There’s a saying in our business that the really good agents should take the J months off: January, June and July. That certainly happened this year: most good agents have spent a fair proportion of the last eight weeks re-connecting with family, friends or their inner self. Yes, we do have all of the above, (well most of us do).

Sure, there’s been plenty of talk about tough times from the punters and press; plenty of conjecture about where prices are going from anyone who knows anything,  and from plenty who know absolutely nothing about high end Melbourne real estate. Like that other great weekend game there have been some personnel changes – and the odd betting, sorry ‘quoting’, scandal and a few boys who didn’t pass the dope test.

All in all we seemed primed for an interesting four months between Footy Finals and Santa time.

This next four months is traditionally two markets:  the early Spring market – which runs from just before Elimination Final day to Grand Final – and the late spring market which starts the week after Grand Final and runs at a frenetic pace until the Melbourne Cup break and then for another month before winding down into Christmas.

We’re likely to see some ‘Super Saturdays’ at the end of August, on preliminary final day and the weekend before the Cup. And then, depending on the early Spring market, perhaps also the last week in November and the first fortnight of December.

The almost guaranteed Super Saturday will be the last week before the Melbourne Cup – although with the Grand Final running a week later this year sellers will need to start their four week campaign on that holiest of days, the Grand Final, to get in before the horses leap from the stalls at Flemington.

So what should home hunters be looking for? A good start is to look at the thickness of their Weekly Review over the next few weeks. Seriously. If the Review is like a phone book prior to Grand Final, then we’ll have some choice and prices may not run away on the good quality homes. But if it is as thin as a dry cleaning brochure, buyers are going to have to compete hard on the limited quality stock presented.

Which is what has been happening since May. There has been so little on offer that is quality. Which means any quality, well-priced home has attracted considerably more interest than you’d expect reading the gloom and doom headlines. That’s because this market is not a weak market caused by lack of demand – any weakness or negativity is due to a severe quality contraction of supply of well priced quality homes.

Our company went to 28 auctions the weekend before last and a third had 3 bidders or more – with three $1 million plus auctions attracting 5, 7 and 9 bidders That included a 5 bidder auction at 3 Irymple Ave, Glen Iris (Iain Carmichael and $3,000,000 Bought); a 7 bidder at 42 Guildford Rd, Surrey Hills (Antony Woodley and $1,381,000 Bought) and a 9 bidder, at 28 Montclair Ave, Brighton (Peter Kennett and $1,820,000 Bought).

So it’s all about the sellers. The late spring market post Grand Final will be in part determined by the headlines in marketnews.com.au and the newspapers over the next two months. If August and September is all negative headlines and low clearance rates and talk of falling prices then anyone who doesn’t have to sell will again be reluctant to market their homes – and that will again  impact on buyers.

So what are buyers hoping for in this new home hunting season? Choice. Firstly they want some thick property mags in August or September; they want to see some positive headlines in the papers in the lead up to Grand Final; and then they want more thick magazines between Grand Final and Melbourne Cup. If that happens the world should be a wonderful place for Melbourne homebuyers. If not well ….. let’s wait and see.

Published each week in The Weekly Review – Melbourne’s million-plus property magazine.

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

Key Points:

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

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

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

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

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

Not Happy James: 3 Scott Hawthorn: Passed In for $1,260,000. 1 bidder.

Key Points

• Clearance rate lower than expected
• 4 out of 5 properties over $2,000,000 passed in
• A number of no bid auctions which we haven’t seen for some time in Boroondara
• 6 out of 7 properties in Balwyn North between $1,000,000 and $1,500,000 were bought

Price Watch

• 10 Leslie St Hawthorn with Chloe Quinn of Jellis Craig was bought for at $1,310,000, around 20% more than was paid last year
• 11 Carlyle St Hawthorn East with Tim Heavyside of Fletchers is bought for just under $2,000,000 or $2,400 per sq metre in Harcourt precinct
• 15 Constance Hawthorn East with Tina Ceravolo of Hocking Stuart is bought for $2,451,000, or $3100 per sq metre if you bulldoze in Anderson Park precinct

Biggest

• 4 Willandra Canterbury was bought pre auction through Paul Pfeiffer of Hocking Stuart for around $3,000,000

BidderBuzz

15 Constance St, Hawthorn East, Glen Coutinho, Hocking Stuart, Under the Hammer $2,451,000, 5 bidders
“A superb spring day greeted the very large crowd that gathered at Constance Street, Hawthorn East. There was a high level of eagerness and once the auction began it was clear why. As Glen Coutinho initiated proceedings an immediate bid of $1,700,000 was placed. This was obviously below the vendor’s expectations, however Mr Coutinho accepted the bid and the auction began to take shape. With 5 keen participants there was a high level of activity – it did take sometime for the bidding to reach the reserve of $2,400,000. This auction was highly entertaining and the bidding was managed and delivered with enthusiasm and excitement. Mr Coutinho’s honesty from the outset of where the reserve price sat helped to deliver a favourable result for the vendors. With two potential buyers still in the race once the reserve was met, the property was finally bought under the hammer for $2,451,000.” (Dustin Cracknell)

Agent Q & A:

October 23 is Super Saturday – What can we expect?

