What are you talking about? - course the market's OK! St Kilda East 239 Alma Road: Phillip Kingston: Bought for $1,500,000: 3 bidders (Photo Kate Agnoleto)

At 6pm on Saturday, the James Clearance Rate on the 31 auctions we covered was 58%.

Bidderman, our demand indicator of average bidders per auction, had a small rise to 1.6 bidders per auction, in part due to four volcanoes (strong auctions) including one 7 bidder auction in 28 Barrington St Kew.

These figures indicate that the market has now cooled – not frozen or falling apart, just cooled. That means we have moved into a buyers’ market, perhaps until Easter and possibly until Spring.

Well-priced homes are still selling. And there have been some surprising above-expectation results, such as 28 Barrington Kew (Glen Coutinho) which sold for $2,230,000 and, last week,Victor Road Kew (James Tostevin) at $4.1 million. But if the market doesn’t agree with initial pricing then it’s a slow, torturous journey to get a result. See our special Pass-Ins and Stales Report below.

This week we also look at the returns of serve on The Economist’s article as the ‘Experts’ hit back against the “Overpriced” headlines of last week.

This Weekend’s Market Summary:

This weekend in most places, except Boroondara, there was limited $M+ stock on offer at auction. The individual council clearance rates we report on in our market wraps could be distorted due to a) lack of auctions and b) lack of overall quality in those auctions. But this is not to imply a lack of stock in general – there are high levels of $M+ stock available across the board and Boroondara in particular is almost awash with homes on the market.

Looking specifically for a moment at Boroondara (Kew, Hawthorn, Canterbury and Camberwell), while this market may be a little out of kilter with the rest of Melbourne in terms of auction numbers, in the past few years it is a market that has shown the strongest resilience against negativity. It was affected by the GST for the shortest time, and has had the biggest price increases since. This weekend too it seemed to have a little oomph and we expect the clearance rate for Boorondara $M+ homes to be in the high 50s to low 60s.

But it does have a fight on its hands right now, with the main demand drivers (overseas buyers) reducing greatly in activity and supply to the market continuing to arrive week after week. Which means that buyers who can look beyond the headlines will find opportunities, and with the right strategies you should be in a position to push back a little against the seemingly never ending sellers’ market.

The next few weeks will be better in terms of auction quality in the top of the Top End in Boroondara. As long as those properties sell and the clearance rates stay stable, and if new stock reduces post Easter, we could move back to a balanced market. But if stock continues to come on in big numbers then the market will almost certainly remain cool with a significant change in demand sentiment.

Most of the $M+ homes on offer that sold this weekend were in the early $1 million range.

Bayside, Port Phillip, Stonnington have been quiet, with only a handful of sales in the post auction wash up from March 19th  and likewise at auction this weekend. In Port Phillip this is understandable as the Grand Prix completely extinguishes the market for almost a month. Why auction numbers are down in Brighton, Toorak and Malvern is not completely obvious – well not to us anyway. April 9th is shaping up as a Super Saturday of some sorts with almost 120 auctions in Boroondara and Stonnington combined. $M+ auctions in Bayside are still light on at the top of the Top End with mainly $1 million to $2 million homes on offer for the next few weeks leading into Easter. Most of the top of the Top End in Bayside is not going to auction.

Agent thoughts: Has the market changed since before the Labour Day weekend?
Chris Barrett, Marshall White, Hawthorn:“There have been a lot of people in the media talking about a negative change in the market since Labour day weekend, I however have found this to be unsubstantiated. As long as vendors prices are realistic and the property is presented well vendors can expect solid interest in their home.”
John Clarkson, Hocking Stuart, Brighton:“Good properties near local attractions and amenities, schools, shopping and the beach are still attracting a high level of enquiry.  Since Labour Day weekend the message is clear: If you are realistically priced you have a very good chance of selling . If you are above market perception, enquiry is reduced to a trickle.”  * For John’s full comments please see the Bayside weekly wrap.

James Special Report: Pass-Ins and Stales – The Autumn overhang build up.

We went back and re-examined all the auctions we reported on this year in 2011 and we revisited all the pass-ins, using still advertised on the net to determine their still for sale status. Please note that the table below is only connected with PASS-INS, not the homes we reported as bought before, at or just after auction on the day.

The table does make for interesting reading on the fate of a home that the market does not consider to be priced correctly at auction.

The table below shows Adjusted Clearance Rates comparing”On the Day” Clearance Rates with “On the Day plus Bought since”. Back in February 19 and 26 Pass-ins were taken up fairly quickly. However the most interesting stat is the lack of take up on Passed-in homes over the last two weeks of auctions: only 3 in 26.

• 1 of the 13 unsolds from the March 5th pass-ins and
• 2 of the 13 from the March 19th pass-ins.

This we feel confirms the view that the $M+ market started the year as balanced, but around Labour Day took a cooling direction.

What's happening Nick? Bentleigh 7 Eddys: Bought $1,312,500: 3 bidders. (Photo: David James)

James Big Issue: Agents claiming there are 100% Clearance rates in this market are just as misleading as saying the market is in freefall – both are far from the truth. Klarity Kris and Architect Adam cover it in the James Big Issue Video. Here is a summary of what they say.

• Still some surprising results. Two in particular, both in Boroondara, that stand out are Victor Avenue in Kew with James Tostevin – which sold for a hard to believe $4,100,000. Nic Franzman, Mark Dayman and Nic Ptak also from Marshall White’s result at 22 Stawell St Kew for $3,300,000. That was also a most surprising result
• We are hearing from agents 100% clearance rates – mainly due to agents feeling they need to respond to the Negativity of The Economist’s article and the Earthquakes, which for the moment have contributed to dampening demand.
• An interesting stat is that only 3 of the 26 homes we reported as passed in after auction in the last two weeks of auctions have since sold.
• We could say that 3 from 26 is reflective of the market strength – a far cry from the 100% Clearance Rate stats, BUT 3 from 26 while true, is also misrepresenting the market just as is reporting 100% clearance rates
• The market was in a balanced state pre Labour Day and as expected it is now going into a cooling phase until Easter due to increased stock levels and drop in demand intensity.

The message for buyers

• You have choice in the $3m+ range but there are still a few surprisingly strong results
• You will still have to compete relatively strongly if the home is good and well priced in that $1m to $1.5m range
• And the middle range say circle $2m to $2.5m is a bit of moving beast – the trend is not crystal clear to us at this stage.

Click on the JAMES BIG ISSUE video with Architect Adam and Klarity Kris in the middle of the home page

Media Monitor: Are Melbourne homes overpriced?

The case for being overpriced arose from The Economist’s article – which we reported on last week.  And now this week the case against those seemingly extreme overpriced by 56% headlines.

Rob Brooker head of economics from the NAB

1. Current events such as floods and Japan are affecting Melbourne short term, but long term our fundamentals are very strong.
2. Not suggesting prices are going to increase rapidly as affordability is hard pressed right now but we do have a shortage of housing stock.

His comments can be found in the excellent Kay and Burton report – sure it’s a selling tool but we listen to the expert commentary each time it’s on It’s well produced, they have credible experts and it’s relevant to our high end Melbourne market. Check it out, at least the expert comment stuff. The home fluff afterwards is up to you: http://www.kayburton.com.au/kayburtonreport

Paul Bloxham – HSBC’s chief economist for Australia and New Zealand, and a former RBA economist savages The Economist’s article stating “it’s too naive to be useful”. His main points in the Business Spectator are

1. We have an undersupply in inner city areas (totally agree with this comment)
2. Our stock is very high quality and has improved considerably over the last 20 years contributing to the increases in price paid (totally agree with this comment)
3. Very strong and improving economy (beyond our level of expertise but sounds good)

For the full article http://www.businessspectator.com.au/bs.nsf/Article/Australian-property-prices-housing-bubble-pd20110317-F24WP?OpenDocument&src=sph This was supplied by Al Craig of Jellis Craig – thank you.

‘Round the Grounds Headlines:
Boroondara- Some solid results but the trend is down under weight of stock numbers.
Bayside- Little movement on a lot of the recent Auction pass-ins
Stonnington- Small numbers of $M+ auctions today – although plenty of Top End non auction stock available
Port Phillip-With the Grand Prix – only 4 key $M+ auctions – 3 sold
More detailed analysis on our Weekly Local Council Market Wraps

Biggest Sales we can report:

• Templestowe, 9 Edwin: On the market since October of last year with Jeremy Tyrell of Fletchers. Has been bought for in excess of $4,700,000
• Richmond 37 Docker: Ken Griffith of Jellis Craig. Bought at auction, $3,300,000 – $3,500,000
• Hawthorn 23 Lisson Grove: Michael Lui of Marshall White. Bought after auction $3,600,000 – $3,800,000
• Toorak 17 Lansell, Lisa Jarrett of Abercrombys. On the market since December of last year

Biggest Sale we covered after auction: 44 Mary St Hawthorn, Antony Woodley of Marshall White. Above $2,700,000 (Undisclosed): Bought after auction, 1 bidder

Biggest Sale we covered under the hammer: 28 Barrington Ave, Kew, Glen Coutinho (Hocking Stuart), Under the hammer $2,230,000, 7 bidders (WOW)
“This Kew property did attract a crowd of 80 people, with quite a few potential buyers in the mix. The auctioneer, Glen Countinho, had to field bids from a whopping seven different bidders! Despite the light rain, the flow of the auction was quite amazing and reached the final amount of $2,230,000 before the hammer came down.” (Sonia Matmati)

Biggest Pass In: 68 Studley Park Rd, Kew, Passed in, $3,700,000
“A very pretty setting for an auction. Standing on an elevated embankment, auctioneer Richard Earle literally oversaw proceedings. He began by highlighting the virtues of this property with energy and detail. No bids came forth, however, so it was passed in for $3,700,000.”

