorry guys, but this was always going to a disaster in the making. For us though as viewers, it was an invaluable lesson in how not to make money through property.

So what did we learn from the show apart from the fact that Josh is getting married to Jenna?

Rule No 1: You make your money when you buy

If you’re buying property as an investment and you’re hoping to make a profit on the resale, what really matters is not the selling price but how much you pay for the original property. Okay we understand that Channel 9 was more interested in the show’s ratings than the profit they’d make on reselling the properties. But the price they paid for the initial properties was way too much. Sure it was a big block, and it had four houses on it, but at an average of around $900,000 per site, plus stamp duties of around $50,000 each, plus holding costs of 6% (another $50,000+ each), plus the selling agent fees…Well each home was priced at well over a million dollars before the first contestant even showed up and the first nail was hammered.

Rule No 2: Buy the best position you can

This for me was the real killer – the position was a shocker. Yes the properties were close to all amenities but anything in Richmond is close to all amenities. Have you been down that street at night? It’s scary. Stand in the street or look on Google streetview and do a 360 degree turn – what do you see? Industrial sites, multi storey car parks.  And who knows what is going there in the future? What if it’s a panel beater shop and you end up with the smell of paint thinners in the morning? There’s a vacant block of land to the west of No 37 that has recently changed hands for just over a $1million: who knows what will go in there?

Rule No 3: Consider your target market – before you start!

The properties themselves had some real positives in terms of the land. The north orientation will bring light and winter warmth into those back living areas. So sure, that’s a tick. They all had good street appeal (tick) and the block widths were above average for the area, meaning the homes could give that feeling of space which is very important in a home (tick). However they all had another huge negative: on top of the scary street there was no car-parking. Which means that your future buyers or renters are going to have park their car at night somewhere in the street. So that is going to knock single women, young married couples, and older couples out of your target market. In fact, just about anybody except students and local lads would have concerns about living here.

Rule No 4:  Don’t overcapitalize.

If you are about to spend $1million or so even before one sod of earth is turned or one nail is hammered AND you want to make a profit, you need to know whether you’re likely to recoup the costs of your renovation – and hopefully more. Otherwise you’re going to end up overcapitalising. How can you work that out? Well, look around you. What sales evidence was there in The Block area for $1.5million homes? Zippo. We can tell you this because coincidentally on the same day of the Block auction we bought a property at auction for a client in Richmond only a few hundred metres away. It was on bigger land,  it had car parking and good period features – and we got it for just over $1.2million. So if $1.5million is the minimum amount you need to make serious money, but there is little or no sales evidence of properties selling for that amount in the area – DON’T BUY.

Rule No 5: Amateurs don’t make money on renos – they make money because they are lucky that the market happens to be in an upwards phase.

Whenever someone tells me they made money on a renovation, I think, well, no you didn’t, you made money by buying the right home in the first place. They would have made the same, and maybe even more, by doing nothing. It’s the market that makes you money. If the market is not in your favour, most amateur renovators lose money and the Block confirmed this. The bloke at 35 Cameron St Richmond (the vacant block) made more money than all the renovators combined by doing little.

Rule No 6: Don’t think short term with property unless you like excessive risk

The Block also highlighted the risks of short term flipping. Besides the fundamental error in the initial choice, the market was also unkind to the contestants. Which again highlights the short term risks in property. To buy this year, tart up and flip next year is a strategy fraught with danger and can cost you a packet. Each of these homes lost at least $200,000 if you factor in all costs – and they probably lost a lot more.

Rule No 7: Choose local selling agents, who are experienced at your price range – and choose the best not the cheapest.

The four auctioneers chosen to sell The Block properties are all very good at their job. But it was interesting to note that the only home that sold under the hammer was sold by a local agent, Russell Cambridge. He is a good operator, as is his partner Sam Davenport, who got the buyers there. Glen Coutinho is a really good auctioneer but his patch is Hawthorn, which may be close but it is quite a different market to Richmond. Ruth Roberts is a top female auctioneer from whom we bought a property less than a fortnight ago – but she is well known in Carnegie, and that’s a long way from Richmond. And again, while Clayton Smith is a strong local agent, he was always up against it having to market the weakest home in terms of floorplan. There can’t be that many people wanting to buy in Cameron St and he was always going to get the leftovers. Tough gig. (By the way: well done to Jellis Craig and Biggin and Scott for their very generous donations to charity.)

Rule No 8: Good Buyer Agents are of value.

Apart from Frank Valentic who is a smart operator with Advantage, the buyers agents who showed up to The Block auctions were just embarrassing. Our apologies – this is not how normal quality buyer agents represent the clients and just shows that when you put a camera in front of an idiot, they are still an idiot. Notice how you didn’t see quality buyer agents like Morrell and Koren there trying to buy rubbish or making a fool of themselves – they simply didn’t recommend The Block homes to their clients.

Rule No 9:  Substance v Puffery

In homebuying, digital TVs, paint colours, furniture etc come and go. If you view our online ratings you will notice that we give a total of 1 point out of 1000 for stuff like cabling and shower screens etc. The other 999 points are for land, position and floorplan. And if you’ve learnt one thing off The Block then hopefully it’s that it is the price, property, and positional fundamentals that really count.

Unfortunately on all those three counts the contestants were doomed even before they started.

Printed each week in The Weekly Review, Melbourne’s million plus property magazine.

Like many auctions this weekend, a lot of standing around, not doing much. MALVERN EAST, 9 Lewes Drive: Passed-in at $2,500,000 with two bidders. Anthony Grimwade (RT Edgar)

At 6pm on Saturday the James Clearance rate for $M+ was 57% on the 30 auctions we attended. That was well down on last week’s cameo of excitement, but understandable giving the quality change between this week and last week at the Top End.

Bidderman, our demand indicator, was 1.5 bidders per auction. However the quality of the offerings was one of the lowest this year.

While there were a few volcanoes (4 or more bidders), what was more interesting was that 1 in 3 homes were ducks meaning they didn’t get a bid a all. We think that was a confirmation of the market reaction to this weekend’s lack of Top End quality.

In fact, only 1 in 5 of $M+ homes monitored this weekend sold under the hammer.  The rest sold before or soon after – or didn’t sell at all. That’s an Under the Hammer Clearance Rate of 20%.

What that means is that in this current market buyers need a lot more than just a ‘hand up in the air and hope’ strategy to buy homes well.

Market Summary:

There were plenty of auctions at the lower levels, e.g. at or around a million dollars, but many lacked any WOW factor.

A number of the key selling agents were off this weekend on holidays and, as with many buyers, they seem to have turned their attention to pursuits other than buying and selling.

It was hard to find a property over $2 million up for auction. The only $3 million plus auction we saw in Toorak was at 68 Hopetoun Road with Steve Abbott of Jellis Craig – an art deco that seems to get sold every 12 months (see report below).

The REIV median prices came out this week and rightly confirmed what the market has been saying for some time: Prices are weaker.

This year to date has been a positive one for buyers with reduced competition, more choice and lower prices. On the flip side the buying opportunities are only such if you take them (a Steve Abbott auction line).

Next week, there are almost no auctions and not too much the week after.

