33 James Street Surrey Hills is a property that may not immedidately impress you -  in fact, you might walk straight in and then straight out.  But give this one a chance: it does have a lot going for it and it would suit a young family very well.

Big pluses here are that it is located in a quiet street wthat is within walking distance to the Union Road shops and Chatham Primary School. While the backyard is not overly big, you do have Grovedale Park across the road, with plenty of room to kick the footy or fly a kite. The house itself is quite good, with original 1920s facade,  double carport, private backyard and the arrangement of rooms is not too bad.

The front appearance of this house understates this property and a high fence, large trees and an abundance of brick paving does not help. A new picket fence, some careful landscaping and a cosmetic update to the facade would do wonders here.

The concept design would address the rear of the house to incorporate a larger rear open living area. At present, this does not work well and the rear studio is not all that well sited, taking up too much of the backyard.  The master bedroom would be improved, sacrificing the bedroom beyond for a walk-in robe area and an ensuite. The end of entry hall would also be widened. A modern trend in houses today is the need for small ‘study’ areas as often mum, dad and the kids have their own computer – two of these small areas are incorporated in this design and that would be beneficial.

33 James Street Surrey Hills is scheduled for auction at 11am on March 13. Sue Wooldridge from Noel Jones expects $1.4 million plus here.

Richard Earle (Jellis Craig) tries to coax a reaction from the crowd at Murdoch Street Camberwell

Although the sun was not really out, the bidders certainly were, with most properties over $1m selling in Boroondara today. Bidderman was strong at many auctions and there was no shortage of them.

Talking to Richard Winneke from Jellis Craig this afternoon, the market, he believes, has gone up at least 10% since the end of last year (and we may well agree with this). One property Richard sold today was 98 Pakington Street in Kew. This sold under the hammer for a strong $1.851m  – interestingly it last sold (property condition basically unchanged) in the heat of the market 2007 for $1.445m.  30% in about 2.5 years – that is good capital growth in any language.

Richard also mentioned that Jellis Craig had sold 43 out of their 46 auctions. This stacks up closely with the other Boroondara heavyweight agency Marshall White which too had a similar clearance rate for a similar number of auctions. Hamish Tostevin of the firm continued his successful run with a result of 7 sales from 7 properties this week.

Another strong result in Hawthorn (remember York Street last week) was 7 Lyall Road Hawthorn. Hocking Stuart sold this at a strong price of $1.95m – around $300K over reserve. Bidderman was 8 here, and this auction went for almost an hour. Well done to auctioneer Glen Coutinho for hanging in there.

Some other auctions we covered where Bidderman was strong was  87 Sackville Street Kew (sold for $3.305m, Bidderman 3), 18 St.Andries Street Camberwell (sold for $1.62m, Bidderman 3), 9 Leslie Street Hawthorn (sold for $1.435m, Bidderman 3) and 7 Fakenham Road in Ashburton (sold for $1.325m, Bidderman 4). On the subject of Ashburton, is this gaining some sort of parity with Glen Iris? 22 Boyle Street and 13 Ward Street also sold today for $1.310m and $1.429m respectively – all three of these auctions were strongly attended and fought for.

An interesting ‘land’ sale was 35 Essex Road in Surrey Hills – land size here was 1080m2. Had a period home which needed work (refer last week’s architecture article) or could have been bulldozed. This sold for $2.007m or $1860/m2.  Compare this to a similar property in the next street – 8 Middlesex Road – approx. 180m2 less land but a very-well renovated period home sold for $2.005m. Another land sale was 100 Winmalee Road Balwyn – 953m2 -  sold for $1.635m or $1734m2. An interesting ‘architect home’  sale was 10 Bluff Street Hawthorn – the style of this  polarised opinion, yet did sell under the hammer for $1.98m. The style may not have been for everybody but room sizes and flow were very good.

Not everything was bought however. At the higher-higher end 24 Coppin Grove Hawthorn passed in.

As things cool off a bit for auctions next weekend due to the Labour Day long weekend, buyers can take a breather – big auctions coming up after this though (flag March 27) and the strength in the market looks like it will continue up to Easter at least.

Design Smart

Adam

Tim Heavyside of Fletchers was pumped today - in fact, we almost thought we saw a bit of disco on the way to his four-bidder sale at Surrey Hills.

For many years, Scott Patterson has been the “pin-up” auctioneer of Hawthorn and surrounds – well, according to the ladies we represent, he is. Scott is the “new face” of Jellis Craig. Our personal dealings with Scott have always been straightforward and, while we have had differences and probably will continue to do so with Jellis Craig (this is not a derogatory comment), at least with Scott, and for that matter Jellis Craig as a whole, we feel we do get a fair hearing. As a Boroondara auctioneer around the $800,000 to $1.2 million mark (difficult or easy auction), Scott has no peers – he is consistently the best we have seen. And, finally, we like talking to Scott because he is a stats man – yes, there are issues with stats but at least many of Scott’s thoughts are supported by reason. His contact number is 0417 581 074

Mal: Morning Scott.

