Big auction, big crowd and big bidder numbers: 98-100 Mont Albert, Canterbury, Alastair Craig (Jellis Craig), under the hammer, $3,380,000, 6 bidders

End of Spring Market Summary

Bidderman: The stats over the last 3 weeks (below) highlight in our opinion exactly what has been happening to a large extent all year. Two weeks ago we reported 27 bidders on 5 homes and 14 bidders combined on the other 21 auctions. Last week it was the same story – 17 bidders on 4 homes auctioned and only 15 bidders combined on the other 21 homes that we reported on. This week we had 26 bidders on 7 homes and 24 bidders combined on the other 27 homes we reported on. If you are hot, you can be really hot and if you’re not then you need a panadol and a good agent.

Clearance Rates: Basically on auction day you have a 50/50 chance of selling – although demand for $3m+ properties has weakened in last fortnight.

Stales: (long term pass-ins) The market is acting on properties where prices have been adjusted, and continuing to pass over homes where the vendor remains committed to a price rather than a result. One month after Super Saturday a full third of the homes that went to auction still had not been sold. It is not true for agents to say they are all being cleaned up. They are not.

Expressions of Interest – are no different to auctions. At the Top End last month we nominated 8 homes to monitor as having Expressions of Interest closing dates either side of the Melbourne Cup. Of those eight, four (50%) have sold around the proposed closing time and the others remain on the market. The four that have sold were goodies and they got exceptional prices. The other four – well, they remain unattached to a buyer.

The Top 3 things buyers can do to take advantage of what is on offer before Christmas.

1)   Find: Off markets, stales, rebadgers and pass-ins. Many homes are being re-presented after failed campaigns early in the year. If they failed on price then, why pay it now? Off markets are back in season as many recent buyers would be keen to see a quiet sale before Christmas rather than wait till 2012 – there may be a bargain there. Stales – don’t give up. If it’s a home you like then revisit with a  written offer – even if the asking price is baloney. Rule One in this market: if you don’t ask, you don’t get. Man up and put the offer in!

2)  Assess Price: Use past sales carefully and change their meaning – sales of six months ago are now the ceiling prices, not the floor prices (as in previous years). The market is going backwards in price, not forwards (A graders excepted).

3)   Negotiate: As buyers if you want to negotiate to your advantage while still maintaining a reasonable level of risk in terms of buying versus missing out on the home, then you need to be able to apply the Fisherman’s Friend Wet Fish Slap on overpriced homes. You know the commercial – where she gives him an uppercut with a wet fish. If the price is baloney and you are not going to pay it, don’t walk away – you may be doing yourself and the seller a disservice, as you may in fact be the best buyer. Go and hit the seller with the Fisherman’s Friend Wet Fish Slap and then apply pain relief afterwards. This is exactly what our selling agent friends have been doing for years in post auction negotiations. They hit you hard with a big number, then they offer to relieve your pain (slightly). So if you have a sensible price, go and offer it – you may well be the seller’s best deal and if you walk away because of your timidity, then both you and the seller lose. If aFisherman’s Friend Wet Fish Slap is not your caper consider hiring a professional who can help you – it’s invigorating. And of course if it doesn’t have the desired effect – consider moving on.

Saturday 26th November Weekend Auction Results

Bought

• 98-100 Mont Albert Road Canterbury (Alastair Craig) – $3,380,000 – 6 bidders
• 25 Grange Road Kew (James Tostevin) – Around $3,000,000 – 1 bidder
• 24 Anderson Malvern East (Heather Elder) – Around $3,000,000 – 2 bidders

Passed-In

• 2 Collins St Brighton – $2,975,000 – 0 bidders
• 1022 Malvern Road Armadale – $2,800,000 – 0 bidders
• 21 Wattle Road Hawthorn – $3,050,000 – 0 bidders
• 68 Molesworth Kew – $4,600,000  – 0 bidders
• 20 McGregor Middle Park – $3,200,000 – 0 bidders

Friday 25th November – 58 Howitt Road, Caulfield North has been bought for a record Caulfield price according to the effervescent Ross Savas of Kay and Burton. The price;  well can say they were talking $6 million and the calibre of the home leads us to conclude they would have got that, so over is definitely not out of the question. This was a truly great home, our James Home Rating of 838/1000 is one of the highest we have scored this year. The market is obviously still recognising and paying for great quality.

Thursday 24th November – 25 Montalto Avenue Toorak ( Nicole Gleeson) – Basically land only for the area as the home requires a serious reno – passed-in last Saturday on a lone vendor bid of $3,450,000 was bought today for an undisclosed amount.

Wednesday 23rd November – 58 Glyndon Rd, Camberwell (Jock Langley) Private Auction  BOUGHT over $3,300,000: Attended this mid week private auction  just in case a bargain was to be had. No bargain, with a very healthy Tim Derham – Abercromby’s auction – 3 bidders and passed in for $3,300,000 and bit – deal was negotiated after wards in excess of that figure. Strong result – this is still outer Camberwell!
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

Monday 21st November – 6-8 Myrtle St Brighton (Barb Gregory). This last weekend’s biggest auction – and another private one at that, was completed at a price over the quote of $6,000,000. So another solid Golden Mile sale with land in excess of 1600 sqm plus some solid improvements and another good result for Marshall White in Brighton. While private auctions are very secretive they seem to meet the vendors requirements for privacy and a buyers liking for transparency – perhaps a way of the future for some key homes.

Subdued mood: Toorak, 25 Montalto Ave, Jason Scillio (Kay & Burton), passed-in $3,450,000, no bidders

Saturday 19th November: At auction only two out of ten were reported as sold at the $3m+ level.

• 19 Florence St, Kew (Diana Healy) – Bought for over $3,600,000
• 2 Monomeath Pl, Canterbury ( Richard Earle) – Bought after for over $3,100,000

Pass-Ins at

• 47 York St, Kilda West – $3,800,000
• 24 Monaro Rd, Kooyong – $3,500,000
• 25 Montalto Ave, Toorak – $3,450,000
• 9 Berry St, East Melbourne – $3,200,000
• 11 Victor Ave, Kew – $3,000,000
• 2 Snooks Crt, Brighton – $3,000,000
• 26 Stawell St, Kew – $2,950,000
• 6-8 Myrtle St Brighton – undisclosed

Overall quite a weak day – although having been through many of those pass-ins I can say that a number were not the most exciting of offerings.

Friday 18th November: The Christmas Stock Flood has really gained some momentum in the last week with a large influx of homes coming onto the market right now – especially at the Top End (look at our stock graphs in Market News). This has to be good for buyers. Where in recent times our main role has been finding quality homes – the bulk or our work has moved to assessment and negotiation. Price is such a movable beast right now and it’s good, as a buyer, to have an open mind and strategies (within your acceptable risk v reward parameters) to take advantage of the lay of the land. Please that is not to say that all the goodies are being given away – far from it – but once a home falls into that certain category (eg stale, overpriced or a B grader) then significant discounts are possible – if the vendor wants to sell. Yes you need to know what to do, how to do it and when to do it – but professional advice can fill that knowledge gap for you. Two properties purchased in the last fortnight or so $700,000+ off the original asking price and that was a $3m home and $300,000+ off the original asking price and that was a $2,000,000 home. The market is operating normally – however now, more so than at any other time this year, it is a true buyers’ market – Great Choice and Negotiable Prices. Buy Well.

Wednesday 15th November: 4 Kiers Court Caulfield North (Phillip French)  one of the more distinctive homes I have seen this year is now reported as sold in excess of $3,000,000. Our James Home Rating was 684/1000 (see below) and what the owners did with a difficult block was in my opinion, amazing and the price was solid. Also a huge block at 181 Gipps St East Melbourne (Sarah Case) over 1000 sqm was bought undisclosed (over $5,000,000) and finally to complete the RT Edgar trifecta 29 Loch St, St Kilda West (Anthony Grimwade) almost 1000 sqm plus period home was bought for $3,800,000.

Tuesday 14th November: 3/61 Nepean Highway Aspendale (Rowan Thompson) which we reported as passed-in on the weekend, has now been bought for $3,150,000.

TOORAK 49 Mathoura Road, Justin Long, 4 Bidders, $5,220,000

Saturday 12th November: 3 biggies – 2 bought and 1 passed in.

47 Kinkora Rd, Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders
Grace Park, north-facing rear, big land and beautiful period home. Some may say a drover’s dog could sell this on a sunny day, but that would be unfair on Peter Batrouney and Campbell Ward. This writer knows for sure we will get a first rate performance and in all likelihood a very solid result. About 120 have gathered in the back yard and we begin with a vendor bid of $5,000,000. Quickly in $50,000s between Bidder 1 and Bidder 2 we reach $5,300,000 and a half time break. Two more bidders join in and it’s on the market at $5,500,000. A few more bids and it’s all over at $5,660,000. A typical successful Peter Batrouney and Campbell Ward / Grace Park auction.

49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders
Justin Long is a very experienced and capable auctioneer and he needed to be today as he was put under pressure by bidders constantly trying to reduce the bids he was calling for. He held firm time and time again, and in the end the vendors would have to think (whether they were happy with the price or not) that without Justin’s skill and endeavours, this property might not have been sold this weekend. Five bidders all with their own individual strategies locked horns for 45 minutes involving breaks and multiple “is it on the market?” questions. The opening bid was $4,000,000, the property declared on the market at $4,950,000 and eventually bought under the hammer for $5,220,000.