Post Easter, as we said last week, may or may not be a different story. But our feeling is that quality choice will dry up and the big issue will become finding a rose amongst the thorns, the pass-ins and the stales. If those roses are hard to find then prices for them will firm as new quality drops with discretionary vendors adopting a wait and see strategy.

What Sold Well – Volcanoes with 4 or more bidders

• Albert Park, 62 Barrett St – Peter Simmons – Nicely renovated Period Home – $1,575,000
• Hawthorn, 23 Falmouth St – Hamish Tostevin – Nicely renovated Period Home – $1,330,000
• Hawthorn, 11 College St – Richard Earle – Nicely renovated Period Home – $1,409,000
• Kew, 36 Maitland Ave – David Oster – Land site – $1,345,000
• Toorak, 80 Grange Rd – Rodney Morley – Nicely renovated Period Town Residence – $1,500,000

$3M+ market: Overall, the high end at $3 million+ appears as weak as it has been for 12 months. Although  a shortage of new quality stock post Easter has put some zing back into the market as some buyers are forced to act.  Growing kids, divorce, lifestyle, whatever cannot wait for everyone indefinitely. Go to our $3m+ report to see most of the last weeks’ 10+ sales.

Michael Armstrong, Kay & Burton, South Yarra: “I think we can expect a fairly normal market post Easter.  Market conditions are settled and stock levels looking forward to May/June are lighter than what we’ve experienced in the past couple of months.  Vendors have had to adjust their expectations in recent times and buyers with long term views have realised that the past few weeks have presented them with good opportunities. The better quality offerings will continue to attract competition and alternatively  buyers will continue to deal harshly with those vendors (and agents) who price properties incorrectly.”

ST KILDA, 2 Marine Pde: On a bit of a rollercoaster day, it was apt to have the Scenic Railway at Luna Park as the backdrop of this Claudio Perruzza (Biggin Scott) auction. Passed in, $1,850,000, no bidders

Biggest Sale we covered: 68 Hopetoun Rd, Toorak, Steve Abbott (Jellis Craig); after auction, $3,050,000, 3 bidders
“This art deco property with Heritage One (HO1) overlay was looking for a committed buyer to make it a home. A vendor bid of $2,800,000 got the proceedings underway and the first bidder entered the race with a bid of $2,850,000. A second vendor bid of $2,900,000 signalled that the bidding was still some way off from the desired sale price. Auctioneer Steven Abbott wouldn’t entertain an increment of $5,000, demanding at least $10,000 to stay in the race. Despite keen bidding, this property was passed in at $3,020,000 but this was just the start of the negotiations. Bought after for $3,050,000.” (Debbie McTaggart)

Biggest Pass In we covered: 12 Dudley Pde, Canterbury, Doug McLauchlan (Marshall White); passed in $2,000,000, no bidders
“Doug McLauchlan took centre stage in the very big, leafy backyard of this great property and looked ready for action. Assisted by his Marshall White team, Mr McLauchlan explained that the circa 1923 home had been in the same family for a massive 72 years. But even the sentimentalists amongst us in the crowd weren’t ready to put their hands in the air and bid. Mr McLauchlan opened and closed on a vendor bid of $2,000,000.” (Jen Milligan)

Auction Video: Architect Adam heads to sunny Hawthorn this week to witness a ripper auction at 23 Falmouth St, a Marshall White property with auctioneer Hamish Tostevin.  Click on the live action.

Big Issue and Weekend Reflections: Coming back after the Easter holidays.

Two Weeks Off: Marketnews will be on holiday for two weeks with our next Marketnews on the 7th of May. A number of agents are talking up the 21st and 28th of May as possible Super Saturdays (as buyers let’s hope so). For James Buyer Advocates it will be business as usual.

We Only Buy Homes and have a safe Easter break:

Job Advertisement:

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

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

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

So what was bought and what wasn’t

Bought

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

Passed-In – the difficult ones

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

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

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

CANTERBURY, 35 Wattle Valley Rd: A big crowd of 80 turned out to watch James Tostevin in action. Unfortunately, there wasn't much action to watch. Passed in $2,300,000, no bidders

Key Points:

• Is the dream run over for agents in Boroondara or is Post Easter going to be a very different story? Just like the market itself, there has been tremendous change within the business of real estate in Boroondara in recent times. Both the May and Winter markets could be very different to past years – it will all be determined by stock levels – the size of the overhang, how it’s mopped up and whether or not we will see nervous vendors putting their quality stock up for sale post Easter. Not writing the old girl for any length of time, not by any stretch, she has got up off the floor quickly before. For buyers, now may simply be a window and not a trend.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,000,000.
• Even if its got something to offer, if the market says it’s a bit different and not perfect then it’s not selling at auction;  evidenced by 35 Wattle Valley Road Canterbury and 6 Wharton St Surrey Hills.
• Price check 2 Kaarumba Balwyn (Michael Nolan of Noel Jones) – just out past Narrak Road, a big but difficult, irregular block of 1200+ sqm sold for just over $1100 psqm.

Chloe Quinn, Jellis Craig, Hawthorn: “We are experiencing mixed auction results at the moment. Some auctions are performing as expected and we are seeing competitive bidding, others are passing in and either selling on the day or in the week post auction. Houses that are appealing and are in sort after locations are always going to experience competitive bidding (regardless of the market conditions). There are some good opportunities for buyers looking either side of one million dollars, as there are a number of properties for sale. Due to this, price guides and results are more predictable.”

Glen Coutinho, Hocking Stuart, Camberwell/Hawthorn: “I do not believe it’s a buyers market, I think that the market is evenly balanced. The best advice I can advise is that real estate is a long term investment and there is no doubt that property prices will be higher in the next 18 months, then they are now. So they are better off too buy their property and get settled; as there are no signs of a falling market coming.”

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"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.

In much of our homebuying discussion, we often mention the supposed opposing forces of Risk v Reward.

We mention them because a lot of homebuyers don’t act with any level of risk v reward consciousness in the homebuying process – in other words, they often make decisions without considering that, for every action, there can be many reactions. In this changing market a number of sellers are now facing similar risk v reward scenarios.

There are four key risk v reward areas we would like to discuss today. Two directly relate to buyer actions and two are connected with the buyer but are more related to seller actions.

1. Offering
2. Process
3. Counter Offering
4. Agent Selection

Four financially powerful risk v reward firecrackers.

Offering. When many buyers make an offer, they place little thought on what happens next. Their main focus is to get the property for as little as you can. There’s nothing wrong with that approach but what happens if the seller says no? Do they have a back-up plan in place?

What position has your first offer placed the seller in?

Three of five key questions we ask before we make an offer are:

1. Do you, the buyer, want to buy a price or a property first – in other words, what is most important to you?
2. If your offer is refused, then what position may we be left in to go forward?
3. What does the other side really want and can we accommodate?

Let’s look at a practical example. On Saturday, on behalf of an investor, we attended an auction in Hawthorn with Richard James, Richard Winneke and Adam Cashmore (has to be the best selling agent surname going round), all from Jellis Craig. It was a good single-fronted period home and our client had decided to buy it if the price was right but, equally would move on and look for another property if it wasn’t.

The property was quoted at $900,000-plus and we asked Richard James before auction if there was a reserve. He answered ethically and said that, at this stage, there was no reserve. Annoying but very common.