Scott: Morning. Have a good holiday?

Yes thanks. What, in your opinion, has the market done to date this year? Eg do you think the market may have kick-started in volumes?

The year to date has seen a dramatic turnaround in price due to a combination of low interest rates, high rental returns, government stimulus packages, Melbourne’s growing population (1700 per week), a housing shortage and increased foreign investment.

Volume levels year to date Jellis Craig in 2007 – 909 auctions; YTD in 2008 – 794 auctions and YTD in 2009 – 700 auctions. Clearance rate this year sold 683 from 726  auctions (94 per cent- that does include sold afters).

What are you expecting to happen up until Christmas?

Between now and Christmas, I would expect the trend to continue.  The steam will not come out of the market until interest rates go up.

The strongest market segment?

For us, it is the $1m-$2m range, as there has been limited offerings. Big stock shortages earlier in the year created pent-up demand that has not yet been satisfied.

The $2m to $4m segment is not quite as strong but is still going well, as there have been fewer job losses than expected.

$4m+ is interesting. I can remember in 2007 when your company bought Grange Road Kew off us and there were four bidders over $6 million and then you bought Sackville Road off us a few weeks later which had seven bidders around $5 million but in 2009 there has been only one property per month over $4 million in all of Boroondara. But I don’t think it’s a weak market. I think the demand may be there, it’s just there is no stock.

Another interesting market, Mal, is land. Values in Hawthorn have gone through the roof.

Yes I agree. Kew and Canterbury has been booming for some time.

True, with the Chinese influence.

But since the Urquhart sale and then, the following week your sale at Manningtree Road, Hawthorn land has grown another leg. (In late July, 49 Urquhart sold for $2.11 million when we at James thought a few weeks before that $1.6 million was plenty. 64 Manningtree – the 3AW-publicised home -was bought for $1.92 million after early quotes were at $1.5 million.)

True, Mal, those two sales were the catalyst for Hawthorn to start catching up to the increases we were seeing in Kew and Canterbury. Look at 3 and 9 Ardene Court Hawthorn. No 9, which was renovated and we sold for $1.1 million in May versus 3 Ardene, completely unrenovated but after those two auctions above we sold in August for $1.275 million. That is a quantum leap.

500sq metres, or what we traditionally called smaller blocks, are a real flavour. 8 Rossfield (533 sq metres and $1.43 million), 2A Rae St (538 sqm and $1.39 million), Swinton (590 sq metres and $2,000,001). The first two had no house value.

The weakest market segment?

The weakest market segment? Tough question because they’re all going well at the moment.

Scott, come on.

OK anything that is compromised eg main road, tram line, is still being avoided or discounted, although those discounts are fast diminishing again. Mal, we are selling almost everything.

Auction bidding is in the news – your thoughts?

Auction bidding has been strong for well positioned real estate.  Traditionally, the Asian community has not liked to participate in auctions; however, now they are the main players.  We have been using whiteboards to help them understand the bidding sequence and, in some situations, we have conducted the auction in both English and Chinese.

Scott, I agree that Jellis Craig does run superior “Chinese auctions”. The heat on quoting seems to have gone out of the debate. Do you agree and why is that?

The heat on quoting has diminished.  As a company, we made the decision to remove “price quotes” and it hasn’t affected business one bit.  I think buyers prefer to have a discussion about recent sales in the area than be told an agent’s “quote”, which turns out to be inaccurate in a rising market.  We have noticed less aggro since removing reference to prices.  As we all know, the market determines the price on the day.

Now you know I don’t agree with no quotes but I am accepting that there is a logic to what you, Marshall White and Kay and Burton espouse. But isn’t it reasonable for buyers to be given some guidelines?

Mal, they are. This is not a work-reducing exercise. We are spending a lot of time training our sales staff to communicate better and spend MORE time with buyers discussing comparables. No quoting is more work, not less work. Consumer Affairs are coming the heavy; the market is rising quickly and there is significant lag time in such publications as Melbourne Weekly and it is a rapidly rising market. That is why we removed our quotes.

You could put you quotes on the internet only.

Mal, I grant you that the issue has not been completely solved and we may return to quoting but, as an interim step to remove criticism, we have removed them. Maybe Consumer Affairs need to give better guidelines.  And, to be frank, I think, for some of our sales staff, it has put them more in touch with buyers – you do have to spend more time explaining the comparables. You do like our comparables system as you wrote about it last year as the best single innovation by an agency in 2008.

True. Your comparables information on the web and at opens is great information for buyers and still superior to all other agencies in Melbourne.

Thank you. We do try to update each property each week and we are working harder with all our staff to be more accurate and we are looking for the perfect quoting solution, but I feel it may not be there.

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

Money from mainland China has added a another layer of value in my opinion – probably as much as 10 per cent.  The relaxing of the foreign investment rules has spurred it along a bit but the investment from China was already happening because Australia is seen as a safe haven.  I think so long as China and Australia have a healthy working relationship, investment will continue.  Will it continue forever? Probably not.  India is a country with a massive population and they like Australia too.