Auction Video: This week i’ts down to Brighton with Klarity Kris at 22 Oakwood Ave, a Hocking Stuart auction with Peter Kennett. 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 Master Class: Klarity Kris discusses what’s necessary when buying a home when there are kids in the picture. Is it double storey single fronted or single storey double fronted!

Copyright: Mouldy Bread Picture from ChemistryWorldBlog.

We Only Buy Homes

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

Key Points:

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

Highlights:

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

$3m+ not so highlights:

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

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

Investing in your family home means you can avoid, perfectly legally, the tax the government wants you to pay on an investment property.

“Why not live in your money?” one wily auctioneer suggested at a crisp winter morning auction in Melbourne recently.

Why not indeed?

As a buyers’ agent of million-dollar-plus homes in Melbourne, I see people buying and selling some very nice homes in some very nice suburbs.

One thing I often wonder is why, when someone has made money out of one of those very nice family homes, either by design or by accident, their first thought is often to draw on that money to invest in something completely different.

Why would you invest $400,000 in a house in Seaford or an off-the plan apartment on Queensland’s Sunshine Coast when you have made your money in a $2 million home in Eaglemont or Hawthorn?

The family home can be put to work to store and to create wealth. Photo: Justin McManus

Why would you put money you made buying land in inner Melbourne into oil futures or Russian uranium?

Family homes can be the cornerstones for wealth creation and wealth storage.

Suburbs such as Toorak, Port Melbourne, Albert Park, Balwyn and Kew offer plenty of proof that family homes bought in good suburbs can create and store wealth.

Following this logic, then why not invest in something that works – why not think about trading up on your current home as your next investment strategy instead of pulling out $400,000 and buying another investment with very different characteristics from the one that made you good money in the first place?

Why not put some of your superannuation ideas or your new Porsche research effort into something you and your whole family can actually enjoy right now and for a long time to come?

Why not think laterally about what the tax office calls your principal place of residence – your home?

Yes, negative gearing gives you a tax deduction, but by investing in your family home, you can avoid, perfectly legally, the land and capital gains tax the government wants you to pay on an investment property.

And you get to improve your own lifestyle at the same time instead of letting a tenant and an investment scheme salesman enjoy your investment while you live in a less than satisfactory home.

The obvious question is, what to do when you need extra money for things such as school fees or holidays? You can’t live off the income from your family home, but you can borrow against it and down the track you can downsize, and pay the whole lot off, thus getting the school and holidays and interest paid for by others.

So how do you make sure you’ve bought well? Clearly not every family home is a good investment. When investing in anything, what you are looking for is a good financial outcome, which has three parts: growth, cash flow and risk.

How does a family home measure up?

■ Growth: Price increases come from demand and supply, and we can fairly safely assume that there will be ongoing demand for good homes in good suburbs, and that the supply of land in those suburbs is limited.

■ Cash flow: You need to be able to service the investment and minimise your expenses; your income needs to be able to service the interest on your family home. You may be better off upgrading rather than spending too much on renovations.

■ Risk: There is no replacement for homes with a backyard near a train station and shop. I don’t think shelter is on the way out as a human necessity.

Your home as your main investment is only a good idea if it has the right investment characteristics – the three P’s.

■ Position – inner city, near a central business district with an international airport, and near infrastructure.

■ Property – good land content; a land-to-value ratio of more than 66 per cent is ideal for an investment. Remember, land appreciates, while buildings depreciate. The building itself should have a good floor plan requiring minimal renovation.

■ Price – affordable within its market or better and with the right risk characteristics.

There are some great books around that expand on these points.

Try any Jan Somers book (a great Australian property writer), or The Millionaire Next Door by Thomas Stanley and William Danko. Or approach reputable selling agents.

Why not invest in your family home and, as that wily auctioneer said, live in your money? Why not indeed!

We have held over to next week the start of  9 part series on Negotiation which includes a week on Backward Bidding – A New Negotiation Technique : Look for on a Tuesday at James Buyer Opinion from next week.

This article was written in The Age, Business Day section 26^th July 2010. Author Mal James http://www.theage.com.au/business/property/the-castle-as-a-bank-vault-20100725-10qjq.html

What a funny lot we are at auction! Check out the Expressions! Malvern 4 Grace: Marcus Chiminello and Justin Long: 4 bidders, Bought After Auction

At 6pm on Saturday the James Million-Dollar-Plus clearance rate was 59% for the 31 auctions we attended.

Bidderman was at 1.5 – a more representative number than last week’s 2.2 we think. 

Main Points:

• A significant, but largely expected, drop in activity and dollar value
• 3 Longstaff Kew East – sold by Glen Coutinho of Hocking Stuart, had a crowd of 80 with 5 bidders and was bought for $1,413,000. This one was all about the renovation and not the position, home rather than location. See our report and click onto our ratings below.
• Albert Park – I got an interesting answer when I asked Michael Szulc of Cayzers why we had such huge stock levels early in the year. His response was the most original I have heard: With the GFC a number of investors took out 12 month leases. All those leases lapsed about the same time, just as we had come into a significantly better market, and were all put up for sale around the same time.

Guilty – Last Week we were harsh on The Early Million Market

The market has corrected both in terms of price and activity. However, as we put on our winter coats, we should also put our hands up and make our apologies: there is one segment of the $M+ market that seems to be exempt from our blanket market price-drop statement.

We think the market for $1 to $1.5 million-ish quality homes hasn’t really dropped as we first hoped it might have over the holidays.

Yes, there has been a major drop in demand across the Melbourne Top End. And yes, prices are off by as much as 10% since April. And yes, the gains for 2010 have dissipated in most market segments – especially for the unsolds that need to become solds. But the mounting evidence over the last week indicates that such a blanket statement is too strong when talking about quality homes in the early $1 million dollar range.

This segment still has a strong wave of demand – with new buyers taking up when other buyers drop off, albeit at lower numbers than May, but still at three and four deep. In this quieter July market, the evidence is strong (in fact it’s being pushed into our faces) that, even with the reduced stock levels, we may see prices increase faster than we thought possible even a fortnight ago in this early $1 million segment.

So, after a polite battering from some avid selling agent readers, as well as some of our own unsuccessful auctions and some relooking at sales and private sale basket lists, we’ve reworked our blanket statements to:

Reduced activity and price that started from late April, up to now and possibly continuing into Spring for:

1.  Poorer quality million dollar homes (weak 3Ps – price, property and position characteristics)

2.  Many homes over $2 million-ish

But this does not apply to the early $1 millions price segment for good homes. That market has survived the significant market adjustment better than we implied last week.

With the benefit of six more auctions under our belt this week, we’re already thinking that nirvana may be shorter lived than we initially hoped. But it is winter, and we are dealing in a lot smaller numbers stock wise. Even so, the mood at this level is positive and seems to be rebuilding quite quickly.

Our overall last week auction strike rate was 3 from 6 in this $1 to $1.5 million dollar quality homes range. Bidders have been 1-6-2-3-3-3 respectively.

The above $2 million market

The market above $2 million is, as we stated last week and in previous reports, solid on a few good properties and limited on the rest. There are large numbers of stales and unsolds in this range, and it seems that most of the limited demand is for new and quality auction stock, which is itself limited.

The last two weeks has shown little improvement in this area, particularly as you go further up the food chain dollar-wise – unless of course it’s for a first rate home.

Sales at $2m and above (not all are reported) were running at three (3) a day in May 2010. In July they are reported at being down to one (1) a day.

Compare this to the $1m – $2m range in Boroondara, Bayside, Port Phillip and Stonnington. These were at eleven (11) a day in May and while they are down, they are still up at five (5) a day in July.

Of the more than 140 sales over $1 million in those four markets this month, 5 out of 6 are mopping up the early $1 million overhang and new auctions, while just 1 in 6 are mopping up the over $2 million overhang.

Activity is down across all sectors or segments of the market (to be expected, given it is winter) but things are holding up far better in the quality $1million range than in the $2 million+ range – due to significantly stronger bidder depth. This is leading to less overhang than we may have implied through last week’s blanket statements.

Glad to have cleared that up.

166 Bank St South Melbourne. Crowd of 60 saw Gerald Betts Pass In at $1,330,000

We love auctions

Enjoyable auction No 1

Antony Woodley and Peter Mitchell of Marshall White – well done. The three bidders – well done. For me this is how you run an auction: a bit of argy-bargy and a bit of old fashioned fair play.

The quote during the campaign had been conservative, and when the first bidder opened with $1,700,000, at the quote, he asked: is it on the market? “No”, was the agent’s answer, “and I’ll take $25,000s”. A second bidder bumped it up another $100,000. Wow! The first bidder repeated the question to the auctioneer and Antony’s reply was ditto, requesting $25,000 bids. Again, bang, from a third bidder this time – another $100,000 rise. Now with the price up at $1,900,000, all three bidders asked the question: was the property on the market? The second bidder said he had more, but refused to bid unless it was on the market. In the spirit of auction it was put on the market. Another $10,000 and then the third bidder said $2,000,000. Wow – who says “on the market” doesn’t work? It was a great bid, which could not be matched – and the home was knocked down at $2,000,000.