James Tostevin, Marshall White, Hawthorn: “It has been a strange ‘lead-in’ to spring, given the drawn out election and uncertainty surrounding which political party was going to be in office, two AFL Grand Finals and of course, the school holidays. The weekends leading up to the 23rd have a reasonable offering of properties, but the weekend prior to the Melbourne Cup long weekend will provide a real test of the current strength of the real estate market. I am anticipating a clearance/success rate in the vicinity of 70% across Melbourne, possibly a little above that in the best performed suburbs within the Boroondara, Whitehorse, Stonnington and Bayside areas.”

Steve Burke, Jellis Craig, Hawthorn: “Super Saturday is a great test for our marketplace and I am sure the clearance rates will continue to be strong based on the energy from the buyers coming through the open houses.”

Forward Auction Bookings

Clearance Rates

Results

Some of our buyer prayers have been answered

Market: Even with significantly reduced auction numbers this weekend (owing to a more important event which finally delivered a result that proved there was justice in the world), we still saw a pretty healthy market result for sellers – with a 74% Clearance Rate on the 55 $Million+ auctions we monitored. Of those 55 auctions, 9 results were not reported. But even that is not unreasonable under the circumstances of the GF Replay.

There seems little doubt that the market is on the rise. The big interest now is how the market will absorb the stock surge that will culminate in Spring/Summer’s first Super Saturday on October 23rd.

And it really is Super Saturday - with a massive 81 $M+ auctions booked for Boroondara alone, and around 200 $M+ auctions booked in our key focus $M+ areas – Bayside and Inner East. Check out the size of the Weekly Review this week (it’s as big as a phone book). By comparison this weekend saw only one quarter of that number of auctions. So if you were at an auction this weekend, those four bidders you competed against may well be spread across four homes in a couple of weeks. Well that’s the “buyer-hope” theory anyway.

This Week’s Highlights:

• Two land sales showing vastly differing land values
  a) Land at 101 River Avenue Plenty (39,500 sqm), which can be subdivided, was auctioned  by Rob Stefanovski of LJ Hooker Greensborough and  bought for $3,830,000 or $96 per sq metre
  b) A large land parcel (1,813 sqm) at 3-5 Heath St Sandringham sold after a failed auction by Bill Jowett of Buxton for $2,800,000 or $1,544 per sq metre
• The major stock inflows that took place on Monday, Tuesday and Wednesday when agents began their marketing campaigns for the next Super Saturday – October 23rd.
• The continued improvement of the $3M+ market – two examples below
  a) Off market in Black St Brighton (Peter Bourbaud and Barb Gregory) – bought for around $4 million
  b) 27 Moorhouse Armadale with Gowan Stubbings of Kay and Burton – bought after an Expression of Interest campaign for more than $5 million
• The Pies Forward Line pressure (whoops, sorry – I got distracted)

Auction Snapshot from this weekend: 133 Rathmines Fairfield: Michael Fry and Grant Leonard of Nelson Alexander. Bought under the hammer for $1,116,000. 5 bidders.
There was a buzz about this well located timber period home, which had had its quote lifted to $930,000 during the campaign. It was a surprising development given Grant’s comment that the property failed to attract any interest in the high $800s a few months ago with a quiet sale campaign. It was on the market with the first bid at $900,000. Second bid $950,000. Third bid $970,000. Fourth bid-  bang $1,000,000. Three more bidders joined in before the action stopped at $1,116,000. It was a well run auction campaign. I always enjoy a Michael Fry auction. He has a sophisticated grace about him incongruent with the fact that he is yanking the dollars from buyers’ pockets. Enjoyable to watch unless you’re an underbidder – which unfortunately this time we were.

Bumper Market Insight: We have an information packed Market Insight this week; even though there are no Market Wraps, Bidderman, reports or videos.  The footy replay threw this auction weekend into a bit of chaos, with a few auctions even changing days. But it was a very low stock weekend anyway, so no major damage. All $M results are at the end of this Market Insight. But the big news now is the next three weekends that will lead full bore into the Melbourne Cup Long Weekend.

Stock Levels and Price Assessment:
The big question the market will be asking now is: What will happen to prices on October 23rd? With this big stock influx, how is the price game of snakes and ladders going to pan out? Are we going to see the slippery snake and big price slide of May 2010 or will the market just take this in its stride, as it did this time last year, with prices climbing further up the ladder? Time will tell. Importantly as buyers you need to get yourself organised – and don’t count your chickens before they’ve hatched.