What about the thoughts that Chinese people are only buying here for the private schools and they are full to overflowing in enrolments?

Some truth in that and we need to be careful if we are claiming that. I remember a few years ago we had to withdraw any reference in our advertising to Balwyn High when they suspended enrolments for two years. But, yes, Mal, this may affect a push into areas by Asian buyers who have a good school for their children as a prerequisite to purchase.

I do think Chinese interest did spike a few weeks back and, as Robert Ding in our company stated, the Aussie dollar is climbing all the time, which may also lower the spending abilities of some Chinese buyers.

Anything else you would like to talk about?

It is very positive now that Australia is in “recovery” mode.  The doom and gloom of last year is behind us.  Our stock market is recovering well, business confidence is back and people feel safe to invest in bricks and mortar.  With our population growing so fast, it is likely that the established suburbs in Melbourne will continue to grow in value.

Also I found the Neil Mitchell article interesting reading, stating we are going through a population boom. I’ll send you a copy.

And, finally, did you know that in Balwyn and Balwyn North between $1.8m and $2.3m in realestate.com right now there is one new home to look at. One – this time last year, and I know this because I was helping my sister, there were 35 modern homes. Big change.

Love those stats, Scott, and thanks for talking to us.

Thanks Mal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why is this happening?

Three key reasons:

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

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

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

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

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

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

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

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

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

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

Government – Valuer General Median Prices:

Hawthorn

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

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

Five-year increase homes – 95%.

Five year increase in apartments – 18%.

Toorak

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

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

Five-year increase homes -  79%.

Five year increase in apartments – 30%.

Brighton

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

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

Five-year increase homes -75%.

Five year increase in apartments – 24%.

Port Melbourne

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

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

Five-year increase homes – 38%.

Five year increase in apartments -1%.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mal

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

Balwyn: 24 Winmalee: Bought for $1,166,000. 3 bidders for Mike Nolan of Noel Jones

Mont Albert, 11 View: James Tostevin revving up three bidders among a large crowd to be bought at $1.936 million.

Very strong in Boroondara again this week

Some highlights:

13 Celia St Glen Iris Paul Williamson of Jellis Craig: Land (641 sq metres) sold today for $1.301 million at auction. A few doors up at 45 Celia, and effectively its twin (675 sq  per cent on land in this area in a few months? Well, these were both competitive auctions, so effectively, in this instance, I think that is a fair statement. Land is at $1700 per sq metre, assuming $200,000 for the home.

This comment is supported by:

34 Walerna St Glen iris – Damian Davis of Jellis Craig

James Home Rating and Comments: 706 out of 1000. This is a house that surprised me a little – it’s better than it seemed on the net. The façade will date and the quality is good without being above good builder quality and there is no downstairs bedroom for separation. However, the feeling of the home is good, light is good, flow is very good and ceiling height is very good downstairs and good upstairs. Overall, while a spec home, it certainly is one of the better ones and will have appeal to a number of families. Position-wise, this is regarded as top-notch Glen Iris, being near the green belt and shops and not too far away from the freeway, trams and trains.

James Control Price: Dirt $1,062,000 + House $700,000 = $1,762,000. We put land at $1500 per sq metre.

James Auction Report: Damian Davis auctioned 34 Walerna in front of a crowd of around 60. Five bidders. Opened at $1.55 million. On market at $1.7 million and sold under the hammer for $1.94 million. This property had strong Chinese interest.

James Post-Sale Examination: Land continues to increase at an incredible rate in good spots in Glen Iris. If we placed land at $1700  per sq metre, which both the above sales said it should be at, then the James Control Price would match the result. Good result for Damian Davis.

Further Examinations:

11 View St Mont Albert - Walter Dodich of Marshall White

James Home Rating and Comments: 838 out of 1000. A lot to like about the area, this street and the home at 11 View St. Good land size, good street presence and good feel inside. Plenty of space for children indoors and outdoors. Being picky, it is one bedroom short upstairs (for some) and rear living areas and study are not the biggest. However, overall a very good home and is sure to attract a fair degree of interest from family home buyers.

James Control Price: Dirt $1,194,000 + House $500,000 = $1,694,000.

James Auction Report: Huge crowd of 130 people gathered in windy, warm conditions to watch this auction. Opening with a genuine bid of $1.6 million, there were three bidders. The property was on the market at $1.66 million and sold for $1.936 million. A good property and a good result.

James Post-Sale Examination: The ingredients were there (quality street and area, moving market, sexy family home, strong James Rating, good agents) for a runaway and, while not unexpected, it was still a very, very strong result. You’re only a few hundred metres from Box Hill and this said almost $2 million. For the record, strong Chinese interest.

19 Currajong Avenue Camberwell - Debbie Silk of Noel Jones

James Home Rating and Comments: 705 out of 1000. Good north light and proud block in the Sunnyside Estate. Doesn’t always make sense but if they can bulldoze this (STCA) then, in this market, may be worth more than a block with a house on it – eg Kerr.

