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

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

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

Rule No 1: You make your money when you buy

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

Rule No 2: Buy the best position you can

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

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

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

Rule No 4:  Don’t overcapitalize.

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

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

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

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

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

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

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

Rule No 8: Good Buyer Agents are of value.

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

Rule No 9:  Substance v Puffery

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

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

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

This article first appeared on Property Observer, Australia’s top site for property investment news and advice.

The projected priciest offering of the four Richmond houses on The Block is 37 Cameron Street, renovated by the hometown couple Jenna and Josh, according to James Buyer Advocates. All four properties go to auction this weekend.

37 Cameron Street (Jenna & Josh)

The buyers’ agency deemed 41 Cameron Street a close second – the one renovated by sisters Katrina and Amie, who chose Hocking Stuart’s Glen Coutinho to sell the house.

The key attribute of the likely top seller is its double-fronted façade. Ruth Roberts of Woodards is quoting the three-bedroom residence at $900,000 to $990,000. Jenna and Josh won the right to choose which of the four houses they wished to renovate.

41 Cameron Street (Katrina & Amie)

The ratings difference between the two was 615 out of 1000 and 595 out of 1000 under the James Buyers Advocates rankings system.

Biggin & Scott sales director Russell Cambridge has marketed the listing for Polly and Waz’s house at 39 Cameron Street, which has a 535 rating.

The lowest ranking of 502 was given to 43 Cameron Street, where Clayton Smith of Jellis Craig represents the contestants Tania and Rod.

39 Cameron Street (Polly & Waz)

“As a bit of fun we rated all The Block properties,” James Buyer Advocates principal Mal James says.

“While all contestants had done some great things, we are not sure we would put any on our shopping list.

“The internals may excite but the externals of no car parking, industrial street and commercial neighbours do not,” James says.

43 Cameron Street (Rod & Tania)

James Home Ratings examines pieces of information about a home and matches them against established buying criteria.

A rating below 550 means the property “has issues.” Between 550 and 650 is at the low end of average. Between 650 and 700 is at the high end of average. Between 700 and 800 is well above average. Between 800 and 850 is the best of its type, and above 850 is a rare gem.

“Nobody can predict with complete certainty the behaviour of each individual buyer or seller in a property exchange – however, it is possible to predict with a high level of certainty how large groups of human beings will react to a home.

“That is, there are a body of facts or truths when systematically analysed that show the operation of general laws with regards to home exchange,” James suggests.

The winner of The Block will be determined by the sale price above its undisclosed reserve, which means all four contestant couples have a chance no matter what rankings buyers agents give their renovated houses.

Channel Nine – THE BLOCK Auction Postscript
Congratulations to Channel Nine and The Block producers and selling agents for keeping it real. They could have made the whole auction night a charade but they didn’t – this is how Melbourne Auctions are right now for B and C grade properties – they are a very difficult sell and that was evidenced with 3 from 4 passing in.

We loved what the contestants did inside, but there was no way we could have bought any of them for investors or OYO’ers with the major negative issues they had outside the wonderful renovations – poor street, industrial neighbors, no car parking. These were mortal blows to the contestants before they even started – position is so important.

Well done to all who participated – it was true reality TV. Our ratings are still up for the Cameron St Richmond properties if you want to Google them. Also, well done to Biggin & Scott and Jellis Craig for their substantial donations to worthy charities.

STOP PRESS: March, while not huge in numbers, did finish the month with 3 solid mid week $3M+ buys – including 4 bidders at $7 million or better at 2 of them.

• Toorak Ottawa Avenue : Jeremy Fox of RT Edgar – quiet sale off market in the mid $8m’s
• Toorak 19 Huntingfield: Justin Long and Peter Bennison of Marshall White – mid week auction, 3 bidders and on the market at $6,700,000. Bought under the hammer for $7,060,000. James Connell said afterwards that this market was not all bad news and Huntingfield supported that.
• Canterbury 13 Rubens: Jeremy Desmier Fletchers and Tom Ryan, Sold before Auction: Over $3,200,000
• South Yarra – The Caroline Coachhouse – they were looking for $3m ish for a very long time (eg in the years) and now Mike Gibson – Kay and Burton has got it away.

South Yarra 17 Acland St: Gerald Delany. Fairly typical of the market for the slightly overpriced or slightly less than perfect. Passed-In with no bidders and now for sale at POA.

New Subscriber System: Over the next few weeks we will  introduce a free subscription model giving you greater access to our council-specific wraps, which include auction results, news, opinion and analysis on a micro level. This subscription model helps us improve your browsing experience as clients or general subscribers by delivering more relevant content to you on the site and in your email newsletter. Sign up by clicking Subscribe at the top right of the website. If you experience any problems as we are testing and implementing this new improved system please let us know at enquiry@james.net.au

Week Ending 26th March: The Market at this level was fairly quiet this week with the good sales, price wise but not too many of them.

• 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 and selling for circle mid $3′s

Armadale 1026 Malvern Road: The recipe was there for a good auction - quality period home on big land - however the market is a different beast from some time ago at this price level and a quiet auction took place with Jack Bongiorno in charge. Opened on a bid of $3,400,000, passed in to that bidder and was bought after for an undisclosed amount. Crowd of 40.

Week Ending 19th March:

Off Markets, Forthcoming Auctions and Expressions of Interest are increasing as market stock levels begin to rise dramatically. However some big sales including a $13,000,000+ in Toorak and a $7,000,000+ in Brighton along with a few other $3m+ buys indicate the market hadn’t completely gone to sleep .

James Tostevin: “Overall a good day. The $3m+ market is hard to read and we are not getting huge numbers of bidders at many auctions;  so there is a case to say the results may be looking healthier than the market actually is – but from a purely stats points of view (clearance rates) today was a good day.”