With this apparent largess of choice, perhaps you don’t need brilliant home-seeking skills right at this moment. But you will need first class assessment procedures (e.g. sorting the goodies from the baddies in terms of capital growth prospects, and working out which one is best from a “happy wife = happy life” point of view). You will also need good negotiation strategies – because while you may have more choice, you will also have competition. Remember, our bidders per auction indicator Bidderman was strong on lower numbers in September, especially on good homes. On the flipside, some sellers expectations may be disappointed, so planning good negotiation strategies will improve your chances of grabbing a bargain when it presents.

Have a look at our Forward Auction Booking graphs below to get an idea of what is ahead of you: (click on a graph to enlarge)

There are also some exciting trophy homes on offer through private sale and off market – especially in the $3m+ segment.

Have a look at the New Stock Graph at the top of Market Insight – which compares the last week in September to the last week in June, (private sale and auction weekly new stock numbers are combined).

Special Report on the $3m Market

The $3m+ is back, after the self induced May hiccup that led to a very quiet winter.

There have been over 50 buys in the month of September at this level, with buyers coming from all quarters. Let’s pick one of the segments – around $4million. We have bought 3 homes at this specific level in the last few weeks. All were classic period homes with land of over 1000 square metres. Two were bought post auction (eg after a pass-in) and one was off market (Black St Brighton). However, the interesting thing were the buyer profiles. One buyer was a change of life family, one was a growing family that needed more space, and one was an expat family returning from overseas. This is a fairly accurate representation of the range of people we look for homes for. Of the last case – expats returning from overseas -Brighton high end agent Peter Bourbaud believes “this group will push the market along for the next few years, after a couple of very quiet years from the expat community”. We concur. Last year we conducted very little in business terms last year for expats. However in 2010 there has been a distinct pick up in action from expats returning home.

The James September $3m+ Report with all reported $3m+ boughts and solds can be viewed from the Home Page (next to Market Insight and below Buyer Masterclass) or click here

If you are new to the $3m market you may find the charts below (using 2007 to 2010 Valuer General, REIV and our own James Databases) of some value, as they help to show how the overall $3m+ market works. Note particularly that:

• The two powerhouse $3m+ suburbs are Brighton and Toorak (see 2009 results graphed below). However these two suburbs behave quiet differently from each other (see median graph). More on that another time.
• More $3m+ is bought later in the year than early. (2009 graphed below)
• There are some real name streets around and there are some falsies (where if you pay top dollar you will stand out like a beacon)
• Less than a quarter (25%) of $3m+ homes sell under the hammer at auction (click on September Graph below)
• A lot more activity is off market (not advertised) at this $3m+ level than any other price point, e.g. sub $3m.

Click on any of the graphs below to bring them up to full size

Agent Comments on the current $3m+ market

• “Prior to the school holiday period there was some renewed strength in $3m+ market due to things stabilising after the election and to the shortage of good quality homes. With the spring market in full swing it will be very interesting to see what happens with the increase of volume. But if the enquiry rates are anything to go by, October will be a strong month of sales.” Andrew Hayne of Marshall White Malvern
• “The $3 million plus market is strong, and we are expecting a big finish to spring in this market for good family homes.” Nick Johnstone of JP Dixon Brighton
  
• “There seems to have been a resurgence of buyer enquiry for the upper end properties recently.  It will be interesting to see if this follows through once we see increased stock levels after the school holidays and round 2 of the Grand Final.” Julian Augustini of Hodges Brighton
• Andrew Baynes from Kay and Burton South Yarra “Last Monday was the busiest auction sign up day for me in 10 years.”

Media Monitor: Domain – The Age 2/10/10. Headlined: “Hands up if you don’t have a clue” by Josh Jennings. Basically a solid article – but Josh, how many homes has Dr Damien Eldridge, Economics Lecturer from La Trobe University, bought using his quoted bidding advice this year? Would it have been 5 or 10 or 50? Going by his auction comments we were unclear as to whether you were holding him out as an expert – or simply providing supporting evidence to your headline.

We are not all brickbats here for the mainstream press. Congratulations to Chris Vedelago from The Age who this year has been consistently reporting the market as it really is and who actually seems to get out of the ivory tower (that so many property reporters are stuck in) and goes to auctions and talks to agents. We mightn’t always agree with you Chris, but we respect your work. Keep it up and keep getting out into the market.

Market News TV: On Tuesday of this week we ask the question: Is the ACCC or CAV the right watchdog for the real estate industry? Check out our Agent Opinion Videos.