James Control Price: Dirt $1,490,000 + House $200,000 = $1,690,400.

James Auction Report: Despite requiring a renovation, this auction was keenly contested by multiple bidders. In front of 110 people, this auction opened with a genuine bid of $1.4 million and was on the market at $1.5 million. Eight bidders competed for the property, which sold for $1.87 million.

James Post-Sale Examination: The quote related to the vendor, not the market, and I thought was conservatively conservative. Our control price was $300,000 above quote and we were still $170,000 short and had no connection with the campaign. This was not as runaway as it appears if you only look at the agent quote. Sunnyside Estate, north-facing is a much sought-after part of the world and, if the block is right, then land is approaching $2000 a sq metre.

Further support to this is 72 St Helens Hawthorn East – Nick Todd of Cantwells – James Home Rating of 513 out of 1000, just over Burke Road, which sold on Saturday under heavy competition for $1.578 million, or around $2000 per sq metre. Cantwell’s quote was also conservative but they had a few more excuses, as the block was tight, with a south-facing rear and a strong neighbouring property, so was a little more justifiable.

Design Smart

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

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

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

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

12 Moorhead St Camberwell – Chris Burne of Marshall White

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

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

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

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

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

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

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

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

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

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

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

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

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

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

8 Rossfield St Kew – Maurice Di Marzio of Jellis Craig

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

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

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

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

Buy Well

Hawthorn, 10 Hawthorn Grove: Auctioneer Jeremy Fox in action probably claiming he was not here for his looks, so why not bid? Opened with a vendor bid of $2.1 million but was unable to entice any interest from the crowd and the property was passed in at t

Camberwell, 17 Doonkuna: David Gilham conducted this auction in front of around 80 people (inside). Opened at $1.3 million, on the market at $1.5 million and sold above this amount for an undisclosed price. Five bidders.

312 and 314 Cotham Kew: a big parcel of land sold through Walter Dodich of Marshall White for $3.42 million or $1800 per sq metre on just over 1900 sq metres, which does appear to show that, in this case, on Cotham Road you get a significant discount per sq metre for land on a main road. Marshall White also sold 61-63 Alfred St Kew (just behind and 2,256 sq metres) back in May at $2174 a sq metre. The discount argument works if we assume the buyers placed no value in the period home on 61-63 Alfred St Kew then and we think that was close to the mark (even though it had a beautiful façade, you could bulldoze it) as $2200 to $2500 was/is the going land value for the Sackville Road Kew precinct.

This, initially, in our mind emphasised the very strong result last week at 103 Mont Albert Road Canterbury with Peter Smith of Jellis Craig, which seemed to be at $2400 per sq metre. Why? We think that part of Canterbury and Balwyn is regarded by the market as similar to the Sackville Road precinct. However, with further examination, this means two things: Mont Albert Road, which borders the Reid Estate and is maybe 2km away, is leafy green but still carries a lot of traffic, is regarded as a far less offensive main road than Cotham Road Kew; also that we may have underrated the value of the 103 Mont Albert Road home at say $400,000. If we say the home value of 103 Mont Albert Road was worth $800,000 last week, then that brings land on Mont Albert Road back to say $2100 per sq metre, which makes a bit more sense, as good land seems to be worth up to $2500 per sq metre in the area, except, for say, Golden Mile streets (not main road) such as Monomeath and, therefore, Mont Albert Road land is at a discount.

But before you say “You idiots, of course the house at 103 Mont Albert was worth more and land less”, then technically we could say then that 61-63 Alfred St Kew had a home worth say $1 million. In the past, there has been more inherent value in period (61-63 Alfred) than dated recent homes (103 Mont Albert). If that was the case, then back in May, 61-63 Alfred St Kew sold for $4.83 million, less $1 million for building, and that leaves the 2256 sq metres valued at $1700 per sq metre.

The market was really starting to move in May, so maybe the Cotham Road land sale of this week of 1900 sq metres was at just a 10 per cent discount to the Alfred St sale and maybe the 103 Mont Albert Road sale was at a slight discount to the area land values. Certainly, the land in Mont Albert Road is regarded as being significantly better than on Cotham Road. This is a relief, because we always thought that was a given, but now we are being forced to put more value onto basic buildings with a changing Boroondara market.

If you accept the argument that there was a lot of value in Alfred St’s building in May, then the land at 61-63 Alfred St Kew was incredibly cheap against other Sackville Precinct sales (eg Ross St Kew at $2500 per sqm); or was it at a discount because of its size – another historical trend – bigger the land, fewer bidders, lower prices. (Although there were six bidders at Alfred St.)

No, personally, I think the Alfred St land sold around $2000+ per sq metre then and that means the home value was $0 to $400,000 max (it needed a huge amount of work and I think the value was limited because of the scope of work needed rather than it had a lot of building value because it was beautiful). So Cotham Road with tram line did sell at a significant discount, which is what we have come to know over the years.

