Albert Park: 81 Vincent St: Good Crowd (70) but no action; Passed In on multiple vendor bids for $1,670,000

Not a lot on offer today and despite our headline a few were put away albeit on lower interest levels than last month. Of the reported sales we saw 7 from 13 go under the hammer or sell soon after for a 54% clearance rate. The standout auction was 65 Beacon Vista Port Melbourne with David Lack of Biggin and Scott. In front of a big crowd of 150, 2 bidders fought it out from $2,500,000 to $3,135,000. A strong result by anyone’s standards.

Some Opinions

Michael Szulc from Cayzers believes “the market has dropped right back – peaked back at the end of February”.

Kaine Lanyon of Bennison Mackinnon thinks things have dropped off a lot also.

To quote Damien O’Sullivan of Bennison Mackinnon: “Buyers are perhaps not acting in their best interests”. Implying there are some bargains not being taken up.

Is it demand or supply? At this stage there are a number of single fronted homes in Albert Park, Middle Park and South Melbourne – all around the 900K mark so it maybe supply and lack of qualty, just as much as it maybe buyer caution caused by outside influences.

St Kilda West and 24 York St had a sold result last Sunday just under $2million through Andrew Turner of Cayzers. Again reinforces quality land is anything up to $6,000 sqm with York selling for over $4,500 per sqm with a wide frontage and good redevelopment possibilities.

Dropping further down the bay we see Elwood finding plenty to put onto the market with 5 sales and an off market in the early to mid $1’s being bought. However once the number approaches or exceeds

 $2million it’s a different story. There are few bidders and homes take longer to sell (as a general rule). Cases in point are 2 Kendall and 11 Addison but granted 57 Dickens with Torsten Kasper of Chisholm and Gamon did sell. And what’s with Addison St – I’ve never seen so many homes for sale in this prized stretch before.

Another big week coming with 23 scheduled auctions over a $m. The big question is it lack of quality, quantity of supply (choice) or buyer mood changes from external sources that are currently affecting the market? What will this mean going forward? Lots still happening just in a diferent manner, at a different pace and on a different level to last month!

Buy Opportunity

Port Melbourne: 65 Beacon Vista: BANG: Bought under the hammer for $3,135,000: 2 bidders: Biggin and Scott's David Lack in charge!

Middle Park 85 Carter: Quiet auction for Kaine Lanyon of Benmac. No bidders and passed in at $950,000.

So how is Port Phillip (Port Melbourne to Elwood) travelling in this changing market.

Lets look at some stats on the auction we had scheduled to visit, bid on or review below.

Of the 16 auctions all bar one reported their results so the clearance rates are accurate.

The clearance rate was 50%. That is for every auctioned property that was bought- one was not.

Of the auctions we attended 3 out of 4 passed in and Bidderman was propped up by the Brooke St auction otherwise he didn’t really get a run yesterday.

Good news for agent quoting though ALL that had quotes achieved sales of pass-ins within those ranges. A miracle – not! A solid effort -well done. Being fair Hocking Stuart (Albert Park) and some others in Port Phillip have always had a policy of fair quoting.

Another interesting point is a number of these auctions below we estimated to go over a $1million on first glance six weeks ago when we first began to monitor them.

Longer Term how have the various suburbs and price points been travelling.

Looking above we can see almost identical numbers of sales (over a $million) in identical suburbs for April 1 to May 15th 2007 v 2010. A little anomaly is the Middle Park sales have been replaced by the St Kilda sales – not sure if there was a council line change. Anyway I digress, the median on all sale over a million has been on a rollercoaster during those 3 years and has returned to about the same spot plus a bit (5%).

So what does this all mean. Things have been fairly solid up this last six months, agent reporting has been accurate, quoting seems good but the market is now definitely either flattening or possibly in slight decline. Evidenced not only by a falling clearance rate which is matching other Bayside suburbs; but by agents comments such as the balanced Andrew Stuart who says ” Yes Mal things are tapering and the market is now not as it was a month ago

Prepare for all auction eventualities, maybe even get some advice!

369 Dorcas St South Melbourne: Land sale no declared interest. Passed In for $1,200,000.

A modern extension to a period home in Swallow Street Port Melbourne - space and light in abundance here!

Are ceiling heights important? Most people would agree that they are very important, for a variety of reasons.

Generally, most marketing campaigns for houses for sale will highlight tall ceilings and for good reason: quite simply, the rooms are more spacious and feel better. Tall ceiling heights  are nearly always found in old period or high-quality contempary homes. One house we recently visited (which sold quite strongly) was a renovated period home in Swallow Street, Port Melbourne. The original rooms had tall ceilings (these were now used as bedrooms) and the extension toward the rear was modern and had even higher ceiling heights. This combination created such a powerful effect, and was a real key to the success of the house.

Why do most 1970-80-90 builder spec. homes  have low ceiling heights? The answer is generally related to cost cutting. The houses are cheaper to build while the footprint of the room size remains the same.

Low ceiling heights do have a place  in house design. Often they work well in utility areas and also in transition spaces like hallways. Walking through an area with a lower ceiling into a larger space with tall ceilings helps to accentuate the sense of space and this is a very effective architectural design trick.

A quick and easy test (for most people of average height) to ascertain ceiling heights when walking through a home is to simply raise your arm straight above you. If you can (or almost can) touch the ceiling, then the ceiling heights are probably about 2.4 metres. In living areas and bedrooms, most people will not like this as it is just too low.  As a rule, 2.7m is OK and 3m or higher is best.

In summary:

Tall ceiling heights (say 3m or more):

Pluses

• air circulation (particulary important in bedrooms)
• space!
• more opportunities for light via highlight windows
• house feels grand
• can always be lowered in time if need be

Minuses

• heating cooling costs can be higher, as the room volume is greater
• acoustics can be a problem, as noise reberation (or echoes) is longer

Lower ceiling heights (say 2.4m) –

Pluses

• spaces can be more intimate (particularly over dining room tables)
• areas are cheaper to heat and cool, as the room volume is smaller

Minuses

• rooms feel cramped or small
• can be stuffy, due to limited opportunity for air flow
• house feels cheap

Ceiling heights in houses can make or break the design but is often overlooked by buyers. It is a key facter we use when rating houses and rightly so.

Design Smart.

Middle Park: 179 Richardson: Bidderman 4. David Wood of Hocking Stuart. Bought for $1,443,000. Good crowds at a lot of Port Phillip auctions.

The two big ones in Elwood didn’t go off under the hammer today. Our top rating home for the year with 904 out of 1000; 71 Addison St Elwood (Torsten Kasper of Chisholm and Gamon) did not attract a bid at the price asked and remains unreported at time of writing. 396 Barkly St Elwood with Robert Harvey of Hocking Stuart had a Bidderman of 2 but passed in at $2,640,000 and remains unreported. However 5 of the other 6 scheduled million dollar plus auctions were bought.

Good crowd numbers at the 5 auctions we went too yesterday with an average of 60 people at each auction. Bidderman was 2

The Table below shows number of scheduled million plus auctions to number reported by the REIV to those reported bought as a percentage of scheduled. Strong, but not invincible looking like a few weeks ago.

248 Beaconsfield Parade Middle Park (David Wood of Hocking Stuart) was Port Phillip’s big buy at $4,750,000 negotiated after auction. And well done in a strong market on a big sale, the agent quote was spot on.

48 Marine Parade St Kilda (Sam Gamon of Chisholm and Gamon) was the only $2m plus sale reported with the other 15 being in the $1million to $2million range.

HISTORY OFTEN REPEATS ITSELF!

Let’s look at a couple of the most common properties in Albert Park. Middle Park and Port and South Melbourne – the Victorian single fronters on smaller blocks of land that traditionally would have been in

• 2000  around $400,000 to $500,000
• 2005 around $700,000 to $900,000
• 2010 around  ???

179 Richardson St Middle Park – Stephen Brooks Hocking Stuart.
James Home Rating 655/1000: It’s all about  a metre. Another metre in width would make this a very good home – as it is it’s just a good home. Another few metres at the rear for car parking would have made this a very good home as it is with the side laneway its OK. It is what it is, a basic Inner Melbourne terrace offering with some provision for car parking at rear. The laneway gives light as does the lightwell running the length of the building to north side. Everything is in the right place including the bathroom of which there is only one. The street is one of Middle Park’s best so no question on position. For many it will be too compact but for the buyer it will be cosy – each to his or her own.