That’s how an auction should be run: three bidders, five bold bids. It was a pleasure to report on. More power to buyers who work together to get a property on the market so they can battle it out fairly. And more power to auctioneers who respect those buyers playing the game.

Enjoyable Auction No 2

This was a boardroom auction with a James Market News’ favourite, Lachie Fraser Smith, and took place on Tuesday night at Bennison Mackinnon’s boardroom. Over the previous 48 hours Lachie had informed a number of buyers that a home going for around $1 million in Glen Iris had received an acceptable offer and that all interested parties were invited to attend an auction where the reserve was set at $1,050,000 and that the property was on the market. Sitting around drinking water, six (6) bidders fought it out pleasantly, with the property selling for about $100,000 more. Gee, it’s amazing what buyers will do when they are told the truth: a stated reserve and the property on the market with the first bid –  and six bidders still turn up.  Bennison Mackinnon continues to sets the ethical standards for inner Melbourne auctioneering.

We only buy homes

Mal

Brighton East 8 Carrington: Auctioneer Danielle Martin. Passed In on a Vendor Bid at $1,000,000

Which way are things going? South Yarra 32-34 Park St: David Colbran and Warwick Anderson of RT Edgar: Passed In: $3,903,000: Bought Afterwards: 4 bidders

It’s 6pm Saturday and the James million-dollar-plus Clearance Rate on the 41 auctions we attended today was 61%.

Bidderman is 1.7 and it seems to have found a momentary level of some strength on large numbers of auctions.

We monitored 174 $million sales across 56 Melbourne suburbs.

Overall Clearance rate is 60% for those 174 auctions and in line with our James clearance rates – confirming again our James Clearance rate is an accurate measure of $Million Melbourne.

Considering the large amount on offer today and two of the next three weeks, it was a solid result for the market, albeit on falling clearance rates.

Summary Clearance Rates

• Bayside – 26 monitored – 12 bought – 46% clearance rate
• Boroondara – 46 monitored – 32 bought – 70% clearance rate
• Glen Eira – 18 monitored – 10 bought – 55% clearance rate
• Inner Melbourne (Yarra) – 11 monitored – 8 bought – 73% clearance rate
• Northern Melbourne – 22 monitored – 13 bought – 59% clearance rate
• Port Phillip – 22 monitored – 7 bought – 32% clearance rate
• Stonnington – 26 monitored – 18 bought – 69% clearance rate

Highlights

• Only 5% were not reported which shows a high degree of accuracy for clearance rates
• Increasing numbers of undisclosed results – maybe privacy or less than stellar numbers
• It is Port Phillip’s turn to not fire under the auction system
• Stonnington was surprisingly strong with Park St South Yarra (Warwick Anderson of RT Edgar) going passed $3,900,000 on multiple bidding and 81 Clendon Road Toorak (Gerald Delany of Kay and Burton) selling post auction north of $7,350,000 and 64 Burke Road Malvern East (Iain Carmichael of Benmac) selling before for 3,320,000 or $1366 per sqm for main road land. We think a number of Toorak and South Yarra vendors have wised up to the mood change and as a result clearance rates are improving.

In some segments, the market has dropped an estimated 5% in the past three weeks; in other segments, not at all. Fringe positioned, poor quality and hard to sell properties we feel could be as much as 10% off what they may have achieved in a frenzied April auction. This is of course opinion and hard to substantiate; but it is what we believe.

But our blanket headline is not 5%-10% price drop; it is mood change for all markets and some markets are patchy and some homes have experienced a drop in price.

Before we are yelled down by the lobbyists, let’s be specific.

First, there are several markets going quite well (for sellers), thank you very much.

$4 million-plus market
Evidence is emerging that this market, which we felt was in trouble a fortnight ago, is not as patchy as it seemed to us – and actually has some strength. Our correction: A more accurate read from us would have been that the auction system itself is frosty at this price level but there is activity outside the auction system (private sale, off market and expressions of interest). Michael Gibson of Kay and Burton agrees this is an accurate statement. He implied his company wouldn’t be selling $6 million-plus homes in Canterbury, Hawthorn; Scotch Hill; Grace Park and Flinders in the last month (and today at 81 Clendon Road Toorak, post-auction after a vendor bid of $7.35 million) if the $4 million and above market was declining substantially.

Note: Back in the GFC days during one six-month period (late 2008 – early 2009) at this same $6 million-plus price level, there were only nine recorded home sales in total (two in Brighton, one in Balwyn; and six in Toorak) for all real estate agencies in all of Melbourne.

$1 million – $1.75 million market in inner Melbourne
While there is definitely less bidder depth than a month ago, buyers may notice little change in end results on good properties going forward as there was such great depth pre-Easter. In fact, we were at an auction in Clarendon St Armadale (Madeline Kennedy and Andrew Hayne of Marshall White) where a nice little Edwardian single-fronted was bought for just over $1.2 million, and its twin sold earlier this month for $50,000 less. The $1 million to $1.75 million market is not seeing widespread price drops; despite less bidders per auction.

Shall we stop building the drama? Where do we feel the market has dropped?

$2 million to $4 million market
Is where the possible gains in 2010 have evaporated for a number (but not all) homes. On some good $3 million homes, we feel that the market view could be $100,000 to $200,000 less than Anzac Day and on poorer homes the drop feels more dramatic.

On what basis do we make such a claim? What about such and such, which went for $150,000 over reserve?

Clearance rates seem weaker at this price level; although today 10 from the 16 we witnessed in the $2 million to $4 million mark sold and that’s 62%. We feel the easing has been mainly in this market, but we have no evidence to suggest anything more than light price drops on some good homes.

Look at three Hawthorn homes we have been involved in, in the $3 to $4 million market in May 2010.

All three of these homes we assessed at $3.3 million under strong competition. All three of these auctioned homes had supporting evidence and independent outside agent opinion matching our $3.3 million assessments.

Yet the results were different (around $3.1 million on two occasions and $3.46 million on the other occasion). This had nothing to do with the agent (despite what their opposition may say). It may, of course, be our poor assessment of two but, if you assume we have some level of competence (others may argue), then it does hopefully give an insight into what we think is happening in the $2 to $4 million market in May 2010.

INCONSISTENT RESULTS and MINOR PRICE DROPS FOR GOOD HOMES

What does this mean for buyers going forward?

Opportunity!

There are $2 million to $4 million sellers out there that have to sell as they have bought and do not have the luxury of holding multiple homes. Interest rates are rising and business, as evidenced by the stock market index, is not as rosy as April.

Even those sellers that do not press the panic button may still be of a mind that things may not improve in their selling horizon and will, if they are listening to their selling agent, be more inclined to deal on a sensible offer rather than wait till the uninformed or ridiculous one arrives (which, increasingly from Anzac Day, is not happening).

A home that in April you would have paid $2.5 million for could now available to you for $2.3 million if:

1)      You know where to look

2)      You look

3)      You have some luck

4)      You put your hand up and then in your pocket.

Some important riders on our $2 million to $4 million blanket statement:

1)      It still needs to be the right home for you.

2)      It still needs to be a good home. Low land content, poor floor plans and badly positioned homes can become better in price but they never become good land content (above average growth), good floor plans (without serious money) or better positioned homes.

3)      Not all homes are adhering to our price drop assertion.

Overall Market Summary

At this stage, we have no feeling that the market corrections are anything more than normal market corrections. Market corrections come from market imbalances and the $2 million to $4 million property market has, in our opinion, been out of balance in May. Other markets are experiencing less bidder depth but not the imbalance and it’s not showing as much on the scoreboard.

While in all markets demand per auction has been steadily falling as evidenced by our Bidderman graph below; that is not necessarily as sinister as it may seem if you look at the supply graphs chart we keep on new million-dollar-plus stock to the market (graph 2). Those charts confirm what agents have been claiming – record months of auctions etc. Look at the up-swing in new stock (and we keep both on-market and off-market data) from 30 to 60 days ago. Big increases!

To some extent, these large increases in stock are the obvious reason why demand per home (Bidderman) has fallen; however, what is different to March and more in line with a normal market, is that the May 2010 market has not been robust enough to absorb all of this stock increase, particularly in the $2 million to $4 million mark. We have seen some seller stress for the first time since mid 2009. In addition the rest of the market seems to be leveling which can’t be a bad thing for all sides of the market.

Note: The above graph (2), implying lower stock numbers coming in over the last few days, may simply be a data entry timing issue from us – the guaranteed accurate stock level indicators for us are the 30 days and over figures and these are unseasonally high.

Three-month market outlook

$1 million to $1.75 million buyers.
There needs to be a big reduction in buyer overhang and a greater mood change resulting in an increased number of pass-ins before many good homes will reduce in price.

We think the current mood change and bidder depth has resulted in a leveling of price. Poorly supported properties are dropping in price.

As another aside there are an increasing number of pre-auction and off-market opportunities even at this level. By example, we bought a ripper little off-market one in Elwood last week at this price level. Good home – we were surprised it was offered as an off market (and, please, we don’t mean that negatively for either party).