What we are reassessing are dated home building values and I don’t know if any of us have got it exactly right yet. Prior to this year, the market placed little value in these sorts of homes; although our company was always keen to buy them because the clients (eg young families) were getting an OK floorplan and a free home (buying at land value – 90%+ land to content value ratio).

Now things are different in Boroondara and this does make some sense, as the Boroondara market has substantially changed this year with money from mainland China, and Chinese buyers view land and buildings through different eyes and are forcing market changes to values of not only land but now possibly buildings.

If Chinese money is a long-term thing, then those in this market will need to look at values in a different light. You don’t have to like the offerings, it’s just you will need to understand what they are worth. It’s similar to a cassette being worth something in 1980 but now nothing, then a CD was all the rage and now its value has declined with MP3 coming in.

If Chinese money is short-term, you need to be careful you are not overpaying for something that may drop in value in a few years. Eg we had a lot of money come from Japan into Queensland in past decades which changed values, especially of, say, golf courses, dramatically.

Finally, on this matter, we are not just looking at these isolated sales above. We are using them as a highlight and they had multiple bidders. We really wanted to know why four people bid so strongly on Mont Albert Road last week and other similar homes (this has been going for a little while), as it is our job to try and interpret the market nuances so as our clients can plan better in their future dealings. If you read anything into the above words as saying we are moving away from the real value is in the land, you are incorrect. We are trying to show that pricing and values are living breathing things that change all the time and 1960s to 1980s building values may, just may, be on the rise. Your auntie may be right when she told you it’s not just the flares and orange tiles of the 1970s that would come back into favour.

106 Church St Hawthorn with Steve Burke and Richard Earle of Jellis Craig sold at auction for an undisclosed price believed to be in excess of $3.5 million. It was really a $5 million buy after reno but I love these sort of homes and the view from the tower was a highlight of my week last week. http://www.106churchsthawthorn.com/ Well done on pricing – I thought Steve Burke was spot on and didn’t seem scared to talk about what might happen and the difficulties in maybe being spot on with price. This was a pleasant change from the rubbish or non-talk that is going on in Boroondara with some agents seemingly incapable of rendering any sort of meaningful price estimate.

7 Bowley Bawlyn with Jellis Craig. Now this is an interesting one. We rated it more than 800 but some of my colleagues thought a mid-700s rating was more appropriate. I went back again and I can see their points but I followed the ratings book and still got more than 800. Anyway, to date, it went to auction and didn’t get a buyer bid at $2.4 million and I thought it was put back up for private sale around $2.6 million. I now see that it hasn’t sold, so they have put the price up to $2.8 million. That’s different, or did I miss something?

6 Carronshore St Balwyn didn’t sell and I think I know why but Peter Smith of Jellis Craig has proved me wrong many a time. Good home but it has no real street frontage and land size is deceptive with a fair bit of it in the driveway, which the market has not put much value on in the past. It will be interesting to see what numbers it does eventually add up to.

Bit of a Mont Albert Road Area focus this week.

Stock levels are up, so good hunting.

EXECUTIVE SUMMARY
Nothing fazes Hamish (well, he doesn’t show it). We’ve never seen him lose his cool under pressure. If you need to know something in his specific Boroondara area, then ring Hamish, as he almost always knows the answer. A conservative buyer quoter of homes and a big seller, Hamish is pleasant, friendly and accommodating for inspections such as pest and building and revisits out of hours. Now a director at Marshall White and deservedly so, as he’s a good bloke and a good agent.

Mal: Family status and where do you live?
Hamish: Married with two girls, and living in Moama Road, Malvern East.

Mal: How long have you been in real estate and what is the company you work for?
Hamish: 10 years – Marshall White Hawthorn

Where do you mainly work (area) and what types of homes do you specialise in?
City of Boroondara – and I tend to handle all sorts of homes; however, a client of  mine did say to me the other day that he always flicks open the Melbourne Weekly to see what is coming through and he always sees my name on pretty single-fronted and double-fronted Victorian and Edwardian homes!

What makes a good investment?
A good balance of both return and capital appreciation – but if you can secure a property that you can add some cosmetic improvements – this will only help this.

What makes a good family home?
A decent-sized family room – and a good rear garden for entertaining family/friends.

What makes a good buying decision?
Keeping to a budget and doing the appropriate homework on values.

Best investment decision you made?
Bought my first house in Prahran at the age of 23.

Worst investment decision you made?
Buying into a share of a racehorse!!

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

1. Hawthorn /Grace Park – period homes predominately, 700-800sqm blocks, 800sqm worth $1.8-$2mill for the land, a good renovated home could be worth $3-$3.5mill.
2. Camberwell/Tara Estate – period homes predominately, 700-800sqm blocks, same pricing as the Grace Park.
3. Kew/Sackville Ward – mix of period/modern, 800sqm blocks, worth $1.7-1.8mill for the land, a good renovated home could be worth $2.5-$3mill.