In Boroondara:

• Balwyn 34-36 Linckens:  (Toby Parker of Hocking Stuart) – a $3m+ auction slotted in for auction this weekend has been bought before.The quote was over $3.7m and if, as we believe, it was bought for close to $4 million then it was a strong sale.
• Kew 41 Victor Avenue: (James Tostevin) – Two strong bidders and sold under the hammer for $4,100,000.
• Canterbury 17a Alexander Avenue: Passed In $3,200,000. No bidders
• Kew 22 Stawell: Passed In $3,000,000. 0 bidders.

In Stonnington:

• 19 Kingston St, Malvern East, Iain Carmichael (BenMac); After auction in excess of $4,600,000
  “Auctioneer Iain Carmichael was in charge of proceedings for this picture perfect home.  A large crowd of over 80 packed in to the beautiful mature gardens surrounding the house, as the sun shone to show this property at its very best.  The initial vendor bid of $4,250,000 didn’t seem over the top given the location of this park-adjacent idyll.  Despite the auctioneer being confident of a sale, no further bids were forthcoming and, after referral to the vendor, the property was passed in. (Debbie McTaggart)
  Footnote: Nobody bid at auction at $4,250,000 but 2 bidders emerged post auction and fought it out afterwards to a price well in excess of the reserve and well in excess of $4,600,000. Go figure.
• Armadale 1026 Malvern: James Redfern of Marshall White: Passed in $3,400,000 and bought afterwards. 1 bidder.

In Bayside:

• Brighton 29 St Ninians: As always, auctioneer Jonathan Dixon opened proceedings right on time and the preliminaries were soon completed. This property has a supreme and uninterrupted view of the Bay from the City to Royal Brighton Yacht Club and the potential for future development was clearly explained by Mr Dixon. Nevertheless, no bids were forthcoming and the property was passed in on a vendor bid of $7,300,000.
• Brighton 18A Martin: Passed In for $3,300,000. 1 bidder.

Labour Day Weekend March 12th: As expected minimal activity over the weekend; well no auctions that is – a heap of new stock was listed to go onto an already over supplied market.

Brighton 2 Shandford: Bought Post Auction for over $7 million or in around $10,000 per sq metre - meaning Melbourne absolute waterfront is amongst the most sought after land in the world. Regina Schmidt and Brian Devlin from Buxton.

On a buying note, the Golden Mile in Brighton is still alive and well with Regina Schmidt and Brian Devlin from Buxton getting 2 Shandford away post auction for an undisclosed amount over $7 million and in fact over Shandford’s other $7 million sale of a few weeks ago. This home had some positives and will possibly be retained but with two blocks totaling around 1400 sqm going for nearly $15,000,000 this shows that Melbourne absolute waterfront has some of the most sought after beach front in the world on a dollar per sq metre basis.

Another quieter one in the Golden Mile just before the long weekend – 11 Kent Avenue (Stan Fisher of Biggin and Scott) – was reported as bought again for an undisclosed amount having been sold only last year for a tick over $4 million. The rest of Melbourne may be a little quiet, but Golden Mile Brighton is relatively hot for land sales (compared to previous years).

In the heart of the Bagel Belt at 85 Lumeah Road Caulfield North (Gowan Stubbings of Kay and Burton) a large block of land (around 1800 sqm) with a tired home on it was sold for an undisclosed amount for over $4 million, under the hammer, having been on the market at $3.5 million – 3 bidders. That makes it number two along with Langdon Road at or over $4m in the last fortnight in Caulfield.

In Stonnington 20 St Georges has been bought for an undisclosed amount. The property had been quietly on the market for some time before a more public campaign this year. The asking price estimate was $12,000,000 to $15,000,000 and it is believed to have been sold in the middle. Andrew Tolson of TBM was the selling agent. We went through it a few times on behalf of different clients and found it to be a home of some class with good light and a nice flowing floor plan – slight negatives were a less than full-sized tennis court and some overlooking at the rear (although it was not significant and, if you lost the tennis court, planting could remedy that). Being St Georges it commanded a premium – although to date its “little brother” down the road at No 10 hasn’t sold at an already passed Expressions of Interest deadline. However, considering the home’s characteristics, it would be hats off to the agents if it got near their $10,000,000 ask, even if it is St Georges.

Also went through 14 Bruce St Toorak late last month –  it has been bought for a reasonable margin over $3,000,000. Again showing the power of good architects and in particular Wayne Gillespie. Difficult block and orientation and a market place that has competition for supply, so this was a good result for an Expressions of Interest campaign and the man that sells a number of these very quietly – Marcus Chiminello.

‘Hoping for $3m in a different market but didn’t quite get there’ stories: In Port Phillip, 7 Pilley Street in St Kilda East, which was originally marketed at an ambitious around $3 million, has been bought for around $2.6 million - Jeremy Fox of RT Edgar. All things considered, this was still a very good result for the area. In Malvern, 5 Gaynor Court with Rob Vickers-Willis got to $2.73 million and a three storey terrace home in Carlton with Anthony Gattuso of AG Property got around the same amount. All solid results.

Overall still a lot of properties on the market at this $3m+ price level that have completed normal auction and Expression of Interest with no result.

Malvern 66 Claremont: Iain Carmichael: Bought for $3,700,000: 3 bidders: At this point, someone yelled "is it on the market?" and the BenMac team hastily retreated inside to speak to the vendor. Upon his return, Mr Carmichael said yes indeed it was on the market and it was here that the bidding really took off. After the price hit $3,625,000, one of the bidders went bang - $3,700,000 - and knocked everyone else out of the competition. A great finish to a great auction

Week Ending 5th March: All the bigger deals were basically in one spot, Stonnington.