Biggest Pass In: 3/61 Nepean Hwy, Aspendale, Rowan Thompson (RT Edgar); Passed in $3,000,000, 1 bidder
The excitement was in the air and the house was buzzing with people enjoying the sunshine and the stunning panoramic view of the beach literally on the doorstep.  With only 500 beach front homes in Melbourne, explained auctioneer Rowan Thompson to the large crowd of 100, the “international standard resort style property” represented  a wonderful opportunity.  Mr Thompson opened proceedings with a vendor bid of $2,800,000 and sought $100,000 rises.  With Mr Thompson’s encouragement, a bidder from the crowd obliged with a bid of $2,900,000.  A vendor bid of $3,000,000 followed and despite Mr Thomson’s best efforts, there was no further bidding on the day and the property was passed in on the vendor bid.

Friday 11th November: This is a typical week at the Top End for me. I have been through the following homes, given them a James Home Ratings (not for public display), calculated buyer value and price ranges and noted a few negotiation strategy issues each home may present when attempting to maximise buyer outcomes:

PRICE: $3,000,000+ (Agent Quote)
POSITION: 7 Linacre Road, Hampton, (Jenny Dwyer)
PROPERTY: James Home Rating Excerpt: Complex family home with water views (quality ones of Yacht Club), multiple living areas, 5 bedrooms on one level, dual staircases, basement and all on 635 sqm in one of Melbourne best inner seaside precincts. Price – that will be interesting as will the method of sale – both rare birds for this part of the world right now.

PRICE: $5,250,000 (Asking Price)
POSITION: 29 Seymour Grove, Brighton (Ian Jackson)
PROPERTY: James Home Rating Excerpt: North-facing rear, brand-new build on a big block around 1,000 sqm. Upstairs is very good, perhaps a lift was needed at this price. It’s to a formula and one that always sells when buyer meets seller or vice versa on price – that meeting price – well that is the big question? I remember going to the land auction around the start of the GFC (early 2008) and it was bought quite well at $2,100 per sqm – bought quiet well, considering what other knockdowns in this street and Wolseley had gone for, a short time before this auction.

PRICE: $8,000,000 ish (Agent Quote)
POSITION: 18 Fitzroy St, Kilda (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Has already received a lot of publicity due to its current owner and the facade photograph is wonderfully enticing. A home of pluses and minuses for different family types. One of the real pluses for some families would be the rooftop pool – spectacular is an understatement. Location is also smack bang in the middle of the action. Building was an advertising agency office in a previous life – although much of the work was already done when this last sold (twice in 2004 between $3,000,000 and $4,000,000) .

PRICE: $6,500,000 plus (Agent Quote)
POSITION: 21 Isabella Grove, Hawthorn (Scott Patterson)
PROPERTY: James Home Rating Excerpt: It’s a trip back in time. The entrance really looks like a movie set from Charles Dickens (love the dome). One of the most powerful views for me was actually through the kitchen window of what would have been servant’s quarters – the form the steps take going back up across the road stick in my mind. The home itself is obviously one for specific tastes and you will have a few issues to get your head around if you are going to be the buyer – but that could be well worth the mental effort.

PRICE: Circle $10m to $12m (Agent Quote)
POSITION: 1 Harcourt St, Hawthorn East (James Tostevin)
PROPERTY: James Home Rating Excerpt: Most “in the trade” would describe this as a big thumper and the agent quote estimate says you are going to need a big wallet to match. Valuing this would require an open mind and purchasing well, would require a firm base on goals and a flexible strategy to test on many levels. The house – well – it’s not about the house, there are bones to work with. No, in my opinion it is all about is the land and more to the point the shape of the land and where the home sits and what you want and can do within its limitations. So is the land worth the $sqm of  say no 49 Harcourt which had two bidders at auction and went for over $7,200,000 last year or is there a discount involved? Challenges for all parties if this is to be a deal.

PRICE: In the picture you can see next door which was also subject to a similar campaign recently at a similar asking price tag ($20,000,000 to $30,000,000). The price –  if it does indeed sell – will be a source of conjecture, supposition and innuendo for months to come just like Shakespeare Grove was last year and just like when this home was so famously bought and sold last time (a decade ag0).
POSITION: 1 Towers Rd, Toorak (Michael Gibson)
PROPERTY: James Home Rating Excerpt: Wow – if you can work out a way to get through this home you should. An art deco masterpiece with pool, tennis court, contemplative gardens all on a Toorak acre. The entrance and view from the kitchen are very powerful. At this price level, there are many more questions, but it always comes back to one final one, when the others have been answered – How can I buy this for the best possible price? Your answer may well be determined by the relationships you keep.

PRICE: Around $3million is Agent Jock’s quote
POSITION: 58 Glyndon Rd, Camberwell (Jock Langley)
PROPERTY: James Home Rating Excerpt: Big home in the “almost ‘burbs” on 2100 sqm with tennis court – it’s all about the land. Set down for a private auction as opposed to a public one – (mmmmm, that’s an interesting twist) on November 23rd. What is the land per sqm at this size worth? How many other competitors do I really have in this market? Am I better to go before and if not successful how will I manage a Jock Langley pass-in?

PRICE: Around $4,500,000 (Agent Quote)
POSITION: 68 Molesworth St, Kew (Hamish Tostevin)
PROPERTY: James Home Rating Excerpt: This is a home of thought and quality – and with a price tag quoted over $4.5m if you are going to be the buyer you are going to have to put some thought and quality into how to go about this – such as, what is this home really worth? It is a very specific home – big in size, lifts, views, a lot of WOW. Attention to detail is obvious. But what about heating and cooling and sun with all that glass. Land value is not hard but home value – is this a $1.5m or a $2.5m build and will that matter? One of those buys where process is so very important if you want to buy well. A rare offering for the modern home buyer and worthy of serious consideration.

Grand Sale Land Sale in Kew - Tender Closing Today (Friday 11th November). It will be interesting to see what happens at 6-12 Madden Grove Kew on this mini-subdivision of 4 blocks around 600 sqm each. Mark Dayman and Antony Woodley taking in the offers and have expectations above $2,000 per square metre.

Thursday 10th November: Another three strongish Toorak buys in the last week.

• 16 Kenley Court Toorak (Michael Gibson of Kay and Burton) – Bought for over $12 million for nearly 2000 sqm of land a very substantial home. James Home Rating 779/1000. Excerpt from James Home Rating:

The big pluses for me are the court location, the look from the street and the gardens – tranquil, serene, sanctuary – all those words that are antonyms to stress. This is what the gardens are, and for me they are the major selling point to 16 Kenley. The home, well for most of us (i.e. those who can’t afford it) it’s a rare and magnificent home. However for buyers at this level I think they will find some issues with the floorplan – especially the position and connection between the kitchen and living area  and the front staircase so close to the front door. This seems an afterthought and does detract a little from the majesty of the entrance. Walking through the home I keep thinking of the gardens, the location and the land size more so than the building. However if you can afford 16 Kenley then you can afford to make the changes you want. And so, like almost offerings at this level in Toorak, it comes back to: when do you want to buy, what is available, what is the right exchange price and how best do you go about the process?

• 24-26 Balmerino Ave, Toorak (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land inc tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and was bought immediately afterwards for an undisclosed amount. As I went through this home it felt mostly about the land and the sweeping views, however I suppose that is the way with almost all Toorak homes. The end result was $3,800 per sqm approx.
• 4 Lisbuoy Court Toorak (Nicole Gleeson and Michael Gibson) – Townhouse with some land, bought for over $4,000,000.

Greg Costello and Tim Wilson in full swing on the Brighton Golden Mile - continuing to sell at $10,000 per sqm. See report below

Week Ending November 5th: Has the action returned after the September excitement was followed by an early October siesta? We think yes – it is back. People do have cash and they are parting with it when they find the right home. In the last 10 days at least 9 homes over $4 million have been bought and sold.

Some Auction Results this weekend

• Biggest Sale: 2 Mytton Grove, Brighton, Greg Costello (RT Edgar); Under the hammer $6,050,000, 2 bidders
  Brighton Golden Mile Beachfront – these are four words that mean money. In recent times that has meant $8000 to $10,000 per sqm – at least at the northern end. A question our auctioneer Greg Costello asked in his opening spiel was “is this southern part of the Golden Mile more highly regarded than the northern part due to the activity on the beachfront?” Personally, as I run past here every day I think yes, but the auction result will tell us for sure. With the blue sea as our backdrop I’m expecting an exciting auction – irrespective of the market this stuff always sells. Greg Costello is conducting proceedings in front of a small crowd of 30. We start with an opening bid of $4,850,000 from Bidder one. $5,000,000 comes in from Bidder two strongly – solid bid. $5,100,000 from a third bidder – who as it turns out was with Bidder one – so we don’t count him – strange strategy that one. Anyway with a fair bit of action we move up to $5,600,000 in various amounts and then to $5,750,000. At all times Bidder two looks in control and is bidding very well and with some intimidation without being over the top. Normally Greg Costello is in excellent form but today was not his best day with bid retention and there are a number of confusing referrals back to his penciller for clarification. At $5,900,000 the “is it on the market?” question was asked, and after a quick referral, an affirmative answer is returned. There are two more decisive bids from Bidder two and its all his at $6,050,000. Loved the winning bidder’s style – aggressive and sensible and much better than his opponent and also many so called professionals that I have witnessed recently – well done sir – we have a job for you here if you care to apply. (Mal James)

• Other Brighton Golden Mile Results: 2 Mytton at $6,050,000 divided by 613 sqm = $9,869 per sqm or almost identical for previous absolute beachfront sqm rates over the past year (which have maintained themselves in the last year and increased on previous high water marks). 8 Moule Avenue (David Hart) is a classic Golden Mile address (but not absolute beachfront) and sold this weekend for $2,310,000 or $3,510 per metre. On first glance that is not expensive, but it is in fact not too far off previous Golden Mile sqm rates. A third Golden Mile property 15 Dudley St (Regina and Brian) sold for in excess of its pass-in figure at $4,400,000 which, again considering the house was nothing other than a nice facade, was a very, very solid result.
• Biggest Pass In: 58 Kooyongkoot Rd, Hawthorn, Scott Patterson (Kay & Burton); passed in, $3,400,000, no bidders
  Could you find a better setting for a Melbourne Spring auction? A tranquil backyard by the pool! In front of around 60 people, auctioneer Scott Patterson gave his usual professional best to attract some crowd bidding but this was to no avail. The property passed in after two vendor bids – $3,300,000 and $3,400,000 respectively – and remains for private sale. (Adam Woledge)
• Bidderbuzz Auction: 15 Chastleton Ave, Toorak, Warwick Anderson (RT Edgar); Under the hammer, $4,135,000, 4 bidders
  Spirited bidding after a slow start was a welcome sequence at the auction of this single level home in Toorak. A crowd of 80 neighbours chatted quietly throughout the action, eagerly anticipating the value to be determined by the market. After opening on a vendor bid of $3,400,000 and the declaration that the council had valued the property at $3,700,000, auctioneer Warwick Anderson tried to keep pace with the determined 4 bidders. After the second vendor referral, Warwick announced the property on the market at $3,800,000 but the strong bidding continued, with bidder number 4 securing the home at $4,135,000. (Gina Kantzas)

RT Edgar: Has had a pretty solid time with 8 properties selling over $2 million in less than a week, including an off market at 68 Walsh St believed to be around $4 million, not mentioned in above dispatches.