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

1. Empress Road, Surrey Hills for its convenience.
2. Ropley Avenue Balwyn for its parkland back-drop.
3. College Street, Hawthorn for its location  parks/city/village.

What would you say to a young couple with $800,000 looking for a family home specifically in your area – eg (where, type and style, would they have to renovate)?
Camberwell/Surrey Hills are ideal – follow train lines for CBD access, buy a period home, even if it looks a bit daggy, get as much land as you can – lock in and give it a good paint job inside and out, carpet, change lighting, door handles etc and it is amazing how it can change the feel of a home!!!

What would you say to  a downsizing couple with $1.5m specifically in your area (where, type and style, would they have to renovate)?
Limited selection of good quality town residences – I would still aim at Hawthorn or Hawthorn East/Kew, single level hard to find, try and get one that is side by side, rather than in larger development.

Buyer Agents yes or no?
Yes – very good people to deal with.

Apartments or Houses?
Houses definitely.

Auction or Private Sale?
Auction – sets the deadline for the buyers to perform.

How can a seller maximise their value at sale?
Definitely getting an Interior Decorator to improve the presentation, really work hard to make sure the home has a great feel.

What are the do’s and don’ts for buyers when dealing with selling agents?
Ask them lots of questions – some agents are very helpful in providing good comparables, still allow for some flexibility on their quote prices, and make sure you get them to keep you posted if you are interested in the home.

What do you think are the opportunities now with us?
People must make the most of the market being slightly down – this is a great time to purchase!!

Where is the market going in 2009 in your area?
In my view, it will be steady for the first six months and may get tougher in the second half of the year, dependent on the volume of property on  the market.

Who will win this year’s premiership and why?
Geelong – will be even more determined after last year’s Grand Final effort.

If a potential seller would like an appraisal or wishes to sell their home, how is it best to contact you and what are your details!
My mobile – always available!! 0408 004 766  hamish.tostevin@marshallwhite.com.au

There is definitely more housing stock coming onto the off-market part of the market; however:

1. it’s not across all geographical markets and dollar market levels; and

2. it’s not necessarily the home you must buy; ie the price and quality is mixed.

Specific off-market properties that we have heard about, driven by, or looked at this week include:

Camberwell $1.3 million
A drrive-by (took some pics) revealed this as a really nice mid-one-million ask. It has both Victorian and Edwardian characteristics in it). The land size is good and, if the floor plan matches (we haven’t been through it), then this is something that needs serious consideration. It’s in a really good part of Camberwell bounded by Stanhope, the railway line, Riversdale and Prospect Hill Roads

Canterbury $2.5 million
These are the agent’s comments, not ours: impressive Spanish Mission-style four bedroom, two bathroom brick family residence set on a magnificent allotment of 14,176 square feet (1317 SQM), presented in excellent condition, yet offering some scope to further enhance if desired. Highlighted by beautifully proportioned formal rooms, a beautiful established garden and a coveted position in one of Canterbury’s finest streets.

Flinders $5 million
Good views but some distance off. It has vineyards, a dam and a basic but presentable ’60s home. Have been through and indicative rating only.

Hawthorn $4.5 million
Drive-by only. It has big land and a lovely looking renovated Victorian. The townhouses next door let it down a bit, as does the road, but it has a north-facing rear and is in a great area. Indicative rating only.

Surrey Hills $1.8 million
Agent’s words: two-storey fully renovated Edwardian four/five bedroom residence featuring first-class presentation, superb family floor plan incorporating separate rumpus/theatre room and a stunning open plan kitchen/family/meals area of very generous proportions leading to a covered timber sun-deck (ideal for entertaining) and the established rear garden complete with in-ground pool. This house is in between Whitehorse Road and Mont Albert Road, so is close to transport etc.

Balwyn $2.3 million
Haven’t been through yet and this may well be sold before I do get through, as the agent is good, the price is market and the position is not a long way from Camberwell Grammar.

Kew $2.5 million
Period home that needs work. It’s in the Sackville Road area and has biggish land and a south-facing rear.

Brighton $10 million
This has sold a few times recently and may have already been resold again as we go to press.

Brighton $2m
Apartment in Church St prencinct – completed not off plan.

The upper end of the market has had some sales of note recently outside the auction system.

I was having a coffee with Ian Jackson of JP Dixon this week and he casually mentioned that, in the past six weeks, his company had sold more than $50 million worth of real estate. I didn’t feel he was boasting but just giving me a reference point that the ultra-top-end in Bayside has some legs. I was aware of a few sales - Leslie Grove around $8 million; two on the Esplanade  (78 and 142); 6 Mytton Grove under $4 million and 15 North Road last week at auction at $4.6 million - but the $50 million figure surprised me. Peter Bennison from JP Dixon Toorak mentioned the same figure to me in a separate conversation. Either they are well rehearsed or, as the buys above suggest, there is a fair amount of truth in what they’re saying.