The auction had a buzz about it and we made an opening offer of more than a million dollars – and we did that to shake other buyers. This opening bid had two key risk v reward impacts.

In trying for a knockout bid, the reward is that you buy the home and the risk is that you bid above what is needed to buy the home – ie pay too much. Making a lower offer, the reward is that you may pay less but the risk is that you may bring other buyers into the frame, who may then push themselves further than your knockout bid.

As it turned out, the opening bid created a deafening silence and Richard James, being an experienced auctioneer, padded things out until ……

Until we asked the question was it on the market?

This question now brought in a risk v reward scenario for the seller: acceptance or counter offer. In 2007 and 2009/early 2010, the counter offer for a seller was a lot easier than it was in 2008 and is again in May/June 2010. If you are selling your home in a rising market, then a “no, we want more” response carries with it far less risks compared to the reward (more money) than a “no, we want more” in today’s market. There are many sellers out there in million-dollar-plus Melbourne who are still owners and are now getting significantly lower offers now than what they had previously refused.

Back to Saturday’s auction. After the half-time break, Richard said “Mal, the property is not on the market.” In many ways, this was not surprising but it was nonetheless disappointing when a prospective buyer had bid well above the quote.

Our response was to offer significantly less – yes, we went backwards. It’s not the first time we have done it and it won’t be the last in this market. Richard, to his great credit, accepted the bid in the spirit in which it had been given and asked the slightly stunned crowd if there was any more bidding.

Richard’s acceptance of our bid at least proved the seller had made a good risk v reward decision in auctioneer and agent selection. Many sellers don’t consider auctioneer selection as risk v reward, as they consider all agents the same – it’s just a matter of who offers the highest price estimation and the lowest commission.

In this market – in fact, in any market – such thoughts are well wide of the mark, in our opinion.

How would an inexperienced or old-school auctioneer have handled a reverse bid and the ensuing negotiations on Saturday? They could have refused our lower bid, refused to deal with us, or belittled our bid (the best one and well above the quote). Any of these tactics could have resulted in a situation that weakened the position of the seller even more. Yes we could see an argument that such actions could strengthen a position of the seller as well. That is another risk v reward.

We brief our clients on the reverse bid and, in this market of choice, many of our buyers have accepted that, like a seller in a rising market (where there will always be another buyer), in a falling market, there will always be another home.

Back to the auction. Richard passed the property into us and we offered lower again against the seller’s even higher reserve. Can I say this is where the seller wised up very quickly and, through steady and calm selling agent work, an agreement was reached satisfactory for both and it was not at a higher figure than the original bid.

Sure, the seller today, may now be dealing with an offer from another party above our auction offer but, hey, the stats show that very few homes are selling above what was offered at auction – in fact, many aren’t even selling – so if Richard had of mishandled us then they may be dealing at a lot lower level. Risk v Reward.

Of course, a buyer could have done all this themselves by turning up at auction and just buying without an advocate. Buyers can just buy the first home they see that has four bedrooms. The reward for them is that they get their weekends back. Right here and now, the risk is … well, the risk is they buy the wrong home and learn the true meaning of “happy house, happy spouse” or they pay a far larger than necessary learning fee (high price, poor capital growth etc) – see our “Learning Fee” article. Mistakes are common in homebuying when you don’t go through a process. There is another risk v reward set of actions process or luck.

In summary, there are many risk v reward scenarios; in fact, every action you take or is thrust upon you will have a number of risk v reward scenarios.

Next week’s James Market Opinion will focus on the backward bid – look out for it next Tuesday.

We only buy homes

Risk v Reward

In much of our homebuying discussion, we often mention the supposed opposing forces of Risk v Reward.

We mention them because a lot of homebuyers don’t act with any level of risk v reward consciousness in the homebuying process – in other words, they often make decisions without considering that, for every action, there can be many reactions. In this changing market a number of sellers are now facing similar risk v reward scenarios.

There are four key risk v reward areas we would like to discuss today. Two directly relate to buyer actions and two are connected with the buyer but are more related to seller actions.

1. Offering
2. Process
3. Counter Offering
4. Agent Selection

Four financially powerful risk v reward firecrackers.

Offering. When many buyers make an offer, they place little thought on what happens next. Their main focus is to get the property for as little as you can. There’s nothing wrong with that approach but what happens if the seller says no? Do they have a back-up plan in place?

What position has your first offer placed the seller in?

Three of five key questions we ask before we make an offer are:

1. Do you, the buyer, want to buy a price or a property first – in other words, what is most important to you?
2. If your offer is refused, then what position may we be left in to go forward?
3. What does the other side really want and can we accommodate?

Let’s look at a practical example. On Saturday, on behalf of an investor, we attended an auction in Hawthorn with Richard James, Richard Winneke and Adam Cashmore (has to be the best selling agent surname going round), all from Jellis Craig. It was a good single-fronted period home and our client had decided to buy it if the price was right but, equally would move on and look for another property if it wasn’t.

The property was quoted at $900,000-plus and we asked Richard James before auction if there was a reserve. He answered ethically and said that, at this stage, there was no reserve. Annoying but very common.

The auction had a buzz about it and we made an opening offer of more than a million dollars – and we did that to shake other buyers. This opening bid had two key risk v reward impacts.

In trying for a knockout bid, the reward is that you buy the home and the risk is that you bid above what is needed to buy the home – ie pay too much. Making a lower offer, the reward is that you may pay less but the risk is that you may bring other buyers into the frame, who may then push themselves further than your knockout bid.

As it turned out, the opening bid created a deafening silence and Richard James, being an experienced auctioneer, padded things out until ……

Until we asked the question was it on the market?

This question now bought in a risk v reward scenario for the seller: acceptance or counter offer. In 2007 and 2009/early 2010, the counter offer for a seller was a lot easier than it was in 2008 and is again in May/June 2010. If you are selling your home in a rising market, then a “no, we want more” response carries with it far less risks compared to the reward (more money) than a “no, we want more” in today’s market. There are many sellers out there in million-dollar-plus Melbourne who are still owners and are now getting significantly lower offers now than what they had previously refused.

Back to Saturday’s auction. After the half-time break, Richard said “Mal, the property is not on the market.” In many ways, this was not surprising but it was nonetheless disappointing when a prospective buyer had bid well above the quote.

Our response was to offer significantly less – yes, we went backwards. It’s not the first time we have done it and it won’t be the last in this market. Richard, to his great credit, accepted the bid in the spirit in which it had been given and asked the slightly stunned crowd if there was any more bidding.

Richard’s acceptance of our bid at least proved the seller had made a good risk v reward decision in auctioneer and agent selection. Many sellers don’t consider auctioneer selection as risk v reward, as they consider all agents the same – it’s just a matter of who offers the highest price estimation and the lowest commission.

In this market – in fact, in any market – such thoughts are well wide of the mark, in our opinion.

How would an inexperienced or old-school auctioneer have handled a reverse bid and the ensuing negotiations on Saturday? They could have refused our lower bid, refused to deal with us, or belittled our bid (the best one and well above the quote). Any of these tactics could have resulted in a situation that weakened the position of the seller even more. Yes we could see an argument that such actions could strengthen a position of the seller as well. That is another risk v reward.

