We’re in a tricky market pre Easter 2012. One minute there’s spark of life, the next the puff has gone. As a buyer you may be feeling a little confused. How can I buy well in this market?

First, let’s think about what buying well means. If you think it means a guaranteed market outcome, forget it. We are not in a market of certainty. (In fact there’s never any absolute certainty about the property market.)

A better way of thinking about buying well is in terms of good financial and emotional outcomes for you.

In terms of financial outcomes, the best you can aim to do is to buy a home that has a real chance of outperforming the market.  An outperforming home will not drop by as much as the average if prices go down and will go up more than the average on the next upswing.

A good example is the $2 million homes in Hawthorn that have really powered through the negativity of recent times and continue to hold and even increase in value.

Emotionally speaking, buying a home well is about meeting your family’s changing needs as you go through the cycles of life. There is no such thing as the perfect one-size-fits-all, long-term perfect home – (although in our opinion a well-positioned single-fronted, double-storey Edwardian or Victorian comes very close). But you should aim to buy a home that has five year flexibility to meet your changing foreseen and unforeseen needs.

The good news is that the same home can deliver both good emotional and financial outcomes.

A  good buy is a home that you personally like (emotion outcome),  as well as one that has strong long term demand with a limited supply (financial outcome).

What does a home that will have both long term demand and a restriction of supply look like?

We like to use the Three Ps Characteristics – Price, Property and Position to be describe what we think such a home is.

The most important P for financial outcomes is Position. Position is about a property’s location in relation to the CBD, shops, rail and good schools. If you can walk to these amenities the demand will be higher  than if you have to drive. By logic the supply of these kinds of properties is restricted (they are making very few train stations or commercial centres). But position is not only area “big picture” – the minutiae and subtleties of one precinct over another is also an important consideration in emotional and financial outcomes of each family.

You might think there is great demand for new homes in outer areas and for high end apartments in the inner city. But in both cases there is no restriction of supply. They can always build more outer suburbs or Dockland apartments. That is why these homes have underperformed the market in the medium term.

The second P, Property, is both about land content and the floor plan. When buying well most of your money should be going into the dirt the property is built on rather than the bricks and mortar. Dirt goes up in value over time whereas buildings tend to lose value. Building in a fringe suburb is hard to stack up financially. If you’re buying land in the mid $1 millions to build on in Beaumaris, for instance, and expecting to sell it for mid $2 million to $3 million you are going to do your dough 9 times out of ten. The same applies to North Balwyn or Bentleigh East. Building new or major renovating can be emotionally satisfying but it can also seriously affect you land content to market value ratio – which is one of the more important ratios in long term financial outcomes. We like to see a ratio of at least 70% meaning the land is worth 70% of the market price (when completed).

The third P, Price, is important, because even in a great location it is possible to pay too much and so reduce your financial outcome. Be careful of false market prices created by marketing, skilled agents or unusual circumstances. Eg new developments, even within established suburbs, can often be false markets especially if what is on offer is well above the price of surrounding precinct types – at the very least it represents an elevated risk financially.  A “real” market price has a historical basis and is currently determined by a number of other informed bidders.

So following these Three Ps of demand and supply characteristics, buying well is about buying into a good suburb with good land content and a good floorplan that does not require  major work at a good price.

Want to know  where you’ll find a property to this formula? Well, in Melbourne you can’t go past property near good schools in Bayside and the Inner East, which is why the long term trends for those suburbs consistently exceeds  the Melbourne average (even if they go up and down in the short term).

As close as there is to such a thing, a good property in these areas will be the magic bullet that will allow you to buy well in this or any market.

BRIGHTON, 7 Yuille St: Jonathan Dixon looks for bidders and finds one. Not enough to sell under the hammer though. Passed in $2,500,000, 1 bidder

Key Points:

• Two Land Sale Volcanoes 4+ bidder auctions below:
• 11 William St Brighton with Rod Richardson of Hocking Stuart – $3,100,000 for 1383 sqm of land = $2,241 per sqm for land in central Brighton. Solid and expected result. 5 bidders.
• 5 Horton Close Brighton with Campbell Cooney of Hodges – just off the north end of the Golden Mile. – $2,055,000 for 652 sqm of land = $3,151 per sqm land for smaller parcels closer to the beach. Solid. 5 bidders.
• People do want new homes in Bayside and this is backed up by the post auction sale with Peter Kennett at 1 Hunter St Black Rock – it is what we call the almost Balwyn formula (small land and big new home) – only its not quiet as big and lavish and has a more palatable $2m price tag instead of the $3m and $4m Boroondara price tags. Black Rock $2m versus North Balwyn $3.5m -  mmmmmm
• Further supporting evidence for new homes at the right price – 91 South Road Brighton with new home package specialist Justin Follett of Kay and Burton was bought on Tuesday through an Expressions of Interest campaign for in excess of $2,600,000.

Agent Q & A

How are stock levels and what will they be like leading up to Easter?

Robin Parker, RT Edgar, Brighton: “Stock levels for good quality family homes continue to be in short supply in the sub $2 million price bracket.”

Rod Richardson, Hocking Stuart, Brighton: “We definitely have a lot ahead of us.  I wouldn’t say stock levels have dropped at all and there is a lot more for sale in the coming weeks as we approach Easter.  The past few weeks we’ve had some good results and it looks like that’s set to continue.”

More big crowds this week, such as this one at 27 Auburn Pde, Hawthorn East, which stopped traffic! Under the hammer, $1,360,000, Peter Batrouney (Jellis Craig), 4 bidders

At 6pm on Saturday the James $M+ Clearance Rate on the 32 auctions we covered dipped to 59%. For the second week in a row there were around 150 new $M+ listings in our main coverage area of Bayside and the Inner East. Buyers have firmly said to sellers – “if it ain’t priced right we ain’t bidding, because we can see plenty of other homes coming on”. This attitude was particularly evidenced by the ‘duck’ rate (auctions with no bids and no sale afterwards) which was almost 1 in 3 this weekend  – well up on last weekend.

However there were exceptions – such as in Stonnington at the top of the Top End where there was almost no stopping the market and it made its strongest statement of the year so far.

Where is the Market At?

Last week there were indications the early $million+ market could be warming up a bit. But a second strong week of listings has taken some heat out of the market.

The strongest “take notice of me” stat was this weekend’s Bidderman dropping back to 1.5 from a more healthy 2 last week. What that tells us is that buyers are seeing stock choices going forward and the urgency has dimmed on some homes.  If Bidderman continues like this to Easter, prices are unlikely to rise.

This weekend we did see price pressure on quality homes, with quite strong bidding at a number of auctions (including several $3m+ auctions) and five ‘volcanoes’ of 4+ bidders per auction.

What we’re saying is that this first market period, up to Labour Day, has started healthy and balanced. But the second market (up to Easter) is no longer a shoo-in positive for would be sellers.

For buyers, this two week stock surge presents an opportunity for good prices on some good homes that the market may miss – at least until Easter. But things can change quickly – while May last year saw oodles of stock coming onto the market, that may not happen again this year. Given we’ve got such a late Easter in 2011, we may already be seeing the stock surge we saw in May last year, which could mean we don’t get strong stock levels this May.

Crowd Numbers: Again we had big crowds at many auctions, indicating a strong level of interest in results. This weekend we reported one in three auctions with 80 or more people in attendance. All others had good numbers watching.