179 Richardson Street Middle Park

James Auction Report: David Wood Auctioneer Sold under the hammer for $1,443,000. Bidderman 4.
A picture perfect home, street and Autumn weather bought many families and their pets to this charming Edwardian home. After a non eventful start David Wood from Hocking Stuart calmly opened the bidding at $1,200,000 on behalf of the vendor. With little animation from the crowd Mr Wood achieved an on the market bid of $1,310,000 with two bidders. The bidding took a turn from hesitant to enthusiastic with a third bidder stepping in. Quickly climbing to $1,427,000, Mr Wood had a vision of a sale however just before the hammer fell a fourth bidder showed his hand with Mr Wood exclaiming “the keys in your pocket felt good, now you have to start again”. Three further bids concluded the bidding, bringing the total bids to 21 with a bought price of $1,443,000, well above the expected.

82 Iffla Street, SOUTH MELBOURNE Max Turnbull of Cayzers.
James Home Rating 648/1000. Good feeling home that has been updated well – no-off street car-parking here may be among concerns for some, but that is fairly typical for this area.

82 Iffla Street SOUTH MELBOURNE

James Auction Report: Geoff Cayzer Auctioneer Sold under the hammer for $1,300,000. Bidderman 3.

A relaxed crowd of approximately 80 were in attendance at this beautiful Victorian home. Lots of locals hovered chatting with anticipation of the impending sale. Geoff Cayzer from Cayzer opened the proceedings with a light hearted quote “lets have a bit of fun, we could be in Ferntree Gully” the crowd laughed loudly in shock. Mr Cayzer opened the bidding with a Vendors bid of $1,200,000, after some cajoling one bid was made before Mr Cayzer announced a further vendor bid of $1,225,000. A shout came forth “is it on the market?” to which he replied “not quite, because I hold the bid and my wife won’t let me buy it”. A total of 12 bids between the three bidders saw the property on the market and bought at $1,300,000. The look on the new owner’s face was of absolute relief.

The old reliable single fronters are still looking pretty good longer term investments but they still need to be the right ones chosen.

Buy Well

23 Loch St St Kilda West - Rodney Morley of TBM moved 8 bidders from $3,000,000 to $4,100,000 and a sale.

A lot has been happening in Port Phillip (Elwood, St Kilda, Albert Park, Middle Park, Port Melbourne) with 18 buys over a million in the last week. The thing we have been happy with as buyers is the amount of quality stock – we know everybody tells you that’s low and Bidderman is saying there is not enough to go around but if you look closely enough and are prepared to fight at the 2010 price levels then good homes are there to buy.

This last week there has been 5 major sales over $2,000,000 on quality properties
Three big renovation projects at
23 Loch St St Kilda West ($4,100,000); TBM Auction with Rodney Morley – under the hammer
89 Harold Street Middle Park for a tad under $3,000,000 – Michael Szulc of Cayzers – Private Sale;
27 Canterbury Road Middle Park - after auction believed to be between $2,700,000 and $2,800,000. John Holdsworth of Hocking Stuart
A modern offering
249 Beaconsfield Parade Middle Park ($2,685,000) - Lisa Jarrett of Abercromby’s strikes again (doing some business in this area now);
A ready to move in period home
10 Anderson St South Melbourne ($2,900,000). A strong result for Anthony Grimwade of RT Edgar. We loved the street, the decor and the whole home and so did the eventual buyers moving upwards by $500,000 post auction. That’s 1/2 a million – a great post auction negotiation.

Land as we see it in Albert and Middle Park is now a minimum of $5000 per square metre in our calculation. And whilst on a warm Wednesday morning having coffee with John Holdsworth – Albert Park’s legendary selling agent - when our conversation turned to values we found we were in agreement.

Lisa Jarrett of Abercrombys sold this modern offering for $2,685,000 mid week

Elwood is no different as far as supply goes with 4 offerings between $1,450,000 and $1,900,000 being bought this week. Mostly period homes with various degrees of renovation.
46 Rothesay and 122 Ruskin (new home) - Sam Gamon of Chisholm and Gamon. Oren Flamm of LJ Hookers got 13 Foam St Elwood away and 8 Addison sold under the hammer (see report below) through Kaine Lanyon and Nathan Waterston of Bennison Mackinnon.

We are calculating land at a minimum of $3000 per sqm in the good parts of Elwood. And in the good spots eg Ruskin, Addison or along the beach in Foam, Beach, Selwyn etc $1,800,000 is the benchmark for a good side by side well renovated 3 to 4 bedroom home on 400 sq metres of land (with car park). Elwood specialists Sam Gamon and Torsten Kasper who are knocking over some deals in this area concurred in recent phone calls when they were assisting us price another property.

When you think about the action or lack of it this time last year you would say things are positively buzzing in Port Phillip

Buy Well

Brighton: 21 Montclair: Happy Photo. For David and Fiona Southgate the buy and sell stress is over. Photo: Carole Laird from Hodges.

Bidderman at 1.7 is still consderably lower than elsewhere in Million Dollar Melbourne.

Brighton and Brighton East reported 16 $m+ auctions with 5 passed in. In addition to the reports below was a strong result at 40 Black St with James Paynter of Buxton which sold under the hammer for $2,050,000. Small block, period home needing serious work – the renovators are back with a vengeance – such a different story from this time last year. This would not have even drawn a crowd let alone a strong result.

The Port Melbourne Apartment Market is semmingly back with 22/1 Beach St (HMAS) and Level 6 in the 4th tower selling at auction for $1.645m and $1.77m respectively. Jane Lucas of Kay and Burton and John Slavkoski of Barry Plant

Julian Augustini said Hodges 6 out of 7 sold at auction.
Buyer demand is quite strong as buyers realize little stock is coming on moving forward over next 5 weeks
“Both Campbell and I have 5 auctions each for December 12^th. These campaigns started today and response has been strong so Dec 12^th is looking strong despite huge numbers of auctions this weekend.”
More offers being made prior to auction that I’ve seen in a years – and there are a quite a few sold before.  Sandy last week 2 sold at and 1 passed in and 4 sold before.
$1m to $1.5m is very strong through Sandy and Hampton.

Other properties included 7 Armfield and 127 North Rd both of which sold in excess of $2m.

Auctions we attended today:

BRIGHTON – 2 Wellington St – Bought – two bidders
According to auctioneer Frank Hellier, for Malcolms Real Estate, there was a lot of genuine interest in this property, with Asian and Russian buyers among the mix. Assisted by the young Tom Davidson, Mr Hellier took a genuine opening bid of $1.5m and the property was on the market at $1.7m. Two bidders saw the property sell under the hammer for $1.85m in front of a crowd of around 60 people.

BRIGHTON – 3 Maysbury Ave – Passed In – no bidders
Agent Robin Parker described the wide frontage of this property as ideal for developers, but unfortunately even that didn’t entice any buyers for this 1920s home. Auctioneer Greg Costello, of RT Edgar, opened with a vendor bid of $1.95m, and after a further two vendor bids the property was passed in at $2m. A small crowd of around 20, many of whom seemed to be nearby residents and not genuine buyers.

BRIGHTON – 113 Male St – Passed In – one bidder
The meticulous renovation of this Victorian home attracted a lot of interest from passers by, but unfortunately the only sale that took place was by a neighbour selling plants from his driveway! Julian Augustini, of Hodges Real Estate, opened with two vendor bids (the first was $1.3m), followed by a single genuine bid of $1.35m but the property was passed in at that price.

BENTLEIGH EAST, 43 Mawby Rd – Passed in – no bidders
Three couples seemed interested in this neatly presented property and were seen talking to agents from Buxton Real Estate before proceedings. But despite that, no one placed a bid and the property passed in on a vendor bid of $900,000. A big crowd of around 80 people. Auctioneer was Craig Williamson.