The Question: After Super Saturday would these 3 not sell, sell lower or would the Mexican Wave** (see explanation below) kick in and they all sell once one had gone.
The Answer: The Jungle Drums beat loudly and the Mexican Wave kicked in with all three selling within 24 hours of each other. All three had quotes of $5m to $6m during their campaigns. Scotsburn was bought after a weekend pass-in (believed to be around $5m), Montalto was for most of its campaign a private sale (but finished in a Boardroom Auction at just over $7m) and Scott Grove was an Expressions of Interest closing Wednesday (reportedly 3 interested parties and sold 2 hours after the deadline for well over $6m).

October 29th: 54 Hanby St Brighton (above) (Kevin O’Brien) – The only auction I came out for today. Damian Davis – a bit out of his normal territory started up the engines with a solid opening spiel in front of a crowd of around 50. After he had finished his coverage on the home’s flow, light and feel, he asked for $3,300,000 from the crowd. Nothing was forthcoming, so a vendor bid at $3,300,000. Another vendor bid at $3,350,000 and a half time break did nothing to excite and so the words pass in brought an end to the proceedings on this lovely home that has a vendor at one level and potential buyers seemingly at another.

October 25th: 25 Scott Grove Glen Iris (Rae Tomlinson and James Connell): Bought within 2 hours of close of play for well in excess of the $6m+ price tag. This was a very good home on a very big parcel of land and the result was deserved and expected for a quality A grader – we rated it at almost 3 hats or 791/1000 (see our rating below). And a good night for Marshall White overall with 34 Chatsworth Prahran being sold through Madeleine Kennedy for $3,137,000.

October 24th: The collection of Expressions of Interest campaigns finishing in late October/Early November will be watched by many. There are some great homes, but the results this last weekend indicate they may not sell as strongly as September results suggested they might. We are monitoring a geographically widespread sample – all over $3m and will bring you the results as they come. Lets see if the K&B Mexican Wave** is in play for the Top End buyers or have taken their bat and ball and gone home.

**K&B’s Mexican Wave: It is possible that the above marketing campaigns could in fact produce higher results if we see more marketing campaigns in the style of Kay and Burton’s Mexican Wave effect. It’s just like at the MCG: Kay and Burton brings a group of homes together and push and prod till they get one buyer to perform and then uses that result to get other buyers to put their hands up on other homes. This is planned months beforehand, it’s totally legitimate, it’s brilliant in concept and it’s why people like Ross Savas and Mike Gibson are worth their fees and then some. Other Mexican Wave agents who plan and execute well are Marcus Chiminello, Rae Tomlinson, Heather Elder, Justin Long and Peter Bennison of Marshall White to name a few. However K&B are the absolute masters at the Mexican Wave.

Alastair Craig and Richard Winneke maneuver 3 bidders to a bought price of $2,855,000. This is where some of last spring's $3M plus action is right now at $3M minus.

October 22nd: During 2011 the $3M+ market has been as fickle as we can remember: it disappeared for most of the year, came back with a vengeance in September and has now seemingly run away lost again.
To demonstrate the point, only two homes out of 150+ scheduled $M+ auctions reported a sale price over $3 million today.  Yes two – that’s not many.

They were 34 Stevenson St, Kew with James Tostevin, which sold after auction and 7 Barrington Ave, also in Kew, with Scott Patterson, which sold before auction.

Mid- Week Apartment Auction: 3002/368 St Kilda Road (Marcus Chiminello) – Thursday night auction @ 7.00 pm. A similar property in the same building on the same side, same square metres, same décor, sold for $3.3m a short time ago. Quoting $3.3m plus then $3.5m plus. Surprising to have an auction in St Kilda Road but Marcus Chiminello and Nicole French (the new Batman and Robin) lined up auctioneer Growling Jack Bongiorno and 3 bidders fought it out past the last sale sales, past the first quote and the last quote and all the way up to $3,800,000.

Why did it sell so well? Demand exceeding Supply for North orientation; 315 sqm size with car parking on the 1st floor (no dizziness getting in and getting out) and Shrine views. Well marketed by one of the best in the business at this stuff.

Price: Has been gently improving in some key blocks on some key apartments – but it’s all about the apartment characteristics. There are literally hundreds of apartments above a million that have no buyers at all, because they have nothing unique to offer except a very cheap price.

Biggest Sale: 38 Kerferd St, Malvern East, Glen Coutinho (Hocking Stuart); Under hammer, $2,862,000, 4 bidders
Wow what an auction! This is as intense as it gets. Glen Coutinho has firmed as one of the best auctioneers in Melbourne in my humble opinion. What started out with meek interest from a lively crowd of around 70 people turned into the most hotly contested auction I’ve ever seen. A modest opening bid of $2,350,000 was announced from one party in the crowd and was quickly overtaken by another for $2,355,000.  The two went back and forth in increments of $5,000, then $2,000, then $10,000. Once the price reached $2,501,000 it seemed as though the action had come to a head, and Mr Coutinho retreated to his vendors to discuss the situation. Confident of reaching the price he and his vendors desired, Mr Coutinho continued unabated, knowing full well there were several other parties very interested in the property. As the property was being called down for a fourth time a third party entered the fray, bidding $2,540,000. This guy was ready for a showdown, but the original bidder stuck to it and was relentless in his pursuit of the Glen Iris home. Unable to continue, the young lion who made a worthy challenge correctly backed off, leaving the fight wounded but not insulted. At this point the crowd was able to breathe momentarily, but it wasn’t over! A fourth man entered the mix, and began his challenge. He proceeded to walk across the road towards the original bidder attempting to eye him down, but the original bidder was having none of it. As those who play enough poker know, when someone shows aggression towards you, it is generally a sign of weakness. Fortunately, the original bidder (who probably doesn’t play poker) picked up on the bluff and showed no signs of folding. Once the figure reached $2,862,000, the new combatant gave up announcing: ‘he can have it,’ and the auction ended with a standing ovation from the crowd, although it may have only been an ovation as they were already standing. (Daniel Ehrenreich)

Biggest Pass In: 11 Scotsburn Grove, Toorak, Jeremy Fox (RT Edgar); Passed in, $5,000,000, 1 bidder
A small crowd of around 40 and half are Toorak agents just looking. Jeremy Fox gives us a good solid spiel and we are away. Or are we? Jeremy calls for a $5,000,000 opening bid and gets nothing but silence. He goes inside for his half time break and leaves us all in the rain – actually he was pretty quick to return. I’m typing in Passed in on my Ipad and – whoops no – there was a genuine bid and $5,000,000 is taken up. Then it is passed in to the lone bidder. We await the outcome. (Mal James)

October 15th: Quality Stock Levels have improved for Buyers:
Good levels of good stock came into the market late September and buyers began to take deeper breaths and relax a little.  Angst dissipated somewhat as quality buyer saw more quality homes they could buy, diminishing the spectre of missing out on a home, leading to a drop in buyer urgency and ultimately price.

This Quality Supply Increase is best demonstrated at the Top End.

Want a home with a Tennis Court in Toorak? Got around $6 million dollars?

In the last week we visited, assessed and rated: 11 Scotsburn Toorak (Andrew Smith), 10 Montalto Toorak (Mike Gibson) and 25 Scott Glen Iris (Rae Tomlinson). All have tennis courts. So even if there are 10 buyers for tennis courts at this price level, there’s a fair bit a choice there. If normal market forces prevail and the buyers have good representation, then the prices on all three could be lower than if there was only one of these homes on offer. That’s unless, of course, one home is more strongly favoured than the others by a significant number of those 10 buyers – or if the Mexican Wave effect happens (see below).

Similarly in the last week we have been through some really good new home offerings at over $6 million, including 14 Kilsyth Toorak (Michael Armstrong); 15 Vista Toorak (Nicole Gleeson) and 33 Coppin Grove Hawthorn ( Scott Patterson) – see our ratings over the coming week.

These are just some examples. And in fact, quality stock levels have improved at all price levels. This is good news for Top End buyers and the reason we think October 2011 and hopefully November 2011 will be better months for buyers than were Winter 2011 and September 2011 in terms of:

1. More choice

2. Less chance of the runaway prices.

This price segment is all about either side of the Melbourne Cup – as a number of Expressions of Interest, Private Sale and Auction campaigns are scheduled for some sort of conclusion at that time. We anticipate publicly reporting in  early November as to market movements since September’s price and activity spiking.