Our $M+ Supply Indicators:

New Stock: This has been the second huge week in a row for listings with around 150 $M+ homes newly listed for sale in the Inner East and Bayside areas that we cover. There were around 200 $M+ listings across Greater Melbourne.

Actual Numbers Sold: There are solid numbers of $M+ homes changing hands, which is in part why we are not yet buying into any  cries of  a “weak market”.
Agent Market Comments:
Gerald Delaney (Kay & Burton): “I can’t see anything wrong with the market at the moment. We have seen good interest on good properties. I definitely think the market is a healthy one.”
Justin Long (Marshall White): “I feel the market has a bit of upward pressure at the moment. The well priced properties are going beyond expectations and the overpriced or not so good can be very hard work.”

James Marketnews Big Issue:
A few Expressions of Interest and Forthcoming auctions are coming back – a possible sign the pre-Easter auction market is viewed as oversupplied. Watch the discussion on Market News TV.

‘Round the Grounds Snapshots
Boroondara -  Stock Surge in Boroondara – Clearance Rates are definitely not as good as we are used to, but nearly 40 homes at $M+ were bought this week
Bayside – Bayside still shining the brightest – more stock coming on pre Easter will re-test its underlying 2011 strength
Port Phillip – So-so weekend, but stock wasn’t that exciting. Wow on Howe – Big $6m+ sale.
Stonnington – Where the big action was this weekend.
Rest of Melbourne – Just not a lot of $m+ auction action happening so we held over this week’s report
More Detailed Analysis in our Weekly Local Council Market Wraps

$3M+ Markets:
New Homes: Definitely weaker than last year particularly in the Balwyn and North Balwyn heartland.
Period Homes: Solid interest continues
More News and Specific Results can be found in $3-Million-Plus Market articles on the home page

MALVERN, 66 Claremont Ave: Iain Carmichael (BenMac) led a cracker auction - on the market at $3,300,000 and selling under the hammer $3,700,000, 3 bidders

Biggest Sale: 19 Hamilton Rd, Malvern, Justin Long (Marshall White): Under the hammer $4,357,000
The auction opened on a bid of $3,820,000, was on the market at $4,250,000 and bought under the hammer for $4,357,000. There were two bidders and a crowd of around 150. A solid result for this 1930s reproduction home on 668sqm of land.

Biggest Pass-In: 279 Beaconsfield Parade, Middle Park, Gerald Betts (RT Edgar): passed in $4,250,000
“Auctioneer Gerald Betts opened with a vendor bid of $4,000,000 and closed with a vendor bid of $4,250,000 in front of 40 seemingly uninterested observers.” (Mal James)

Bidderbuzz Auction: 11 William St, Brighton, Rod Richardson (Hocking Stuart): Under the hammer $3,100,000, 5 bidders
“The epic 45 minute auction of 11 William Street had a mix of elements to entertain those spectators watching on – intensity, drama and tension with a few awkward silences thrown in.  In the end it was a battle of the property developers for this generous block of land, in the heart of bayside Brighton.  Auctioneer Rod Richardson showed composure in the face of heckling and the patience of a saint during this long auction, working tirelessly to achieve a solid result for the vendor from the opening bid of $2,710,000 to the winning end at $3,100,000.  All in all, it was an entertaining auction to witness!” (Nikki Hills)

Auction Video: This week Architect Adam heads to Hawthorn to witness James Tostevin and the Marshall White team auction 66 Manningtree Road. Click on the live action.

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

Buyer Masterclass: A change of pace with Architect Adam telling us why we love Victorian homes – with plenty of facts and figures.

No Marketnews next week with Labour Day Long Weekend.

We Only Buy Homes

Valuing land is difficult enough, but there are even more variables when it comes to getting a consistent opinion of the market value of an actual building.

We always counsel long term passive investors to buy purely on land value, or to buy proven populist homes like Victorians and Edwardians as opposed to new homes.  Why?

Buildings are very much like clothes: they are fashion statements and, as such, various styles go in and out of fashion. Many of us love period homes now, but in the 1960s the thinking was to modernise them and in the process a number of classic buildings were destroyed. Similarly, Art Deco was loved in the 1920s and 30s but now has a limited following  – a very passionate one who will pay strong prices, but limited nonetheless.

The value of a home depreciates just as a new car does the moment it is driven from the showroom.  If half your money is spent on the home (the other half on the land) and that home goes out of favour as many do (such as the recent fad to Georgian reproduction homes), then while the land component may be growing in value, the other half of your money is working in a negative direction growth-wise.

To demonstrate the various ways different people can regard the same building, here are the opinions of four famous agents on the value of a 25 square 1970s home, with an ensuite and double garage, on a nice block in Inner Melbourne.

Ms Artina Deco: $400,000. “I think this home will be bought by an overseas buyer who would consider this a good solid home.”

Sir Eddy Wardian: $300,000. “I think this home will be bought by a new home buyer and renovated to new. My estimate of its value when renovated is $700,000 and I think it will cost $400,000 to renovate – therefore it is worth $300,000.”

Mr Victor Rian: $200,000. “I think this home will be bought by an investor who will get a 3% rental return so I have based my calculation on that.”

Cal Bung: Zippo – $0. “I think this home will be bought by a developer who will bulldoze and put up units.”

As for me – my opinion of the market value of this home would depend on where it is located. If it was Balwyn I’d say $300,000 to $400,000, because that’s how overseas buyers from China and India have been assessing similar homes recently.

But if I was in Brighton or Toorak, I’d say between zero and $200,000 because it is more likely to be bulldozed and the site developed. Many great homes in Toorak have no value because they are bulldozed by a new owner with plenty of funds who want to make their own footprint.

While there are no set in stone rules in building value assessment – here are a few guidelines that we follow

1.       New homes we calculate at replacement value

2.       Near new homes we calculate at replacement value minus a cosmetic update cost

3.       Homes 20 to 50 years old depend on the suburb. A way of getting a handle on values on these buildings is to build a database of comparable (similar) sales, subtract what you consider to be land values, and build a range of how the market values homes.

4.       1940s to 1970s homes without architectural merit – zero. With merit – difficult!

5.       Pre 1940s period homes that need to be completely gutted – a token amount depending on size

6.       Pre 1940s period homes that need some work – completed value less estimated renovation value

7.       Pre 1940s period homes completely renovated – compare to others in area and if that is not easy we value at replacement cost as if it were a similar quality and sized new home.

Valuing homes and land and emotion is the pursuit of perfection by the imperfect – but the closer you get, the better your decisions and strategies can be.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Highlights and Lowlights

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

BidderBuzz Auction of the Day

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

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

Are Special Conditions costing sellers BIG MONEY?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We Only Buy Homes

Mal

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

Bit of traffic at 6 Tribe Street South Melbourne both before and during the big game. Bought under the hammer for $1,493,000. Geoff Cayzer and 4 bidders.

Key Points

• 41 sales for the month of July – only one over $3m.
• Albert and Middle Park combined reported only six $M+ sales in July
• Two BidderBuzz Auctions – both with four bidders and both bought under the hammer in the $1.4 millions. 367 Dorcas St with Gerald Betts and 6 Tribe St with Geoff Cayzer.