HAMPTON, 26 Avondale St – Passed in – no bidders
Despite the efforts of Greg Costello, from RT Edgar, and a good crowd of around 60, this property failed to attract any bids at auction. Earlier, two parties had shown interest in the property, but it was passed in on a vendor bid of $2.4m.

HAMPTON, 1/39 Holyrood St - Bought – four bidders
A moderate crowd of around 50 people attended a unique auction where the reserve of $475000 was disclosed by Greg Costello before proceedings. RT Edgar took the unusual steps at the vendor’s request and after a cheeky bid of $400,000, a serious bidder met the reserve. Quick bidding from four parties followed with increments down to $250 and selling for an undisclosed amount.

MIDDLE PARK, 191 Page St - Bought – four bidders
This auction was described as being like a street party with several groups of people staying and chatting after proceedings. Even auctioneer Andrew Stuart, of Hocking Stuart,  joined in the frivolities when the business of selling properties was over. Four bidders after an opening vendor bid of $1.8m. The property was on the market at $2m and bought for $2.120m.

BRIGHTON EAST, 5 Lysander St - Bought – five bidders
Strong interest from several developers for this good sized property pushed bidding up quickly. Campbell Cooney (Hodges) led proceedings which started with a genuine bid of $1.1m. The property was on the market at $1.255m and sold for $1.280m. A solid crowd of 50 people with five bidders.

BRIGHTON, 29 St James Park Drive – Bought
A lovely atmosphere, with many of the 45 strong crowd sitting on the grass to watch the auction. Rod Richardson (Hocking Stuart) was in charge and opened proceedings on a vendor bid of $1.69m. Unfortunately there was no response from the crowd and the property was passed in. It sold later for an undisclosed amount.

ELWOOD, 10 Lawson St – Passed in – one bidder
Auctioneer Tony Pride gave a great address to the crowd of around 50 people, but even this failed to excite the crowd. Only one bidder became involved in the proceedings after an opening vendor bid of $1.75m. The crowd just wasn’t in a buying mood and the property was passed in at $1.76m.

Happy Wife Happy Life

Ormond: 133 Wheatley: Nick Renna bought the usual racing sized crowd of over 130 people. 4 bidders. Opening Bid $1.05m. On the market at $1.1m and bought for $1.23 million.

Lots of homes to report on. In not the best part of Brighton East – 20 Letchworth Avenue – which is down towards Moorabbin; saw a block of land sale by Andrew Urquhart of JP Dixon of just over a million or $1500+ per sq metre. While down that way Jacquie Maggs of JP Dixon also sold a brand new home on similar land size (643sqm) facing onto Dendy Park for in excess of $2.5m - 78 Glencairn Avenue. That is solid.

Middle Park: 221 Beaconsfield: Andrew Stuart and John Holdsworth: Bought for $4,600,000. 3 bidders

Moving into Central Brighton Justin Follett of Kay and Burton who seems to be the “$3m agent” around Bayside at the moment finally got 12 Campbell St Brighton away through an Expressions of Interest campaign at a price in excess of $3m. Looks it is an OK build and has the glitz but I remember walking through there six months ago and thinking $2.6 ish and said to Justin you are dreaming at $3m+. He smiled. When you compare it to the new home sale in Vaucluse St only a few hundred metres away earlier the year – February I think at $2.1m you can see just how far the market has moved. I acknowledge that Campbell is a slightly better street and product but it is marginal and Vaucluse was north facing rear.

Solid but expected result for Jenny Dwyer of Hocking Stuart at 6 Keats St in Sandringham. Even if it’s not perfect – if its central Sandy and period then what seemed such a mountain last year – high one million’s – is now becoming very achievable again.

James Auction Report: A massive turn out for Keats St, Sandringham with a crowd of more than 100. Hocking Stuart was the agent and Stephen Tickell the auctioneer. Very interesting and entertaining auction with seven bidders! Opening bid of $1.4m and three strong bidders to start. Property went on the market at $1.6m which attracted another 4 bidders – one of whom kept telling Stephen he could – have a break -, while he conferred over the phone, much to the delight of the crowd. Especially when the bidder then got in his car and drove off after reaching his limit! The property sold for $1.78m, which Stephen later told another crowd at Fourth St, was nearly $250,000 over the reserve.

In that area 20 Orlando St Hampton sold before auction for an undisclosed but pretty much as expected result.

20 Orlando St Hampton - Julian Augustini of Hodges and Chris Bevan of JP Dixon

James Home Rating: 806 out of 1000. Great package – brilliant location (except for some at rear of shops is an issue), but close to beach, shops, train and everything including Brown Cow. The architect James Rigney has a well deserved excellent reputation and apart from no downstairs bedroom the floor plan is hard to fault and 3 bathrooms upstairs. Looks really well built and has a real northerly (the best) aspect for light. This will be hotly contested at auction and will probably go beyond simple land plus home values. I really like this as a new home and recommend that if you also do then you should go the extra mile and buy it. Overall package as good as it gets in Bayside for this type of home

James Control Price: Dirt $1,176,000 + House $1,100,000 = $2,276,000.

James Auction Report: Sold before hand.

Post Auction Result: As expected.

Moving northwards into Middle Park and Port Melbourne we saw two $4m plus sales.

19 Beach st through top end agents – Gerald Delany and Peter Kudelka of Kay and Burton in excess of $5m.

While on big numbers another heavyweight duo this time at Hocking Stuart – Andrew Stuart and John Holdsworth got the development site at 221 Beaconsfield Parade away

James Auction Report: Opening Bid of $3,800,000 and 3 bidders took it to a bought price of $4,600,000. 50 people.

Happy Wife Happy Life

Elsternwick: 48 College: Stand Up comedian and auctioneer Bill Stavrakis entertains the 90 strong crowd and 4 bidders to a bought price of $1,238,000.

Overall Bayside looked pretty solid this week and the next two weeks will either confirm its strength or show some signs of minor distress as we have a lot of auctions coming up.

Brighton: 116 Carpenter St. Jason Gill of Hodges a prolific Bayside $1m seller gets this way away with 3 bidders at $1,170,000

This week

15 Well St Brighton which was 1000 sq metres with permits for apartments right in the middle of the Church St precinct sold through Brian Devlin of Buxton for a very strong $3500 per sq metre+

116 Carpenter St Brighton which was a difficult back – near a funeral parlour and backing onto a railway line still sold through Jason Gill of Hodges.

James Auction Report: A bid of $950,000 from the crowd of 35 people started off this auction. There were three bidders in total, with the property on the market at $1.04 million and sold for $1.17 million.

This has either been bought by somebody keen to get into Brighton at this $1m price point and made sacrifices or a developer who sees putting a glitz and glam home on it and reselling north of $2m or of course I could be completely wrong.

4 out of 5 sold over a million at auction in Brighton East - Curley, Canberra, Glencairn, Lubrano and only Milliara missing out

Down the bay a bit Julian Augustini of Hodges was again in form selling one at auction and one quietly.

70 Holyrood Hampton (auction) – at $1.51 for 811 sq metres and a serious renovation and quietly a similar land size in Littlewood St Hampton for just under $1.5m. Assuming little value in the homes that is putting land around $1600 to 1700 per sq metre if it is a good block in the Golden Triangle of Hampton for prime Middle Hampton.

James Auction Report: In front of 50 people, auctioneer Julian Augustini opened this auction with a vendor bid of $1.35 million. Three bidders joined in and the property eventually sold for $1.51 million.

51 McGregor Middle Park was a strong sale at $2.27m for John Holdsworth of Hocking Stuart – who like British Paints just keeps on keeping on. Land is hard to estimate but it looks to be well north of $5000 per sq metre if we saw house value in its unrenovated form at $450,000. This time last year nobody would have turned up let alone bid on this even under $2m. Not because it is not good but because that was the market then.

James Auction Report: This corner property was buzzing with a crowd of 110 gathering from all angles. Andrew Stuart got things rolling with a vendor bid of $1.7 million and three bidders joined in. The property was on the market at $2.15 million and sold at $2.27 million.

Happy Wife Happy Life

Bentleigh: 22 Yawla. Nick Renna - Mr Dynamo firing up a huge crowd of 100 to a 4 bidder final result of $1,065,000.