25 Campbell Road Balwyn - Peter Mitchell - Under the hammer - $3,000,000 - 5 bidders

Week 4 September 24th: Overall market interest is down this week, best evidenced by the fact we had 30% less Marketnews readers on the Monday of  this week than the past two month average (alternatively we may be just getting boring). While some new AFL coaches bobbed up, so have some interesting homes and it may be worth your while to revisit your contacts to see what new offerings are on the horizon. The internet portals are showing more homes in the Upper End than they have for a while and this is due to the agents planning an extended campaign to manage arrange the Grand Final while still trying to get the home done and dusted prior to the Melbourne Cup. So this week may have been more interesting than you thought but soon it will be back to “quiet and low new stock” as far as listings go until the second week of November post Melbourne Cup (hopefully).

Biggest Sale: 2 Albert St, Brighton, Leigh Hallamore (Buxton); after auction, in excess of $3,100,000, 3 bidders
With a relatively big crowd of 60 lining both sides of Albert St, there was a feeling in the air that this auction would be an exciting one. And, although he had to open on a vendor bid of $2,500,000 to kick-start proceedings, auctioneer Leigh Hallamore soon had a tightly contested battle between three parties on his hands. Bidding was strong and constant with bidder 3 eventually earning the right to negotiate after the property was passed in at $3,120,000. Bought after for an undisclosed amount. (Jen Milligan)

Biggest Pass In: 324 Beaconsfield Pde, St Kilda West, Andrew Stuart (Hocking Stuart); Passed in, $5,000,000, no bidders
Auction Andrew Stuart took great pleasure in explaining to the crowd how the under-ground car lift and turning circle worked – with a  practical demonstration. Demonstrations over, Andrew asked for a bid somewhere near the lower end of the quoted range. No one offered a bid and  a vendor bid of $5,000,000 was made – still no interest and half time was called. Half time was short and sweet. The property was reoffered again and surprise, surprise – no bids and the property was passed in at $5,000,000. It has been a long time since a property on Beaonsfield Parade has sold under the hammer. Sales are being transacted its just taking some time for vendor and buyer to reach that all important middle ground. (Guy Angwin)

Bidderbuzz Auction: 25 Campbell Rd, Balwyn, Antony Woodley (Marhsall White); under the hammer, $3,000,000, 5 bidders
Antony Woodley took the helm and fielded bids from 5 parties before the hammer fell at $3,000,000; after being on the market around $2,700,000. Around 70 people attended this auction. Full report in Market News (Adam Woledge)

Some clean ups from previous auctions and another few off markets and quiet results for the month.

• 34 Tormey St Balwyn North – James Tostevin – after auction for around $3,000,000
• Brighton 12 North Road – Jonathan Dixon – off market – over $5,000,000
• Toorak 67 Lansell Road – Andrew Harlock – after auction – over $3,500,000
• Toorak 1 Sargood – Lachlan and Paul Castran – Expressions of Interest – new home – undisclosed
• Balwyn 49 Metung St – John Bradbury – Expressions of Interest – new home – undisclosed
• Kew 26 Dean St – James and Hamish Tostevin – Expressions of Interest – new home – over $4,000,000

Not everything sells at the top - 111 Walsh South Yarra - Passed-In $3,250,000

Week 3 September 17th: Good quality Top End (around $3m and above) continues to change hands in strong numbers.

• 40 Balwyn Canterbury Peter Dixon over $3,000,000
• 37 Fairview Hawthorn Jeff Gole just under $3,000,000
• 3 Gardiner Hawthorn Hamish and James Tostevin – 5 bidders $3,850,000
• 41 Drummond Carlton James Keenan – $3,160,000
• There were $3m pass-ins at 111 Walsh South Yarra and 2-4 Sandown in Brighton.

During the week these $3M+ were bought

• 48 Hampden Road Armadale Andrew Baines over $6,500,000
• 45 Martin Brighton Ian Jackson just under $4,000,000
• 42 Matlock Canterbury Sam Wilkinson just over $3,000,000
• 198 The Esplanade Stewart Lopez – were quoting in excess of $6,000,000 – undisclosed

This September, to date, we are aware of 26+ sales in the is $3m and above price range – see our $3Million Plus report. If you look at our $3Million Plus market report for last year, September 2010, we got to 46 boughts by months end – http://marketnews.com.au/2010/09/two-9-million-homes-bought-on-monday/ and that was pretty much a solid activity time in the market. The Top End has some ooomph just now.

Michael Gibson and Justin Follett of Kay and Burton were both a bit chipper when I spoke to them this weekend and assured me that while the market may seem a little boring until the end of the school holidays, there are some good homes coming on after that. Hopefully post Melbourne Cup as well. Michael added that vendor moods have improved with the Top End good news of recent times. We hope he is right as that will mean more choice for buyers.

78 Blessington St Kilda - John Bongiorno - 6 bidders - Under the Hammer for $3,400,000

Week Two September 10: With the third week in a row of significant competition on A grade Top End homes there is little doubt we are now firmly in the midst of  an activity spike due to significant stock shortages of “ready to move in family period and new homes” in the $2m to $6m range.

On top of what we saw 2 weeks ago (11 sales at $55m with an average of 2 bidders each) and last week (7 from 8 bought over $3m) we saw solid results this weekend at:

1. Kew 20 Barry – Peter Batrouney 3 bidders, under the hammer, $3,850,000
2. St Kilda 78 Blessington – John Bongiorno $3,400,000, 6 bidders.
3. Armadale 46 Stuart – Andrew Hayne 2 bidders, after auction, over $3,300,000
4. Malvern East 58 Kerferd – John Bongiorno, 1 bidder after auction, $3,075,000
5. Malvern East – Little Como – 50 Finch – Gowan Stubbings – Expressions of Interest – It was a long battle but there is a sold sticker on the board.
6. Toorak 8 Ultimo – Justin Long – After Auction – 3 bidders – $2,900,000

Whilst the market is giving a big tick to those it likes (well priced A graders); it is marking very harshly those that is doesn’t and they are best summarized as B or C graders – homes that have issues. Some examples below

1. Toorak 32 Canberra – its old and tired – big land though.
2. Kew 2 -4 Heather – No backyard, no garage and no real interest.
3. Malvern East 4-6 Finch – 0 bidders – a big reno required and only a few metres from Dandenong Road

And then there is 22 Surrey Road Toorak – Auction was due today – converted to Expressions of Interest at the last minute. What does this mean?

Yes our focus in Marketnews seems to be all at the top of Top End ($3M+). Right now that is where the real action is. There has been an unequivocal mood change that does not seem to have been shared by the market at the lower dollar values.

Buyers are now having to answer some very real questions.

What is the real price? – Eg What is the highest other bidder prepared to pay, if indeed there is one? As a buyer am I trying to buy an A grader or a C grader – am I $300,000 below the other bidder or $300,000 above nobody!

What should my new strategy be in trying to purchase a Top End home? Extract from an MW St Kilda auction report “This market now plays to MW’s great little system and strength – shake the buyers up, show ‘em their competition, work out who is the strongest, then pass it into them and mentally torture them in post auction dealings by referring to those outside. It’s very hard to argue with it’s effectiveness, for if you don’t play the game, on a good home in this market, then there is a high chance somebody else will. This market is now spiking in the direction that will enhance MW’s reputation amongst sellers but …  um how do I say un-enhance their reputation amongst buyers.” This applies to not only Marshall White, but Jellis Craig, Kay and Burton, RT Edgar, Benmac and many of the Bayside agents. The main question for buyers is not it’s legitimacy (the sellers absolutely want this); its how do I best manage it and achieve my main goal within my buyer risk profile.

How will you manage a negotiation situation under extreme pressure – then is not the time to work out a plan. After the event is not a time to say I could have done it a lot better. The market has changed at this level, and may well change again, as a buyer have you moved with the times?

Strong Crowd at South Melbourne 210 Nelson Road - Anthony Grimwade - Under the hammer - 3 bidders

Week One September 3: My week this week. A good week with another $3M+ purchase for a satisfied client – which makes a good string of activity in the last month for our company. Overall a solid start to Spring after a less than exciting Winter (well I enjoyed Scotland with my son anyway). A magic moment for me was the home at 8 Torrington Place in Canterbury (Michael Armstrong of Kay and Burton). We will have a rating up in the next few days – but in a nutshell it’s a very brave new build home. Its Olde English for a start, which already loses most of you; but it is built to such a standard that when its attracts a suitor to its sweet offerings they will be entranced and will move to a mindset of I have to have this. The French Provincial being built next door will attract more; but this home will attract a greater intensity of interest. The price – well its asking $5million and for me the end result will be give or take a million and the sold sticker will be slapped on in an almost impossible to guess timeframe. That will depend on when the specific bee walks into this very specific honey pot. A lovely, well thought out, beautifully crafted home – go and check it out – its open mid week and weekends or google for our rating by weeks end. Please we are happy to be more specific on perhaps how best to buy it; if indeed it’s of interest to you.

My other magic moment was the 29 Rose St Armadale Auction: I really love watching Heather and Rae (Marshall White) at work – they are masters at their craft also – just like the developers of 8 Torrington. The two of them had positioned buyers on this home (last sold for around $2,500,000 in mid 2008) to get involved in the biggest shootout I have personally witnessed at an auction this year. And they lined up one of the best sheriffs to take all-comers on – Growling Jack (John Bongiorno) and boy did he fire up – to use the vernacular he stuck it right up ‘em and corralled 9 bidders into the final $3,030,000 result. It was very powerful to watch and while not reflective of the overall market right now, it did provide a pointer to the current lack of stock at the $3m+ level and a beacon for those that feel the only way forward is without hope. Sure we are all a bit nervous, but things are simply not as bad as The Age daily headlines make you think they are – well not right now in the $3m+ segment anyway.