Agent Comments re the question of Spring stock levels and new WOW projects

Kaine Lanyon, BenMac: “Stock levels over the next month are still looking relatively thin. There is a trickle coming on but we are definitely feeling that many vendors are holding off embarking on a sale campaign until the federal election is well out of the way, thus making sure that won’t be a distraction to the buying public;  The really good homes have been missing from the market of recent weeks and while we have some with the “Wow” factor not far away from coming onto the market, that product is as scare as hen’s teeth at present; New homes being built/constructed are almost non-existent in the Port Phillip area mainly due to the heritage overlays, making genuine ‘start-again-from-scratch’ opportunities just not there” .

Nick Yannopoulos, RT Edgar: “Low stock levels at the moment, I think because of the election. After that I think things might pick up a bit but at the moment there is a shortage; Not too many good family properties out there at the moment; Not much building – planning always takes time…development is slow at the moment.”

Michael Szulc, Cayzer: “Stock levels will increase through natural progression towards Spring. Things don’t just triple however in a few weeks  and properties are very tightly held in this area anyway; In this area, there are only ever a few big, family homes with that “wow” factor on the market – this isn’t the area for that type of property; No building going on. Nothing. The landsize doesn’t suit new big, family homes.”

Clearance Rates & Monitor Table

Buying Activity

We Only Buy Homes

Andrew "Comfy" Stuart sells post auction for $1,235,000. 13 Ward St South Melbourne. 0 bidders.

McKinnon 40 Wheatley Road Nick Renna Passed In. Huge crowd of 200 saw 3 bidders fight strongly for the right to go toe to toe with Mr Renna post auction. We await the final outcome.

Unless you have been in a cave you would know that property prices in Glen Eira have been increasing for some time now. However in the past two weeks, after the Easter break,  million dollar prices have been common as common as Bagels in Glenhuntly Road; as common as Gary Peer signs on Bambra Road and as common as Collingwood premierships (woops that’s wrong); anyway (25 in total) in Elsternwick (5);  Caulfield (12), McKinnon (3) , Bentleigh (1), Ormond (2) and Murrumbeena(2). That is very strong and unlike early 2009 or all of 2008.

Caulfield North $2m+ private sales: 3 in fact at 5 Rowena (Rodney Morley TBM), 8 Craddock (Gary Peer) and 8 Fosbery (also Gary Peer) averaging out a tad over $2.5million. These were all new homes and shows that in Caulfield if you build it in 2009 they will buy it in 2010.

The market didn’t show a similar strength today on the 6 homes we chose today. Three had issues and they all passed in – the other three were bought. However there were bidders atall bar one auction.

Some land sales for values:

66 Shoobra Elsternwick with Bill Stavrakis of  Biggin and Scott. 668 sqm for $1,300,000 or just under $2,000 per sq metre. Seriously across Melbourne this far out from the CBD in that caliber of precinct it sounds cheap. The sale  is good – that is land value in the are – we are saying the precinct for what is offer is cheap. Glenhuntly road shops, synagogues and churches, rail and tram (sounding like a selling agent, but its true). It’s almost a hidden treasure except everybody knows – sort of.

20 Marriott St Caulfield with Mark Rogers of Buxtons. Nice north facing rear block of 73o sqmetres sold for around $1800 psqm. It’s a little bit away from the action but after a good home goes on it you are looking well north of $2,000,000 which supports those 3 new home sales mentioned above

So far this year we have seen regular crowds of up to 70 to 100 people; far bigger than in Stonnington and Bayside. Why I’m not sure – there maybe even greater buyer depth here than we first thought and many are not getting the chance to put their hand up on the goodies.

The median price trend chart below, courtesy of the REIV, shows as we are finding, a solid recovery in prices began around the middle of last year and has continued on into this year. We think these charts accurately reflect what is happening in the Glen Eira $M+ market.

All this is showing the potential of buying in Glen Eira for those that can’t afford Malvern or Brighton and for those who simply want to live here for the family life and period homes on offer.

If you haven’t noticed Glen Eira before then just take a drive around the suburbs and you will be pleasantly surprised.

Stay Focused, Stay Happy

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.

Camberwell: 29-31 Rowell: Big Crowd. Big Price. 3 bidders. $3.755m. Jeff Gole of Jellis Craig

33 houses reported for sale today under $1.8m and only 2 passed in. Bidderman 1.6

Balwyn was interesting today with 9 reported auctions and 4 pass-ins but drill down on the stats a bit more and you see anything under $2m sold and everything over $2m passed in. Drill down again and those pass-ins were all double storey new homes that have been so successful this year with the Chinese community. Chinese people (the catalyst for our improving market, so thank you) have (a) gone back for the summer break and (b) are being affected by the dollar and nothing states this so succinctly as the above observation.

The power of the Canterbury Golden Mile never ceases to amaze and the sale of 15-17 Mangarra Road (Nick Elmore and Tom Aylward Jellis Craig) in my mind evidences this. It was not a great floor plan and opposite a school and it still pushes past $3m. Canterbury and $3m for a decent sized block are now becoming as common as burger and fries (it must be dinner time).

Most things sold in Kew today (5 over a million) except for the biggest pass-in at 18 Walmer St (Peter Batrouney- Jellis Craig) and is now for private sale at $4.35m.

Glen Iris/Ashburton: Another incredible day for the area for $1m+ sales with 7 out of 8 selling under the hammer or soon after; only 9 White St Glen Iris (Karl Fitch of Noel Jones) remaining to be mopped up at an asking price of $1.82m

Land Value Check: 22 Wattle Road Hawthorn – narrow road – south facing block – wedged between two rows of townhouses with a Victorian on it that needs the works sold for an estimated $1500 a sq metre. If the block has enough issues even in this central area the market will discount severely.

House Value Check: 29-31 Rowell Avenue Camberwell (Maurice Pitard and Jeff Gole). It sold yesterday for $3,755,000 – see report below for almost exactly as predicted. At 1700 sq metres in size and land being in the early $2000 per sq metre for Rowell Avenue/ Sunnyside estate area – after the pool and tennis court is accounted for that leaves a house value of …….. almost free. Interesting. Not a comment on price – it was the right money – just a comment on the house value.

James attended auctions below

HAWTHORN, 2 Summerlea Grove – Bought – three bidders (Jellis Craig)
Auctioneer Richard Earle managed a robust auction with three bidders from a very small crowd of around 30 people. Mr Earle accepted an opening bid of $1.8m and the property was on the market at $2.4m. The property subsequently sold for $2.5m.

HAWTHORN, 7 Woodburn Rd – Bought – three bidders (Jellis Craig)
Alastair Craig of Jellis Craig conducted this auction in front of a crowd of about 30 in the backyard of this well renovated Californian bungalow. Three bidders participated and after starting slowly at $1.2million bids increased by $5000 and $10,000 to quickly reach the reserve of $1.38m. Four more bids took it to its bought price $1.405m.

BALWYN, 66 Gordon St – Bought (Hocking Stuart)
This property sold before auction for an undisclosed price.

CAMBERWELL, 29-31 Rowell Ave – Bought – three bidders (Jellis Craig)
A large crowd of locals attended the auction of this unique property which included two houses, a swimming pool and tennis court. After an exuberant speech from Steven Abbott, and an opening bid of $2.9m, the bids came thick and fast. There were three bidders overall, with two battling it out to reach a sale price of $3.755m.