It’s 6pm Saturday and the James Clearance Rate for million-dollar-plus auctions is 68 per cent on the 19 auctions we attended today.

In this week’s Market Wraps, we are most appreciative of the time and effort Scott Patterson of Jellis Craig (Boroondara), Iain Carmichael of Bennison Mackinnon (Stonnington) and David Hart of Buxton (Bayside) put into answering our Market Wrap questions. As this weekend is a quieter weekend, with weaker homes and land sales and smaller turnover, we thought the focus should be on a Q&A with quality, key agents on what to expect between now and Christmas.

Please note Chinese translation pdf to the right of this article.

But onto our Market Insight. Buyers – a time to perhaps keep your head?

We think the hot topic of today is definitely buyer panic. You can see it at auctions, you can hear it in buyer voices at opens and you can feel selling agents are thinking we are back to 2007 buyer mindsets.

As a buyer, you can panic if you wish; that is your prerogative, but there is no need to do it and there is no value add for you, the buyer, while you are in that state of mind.

Yes, the market has moved and, yes, it is still rising and, yes, it is hot. Many credible agents have been advising for some time that “now” was a good time to buy – that “now” was last year and early this year – that “now” was five years ago. We are at another “now” – now. So is it a good time to buy or should we throw up our arms and say it’s all too hard?

Look, why not throw up your arms and give up? Or why not just go and buy something – anything – just something to get off the treadmill of inspections, bid and miss.

Why not? Because such a decision could lead to a lesser, unhappier life for you and your family.

When the pressure’s on, when – to use sporting parlance – you are in the premiership quarter or, if you are a golfer, when you are on the back nine on Sunday, or, if you run marathons, when you hit the wall at the 36km mark, when the real pressure is on, do you achieve anything by giving up? No. The “winners” are those that can keep their head and make good decisions under pressure.

And there is no doubt that buyers in the $1 million to $4 million range in Inner Melbourne are under considerable pressure right now.

So let’s look at the pressures. Let’s examine what is happening in the market and then let’s look at some practical solutions.

Pressure No 1: Overseas Demand: Scott Patterson from Jellis Craig (the full interview, full of interesting insights, is in our Boroondara Wrap below) pointed out broadcaster Neil Mitchell’s article in the Herald Sun examining our population increase as reported by the Bureau of Statistics. (It was a good article: http://www.heraldsun.com.au/opinion/how-many-is-too-many/story-e6frfhqf-1225780951508). But let’s move on from the article’s point as to whether we should be encouraging population increases. The fact is that we are actually having migration increases, have been having them for a long time and, from all reports, we will continue to do so for decades. Population is the key to Demand and Migration is the key to major price shifts (new ideas, new money, new price levels). So what evidence can we see of this in the market? The clearest evidence is at auctions (if you attend them) and statements from Marshall White and Jellis Craig that 25 per cent of their sales over a million dollars in Boroondara (Hawthorn, Kew, Canterbury) are to Chinese or Asian buyers.

Pressure No 1a: Local Demand: We are experiencing a mini baby boom, more family homes now, and, in 20 years’ time and beyond. That will put more pressure into the housing market. But, right here and now, local demand is very strong and that is best evidenced by the fact that, despite the world being in the greatest recession/depression since the last depression/recession, there is genuine talk of interest rate rises in Australia from Glenn Stevens of the Reserve Bank. This, in our opinion, proves that people are feeling good, acting on it and this is shown locally in, say, Bayside (Brighton) where there are some overseas buyers but nowhere near the same extent as in Boroondara (Kew, Balwyn etc); however the Bayside market is buoyant and also rising steadily and, while not at the same level as Inner Eastern, is fast approaching the 2007 price peaks and will, in all likelihood, surpass them before Christmas. Bayside demand is still largely driven by local buyers.

Pressure No 2: Supply: While right here and now in early October 2009 we are seeing some good supply, this, according to the best advice from selling agents, is a small window created by the Melbourne sporting and religious calendar. In Spring, there are three key weeks for stock: the first week in September (to get it sold before Grand Final), the first week in October, after Grand Final (to get it sold before Melbourne Cup), and the first week in November, after Melbourne Cup (to get it sold before December and Christmas). This week, we have experienced the second of the three one-week bursts and there were literally hundreds of homes brought onto the market in the past week. However, there will not be that number next week or the week after. We are in an overall low stock environment right now and that is confirmed by figures such as from Scott Patterson of Jellis Craig: year to date Jellis Craig in 2007 – 909 auctions; YTD in 2008 – 794 auctions and YTD in 2009 – 700 auctions. Marshall White, the other dominant Boroondara agent, reports similar drops in activity. It is the same in Stonnington (Toorak, Malvern etc) and Bayside (Brighton to Albert Park).

Why is this happening?

Three key reasons:

1. Overseas buyers find it easier to buy than last year and do not have another home to onsell. Increased demand and reduced supply.
2. Local buyers are buying homes for their future generations. Increased demand and reduced supply.
3. We are an increasingly wealthy society and homes are seen as a store of wealth and many can afford to hold multiple homes as investments. Increased demand and reduced supply.

As an aside, reasons one and three are actually encouraged by government through FIRB changes and the negative gearing tax regime.

Adam Smith, in his book Wealth of Nations back in the 1700s, said, and we, as agents, witness this every day; when demand goes up and supply goes down, then price, without artificial interference, will also go up and the stronger the demand and the weaker the supply, then the greater the price increases across the board.

So, for buyers, the pressures are very real. But you know that.

On top of these pressures, buyers who read and listen may also be influenced by commentary, some of which is not necessarily well informed. These comments, while well meaning, can also spook “panicked” buyers into changing course.

Remember the doomsayers of last year? Well, the world didn’t end.

Equally worrying can be seemingly well-informed commentary such as an article I read recently by Tim Lawless from the respected RPData. It stated “That capital growth apartments are virtually on par with detached houses … This puts to bed the myth that houses appreciate at a faster rate than units.” (See http://www.realestate.com.au/doc/Resources/News/tim-lawless-units-versus-houses.htm).

While by some statistical twist this may appear true, in practical terms we strongly disagree that this is a helpful or relevant comment in Inner Melbourne. And these sorts of statements may encourage the wrong buying action.

Across the board in Inner Melbourne, the above statement is not true and, in fairness to Tim, he may not have meant it to be read in such context. Also in fairness when you look at the reported $15m paid for the Melburnian Penthouse this week through Ross Savas of Kay and Burton, or you just look at the incredible growth in some bottom rung 1 and 2 bedroom apartments in say Hawthorn recently, you may correctly argue that some apartments are money spinners. And finally it is fair to say that a small number of investors dealing in multiple apartment purchases with very sophisticated purchase and “flip-on” or purchase and hold strategies have made excellent returns. But overall if the article was meant to imply that apartment buying was the almost the same as home buying in terms of capital growth ceteris paribus (with other factors being equal) then we find the article not helpful and therefore we feel these sort of blanket comments, around one selected statistic should be qualified a lot more than what they are.

Labouring the point a little, yes it is true that there are some well performing apartments (yes, we buy apartments) particularly in the suburbs, particularly low rise and particularly brilliantly located ones. So, yes, some apartments have performed very well BUT there are vast numbers of apartments out there that have been investment dogs (for all except the developer) and, if these sorts of articles encourage younger people (who can afford to buy either land or apartments) to buy apartments instead of well-located land as their new family home, then it is doing a great disservice to those people if longer term financial outcomes are important in their considerations. I will leave this for another day, but I ask the question: what about resales v new apartments in the RPData figures? What about Docklands, St Kilda Road, half of Port Melbourne (eg the big blocks not on the beach)? What about suburb by suburb comparisons, such as below?

Government – Valuer General Median Prices:

Hawthorn

2003 Homes $662,250; 2003 Apartments $313,700

2008 Homes $1,292,500; 2008 Apartments $372,000

Five-year increase homes – 95%.

Five year increase in apartments – 18%.

Toorak

2003 Homes $1,450,000; 2003 Apartments $430,000

2008 Homes $2,600,000; 2008 Apartments $560,000

Five-year increase homes -  79%.

Five year increase in apartments – 30%.