Actual Boughts in Stonnington:

• Malvern 19 Hamilton – Justin Long – At Auction – $4,357,000
• Malvern 66 Claremont – Iain Carmichael – At Auction – $3,700,000
• Toorak 9 Ross – Justin Long – Auction – over $3,600,000
• Toorak – 3 Teringa – Andrew(s) McCann and Macmillan of Benmac – post last weeks auction – over $3,500,000 – nearly $5000 per sqm for rear south facing land
• Toorak – 611 Toorak Road – Expressions of Interest – Greg Herman of RT Edgar – $3,500,000
• Toorak – 231 Kooyong Road – James Redfern – Post last Saturday’s auction – over $3,500,000
• Malvern East – 127 Finch St – Rob Vickers-Willis – $3,300,000

Bayside: A Key land Indicator

• 11 William St Brighton with Rod Richardson of Hocking Stuart – $3,100,000 for 1383 sqm of land = $2,241 per sqm for land in central Brighton. Solid and expected result. 5 bidders.

Boroondara: Action at the Top End almost non-existent

• Stock Surge – Large amounts of $M+ stock are hitting the market for pre-Easter campaigns
• 61 Bellett Camberwell has been on the market since July of last year and was sold by Sam Wilkinson of Kay and Burton mid week for $3,100,000.
• The Balwyn formula of big block, new home, big price tag seems to have come to a grinding halt – very few high end new sales. Opportunity?
• Off markets are on the increase.

Port Phillip: The overpriced are as cold as ice in Port Phillip right now. No bites, no action – as evidenced by the pass-ins of yesterday and the first two weeks of this market.

• I went to a Beaconsfield auction yesterday – the offering slightly less than perfect but still a great spot – however the start was a $4million vendor bid and then a $4,250,000 vendor bid. I may have to eat humble pie when the result comes in but for me the four sales on this strip over $4m last year seemed different offerings.
• 49 Howe Crescent, which was advertised in an Expressions of Interest campaign for later this month, sold last week well over its $5m+ guideline for more than $6m (we believe). A very rare large land size at 915 sqm with a double fronted Victorian on it shows the pulling power of large land so close to the CBD in the St Vincent Garden precinct (or just off it). Michael Coen of Hocking Stuart was the dealmaker on this one. Good job.

Ivanhoe, 9 Nyorie Crt, David Oster (Jellis Craig); Bought after auction, $3,100,000, 2 bidders

Around the Grounds:
Parkville, 543 Royal Pde, Craig Shearn (Jellis Craig);
“The auction of this Royal Parade home had all the makings of an entertaining event, with a picturesque location, a lively crowd in attendance and just the right amount of sunshine in which those gathered could bask. Auctioneer Craig Shearn competed valiantly with the noise of the passing Saturday traffic as he commenced his preamble prior to the main event. However when Mr Shearn asked the 40+ onlookers for some audience participation there was distinct silence, prompting an opening vendor bid of $1,500,000. This, being the only bid of the auction, the property was passed in, leaving the crowd to slowly disperse.” (Nikki Hills)

Richmond, 177 Brighton St, Andrew Macmillan (BenMac);
“Andrew Macmillan of Bennison Mckinnon gave the neighbours of Brighton Street a lesson in history before the auction commenced at number 177. Unfortunately this failed to generate any action or interest from the crowd and the property passed in on a vendor bid of $1,050,000.” (David McMillan)

Ivanhoe, 9 Nyorie Crt, David Oster (Jellis Craig);
“All the stars were aligned here – the most magnificent day Melbourne could produce, approximately 4,000 square feet of land fronting the Yarra river and crowd of 120 people all in shock over this amazing property. Auctioneer David Oster starting proceedings with a vendor bid of $2,600,000 to get things started which it did and two bidders took the price to $2,950,000 before the the property was passed in. Bought after for $3,100,000.” (Guy Angwin)

Richmond, 177 Brighton St, Andrew Macmillan (BenMac); Passed in, $1,050,000, no bidders.

National Breast Cancer Awareness Month was celebrated at the auction of 12 Sunnyside Grove, Bentleigh (Andrew Chisholm, Buxton). Elmo was on hand to watch as the home was bought under the hammer for $1,165,000, 4 bidders

Key Points

• Ascot Vale, 13 Fisher – Ray White – With views over the Maribyrnong River, this was bought for $2,000,000. Land value $2,000+ per sq metre
• 8 buys over $1m in Caulfield and Elsternwick this week, including in the heart of the Bagel belt – 31 Aroona with Rochelle Butt of TBM at $2,511,000
• Templestowe, 70B Newmans – Robert Sordello – Bought Before for over $2,000,000
• Warrandyte, 31 Oakland – Spiro Drossos – Private Sale over $1,700,000

Agent Q & A

What advice would you give a buyer wanting to purchase a property between now and Melbourne Cup Weekend?
Bill Stavrakis, Biggin Scott, Elsternwick: “My advice to any genuine buyer would be to look at purchasing a property that suits their requirements, if the price is right. Procrastination might very well lead to buyers being ‘caught out’ through the lack of new listings coming onto the market post Melbourne Cup. Stock levels seem to be nowhere near the volume of last year and this may very well result in very few buying opportunities leading up to Christmas.”
David Oster, Jellis Craig, Ivanhoe: “I would suggest to a buyer that wanted to purchase between now and Melbourne Cup… to go for it. There are (higher) stock levels and the opportunity to enjoy a more balanced market.  If you are the highest bidder and it’s passed in to you, make sure that you enter into a reasonable negototiaion. Don’t outsmart yourself.  Be flexible.  And you aren’t paying or competing with the same market as 12 months ago. Enjoy it, as the market can swing again such as it did from 2008 to 2009..and it wasn’t in a buyer’s advantage.”
James Davis, Miles Real Estate, Ivanhoe: “With rates having stabilised, it’s a good time to solidify your position and take the next step on the property ladder and upscale. As the market keeps steamrolling on, now is the perfect time to buy property…today…if not yesterday!!”