Buyer Masterclass: We conclude our Negotiation Masterclass series with an article on Backward Bidding. From next week until Christmas we will be looking at “Pricing and Values” in Million Dollar Melbourne

Reported Results:

Looking cool under pressure, Michael Nolan (Noel Jones) tries to encourage some bidding at 11 Scheele St, Surrey Hills. One bidder entered the fray, the property was passed in at $1,100,000 and bought afterwards for $1,150,000.

Key Points:

• Balwyn 23 Bevan, Richard James & William Chen. Quote $3,300,000 to $3,600,000. James Home Rating 742/1000. Bought After Auction Around $3,500,000. Bidderman 1. James Video Auction:  http://www.marketnews.com.au/video/?vid=316
• Hawthorn 24 Coppin, Jock Langley. Around $9,000,000 Private Sale. This basic house, on an acre on the river in Hawthorn’s river precinct, has been on the market for well over a year and had quotes at $15m then 12m and then…. A number of agents have worked on this. I went through this home last year and finally Jock has got a sale through under $10m. It’s a great block, and its only fault was its price tag.
• Kew 30 Wills, Scott Patterson. 3 bidders. $2,615,000. Under the hammer
• There were bidders at all 10 auctions we went to (although Aberdeen St Hawthorn East was bought immediately after auction, after no prior bidding)
• Clearance Rate of 78% on the 36 $M+ auctions we monitored

Agent Q & A: Premierships and Stock?
Andrew Gibbons, Marshall White, Hawthorn: “Oh … you would have to go the “CATS” my friend…back to back Premierships…they clearly are the most dynamic team in the way they handle the ball and play as a team. They are in fantastic shape with all the key players fit & healthy…they are HUNGRY!”

John Bradbury, Noel Jones, Balwyn: “You would have to say Collingwood, unfortunately. I would like to think the Saints could get up and win but after Collingwood’s defeat of Geelong, you’d have to go the Magpies.”

Michael Nolan, Noel Jones, Balwyn: “After (Friday night), Collingwood. They made Geelong look old!”

Daniel Bradd, Jellis Craig, Hawthorn: “The Bulldogs because it’s about time.”

Richard Winneke, Jellis Craig, Hawthorn: “The Saints because it’s about time.”

Daniel Wheeler, Marshall White:”There are few good houses coming on the market in the next few weeks”

Doug McLauchlan, Marshall White, Hawthorn: “Stock is extremely low at the moment and the concern is that potential stock offered in October will not come onto the market until much later in the year. These low stock levels could be in  part due to the exceptionally high stock levels on the market in the early part of the year. Added to this, an election that took 7 to 8 weeks to resolve wasn’t helpful. Uncertainty seems to be an issue.”

Bidderbuzz Auction of the Day: 2 Cusdin St, Glen Iris, Paul Williamson, Jellis Craig, Bought Under the Hammer, $1,300,000, 3 bidders.

“There was a good feeling at this auction. So much so, that agent Paul Keane had time to look after someone’s pet dog while they were doing a pre-auction inspection. This atmosphere continued as the auction gained some momentum and, after an initial vendor bid of $1,100,000, two bidders competed as if it was a two-horse race. Just at the pointy end of the auction, after eleven bids, came a bold and aggressive bid of $1,300,000, which blew the two other bidders out of the water – and the property was sold at this price.” (Guy Angwin)

Biggest Auction of the Day: 30 Willis St, Kew, Scott Patterson, Jellis Craig, Under the Hammer, undisclosed above $2,600,000, 3 bidders, crowd of 80 people.

“There was anticipation in the air as auctioneer Scott Patterson commenced proceedings with a vendor bid of $2,400,000. With the clouds clearing, things progressed rather slowly until a very determined bidder entered the fray, and the auction began to take shape. Three genuine buyers all fought to secure this great piece of Kew, which created a very exciting auction. After some boisterous back and forth bidding, the successful buyer secured the property for his client for an undisclosed amount.” (Dustin Cracknell)

Clearance Rates & Monitor Table:

Forward Auctions:

Glen Coutinho (Hocking Stuart) means business at 12 Beaconsfield Rd, Hawthorn East. Under the hammer, $1,256,000, three bidders

Key Points:

• We covered 11 auctions across Boroondara on Saturday. Of those, 4 sold under the hammer, and 4 were bought after.
• Bidders on all bar one auction.
• Big crowd increases.
• The biggest auction of the day was 42 Wattle Valley Rd, Canterbury (Richard Winneke of Jellis Craig), which had an after-auction sale price in excess of $3,400,000 and a massive crowd of around 250 people.
• 2 Berkeley St Hawthorn suprisingly sold – considering it was surrounded by for a number of overlooking flats – Robert Vickers-Willis of Abercrombys – good get at over $3,000,000