$2 million to $4 million buyers
This is the most exciting and unpredictable market at present. Buyers, you need to turn up and keep turning up, because the opportunities to buy good homes are here and may not remain for long as you may think. The longer term big picture still shows population and migration pressures conducive to price increases.

At this level we suggest you need:

• Patience because some good homes are still selling very well.
• To cover a wider number of possibilities. There are off-markets and fringe properties that you are not aware of that are selling.
• To do your due diligence in two ways. Emotionally, is it right for you, and, importantly, is it for sale at $2.85 million or do you have to pay $3.15 million (financially).
• Advice. We’re biased. But with opportunities comes a number of decisions and a “no” decision can be just as harmful as a bad “yes” decision. All good decisions are either lucky or informed ones and it takes a lot of work to be informed for all decisions. So are you lucky or do you want to be informed? Possibly consider engaging a competent and ethical buyer agent experienced at this level to assist you.

Of course the market could also worsen (for sellers) but to assume that this market will continue to deteriorate after the forced sellers have gone is not a given; it is a guess. Going forward a number of $3 million owners have discretion and rather than put their home on the market or be in a forced sale they can renovate or hibernate. This will mean reduced choice for buyers which can start an upward price cycle on low quality stock – a buyers lament.

$4 million-plus buyers:
The proof is in the pudding. Sales at this level are up, surprising all of us. So demand is there (for now) and, while this level of home never attracts the bidder depth of further down the food chain, it also has fewer forced sellers than say the sub-million market unless business hits the wall. We don’t have as clear a take on this market as we thought we had, so, we’re keeping our powder dry and no longer passing  judgment until there is some more water under the bridge (love those clichés).

Buy happy

Mal

The Big Guns failed to fire at auction but didn't miss their target on the reload; with a post auction result in excess of the $7,350,000 Vendor Bid Pass-In. No bidders: Kay and Burton's Heavy Duty Gerald Delany, Mike Gibson and Ross Savas presiding.

South Melbourne 69 Napier: Bought under the hammer for $1,425,000: 3 bidders. Checking their scripts Geoff Cayzer and Michael Szulc seemed to be in sync as the result shows.

Port Phillip seems to be firing along on all cylinders with 16 properties sold over a million since our last report just before Easter. You know how we said land in the good parts of Elwood was around $3000 per sq metre before Easter. Well that was before Easter now it’s after Easter and land is also rising into the heavens (for vendors). 92 Ruskin St Elwood sold for $1,400,000 for 408 sqm or $3431 sqm. Torsten Kasper of Chisholm and Gamon handled two very strong bidders to this price. This was one of five sales over a million in this Easter fortnight.

Three $2million plus sales reported were:

(1)    36 Wave St Elwood also with Chisholm and Gamon (Sam) after auction which confirms land north of $3400 for the right block in the best bits of Elwood except on today’s land result at 43 Foam St  $1,600,000 for 566 sqm which shows the negative power of being overshadowed by flats.

(2)    47 Reed Street Albert Park with Michael Coen of Hocking Stuart was sold for around $2,200,000 (post auction).

(3)    502/430 St Kilda Road with Peter Kudelka of Kay and Burton –another one in the Lucient Towers reported sold for around the magic number.

Speaking of Apartments they are continuing to show major improvements – at least in turnover (the jury is still out on recent capital growth) with 5 apartment sales over a million in Port Phillip in the Easter fortnight including 2 reported at 505 St Kilda Road through Icon properties.

During a long conversation with Sam Gamon from Chisholm and Gamon after their 4 out of 4 auction result today he said his company felt the market was still continuing to rise which is in line with the REIV quarterly median price increases as well. Up from $1.2m to around $1.35m. Sam added that stock levels were OK except for the cheaper 2BR flats which are in short supply.

Nothing unexpected happened today with 7 sales but as we said up front the big story was the amount of homes sold since Easter. By the way 2 of those 7 sold at auction today were $m+ apartments – enquiry is definitely increasing significantly in this previously very flat market segment.

The Median Price Chart, courtesy of the REIV, confirms our views that the Bayside markets started to improve ahead of the leafy green suburbs market and you can clearly see the ship started to turn to an upwards price direction about a year ago.

Buy Happy 

Strange. Very strange. Yes Glen we can see you but check out the guy to the right. I'm not sure if he was there for marketing or to revive injured buyers. Maybe he will be mandatory at all auctions soon. Camberwell: 52 Athelstan Road: Glen Coutinho. Passed In.

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 38 Auctions we attended today was 74%; basically no change on the 77% ( pre Easter Super Saturday -March 27).

Bidderman was down from to 3 to 2.3 bidders per auction but that is still very strong all things considered (stock quality and Easter holidays).

Market Mood

Today was expected to dip to reflect this being a secondary weekend for $m+auctions; but it didn’t. Many of the really top homes wouldn’t have been launched with an Easter or School holiday start and May 1 and May 22/29 are shaping up to be the next $M+ Super Saturdays (stock quality and numbers wise).

The last 2 weeks confirm the March 27 strength. Hot! Hot! Hot! You know the market is very strong when you see that REIV agent members have reported 170 properties $m+ properties as sold since that pre Easter Super Saturday. That does not include today’s auctions. So basically the large majority were private sale at a rate of 8.5 a day.

This tells you the mood far more accurately than auctions today. Some expected and some unexpected suburbs below ($m+ sales in last fortnight).

Balwyn (5); Brighton (7); Caulfield (11); Docklands (3); Eaglemont, Elsternwick and Elwood (4 each); Hawthorn East (5); Malvern (5); McKinnon (3); Melbourne (5) and how about Mounts Eliza and Martha (6 between them); Surrey Hills (4) and Williamstown (4).

Interest Rates, Population Pressures, Volcanoes  – not sure what is going to stop this speeding train but it does need to and should slow down some time ……..

FIRB rule changes and major price increases confirmed.

The REIV trend chart confirms the effect on prices the FIRB rule changes had in March of 2009 and the leveling off that occurred when the Aussie dollar started to strengthen strongly against the US dollar (relevant to the Chinese community) later in 2009. With the help of Canberra, the Chinese community single handedly (a bit of exaggeration) rescued our Inner East $M+ property market and whether you like what is happening now with prices this was the beginning, one of the catalysts for the incredible 2009 price improvements right across Top End Melbourne.

Liar Liar Pants on Fire

Hi I’m Mal James and some people think I’m a liar.

It’s a bold statement. Is it grounded in truth? Initially, when representing a client, if I do not know the other side well, I instinctively hold information back. I offer information in a structured way, which helps me in assessing the objective and subjective connection to whatever information I perceive they control. If I am asked a direct question, but I believe that it is not in my client’s best interest to give up that information, then, at times, I will make a statement that may not disclose the whole picture or may allow confusion. Eg Privacy of a client’s identity or limits.

So, to some people, I am therefore a liar. That’s fair enough – you can call me what you like, some people do. I also assume that, at any time, I may be lied to – not always to deceive but I assume that some people are communicating to me in a way that, if I want to jump in over my head, then they will let me do that.

What is a liar?

Is it one who makes false statements? False is a most interesting word with a myriad of meanings and powerful consequences, depending on the interpretation applied in each and every specific instance.

On the definition of making false statements is Channel 7 weatherman David Brown a liar when he tells me tomorrow will be sunny and it’s not? Is Eddie McGuire a liar when he says Collingwood will win and they don’t (it seems he could be an infrequent liar this year) or is your bank manager a liar when she promises something will happen by next week and it doesn’t?

In real estate, is Low Bidders Real Estate’s Artina Deco a liar when she says a property should go for $X and it sells well above reasonable expectations, meaning she is 12 per cent out? Is Top Drawer’s Eddy Wardian a liar if he says a house will be on the market at $Y, the vendor changes their mind and it’s not? Is Victor Rian of Home Sweet Home  a liar if he says Z will be sold by tomorrow and that doesn’t happen, because a previously trustworthy buyer recants?

Are any, or all, or none of the above liars?

You may say lying depends on intent. In the end, does that really make any difference to you?

Is it important?  It was rainy, Collingwood lost, the loan didn’t go through or you missed the property.

Is it the lie itself that is of importance or the rules you apply and your reaction to the lie?

The community views deliberate and accidental “lies” very differently in law, despite in many cases the consequences to the “victim” being the same.

Let’s forget the word semantics. Let’s say an agent told you the reserve on a property is $2.45 million when, in fact, he knew it would not be sold for under $2.7 million, or, conversely, it could be sold to you at $2 million. Is it the deliberate lie or what you do with it – and how you react to it – that is the issue? Or does the lie itself determine the end result?

A deeper question is how should a lie affect you?

That may lie (excuse the pun) in the rules you apply to the circumstance.

If you perceive buying a home as being like a relationship, then you will probably react very differently to a lie or liar than if you perceive buying a home as like a business transaction.

What is the right way to react to a lie?

For me, truth or lies are mostly varying shades of grey – even the ones that seem black and white have shades of grey. To be honest, in business, I prefer truth but I’m not fazed that much, if at all, by a lie. In my personal life I take a very different stance. You may have an alternative take and fair enough, but if that different take involves an emotional response that doesn’t maximise your outcomes then …..

Is lying right or is it wrong?

1.  Is wrong related to unacceptable behaviour or self-interest or the greater good?

2. Unacceptable behaviour usually revolves around

• community self-interest (standards, laws etc) and/or
• individual self-interest (your opinion).