We brief our clients on the reverse bid and, in this market of choice, many of our buyers have accepted that, like a seller in a rising market (where there will always be another buyer), in a falling market, there will always be another home.

Back to the auction. Richard passed the property into us and we offered lower again against the seller’s even higher reserve. Can I say this is where the seller wised up very quickly and, through steady and calm selling agent work, an agreement was reached satisfactory for both and it was not at a higher figure than the original bid.

Sure, the seller today, may now be dealing with an offer from another party above our auction offer but, hey, the stats show that very few homes are selling above what was offered at auction – in fact, many aren’t even selling – so if Richard had of mishandled us then they may be dealing at a lot lower level. Risk v Reward.

Of course, a buyer could have done all this themselves by turning up at auction and just buying without an advocate. Buyers can just buy the first home they see that has four bedrooms. The reward for them is that they get their weekends back. Right here and now, the risk is … well, the risk is they buy the wrong home and learn the true meaning of “happy house, happy spouse” or they pay a far larger than necessary learning fee (high price, poor capital growth etc) – see our “Learning Fee” article. Mistakes are common in homebuying when you don’t go through a process. There is another risk v reward set of actions process or luck.

In summary, there are many risk v reward scenarios; in fact, every action you take or is thrust upon you will have a number of risk v reward scenarios.

Next week’s James Market Opinion will focus on the backward bid – look out for it next Tuesday.

We only buy homes

As we are now firmly into a new market, we thought it time to have a stab at one of the most perplexing concepts confronting inexperienced buyers in high-end real estate  - the “Learning Fee”.

The “Learning” Fee is the amount you as a Do-It-Yourself buyer can end up paying extra for the home you buy, simply because buying a house is not something you do every day. We all pay some form of learning fee every time we buy – for the inexperienced it is an ‘unknown unknown’,  for the more experienced it is just a question of amount.

As buyer agents at James Buyer Advocates, each of us in the office have paid significant learning fees buying property in our personal lives. Let me tell you how many mistakes I made in my personal property life early on. But I’m 50 and have banged my head against the wall enough times for the message to sink in. And now each time I buy personally and professionally, my learning fees are lower.

Learning fees come in a number of shapes and sizes. Here are just some examples we have come across. (To keep the maths simple we’re using $2million scenarios)

1. Wrong Home DIY Learning Fee: You buy a home, and after a year or two it just doesn’t feel right. With the “happy wife-happy life” jingle firmly in your mind you sell and buy again. Your financial Learning Fee, assuming you bought and sold well in the first place, is: $110,000 in stamp duties $60,000 in agent selling and reselling fees $20,000 in removal costs and another $20,000 in incidentals such as legals, repainting etc. That’s around $210,000 in Learning Fees.
2. Capital Growth Gap DIY Learning Fee: This is where you buy a home with poor capital growth characteristics, and it grows at the rate of say 5% while everything around you grows at 8%. A 3% difference mightn’t seem like much short term. But over the average seven years of home ownership, your decision will add up to a Learning Fee of $493,557. ($3,173,748 – $2,680,191).
3. Missed Opportunity DIY Learning Fee: This is the Learning Fee you discover you’ve paid when you compare yourself with Mr and Mrs Jones who always seem to be on holidays, sending their kids to great schools and not working much. That’s because they were prepared to pay an extra $100,000 a few years ago after  beating off stiff competition from six other bidders for a really good period home with good land content. Since then their home has been outperforming the rest of the property market at 11% a year. Meanwhile the less than average property you settled for (see Capital Growth Gap – above) has been growing at just 5%.  Even accounting for the initial extra $100,000 the Jones’s spent “overpaying” for their great home, your Learning Fee for buying your ordinary home is around $1,000,000; over seven years that’s around $200,000 per annum for EACH of those 7 years, before tax.
4. Renovation DIY Learning Fee: Here we have the case of “the Switzers” who paid $1,700,000 for a home that was in need of a $300,000 reno. As with many renos, not everything went to plan and their renovation ended up costing them $610,000. But they got what they really wanted. Well sort of – the home isn’t as close to the shops and they couldn’t afford the pool or the special Masterchef oven. In fact the Switzers now acknowledge they would have been just as happy to have paid the $2million in the first place and avoid the drama of the renovation, and be within walking distance of Hampton Street’s “Brown Cow” – and have a smaller mortgage. DIY Learning Fee: around $300,000 and then some.
5. The Investment DIY Learning Fee: Here we have Jason and Kylie, a couple of 25 year old hot bods who charge off to one of those investment property seminars which promise you’ll make a million dollars in six months, but instead our bright young things end up knee-deep in cash-flow tables, bank documents and (whoops!) a signed investment home contract that results in their off-the-plan, out of town, so-called whiz bang investment property growing at a miserable 1.3% per annum over the next ten years. It’s not only preventing them building any wealth, but worse, it’s stopped them buying the dream home they wanted to live in, which they could have afforded except the banks won’t back them now they have this off-the-plan out-of-town millstone around their neck restricting their borrowing abilities. Their Learning Fee ends up being their whole life – keeping them in a McMansion in Pakenham when they really wanted to be in a period home in Hawthorn.
6. The Emotional DIY Learning Fee: A real life Eastern suburbs example here where a potential client wanted to put a bid in on a home, with a “take it or leave it” demand. We suggested opening up negotiations with an offer a few hundred thousand dollars lower, telling them that “sometimes it’s not how much you offer but how you present it”. No, they said, “that’s our offer and they can take it or leave it”. Unsurprisingly their offer, and their ultimatum, wasn’t accepted.  Annoyed and fragile, these people walked down the road to another agent and paid $400,000 more for a home that we had passed on 6 months ago when it sold at auction. The home requires a major rebuild – in the millions – that will leave very little rear yard. It may be the right home for these people, who knows, as we never really got to know them, but it’s a very real possibility that a very large learning fee has been paid.
7. The DIY Valuation Learning Fee: If you are told its worth $2.2 and you think it’s worth that but it is in fact worth a lot less…..
8. The DIY Negotiation Learning Fee: If you are told to pay $2.2m and you don’t know how to correctly offer $1.9m …………

Of course another Learning Fee can be the fee you pay to a buyer agent to help you buy. In the past financial year we have bought around 80 homes in that $1m to $5m bracket.

An argument against paying a buyer agent learning fee is that at an auction, under the hammer and on the market it’s the person with the most money who wins, and buyer agent fees are just additional imposts.  This at times is a legitimate concept (especially with inexperienced and incompetent buyer agents).  But in this market, seven out of eight deals are Expressions of  Interest or Pass-Ins or Private Sales or Pre Auction Offers or boardroom dealings …(where there are no rules) not under the hammer public auctions.

A substantial argument for paying a Learning Fee to a buyer agent is that it can significantly reduce your overall Learning Fee on this a most important financial decision, which you may make only once a decade. Alternatively a buyer agent fee can be regarded as an insurance against paying the kind of hefty Learning Fees we saw in the above cases.

A result of paying a Learning Fee to a competent buyer agent could be savings off your mortgage, better capital growth, more money in your personal life and –  the hard to measure  but no less important – better emotional outcomes.

In life we all pay – the question is how much.