Biggest Auction of the Day: 42 Wattle Valley Rd, Canterbury, Scott Patterson, Jellis Craig, Bought after (undisclosed in excess of $3,400,000), 1 bidder, crowd of 250
“Like most people in Melbourne I love going to the football. Now, those reading this might say “what are you on about Guy? This is a property report”. Well, the picture I am trying to paint is the auction at 42 Wattle Valley Road was just like going to the football – the crowd has huge! Probably close to three hundred people. Inside the house there were queues to get into the bedrooms and trying to get upstairs was near impossible. This was anticipated as this was a very special house. You don’t get a James Buyer Rating of 805 unless it ticks all the boxes. Now back to the auction, what an anticlimax! If you were the vendor you would think there must have been a number of parties amongst the crowd looking to lock horns and fight to the death to buy this stunning home. Unfortunately there was little bidding action . After a vendor bid of $3,425,000, there was a very last minute bid of $1,000 just to secure right to negotiate after the auction.” (Guy Angwin)

Agent Q & A: What is your view on pricing?

Scott Patterson, Jellis Craig, Hawthorn:“The  market is patchy at the moment and we are seeing mixed results. The homes with the ‘wow’ factor often attract concentrated bidding at auctions and with the properties that don’t need work, there is always more interest in those as many people don’t have the time to fix them up. As for the homes with poor floor plans, it certainly affects their appeal. I would say there is a 20 per cent difference in price to those with good floor plans.”

Glen Coutinho, Hocking Stuart, Hawthorn:“Now that the government is sorted out, the market should remain healthy between now and Christmas. There is a shortage of good houses. Apart from the usual disruptions of the AFL and the racing season, there are still some good selling days.”

Bidderbuzz Auction of the Day: 34 Kinkora Rd, Hawthorn, David Oster, Jellis Craig, Under the hammer $2,690,000, 6 bidders
“Auctioneer David Oster led a ripper of an auction in the highly sought-after Grace Park Estate. There was interest from the get go with an opening genuine bid of $2,000,000, promptly followed by two others from the crowd of around 150. As the price rose so did the bidder numbers – 6 in total, joining the quest to secure this Hawthorn home. The determined bidding of one at $2,500,000 saw the property go on the market soon after at $2,506,000. At $2,690,000 five bidders bowed out to the unwavering bidder left standing. The crowd erupted in applause at this strong result and quickly disappeared, most likely for a coffee at nearby “Liar Liar” to recall the entertaining spectacle of this Spring mid-morning auction.” (Julia Atkinson)

Clearance Rates & Monitor Table:

Forward Auction Stock Levels

Not everyone in Melbourne was home watching the football on Saturday. Around 250 people watched Scott Patterson (Jellis Craig) in action at 42 Wattle Valley Rd, Canterbury. Passed in $3,425,000. One bidder. Bought after, undisclosed.

We only buy homes

What is it with redheads? They're running the country - and now they're taking over the auctions. We counted six in this photo in amongst auctioneer Phillip Kingston from Gary Peer. 7A Nightingale St Kilda East. Bought After $1,200,000. 1 bidder.

At 6pm Saturday the James Clearance Rate on the 22 $M+ Auctions we covered was 59%.

Our Demand Indicator Bidderman was 2.2.  Hmmm – an interesting increase but it was off a very low turnover.

Today’s Highlights

1)      Bidders were present at 18 of the 22 auctions we covered –  and at three auctions there were 6+bidders

• 23 Sunburst Avenue Balwyn North (Doug McLauchlan of Marshall White)
• 12 Lennox St Hawthorn (Russell Turner of Christopher Russell)
• 7 Monomeath Avenue Toorak (Justin Long of Marshall White)

2)      The Pies are top of the ladder – and the election is on

We couldn’t find many $M+ auctions worth covering and only one of the auctions we covered went over $2m this weekend. So with the small numbers – just coming out of  the winter hiatus – it was like a first back training run before we get into the winter season proper over the next few weeks.

Agent Quotes

Scott Patterson of Jellis Craig: “Sold 12 from 16 today throughout the company. Opens and auctions were well attended…those who wish to sell in next month or two could enjoy quite solid results due to lack of supply, because demand seems reasonable… August 28 is looming as big weekend, particularly as it is now the week after the election…only thing is that Hawthorn vs Collingwood might affect crowd numbers etc…’

Hamish Tostevin of Marshall White: ”Opens were steady without being over-run with buyers. Certainly a lack of property at the moment in terms of supply. Should be a solid spring, particularly when the election is out of the way.”

Now, where were we before we were so rudely interrupted (by the school holidays)?

It has been a month since we last reported, and we have seen more Top End activity at Tullamarine than in any other suburb. Was it sales? No. It was our selling agent brethren jetting off to Europe to recharge their batteries. This poor humble buyer agent can only give you a travelogue on the Dubbo Zoo so I won’t bore you with tales of kids and a 12-hour car drive or the fact it ain’t a patch on the Werribee Zoo.