Brighton

2003 Homes $886,000; 2003 Apartments $475,000

2008 Homes $1,550,000; 2008 Apartments $590,000

Five-year increase homes -75%.

Five year increase in apartments – 24%.

Port Melbourne

2003 Homes $560,000; 2003 Apartments $475,000

2008 Homes $775,000; 2008 Apartments $478,500

Five-year increase homes – 38%.

Five year increase in apartments -1%.

Do these figures prove we are right and Tim is wrong? No, we respect the work of RPData, and we use their stats. What this proves is that figures can be made to say anything. Practically speaking, and all things being equal, we would encourage all young buyers to think position first, land second and building (apartments) third. Of course, with spousal approval being even more important than position. If your buy is more than emotional, consider land before apartments, if you can afford it.

Wars are not fought over apartments; they are fought over land. And finally with any data analysis (including ours), if you throw enough ingredients into every different soup, then they all taste the same.

Please don’t panic and change course or just react to a headline because you are under pressure!

But I digress. Continuing with Buyer Pressures which are real and increasing. Do you give up or make poor decisions? Is your case hopeless?

Practically, let’s look at a sample of what we have bought in the past month of September. These homes are worth a million dollars or more.

Northcote (Jellis Craig): couple who wished to move from Outer Melbourne, considered Kew etc and then decided the Fairfield area was more affordable. Great purchase at auction: a lovely renovated period home, with good land content, near shops and Fairfield station. Over a million.

Toorak (Marshall White): Over $2 million, this home had been sitting around for months and months with several agents as well. With $300,000 spent on cosmetic renovations, this home will be simply stunning and will have made up for any market movement in the six months it took to find. Land content more than 70 per cent of the price. We love quality stale properties when the market meets the asking price.

Sandringham (Biggin and Scott): Lovely family home bought at the second attempt to buy for around a million dollars. Good position, street, land content and north-facing rear.

Brighton (Kay and Burton): Family home twice offered, bought after four weeks of negotiations for a fair price to both buyer and seller. Good selling agent work. Over $2million.

Canterbury (Marshall White): More than $3 million. Block of land in Canterbury’s Golden Mile bought after two previous attempts for this client. Great land.

Balaclava (Beller): Off-market: Great initiative by buyer who found the home with a letterbox drop and then asked us to negotiate with the appointed selling agents. Robust but pleasant negotiations and a fair price to both parties. Great land and well done to buyers who did something different but then were smart, not cute, when it came to doing a deal. More than a million dollars.

Hawthorn (Jellis Craig): Off-market: Boardroom auction. Flexible buyers who had tried with us to buy three homes before – kept their nerve – adjusted their PPP (Price, Property and Position) and still bought in a good location with a reduced budget and it’s still a good solution for an expanding family. Over a million.

Hampton (Hodges/JP Dixon): Over $2 million. These clients had been looking for more than two years (with us). Saw it and we bought it pre-auction. In one of Melbourne’s great locations (Hampton Beach, Railway, Shops and Brown Cow). Good land and a brilliantly designed and built home.

South Yarra (Hocking Stuart): Over $1 million. This was the clients’ second attempt with us, but they stayed true to what they wanted and could afford and just shifted suburbs a little. Good land content.

But, please, we are not claiming a perfect strike rate – a sample of where we missed at auctions. Richmond, Camberwell, Surrey Hills, Glen Iris, Mont Albert and Malvern during September in various $1m to $4m price brackets.

Our point is that the successful buyers didn’t give up (not even after two years) and still bought sensible (yes some strongly priced) well located, good land content, workable floor plan properties.

It’s not the price now (within some parameters), it’s the quality of what you buy that will protect you into the future.

Please for young people in particular (if you haven’t nodded off) all of this is to encourage you not to panic, but to stay your course and to not jump at shadows. The market will not be easier in the future; it will be harder – act now (if it makes sense – if not keep looking till it does). When you act do so with streetsmarts. Don’t bury your head or just buy or, worse still, buy crap. Think!

1. Understand clearly what you want emotionally (room for future children?) and financially (growth for your next purchase?) both now and in five to 10 years.
2. Make a plan and, in that plan, understand the value of land content, happy wife and happy life, floor plan flexibility and position.
3. Act on that plan with an accurate assessment of your needs match and values.
4. Negotiate to buy well, not buy poorly or just keep missing out.
5. While understanding that selling agents work for the vendor (always), we would still encourage you to listen to quality selling agents that do tell  truths. We learn more off them than any other group of property professionals.

Finally, we know you are under pressure. While it is almost always better to miss an opportunity than make a mistake, sometimes continually missing good opportunities becomes a mistake.

If all else fails, ring us.  We may be able to help you achieve your dream.

Apologies if it’s sounding like a lecture – we are genuinely trying to help.

Stay cool, buy well and be brave (at the right time).

Mal

PS We all really enjoy the people that come up to us at auctions and open for inspections. It’s good to meet you.

Elsternwick, 7 Seymour: Bill Stavrakis at his mercurial best. Bought $1.66 million.

Albert Park, 41 Cardigan Street: Geoff Cayzer entertains a big crowd. Bought for $2.7 million.

Approaching 80 per cent of the 18 reported auction results for Bayside this weekend – that is as strong as it has been all year.

25 Orchard Street Brighton - Trudy Biggin of Biggin and Scott

James Home Rating and Comments: 577 out of 1000. Land only, or is there some value in this home on this small Brighton north-facing block?

James Control Price: Dirt $1,125,000 + House $200,000 = $1,325,000.

James Auction Report: Three bidders from the crowd of 60 were interested in this property. Opening with a genuine bid of $850,000, this property was on the market at $1 million and quickly sold for $1.035 million.

James Post-Sale Examination: No value placed in the house – we were too strong. With three bidders, and on the market through a good agent, the market is saying the land was worth $2300 and the home nothing, or the home was worth a bit and the land at, say, $2000 per sq metre. I think land is getting stronger and stronger in Bayside and the market judged the home to be of minimal value.

50 Service St Hampton - Halli Moore of Buxton

James Home Rating and Comments: 760 out of 1000. Great Sandringham/Hampton timber home. Really good spot – light is still pretty good, even though south-facing rear and not the biggest back yard. Good flow and quality throughout. If they price this at market, it will have very solid interest. Ready to move in and has lots of WOW.

James Control Price: Dirt $1,133,900 + House $1,000,000 = $2,133,900.

James Auction Report: A large crowd of 100 people gathered here for this auction. It opened with a $1.9 million genuine bid and two bidders joined in but there was no result, with the property passed in at $2 million. Sold afterwards for $2.2 million.

James Post-Sale Examination: Spot on and this represents a 24 per cent increase since it last sold in early 2006. Is land in Service St Hampton approaching $1800 per sq metre? Yes, if the home value is put at $1 million. This still is a good result for agent Halli Moore of Buxton.

41 Cardigan Place Albert Park – Michael Szulc of Cayzer

James Home Rating and Comments: 665 out of 1000. She is a beautiful lady in need of a serious internal facelift – stairs and bathrooms. But stick with the old girl, as she is worth it – good rear light and car access and sensational location. It’s hard to overcapitalise and, if you can handle the stairs, then this is the place to buy to be near absolutely everything. Price-wise this will be interesting: is land worth $6000 a sqm in these parts and what does the market value this building at?

James Control Price: Dirt $2,172,000 + House $400,000 = $2,572,900. Terraces go in and out of popularity, so not sure there will be a host of bidders here on Saturday – not because there is a problem with this but because there are usually only one or two bidders. Let’s see what the market says. James Control Price: points of reference were 35 Vincent St on smaller land, 333 Montague St, 348 Montague St and 353 Montague St Albert Park.

James Auction Report: A crowd of 150 watched Geoff Cayzer kick this off with a vendor bid at the $2.2 million quote. With three bidders in the contest, two fought it out to a healthy $2.7 million result for this gracious old beauty (the house, not Geoff).

James Post-Sale Examination: Spot on for bidders and price. Good result for agent Michael Szulc – whom we think is a good agent and we like to talk to. So is land valued at $6000 per sq metre and the terrace home (which needed an update) around $900,000 or is the land valued at $7600 per sq metre and the home $400,000? This is where the market does seem to be consistent on like-with-like sales and you do have a number of homes with similar characteristics. When “valuing” yourself, it is important to consider these sales. As for land value in Albert Park – because of the small sizes, few vacant land sales and high prices – the only consistency in land prices here is their inconsistency.