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

Middle Park 61 Mills St. Single fronter under a million - admittedly with an issue or two - but only ten people showed up and then there was a vendor bid at $920,000. Silence. Andrew Stuart is a quality auctioneer and Hocking Stuart Albert Park is a dominant performer, so no issue there. It's the market and it seems to be changing very quickly.

1) Its 6.00 pm on Saturday and the James Clearance Rate for the 32 auctions we attended was 47%. May of course rise overnight as more results are reported.

2) Bidderman – now at 1.5 and falling. Significant change from a month ago.

3) This weekend is the weakest of the Big 5 auction weekends in May as far as quality and numbers go; so the next two weeks may prove our headlines and assertions as just that, headlines and assertions, not actual facts or they may confirm once and for all – things have changed in 2010.

4) Of the 32 auctions we attended today.

• 4 were bought before
• 8 were bought under the hammer
• 3 were reported as sold after auction
• 17 remain unreported or passed-in as of 6.00pm

That is very different to a month ago.

5) All agents in the Big 4 $M+ areas (Boroondara, Stonnington, Bayside and Port Phillip) are now reporting a drop in attendances at opens, bidder numbers and sold at auction results.

6) Prices are easing. Why is this happening? A combination of a sustained increase in stock levels (supply) which February, March and April did not allow due to the holiday interruptions and a very noticeable decrease in buyers (demand) best evidenced by Bidderman falling to a low 1.5 and almost all agents reporting lower OFI and auction attendances. Supply up and Demand down means lower prices.

By areas:

7) Inner Melbourne is still a strong market and so is Hawthorn, Kew, Camberwell, Balwyn although bidder numbers are waning in the latter areas – but there are huge stock numbers on offer.

Bayside and Glen Eira showed some resilience this week, mopping up a lot of what was a bad selling day last weekend with a number of post auction sales. And hey, there has still been a $1m sale in Brighton every day this May!

9) Toorak and South Yarra are quickly giving the impression they are an auction basket case – and all in a few short weeks. Stay tuned are we missing something?

What will happen from here? The market will be unsettled for some time unless the next two weeks produce a weekend like March 27 (pre Easter) which slaps the markets back in the face and says I’m not ready to fall yet. We don’t think that will happen. While these next two weeks are chockers with good homes, we are now starting to see an overhang of unsold homes (in some areas and the first time since mid 2009) ; lower bidder numbers on existing auctions and a general mood swing that seems more negative and more sustained than the little price drop blips of post Melbourne Cup 2009 and post Labour Day 2010.

The market has had an incredible run since May 2009 and in particular November  2009 till Easter 2010 where it went skywards like an out of control machine but that bubble of invincibility has been pricked. Pricked by the 3G’s

• Greeks or
• Glenn at the Reserve Bank or the
• Guy who pressed the wrong button which effected the Dow last week.

Whoever or whatever or a combination of all and more has created a market with a mood change now more than a one weekend anomaly.

From here we see an unsettled period as buyers (who you think would love a falling market but in fact don’t) shrink into their shell a bit. It’s Catch 22 – you need a falling market to make buyers happy but if they then acted on that happiness it wouldn’t be a falling market.

We are now in times where that $2 million home worth $2.2m last month is now still worth $2.2 million  (competitive auction) or $1.95m (weak buyer expressions and a keen vendor). Interesting!

Diary of a Buyer Agent:

I love my job as a buyer advocate/agent and I hope more people will join the industry as buyers begin to see value in what a good advocate has to offer, be it with us or another good company (like Morrell and Koren; JPP or Wakelin’s to name a few). If I had a dollar for every time someone asked me “But what do you actually do?”  I would be able to retire. So here is a typical workload week for me at James Buyer Advocates; which hopefully shows the breadth and depth of the work we do. Its as love story rather than a war story.

Saturday, 1 May

This weekend we have five properties to bid at on Saturday and one on Sunday. I call clients and /or advocates in the morning to check their anxiety levels and then drive to my first auction at 112 Edgevale Road Kew. I have my fingers crossed for our clients on this one, as I think we won’t have enough money to buy it. Agent Hamish Tostevin of Marshall White is quoting $1.3-$1.4 million but I believe it will go for at least $1.6 million. There is strong bidding against us and eventually it is sold to another determined bidder for $1.66 million. 5 bidders

After a commiserating phone call to our client, it’s onto the next auction at 3 Keith Court Brighton. Fellow advocate Kristen Hatt calls to tell me we missed out at 16 Merton Street Albert Park (Andrew Turner of Cayzers) on at the same time. The property sold for our control price figure of around $1.4 million but we were never a real chance after the pest and building inspection had (rightfully) lowered our client’s limit. 3 bidders

We haven’t had a great start to the day and I hope the news gets better.

We are not bidding on 3 Keith Court Brighton (Ian Jackson of Kay and Burton) but I wanted to see bidder strength, particularly as it is similar to a Golden Mile property that has a closing Expressions of Interest campaign, with the same agent, in a few days. It’s a strong auction, with 4 bidders, and sells for just under $3 million.

I head back to Kew for a 2pm auction. On the way back fellow advocate David McMillan calls to tell me our client, who we are bidding for on a Richmond Hill property (Chris Murphy of Hocking Stuart), has increased their budget. As it turned out this additional pre-auction work by David was crucial, as it moved the client from unsuccessful bidder to successful buyer – the final result was above their original budget but within their revised limit – 5 bidders.

This successful result helps set the tone for the rest of the afternoon. The Kew auction is quiet – justifiably so, as this block has some issues and appeals only to a specific buyer. The property is passed into us (1 bidder) and we negotiate with Bruce Severns of Noel Jones a price acceptable to both parties.

These post-auction negotiations took an hour, and then it’s off to Hawthorn East for my final auction of the day. This property is also passed into us, and so begin negotiations, which finally conclude three hours later – the Tostevin brothers Marshall White presiding. 1 bidder.

After some more client phone calls and a drink of Champers with one client,  it’s time for bed as I’m getting old and standing in the cold for those long hours at the final auction meant no discoing for me tonight.

Sunday, 2 May

After posting our Market News wrap, and cheering at my son’s footy match – go Vampires! – I meet with fellow advocates Kristen Hatt and Ralph Doubell at a St Kilda Auction (Tony Pride – Pride Real Estate). This was a difficult auction for us for a variety of reasons and, in the end, we were lucky to get the chocolates at a strong, but not unexpected, price. 3 bidders

Monday, 3 May

I had a meeting with agent Ross Savas of Kay and Burton to discuss what may happen at close of business today for the Expressions of Interest campaign in Brighton. There are no set rules with Expressions of Interest campaigns – it’s like meeting a girl at a dance. It’s hard to know how to ask, hard to know what to say and, in many cases, actually when your dance is going to be. The rest of day was reading and lunching with wife Janet and then evening with the family. You need to stay fresh after a full weekend.

Tuesday, 4 May

All advocates, from both our offices, meet to discuss what is happening, what is in negotiations and what issues and trends we should be across. We also film our videos for our website. It’s good to catch up with Advocates Adam, Kris, Ralph, David and Stephen and a few other Rangers.

I finish the day with a meeting of the REIV Ethics Committee. Robust discussions occur each month and we are seeing results – over the past year we have made good progress in offering written guidelines for REIV members for Expressions of Interest campaigns. This committee is well led by Andrew Boyce of Hodges and Peter Lowenstern of the REIV. We cop criticism, some of which we deserve but I do believe genuine attempts are being made to set things in the right direction and I find there is a lot more acceptance of buyers agents from selling agents and the REIV than there was ten years ago.