CANTERBURY,  15-17 Mangarra Rd – Passed in – one bidder (Jellis Craig)
Alastair Craig gave a polished delivery in praise of this Edwardian home on a double block, but the crowd of around 55 people was restrained and there were no bids forthcoming. The property passed in after two vendor bids and one genuine bid of $2.9m.

CAMBERWELL , 44 Athelstan Rd – Bought – three bidders (Hocking Stuart)
No matter what country you are from, when it comes to spending big money MUM always has the last word. In this auction about 100 people witnessed 3 participants making 31 bids until it came down to the last competing bid. Mum was called by the under-bidder on an international phone call. Glen Coutinho of Hocking Stuart gave the bidder plenty of time to discuss all the issues  – but MUM said NO.
The property was bought for $2.605m after being on the market at $2.6m

CAMBERWELL, 56 Bowen St – Passed in – no bidders (Jellis Craig)
A rather large crowd of around 80 people gathered in leafy Bowen Street, Camberwell to witness the auction at number 56. Maurice Di Marzio of Jellis Craig kick-started the auction with a vendor bid of $2.15m. This failed to gain traction as bidders at that price were clearly not in attendance. Two subsequent vendor bids were placed before the property was formally passed in at $2.2m.

KEW, 10 Walsh St – Bought (Jellis Craig)
This property sold before auction for an undisclosed price.

Design Smart

Beaumaris: 4 Scarborough:THE MINDERS - A NEW SATURDAY SHOW STARRING BERT GERAERTS and MARK EARLE of BUXTON. Bought under the hammer $1.355m. Photo Jen Milligan

It’s 6.00 pm Saturday and the James $m+ Clearance Rate on the on the 23 $m+ properties we attended today, was a strong 78 per cent.

HATS OFF to Torsten Kasper, Managing Director of Chisholm and Gamon who said their quoting policy now, was that their reserve was within their quoted range unless a last minute vendor hiccup. I suppose we could handle one vendor hiccup in 20 or so. Let us know if you as buyers are finding this to be the case. We congratulate Torsten on this transparency and we encourage buyers and sellers to support this Elwood and Port Melbourne company as long as this remains their stated policy and is proven to be the case.

Bayside Summary: Just another quiet week (not) in Brighton with 13 reported sales over $1m. Big increase in Bidderman at auction: 2.6

Boroondara Summary: 33 houses reported for sale today under $1.8m and 2 passed in. Balwyn was interesting today with 9 reported auctions and 4 pass-ins but drill down on the stats a bit more and you see anything under $2m sold and everything over $2m passed in. Drill down again and those pass-ins were all double storey new homes that have been so successful this year with the Chinese community. Chinese people (the catalyst for our improving market, so thank you) have (a) gone back for the summer break and (b) are being affected by the dollar and nothing states this so succinctly as the above observation.

Stonnington Summary: Strong day, seven out of seven auctions we attended sold.

Buying a Home Before Christmas

This 2009 run into Christmas is seeing an above average amount of activity and in the estate agency business activity breeds even more activity.

Everybody in late 2009 is coming out of the financial closet and admitting things aren’t actually as bad as they thought they would be. We are seeing buyers and sellers taking what is now in their mind acceptable risks – having two homes (buy first) or no homes (sell first) in their move from one home to another. The market is very healthy – good turnover – good prices and good Bidderman.

A focus for our clients at the moment is off market – I personally have looked at more off market homes this last fortnight than in the last two months. There are a number of February sellers who have committed to agents and those agents are testing to see if a buyer may well pop up before Xmas.

So how do you buy in the next 2-3 weeks, and more importantly how do you buy well.

Firstly you need to see the home and that maybe slightly harder than normal as many agents still have a lot of homes currently on the market to service – next week December 12th is Jellis Craig’s biggest auction day – ever – not biggest December auction day – not biggest this year – biggest day ever.

If you can see a “quietly listed”  home and you like it, then in this market the tricky pre Christmas questions are

1. Is it really for sale now or
2. Is the agent trying to secure the listing or
3. Is the owner just curious or
4. Is it really for sale right now

So a couple of simple questions to the agent

1. Mr Agent do you have a signed authority to sell this property?
2. Mr Agent does the vendor wish to sell before Xmas?
3. Do you have contracts and Section 32′s ready?
4. Do you have a specific asking price?

The answers you get will determine the next step and even if some of the answers are no they still may mean yes and vice-versa.

The tricky bit occurs if and when you assess that a sale may be possible and you want to buy it.

Agent: Yes Mr or Mrs Buyer the home is for sale now

You the Buyer: How much is pretty well your next question – you can ask it smart or ask it dumb but it is the next question.

The replies often become wishy washy in almost all circumstances and fair enough to some extent -

• the agent doesn’t always know for sure what it will take and it is early days
• the agent is also working for the vendor and is probably marking time to see what you may offer after some more questioning. Christmas time is a time of emotion and agents (both buying and selling) use emotion to maximize their clients position.

So maybe you will hear this: Well Mrs Buyer we told the seller $2,000,000; the seller/vendor wants $2,500,000 – I think; although the husband is not as fixed on that figure and we have some buyer interest at $1.9m.

Your (buyer) response to your spouse is………………hey Darls I’ll do the Christmas shopping with the kids at Chadstone can you come here and talk to this nice selling agent.

This is pre offer stage and you really do need to think about some expert help (if you are unsure)  - before you actually commit to a price or an offer  - even a low one.

Why – well a low price may get you offside very quickly and you may well be dismissed; when a sensible offer would have bought it.

I can always increase my offer you say – well sometimes no – not if you are dismissed or sometimes yes you can increase; but if it is a big jump the vendor and agent maybe waiting for another big jump from you because of your huge leap after your first offer – even if your second offer, if originally made, would have bought it.

It is truly a powerful dynamic the first and often last offer – where do you pitch it and how do you present it.

That doesn’t mean well pitched sensible lower offers don’t work at this time of the year – they do – perhaps not as well as last year because seller fear is not as rampant as 2008 but nonetheless they do sometimes work. Some sellers are happy to just move on.

A well placed, well timed and well presented offer can work

The question is when, how and how much?

We at James are happy to talk to you in depth as each set of circumstances are different.

Of course you can save a buyer agent fee and a lot of stress (right now – the stress will come post purchase time) by offering $2.8m on a $2.3m home – try it and watch Santa get killed in the rush – but you do save the buyer agent fee.

Finally on this matter it’s not all about money at Christmas – its about emotion. Way too many homes – and bad ones at that  - are bought at Christmas time only to find that in the cool light of a March settlement a big mistake was made – you just don’t like it – you should have investigated the floor plan more, the termites, the caveat and the plumbing – not to mention you just don’t like the area.

Happy Wife Happy Life yes!  but be careful at Xmas – you wouldn’t want to get a seven iron through your car window if you just went and did something without thinking.

Special Conditions are leaving buyers cold

Sellers this is a truth – you may be losing buyers because of the solicitor or conveyancer you hire. That’s right you are spending $600 to $2000 on contracts that maybe stopping buyers who have 10% deposit, are decent people and like your home.

We were down to a few minutes before an auction last week and refused to bid before the sellers finally agreed to some sensible special condition changes. Sure a conveyancer works for the seller but if it stops a buyer from having a go is that really protecting the vendor.

In the last fortnight we have had 3 separate legal firms refuse to allow our clients to buy until certain special condition clauses have been removed – 3 non starts unless things changed and they did – so my question is why put them in if you are prepared to pull them out. Answer: Because many buyers don’t ask to have them removed.