Around the grounds
Moonee Ponds, 135 Park St, Brad Teal, Bought Under the Hammer, $1,230,000, 2 bidders
“A crowd of around 60 gathered to watch Brad Teal auction 135 Park Street, Moonee Ponds. A vendor bid of $1,050,000 opened the proceedings and things progressed slowly with the half time break, which occurred after one actual bid of $1,070,000. Then the sale was fought between two parties aggressively until a final result of $1,230,000. Solid result for the vendors.” (David McMillan)

I give up! Milo Rasinac (Nelson Alexander) at 15 Jacka St, Essendon. Passed In, $2,500,000, no bidders

Essendon, 15 Jacka St, Milo Rasinac, (Nelson Alexander), Passed In, $2,500,000, no bidders
“Just as the auction started the heavens opened up on 15 Jacka Street, Essendon and despite auctioneer Milo Rasinac’s best efforts no bidders emerged from the 100 strong crowd. The property was passed in on a vendor bid of $2,500,000.”(David McMillan)

Ivanhoe, 51 Robbins St, Rod Watson, (Jellis Craig), Passed In, $1,050,000, no bidders
“By the scheduled auction time at the Robbins Street auction, only a sparse crowd was evident, obviously having been frightened off by the torrential rains earlier in the day. Just as the sun was slow to come out, so were the spectators slow to gather. Yet assemble they eventually did, to witness a largely uneventful auction, despite the quality of the property up for offer. And, despite his best efforts, auctioneer Rod Watson was unable to elicit a response from the crowd to his numerous requests for an opening bid (unless a dog casually sauntering his way through the crowd can be taken as interest!?) and the home was subsequently passed in on a vendor bid of $1,050,000, leaving the surprised crowd silently stunned.” (Nikki Hills)

Templestowe 20 Edwin: Passed In $2,600,000: 1 bidder: Auctioneer Adrian Santini:

Templestowe, 20 Edwin: Adrian Santini of Barry Plant: Passed In for $2,600,000, 1 bidder:
They breed ‘em tough out Templestowe way. This was a knock down, drag it out affair and I was exhausted just watching it. Forty minutes – seven or more vendor bids and one genuine bid. Adrian Santini passed in this home at $2,600,000, having started it at $2,000,000 with a vendor bid. One bid from the crowd at $2,300,000. Next time I’m taking a cut lunch and if it’s that cold again – a sleeping bag as well. I’ll be honest I didn’t see why it took so long to achieve the result it did. A crowd of around 50. (Mal James)

Ivanhoe 20 Robbins: David Oster and Rod Watson of Jellis Craig: Bought After Auction $1,378,750: 2 bidders

Biggest

• Clifton Hill 12 North Terrace Steve Earl of Harringtons was bought at auction for $4,115,000

Around the grounds

Alphington 6 Bennett: Peter Egan Nelson Alexander: Passed In for $1,000,000: No Bidders

It could only be described as scenes from an unfortunate comedy skit – one I’m sure auctioneer Peter Egan had not foreseen when commencing the auction of the Bennett Street property. The crowd of more than 80 onlookers bore witness to a series of natural and man-made interuptions during the proceedings. A swarm of bees passing overhead prompted Mr Egan to joke: “I’ve heard of an auction with a buzz about it but I haven’t experienced this before!” Adding to the crowd’s entertainment, and Mr Egan’s chagrin, was an animatedly barking dog and wailing baby, which was efficiently whisked away from the location. Just as all appeared to be back on track and the focus returned to the job at hand, a bus noisily pushed through and subsequently became stuck in the middle of the street, once again taking the crowd’s attention. Mr Egan valiantly pushed on, humorously making light of the obstacles and with a vendor bid of $1,000,000 attempted to secure a sale. Despite his best efforts, the property was passed in on a vendor bid. And, despite the outcome, it made for an extremely entertaining auction….one that Mr Egan could really only describe as “one of those days”! (Nikki Hills)

Ivanhoe: 20 Robbins Street: David Oster Jellis Craig: Bought After for $1,378,750: 2 bidders

A generous crowd of mainly neighbours turned out for the Robbins Street auction. A row of sensible onlookers took their seats early, perching on the brick wall opposite the action, comfortably bathed in dappled Spring sunshine. Following the opening remarks, auctioneer David Oster looked hopefully to the audience for an opening bid. Although Mr Oster wasn’t put out of his misery straight away, a strong $1,200,000 bid was eventually received from the audience to start the action. A two way tussle followed until the $1,375,000 mark, at which both bidders were keen to know if the property was in fact on the market. A brief interlude, whilst the auctioneer sought instruction inside from his vendors, allowed the crowd to catch up on their neighbourly chit chat. However with the property not yet on the market, the bidding dried up and the home was unceremoniously passed in, prompting the locals to stroll back from whence they came! Bought after for an undisclosed amount. (Nikki Hills)

Essendon 25 McCracken: Milo Rasinac Nelson Alexander: Passed In $1,625,000: No Bidders

What a beautiful afternoon this was. As auctioneer Milo Rasinac worked his theatrical magic on this medium sized crowd of 50 you might have expected that something special was about to happen. Mr Rasinac continued to toil in the afternoon sun looking for that first bid, so necessary to get the ball rolling, but this didn’t eventuate and the property was passed in. (Guy Angwin)

Clearance Rates

Results

Paul McDonald moving things along nicely at 98 Primrose, Essendon: 3 bidders: Bought under the hammer for $1,312,500

The rest of $M Melbourne Melbourne slipped a cog this weekend with a 64% clearance rate on 25 $M+ reported auctions – a fair way down from last week’s stellar 83% on our 30 monitored $M+ auctions.