Wednesday, 5 May

Wednesdays are often busy with Bayside and Port Phillip OFI’s but I cancel all discretionary appointments to meet with my clients to prepare for a Boardroom Auction connected with the Brighton Expressions of Interest campaign. I check with Adam Woledge (our Hawthorn office) who is also an architect on a council issue.  We’ve bought for these clients before, and I’ve worked with Kay and Burton on many deals, so I feel some comfort but you still need to prepare on what may lie in wait for those that don’t prepare. It’s a tough Boardroom auction but we finish with the result and a happy client.

Thursday, 6 May

On Thursdays, we usually hold pre-auction meetings with our clients. Today we have three as we are bidding on three homes this weekend. I also have a number of OFI’s to go to.

In the morning it’s looking at two nice blocks in Alphington and a chat to David Oster from Jellis Craig. Hawthorn and Camberwell  OFI’s and lunch and late afternoon I look at 3 ripper off markets.

Scotch Hill Hawthorn – a wonderful Victorian with pool and tennis court and an asking price of $7.5m. Looking at it I first wonder if they have missed the market as it seems to be easing but really this is a good home on big land in a prime school location so it should sell well if its meets the market. It’s with Antony Woodley of Marshall White if you don’t want an advocate and wish to explore further.

St Kilda and one of the more quirky homes you will see. I love the artwork on the walls just as much as the home itself which is over 4 levels. The rooms have great views and large proportions with a wonderful staircase and there is rear off street parking. The number asked is $10 million and Nicole Gleeson of Kay and Burton was kind enough to show me through.

Finally I get a sniff and a driveby of another Brighton Golden Mile opportunity around $15million. Not sure how for sale it is but I suppose anything is, at the right price. A very enjoyable few hours to cap off a substantial day.

Friday, 7 May

I write draft articles for the weekend’s Market News wrap and for a new publication, the Weekly Review. I finish the morning with follow-up calls, chats with agents and brainstorming auction strategies for tomorrow’s auctions. It will be another big day so the rest of Friday is relax.

Postscript Saturday 8th May till Friday 14th May:  We have since bought for the people who missed on Edgevale Road Kew in Glen Iris through Andrew James of Hocking Stuart (pre auction offer) and to show you life is not all roses and chocolates we had a less than stellar day on the 8th with 1 in 3 auctions going our clients way, however we have since bought a property we hadn’t planned on from a pass-in that one of our eagle eye property searchers noticed..

There are 12 properties that I had direct involvement in over a million dollars in the 10 days I was asked to keep a detailed diary. There were others under a million that I did not mention as my involvement was minimal. All properties below had final results between $1million and $5million. We bought 8 and unfortunately missed 4.

We acted for clients who bought
Lyndhurst Hawthorn East
Selbourne Kew
Dickmann Richmond
Irymple  St Kilda
Golden Mile Brighton
Leopold Glen Iris
Nicol  Highett
Werona Bentleigh

We acted for clients who missed
Merton Albert Park
Edgevale Kew
Victoria Hawthorn East
Bethell  Ormond

It’s a great job and hopefully this will encourage younger agents to consider this as a career going forward. Contact the REIV or write to buyer agent companies from time to time.

Buy happy

Mal

The Mills St Middle Park auction crowd – 10. The train has left the station. The tram has left the stop. The buyers have left the building. Today's market is very different to Easter's and today’s results continue to confirm there is a fall in price caused by a significant drop in declared buyer interest.

Ormond; 7 Bethell: Andrew James put in one of the more powerful auction performances for the year. Bought for 1,320,000. 4 bidders.

Today the Auctions around Glen Eira were a mix of pleasure and pain.
Yes, prices continued in the million dollar mark. But more then a few homes passed in without a shot.
Does this say the market is slowing or does this say vendors need to be pegged down?

Ian Whiteside (Hocking Stuart) advised that “This year the property market in Bentleigh continues to be very strong”.
He ran a solidcampaign on a good looking Californian Bungalow at 49 Bent Street Bentleigh, which was bought today for $1,205,000

Another successful campaign was from Angelo Nikitas (Buxton) who had a 818sqm land and home at 1 Curdies Street Bentleigh East which was bought for $1,037,500.

Other properties bought in Glen Eira of Interest

• 13 Reserve Av CARNEGIE (Gary Walton of Hocking Stuart) $1,400,000
• 3 BrackenRd CAULFIELD SOUTH  (Eyal Malka Gary Peer) bought for $1,250,000
• 14 Long St Elsternwick (Leonard Persichetti of TBM) which almost cracked the magic $2 million mark last Sunday at $1,950,000

Buying your dream home contains lots of emotion, confusion and tactics.
To see an under-bidder today in tears shows how tough the market is mentally and emotionally. It affected me.
You just need to pick yourself up and move on to the next property.

Stay Focused & Stay Happy

While those around him faltered the Rock Star aka Nick Renna pulled a huge crowd to 3 Shrewsbury Bentleigh East. 150 people. Bidderman 3. Passed-In - we assume for a good reason.

Black Rock 19 Stanley Bought $1,600,000. Despite a quiet auction, Mr Smooth aka Wes Belt relieved the one bidder of a solid amount in post auction negotiations. Strong, very strong.

Strength was seen in quality properties today, however, there were still a few surprise pass-ins.  Well-positioned land with homes of minimal value (some could argue no value) led the way.  4 Arkaringa, Black Rock, was auctioned by Campbell Cooney of Hodges and sold for almost $2,350 sqm (if there is no value in the house).  22 Surf Avenue, Beaumaris in another great location was auctioned by Mark Earle of Buxtons for around $2,050 sqm (again with a liveable house requiring major work/replacement). Another land property (920sqm) at 2 Fairleigh Avenue, Beaumaris, overlooking the R0yal Melbourne Golf Club, auctioned by Brian Hutchins of Brian Hutchins Real Estate  sold for $1,340,000.  However, 18 Arranmore, Black Rock (again land only) passed in at $1,150,000.  Another surprise today, given that 40 Sussex Street, Brighton sold strongly a few weeks ago for just over $4,500 sqm,  was  1 Webb Street (a stone’s throw away from Sussex) which passed in for $2,550,000. Difficult home but stellar location so Buxton’s Mr Hart should move it on some time sooner rather than later.

When speaking with Stephen Tickell of Hocking Stuart he advised “Despite buyers appearing to become a little more cautious with their  bidding at auctions over the past couple of weeks there still appears to be a strong underlying confidence , particularly at the ‘top end’,  in our sector of the bayside.”   6a Seaview Crescent, Black Rock   and 71 Royal Avenue, Sandringham both sold after auction today, both over $ 2 million dollars, maintaining Hocking Stuart’s clearance levels above 85% across the board.  He further advised  “The market remains strong, but the heady ‘free for all’ days of auctions with unrestrained bidding may be returning to a more sensible and sustainable level.”  Another sale today over $2,000,000 was with Jason Gill of Hodges, who ran a successful campaign at 52 Asling Street, Brighton.  The property also passing in at $2,110,000 and sold post auction close to $2,200,000.