The world is a different place since our last report: back then Kevin ’07 was in charge, Masterchef was still a competition to find the best amateur chef in Australia, not the luckiest cook as it is now, and our $M+ market had prices cooling quicker than a Melbourne winter, after a blistering start to the year (although there were still an incredibly high number of buys).

A month ago we reported that the early 2010 gains had evaporated in the five auction weeks of May due to the sheer number of listings. May’s record supply finally stopped what had, since March 2009, been a rising market, driven initially by international buyer demand and then solid local demand.

So what is happening in our Winter Market (June to August) right now?

To be frank we don’t know for sure yet. But here are some of our thoughts.

1. Prices Now
2. Stock Quality Now
3. Method of Sale Now
4. Risk v Reward Now

Prices Now
Selling agents love to use the ‘p’ word plateau (rather than the four letter ‘f’ word)  to reflect on, or deflect away, thoughts of a declining price market. Right now, we actually agree with the ‘p’ word – especially if you accept that prices fell significantly in May and June. (By the way, the ‘f’ word that selling agents don’t like to use is fall.)

Some reasons prices may be plateuaing are:

• Seasonally reduced action (winter)
• An election on the horizon –  so some buyers and would-be sellers will pause to wait for the result.
• We had a big price fall in May and  for most of us market watchers the way forward is still unclear. Will we see more price drops or …. who knows? Like many, we are waiting for a sign.

Demand in Relation to Price

• This weekend Bidderman was at 2.2 – but, please note, this is based on very low auction volumes and therefore statistical distortions are possible.
• As a buying company,  we have had commitments from a significant number of new clients over the past few weeks.
• We feel it’s better to reflect overall demand as more cautious rather than dropping – however another month or two may tell us a different story.
• Right now, buyers still do have the rare luxury of having their cake and eating it too – if they choose to. Prices have fallen in May/June, and in July we are in a market of reasonable choice. Hooray for buyers!

Private Sale Clearance Rate – the number of Proven Sales is only 11 from 50 – or 22% – over the past six weeks.

Six weeks ago we randomly selected a basket of 50 higher end Private Sale and Expression of Interest properties, right across our $M+ Melbourne market. We did this with the aim of  checking  what was bought 6 weeks later (roughly the same time as a “go to whoa” auction campaign), and to therefore calculate the clearance rates  to see how Private Sales and Expressions of Interest were really going.

We thought this snapshot would provide the best reflection of private sale market activity and confirm or question comments by some selling agents that: “Oh yes, auctions were not as good as March, but we are selling a heap via private sale”. The results proved that while in May agents were selling a heap, it wasn’t so much the case in late June to early July. However,  it could have just been that many agents were away.

• We have made an effort to contact those that were withdrawn without a sale price, and we may have missed a few sales – but overall the non-auction homes are NOT running out the door any faster than the auctions. In fact you could make a strong argument that, as an effective method of sale, auctions are still outperforming private sales in many cases – despite the declining clearance rates, given that only 1 in 4 private sale properties have been bought in 6 weeks.
• These figures must surely help smart buyers put together an offering strategy. It’s certainly prompted us here at James Buyer Advocates to change how we buy in the last two months.

Today’s final word on price – are you a glass half empty of half full person?

If you feel the double-dip recession is fast approaching and the world as we knew it is about to end, then, by all means, don’t buy – and in fact sell (and please give us a ring if you have a good home to sell).

If you feel Julia (Gillard) won’t be changing the legitimate immigration numbers any time soon (demand) and Justin (Madden) won’t be able to release large numbers of housing blocks in Inner Melbourne because they are not there (supply), you may wish to ignore the doomsayers and take advantage of this current price breather combined with good stock offering. The GFC lasted less than a year  (for us) and in July 2010 Melbourne $M+ home prices are still 20 to 30 per cent above 2008 GFC home prices. Remember the 2008 ‘bulls**t’ rumour of the year, which said the NAB and other banks were about to foreclose on 200 homes in Toorak alone – it never happened. Yes we are biased and make a living by encouraging buyers to buy – but the facts are still very positive for buyers.

Stock Quality Going Forward
Spring quality and auction numbers are the variables we don’t have a clear handle on as yet. Right here and now in July, we have a market with excellent stock numbers for buyers – if you know where to look and you actually act correctly (please see the following paragraph on methods of sale). We also think the quality is good. Going forward, quality stock levels are not clear to us, because traditionally when quality sellers see a declining market they are loathe to put their home on the market on a speculative basis (in that, if they don’t have to sell, they won’t). This obviously leads to less stock on the market, which may affect price but, more importantly, it affects choice. Good buying decisions are more likely when, along with good advice, you, the buyer, have good choice.  You have that now.