Some Highlights

• In Yarra (Richmond to Fitzroy) there were six properties up for auction at around a $million, and six were bought
• Elsternwick 9 Gladstone – Bill Stavrakis - bought at around $2,500,000. Land in that area is pushing $2000 per sq metre if you presume you’d bulldoze 5 Gisborne Elsternwick, which was bought yesterday for $1,505,000 (750 sqm) – Daniel Ashton of Biggin and Scott
• Caulfield saw three from three $M+ bought at auction on Sunday – all with Gary Peer: 7 Palm with Eyal Malka, 22 Pental with Daniel Rees and 53 Bundeera with Darren Krongold
• Williamstown 2 Hannan – a nice little double-fronted, bought this week for $1,720,000 – Michael Harvey of Williams

Agent Questions: Stock Level and Premierships

David Oster, Jellis Craig, Ivanhoe: “Stock levels are looking very good after a soft September. It will be a late Spring.”

Stewart Oldmeadow, Miles Real Estate in Ivanhoe: “We’re finding numbers pretty strong at the moment in this area.  I think it’ll hold at this level through to Christmas now.  People have seen that the sky is not falling in, so emotion alone will determine if it has hit the apex or not. And I think Collingwood will win this year.  To win, St. Kilda would need Riewoldt to do something amazing, whereas with Collingwood each man does his own thing on the team.  I think that’ll win it for them”

Paul Anderson and Paul Anderson Real Estate Essendon: “Stock levels are low for the general Essendon area and we are hoping, and that is all at this stage, that stock levels will pick up towards the end of October”

Around the Grounds - Auction  Flavour

Elsternwick 5 Gisborne: Daniel Ashton; 3 bidders, Bought After $1,505,000
Bill “I love every street in Elsternwick – but this particular one I’m auctioning today just that little bit more” Stavrakis, of Biggin and Scott, gave his usual entertaining and polished performance extracting bids between $1,300,000 and $1,440,000 from 3 bidders within a crowd of 50, before a strategic pass-in took place at $1,440,000. Feels like it was going to sell soon afterwards for a bit more. Bought after for $1,505,000. (Mal James)

Essendon 98 Primrose: Paul McDonald: $1,312,500; 3 bidders, Bought under the hammer
Paul McDonald is one of your quieter auctioneers – he starts things on time, moves through the rules and proceedings at a good pace and gently brings the bidders into the start position. Unlike many others he doesn’t yell and scream and dance – he just tells you where things are at – consistently, firmly and without agro. I found it a refreshing change. The first bidder started things at $1,200,000 and the third bidder finished it under the hammer at $1,312,500. Solid. (Mal James)

Alphington 22 Yarraford Avenue: Craig Shearn: $1,390,000: 3 bidders, Bought under the hammer.
This peaceful, tree-lined street was the picture-perfect setting for an entertaining auction. With an air of anticipation within the crowd, Craig Shearn was surprised and delighted when offered a decisive opening bid of $1,000,000 right off the bat. Whilst two other bidders bravely entered the fray at times during the auction, there remained little question as to whom the successful party would be. Each rising increment offered by other bidders was immediately thwarted with a confident and definitive increased bid. The knock-out bid came at $1,390,000, which brought spontaneous applause from the crowd as the happy couple marked the momentous occasion with a warm embrace! (Nikki Hills)

Ivanhoe East  489 The Boulevard: Stewart Oldmeadow: $1,740,000: 2 bidders: Bought under the hammer
The chance to snap up a home overlooking the Yarra Flats was enough to attract a good crowd to this auction. When Stewart Oldmeadow’s request for audience participation brought silence from the crowd, he commenced proceedings with a vendor bid of $1,400,000. It had the desired effect and what continued was a two-horse race, with strong and steady bidding from both parties until the final bid of $1,740,000, which took it across the finish line to victory. (Nikki Hills)

Monitored Auctions

We only buy homes

Alphington 22 Yarraford: Craig Shearn of Jellis Craig: 3 bidders and bought under the hammer for $1,390,000

Nick Renna Of Hocking Stuart in action on 14 The Highway Bentleigh. Bought $1,301,000. 4 Bidders.

The Melbourne $M+ market outside Inner East and Bayside performed pretty well today with 25 of the reported 30 $M+ auctions or 83% selling. This figure is a little generous, with a few unreporteds, but it nonetheless shows a strong “fringe” $M+ auction market.

Highlights

• 18 Carn Avenue, Ivanhoe with Sue Lacey of Miles selling for $2,040,000 after auction.
• 42 Barkly St, Fiztroy with Nathan Waterson of Benmac selling on auction day for an undisclosed amount believed to be in excess of $1,500,000

BidderBuzz Auction: 14 The Highway, Bentleigh: Calvin Reid of Hocking Stuart: 4 bidders
James Auction Report: Nick Renna usually entertains the crowd and he didn’t fail on this occasion. After a low opening bid of $1,000,000, Nick quickly topped this with a vendor bid of $1,100,000 which produced quick fire action from at least 3 other bidders. When the reserve price of $1,290,000 was announced, this fine property was quickly bought under the hammer for $1,301,000.

James Home Rating: a very impressive 792/1000: This part of Bentleigh is increasing in popularity all the time – we call it the sporting precinct owing to the brilliant sporting facilities on Jasper road – add to this walking distance to train, coffee (Centre Road) and Safeway and this area is becoming highly sought after. The Highway is one of the better streets in Bentleigh due to its consistency of offering – almost all are period homes and Calvin the agent states there is a council overlay restricting development to some extent. The home itself really does tick all the boxes – good garaging although tandem, two street frontages, good home flow. Being picky the upstairs could do with an extra 6 inches in ceiling height and as is the norm the front formal rooms are standard size for this period but in today’s market are regarded as borderline in size. The renovation is first rate out the back and built with some class and foresight and the window tinting and placement are nice touches. You could slip in a pool fairly easily or simply enjoy the backyard as is. Overall for a homebuyer with a budget in the the low to mid ones this warrants thought and if you are lucky it also warrants your signature. Rock solid family home. More Information and see our Full Rating: http://www.james.net.au/rating/14-The-Highway-BENTLEIGH

97 Locksley, Ivanhoe: Greg Taylor of Miles: 1 bidder: Bought Afterwards

James Auction Report: Auctioneer Greg Taylor was concise and to the point in front of a smallish crowd of around 25 people. Understandable as this was a nice property but it had a few issues. The auction opened with a vendor bid of $1,200,000 – followed quickly by a lone bidder at $1,225,000 and a pass in. Bought afterwards. Full Auction Report at http://www.marketnews.com.au/auction-reviews/8713/97-Locksley-Road-IVANHOE/

Greg’s Market Comments: The market is light on for $M+ homes compared to earlier in the year and this time last year. Most homes are going within the quote ranges except for those with a real WOW factor – eg family homes. Some of these are shooting past expectations.