Again the standout $ segment – granted on very low numbers ( 6 from 8 ) Yes there were some big pass-ins like 67 Lansell Road Toorak ($3,200,000 vb) but it has some challenges. Also passed-in 2 Iona Toorak ($5,000,000 vb) – postscript: was bought over the weekend.  However the ones that were bought this week showed, in the main, multiple interest.

• Toorak 2 Iona – Jeremy Fox – bought after auction $5,080,000
• Armadale 29 Rose  – see report below 9 bidders $3,030,000
• Malvern East 7 Bates – Heather Elder and Rae Tomlinson – 3 bidders – bought after for $3,500,000+
• Hawthorn 34 Coppin Grove Jack Bongiorno – 3 bidders – under the hammer – $4,110,000
• South Melbourne 210 Nelson – Anthony Grimwade – 3 bidders – under the hammer – $4,215,000
• Toorak 19 Sargood – Jeremy Fox – 2 bidders – bought after – $4,700,000.
• Balwyn 12 Creswick – William Chen – Bought Before – Undisclosed – around $3,000,000 . This was after a failed auction earlier in the year.
• Canterbury 52 Mont Albert – Karen Gornalle – Private Sale – over $3,800,000.
• Hawthorn East 5 Constance – John Chartres – After Auction – just under $3,000,000. 2 bidders.

Roll Up, Roll Up and see if today is a horror movie or not? 40 Fordham Camberwell: David Gillham: Bought After $1,650,000+. 1 bidder

Yes it was a bit of a dog of a day for the market this weekend, but it was not an absolute shocker.  And really, what else could you have expected!

At 6pm on Saturday, the James Clearance Rate for $M+ was 52% on the 25 auctions we attended. We have seen worse.

The Weekly Review Bidderman, our demand indicator, was down at just 0.8 bidders per auction. The last time we saw that kind of number was back in 2008 – but hey did you expect a plethora of volcano auctions? Actually, there was not one volcano (4+ bidders) auction in the 25 we covered on Saturday.

We all knew buyers were not going to brave this weekend and who can blame them? This was confirmed by the fact that only 3 of the 25 auctions we covered sold under the hammer – that’s 12% or 1 in 8. Which again re-emphasises that if you do feel inclined to buy a home right now, you need to understand the processes and strategies involved in buying a home outside the auction hammer process.

The Market This Weekend

Who are the unluckiest sellers this year? I think we would all agree those who had their home on the market at 10.30 this Saturday morning. This weekend was always going to be a time of concern for the market, no matter which way you mentally packaged Friday’s stock market news.

And yes, there was some blood on the Colosseum floor. But before you move into a catatonic state about the health (or lack thereof) of Melbourne’s $M+ home market, let’s put this weekend into context.

Firstly, even without the doom and gloom we would have been most surprised to see a strong clearance rate this weekend. The choice of homes on offer was average at best, while good stock is hard to find.

Secondly, buyers, and there do seem to be a few around if you go by last week’s results, are now beginning to see some early Spring stock and some of that is more appealing than what was on offer this weekend.

Thirdly, after every ‘catastrophe’ there is a knee-jerk reaction where people, including buyers, simply find the air a little harder to breathe and things a little harder to do – especially make decisions and take even calculated sensible risks. But we do seem to all get back on the horse at some stage.

Fourthly, as we said last week, right now is pretty much a nothing market – and again this weekend, nothing much happened. But nothing much has happened for several months.

So we’re not apologising or talking it up or down – we’re just saying this weekend’s market was always going to be tough after yesterday’s financial news – and tough it was.

What will next week bring and the week after – who knows?

One thing we don’t know (for sure) is anything involving a short term time line. We can’t say if we are in for a GFC Mark II, something worse than a GFC or no real damage at all in the next six months.

On the flipside, yes it’s true that long term we have good job prospects, solid immigration and a healthy economy etc BUT……

….BUT, as buyers we all want to buy well and at the best time. We would have preferred to have bought a home at November 2008 prices instead of November 2007 prices or July 2011 prices instead of July 2010 prices. However taking that argument down another line, as buyers we would have preferred to buy homes in 2008 at market price rather than 2009 or 2010 at market price.

And you could feel that price was top of mind with almost every bidder or non-bidder this weekend. Is this the right time to buy? Can we get it cheaper? How cheap can we get it?

This almost overpowering mindfog was evident at almost all auctions this weekend and explains why the hammer rate was so poor, at 1 in 8.

So is it OK to buy now? Is this a window of opportunity or the start of the slippery slope?

It’s human nature as buyers to be wanting to get a great deal at any time. We as buyers want to make the best decisions on our needs and maximise our individual long-term emotional and financial outcomes for our family – just as sellers do. But there is wanting and there is making it happen.

Going forward, what will happen is that:

1. Some buyers will panic - We are all a bit circumspect and nervous, but if we become a panicked buyer we are a danger to our family.  The best way to avoid panic is to be clear on what it is that you, as the breadwinner or decision maker, are trying to achieve. What do you want for your family? A home with 4 bedrooms, a good backyard near schools and with a good floorplan in Boroondara or Bayside. Good – well stick to it. The condition of the Greek economy shouldn’t make you now think you want a 2 bedroom home in Epping with no backyard because that is somehow less risky than Hampton or Glen Iris.
2. Some buyers will not learn from history – Think what happened during and post the GFC, during the 90s drop, and during the 70s –  if you are as old as me. If you understand what is happening now you may be able to take advantage of it – even in little ways. It all adds up.
3. Some buyers will act – You can only take advantage of an opportunity if you act. Those that appear to be the wisest of men who pass on everything in life are not that. You can’t look after your family on inaction. Your spouse can’t sleep in your concern and your kids can’t play in your risk avoidance strategies.

Good things to think about when you realise you still need to do something:

Take your time as most sensible buyers have this year. If you see something you like then look at its characteristics: are they what you want and are they any good? If not move on – prices seem unlikely to be going north in a hurry.

Elevate your risk taking in negotiations and go harder on price. Especially if it’s been passed-in for longer than a few days. Providing you don’t have to have it at any cost, push a little harder. It’s not immoral to try for a good deal.

Aim higher – especially if you are above $2m. If you can stomach a bit more debt, then now may be the perfect time to look for something a bit better than what you could have afforded last year.

Marry a doctor or a somebody with equally good cash-flow because over the next few months some bargains may appear and cash flow kings will be able to take advantage of the debt bunnies.

We admit we have a complete bias towards property, so maybe our thoughts are not quite balanced. But maybe that’s why we feel some comfort right now. If the kitchen in stocks is a bit too hot maybe nervous investors could come over and try the relatively stable inner Melbourne housing market. Sure, it’s a bit rough around the edges, but it is solid inside.

The rest of this year is an opportunity for us all – and for some that opportunity will be a time for action, for others a time for reflection and for a few a time for panic.

Each of us is different. Good luck

$3M+ Market
We’ve had a few comments that we haven’t put up a $3M+ market report since May. That’s  been for a good reason – it would have been an almost blank sheet. However there have been some sputters of life from deep within and this could be a sign that the top-end engine is starting to turnover again. From our own company’s point of view we are now involved in 3 dealings after having been bereft of activity for most of winter at this level. Other recent notable sales at this level are:

• A sale in Boroondara this last month at just over $6M – completely off market
• 24 Boxshall St, Brighton (Sam Paynter of Hodges), which has been on the market for a long time and has finally changed hands just under $3M
• 4 Sussex St, Brighton (Regina Schmidt and Brian Devlin) sold for a hard to believe $3,775,000. We attended that auction and the result was … well brilliant.
• and while down in Bayside, 2 Tennyson St, Brighton with Jonathan Dixon, after passing in at auction a month or so ago, has just sold for around that pass-in figure and well over $3,000,000
• 12a Harrison Crescent, Hawthorn, which had a rating too low to put up on our site, was sold by Sam Wilkinson of Kay and Burton for over $3,000,000
• Along with 3 Irymple Ave, Glen Iris (Iain Carmichael); 5 Story St, Parkville (Tom Roberts) and 80 South Road, Brighton (Barb Gregory) in the last week, the Top End over $3M is trying to work its way back into some form.

With a couple of big homes due to go to auction next weekend – amongst them 49 Sackville St Kew (James Tostevin); 7 Foote St Brighton (Phillip French of RT Edgar) and 83 Walsh St South Yarra (Peter Bennison and Justin Long) – we will begin to see if there is some air at the higher altitudes as we limp into the footy finals, traditionally a key indicator for activity in the early and late Spring markets at the $3M+ level.