This has been going on for years but it is getting worse. Please we are not saying that penalties for defaulters are not an issue, but this article is not about any default clauses. Its about unfair special condition clauses including:

• 1) Removing general conditions from standard Law Institute contract – the few that protect buyers
• 2) Telling buyers they and only they are responsible for the home at time of signing – even when they don’t have access – instead of at settlement when they do.
• 3) Telling buyers they are responsible for things the vendor did prior to the auction. Hello!!!
• 4) Telling buyers they are not allowed to ask questions or dispute title even if title is wrong

You need to challenge these things if you are a buyer – you can’t stick your head in the sand – sh…t happens in this business if you do. In three of the past 20 contracts we’ve ultimately bought we have found issues re the size of the land – one smaller than claimed, one larger than claimed on the title but it was a laneway that hadn’t been put on title. One was an agent’s measurement and advertising error. Remember you are buying a title, a piece of paper and although we always measure up (with our measuring wheel) if you’ve given away rights in the special conditions and you find a problem, recourse is more difficult if not impossible. You as buyers should not agree to these unfair special conditions.

And on top of this, at Christmas time some agents are not getting contracts till a day or so before an auction making a buyer’s legal due diligence prior to auction very difficult.

Who cares the sellers may cry. No problems but if you are reducing your bidders you should care.

Lawyers believe they are protecting sellers and they need to. And yes we work for the buyers, but Mr and Mrs Seller we’re just pointing out buyers maybe walking. If I had to choose last minute between two identical investment buys – one with a buyer unfriendly contract and one with a normal Law Institute contract which still favours the seller but in a balanced way then I know which I would choose.

Please, not trying to be controversial – pointing out facts – if you stop a real buyer from bidding I can’t see how that is good for you the seller. I don’t see how your conveyancer has helped or protected you by removing a legitimate buyer.

This is our last Market News for this year – except for our Bumper Christmas Special in two weeks – best auction – best auctioneer - best deal and so on.

In finishing I would like to thank our brilliant reporters; Tom, Julia, Gina, Annette and David who with Jen help put our market news together each week. And I would like to especially single out our editor Melinda Brown who makes the wonky ideas we all have read like classic prose – well most times.

A big thank you to all the selling agents (yes I’m sucking up) and auctioneers and company directors who allow us to move freely around auctions and who ring in results and let us report as we see it without complaining; even when we say things they don’t agree with or when we take the micky out of them. Many of the selling agents are far more open minded than some negative press gives them credit for.

It’s a great job being a buyer or seller agent, you change peoples lives.

Buy Well now or maybe have a rest at Christmas and come back stronger and smarter next year. Stay safe.

Mal

Kew: 10 Vista: 200+ crowd. 5 bidders. Sold for $3.936 million

Balwyn North: 20 Tormey: 200+ crowd. 2 Bidders. Sold $3.58 million.

Boroondara continued it’s strength and perhaps moved up another notch. Alastair Craig of Jellis Craig said today was a very strong market day and we have to agree with him.

79a Harcourt Hawthorn East (Rathmines Precinct) and north facing rear gave us another clear indication of land values. Bulldozer home on 523 sq metres sold for just under $2600 per sq metre. Solid quoting by Choon Chieh  and Chris Ewart of  Christopher Russell as it fell within their range and they were professional enough to give the public an accurate and written indication of possible price. It’s not hard for the big guys – they just won’t do it (and they should).

12 Moorhead St Camberwell – Chris Burne of Marshall White

James Home Rating 675 out of 1000 Neat and tidy, renovated period home. Solid hill position from the front yet rear yard is higher than internal floor level, which is not ideal here. Comfortable to live in.- no covered car-parking and limited land size could be among concerns from a buyer’s perspective.

James Control Price: Dirt $744,800 + House $500,000 = $1,244,800. In this market we think this could be a towards $1.4m home as the market may well value the dirt more – it’s going up weekly. Across the road and on the lower side with a similar shell (not as well renovated inside) of a home and land - sold for less than a million only a few months ago.

James Auction Report: 80 people – 3 bidders. On market a bit over $1.2m and sold under the hammer for $1.285m. Good result for Chris Burne and auctioneer was Doug McLauchlan. Reported in (thank you) by Chris Burne as we got caught at another auction.

James Post Auction Examination: The word around the traps was more bullish than our control price and the result. It was hard to produce that control price in line with some recent sales. But we and the market shared the same view on this.

11-13 Victoria Road Camberwell – Sam Wilkinson Kay and Burton

James Home Rating 784 out of 1000 A good single level home which is dated yet has a functional floor plan and good bones and ceiling height. Would benefit from a cosmetic renovation. Land size, rear orientation and position is good – that is where the value in this lies. Is a square block and while width is generous it does lack depth and therefore some rear yard space. But this is a very good package.

James Control Price: Dirt $2,184,600+ House $300,000 = $2,484,600 or you could argue dirt alone at $2500 per sqm which equals same price.

James Auction Report: Good crowd of around 70 people saw 4 bidders move from an opening bid of $2m to on the market around $2.25m and sold under the hammer by Gerald Delany and Sam Wilkinson for $2.35m. Some last minute bidding again – I’m sure there is some wisdom behind it but I’m not smart enough to work it out – certainly the element of surprise is gone as it’s on the increase, becoming some what expected and good auctioneers are getting smarter and bringing the hammer down very quickly after fair warning.

James Post Auction Examination: If anything we also saw value in the home and still could of had land right up there per sq metre. We get them wrong at times but this is where we think the only one with the smarts on this property was the actual buyer (and it wasn’t us, bugga!) Well done purchaser, good buying at this level.

20 Tormey Street Bawlyn North – Tom Aylward and Nick Elmore of Jellis Craig

James Home Rating 742 out of 1000 One of the more impressive Balwyn /Boroondara new homes that I have walked into for some time. This truly is a modern day Mansion and while it appears to have been built to sell; it has been built to sell well to a top end audience. Many times we see a project of this nature not carry off what it’s trying to achieve – however this one has and it really is a Toorak home in North Balwyn. Therein lies it’s main negative issue (if indeed that is one). Am I overcapitalizing and buying way too much house in an area that many homes sell for around a third of what this should sell for. Maybe – but life is not all money and if you want a big home with grand proportions and floor plan that works and a home with the glitz and the glam and you have at least $3m and are prepared to beat off a number of overseas buyers who would be attracted to this home then visit and perhaps buy 20 Tormey. I like people who take risks and make an effort and you should like what has gone into this home if you are a big new homebuyer.

James Control Price: Dirt $1,178,100+ House $2,200,000 = $3,378,100. These are brave calls as this is a bit out in the boondocks and the home is so big. Our calculations were based on south facing land at $1000 per sq metre (easy) but the home was a lot more difficult – good quality finishes, size, ceiling heights and huge basement all said this could have been a $2m plus home to build. There is an overseas market out there – will it pay this money for this location is the question and the land content to value ratio is below 33% at these dollars.

James Auction Report: A huge crowd of 250 people flocked to this auction. Opening with a vendor bid of $3.2 million, two bidders fought this out to a sold price of $3.58 million. Auctioneer Stephen Abbott.