Happy Wife Happy Life

Gerald Delany of Kay and Burton bringing the hammer down.

Sandringham, 9 Codrington: Steve Tickell. Passed in for $1.47 million.

A few mixed results in Bayside again today, but mid-week JP Dixon got away a big apartment sale in the Sandown St Golden Mile complex at just under $4 million. That is almost $20 million-worth of apartment and townhouse sales in a week and a bit for Brighton’s big end of town.

Some more significant sales: white-hot Justin Follett sold 77 Well St Brighton during the week for $3.3 million. It was an expressions of interest campaign. If it’s a new developer home in Brighton worth more than $3 million, then, right here and now, Justin seems to have a stranglehold on selling this market. Also from Kay and Burton, the dapper Sturt Hinton quietly unloaded the unfinished and off-market 14 Tennyson St, believed to be north of $4 million. The Willansby St development continues to be well received, with another two sales during the week. The power of location.

10 Harwood Street Brighton – Nick Johnstone, JP Dixon

James Home Rating 768 out of 1000. We like this home a lot. It has a really good family feel and excellent flow in home. 1920s, very well-renovated four-bedroom home. Despite having a south-facing rear, the large side and rear windows let in a lot of light. Position-wise, you could argue this part of Brighton is a little far from the shops but, then, you could also say it’s close to the Bay. I would be most surprised if this was not well received by the North Brighton/Elwood $3 to $3.5 million buyers.

James Control Price: Dirt $1,920,000 + House $1,400,000= $3,320,000 Reference points for land were Drake St Sales such a 1-4 with Buxton in July 2009.

James Auction Report: About 80 people turned out for this auction, which opened on a vendor bid of $2.85 million. Three bidders joined in the action. After a half-time break at $3.06 million, auctioneer Jonathan Dixon announced that the property was on the market. There were no further bids and it sold for $3.06 million.

James Post-Sale Examination: We think we were too bullish on home value on this one and should have had the home around $1.1 million – effectively single level. The market seems to see a home price barrier at around a million for anything single level. One for the memory bank. The result seemed market – it was us who was out. Still more than $3 million for North Brighton though.

11 Butler St Brighton – John Clarkson of Hocking Stuart

James Home Rating 768 out of 1000. Close proximity to school and shops. Good building block and house is livable for the time being. Last one in the street flew at auction.

James Control Price: Dirt $1,462,500+ House $100,000= $1,562,500 Reference point 3 Butler St which sold at $1.47 million under intense competition in April.

James Auction Report: There were four bidders from the crowd of 80 at this auction. Opening with a genuine bid of $1.15 million, this was on the market for $1.2 million and sold for $1.665 million.

James Post Sale Examination: Interested to see because it is rare to get such like with like. This says the market has risen 13 per cent since April for building blocks in this area. And that was when we thought 3 Butler was a stellar selling result. Pretty well as expected result but, nonetheless, this is a bulldozer home and if so then a towards $3 million buy.

Happy Fathers Day.

Port Melbourne, 6 First Point: A large crowd of about 90 people turned out for this auction. Auctioneer David Wood of Hocking Stuart opened with a vendor bid of $4.75 million but there were no takers and the property was passed in at this price.

Auctioneer Kaine Lanyon opened this auction with a vendor bid of $1.5 million and no result.

Bayside was alive with the sound of keys changing hands.

Well, except for 6 First Point at Port Melbourne – beachfront. Our auction report: A large crowd of about 90 people turned out for this auction. Auctioneer David Wood of Hocking Stuart opened with a vendor bid of $4.75 million but there were no takers and the property was passed in at this price.

Moving South

To the big one that did sell, which was with Kay and Burton, at 23 St Ninians Road. It was a three-bedroom Golden Mile beachfront apartment selling towards $6m. On top of the two $3 million-plus Male St sales last week, it has been a big week for Kay and Burton’s Church St office and, in fact, Brighton.  With just over 300 sq metres at St Ninians of internal area, that works out around $18,000 per sq metre, or similar to the record sales reported at the Salta Mercy Development in East Melbourne before the GFC. It does also have 200 metres of external courtyard and four car spaces and is beachfront. Nonetheless, this is better than what Toorak and South Yarra have been doing in terms of townhouse/apartment sales.

And speaking of apartment sales and Kay and Burton, two sales over a million dollars reported at the 30 Willansby Avenue development, which is out the back of the old Bowling Club development.

7 Blairgowie Court Brighton. Sold after at $2.04 million with Peter Kennett of Hocking Stuart. Our auction report: About 40 people gathered inside for this auction. Auctioneer Peter Kennett opened with a vendor bid of $1.8 million and was eventually able to extract a bid of $1.9 million from the sole bidder on the day. There were no further bids and the property was passed in at this price. This says land values are holding strong in Brighton. House value $400,000 would make land at $2500 per sq metre; however, if we look at it as a bulldozer or no value like 7 Cosham St Brighton, which also sold with Peter Kennett a month or so ago, then both got north of $3000 per sq metre improved.

Moving South

Hampton: 2 Ocean St Hampton with Steve Tickell and Jenny Dwyer of Hocking Stuart interested us as it sold last year for $967,000. The 2008 auction was very quiet and it was passed in and bought after for $967,000. Then came the Global Financial Crisis and doom and gloom. This is our auction report of yesterday: There were five bidders in the crowd of 60 at this auction. It opened with a genuine bid of $910,000, was on the market at $1 million and sold for $1.155 million. Nothing was done to 2 Ocean St and it resold for a near 20 per cent increase. It’s good money if you can get it. Location. Location. Location.

Moving South

13 Prospect Grove Black Rock (two streets back from beach and shops) with Garry Murphy of Hodges sold for $1.135 million. It was land only and that says land is $1746 per sqm in that immediate area. That is Golden Triangle prices; mind you, it is just as close to the water and shops as some of Black Rock’s outer Golden Triangle.

Moving South and still with Hodges – Errol Driver and Suzi Finch at

3 Bodley St Beaumaris

James Rating 715 out of 1000. This house has a great feel and would suit a younger family well. Really like the way light is brought in to the rear living areas and bedroom separation and car garaging is good. Given level changes, rear yard and pool is a little higher than the internal floor area. This is not ideal, yet you do have good views out to the backyard from the kitchen area, which is important. Well presented home offering alternative living areas for a variety of family needs. Perhaps could have done with an extra bedroom upstairs, depending on your needs. Easy walking distance to The Concourse, schools, beach and parks.

James Control Price: Dirt $942,000 + House $300,000 = $1,242,500

James Auction Report. About 35 people witnessed this auction, which opened with a genuine bid of $1.2 million. On the market at $1.315 million, three bidders pushed this to a sale under-the-hammer of $1.355 million. Errol Driver is an auctioneer we like: on time, succinct and gets the job done.

James Post-Auction Examination: Our land was right but the market said the home was worth $400,000 and, upon reflection, we agree that was not unreasonable. Good home – well  done to the purchasers.

Finishing off with a good result also with Hodges and also with Suzi Finch at 2 Tramway Parade (just around the corner from Bodley on similar land size) which sold for $2.15 million.

Happy Wife Happy Life

I have known Gerald a fair while and he is without peer in a number of beachfront high-rises as far as selling goes. He’s very patient, is good at following up and will meet you out of hours. Gerald has many contacts and has sold a number of apartments several times over. If you ask and listen, you can learn a lot from Gerald about where to be and where not to be in many apartment block situations. He represents his vendors strongly on price at all times, so keep thinking when you are talking to him.

Mal: Family status and where do you live?
Gerald: I am married to Suzie and  have six children, three boys and three girls. I live in Glen Iris, having moved from Port Melbourne three years ago to be close to private schools.

Mal: How long have you been in real estate and what is the company you work for?
Gerald: I have been in real estate for 12 years and work for Marshall White out of their Armadale office.

Where do you mainly work (area) and what types of homes do you specialise in?
I specialise in the Bayside suburbs from Port Melbourne to St Kilda and sell a lot of high-end apartments and houses.