3. If it’s right for you but wrong for other guy – is it right or wrong?

Your self-interest opinion may be different to mine, in turn different to the seller’s, the seller’s agent and different again from community expectations. A current real estate and lying conundrum is notional propriety and the disparate self-interests of underquoting.

So, is a lie always right or wrong? You know, truthfully, I’m not exactly sure. We are taught that, morally, a lie is always wrong. I think a lie that kills a soldier is wrong but, if it saves 100 others, maybe it is right to tell a lie in those circumstances. A less dramatic situation is whether a lie is wrong that gets two parties together on a $2.5 million deal, which would not have happened but for the lie and the fact that the deal is in the best interests of both the buyer and seller.

Does a lie really matter?

Let’s return again to the example of a house quoted at $2.45 million, when, in fact, it can be bought at either $2 million or $2.7 million. Is the real issue the lie of $2.45 million? Or is the real issue the fact that you might get it at a different price if you know how? Is the issue that the lie is a danger to you or is it that you don’t have a lie detector process that is the real danger to you.

If you have a tried and true process – in other words a certain set of self-interest rules (such as the CAN process that we use) then is a lie a big deal?

If you have a process such as the CAN process,  then no matter what is presented, you or your advisers will break it down and look into it in an organised and beneficial self-interest manner. You will save flair and risk for the last little leap of faith when the agreement gap is small and all other elements of the deal have been explored and confirmed. Your procedural disciplines will discourage reactions that can be dangerous for you in the event of a lie.

In real estate, when you have such a process, liars are just interesting people you meet along the way that present opportunities to you rather than dangers.

If, however, you do not have a solid set of rules such as the Clarity-Assess-Negotiate process, then liars are Melbourne Real Estate dangers to you.

Is the issue in home-buying the lie or the process required to obtain the truth?

Finally sometimes the liar is within

Yes, some liars are faceless agents representing their clients. However, for some buyers, a far more dangerous liar is part of the inner sanctum.

He says to his family. “It’s just bad luck” that he keeps missing out. He is constantly surprised by the actions of agents, the process of real estate purchasing, the sold prices compared to the quotes. He has missed numerous times on homes his family wanted to –and should have – bought.

Or it’s a she: one who expects history to not repeat itself, just for her, and reacts badly when it does. She ignores that her emotional world of buying a home has collided head-on with the unemotional world of selling agents. She has taken no action, and made no change to her modus-operandi to cope with the emotional/unemotional disparity.

These liars take a “she’ll be right” attitude and say to their family “Let’s move further away” and accept less than they have to, or they say “Let’s look again in five years time, when prices will be cheaper.” Furthermore they take the identity of a victim, a victim with a family and worthy of pity, but a victim without a family home.

In real estate, and in life, some lies are very wrong and can hurt deeply. We have all seen and experienced that. However, lies can allow beautiful things to happen. As truth does; lies save and destroy. Truth and lies are a part of life. Your level of understanding, management and reaction to lies will ultimately determine your short and longer term property outcomes.

Buy happy

Mal

Footnote: Clarity on my position: I personally think truth adds considerable value to the home buying process. The best agents, deal makers and negotiators know how to use both lies and truths to maximise their client’s position and most do so with little emotion. Most experienced negotiators realise truth often bridges gaps that lies cannot. Please, for all my talk of lies, most of the deals James Buyer Advocates are involved in with high-quality selling agents are often win-win and with a high degree of truth. Truth and lies are why again and again we outline the benefit of professional buyer and seller agent relationships.

Rocket Rodney Morley and Marvelous Mike Gibson; Real Estate’s dynamic duo usually playing on opposite sides - this time K&B and TBM were working together to extract a lazy $10,000,000 plus from the market. Toorak: 4 Trawalla and next door: Sold $10,450,000. 4 bidders.

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.

Abbotsford: 8 Turner: Bidder 3. Bought for $1,520,000. John Piccolo of Woodards talking 3 bidders through their options.

Since the start of 2010 we have seen buyers itching to get into the market… the amount of bidders in the North has increased as the weeks have progressed.

Where is everyone coming from…? Well it appears a combination of people who missed out in 2009, investors returning to the market and obviously a new bread of buyers that made the decision to purchase at the beginning of 2010. Add this to positive media commentary, historically low interest rates and relatively low stock levels and you have the ingredients for a boom. But values already rose 20% in Melbourne last year so that should mean we are at the end of the boom…? Correct?

Well the truth is we really don’t know, but we are seeing strong results in the market place and we are seeing bidders in serious numbers.

Take 290 Lennox Street, Richmond sold by Edward Hobbs of Biggin & Scott quote range of $700,000 – $770,000, 8 bidders in totals and more importantly 4 bidders still in the race as the property moved above $900,000, eventually selling for $985,000. The main story line here is bidder depth and market movement with 3 bidders who would have paid above $900,000 for that property that are frustrated and still active in the market place. It was a great auction with Mr Hobbs adding “the market is red hot at the moment with vendors extremely happy achieving prices above expectations across the board”

Similar storey at 102 Keele Street Collingwood sold by Paul Markovic of Peter Markovic, huge crowd of over 150 people, so big that the auction was stopping traffic. The original quote was $490,000. Bidding was opened strongly at $570,000 and then bids went to – $620,000 – $670,000 – $700,000 $710,000 $740,000 in literally a matter of moments. Needless to say the vast majority of the crowd were in amazement. There was a total of 6 bidders however I suspect there was the same amount hidden in the crowd who did not manage to place a bid – again frustrated bidders and lots of them.

David Oster of Jellis Criag Ivanhoe indicated that when the market was strong in 2007 that used to mean  4 or 5 bidders, now it means 8, 10 sometimes 12 bidders. Mr Oster aslo added “there are frustrated and desperate buyers out there who just want to get into the market” and importantly “despite price increases properties are still more affordable than they were in 2007 as interest rates at that time we approaching 10%”

So with the amount of bidders  and people rushing into the market are we starting to see a pack mentality? remember Warren Buffet’s famous Quote -  ”be fearfull when others are greedy, and be greedy when others are fearfull” I don’t yet believe its time to be greedy nor fearfull its just time to be informed.  There are prices that we see out there that are well over the odds and there are prices out there that are just strong results given strong market fundamentals – its very important to know the difference.

Know Your Market!

Glen Iris, 27 Scott: One of our favourite auctioneers, Rodney Morley, actually took a bid from this car but it wasn't enough. Passed in at $2.15 million.

Iain Carmichael is a tough cookie and one of the best, if not the best, auctioneer in Melbourne. We exchange thoughts often and I find that enjoyable. The discussions are always quick, robust and, occasionally, I need a disprin afterwards. But I would never say that Iain gives you anything other than his genuine opinion and that, to be frank, is why we often seek it. Not always one I agree with, but always one that is genuine. There is more to Iain than you may think if you just saw him at a difficult auction. Iain’s contact number is 0418 850 988.

Mal: Morning Iain. Nice little stick it up ‘em ad in the Melbourne Weekly re Price Quoting.

Iain: Morning, Mal. Well, it’s the truth.

So my next question that the heat on quoting seems to have gone is not going to get a standard response?

Correct. The heat on auction price quoting is full-on! Buyers should expect to receive a guide as to what vendors expect. Too many agents are ignoring buyer sentiments at their peril. What is good for buyers is good for sellers! Good agencies will know what their vendors expect and will make it easy for buyers to get this information asap.

I read your ad where your survey says 97 per cent of buyers prefer to see auction advertising containing price ranges. What about the blow-up a month or two back where it seemed all buyers were saying quoting was a waste of time.

Accurate and/or sincere quoting, not misleading quoting, is what buyers want and 47 per cent of buyers have said they have chosen not to view because it did not have a price estimate.

But, Iain, you can’t get it right all the time.

True, but, like you do in your Buyer Control Prices on your website, you can try and get it right, Mal, and make a genuine attempt.

And what about those that say it limits the vendor’s price?

Buyers deserve a transparent and open approach. Look at how well the auction system now works. Is it open and transparent, Mal?

Yes. Geez, you’re full-bore again Iain – obviously the holiday treated you well.

Yep. A lot of good properties coming on in the next few weeks and we’re ready to go. Next question!

The market?

Market prices up overall around 20 per cent from March 2009, past six months, ie $2. million = $2.4 million minimum. Top end 25 -30 per cent.

And until Christmas?

Here to Christmas – more of the same. Power on through Spring Carnival and maybe a 5 per cent rise for the final quarter of 2009.

Strongest market segment ?

No doubt at all, family homes over 700 sq m in Malvern/Toorak.

Weakest market?

No idea, too busy working in our own markets!

Iain, that’s a weak answer.

It’s true, although I’ll concede highly overpriced is not getting there, even with us.

Auction bidding is in the news – your thoughts?

If you want to buy, put your hand up or risk missing out. That’s what an auction is about. If you are not going to bid on the day, you are just an observer – which is fine, but don’t whinge about missing out after it is sold!!!

Just like that, hey!

Yes, Mal, it is as simple as that. And if they can’t do that, then get a professional to help you.

What, like an advocate?

Maybe. Next question!

How much effect is money from mainland China having in your market and do you think that money is here for the long haul? Another question: has there been a bigger influence on price recently?

We have experienced a significant increase in buyers from Asian origins. In recent years, our internet sites have provided greater levels of inquiry than traditional press mediums and this is likely to increase exponentially in the years to come. Fairfax and other major press outlets will need to move quickly from ink to digital. Last to move loses!