James Post Auction Examination: As expected. That’s the market at present. Bang! Good result for Nick and Tom of Jellis Craig

8 Rossfield St Kew – Maurice Di Marzio of Jellis Craig

James Home Rating 670 out of 1000 Good medium sized building block in a great central location.

James Control Price: Dirt $1,337,500+ House $0= $1,337,500. I’m never confident exactly what it will go for but I’m very confident what is should go for if it follows current market forces. Smaller block, but it is a great central location and land in good Kew spots is $2500 per sqm metre in the last few months.

James Auction Report: There were eight bidders out of a crowd of 90 here. Opening with a vendor bid of $1 million, this was on the market at $1.21 million and sold for $1.43 million. Auctioneer Peter Batrouney.

James Post Auction Examination: What only 8 bidders!!! As expected. Land is at just under $2600 per sq metre.

Buy Well

Which auction is this? No auction, it is a normal open for inspection at 24 Kingsley St in Camberwell. Selling agent is Jeremy Desmier of Fletchers.

It’s 6pm Saturday and the James Clearance rate for $1 million-plus auctions in Melbourne is 70 per cent from the 20 auctions we attended.

There are very few quality $1 million-plus auctions or private sales of note to report this week. Please note the Chinese translation to the right.

Auction behaviour on both sides is slipping and there will be issues if it is not addressed. The heat in the current environment is being fuelled by many and things will continue to hot up as homebuying is a passionate pass-time; shelter is a basic need and lots of money is involved. So, will we see threatening behaviour as well as the stress? Will we need security guards at one of Australia’s favourite Saturday outings – outings that on many Saturdays in Melbourne have more followers than the footy.

The temperature is rising, in part caused by agent quoting, and it’s not because the media is highlighting it unfairly. Reading Neil Mitchell’s article in the Herald Sun and listening to Monique Wakelin on the ABC, they both made valid points and did it in a non-inflammatory and balanced way. As an aside, I truly hope Enzo Raimondo’s (from the REIV) comments stating that underquoting was rare was indeed a misprint or taken out of context because ………well, what hope is there if indeed this comment was correctly quoted?

In our Market Insight article May 30th on Quoting – we asked the question what are selling agents quoting. There is no definition and Government guidelines are well intentioned but very, very confusing!!! Are we quoting

• what the seller or vendor wants?
• what the seller or vendor will take?
• what the agents think buyers will pay?
• what the agents hope buyers will pay?
• what offers they have had?

Full article at http://www.jamesbuyeradvocates.com.au/marketnews.html?newsid=54

But this is NOT another article about bagging agent quotes. Being optimists (we are buyer agents), we hope that, like dummy bidding legislation (which really does work), somebody smarter than us will find the magic pill that shows:

• selling agents, some who continually misrepresent, just how destructive their quoting mindset is to buyer relationships;
• sellers that they cannot have a last-minute greedy tablet and hide behind their selling agent without some consequence;
• buyers that selling agents are truly not there to act in your best interests at the expense of their “master” and income provider – the seller; and
• buying agents that we cannot, with good conscience, land cheap shot after cheap shot when we know that quoting is not a perfect science and, at the moment, is extra difficult especially in the early part of a campaign.

Then it would be great if that same magic pill could force or encourage behaviour through clearly defined rules that returns a common decency and respect equilibrium to the home buying and selling market.

The real question is not agent quoting or the agent quote range! It is HOW CAN YOU WORK OUT THE REAL ESTIMATED MARKET PRICE RANGE?

Remove the selling agent quote from your mind, as it is currently not a reliable indicator in Assessing Price. Replace it with one or both of the below:

• Engage a professional buying adviser such as a buyer agent (of course we’d say that) or valuer or even an experienced friend. This in itself it not an answer unless they can get the essence of price assessment right – at least 80 per cent accuracy before the day (forget those hindsight experts).
• Adopt a regime of personal research that includes:
  a) the latest comparable sales in the area of similar homes;
  b) the latest land values (price per sq m) plus building costs;
  c) the recent record of the listing agent and auctioneer on similar homes; and
  d) auctions, auctions and more auction visits in your area and surrounding areas to ascertain prices, bidding strengths and buyer depths.

Please note Assessing Price is Step 2 of Three Steps to Smart Buying and is an important foundation on which to build a buying campaign, but it is not the only step you need to take. You still need Step 1 – Clarity of Options and actually finding the right home, and Step 3 – Negotiate, which is a lot more than a few lines of theory. But I digress.

We mentioned Comparable Sales. What are they? At James Buyer Advocates, we look at hundreds of sales to find four to six homes that have as many similar characteristics to our target property as we can find. Homes with multiple similar characteristics we call Comparables. Some similar characteristics we look for are:

1. Same Market – Houses bought in December 2008 were bought in a different market to now but houses bought last month were not.
2. Same Area – Houses in different suburbs command different prices. Houses in the same suburbs but in different precincts command different prices.
3. Same Land Size – eg 500 sq m is a big difference in value from 700 sq m.
4. Same House Style – Period homes command different prices to New Homes.
5. Same Size – Bedrooms, Bathrooms, Living Areas, Car Spaces. Different numbers means different values to many.
6. Same Condition – Renovation, Quality.
7. Same Features or WOW – Views, Road Types, Neighbours etc.

The more similar characteristics between the properties and your target home, the better the comparables. The higher the number of GOOD comparables, the more accurate your price assessment is likely to be in, say, eight out of 10 cases. Comparables and price assessment in general is not a 100 per cent exact science like mathematics; it’s more an 80 per cent science like medicine.

Good comparable: Similar sized home in same condition sold around the corner four weeks ago, especially if it was at auction and there were five bidders. It tells you what your market competition (other buyers) thinks a similar home is worth and history often repeats itself.

Poor comparable: A very different type of home sold last year on very different land size, in very different condition at a private sale scenario and, with further research, you find it was a private sale and one “wood duck” buyer paid 30 per cent more than anybody else thought it was worth.

Why are Comparable Sales important? Because, in property you cannot predict what each individual is going to do (eg spend) but you can predict what a large number of people will do based on well researched recent history. Alternatively put, you cannot predict every result correctly; however, you can predict what will happen in a large number of sales (before they happen). In a rapidly changing market, the less skilled you are in the research, the lower your correct price prediction percentage will be.

Our client ratings system goes well beyond our public rating system and addresses each potential property and narrows the search down to four or six best comparables.

These “best comparables” are rarely perfect matches and, in some cases, there are few or no comparables or ones that tell very different stories. This is where you either bite the bullet and hire a professional or you learn from experience (missed opportunities) until you can distil the relevant points, estimate a range of possible price estimates and determine your own price quote or price foundation with which to proceed. If you have done this well, then “your quote” will be a lot more helpful to you than the agent quote.

Knowledge should encourage you to feel more confident to make the right decisions under pressure. Of course, you can always just turn up or override the financial logic you arrived at and buy anyway if emotion so directs you. At least your decision to either hold ‘em or fold ‘em was an informed one.

Of course Happy Wife, Happy Life in many cases still overrides “but Darls the Comparables say…..” .

Think of a selling agent quote like you do a council valuation or a bank valuation: it’s one more piece of information of interest but it usually in no way relates to your reality and this is especially true in a moving market such as we are in now in July/August 2009.