Method of Sale
As we said, there is choice now if you know where to look, whom to ask and how to deal. Look at the above private sale table – there are some good homes there. We keep overhang lists (stales and unsolds) and there are also a number of off-markets and quiet pre-releases available. Granted, some of the vendors are still in their price cocoons but  quality sellers who have adjusted their price expectations may have homes worth considering. The off-market (unadvertised properties) may well be the market of choice for a number of buyers and sellers in the next few months.  But, please note buyers, you will have to sharpen your negotiation strategies to take advantage of all that is on offer.

Risk v Reward
To digress – Risk v Reward is where Masterchef’s Adam and Claire had it all over Jono. While Jono was going for the big dish on every occasion – and you have to admire him for that – he wasn’t playing the game to the best of his abilities. Adam is the quiet master at the Masterchef game. He sees a situation and says: “Yeah, I want to try and make a dish that will impress the judges and maybe get me a shot at immunity – the reward – but I don’t want to push the boundaries that far that I risk getting in the elimination round if I fail.” Good Home Buying and Negotiation is absolutely the same as this. Why is that? Because in the first instance the strategy should be to get yourself into a strong position and not risk all for the pot of gold. Once you are in that strong position, then you can make a run for the prize. Another analogy is acclimatising at base camp before you make the assault on the Everest summit. This is Risk v Reward.

A full James Buyer Opinion on Risk v Reward in today’s Market will be published here on Tuesday – so look out for it this week. At the moment you will find our biggest ever ‘clicked on’ James Buyer Opinion article – The Learning Fee - right next to this article.

It’s good to be back

We Only Buy Homes

Mal

Balwyn North 23 Sunburst. Big Crowd for Doug McLauchlan of Marshall White - 125 in fact. Seven bidders. Bought under the hammer for $1,567,000.

Hawthorn 18 Melville: With the sun in his eyes, auctioneer Alastair Craig took the helm on this crisp, sunny morning in Melbourne. There was a strong atmosphere in the crowd. With three bidders, it was passed in at $1,605,000 and was bought afterwards well above this figure.

As we approach the shortest day of the year, we saw a record number of auctions in Boroondara on Saturday (compared to equivalent weekends in past years). Given the large supply, the market seems to have  some resilience. In fact, there is so much going on that  many key agents are delaying their traditional mid-year holiday by a few weeks.

Of the 11 auctions we featured, two were bought under the hammer, six were passed-in,  one was bought after and two were bought before. Our demand indicator, Bidderman, was 1.4 for the weekend.

The word from some of the selling agents we respect:

Richard Winneke (Jellis Craig) – “The market is patchy right now. There is certainly a lot of stock on the market. Jellis Craig’s clearance rate for the day was around the 65% mark. Hawthorn appears to be holding up quite well.”

Geoff Hall (Noel Jones) – “Good results for the company with 6 out of 7 selling. The one that didn’t sell should sell soon. Not listing too many to sell in the immediate future. There should be some good buying opportunities in the next 6-8 weeks. Then, as property levels dry up going into spring, the market (and bidders and clearance rates) will probably rise back up.”

Paul Keane (Jellis Craig) – “Strong results in Glen Iris, with three sales at the mid-to-late million dollar levels.  Market seems to be steady, yet is struggling a little under the sheer weight of numbers. Glen Iris represents a good option for family buyers in the sub-$2 million bracket – as opposed to Camberwell and Hawthorn East where the same demographic of buyer needs over $2 million to buy.”

James Tostevin (Marshall White) – “The company had a clearance rate of 77% rate which, given numbers for this time of the year, was very good. Most vendors are coming into line with the market.  Australians as a rule are resilient and, despite what is happening elsewhere (and written in the media), are fighting through. Mid August through to late September looks to be an interesting period in terms of market activity”.

A tale of two auction reports - both surprises.

16 VAN NESS AVENUE, GLEN IRIS 577sqm Doug McLauchlan.  Strong Vibe Crowd of 50. Bought Under Hammer at $1,580,000.  6 bidders 19 Jun 2:30pm
Doug McLauchlan, Anthony Reis and James Redfern had a good home here with some unusual features – a lift in the almost ‘burbs and a piano player warming us up prior to the auction. Before half-time it was like pulling hens teeth from the three bidders. However after half-time (when I left –  thanks to James Redfern, who finished the report) it was a very different story – especially once the home was on the market at $1,480,000. Three more bidders emerged and the home was bought for $1,580,000 – something of a surprise. Mal James Reporting

49 PARKHILL ROAD, KEW 810sqm Maurice Di Marzio. Quiet Vibe Crowd of 80. Passed In at $3,200,000. 1 bidder 19 Jun 11:00am
The auction started positively as auctioneer Maurice Di Marzio commented on the size of the crowd (about 80) and the good level level of interest this luxury home had attracted during the marketing campaign. But that interest did not follow through, with most of the crowd preferring to keep their hands firmly in their pockets. Mr Di Marzio opened with a vendor bid of $3,100,000, followed by another of $3,150,000. Mr Di Marzio’s announcement that there would be no further vendor bids was successful in eliciting one genuine bid. The property was passed in to that single bidder at $3,200,000. Overall a very quiet auction. Amy Wong Reporting

Auction Clearance Rates

45 monitored – 26 bought – 58% clearance rate ( last week 52%/week before 70% )

Design Smart

Kew 49 Parkhill: Big crowd - a new home that a few months ago would have had some legs. Passed In $3,200,000. 1 bidder.