What makes a good investment?
A property that has location or views, or both, that is desirable to most people. It need to have something special. Normally one that rents well and has good capital growth. Apartments: normally smaller blocks, secure, strata titled, parking, good lease, sometimes older style, preferably not main road, must have outdoor space, heating and cooling and be low maintenance.

What makes a good family home?
Assuming that a family has two or more children, a good family home will have two living areas, master bedroom  away from the children’s bedrooms and some outdoor space and preferably close to shops and transport and schools.
Off-street parking is very important.

What makes a good buying decision?
Have a budget, and a list of requirements and make sure that the home ticks 80% of your boxes.

Best investment decision you made?
Buying two bayside apartments off the plan in 1998.

Worst investment decision you made?
Selling one of these apartments.

What are the top three precincts in your area, how big is an average block, what type/style of home, what is the dirt price and how much for a renovated home today?
The three top precincts in my area are Middle Park, Albert Park and Port Melbourne.  The blocks vary considerably and views of the water can add thousands to the price. Beacon Cove, which is Port Melbourne, is a suburb on its own and is made up of apartments and houses.

•1. Beacon Cove

•2. Beach Road – in particular HMAS Lonsdale

•3. St Kilda West

Note: Gerald provides more indepth views in audio (see link above).

Three underrated streets in your area for family home buying (where, price, type and style, would they have to renovate)?

•1.     The five Port Melbourne towers with water views

•2. Beaconsfield Parade

•3. Richardson Street

•4. Page Street

•5. McGregor Street

Note: Gerald provides more indepth views in audio.

What would you say to a young couple with $800,000 looking for a family home specifically in your area – eg (where, type and style, would they have to renovate)
It is very hard to find a property of any size in this area for $800,000. Possibly only a single-fronted property that needs a lot of work.

What would you say to  a downsizing couple with $1.5 million specifically in your area (where, type and style, would they have to renovate)?
For $1.5 million in our area, you would buy a three bedroom apartment, a house in Beacon Cove or a renovated single-fronted house. You may find a double fronted house that is in need of a major renovation.

Buyer Agents yes or no?
Depending on the time you have to look.

Apartments or Houses?
Apartments are great, as there is no maintenance and you can lock them up and get away.

Auction or Private Sale?
We are a strong advocates of the auction system but sometimes it will depend on the property.

How can a seller maximise their value at sale?
Put your property in the hands of a good experienced agent and let them run the campaign. Be realistic and be prepared to meet the market.

What are the do’s and don’ts for buyers when dealing with selling agents?
Let them know what your requirements are and don’t deviate. Be honest and a good agent will return the favour.

What do you think are the opportunities now with us?
Water views.

Note: Gerald provides more indepth views in audio.

Where is the market going in 2009 in your area?
I believe that Bayside prices came off in 2008 and have now stabilised. Prices  will stay steady throughout 2009. People everywhere around the world have always been attracted to water and that won’t change. People are looking more for lifestyle. This area is only 5k’s from the city and an area that people flock to for their social life.

Note: Gerald provides more indepth views in audio.

Who will win this year’s premiership and why?
It will be a Hawthorn v Geelong GF again and I think Geelong.

If a potential seller would like an appraisal or wishes to sell their home, how is it best to contact you and what are your details? Mobile 0418 371855  Email: gerald.betts@marshallwhite.com.au

The Boardroom Auction is back on the agenda. There are traps, pitfalls and strategies required with a boardroom auction. However, in many ways, a properly conducted boardroom auction is a transparent way to conduct business. The jury seems to be out on whether or not a boardroom auction is covered by the auction legislation – meaning different selling agents do have different opinions. It seems black and white to us and the REIV has issued memorandums on the subject, but many selling agents are still unclear when the 2003 Dummy Bidding Government Rules apply.

Traps for buyers:

• A boardroom auction called without a reserve or acceptable offer.
• Not understanding the pressures involved in a boardroom auction.
• Not being clear on process – the rules.
• Intimidatory tactics from agents (deliberate and inadvertent – this is becoming rarer).
• Not being ready in time.
• Not having a clear mind on your limits.
• Not even knowing it was on and seeing your dream property sold without reference to you.
• Paperwork.

Strategies

• Preparation.
• Plan.
• Process.

We have dealt with these agencies below and found their boardroom auction behaviour credible and transparent. The agents/principals named in brackets are people we have seen display consistent elements of credibility and we have a solid dose of trust in what they say. So, if you have doubts, don’t wish to get buyer representation and need to check the legitimacy of what is happening, then contact the principals/selling agents mentioned to check the rules. Note that we’re not saying to ask them for advice re money or whether it is right for you - they are working for the seller. Just ask these selling agents to confirm the process is fair dinkum and not a sham. We prefer all responses in writing with a signature.

• Hocking Stuart – Bayside, Hawthorn (Steve Tickell 0418 177 565).
• Bennison Mackinnon – Albert Park and Armadale (Iain Carmichael 0418 850 988).
• Kay and Burton – South Yarra (Mike Gibson 0418 530 392).
• Jellis Craig – Hawthorn, Glen Iris (Tim Picken 0419 305 802).
• Nelson Alexander – Carlton (Tom Roberts 0418 553 680).
• Marshall White – Hawthorn and Armadale (James Connell 0418 312 907).
• Biggin and Scott – Port Melbourne (David Lack 0418 996 265).

Over the years, we have found a number of boardroom auctions / expressions of interest to be less than straightforward. Some commentators suggest that you contact the REIV or Consumer Affairs or whoever if you find that is the case. But how is that going to help you? The deal is done and you have either paid an uninformed amount or you are out of the picture.

If you smell a rat, are scared or unclear, you really do need to consider getting experienced representation. In fact, you should consider representation even if the auction seems ridgy-didge. Boardroom auctions – the large majority of which are legitimate – are still about preparation, homework and strategy; that is, they are if you wish to maximise your chances of making the right decision under pressure.

Case Study – 25 Clive Road Hawthorn East – sold in a boardroom auction in April.
Interview with Glen Cortinho, Director, Hocking Stuart Hawthorn.

Kris: Thank you for your time Glen. Why did 25 Clive Road, Hawthorn East end up as a boardroom auction?
Glen: My pleasure Kristen. Good to see you again. Here are the reasons:

• The owners were away and didn’t want to go through opens on their return.
• The objective was to test the market and see if we could get a satisfactory offer before running the full campaign.
• 30 people turned up at the first open. This was a slight surprise as it was advertised on the Internet only.
• Based on that inspection, we knew the property would sell well, as there were four interested parties that we assessed were willing to offer more than what we thought the reserve would be.
• The highest expressions were around $1.6 million, which then became the acceptable vendor reserve.
• By Wednesday, we had received two expressions at $1.7 million.

Kris: What was the process from there, Glen?
Glen:

• The paperwork was then sent out to all interested parties with an advice that the property would be auctioned at 5.30pm on Thursday.
• On Thursday, we confirmed instructions with the vendor and all buyers that we knew of were phoned and advised of the process. We advised:

1. where the auction would be held.
2. when.
3. that buyers would need to have had legal advice, as there would be no cooling-off period.
4. all parties were told that $1.7 million had been offered and accepted, unless a higher bid was made.
5. that they needed to have a 10 per cent deposit.

Kris: What happened on the day?
Glen:

• Four parties turn up and bidding was opened at $1.7 million.
• It was announced that the property was on the market.
• It was  sold in ones and fives at $1,754,000.
• Two bid and two watched.

Kris: If you could put your buyer’s hat on, what do you think of boardroom auctions?

Glen: Positives:

• Transparent
• Private
• Minimal peer group pressure
• Over and done with – if you are going to get rolled
• Small numbers

Negatives:

• Can be intimidating with face-to-face opposition. If you feel this way, you should consider having representation.

Kris: What things do you need to make sure of before you attend a boardroom auction?

Glen:

1. That the contracts are reviewed.
2. Need to be sure that an acceptable offer has already been offered.
3. Need to have acceptable offer confirmed by auctioneer at start of the auction.
4. Need to know that the agent has got instructions to sell then - ie the vendors can sign.
5. Need to know your limitations.