STOP PRESS: ACCC’s Graeme Samuel in today’s Herald Sun has said he will get involved in underquoting. In our opinion he along with buyer advocate David Morrell of Morrell and Koren and some good Victorian government legislation were instrumental in changing key real estate directors’ opinions in 2003 that dummy bidding was OK. I also notice Graeme Samuel has placed a focus on owners. Let’s hope this previously successful trifecta can put in a repeat performance and our industry cleans up it’s act. Please also note that in this rapidly rising market it is difficult to be 100% accurate. How can an agent control or predict how far over the reserve the market will take the final price (every time)? All they should be able to control (every time) is where a price range is declared, that the seller’s reserve, is within that range. Anyway ACCC’s involvement is seriously good news; if it’s true and they can make a difference. Most real estate directors (who are hard to scare) would be genuinely concerned (if they had done something wrong) about a call from an agro Mr Samuel – I for one, certainly would be.

Buy Well

Mal

Two properties that we visited and rated this week are 14 Greville Street Prahran & 11 Keats Street Sandringham.

These homes are located in two very different parts of Melbourne, but both properties are renovated period homes with a great feel, well suited to the area demographics (Prahran is mainly singles and professional couples, while Sandringham is mainly families) and we really feel they will have many admirers.

The one big difference with these properties is the orientation of their rear yard: 11 Keats had a north-facing rear yard, while 14 Greville’s was south-facing.

Rear light is an important consideration as part of our James Home Ratings system and rightly so. In Melbourne, we live in a temperate climate and it does get cold in winter (as we are again finding out!) Natural daylight streaming into our backyards and informal living spaces is really important, and these areas ideally are located at the rear of the property where it is private. But it is not just light that is important;  the warmth (or passive solar gain) from the sun is equally beneficial.

With energy efficiency design standards becoming more and more regulated (ie, in addition to all new homes, some renovated houses now need to comply with government 5-star requirements), a modern house with a north-facing rear will generally score better than the same house with a southern orientation.

In a recent book by American architect Matthew Frederick, which discussed the effect of natural light on buildings, he stated  “The altitude, angle and colour of day lighting varies with compass orientation and time of day.” His views include (please note that I’ve paraphrased and changed his directions to accommodate our southern hemisphere here):

• daylight from the NORTH-facing windows is dominant from mid-morning to mid-afternoon. It tends to render colours accurately and cast strong, crisp shadows.
• daylight from the EAST is strongest in the morning. It tends to be of low altitude with soft, long shadows, and grey-yellow in colour.
• daylight from the SOUTH tends to shadowless, diffuse and neutral or slightly greyish most of the day and year.
• daylight from the WEST is strongest in the late afternoon and early evening and has a rich gold-orange cast. It can penetrate deeply into buildings and occasionally be overbearing.

Even though we liked our two house examples (and I am sure a lot of people will too), the rating scores vary considerably, and one reason for this is the rear orientation. It is easy to fall in love with a house with a great feel and presentation, but you do need to understand the impacts and effects of direct natural light. In short, natural light can really change your mood.  When inside, how many of us gravitate towards the windows when sun is streaming into the house on a cool day?  While south light is consistent and suits working areas well (most factories and studios have south-facing windows), it is shadowless and – well – boring. If you’re looking at a two-storey house with a south-facing backyard, be aware that most of the shadows cast by the house will fall into your backyard – who wants a pool that rarely has access to natural light? If considering a second-storey renovation to a single-level house with a south-facing backyard, be aware that shadowing can often impact on the neighbour’s amenity, so it is a real planning issue to be aware of.

A counter argument to the south-facing rear yard issue is that in summer we often don’t want too much natural sun, as it can be overbearing and overheat the house. But effective screening and eave design can easily address this. If there is a wonderful view to the south, then of course we will want to include that view and locate our living areas to take advantage of this – there is always an exception to any rule – but, generally, a north-facing rear will be much more preferable to a south-facing one.

14 Greville Street Prahran is listed by Mark Harris of Bennison Mackinnon and it is scheduled to auction at 10.30am on 13 June. We rated this property 617/1000 and currently it is quoted at $1.2m+.

11 Keats Street Sandringham is listed by Kate Smith of Hocking Stuart and it is scheduled to auction at 11.30am on 13 June. We rated this property 845/1000 and currently it is quoted at $2.5m+.

Design Smart.

Mark Dayman looking for bidders at the Alfred St Kew auction. He found six of them.

The million-dollar-plus market is the strongest in Boroondara on low stock levels, and is being driven by overseas buyers.

61-63 Alfred St Kew was obviously the big one last Saturday and there was strong bidding from overseas buyers, as well as locals, with six bidders in total. Not sure if it’s a renovator or a bulldozerer or maybe a landbanker who bought it. Good campaign, as usual, by James Tostevin from Marshall White. Another James Market News favourite, John Bongiorno, conducted proceedings.

Auctioneer Scott Patterson from Jellis Craig is setting the benchmarks on what an auction crowd wants:

• Start on time.
• Short, sharp and comforting preamble.
• Get the bidding going through the crowd or vendor bid.
• Be polite but firm with bidders, and
• then pass it in or sell it.
• No long half-time breaks, drawn-out last gasps, and
• did we mention he starts on time and has a short punchy preamble?

You can see why he is the leader of the Melbourne pack at present. And this is not one person’s opinion. All of us at James feel this and you can see the crowds do as well.

A couple of Camberwell Junction land blocks sold on the weekend:

1 Peppin Street, Camberwell on 627 sq metres sold for land value at $1.522 million, or $2427 per sq metre, and thank you to Peter Dixon of Jellis Craig who we rang mid-week to ask whether we should submit to a client. He nominated the estimated price within 2 per cent of the actual price.

16B Waterloo St Camberwell on 1031 metres and sold for $1.45 million. The photos on the web were a lot better than the home and, before you start thinking selling agent Tom May of Jellis Craig let it go cheaply, take a look at the block. It was a battleaxe block and probably equivalent to about a 600 sqm building block, or around $2400 per sq metre, for Camberwell Junction.

Speaking of land sales, here is one to watch at the June 13th auction. Talking with Campbell Ward of Jellis Craig at the 55 Alexandra Avenue Canterbury open, he said the level of interest is so strong from Asian people on this home that they may have to lift the quote a third time, having already moved it from $1.35 to $1.5 million to from $1.4 to $1.6 million. The big attraction to this very plain home on an average-sized Canterbury block according to Campbell is:

• proximity to Mont Albert Road.
• 60 foot frontage.
• west rear orientation.
• you can bulldoze it.

Boroondara new homes: is $4 million too much in Kew?

• 21 Ross St Kew.
• 31 Rockingham Street Kew.
• 17 Grange Road Kew.

All are really good homes – our opinions are in the ratings and we don’t think $4 million-plus is overcapitalising for a good home - but, to date, no sale on these.

$3 million-plus seems no problem if the home is right, as Karen Gornalle sold one just over $3 million in Mont Albert Road, as did Richard James in the Sackville precinct, and both sales occurred this month.

19 Oak Hawthorn is being re-auctioned this month with new agents Steve Burke and Al Craig of Jellis Craig. Perhaps the reported offer of high $3s should have been taken and that seems a long way from the current quote in the low $3s. This is a high-quality home on good land in Hawthorn. However, 27 Oak just down the street sold well once the price moved in line with the market.

Yes, we are saying the Boroondara market is on the up, but it is still price sensitive.