We also asked Ian and Nic Johnstone if there was more off-market stock coming on in Bayside. Both answered that it was minimal. Both Ian and Nic stated that there are a few forced sellers who wanted to remain private, but not the dozens we continually read about in the newspapers and neither could give me an example of an off-market in Brighton’s Golden Mile. There is, of course, the Glyndon Avenue property that is being sold publicly.

Barb Gregory of Hocking Stuart Brighton stated there were a few off markets she was aware of coming up, but she had not completed a lot of off markets recently. Jenny Dwyer from Hocking Stuart Sandringham stated that she knew of little off-market activity around her.

There has been a bit of a run of off markets in Bayside recently.

Boroondara and Stonnington are showing a definite increase in market stock levels and John Bongiorno from Marshall White was saying things were looking better for auction stock in April compared to last week, this week and a bit of next week’s very lean times (stock-wise) for Marshall White. However this increased auction stock level seems to be focused under a million and around the $1 million to $2.5 million range.

Please note that all agencies, such as Jellis Craig, Kay and Burton, RT Edgar, Bennison Mackinnon and Hocking Stuart etc, have said that their stock levels are very low in this upper market.

Killing some time in a post auction negotiation today I asked Alastair Craig about his recent off market experiences and I felt he was genuine in his responses nominating around $10m in activity with a $4m sale off Burke Road and a $2m+ sale in Canterbury’s Golden Mile by Robert Ding to an overseas buyer sight unseen as his highlights.

$5 million-plus activity

When speaking with Peter Kudelka, director of Kay and Burton, and Jeremy Fox, principal of RT Edgar, both could point to isolated $5 million-plus buys in recent weeks but nothing of the quantity mentioned above in Bayside. “There are buyers at $5 million-plus but no stock.” From our business knowledge, we know this is true; for example, we have had consistent enquiry at this level; and there were three bidders on Maple Grove, which sold for more than $5 million, and so on.

Overall, the off-market and market above $5 million is quieter than 2007 but stronger than 2008.The would perhaps be more noise if there was more available stock as there does seem to be some buyer depth. Bayside proves that, when property comes onto the market that is well priced and is of good quality, it will be bought.

The Mornington Peninsula also proves this point. There was a very big buy recently, completely off-market and well north of $5 million for a block of land with a great view. If you have the home, the buyers, unlike 2008, seem to be there in 2009.

$2.5 million to $5 million activity

Auction results and private sales in the $2.5 million to $5 million range in all areas are proving that, to date, there is also buyer demand to keep the market stable. However, stock levels look like they are marginally increasing in this range and time will tell if price can be sustained. Please refer back to our comments in Market Insight following up last week’s easing from February of the $1 million-plus clearance rate.

We have a separate section for our off-market and quiet buying clients. Our clients do have the addresses of off-market properties made available to them and, in some cases, photos. So, if we can help you, please look at our off-market section at www.james.net.au and please contact James Buyer Advocates on 9804 3133 if you feel the way forward may be with a buyer agent helping you.

Good Hunting!

Market News

To say the market is experiencing incredibly growth in capital values is an understatement.
Last year we reported values increasing by as much as 30% despite what the stats people were saying and there are ever greater increases this year. These large increases as per most of the rest of the world are largely confined to inner suburban quality properties. Land itself, meaning land where homes can be pulled down, is particularly well sought after in all Melbourne Bayside and inner eastern suburbs

What is driving the market?
It is being driven by overseas buyers, stock market wealthy buyers, buyers whom have seen large increases in their own properties and buyers who are confident in their future.

However rather than focus on what is now being largely reported in the press we thought we would dedicate this newsletter to showing what we are buying and what we can do to help you.

Why Use an Advocate?

Buying the right property is an art and a science. Think of a few houses in similar areas with similar characteristics and ponder what they were worth 10 years ago. What are they worth now? Will they have increased or decreased in value at the same rate? If that is a priority for you (and it should be) James Buyer Advocates through our ratings, processes and experience show you the good ones.

Strategy is vital to buying the right property. How to buy, how to minimize cost, what to buy, and where? How do I make an offer? What do I really want and how do I get it? Where do I want to be financially in the next decade? Why do some people own multiple properties without a mortgage and others have one property and are struggling? The answer is strategy. James Buyer Advocates helps you define and execute your action plan to buy the right property.

We will save you money – and make you money in a highly competitive market. This is the number one reason why most people think about advocates in the first instance, and in many, many cases we do just that. We know this is of primary importance in all business negotiations but it’s interesting to note that clients we’ve surveyed after the buying process often rate savings as the Number 3 benefit in using James Buyer Advocates. Buying property well is as much about MAKING money as it is about SAVING money. We’ll be happy to explain this in detail at our first meeting.

Understanding the true value of a property is tough. Working out what a property is worth is a lot more than looking up a few statistics. And we definitely need to talk some more if you think saving money is about finding a cheap place “below valuation”. In many cases if you are not crystal clear about property values, you could well be negotiating at a level that will not buy the dream home you want. It might also leave you with a compromised property in the long run. Another expensive and distressing mistake a buyer can make is to pay way too much or never buy at all.