I think that was an answer to the question.

Yes, increasing Asian buyers and one of the key reasons for price increases. That and lower stock levels.

The most humorous or strangest thing you have witnessed this year at auction?

Actual event – auction, East Malvern, July 2009. Auctioneer, knowing that two buyers are keen, passes in on a vendor bid of $1 million. Both buyers front up to pay ‘post auction asking price ‘ of $1.06 million. Ten minutes later, a well run private auction  yields $1.15 million for the delighted vendors. Moral of story – BE THE HIGHEST BIDDER – at law, the agent must negotiate with you at the reserve price. (in the above case – $1.06 million and not the eventual price of $1.15 million. When will buyers wake up!

And,Mal, it happened again at Balnarring last month. I rarely do this but I said first bid over my $1.15 million vendor bid buys it. Nobody bid. The seller wanted it sold but he firmed up post-auction and the eventual buyer (who was in attendance on the day) paid $1.3 million a week later.

Yes, Iain, but you just don’t bid at all costs.

True, Mal, but when it’s well priced, you should and we are in a rising market.

Agreed. Any other pearls of wisdom?

To property sellers – appoint the best people, within the best agency, and trust them to do a great job. Pay a full fee for quality service and enjoy the benefits that a great result bring you. In reverse, if you pay peanuts, you get monkeys!

That was your free plug, was it? Thanks, Iain, for your thoughts.

Enjoy your day and good luck at auctions tomorrow.

Same to you.

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.

Toorak, 78 Clendon Road: $4.35 million. Paul Castran as the buyer would see him!

It’s 7pm on Saturday and our James Clearance Rate is 82 per cent on the 22 auctions we attended and reported on. Need we say any more – the market continues its strength and subsequent price rising, despite being in an increasing stock level environment.

Flashback: our report from 22 November 2008: Today, only two of the 13 auctions we attended sold under the hammer. The weakest market is the $1 million to $4 million market. What a difference a year makes. In September 2009, the strongest segment at present is this same $1 million to $4 million market.

Summary of today’s Market Insight:

1. The James Connell State of the Market Interview.
2. Repeating 2007 and The Chinese Influence.
3. Buyer Stress.
4. Re-think rather than Give Up.
5. Control Price – Neighboring Properties Discount.

James Connell, Managing Director of Marshall White, one of the two dominant selling agencies in Boroondara and Stonnington, talks to Market Insight this week. James has 30 years in real estate (a slow learner) and has co-owned Marshall White, with John Bongiorno, since 1993. The water-cooler talk within our industry is that he has respect among his troops and his support is very hands-on, even when it was a bit tough. He has given our company solid helpful advice over the years and, while buying off Marshall White is never overly easy, we have always found their salesman quality runs to the bottom and this must ultimately be a reflection, in part, of his leadership.

Mal: Where is the Boroondara/Stonnington market going?

James Connell: Under $1 million, I think the market has peaked. The $1 to $4 million market, I think, hasn’t peaked and there is some steam left. Over $4 million, the air is pretty thin and still minimal activity.

Mal: Anything else?

James Connell: Most secondary properties, eg main roads, next to commercial, have, up till recently, taken a pounding; however, they are now gaining momentum again, along with the rest of the market.

What are you saying?

There are times to buy secondary properties – that time has passed. Buy quality – you will need to wait for the next downturn to again buy most secondary properties well.

Anything else?

Period homes in that $1 to $4 million market (which, in your past Market News’ articles, Mal, you have correctly identified as slow last year and hot this year) are very, very strong and, in a natural cyclic movement, we are finding Armadale is going better than Malvern.

What do you expect until the end of the year?

No change in the current strength of the market. Our company’s auctions are 20 per cent down on the 2007 peak (120 to 100) but, looking positively, we are 20 per cent up on last year.

What about bidding? What are you seeing?

Most of the same ol’ same ol’. People who don’t normally do it are taking advice from people who did it once 10 years ago. Giving your company a plug, Mal, and other professional buyer advocates – I really don’t know why people don’t pay your fee and hire some expertise. It is not as easy as people think and, under pressure, people make mistakes. However, the auction system, when run well, is still the most transparent and fair way to buy/sell a home.

What should buyers do if they are going to do it themselves?

Pre-determined figure. Actually bid and then buy it or walk away at a pre-determined figure (or maybe a little bit more).

Both laugh.

What about quoting: I have always thought you guys were wimps not putting some sort of figures out there.

It is not in the vendor’s best interests to do so, Mal. We think quoting puts artificial ceilings on homes. Also, as you well know with your Control Prices, you don’t get it right all the time and, in fact, in this market, we have media lag times for advertising of at least 14 days and things can change a lot during that period.

But you say at the door what the price may be?

That is buyer interest and we can change it and explain it.

Aren’t you alienating some buyers who simply won’t bother if they can’t work out price?

I firmly believe in this market that we are not missing any serious buyer enquiry.

Chinese buyers?

Major, major effect on our market. 25 per cent of our sales in Boroondara and 12 per cent in Stonnington. And I think Chinese money is here to stay. Chinese buyers are not scared to pay what they need to and, with government changes, it looks like this solid migration will continue. Mal, Chinese people have effectively kick-started our economy and underpinned all our housing values in inner Melbourne. We have a lot to be thankful for and I believe their influence on price has been around 10 per cent. Chinese people are buying $1 to $4 million homes, well positioned and good land and, with the FIRB changes, they have moved from buying apartments (which is very quiet – nowhere near 2007) to land.

And what else have you seen in the market?

The complete collapse, due to lack of success,  of Expressions of Interest Campaigns.

Why?

No standard rules, in fact no rules, and agents are just as confused as the public. That is our fault. Also, it’s human nature for people to only offer what they want to, not what they have to.

Please expand.

An expression of interest or auction is only a conduit, not a solution. The solution is good agent work. However, as a conduit, Expressions of Interest is not working and not allowing a good agent solution. Buyers don’t understand it (as many agents don’t) and buyers certainly don’t trust it.

What makes a good auctioneer?

Empathy with crowd – one with the crowd – can settle buyers and raise their excitement at appropriate times.

Premiership?

My team is your team – the Pies and Dane Swan for Brownlow.

Thank you, James.

My pleasure and good luck tomorrow.

(This interview was on Friday)

Continuing on with James Market Insight – Repeating the Past of 2007:

Flashback: October 2007 James Market Insight: …These large increases as per most of the rest of the world are largely confined to inner suburban quality properties. Land itself, meaning land where homes can be pulled down, is particularly well sought after in all Melbourne Bayside and inner eastern suburbs. What is driving the market? It is being driven by overseas buyers, stock market wealthy buyers, buyers who have seen large increases in their own properties and buyers who are confident in their future.

Back to now in September 2009:

The question I get asked the most. Why is our market so strong? It was initiated by demand from Chinese buyers. It started as a trickle in April and now the floodgates are opening, as evidenced by such comments as those from Pat Dennis of Jellis Craig, who, when we were on the phone, said his last 13 sales in Balwyn and Kew had been to Asian/Chinese buyers. Both Jellis Craig and Marshall White – the two dominant Boroondara agents – state that around 25 per cent of all their sales are to Chinese/Asian buyers. The market stock levels are reducing further, as most Chinese buyers do not have homes to sell – or do not wish to put other homes back into the market for sale.

I’m not saying this is a concern; I’m simply saying that this is a fact. It is government policy that is encouraging Chinese people to buy up large amounts of land here. Good on them – in many ways, while there may be some concerns now and in the future re price increases and stock tightening, if it wasn’t for Chinese money earlier this year, we may now be in a far worst state economically than what we seem to be.

However, we are a micro society compared to the wealth of China and maybe some thought needs to be given to the long-term effects of such amounts of money coming into the local housing economy.

Boroondara’s activity has placed price pressures on the nearby Stonnington suburbs of Malvern, Armadale, Toorak and South Yarra and prices have continued a steady rise, as more Chinese buyers buy more properties.

Bayside suburbs have not yet experienced the Chinese influence to the same extent and, consequently, have not had as sharp an increase in housing prices.

The biggest issue out there at the moment is increasing BUYER STRESS or panic or feeling of hopelessness.

If the market continues like this, then you the buyer have PPP adjustments to make or else you will not meet the market on Price, Property or Position.

While we encourage the buying of quality properties only, we don’t encourage paying more and more and more. There comes a time where you can either stop, (we have never found that a successful strategy, as most who stop are often too late restarting and miss the market again) or re-think. What we think works is a re-think. Adjust your Property or Position while still being a bit flexible on Price, but, if you can’t keep up with the market, then firmly focus on Position or Property adjustments. Rule of thumb; it is usually (but not always) preferable (long-term financially and emotionally) to adjust Property (land + building) rather than Position.

In September 2009, if you have $1.5 to $2.5 million in Hawthorn and you are looking for a family home, then prices like Urquhart Street say you have a lot of friends also looking for a home but little to choose from. If you can’t afford the $600,000 jump, then why not consider Eaglemont or Kew or Glen Iris? If that Positional change does not excite you, then why not consider a 1980s home or a period home that is a bit dated rather than a new home now.

Your mortgage levels need to be considered. If interest rates are about to be increased, then bigger mortgages at higher rates will soon take the gloss off your new home joy. Buying rubbish is not a suggested solution either, as we have often talked about the GAP LAW – time does not heal bad buying decisions. And James Connell confirmed above that the time for smart rubbish buying may well have passed.