Clearance Rates and Results:

Greg Taylor of Miles: 97 Locksley, Ivanhoe: Bought After: Undisclosed: 1 bidder: Passed In $1,225,000.

We only buy homes

Clifton Hill 40 OGrady: Bought under the hammer for $1,190,000. 3 bidders. Craig Shearn moving proceedings along.

Well, after a few weeks of modest bidders numbers I think its fair to say that the market is softening in the inner city.

Softening in terms of bidder depth (bidderman at 1.7) and a much higher degree of buyer discretion.

Russell Cambridge of Biggin and Scott said:  “whilst bidder numbers and open attendance numbers are falling this is normal as we move into the winter months” and “despite the reduction in bidder numbers we are not seeing a reduction in price as demand is still quite healthy” this is no doubt backed up by the fact Biggin and Scott Richmond sold 6 out of 6 today.

Clifton Hill was equally as strong with most properties selling well. 4 Dywer Street, (Roland Patterson of Nelson Alexander) a two bedroom single front, sold for $895,000, with 4 bidders,  a strong result and an argument to say prices are still appreciating slightly in that area. Conversely 40 O’Grady Street (Nicolas Corby of Jellis Craig) a three bedroom single front with all the right attributes sold for $1,190,000, 3 bidders, now that is good buying and could suggest that prices are softening in that area.  These properties are only a few streets from one other, Conclusion….?

Tom Roberts of Nelson Alexander had a big one today at 571 Canning Street, Carlton North. 200 people turned up to watch this grand terrance go under the hammer. Bidding opened at $2,500,000, and two bidders moved it slowly to $3,250,000 at which point the property was passed in. Mr Roberts sold 5 from 6 today and indicated that market is hot and warm depending on price points.

Inner (Yarra) Auctions

Inner Melbourne (Yarra) – 11 monitored – 8 bought – 73% clearance rate

Know your market

Richmond 22 Stawell: Passed In $900,000. 2 bidders. Scott Patterson, Clayton Smith and Hayden Reed in action.

Sam Rigopoulos of Hocking Stuart was in fine form at 33 Barry Street, Northcote

The market is holding up in the inner suburbs of Melbourne – no run-away results, just a stable market with depth.

Hocking Stuart, (Richmond) &  Biggin and Scott (Richmond) reported a 100% clearance rate today with 11 out of 11 sold. Both agencies reported multiple bidders and a stabilising market.

Andrew Gibbons of Hocking Stuart noted the biggest auction of the day was 319 Highett Street, Richmond, a big turnout of 250 people watched the property sell under the hammer for $1,492,500 on a reserve of $1,395,000. Five bidders and a strong result considering the property has no off -street parking.

The 2 bedroom Richmond market is still solid with, 31 Wall street, Richmond -  bought $785,000, 68 Bendigo Street, Richmond – bought 775,000, 16 Rose Street, Richmond – bought $826,000. All these property had issues and still sold well with 3-5 bidders across the board. Mr Gibbons indicated that the current market is seeing a noticeable reduction in open numbers however those that are attending are quality buyers.

Further North – Sam Rigopoulos of Hocking Stuart put on a great performance to rev the 100 strong crowd at 33 Barry Street, Northcote. The property was announced on the market at $880,000, 5 bidders emerged from the crowd and the property was finally sold for $950,000. Its was a solid result for the well located single fronted period dwelling.

Two big listings in the past two weeks that I thought I would mention, 571 Canning Street, Carlton North and 501/28 Tanner Street, Richmond.

571 Canning Street with Tom Roberts of Nelson Alexander (James Rating 765/1000) 
Link: http://www.james.net.au/rating/571-Canning-Street-CARLTON_NORTH 
is a wonderfully renovated and extended terrace with all the bells and whistles. The outdoor space of this property is equally as attractive with meticulous landscaping, which includes lap pool come water feature, inbuilt BBQ/Bar, retractable canopies and surround sound. It will be very interesting to see the result as there are not many dwellings in the Carlton North area that attract offers over $3 Million.

501/28 Tanner Street with Nathan Waterson of Bennison Mackinnon (James Rating 771/100)
Link: http://www.james.net.au/rating/501/28-Tanner-Street-RICHMOND  
is a two bedroom penthouse with arguably the best views in Richmond, 270 degrees, un-interrupted of the CBD, MCG and out to the Eastern Suburbs. Winning apartment of the year in 2003 this property is sure to impress and with a price tag around the 2.5 million mark it will be a landmark apartment sale for the Richmond area.

Little to report in Banyule (Eaglemont, Ivanhoe, Ivanhoe East) this weekend.

Until next time, know your market.

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

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

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

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

4) Of the 32 auctions we attended today.

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

That is very different to a month ago.

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

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

By areas:

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

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

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

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

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

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

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

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

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

Diary of a Buyer Agent:

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

Saturday, 1 May

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

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

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

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

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

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

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

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

Sunday, 2 May

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

Monday, 3 May

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

Tuesday, 4 May

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

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

Wednesday, 5 May

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

Thursday, 6 May

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

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

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

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

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

Friday, 7 May

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

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

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

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

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

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

Buy happy

Mal

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

Gino De Iesi of Barry Plant at 10 Plow Street, Thornbury giving us the 'ol soft shoe shuffle as he sings and dances his way to a bought result at $971,000. Bidderman an impressive 5.