We help ease the stress and emotion in buying property. Buying a home is about as bad as it gets. It’s emotional, exhausting and sometimes terribly discouraging. You only need to miss that perfect property, drive for miles to find the picture on the brochure didn’t nearly match your expectations (or what you’d been told), have agents leave you hanging or be gazumped in the negotiation stage. It hurts. At James Buyer Advocates we provide a barrier.

“Hidden” properties do exist – so understand ALL your options. “Hidden” properties do exist – so understand ALL your options. There are hundreds of places out there you may never find or get to see. Quiet sales, private transactions, sales without boards. There are places you won’t be given the opportunity to inspect because they aren’t advertised. We deal with agents every day. We find “hidden’” houses that will never be listed because agents and vendors approach us quietly all the time. And we are involved in a number of property purchases “off market” without any publicity or fanfare.

Agents are not your friend, mentor or guide in the buying process. We actually like and respect many selling agents, but they act for sellers or vendors, not buyers. They work exclusively for the vendor. James Buyer Advocates works exclusively for the buyer.

Your privacy is guaranteed. Most agents don’t know who you are, and it’s a good idea to keep it that way. That’s because if you don’t buy today, you might buy something else tomorrow. It’s not in your best financial interests if an agent knows “what you were prepared to look at before”. Our role as a buyers advocate is to keep you ahead of the game without revealing your hand.

Finally, if you are looking in this market at the million dollar and above level

1. You will be negotiating against a selling agent who has a strong level of experience – have you got that?
2. The selling agent will be very good at his or her job of “slotting” you into a home and into a price that fits nicely with the seller – but that’s not you! Good selling agents work diligently for the seller first not you the buyer; otherwise they are breaking the law.
3. Other buyers will have professional help whose job it is to purchase for their client – often before you have a chance.
4. If it’s an easy buy with a smiling agent then well ………

What are some of our money-saving tips?

Don’t confuse saving money with buying the wrong property. What happens if it’s not the right place and you have to sell again in two years? An inner Melbourne home in a good suburb will cost you $100,000 to $200,000 in stamp duty and agent fees, not to mention the cost of moving and stress. If you think negotiating is all about money and arguing the edges then you will not buy or negotiate well at Melbourne’s higher levels unless you are a very lucky person. Higher end Melbourne agents in the main (eg companies like Kay and Burton, RT Edgar, Marshall White, Bennison MacKinnon, Jellis Craig, Hodges, JP Dixon, Buxton, Hocking Stuart to name a few) have very good top end agents.

We all need expert advice, strategy and tactics sometimes. Would you go to court without a lawyer? Or would you handle the court case yourself and just call a lawyer in for sentencing? It’s a bit like that getting somebody at auction to put their hand up when they have done no research into worth, the seller, the agent, other buyers or more importantly, your needs. We have the experience to know what, when and how to make an offer.

Paying the right price is about establishing the value of the property. Are you happy getting $50000 off the asking price when you could have got $500,000? Do you know how to make a low offer and not risk losing out to another buyer? Are you paying $800,000 too much for the wrong place? It may take you a long time to recover from these decisions if you are wrong. If you think homes with similar price tags are similar homes with similar long term outcomes then many selling agents with poor homes would love to do business with you now. You need to know the sometimes subtle differences between a $2M home and $4M home and unfortunately for some buyers (selling agents call them wood ducks) the only difference was the price you paid.

You will save the most money by matching the correct property to your needs. You don’t want to pay $1.5 million when a house is worth $1 million, but similarly you don’t want to not pay $1.1million if it’s the right property for you. Understanding your needs can take less than 48 hours to do, but it needs to be done.

Renovating or re-building will not always save you money. Say there’s a 10,000 square foot property and the price is more than $2 million. The house is arguably a knock-down job. If you had $2.5-$2.7m to spend, would this be a good buy if you could put a new home on the block for $500,000? The answer is probably no. You couldn’t put a half-decent home on the block for that money that would be viewed by new buyers as value when it came time to sell.

Buying property is all about achieving capital growth. There’s no point saving money on the asking price if you don’t make money in the long-term. The major part about buying property is that it is all about making money. None of us have money to waste, and we can stop you spending more than what is fair.

What we have bought in recent times at James Buyer Advocates

Our Property Focus Areas

Some changes

With growth comes decisions and at James Buyer Advocates we faced accommodation and client service issues. After a few months obtaining advice from various consultants Ian, Antony, Justin, Sam, Courtney, Catherine, Denise, Craig have moved to Hawthorn Road Caulfield to focus on a streamlined investor and owner occupier approach to buyer advocacy. Ian can be contacted on 0418 131 636 or through his website www.jpp.com.au. His new company will cover investors and a far wider geographical area than we have in the past.

Peter, Adam, John and Mal remain at 9 Hillcrest Avenue Brighton with a focus on personal, one on one service for higher end clients – that is clients who are wishing to purchase properties in Inner Melbourne. Our office phone number remains the same 9596 8822. We have launched our new and improved website at www.mjba.com.au