So, if you can’t stop or get bigger mortgages or buy rubbish and be happy, what can you do?

Why not consider smaller land size and a smaller home (if that is possible)? It still makes sense if you keep Land Content to Value Ratio in the 70-plus percent range - even on some smaller block sizes. Albert Park (block sizes around 150-200 sq metres) as a whole is testament to this. You do have choices rather than give up or kill yourself with a huge mortgage – you can rethink.

In summary, some “rethink” observations:

1. Stopping or panicking usually isn’t a long-term solution.
2. Be careful with major positional rethinks. For example, do you really want to live in that area or have you just found a house you can afford? We feel yes, connect with the PROPERTY, but you still need to connect with the POSITION.
3. In property, it is position first, then go for a home with good bones, even if you can’t afford the “skin” right now.
4. PRICE is important as to paying market and your ongoing affordability.
5. And if all else fails, you can always get a new spouse with more money!

Now, a word on our James Control Price performances. Got a few “right” today and also a few “wrong” Another “wrong” by a million today and this time the agent was right. Happy to politely bag Jeremy Fox at times, but this time he was spot on and I got it very wrong. I used the James Control Price to say land at 6 Kensington should be worth $4500 per sq metre, or around $4 million for the dirt and $1 million for the home = $5 million. Jeremy said I was “on drugs” with that price, as the adjoining flats were hurting this home. He was right. It sold around $4 million. No excuses – he was a lot more on the money than our Control Price.

This neighbouring property discount was further backed up by 78 Clendon Road Toorak, which also had an incredibly dominating block of flats as a neighbour (you can see it in the marketing picture). 1143 sq metres x $4500 per sq metre plus $600,000 for the home (it needed major refurbishment) equals $5.7 million. Today, under the hammer, it sold for $4.35 million. So is the land worth less or do we keep the land the same and apply a negative emotion discount? Either way, just like irregular blocks or main roads, neighbouring properties with serious issues can present significant discounts to the end result.

But, please, I am not saying every block of flats presents an issue. We recently bought a beautiful period home that was next to a block of flats but those flats did not present an overriding privacy issue that it seemed to in both of today’s examples.

Finally, on this matter, as we keep saying, the air is still thin at $5 million, despite the pumping along at $1 to $4 million. Here the buyers do have more choice and they demand “perfection” or they discount or don’t buy.

Lead Photo today was a brilliant one by photographer Tom Wilson.

Buy well and make good decisions

Mal

We covered the significant 20 Ross Street Kew sale in Market Insight above.

Golden Mile Land
9 Boronia Canterbury. Another land indicator in Canterbury’s Golden Mile fringe. Sold under the hammer for $1.6m on a very low quote of $1.25m. 650 sqm or $2461 per sqm confirms all recent land sales in this area.

Boroondara Land in General
If you are looking for quality land, between 600 and 900 sq metres, in a quality precinct such as the Reid Estate Balwyn, Sackville Ward Kew, Grace Park Hawthorn or Canterbuy’s Golden Mile then $2300 per sq metre seems what you may have to pay if you are competing in an auction environment.

$4M+ market
31 Rockingham St Kew
http://www.james.net.au/rating/31-Rockingham-Street-KEW

Interested to see if the Top End market responds to this offering. With 21 Ross St Kew selling north of $4 million but 17 Grange Road Kew (asking around $5 million) still remaining unsold, we think the $4 million to $5 million market has a few wobbles but this auction may help clarify things.

These were our words from our last Boroondara Wrap. 31 Rockingham did sell but it was not around $5m it was around $4m and I’m being generous there. 17 Grange Road which is a great home remains unsold and obviously has or had a price issue. Despite the FIRB changes and the apparent strength of overseas money into the Boroondara market the $4M+ market remains in some eyes slow and in other eyes weak. New buildings at this price level are not attracting the interest they are at the lower levels and this is in direct contrast to 2007 where the $4m+ levels had in many cases stronger interest.

River Precincts
2a Oak Hawthorn. Wonder if Marshall White will adjust their quote after the sale across the road at Harrison Crescent today – from our last market wrap? Sold for $1,530,000. 601 sqm or $2545 per sqm – this was affected by the Harrison Crescent  sale which was affected by the Blytheswood sale and so on. In fairness when I looked at Oak a few weeks ago and Nick Ptak from Marshall White gave me the quote of $1.1m, I didn’t roll me eyes. It was after all south facing rear, needed a major reno, car parking was not great and I’ve seen wider blocks.  Quote was initially 1.1m+ and seemed fair (as to how agents quote) as $1.2m was realistic.

5 Fairview Hawthorn was bought through Dale Edgecombe of Hocking Stuart for just over $3m

An another River Precinct Scotch Hill land sale through Jellis Craig of 8 Hawthorn Glen – $1,750,000 for 803 sq metres or $2179 per sq metre for south facing, sloping away from the road a bit block of land.

Tara Estate
Sale by Jason Scillio and Sam Wilkinson of Kay and Burton of 25 Loch St Camberwell – Expressions of Interest for $2,750,000. Good property, good price. Win for both buyer and seller.

Stock Levels.
Despite the price strengthening  having been up and running for a month or two before these stats below, they prove we are still in a situation which is conducive to continuing price increases.

• May to June 2008 – 199 sales over a million.
• May to June 2009 – 130 sales over a million.

If we continue to see money from Asia coming in strongly and stock levels remaining at historical lows, then prices will have to continue to increase. In Boroondara if you have a fixed budget you have 3 alternatives in the next few months.

• 1. Wait
• 2. Alter your PPP strategy (Price, Property and Position)
• 3. Tell your spouse the budget is changing.

Buy Well and we can help you with changing your PPP strategy.

Sandringham; 43 Victoria St: Buxton's Mark Earle under pressure from weather, foliage and 5+ bidders, delivered solidly for his vendor with an under-the-hammer result at $3.350 million.

It’s 6pm Saturday and no surprise that the James Clearance Rate on million-dollar-plus homes is 70 per cent on the 18 auctions we covered and two sold before. It’s no surprise because demand is “2007 strong”, with the Foreign Investment Rule Board rule changes regarding overseas buyers coinciding with a firm pick-up in confidence among local buyers. It’s also no surprise because stock continues to be at historically low levels.

Chinese Translation and Price Wormy to the right of this article.

Buyer Stress, Mind Traps and Mind Games

If you are a regular reader of James Market Insight, it won’t come as news to you that the market has shifted upwards between 5 and 15 per cent in the past eight to 10 weeks. As a buyer, you may well be paying more than February/March 2009 and considerably more than November/December 2008. In some cases** (not all) cases, you may even be paying a premium to the 2007 peak for good quality, well positioned $1 to $3m family homes and building blocks. For apartments, $4m+ homes and poor quality offerings it is a different market. These markets are weak to OK.

The global financial crisis was starting to bite in June 2008, although in some areas, such as Boroondara (Kew, Hawthorn and Canterbury), it did not reach its full depths until November 2008. Of course, some say it still may not have reached the full depths. But all this year the $1m to $3m family market has bounced back strongly and in 2009 it is clearly no longer going backwards.

For example, 20 Ross Street Kew, a block of land with a bulldozer house on it (910 sq metres) sold for $1.901 million in June 2008. A year later in June 2009, this house was re-sold at public auction, with three bidders, for $2.335 million. No improvements had been made to the house and you were still paying basically for a block of land. Although the value of the house would have been less than $1.9 million at pre-Christmas 2008, when the market really hit a bottom, it hasn’t taken long for prices to not only come back, but in some cases surge well past.

A 22 per cent increase, I wish my super fund had done this – whoops, I’m off track again.

Is 20 Ross St an aberration or an accident? Are we being selective in the example? Well, please look at the clearance rates for the past three months! Ross St was a strong price ($2565 per sq metre) but still market. Here are three comparable sales of the past six weeks (land only in the same area), and all three of these auctions had five or six bidders:

• 55 Alexandra Canterbury (780 sq metres sold at $2455 per sq metre);
• 61 Alfred St Kew (big land – 2261 sq metres sold at $2145 per sq metre); and
• 4 Blytheswood Kew (814 sq metre sold at $2396 per sq metre).

So, we know the market is hot, and the above are just three of numerous examples we could provide to prove this. Strong clearance rates, square metre price increases, large numbers at opens and auctions, lots of agent underquoting and lots of bidders – these are all symptoms of a strong and, in fact, rising market.

OK, OK, what’s your point?

Well, rather than writing another article telling you that the market is hot, we would like to help you understand how to operate effectively in such a market. A hot market means stress for many buyers and it’s easy to fall into what are called Mind Traps.

Some of these traps can include:

• a pattern of apathy or inaction – eg stop looking;
• taking the line of least resistance once an obstacle is put in your way – deliberately or accidentally – eg banks or bidding competition or a negative spouse;
• hating agents to the point that your emotion blinds you; and
• zigging then zagging to every newspaper headline and so on.

Have million-dollar-plus buyers in inner Melbourne missed the boat? Is the market racing out of control? Will we be able to find a home? Many buyers may be asking themselves these questions. Trying to answer them can put many into these Mind Traps, which can result in mild to severe bouts of stress, even depression and anxiety and, in some cases, a total freezing of life as you try to decide what to do.