In Richmond today, the auction at 501 Swan Street had 9 bidders. It felt like we were back to the start of the year in which this was a very common occurrence. Andrew Gibbons of Hocking Stuart announced the property on the market at $795,000 and that’s really when the serious bidding started with bids coming from everywhere. The property was bought for $880,000 – a very solid result for the vendor considering the main road frontage.

On the flip side 5 Thomas Street, Richmond – a 3 bedroom single fronted only had one bidder and passed in on a vendor bid of $1,380,000. Not all bad news though as Clayton Smith of Jellis Craig managed to negotiate a final result of $1,510,000. Despite this anomaly the market remains “red hot” according to Edward Hobbs of Biggin & Scott who sold 5 out of 5 today. Mr Hobbs who sold 253 Punt Road today for $904,000 added you know the market is hot when main road properties are selling for very solid results – on this point I would have to agree.

Thornbury is following Northcote’s lead and is fast approaching the million mark for basic 3 bedroom dwellings,  two sales of note today were 10 Plow Street (Gino De Iesi of Barry Plant) and 259 Raleigh Street (Michael Fry of Nelson Alexander) selling for $971,000 and 980,000 respectively. Both dwellings were renovated and well located but not without there faults. Bidder numbers were strong with an average of 4 bidders across the two auctions.

A few big land sales out in Ivanhoe; 10 Young Street, Ivanhoe (Kieran Whaley of Barry Plant) sold for $1,360,000 on 728m2 showing a rate of $1,868 psqm & 48 Marshall Street, Ivanhoe (Sue Lacey of Miles Real Estate) sold for $1,155,000 on 645m2 showing a rate of $1,790psqm. This further confirms that land in the better located parts of Ivanhoe, Ivanhoe East and Eaglemont is on its way to $2,000 psqm.

May 8th was not a huge day volume wise – looking forward to brining you more news in the coming weeks

Know Your Market!

Eaglemont: Melbourne best kept real estate secret, according to Rod Watson of Miles Real Estate.

There were hints from a number of agents that the Richmond market might be cooling. Today results showed no evidence of this with high clearance rates and seven results over the $1,000,000 mark.

Russell Cambridge of Biggin & Scott indicated that there were multiple bidders at all auctions with all properties sold and strong results across the board. Mr Cambridge said: “The run-away result of the day was 63 Charles Street, the unrenovated two bedroom had a reserve of $800,000, pushed well passed $1,000,000, finally coming to an end at $1,115,000″ – Mr Cambridge also added that he had never had a bigger hug from a vendor.

Million dollar results in Richmond include 5 Dickmann Street, 4 bidders, bought over a million undisclosed – 11 Clifton Street, 3 bidders, bought $1,867,500 – 63 Charles Street, 6 Bidders, bought $1,115,000 – 30 Wrede Place, 2 bidders, bought $1,086,000 – 103 Coppin Street, 4 bidders, bought $1,000,000. In addition to this Andrew Gibbons of Hocking Stuart indicated that two pass ins from last week have been sold within the past 48 hours being 22 Grattan Street, bought $1,300,000 and 537 Swan Street, bought $1,045,000.

161 Rose Street, Fitzroy passed in on a vendor bid of $860,000 – most surprising however was there was no bidders. This property was subsequently sold for $930,000 on Monday morning (Simon Shrimpton, Jellis Craig).

Into Eaglemont, a key land sale at 29 Hawdon Street (Rod Watson, Miles Real Estate) bought for $1,455,000 on  780 m2 showing a rate of $1865 per square metre. Hawdon Street is very attractive and tightly held, so no doubt 4 out of the 5 bidders will be very disappointed. Round the corner in Ivanhoe East, 6 Keam Street, a wonderfully renovated family home passed in for $1,725,000. Walter Dodich of Marshall White invited the lone bidders in and managed to negotiate a final result for his vendors of $2,000,000.

Looking at the inner Melbourne market from a birds-eye perspective it’s apparent that bidder numbers are reducing from the 6, 7….10 bidders we were seeing in the months past. Despite this there is still enough competition to sustain high clearance rates and solid results.

Know your market!

Abercromby's Rob Vickers-Willis in fine form at 14 Wheatland Road Malvern with a big crowd of a 100 producing 6 bidders and a post auction result in excess of $2,250,000. Photo: Julia Atkinson

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate for the 36 Auctions we attended today was a solid  75 per cent on good stock numbers.

The “frenzy” feel has left the highest of the higher end market for now as the new age businessman and establishment money, who determine the Toorak market, reconsider after

(1)    looking at their business’s forward estimate balance sheets.
AND
(2)    looking at the prices being asked.

While we are indicating we think the market has cooled in the last fortnight, we are not saying prices are dropping – they are just leveling a bit as buyers say; no more – nope – that’s enough – I don’t wish to afford anymore. Consequently at the TOP END there are now fewer occasions when there are multiple extreme bidders pushing prices 10% beyond the previous week’s experiences. This in effect has produced a leveling of demand at the $2m+ mark and consequently vendors are selling at market expectations in line with last months performances or they are not selling.

The price surge since November 2009 on top of the unending climb since March 2009 may well be showing some light at the end of the tunnel for distressed buyers.

But please . We felt this cooling about a month ago and then the pre-Easter weekend slapped us in the face and said: “No buddy you’re wrong – no market leveling here”. That same cooling feeling or perhaps better described as less frenzied feeling is flowing freely throughout the Top End of the market today as buyers simply say. No.

No – I’m not scared anymore – I need to be sensible and if I can’t buy it at that; then I need to move on and find one I can.

This could become the May 2010 buyer mantra as we have good stock levels for the next 4 weeks. How long will it last? Personally I think it is a thought of some substance and we may see an extended period of buyer caution.  We are saying buyer caution not buyer inaction.