These are very good period homes but they need work and are awaiting a buyer:

54 Mary Street Hawthorn – Ross Savas, Kay and Burton.

53 Kinkora Road Hawthorn – Nick Elmore, Jellis Craig.

Brighton, 36 Whyte Street: Auctioneer David Hart licking his lips as he conducts the classic auction in front of a large Bayside crowd. Sensible quote, set the tone, vendor bid, two bidders, pass-in and negotiate higher.

The James Clearance rate stands at 83 per cent on the 23 auctions of million-dollar-plus properties we attended today.

Please note James Market News is now translated into Chinese by Su who now works with us and can be viewed by clicking button to the right of this column.

This weekend, we thought you may be interested to read part of our initial draft for the James Million-Dollar-Plus Residential Homes Half-Year Report, due out at the end of June. Of course, things may change over the next month, but this is how we are reading things to date.

We feel the 2009 Melbourne million-dollar-plus market has risen by around 10 per cent this year. In context, that same market had fallen between 10 per cent and up to 40 per cent (in extreme cases) from its 2007 peaks by December 2008.

Good properties have risen in price since a turn in late January. Prices stabilised in February 2009 and gathered momentum, resulting in increases for high-quality homes, in the past six weeks (April to May 2009). It is also worthy of note that weaker properties have now become sellable, although, in many cases, still 10 to 25 per cent lower than the peak reached in Port Phillip and Bayside in late 2007, and the peaks reached in Stonnington and Boroondara in early 2008. The James Price Worm, showing our anecdotal thoughts on the market, is to the right of this article.

From what we have witnessed, million-dollar-plus Boroondara is the strongest area, then million-dollar-plus Stonnington and then the Bayside million-dollar-plus market.

Strong demand properties:

• Rectangle house blocks around 750 m2 and more.
• New homes with “wow” and good floor plans.
• Renovated period homes with good floor plans.

Weaker demand properties:

• Single-fronted period homes, especially in need of repair.
• Over-quoted or higher than market-priced homes.
• Difficult floor plan homes that require serious renovation.

Short-term factors driving current million-dollar-plus prices:

• Shortage of stock.
• Overseas demand from Asia with Foreign Investment Review Board rule changes.
• Locals have decided to get on with life. They understand the global financial crisis but have found that its just not affecting them as much as the papers are implying (for now anyway).

Short-term factors restricting current million-dollar-plus prices:

• Banks’ tighter lending policies.
• General nervousness among 20-35-year-olds, who do not have the asset base of older people. This has been played out in the significant drop in single-fronted period home prices and the weakening of the sub-million-dollar apartment market.

Key long-term demand drivers:

• Overseas people after schools for their children.
• Overseas people after political stability and safe money havens.
• Local population growth.

Key long-term supply drivers:

• They’re not making any more land in Inner Melbourne.
• The contracting of the development market in mid-to-late 2008, which will be felt even harder around late 2009 and early 2010. There will be a 12-to-18 month lag after developers re-enter the market.

Some key James statistical evidence:

15 November to 6 December 2008 (four auction weeks): James $1m+ clearance rate: 35% on 53 auctions. Average bidders per auction: 0.8.

April-May 2009 (last four auction weeks): James $1m+ clearance rate: 75% on 80 auctions. Average bidders per auction: 1.875.

James Auction Success rates (eg what we actually buy vs what we bid on):
In the peak of the market (2007), our auction clearance rates dropped as low as 20 per cent. It’s a bit hard to recommend that your clients go even crazier than the market. By late 2008, our auction clearance rate had moved to almost 100 per cent. We were, in many cases, the only bidder; granted we had very few completed jobs. By April 2009, our Auction Success Rate was declining again and was around 35 per cent, in other words, if we attended three auctions on a Saturday to buy, we bought one. We have since taken a more aggressive line pre-auction, as you can see below, and our Auction Success rate has now moved to more than 50 per cent.

Real life anecdotes: in the past week, we have bought before auction:

• Boroondara home, agent quote $1.5m+
• Stonnington home, agent quote $2m+
• Boroondara home, agent quote $1.5m+
• Malvern East home, agent quote $800,000+

In the past month, we have missed at auction:

• Hawthorn home, more than $1.5m (3 bidders)
• Boroondara home, more than $1.4m (3 bidders)
• Kew home, private boardroom auction, more than $3m (3 bidders)
• Prahran townhouse, more than $2m (4 bidders)
• Brighton land, more than $1.4m (8 bidders)
• As well, we have seen Expression of Interest campaigns not go our way.

If the market changes next week, we will write that up as well.

Finally, we have had conversations at opens and over coffee with Al Craig of Jellis Craig, James Redfern of Marshall White, Jock Langley of Abercromby’s, Ian Jackson from JP Dixon, David Gillham from Noel Jones, John Bongiorno from Marshall White, Andrew McCann of Bennison Mackinnon, Barb Gregory of Hocking Stuart and Peter Kudelka from Kay and Burton, to name a few, and (accepting that selling agents’ views have some self-interest bias, as do ours, on wanting the market to be good), there is no denying that a significant majority of selling agents genuinely think the Melbourne million-dollar-plus market is improving (price-wise).

How long will it last? We’re sticking our neck out here and saying that it will last at least until next week! After that, we will have to wait and see.

Buy Well

Mal

This week, we would like to thank Madeline Kennedy of Marshall White for her efforts in the Another Point of View article.

We have had strong positive feedback from our Video Before the Auctions Segment (live every Tuesday) and a number of suggestions – thank you!

And Architect Adam shows us how we can improve 7 Parslow St Malvern, due for auction next weekend.

Agent Quoting is covered in a Million Dollar Melbourne Article below.

Lifts are becoming the new “must-have” accessory at the higher end of the market. Increasingly, lifts are a standard accessory (indeed, a standard request) in new, multi-level prestige homes. But lifts are not just restricted to new homes; increasingly, in Toorak and Brighton, they are being retro-fitted to beautiful period mansions.

As land prices in Melbourne go up, basement construction becomes more prolific (significant advantages are that you avoid height controls, minimise building footprint, improve car accommodation and security, and create gym and home theatres areas, which do not need natural light etc).

Costs for a lift can vary between $70 – $120K (and could cost a lot more for commercial or boutique models), and it will generally occupy a footprint area of 1.8×1.8m. The lift’s speed (most will rise 1 metre per second) can be an issue and a frustration initially but, if the lift is used as a necessity, this is often quickly forgotten.

The majority of lifts are imported from Italy, assembled on-site and an annual service is required. A lift will add value to your property, and it will be a more attractive proposition to a greater number of buyers when it comes time to sell.

We saw a good example of this in Hawthorn last year, when two modern townhouses in Muir Street, with similar floor plans and similar land sizes, sold for very different prices. The big difference was that one had a lift and the other did not. The one with the lift sold first for around the $3.2 million mark and the one without the lift sold for $2.8 million. The lift was the first feature mentioned in the property advertising and headlined the marketing as “exciting vertical living”.

Even able-bodied people will see the value in a lift, particularly when carrying a multitude of green shopping bags from the car in the basement to the kitchen a floor or two above. Also, while it is not something often considered by many people, if a family member becomes temporarily or permanently disabled, it will ensure the house (particularly a second-storey bedroom) is still accessible.

In James Home Ratings, we give extra points for houses with lifts, where no downstairs bedroom exists, and rightly so.

Design Smart
Adam