Last year, when the market was going a million miles an hour in the opposite direction, many buyers were asking themselves different sorts of questions, which resulted in the same total freezing of life.

It’s not the market – it’s you. More precisely, it’s your thoughts.

But it does not need to be like this.

Buying a family home is not only about money, it is also about shelter, security and family – about futures. Buying cheap doesn’t guarantee it’s a good family home.

Buying a family home is about making good financial and emotional decisions and we have found that going through a tried and true process assists in making a good decision.

When we find ourselves getting off beam and a little stressed, we revisit what we are trying to achieve and we get back on the horse – ie follow a process.

While we are all different, the process we like is a three-stage one.

• Clarify and understand your needs,
• Assess all options against your criteria and price
• Negotiate to buy a home, not just a price, within a measured framework of Risk v Reward.

Like the acronym, this process is a CAN process.

So, in practical terms, what might you do?

First, panic is the key ingredient to poor decision making, so don’t. Yes, the market has gone up for now. End of story. Your panic will not alter the market. Deep Breath. Relaxing Music. Stiff Drink. Kick the cat. Whatever. Move On.

Second, consider all options. The off-market (unadvertised) is currently as big as it has been all year and, in the past month, we have had cause to miss and to buy within this market. We are looking at more homes than we ever have off-market; however, we are still only purchasing a small percentage of what we look at. Why? Price and Quality. Just because it is a secret doesn’t guarantee it’s a good buy. It is a good buy if it fits your needs, has a good rating and is priced to market. But off-market must be investigated.

Third, consider all your options. For example, stale properties. If a home was marketed but not sold last year and you thought it was OK, why did it not sell? Was it price? Well, if the market has moved up and the seller down, isn’t price now correctly aligned? Should the stale property be looked at with fresh eyes? Yes.

Fourth – Action. In 2007, buyers had to act quickly and boldly and, in 2008, buyers had time for consideration – even  procrastination – and were able to purchase as prices fell. We are now into Winter 2009 and the market for good homes no longer allows the luxury of time – it’s getting back to being like 2007. So you need to be well prepared and have a plan and a process that can condense the necessary due diligence into a far shorter time frame. Markets are fickle and always changing and you need to adapt. BUT please due diligence is not about haste and paying stupid amounts - you still need quality – please read below our footnote on Brighton land pricing to keep a pricing perspective.

Fifth, you still need to do due diligence. In property especially, buying the wrong home is a mistake that is far more serious than a missed opportunity.

Six, – turn up, put up and don’t give up. We still buy a certain percentage of homes that I can honestly say I didn’t expect to get but we did. The harder you try, the luckier you get. Keep turning every stone – we do.

Hope this helps and Buy Well.

Mal

Please note ** We are saying land prices exceeding the 2007 peak in SOME, NOT ALL cases – here is an alternative example from our Bayside roundup below.

Another Land sale of interest in June

24 Seymour Grove Brighton sold through Kay and Burton for $2,400,000 or $2152 per sq metre for south facing rear land (1115 sq metres) in the Were St Precinct. 66 and 76 Were St Brighton through Hocking Stuart’s John Clarkson and Barb Gregory for $2,250,000 and $2,237,500 respectively (similar land sizes) and we think we have a good land value yardstick around $2000 to $2200 per sq metre for Were St precinct land (south facing rear). North facing rear could be up to $2400 per sq metre and still be at market price.

We also watched 24 Seymour because it sold at the absolute Brighton peak for $2,920,000 or $2618 per sq metre which means that in this case Dec 2007 to June 2009 your saw a 20% drop. To keep it in perspective the $2.9m was a very strong price and by Feb 2008 (3 months later) land in that area was selling for $2100 per sq metre with sales at 29 Seymour (1011 sqm) at $2,160,000 and 13 Wolseley (1040 sq m) at $2,275,000 both with a northerly rear aspect, so superior blocks.

We think Brighton land is coming back strongly in value, although not as quickly as say Kew, Hawthorn and Canterbury land; and has returned to near the 2007 peak, but across the board it has not exceeded all the strong prices paid in late 2007.

McKinnon, 9 Crozier Court: seven bidders and sold for $1.381 million. Winning bidders.

Interesting to attend yesterday’s auction at 9 Crozier McKinnon. This was the biggest sale we can remember since 23 Hall St McKinnon last year, which sold under the hammer at $1.56 million.

While the Melbourne jewels of Albert Park, Brighton and, in particular, Hawthorn and Toorak are showing price increases – some up to 10 per cent - it is interesting to note that, in the fringe suburbs of McKinnon, Ormond and Bentleigh (and we mean fringe $1 million-plus territory, not fringe quality), we are aware of the following million-dollar-plus sales: seven to date in 2009. There were 24 in 2008 and 46 in 2007.

So, we are not seeing a surge in prices in these areas and that is supported by Phillip Kingston of Gary Peer who said in a casual chat that  ”While we are still getting away a few bigger sales quietly in Caulfield” (and he nominated a $2 million off-market one in the Bagel Belt), “we are not seeing the prices increases you at James are reporting, except in the $300K to $500K unit market.” That’s good information. If you are moving from the well-known $1 million-plus suburbs because it’s going past you, be careful you don’t assume the same is happening in your newly selected target suburbs.

It’s 6pm Saturday and the James $1 million-plus auction clearance rate was over 86% on the 22 auctions we attended. 86% on 22 auctions – hello.

It’s hard to believe we are supposedly in a recession.

Hard to believe indeed when you’re standing across the room from one of your experienced competitors Chris Koren of Morrell and Koren and both of us are looking at each other aghast. No, we are not bidding, we are standing completely mute (hard to believe again, as we’re buyer agents) trying to take in the fact that a property at 40 Lambeth Avenue Armadale, which was on the market and fairly quoted at $2 million, has just been bought for $2,860,000.

And speaking of Morrell and Koren, I was reading Damian Taylor’s article on the FIRB (Foreign Investment Review Board) changes and found it impressive in its content and analysis of the situation. Basically, many overseas people and companies who had a myriad of restrictions on what they could buy and a complicated procedure to achieve purchase can, as of April 2009, buy established residential dwellings and are no longer required to notify FIRB in advance. Yes, there are still some restrictions and, yes, not all overseas people who are here in Australia can buy, but a lot more can than before and they can buy a lot more than before. For more information: http://www.firb.gov.au/content/policy.asp

In a nutshell, this will mean an increase in demand and an increase in money coming into a market already short on supply.

Practically, this could also mean higher prices. Just as the overseas market was the backbone of the off-the-plan, high-rise apartment market, these new overseas buyers could be the driver behind further price increases at the top end.

And the changes have been quick. All of us have seen increases in traffic at open for inspections of overseas buyers but, as we have said in previous market news insights, we have seen no action. No action that is until now.

It started with a report from Dean Gilbert from Marshall White in our market news a few weeks ago, then a casual conversation with Ross Savas from Kay and Burton a week later where he said “Mal, the overseas market has fired up again”. We ourselves saw nothing until a fortnight ago and, since then, we have had several misses to overseas buyers. Some sales agents are no longer reporting just enquiry but also bidding and purchasing at auctions and private sales in the $1 million-plus market arena from overseas buyers.

We ourselves have seen part of our overseas client base move from talking to bidding. Most overseas buyers are from Asian countries.

Sean Cussell of Marshall White, Richard James from Jellis Craig and Jeremy Fox from RT Edgar all say the same: there is a strong pick-up in demand from overseas buyers, mainly from Asia, who now have fewer hurdles to home ownership in Australia and seemingly almost as much money as pre-GFC days. Boroondara is particularly sought after by overseas buyers, but not to the exclusivity of other councils.

If stock stays low, then the FIRB changes, plus the improved local buyer confidence/attitude, means that prices should continue to rise in the $1 million-plus sector, as they have since the second or third auction weekend in February. Yes, many are still below 2007 prices as it was a big fall last year!

This weekend, we definitely saw signs of a market spiking:

• spasmodic breakaway and unexplainable bidding
• continued multiple bidding
• lesser quality homes being bought

These are all signs that the market is rising. How long will it rise for? Well, we thought it may stay strong/rise until stock levels go up, but now we have to add another variable: it may also stay strong/rise until the overseas money drys up.

Click on Mr. James the $m+ Price Worm to the right of this article – he or she is moving up.

Boardroom auctions continue to be held. At Jellis Craig today, three bidders exceeded $3 million on a property that was asked to be undisclosed almost as a condition of entry – we will respect that. It was a strong auction result.

In finishing, I would like to thank Margie Lane, a client of ours, who has experienced some troubles with VCAT, Councils and Heritage. She has kindly put her thoughts down on paper in Adam’s Architecture section below and we thank her very much for that. It’s an eye-opening read.

I would also like to thank Gerald Betts of Marshall White for his contribution to Another Point of View article below.

It’s hard to believe a property can go $800,000 over reserve and be fairly quoted and …………………..

Have a Happy Mother’s Day Mum and Buy Well

Mal

Main Picture above:
See the glum guy in the tie standing above the concerned guy in the tie who is next to the frowning guy in the tie. That’s Michael Gibson, Gerald Delany and Sam Wilkinson of Kay and Burton and they were none too pleased as to how this auction at Cochran St Camberwell was going. No bids. But in the end they got the job done to the buyer’s and vendor’s satisfaction in post-auction negotiations at $1.85 million.