Many (not all) of the buyers who have a few million and then some to spend on a home understand money. They understand balance sheets; they work and/or mix in positions where they observe what is happening in business. And businesses right here and now are asking questions of the future.

So while buyers are not panicking in any shape or form – they are still around in very strong numbers – they as a collective seem to have taken a more circumspect view of what a home is worth to them. Buyers seem happy to leave it to those that must have it (bullish buyers or unrealistic sellers) and move on in search of a home that is good quality and sensibly priced.

Let’s hope this is the case because no one, bar an opportunist, loves operating in a boom and bust market. And if we keep booming then we are going to bust.

The Inner Melbourne Median Market say $1million to $1.5million is a completely different animal and this is to be expected. At this level discretion is not an option – you need to house the family. They are getting bigger or you are moving here or you are leaving home. Buyers need to buy and they still are in strong numbers. Nope. This market is still giving the impression it is well and truly unsatisfied and still has an incredible appetite for the markets offerings at this price level.

Some of today’s (Saturday May 1^st) stats on the auctions we covered

Over $2million – Bidderman 1.9. Clearance Rate 60%

Under $2million – Bidderman 3. Clearance Rate 82%

The market is not going backwards, it is just rejecting those who are still on the rise and rejecting those agents who have promised the world and then some, run a campaign accordingly and looked around at auction time surprised it’s not 15% over last week’s best result.

However buyers the market is not weak; it is still very strong at the right price for the right home.

Buy happy

Mal

Malvern 14 Wheatland Road auction crowd in excess of 100.

Glen Coutinho in action at 537 Swan Street, Richmond. Passed In - geez that's rare for Glen - passed in for $985,000. 2 bidders

As always with the Anzac long weekend the market activity was limited; so its very hard to gauge if any mood change with minimal transactions.

Although no one seems to be on holiday’s in Richmond with 300 people attending the auction at 8 St Phillips Street. The cute double fronted was in high demand, seven bidders emerging from the crowd and a final result of $987,000. Great outcome for Chris O’Shaughnessy of Biggin & Scott. On the flip side 537 Swan Street passed in for $985,000 in front of 60 people with only two bidder’s. Traffic noise is a consideration on this property and this may have held many back.

Andrew Gibbons of Hocking Stuart indicated that the Richmond market was still strong with opens and auctions being well attended for a long weekend. Mr Gibbons added that bidder depth is good with 3-4 bidders at every auction and there seems to be more Asian buyers in the market at the moment. When asked who is buying at the moment Mr Gibbons said: “there is a greater presence of emotional buyers as opposed to investors”.

181 Gipps Street, East Melbourne was auctioned today for the second time in 4 months and again passed in. One lone bidder of $5,900,000 was invited inside for further negotiations.  Another pass in at 10 McCutchen Street, Northcote but what was really surprising was there was No bidders. I would have thought that a well located, well renovated period dwelling in the heart of Northcote would have at least attracted a few buyers. The property passed in on a vendor bid of $900,000.

Nick West of Nelson Alexander indicated that whilst there are still some run away results the market is starting to be a little more discerning. “The demand for Blue chip property is still exceptionally strong, however average properties are a becoming harder to sell”, he said. Mr West also added that quote rangers are now more realistic and vendors expectation are getting higher.

What is quite evident with today’s results is ….. not much. There are 5 auction weekends in May so the end of May will be a good time to reflect on the market direction since Easter.

Know your market!

Chris O'Shaughnessy and Edward Hobbs of Biggin and Scott in the middle of battle at 43 Laity Street, Richmond.

Its been a few weeks since our last update and despite the recent interest rate rises the market broadly is still where we left off – moving upwards.

Starting at the Top End of Town in East Melbourne a crowd of 60 strong witness 50 Berry Street pass in on an opening vendor bid of $1.9 million. Rob Vickers-Will of Abercromby’s gave the crowd every opportunity to bid but no one emerged. Things were slightly different at Albert Street where the penthouse with excellent views of the Fitzroy gardens was aggressively pursued by 4 bidders. The property sold well above reserve at $1,355,000 – solid result for Andrew Macmillan of Bennison Mackinnon

Richmond is still  strong with 2 bedroom dwellings like 17 Reid Street, 149 Lennox Street, 125 Brighton Street, 15 Bendigo Street & 21 Type Street all selling around the $ 900,000 mark with multiple bidders at all auctions. The depth of bidders indicates that well located 2 bedroom dwellings in Richmond are moving closer and closer to $1,000,000 – indicating significant market movement from 2009 where high $700,000′s was the norm.

Craig Shearn of Jellis Craig indicated that the Clifton Hill office had a 100% clearance rate with prices well above reserve anywhere from 5% – 15%. Mr Shearn noted that ” limited stock is still the main contributing factor behind the high clearance rates” and that “the recent interest rise appears to have had no affect on prices as the majority of purchases have already factored rises into there budgets”. Most importantly Mr Shearn noted that in his 26 years of real estate he has never seen  the market continually surged as it has in 2010.

Stefan Dzanovski of Collins Simms has also commented on the market strength with company clearance rates being between 97% – 100% in 2010. Also adding that open’s have been very well attended specifically double storey terrace’s in Carlton North, Carlton and Fitzroy.

Things are also hot in Essendon with 28 Schofield Street selling under the hammer and well above reserve – basically a land sale there were 4 bidders in total, one of them the next door neighbour. Solid result for the vendors and complements to Milo Rasinac of Nelson Alexander for an entertaining auction. At $1,267,000 this buy says land is valued around $1500 per sqm for the Salmon Reserve Green Belt.

The month of May has been talked about amongst many agents as a month of good stock levels and we concur, seeing May 1st shaping up to be a big weekend.

We are sure buyers would appreciate any kind of relief coming into the market as evidenced by the rising median price indicators courtesy of the REIV. While there are anomalies caused by small number of sales in some quarters this chart clearly shows prices have been on the march since the start of last year and circumstances seem such that it is likely to continue.

Know your Market