Not everybody was stressed about life. 8 Blackfriars Toorak: Justin Long: Passed In $3,000,000. 0 bidders

Biggest Sale: 80 South Road Brighton: 1 bidder: Bought Afterwards $3,000,000.
On the market just a couple of years ago, this classic, well built modern home was back on the block for auction today. The main road would be an issue but other than that, it is hard to fault. They wanted and got a big ticket last time, and they are wanting towards $3m again. So I’m wondering firstly if it will sell and secondly if there will have been any appreciable price movement since last time. Jack Bongiorno is our master of ceremonies auctioning for the newly created Brighton MW team with Barb Gregory and Kate Strickland. Hebegins in front of a solid crowd of almost 90 and all packed into the front yard. Proceedings are started with a $2,700,000 vendor bid and bidder one joins in at $2,750,000. Half-time break comes and goes and there is no further bidding and so it’s passed in. $3,000,000 Bought after – good result. Just shy of a 10% increase in 2 years. (Mal James)

• 1/23 Washington St, Toorak: Hugh Hardy of Benmac: 2 bidders: Bought for $2,870,000
• 18 Knutsford, Balwyn: Richard Earle; 0 bidders: Bought After $2,730,000

Biggest Pass In: 8 Blackfriars Close, Toorak: Justin Long of Marshall White: Passed in $3,000,000: 0 bidders
Auctioneer Justin Long had a commanding presence as he addressed the group of 45 in attendance.  In his preamble, Mr Long spoke passionately, describing it as a “wonderful, wonderful property” and explained its history.  Mr Long opened with a vendor bid of $3,000,000 and requested $50,000 rises.  Despite his best efforts to entice bidding, all those in attendance stood as spectators and the property was passed in at $3,000,000. (Kate Agnoleto)

Bidderbuzz Auction: 35 Nelson Road, Camberwell: Michael Hingston of Jellis Craig: Bought $1,665,000: 3 bidders.
This was always going to be an interesting auction, and I was looking forward to it. The property is quite a good one – north facing rear, on good land size within close proximity to Camberwell Junction. Fortunately the rained stayed away and Michael Hingston (backed up by Steven Abbott) did a good job directing traffic in front of around 70 people – and you could sense there were a buzz here. Opening on a vendor bid of $1,350,000 it did not take too long for the crowd to get involved and two bidders fought things out in $10,000 increments to see the property on the market at $1,460,000 – a good reserve I thought. Bidder 3 entered the fray and all of sudden this auction was off and running. At $1,600,000 the auction seemed like it was coming to end yet two bidders (one on the phone, that often looked out of the running a number of times and in the end finally ran out of patience and/or money – how often do we see that?) went tit-for-tat and the auction finished at $1,665,000. Good result for the vendor here and a professionally run campaign by Michael Hingston. (Adam Woledge)

Buyer Masterclass: What to look for to see if you are going to have choice. Also reprinted  in Melbourne’s Million Dollar magazine The Weekly Review.

We only buy (good) homes

Yes they still sell homes at $3,000,000. 80 South Road Brighton: Jack Bongiorno, Maddie Kennedy and Barb Gregory: Bought After $3,000,000. 1 bidder

What is happening this spring after the winter holidays? Hey Mark, c'mon mate! Cheer up -You did sell 27 Rathmines Road Hawthorn East under the hammer with 2 bidders.

At 6pm on Saturday, the James Clearance Rate for $M+ was 48% on the 25 auctions we attended. The Weekly Review Bidderman, our demand indicator, was 1.3 bidders per auction.

This is our last Marketnews summary and auction reporting until Saturday July 30^th. We normally take a fortnight break at this time of the year due to the Winter school holidays, but we have extended it to three weeks due to minimal action in the $M+ Inner East and Bayside market.

Accordingly we have produced our bumper half-year insight on what has happened year to date and what we envisage may happen between now and Santa coming down the chimney.

What has happened on the markets so far this year?

February 19. With clearance rates at 63%, we were thinking this was looking like a healthy balanced market. The $1 million+ was actually looking hottish. But there was little activity on the $3 million+ market, and an increasing number of duck auctions  with no bidders. Overall stock quality wasn’t great and that has been the story all year really.

March 26. Clearance rates dropped to 58%, the first indication that we were moving into a buyer’s market – possibly until Easter and possibly until Spring we suggested. Well, we were right there. The other big issue that portended the future market was the lack of take-up of passed-in auctions from the previous two weekends – just 3 out of 26 had sold over the next couple of weeks.

May 21 saw a surprising lift in the market, with a clearance rate of 84% on the 37 auctions we attended. We certainly didn’t see it coming, but the big difference was the high quality of stock on offer. And buyers snapped it up. As we said though, one swallow doesn’t make a summer. And it didn’t.

June 4. This was the weekend we recognised that this down market was different to last year’s. Last year prices may have been down but there was still lots of activity with buyers and sellers agreeing either at auction or sometime after on a price that was possibly lower. This year the market has been characterised by numerous pass-ins and lots of stales (long term unsolds).

June 18. The wheels of supply really seemed to be grinding to a halt. Clearance rates were 38% but the biggest problems were lack of quality and sellers holding out for unrealistic prices – rather than lack of demand.

June 25. Last weekend saw an uptick in the clearance rate of 58% as an increasing number of sellers dropped their heads back down from the clouds. But, as we saw, it was back down to 48% as we head into the thick of winter.

Consistent Themes of the 2011 Market so far

1. This is a buyers’ market – and basically has been since April last year, 2010.
2. There has been a major contraction of turnover in the $M+ market this year to last year. The A+ sellers have withdrawn and so have the “we also need to buy” sellers. They have become nervous that if they sell now, there will be no good homes to buy.
3. Effectively the market has wound down to a much lower transaction level than last year, initially led by sellers asking prices higher than market, thus reducing turnover. Then as the year has gone on, prospective sellers with A+ homes decided the current market is not for them, reducing turnover further.
4. The underlying market demand is stronger than the stats headlines show. Almost every time we have good stock weekends our demand indicator Bidderman increased (see chart below). Look at the weekends 26 February, 9 April, 21 May and 25 June.
5. Stock overall has been a lot poorer in quality from the beginning of 2011 compared to last year.
6. The key characteristic of price this year has been the stubbornness of both buyers and sellers with regards to movement.
7. Prices continue to improve on selective high quality, well priced homes (yes, it’s true). But this is a very small segment in the market. For many, prices have flat-lined and for lower quality homes the market price has fallen. Overall the market is off by as much as 10% from the last peak in April 2010.
8. Above-market prices are rarely being achieved. So when sellers pass their property in then more often than not they are having to drop their price, wait a long time and go through pain to sell. And even then there is a high chance they won’t sell. In 2011 there is a real risk in sellers going for a big number and not getting any number at all.
9. Stales (long term unsolds) have been building all year. There are hundreds of homes out there that remain unsold and have the potential to negatively affect the market going forward.
10. Selling agents have correctly predicted stock shortages, price corrections and the market gap between good well priced stock and inferior overpriced stock. The market has in fact been predictable if you know how to read the signs.

Buyer Demand weaker, but still there when Quality to be had

 Average numbers of bidders per auction, as shown by our Bidderman indicator above, rarely went above 2 this year. But when stock was of high quality, the bidders were out in force. Clearance rates (below) further supported the argument that there is underlying demand when we have good stock and/or well priced weekends.

On most, but not all, good stock weekends where the sellers have let the market set the prices there has been solid activity. However these figures support the fact, very strongly, that we are in buyers market not a balanced one.

What will happen in Spring?

After a mediocre early Winter market, the question on the minds of buyers and sellers alike is will the market fire back up in Spring?

We asked some quality selling agents to give their predictions.

A number of agents are predicting that we’re likely to have stock shortages again this Spring. Why is that? According to Kay and Burton director Ross Savas, it’s because vendors are perceiving that the market is under pressure, so they are holding off placing their homes on the market till conditions improve.

Is this just false spin to get sellers to act? We don’t think so. Richard Winneke of Jellis Craig for instance reports that most agents are admitting to a 25% volume reduction of high end stock being transacted between this year and last. Balwyn and Kew are down around 20% in overall transactions (not just the high end).

In Bayside Jason Gill paints a similar picture of diminishing turnover but uses a different measurement: “In Brighton in July 2009, 2010 and 2011 we have seen stock on the market go from to 92 to 125 to 150 meaning older overpriced stock is simply not selling.”  What this means, he adds, “is that the stock that comes on in Spring will need to be of good quality and be priced correctly, rather than more of the same, if it is to excite the market.”

As during the GFC, the market has primarily ground to a halt on lack of action and lack of confidence. As with the GFC it will need a kick start of some note (eg Australian Dollar dropping bringing expats and overseas buyers back) to entice WOW and discretionary  sellers back into the market place, thus lifting turnover.

This is where patience presents a conundrum for buyers: if many of us pass on buying in early spring then the late spring surge may not happen at all. And come Christmas time we will still be in a buyers’ market but we won’t have bought. The question is then: how long are you prepared to wait?

For a full wrap of opinions on the Early and late Spring Markets read our Buyer Article section throughout July in Melbourne’s Premier $M+ Home Magazine – The Weekly Review.

So what does this all mean to you the buyer

Smart Buying RIGHT NOW involves:

1. New strategies: You need new bidding strategies at auction. Putting your hand up until you run out can work in a hot sellers’  market, but in a buyer’s market it just means that you are burning cash.
2. Realising that not all sales are at auction:  There are an increasing number of homes sold off-market, prior to auction, as expressions of interest and so-on. You need to have a strategy to keep ahead of what’s out there. And then you need to know how to wheel and deal in these methods of sale – not just to pay the right price but to actually get it, if you want it.
3. Knowing that in this kind of market, you as a buyer may need a new modus operandi. In a hot sellers’ market most buyers are reactive, while in a buyers’ market the best buyers are often proactive. Good homes are still selling well -so when a home is sought after, you may still have to compete as strongly as 2009.
4. Understanding what the Real Value is:  Most genuine buyers are getting the best service they have ever received from selling agents in terms of being told what is out there. How much for all these opportunities? Is 10% on the auction quote or 10% off the sale price the right start point? Well maybe, but there may also be daylight between you and the next buyer.
5. Recognising that Patience is Needed. Patience is the forgotten buyer skill. We are not talking about procrastination, but the ability to wait until you have found the right home that meets your family needs. Just because you can buy now and it’s ‘cheap’, doesn’t necessarily make it your family’s best fit.