Across Bayside agents still feel stock levels are down, however, results like Nick Johnstone of JP Dixon, selling 4 properties in Hampton in the last month totaling $16M may encourage others in the area to think about listing their properties.  Normally these are the sorts of properties we buy in Brighton,  but the strength of the recent market may be beginning to include Hampton on a more regular basis.

The median price trend chart, courtesy of the REIV, is a very useful tool to confirm thoughts over the longer term. This chart below clearly shows Brighton’s price decline in 2008 and price recovery in 2009 – as it does but not quite as dramatically for most of Bayside. Remember these REIV charts are for all homes not just our focus of $M+.

Happy Wife, Happy Life

Balwyn North: 60 Tuxen Street; Toby Parker of Hocking Stuart trying to see all the bids from a crowd of over 300. The story of the day. Huge crowds. Very strong Bidderman. Bought for $4,300,000

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 39 Auctions we attended today was 77 per cent and we have no late REIV results so could be higher.

Bidderman was well up at 3 bidders per auction and any talk from us of the last two weeks looking a bit soft has been well and truly proven as wishful thinking. 

The market of today is showing no signs of any weakness as proven by Bidderman and the $m+ clearance rate.

As a buying group we had nine auctions/buys on today and in my opinion we had an element of luck to buy the five that we did. 

Market Mood

The market according to Gerald Delany from Kay and Burton was astounding today. Rock solid says John Bongiorno from Marshall White. Scott Patterson from Jellis Craig expanded even further with these facts and comments

Strongest day he has ever seen in his 20 years of real estate with 62 of Jellis Craig’s scheduled 75 auctions selling under the hammer or shortly after. Easily their biggest day in real estate dollar wise – ever. In fact at Jellis Craig 88 million dollars of real estate exchanged hands during the past week including around $7 million for Paterson St Hawthorn (Nick Elmore/Tom Aylward) and 5 Moore St Hawthorn (Paul Keane/Alastair Craig) was bought under the hammer for $6,435,000 with 6 bidders. This is 2007 bidder strength.  I think Scott made another salient point when he said it was local not overseas buying strength today.

We mentioned that the last two weeks were down in terms of Bidderman and that it may have been a turn or it maybe due to stock quality. Today seems to have proved it was stock quality. Today was as strong as the other 2010 Super Saturday (February 27 th), as strong as late last year and as strong as the December 2007 peak. It was all about quality and buyer depth and local not overseas buyers.

For every buyer there were two who missed out. Best evidenced by our  trips in the last fortnight to The Boulevard Aberfeldie for no result. 110 The Boulevard,  on the Maribynong river, was sold last week for $1.77m on a $1.2m+ quote with no recent sales to give any guidance. This week a similar knockdown 118 The Boulevard (Fabian Rosin of Nelson Alexander) which may have sold for a tad less actually had 4 bidders over $2 million to eventually  be bought by a most determined bidder for $2,189,500. 4 bidders over $2 million and 20% or $400,000 more than last week’s benchmark. It re-emphasizes the incredible power and momentum of the market on properties that are considered quality.

Stonnington the same – 16 Mercer Road Armadale (John Bongiorno Marshall White). $6,240,000. 4 bidders.

Bayside and Port Phillip was no different. Buy after buy. $2mllion, $3 million. 3 or 4 bidders.

Easter Reflections: You’re young and you maybe panicking. Please don’t give up!

Now that the Easter break is upon us, and the temporary madness of two Super Saturdays (wedged between Australia Day and Good Friday) is abating, it it a good time to have a quiet moment and reflect where you, as a buyer, are at. Even the most balanced and resolute buyers can be thrown off-track by the highs and lows of this year’s property market: it’s overwhelming (when lots of new stock comes onto the market); it’s intense (Super Saturday auctions on February 27 and March 27); and it’s emotional (especially the let-down feeling if you miss out at auction).

This piece aims to (to use the word of the moment) “recalibrate” your thinking back to where, for many, it perhaps should be. In particular I have focused on the young.

I want a home with solar heating – I want a home with no renos – I want a home with a courtyard – I want a home with a nice kitchen and pine floorboards. I want a home next to my latte shop. Fair enough.

But if I can shake your thoughts up a bit, that’s small beer and perhaps overly focused on a narrow set that may lead to a short-term fix but a longer-term problem or it may, in fact, lead to nothing at all – meaning, in this current market, you don’t buy.

Our question to our clients is the same on each property. It’s the same at the start of the process and it doesn’t change as we work through every one of our  pre-auction  and private sale meetings. That question is: what will make you and your family truly happy now and also truly happy in the longer term? What financial and emotional outcomes do you want to achieve when buying a home?

Since Christmas, we have had at least 10 families come and see us to help their kids get a leg into the housing market. Housing is the new private school fees; the new club membership that you introduce your child to. For many, if you don’t help your child into home ownership, then they ain’t getting into it anything short of Bairnsdale East and 2025. And please don’t sit there and say “I did it, why can’t they?” The current state of your wealth – most of it in your home – is one of the reasons you are wealthy but it’s also the main reason your children can’t easily get into the housing market without help.  But I digress. 

Buying any home at any level is PPP: Price, Property and Position. They are the three choice levers you, as a buyer, have some control over. How much, type of home and where? Price, Property, Position. 

You buy a home for emotional and financial happiness. Whether you think through it consciously or not, all your outcomes relate back to financial or emotional happiness. 

What should you buy? What makes you truly happy. It’s the Christian, Buddha, Muslim home philosophy all rolled into one. What really makes you truly happy now and in the future?

When buying a home, two things make you truly happy: good decisions and land.

Good decisions come from luck and goals (financially and emotionally). Bad decisions come from the same places: luck (lack of) and goals (or lack of).

You’re in your late 20′s and early 30′s and you need a home. Relationship pressures are usually the spur – your parents may be helping a bit and you have a good job.

Your name is Freddy and you are sitting down for a coffee with me, because your dad told you to.  

Freddy: I’ve got $500,000 and I want to buy a home in Hawthorn.

Mal: Nice meeting you, Freddy. Waiter. Bill, please.

Freddy: What are you doing?

Mal: I’m leaving because I can’t help you.

Freddy: I could buy an apartment

Mal: But you are getting married and said you wanted some kids. Space, Freddy, space!

Freddy: OK, what about going further out?

Mal: What to Officer or Coolaroo or Tecoma? Freddy, you don’t even know how to use your sat nav.

Freddy: You’re a snob and a very rude man, Mal. My father was right.

Mal: Freddy, homebuying is not about me, it’s about you. Today in 2010 you need to find $900,000. Sell your car; get your wife to get a second job; hold back on the kids and get that big-noting dad of yours to throw in a few bucks and show me the money. Freddy, your life is in Hawthorn or inner Melbourne; your friends are here, you’re happy here and, if you move out to Pakenham, then I’m afraid you may never come back. And I’m also afraid that is not where you want to be. Freddy, I’m telling you what you need to do. You need to fight, scrounge, cajole, weasel and push, push, push with all your might and you need to get as much money as you can manage together and you need to do it now.

Freddy: You’re an old fart, Mal. I don’t want those pressures. I don’t want to encroach on my lifestyle. I would rather be among the trees and without the pressures of an all-consuming mortgage.