Kris:  Dummy bidding at boardroom auctions – your thoughts?
Glen:  Agents would be in breach of laws. I’m not prepared to jeopardise my licence.

Kris: Any other thoughts?
Glen:

• If you are a buyer you must tell the agent that you are interested in the property, otherwise you won’t know a boardroom auction is even on.
• Talk to the agent and, if the agent is not helping you, perhaps go and see the principal and, if that doesn’t work, perhaps see a buyer’s advocate.
• If this is all new to you, then you really should consider appointing an advocate.
• My preference is to do an auction on the street because of publicity and atmosphere. The reason we do it in a boardroom is because we are forced to by a buyer offering pre-auction.
• You can’t do boardroom auctions by phone. That is wrong, in my opinion.
• Even if it’s sounding a bit shonky, you still have to work with that agent. But you should get representation.
• It’s no longer about squeezing buyers, because we have an offer a vendor will take. It’s about being fair to all buyers. Sounds a bit corny, but that is up to you to believe or not.

Kris: Glen, thank you for your time. If you are a seller wishing to get an opinion of value and sell your home in the Kew/Hawthorn area, you could do worse than talk to Glen. His contact details are 0409 779 399 or email gcoutinho@hockingstuart.com.au

EXECUTIVE SUMMARY
Geoff with his silver hair is the most recognisable agent and auctioneer in Albert Park, having been round for decades. He always has a smile on his face and in our opinion genuinely trying to help all he comes into contact with especially his selling clients. His auctioneering style is warm and humorous and most of all effective. When speaking with us we have found Geoff’s quote on vendor expectation, price and eventual result to be as close to 100% accurate as anybody can be. We don’t get that many calls from business owners about properties for our clients but we do from Geoff. One quirky point – never seen him on a mobile and we’re not sure if he has one.

Mal: Family Status and where do you live?

Geoff: Married with 2 daughters and have lived in the Middle Park area for some 30 years.

Mal: How long have you been in real estate and what is the company you work for?

Geoff: I have been in real estate since 1976 after being a live stock auctioneer for some 13 years, and formed Cayzer Real Estate in 1986.

Where do you mainly work (area) and what types of homes do you specialise in?

Our company specialises in the inner city precinct encompassing Albert Park, Middle Park, South Melbourne, Port Melbourne, Docklands & St Kilda. Most of the houses in these areas are of a Victorian or Edwardian nature on small allotments

What makes a good investment?

A good investment in one that gives you consistent return or capital appreciation

What makes a good family home?

This could be best described as one that has a good balance of house to land, and offers good accommodation for the quiet enjoyment of the occupants.  The location of such a home is important as are the services and sporting facilities surrounding that immediate area.

What makes a good buying decision?

The decision to buy is something that people consistently put off.  Over that period the property market has generally increased naturally depending on the area.  It is important to be positive with the purchase of a property that meets your criteria and price range.  Only time will tell whether that was a good buying decision or not.

Best investment decision you made?

My first house which was deemed to be the most expensive in the street at the time

Worst investment decision you made?

Buying shares

What are the top 3 precincts in your area, how big is an average block, what type/style of home, what is the dirt price and how much for a renovated home today?

Answered on audio

3 underrated streets in your area for family home buying (where, price, type and style, would they have to renovate)?

These 3 street offer a blend of renovated and un-renovated homes and are varying in their land size.

The three underrated streets that I would nominate would be:

Beaconsfield Parade, Albert Park/ Middle Park ($1 – 3 million)

Hambleton Street, Albert Park/ Middle Park ($700K – 1.4million)

Henderson Street, South Melbourne ($800K – 1.3million)

What would you say to a young couple with $800,000 looking for a family home specifically in your area – eg (where, type and style, would they have to renovate)?

If a young couple had $800,000 looking for a family home in our area we could only direct them to a single fronted property of 4 main rooms.  One of the problems we are striking is that young couples are outgrowing their homes and purchasing in run off areas such as Port Melbourne, St Kilda East and Elwood.

What would you say to  a downsizing couple with $1.5m specifically in your area (where, type and style, would they have to renovate)?

If a downsizing couple had $1.5million to spend, they could obtain a comfortable Victorian or Edwardian terrace home of 6 rooms (3 bedrooms).  The cross section of homes could be 2 storey balcony terrace, small double fronted Victorian or a Victorian Double fronted weatherboard with good land.  Another alternative may be to buy a new fully renovated town house of 20 squares of more.

Buyer Agents yes or no?

We strongly endorse the suggestion of Buyers Advocates in the support of purchasing a property by inexperienced buyers lacking confidence in their ability to research specific properties

Apartments or Houses?

We would recommend the purchase of apartments or houses across the board.  These are two entirely different markets and are in most cases price driven.  It is not usual for a purchaser to commence looking at a house to find that their budget does not align with the asking price.   They therefore can purchase similar accommodation in the apartment form which may have extras such as elevation, balconies and car parking.

Auction or Private Sale?

We strongly recommend the auction system in our specific area.  It is often said that an auction is a private sale with one extra line stating the date and time of the auction.  In most cases all the procedures set for a private sale are done for an auction also.  There is no three day cooling off period with an auction as there is with a private sale.  Any offers made prior to, at or within three days of the auction, must be of an unconditional basis.

How can a seller maximise their value at sale?

To maximise the value of the sale a vendor must do all things necessary to attract multiple buyers and create competition for their house.  In a lot of cases values are not reflective of the accommodation offered but more the presentation of the product.

What are the do’s and don’ts for buyers when dealing with selling agents?

We would strongly encourage that a prospective buyer forms an association with a couple of agents in their selective area that they can trust and be confident on the information provided.  Agents will provide extra information that is relative to the sale if encouraged to do so.  Be the agents friend!

The do not’s would be not to try to outsmart the agent at his job because they will beat you every time.

What do you think are the opportunities now with us?

Now is the best market that our Company has seen over the last ten years in which to purchase a house/apartment.  Interest rates are at their lowest point and stock prices have been reduced considerably since last year.  Be positive in your endeavours to find the house that suits you and broaden your geographical base.

Where is the market going in 2009 in your area?

The market this year will continue in its normal style with more of the same.  It is best described as a very true market where buyer and seller are prepared to negotiate a reasonable outcome. Please don’t expect vendors to dramatically reduce their price as they may not be in a position to do so.

Who will win this year’s premiership and why?

St Kilda will win this year’s premiership as they have been trying for over the last 40 years and it’s their turn!

If a potential seller would like an appraisal or wishes to sell their home then please contact Geoff Cayzer on 9699 5999 or 9690 9782 (after hours) or via email sales@cayzer.com.au

A stunning Brighton property sold last week after being on the market for approximately 6 months. The home was for sale with two local agents one of whom, I am led to believe, is closely related to the vendor. The local agents were fired and the imposing property was sold the day after through the new agent. Christmas dinner will be interesting for this family this year, it could be somewhat strained. Remember, selling a home is a business transaction.

We are aware the property market has to contend with important issues such as interest rate rises, the high cost of petrol and gloomy economic forecasting. But this weekend there was another external force that the hit and miss market had to contend with, and that was, the wind chill factor. Only the very committed and brave buyers were out this weekend.

Some suburbs such as Richmond, McKinnon and Newport enjoyed hotly contested auctions in the frigid weather. However auctions in Albert Park, Port Melbourne and Middle Park did not fare so well with their profile of buyer maybe remaining indoors in front of an open fireplace.

Auction attended this week.

One auction of note I went to on Saturday was 3 Fraser Street, Middle Park.
I rated the home 917/1000. The home is stunning. Large formal and informal rooms with soaring ceilings and period detail give the home a feeling of grandeur. Fraser Street is fully renovated on an above average block and enjoys easy access to everything this bayside locale has to offer.

In front of a good crowd Andrew Stuart of Hocking Stuart opened proceedings calling for an opening bid, he remarked to all, if he received bidding the auction would be non-referral. As mentioned previously this is a good idea in this market. No bids were forthcoming so Andrew placed a vendor bid of $2.7mil. The home was passed-in and is for sale at $2.830mil. The original quote of $2.7-$2.9mil was spot on.