IVANHOE EAST, 12 Ravenswood Ave: Going, going gone! Rod Watson (Jellis Craig), under the hammer, $1,059,000, 2 bidders

Biggest Sale: Balwyn, 30 Walsh St, Steven Abbott (Jellis Craig); Under the hammer, $1,992,500, 5 bidders
“An entertaining auction, in a fine setting. Auctioneer Steven Abbott looked for an opening bid but none were forthcoming. Mr Abbott then offered a vendor bid of $1,750,000 to get things underway. The auction did not take too long to get started and there was solid bidding between four parties. The property was on the market at the $1,915,000 mark, and bidding looked almost over at  $1,950,000, when a new bidder came into play. The property was eventually bought under the hammer for $1,992,500.   A good result for vendor and agent alike – this property had been around for some time and although the floor plan itself had some concerns, the Reid Estate positioning underpinned value and ultimately buyer interest here.” (Adam Woledge)

Biggest Pass In: Kew, 34 Macartney Ave, Walter Dodich (Marshall White); Passed in, $3,925,000, 1 bidder
“A sense of deja-vu here at Macartney Avenue: about 3 months ago, auctioneer Walter Dodich auctioned No.21 and today it was No.34′s turn. Both properties fine, modern new homes with all the bells and whistles, built by the same builder. In front of a good crowd of around 120 people, a vendor bid of $3,900,000 was placed and just when you thought this was going to be quick auction, a crowd bid of $3,925,000 was offered. There was no further bidding and the property was passed in at this figure.” (Adam Woledge)

Bidderbuzz Auction: 7 Heathfield Rd, Brighton East, Nick Renna (Hocking Stuart); Under the hammer, $1,625,000, 4 bidders
“Another great Nick Renna auction with fierce bidding, big crowds and a great sale price. A genuine bid kicked off proceedings at $1,000,000 and, while low, it was accepted by Mr Renna before he offered a vendor bid of $1,280,000 (which was closer to the quoted price). Two bidders entered the fray and the price quickly rose to $1,405,000 where it was declared on the market. Bidding continued strongly when, out of the blue a third, strong bidder entered into the competition. The price continued to rise and Mr Renna fielded bids from all three parties before bringing the hammer down at $1,625,000. A great, entertaining auction and a strong result for the Hocking Stuart team and vendor alike.” (Jen Milligan)

We only buy homes

KEW, 34 Macartney Ave: A big crowd of 120 people turned out to watch Walter Dodich (Marshall White) in action. Passed in, $3,925,000, 1 bidder

“No way mate - this market is fighting back– taking no prisoners today (April 9th).” John Bongiorno. Malvern 54 Stanhope. Bought $3,170,000. 3 bidders.

Week Ending 30th April: Back from a week or two off, this market now, has a fairly clear run till Christmas, with a only brief breaks for a couple of holiday weekends.

Over the next four to six weeks we should see more choice and some reasonable activity (although not expected anywhere near the levels of last year), as the May market is a traditional agent preferred selling time. Why? Well there is a good stretch of time until Queens Birthday weekend to run an uninterrupted campaign. Stock Quality is the unknown.

Come July things will be relatively quiet as there is a general sellers’ feeling (rightly or wrongly) that good homes do not look their best at this time of the year and accordingly a number of high end selling agents take winter holidays in Europe and therefore do not program campaigns to be run in their absence.

In the post Easter week or so there have been ten or more high end sales including the representative  half dozen below

• 15 St Ninians in Brighton for between $8m and $9m – perhaps not a lot more than what is was sold for less than 2 years ago (need to look up sale time to be absolutely sure of date) – Justin Follett of Kay and Burton
• 255 New Brighton for between $5.5m and $6m – Regina Schmidt and Brian Devlin of Buxton
• 50 Hotham St East Melbourne which had been on the market for at least 6 months for $7million – Paul Richards of Hocking Stuart – on the market for a fair bit of last year and also a failed auction. Nonetheless a reasonable price – not everything the sellers wanted – but more than had been offered at times in the past by buyers. A good result for both parties.
• 150 Clarendon East Melbourne – the Salta apartments saw Anton Wongtrakun deliver another big sale at $5,200,000 for Unit No 4
• Out to the paddocks of Lower Plenty with a Marketnews favourite Rocco Montanaro of Morrison Kleemand who achieved close to $3m on an Expressions of Interest Campaign for a good home on 7 acres at 75 Cleveland.
• And we round up our selection of high end Easter Sales with a $6M+ sale at Mount Eliza 15 Freemans Road – Michelle Skoglund of Aqua

In summary over Easter the market at this level has not been dead, but definitely subdued – there is increasingly a dampening mood in terms of both buyer and seller confidence. Time will tell if this is a short or longer term phenomenon. Price will play a important part going forward as we seemingly move into more uncertain market conditions – i.e. ones that are not as clear as they have been in the past 2 years since we awoke from the GFC. Overall the market now and in fact all of 2011 has not been strong at the $3m+ level – but there are still enough transactions (especially in Bayside) of sufficient value to avoid holding a wake just yet.

With winter approaching and a fair amount of stock available we think it is a buyers’ market and the future is best described as – “uncertain times”.

Finishing on a positive note our James Investment Division has seen some solid interest with investors coming back into the market (rentals are improving) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Finishing on a positive note our Investment Division has seen some solid interest with investors coming back into the market (improving rentals as well) and one current flavor of the times is blocks of flats. Some examples of what we are talking about.

Week Ending 16th April:The $3m action this week was away from auctions.

The drought in the Balwyn Formula – big price, small land, new home – was broken again with Maurice Di Marzio getting 59 Hosken Street, Balwyn North away in the high $3 millions. That’s the third in a week on the back of the two biggies reported last weekend.

Canterbury, 11 Chaucer Close, with Boroondara doyen Peter Mitchell of Marshall White, got the same sort of high $3 millions price.

Hawthorn, Harcourt St, was a hot place to be this week with Nick Ptak getting 79a away for just under $3.4 million (we think) and one of the results of recent times. Peter Vigano of Jellis Craig  got $3.625 million for 42 (we did not see that price coming)

Speaking of good results, Marcus Chiminello got a price in the high $3 millions for 2/264 Walsh St, South Yarra. It’s not our job to talk agents up but in a slow apartment market Marcus has got a number of solid results.

St Kilda West, 10 Loch St, with John Holdsworth sold for $3,650,000.

Andrew McMillan from Benmac got 367 Beaconsfield St, Kilda West away in the $4m to $5m range after a very lengthy campaign (probably due to previous asking prices).

At Auction today 68 Hopetoun Rd,  Toorak with Jellis Craig’s Steve Abbott, sold afterwards for $3.05 million. That was up a few hundred thousand dollars on the last time it sold around a year ago.

Week Ending 9th April: The strongest week this year for the $3m+ Top End market:

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Well over the $12,000,000 quote range making Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: North of $7,000,000 on Scotch Hill for a good home that needs some reworking and a tennis court.

While still in Hawthorn Mr Nice Guy and Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (Modern in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period in Grace Park) for $2,800,000. Both a little down on ambitious asks but nonetheless solid prices for what they were.

But wait there’s more and was it us who cried out the death of the Balwyn formula- new build, small block, overpriced. Well on a technicality were are still credible as it’s neighbouring Kew; but with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million’ish, the death of this market maybe a little exaggerated. However please it is only two sales, but they were biggies.

The news doesn’t stop for sellers there with period home successes at 50 Wattle Valley Canterbury (Duane Wolowiec and James Tostevin) selling under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few strong sales as well with 29 Bay Street Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000 and the final result put north facing (no view) Golden Mile land over $3,200 per sq metre. That is a steady as she goes price similar to last year Golden mile (no view) buys. And another $3m+ sale with a strange twist (all non bidders asked to leave) at 40 Drake Brighton (Ian Jackson).

While on land sales 1073 Malvern Road Toorak (Justin Long) passed in at $3,225,000 and a reserve was offered – not taken up – two new bidders appeared and a second auction took place resulting in a sale well over the pass in figure.

Why all this activity? Pass-ins are still languishing in large numbers without much interest. However its all about quality and new stock and buyer confidence. All three things happened this week -

1. buyers felt better in themselves (confidence);
2. buyers felt this week had some real quality offerings (quality)
3. and buyers couldn’t see a lot of stock coming one (limited new stock)

Post Easter is no Buyer lay down misere after today’s results.

Like many auctions this weekend, a lot of standing around, not doing much. MALVERN EAST, 9 Lewes Drive: Passed-in at $2,500,000 with two bidders. Anthony Grimwade (RT Edgar)

At 6pm on Saturday the James Clearance rate for $M+ was 57% on the 30 auctions we attended. That was well down on last week’s cameo of excitement, but understandable giving the quality change between this week and last week at the Top End.

Bidderman, our demand indicator, was 1.5 bidders per auction. However the quality of the offerings was one of the lowest this year.

While there were a few volcanoes (4 or more bidders), what was more interesting was that 1 in 3 homes were ducks meaning they didn’t get a bid a all. We think that was a confirmation of the market reaction to this weekend’s lack of Top End quality.

In fact, only 1 in 5 of $M+ homes monitored this weekend sold under the hammer.  The rest sold before or soon after – or didn’t sell at all. That’s an Under the Hammer Clearance Rate of 20%.

What that means is that in this current market buyers need a lot more than just a ‘hand up in the air and hope’ strategy to buy homes well.

Market Summary:

There were plenty of auctions at the lower levels, e.g. at or around a million dollars, but many lacked any WOW factor.

A number of the key selling agents were off this weekend on holidays and, as with many buyers, they seem to have turned their attention to pursuits other than buying and selling.

It was hard to find a property over $2 million up for auction. The only $3 million plus auction we saw in Toorak was at 68 Hopetoun Road with Steve Abbott of Jellis Craig – an art deco that seems to get sold every 12 months (see report below).

The REIV median prices came out this week and rightly confirmed what the market has been saying for some time: Prices are weaker.

This year to date has been a positive one for buyers with reduced competition, more choice and lower prices. On the flip side the buying opportunities are only such if you take them (a Steve Abbott auction line).