Mal: Then, Freddy, that’s fine. If that is truly what you want, then, as Nick Renna says at all his auctions: I respect that and good for you.

Freddy: Who’s Nick Renna?

Mal: Don’t worry. Hey, Freddy. Does your wife Christine want to live in Upper Ferntree Gully among the trees? It’s a beautiful place.

Freddy: No, she wants to live in the inner city and she is applying the pressure to me big time. She wants kids, she wants culture and she wants Hawthorn. The only thing I’m not sure she wants is me! I hate this pressure.

Mal: This is good.

Freddy: Good? – are you a sadist as well, Mal?

Mal: It’s good because it shows you are getting some clarity on what you want and what your family wants. Now we need to be smart. Do you really want to live in Outer Melbourne?

Freddy: Not really and not because I don’t like the areas. It’s just it’s a long way out from work and it’s away from my friends and family and it’s not where Christine feels comfortable.

Mal: OK, well, we have one P worked out and that is Position (sort of). Only I think it’s not going to be Hawthorn, initially,  because we agree an apartment is not a goer with kids on the horizon and we don’t have the cash for land and a home there. What is important for now and your future is that we look for as much land in an area we can afford.

Freddy: What, like a knockdown?

Mal: Well, not really, because quite often that can be overcapitalising financially. Have a look at this diagram – you should have bought either of the renovated ones for a little bit more.

Freddy: So we go for big land?

Mal: No, it’s quality land – size isn’t everything, Freddy. See good land in Albert Park can be 180 sqm and conversely bad land in Swan Hill can be 1500 sqm. Quality land is about the combination of position and size.

Freddy: But in Hawthorn a good block costs $1.6 million and I’ve only got $500,000.

Mal: Actually, right now it is more but, in time, if Hawthorn, Grace Park, the Urquhart Estate or Scotch Hill is what you want then you will be able to get it, but you need to start right. Let’s look at Alphington – only 10 minutes from Hawthorn (outside peak); you said Christine’s favourite sister lives there; it has a really good cosmopolitan feel and has a number of period homes that have that good land content. 

Freddy: I get what you said about land quality but not land content. What do you mean by land content?

Mal: See this chart. All three of these homes have land but only the period home on the right has good land content. Land (the capital growth driver) is a lot less in new homes than older homes and even less in apartments – this example assumes you buy at market value all at the same price of say $900,000. But it’s also true at $2,000,000 even $5,000,000.

Freddy: And as you keep saying, they don’t fight wars over homes, they fight wars over land.

Mal: True. Land goes up and buildings go down.  It’s all about demand and supply. That is where growth comes from and another real pointer to show where demand is, is the Chinese.

Freddy: The Chinese!

Mal: When the FIRB rules restricted overseas buyers to new apartments, they bought new apartments as they had no choice. Now last year with the FIRB rules changing and Chinese nationals having choices as to what they can buy in Australia, many are choosing land over apartments and that is evidenced by apartment prices remaining lackluster and land prices, especially in your Hawthorn area, going through the roof. The price increases must surely be giving many people a message. Quality Land is a world language.

Freddy: So I’m getting the second P (Property) worked out. Type of home? Should have as much land content as possible.  What about the final P? Price. I’ve only got $500,000. That’s all the banks will lend and you reckon I need a million.

Mal: Freddy. You can do it. Make the lifestyle changes; get Dad and Mum to lend you some. Talk to the bank about a restructure and let’s see if we can’t find something a bit under a million and you put some sweat into the property – not a major reno but you fix it up a bit. I do think you can make $900,000 work if you want to.

Freddy: It’s a big ask. I want to go on holidays and my new Merc and ……..

Mal: You have choices. The choices you make now are what sets you up in your life. A new car and a holiday and its Frankston South or Aspendale and granite benchtops or none of these; hard yards and Alphington. One of these two has proven financial growth and for you emotional happiness, which you need for choices going forward eg better home, near better schools, a culture you prefer and seem comfortable with and the ol chestnut a happy wife = a happy life – the other has a two strikes policy.

Freddy: Two strikes?

Mal: If you are young and you buy a McMansion as home 1 and then home 2 in an  outer area new estate, then we feel that is where you will live for the rest of your life. Home 1 and Home 2 has to be on the ladder upwards if where you want to get to is where you are dreaming of now.

Freddy: I still think you’re rude and prejudiced but how will I convince the wife of this land content stuff?

Mal: Don’t worry, Freddy, my fourth wife said I was an expert on women and relationships. You start by telling them this …………………

Next market news in 3 weeks (school holidays and Easter)

Buy Well

Mal

Malvern: 39 Horace: Sold under the hammer for $1,670,000. Bidderman 5. Andrew Hayne asking the bidders to speak up over the crowd noise. Solid Result.

Brighton: 4 Dawson Avenue: Matthew Morley in Action. Bidderman 3. Bought under the hammer for $2,460,000 or $3770 a sqm for Golden Mile land.

Another 24 sales over $1,000,000 in Bayside, moving the average for the month to 2.5 per day. It’s 6pm Saturday afternoon, and so far, our research shows 24 of 27 reported properties in Bayside have sold.  19 at auction, 3 before and 1 each by expression of interest and private sale. 

The current clearance rate is 86% in Bayside and bidderman 2.75 for the 4 auctions we covered, although only 2 across all of the auctions we have covered this weekend. Highett was the leader in strength today.  Three properties on offer and three sales – all over $1,000,000.

John Spiers of  JP Dixon auctioned a good house in an average street in Highett, rating 669 on 572 sqm,  at 24 Noyes Street, Highett.  Three bidders took the price over a million dollars (not often seen in Highett until recently), passing in at $1,020,000 and successfully selling immediately after for $1,050,000. Hodges Real Estate had a successful day, with  James Paynter selling 43 Ashwood Avenue, a three bedroom, single living room period home, with small rear garden, rating 676, for $1,192,000. 

Meanwhile, Peter Alpar, successfully sold 2 Morley Crescent, a new large family home, for $1,302,000.  No we are not talking about Beaumaris – this is Highett. Kate Smith and Stephen Tickell of Hocking Stuart showed their skill at 17 Kirkwood Ave, Sandringham.  This was an old English classic, that needed a cosmetic makeover.  Passing in with two bidders, it was sold after for $1,885,000 – a strong result but not completely unexpected in that Royal Avenue Precinct. Nice note from the owner politely correcting a factual error or two (thank you) who is moving to greener pastures in Port Phillip. 

Two in Brighton both had 3 bidders.  4 Dawson Street, auctioned by Matthew Morley of Morleys Real Estate, sold under the hammer for $2,640,000 and Nick Johnstone of JP Dixon passed 10 Kent Ave in at $2,100,000 but was successful in  selling the property for a bit more afterwards. Looking at 3 of the 4 properties passing in, perhaps Vendor expectations are creeping beyond the Buyers, but then quickly placed back in check upon reflection, given the negotiated sales afterwards.

The big land sale this week was on Brighton’s Golden Mile – 14 North Road, 1551 sqm rating 665 with a south facing rear sold after an expressions of interest campaign by Chris O’Farrell of JP Dixon for a little over $3,500 p/sqm.

Happy Wife Happy Life