Hmmm - things are changing and right now it's not for the better. One of Hawthorn's top selling agents Richard P. Winneke fails to get a bid at 90 Walpole St Kew. Passed In $2,100,000

Today was a watershed day for the Boroondara market – a day when the market could no longer gorge the incredible amount it has been gorging (for the last six months). Today was a real (excuse me, while I burp) I just can’t fit in anymore kind of day. Today the Boroondara market which has been the strongest of the four big $m+ markets (Stonnington, Bayside and Port Phillip) showed the white flag and said I’m no different to the rest of you. At 52% it was literally a flip of the coin to see if the home sold on the day.

Going forward what will happen? That is all a matter of supply – there is simply too much stock on the market for this level of demand and therefore price cannot remain stagnant, let alone rise.

Price has fallen and will continue to do so until the market rebalances again – which may only be a matter of a month or so or it may take a fair while longer if demand shifts downwards during this transition period.

For buyers this is good news providing you understand the new rules and the tougher playing conditions the selling agents will require you to play under. While there are fewer buyers, those that are around at this level and who want to buy good homes, will face a more rigorous test than put your hand up and take it at a low price – the vendors simply won’t allow that.

However if prices adjust quickly the market may kick along again sooner rather than later. There is still a lot of hidden demand – waiting… waiting…..

The standout auction of the day was Paul Keane’s 50 Hawthorn Grove, Hawthorn, which was on the market at $3,300,000 and fell under the hammer at $3,510,000. 4 bidders.

Some words from the two dominant companies.

Marshall White – James Tostevin

‘” A real mixed bag today for the company – clearance rate around the 63% mark. Good homes as popular as ever, yet some vendor are not in line with market sentiment.”

Jellis Craig – Richard Earle

” 59% clearance rate for the company. A damp day weather–wise and a damp auction vibe overall for the market. Telling factors – upcoming election, rising interest rates, unsettlement in Europe and of  course  generous stock levels affecting the buyer’s psyche’.

Land is Gold! Gold! and Still Gold!

In a day of transition we took a look a Balwyn (and surrounds) Land – four key indicator auctions. This time last year (2009) these blocks were starting to fly with the onset of the FIRB rule changes – we revist exaclty one year on and find nothing, absolutely nothing has changed. Land is still Gold.

54 Stroud St Balwyn (Michael Nolan of Noel Jones) It was a cold, foggy start for auctioneer Michael Nolan today. In front of a small crowd of 30 – including the neighbours who watched from their premier balcony box seats – Mr Nolan kicked off with a vendor bid of $1,000,000. The bidding started slowly in $2,000 rises, but as the fog lifted so did the speed of proceedings. The emergence of 3 bidders helped push the property to be declared on market at $1,151,000. After a final knock out bid of $1,155,000 the property was bought to a round of applause from the audience.   Amy Wong reporting

5 Yongala St Balwyn (Michael Nolan of Noel Jones) Both sides knew what they wanted today and little time was wasted in getting to the end result. Auctioneer Michael Nolan was keen to start and opened the auction with a vendor bid of $1,300,000. So efficient was the first bidder that he did not even bother to leave the car, calling his bids from the front window. Four other bidders drove the price upwards and the property was declared on market at $1,425,000. The property was bought for $1,510,000. Good auction with confident bidding.  Amy Wong reporting

27 Regent St Camberwell (Michael Hingston of Jellis Craig) The cold, drizzly weather encouraged a brisk, fast paced auction. The auction started with a genuine bid of $1,100,000 which was followed by a vendor bid by auctioneer Michael Hingston. This helped move proceedings along and the emergence of another two bidders saw the property declared on market at $1,220,000 and bought for $1,270,000. Amy Wong reporting

7 Almond St Balwyn North (Scott Patterson of Jellis Craig) Hi Mal, 4 bidders, on the market at 1.25m and sold for $1.37m. A strong result. It had potential views and a 75ft frontage. Land seems to be selling well in Boroondara depending on orientation and location. Supply has increased but demand is still quite good.  Cheers,   Scott

Design Smart

Booroondara Auctions – 46 monitored – 24 bought – 52% clearance rate (last week 70% )

THE NEW BOROONDARA POST AUCTION RITUAL?

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