Next week, there are almost no auctions and not too much the week after.

Post Easter, as we said last week, may or may not be a different story. But our feeling is that quality choice will dry up and the big issue will become finding a rose amongst the thorns, the pass-ins and the stales. If those roses are hard to find then prices for them will firm as new quality drops with discretionary vendors adopting a wait and see strategy.

What Sold Well – Volcanoes with 4 or more bidders

• Albert Park, 62 Barrett St – Peter Simmons – Nicely renovated Period Home – $1,575,000
• Hawthorn, 23 Falmouth St – Hamish Tostevin – Nicely renovated Period Home – $1,330,000
• Hawthorn, 11 College St – Richard Earle – Nicely renovated Period Home – $1,409,000
• Kew, 36 Maitland Ave – David Oster – Land site – $1,345,000
• Toorak, 80 Grange Rd – Rodney Morley – Nicely renovated Period Town Residence – $1,500,000

$3M+ market: Overall, the high end at $3 million+ appears as weak as it has been for 12 months. Although  a shortage of new quality stock post Easter has put some zing back into the market as some buyers are forced to act.  Growing kids, divorce, lifestyle, whatever cannot wait for everyone indefinitely. Go to our $3m+ report to see most of the last weeks’ 10+ sales.

Michael Armstrong, Kay & Burton, South Yarra: “I think we can expect a fairly normal market post Easter.  Market conditions are settled and stock levels looking forward to May/June are lighter than what we’ve experienced in the past couple of months.  Vendors have had to adjust their expectations in recent times and buyers with long term views have realised that the past few weeks have presented them with good opportunities. The better quality offerings will continue to attract competition and alternatively  buyers will continue to deal harshly with those vendors (and agents) who price properties incorrectly.”

ST KILDA, 2 Marine Pde: On a bit of a rollercoaster day, it was apt to have the Scenic Railway at Luna Park as the backdrop of this Claudio Perruzza (Biggin Scott) auction. Passed in, $1,850,000, no bidders

Biggest Sale we covered: 68 Hopetoun Rd, Toorak, Steve Abbott (Jellis Craig); after auction, $3,050,000, 3 bidders
“This art deco property with Heritage One (HO1) overlay was looking for a committed buyer to make it a home. A vendor bid of $2,800,000 got the proceedings underway and the first bidder entered the race with a bid of $2,850,000. A second vendor bid of $2,900,000 signalled that the bidding was still some way off from the desired sale price. Auctioneer Steven Abbott wouldn’t entertain an increment of $5,000, demanding at least $10,000 to stay in the race. Despite keen bidding, this property was passed in at $3,020,000 but this was just the start of the negotiations. Bought after for $3,050,000.” (Debbie McTaggart)

Biggest Pass In we covered: 12 Dudley Pde, Canterbury, Doug McLauchlan (Marshall White); passed in $2,000,000, no bidders
“Doug McLauchlan took centre stage in the very big, leafy backyard of this great property and looked ready for action. Assisted by his Marshall White team, Mr McLauchlan explained that the circa 1923 home had been in the same family for a massive 72 years. But even the sentimentalists amongst us in the crowd weren’t ready to put their hands in the air and bid. Mr McLauchlan opened and closed on a vendor bid of $2,000,000.” (Jen Milligan)

Auction Video: Architect Adam heads to sunny Hawthorn this week to witness a ripper auction at 23 Falmouth St, a Marshall White property with auctioneer Hamish Tostevin.  Click on the live action.

Big Issue and Weekend Reflections: Coming back after the Easter holidays.

Two Weeks Off: Marketnews will be on holiday for two weeks with our next Marketnews on the 7th of May. A number of agents are talking up the 21st and 28th of May as possible Super Saturdays (as buyers let’s hope so). For James Buyer Advocates it will be business as usual.

We Only Buy Homes and have a safe Easter break:

Job Advertisement:

MALVERN EAST, 15 Albert St: There was a bit of fence sitting at this Andrew Hayne (Marshall White) auction, and not a lot of action. Passed in $1,600,000, no bidders

With not much on offer this weekend, only one over $3m ( Steve Abbott – 68 Hopetoun Rd, Toorak) and minimum quality at the lower end, my thoughts turned to family, holidays and the Pies. Winter will be a time of continuing opportunity, but as buyers we will have to work hard to find them. And you will still need some bravery if you wish to take those opportunities. Overall, unless you are convinced that the world is going to fall apart, this is the best time to buy since GFC 2008 – providing it is the right home at the right price.

South Yarra, 2/264 Walsh St. A good high $3 million result from Marcus Chiminello. It’s not our job to talk agents up,  but in a slow apartment market Marcus has got a number of solid results in recent times.

Andrew Hayne, Marshall White, Armadale: “There will be a bit more stock post Easter, but May won’t be as busy as years gone by due to Easter being a bit later. The 3 weeks leading up to the June long weekend will be busy after the school holiday period, and then slow down again.”

Daniel Wheeler, Marshall White, Armadale: “What we will see beyond Easter will be fair prices being paid for properties, and a shrinking amount of property becoming available leading into the colder months. June is distracted with a long weekend, and yes, it’s school holidays time again – so we will have some interruptions. In the meantime, enjoy the quieter roads!”

Have a good holiday from all things real estate and see you back bright, refreshed and ready to buy after Easter. Drive safely – Mal.

There is now also a significant overhang of unsold stock. Of 26 $1 million plus properties we monitored as passing in at auction in March, only five had sold by the end of the month. That overhang will only add to the further supply of stock coming on to market up until Easter.

For those who can look beyond this frosty spell – and we believe that the factors behind the current lack of enthusiasm may be only temporary – the high pre Easter stock supply is creating great opportunities to buy prestige properties at lower prices or buy a better quality home than they may have expected.

Right now then, buyers’ minds have shifted from panicking about finding a home, to thinking how they can cut the best deal.

But what is the best deal? Is it always about getting a home at a bargain price?

A home should serve two purposes: emotional – shelter and comfort and investment – money maker over the long term.  Cutting the best deal involves understanding what goes into both of those components.

The best deal for a buyer varies according to their own specific circumstances. Your specific circumstances and needs may result in a very different outcome than for me or somebody else.

So our first advice to clients wanting to get the best outcome is to clearly know what they want.

Saving $250,000 off the asking price on a home you don’t like makes even less sense than paying $250,000 more than you have to because you can’t withstand the pressure applied by a selling agent.

Secondly, before you enter negotiations on price, you need to understand what risks you are prepared to take for what rewards.

On a scale of one to ten – with one being lowest price and ten being dream home at any cost – what is your main aim in negotiations:  to buy a specific price or to buy the home? Most buyers end somewhere between 3 and 7 on the scale and that is what we call the individual’s risk v reward scenario.

Thirdly it’s important to remember that saving money is not always the best way to make money in the long run. In this current market it can be relatively easy to knock $50,000 off an overpriced long term unsold (stale). But that price saving may also be an indication of a probable low future price growth on that property. You might be better off in a hot auction, bidding hard against three or more other bidders (proven demand) to buy a home with good land content (which indicates a supply restriction going forward).

Even in a supposedly weaker market some homes can still fly. A mid-week auction on a property at 19 Huntingfield Toorak saw three bidders push the on-the-market price of $6.7 million to a final result of $7.06 million – making for land value at $5000 per square metre. No market weakness there.

So if you’re really keen on a particular property you need to know how much it is realistically worth to others in today’s market. That involves true research (hard work). It means understanding today’s market values on land in the area, what are the replacement building costs, what are the true comparable sales not just the “Red Hot” results.

Yes this is a buyers’ market and there are some great homes to be bought right now. But you can’t start a quality negotiation and cut the best deal for you if your foundations are based on guesswork, inexperience and rumour rather than a plan, preparation and some perspiration.

And remember that this current chill may be just a window – not a trend. It is likely that after Easter some sellers simply won’t put their homes on the market, creating a shortage of stock that may push prices back up.

Printed each week in The Weekly Review – Melbourne’s Million Dollar Plus Magazine

“Oh Yeah Sure Buddy - you are joking, aren't you?” Sold for an undisclosed amount, $500,000 over reserve. 4 bidders. Ivanhoe East 32 Warncliffe. David Oster.

At 6pm on Saturday the James Clearance rate for $M+ was 71% on the 34 auctions we attended. WOW – 71%, a big change from last month.

Bidderman, our demand indicator of bidders per auction, was at 1.8. So on our biggest $M+ auction weekend so far this year, when you would expect buyers to thin out and Bidderman to drop, it actually went up on the trend of the last few weeks.

It may be just one day but it was strong out there this weekend. For the first time since late February our advocates reported feeling feeling genuine price pressures whilst bidding.

Market Summary: The big question is whether this is a statistical blip or whether we are a seeing the trend return towards a balanced market. If so, why?

1. Buyers feel a little better than they did last month and confidence came back into the market as a result. Our enquiry rates are certainly up.
2. The overall quality of homes on offer was up on previous weeks and they were plentiful in number. We saw lots of 700+ James Home Rating (quality) homes go to auction this weekend.
3. Last week as buyers looked into the future they saw that the cupboard of  post Easter offerings was bare – and so they adjusted their game plan accordingly.

Whether this is a blip or a trend change will largely be determined by what discretionary sellers do in May. If they are encouraged by this weekend’s results to put their properties onto the market, then prices may stay softer than last year. If those sellers stay out and demand continues as is, then the overhang of stales will begin to be mopped up and the good buying conditions of the last months (price and choice) will dissipate.

This weekend, again, we saw the overall power of the Melbourne market and the power of demand and supply. There is an underlying strength in Melbourne homebuying (based in immigration and lack of homes), that has slackened off in recent times as buyers become more circumspect with concerns about overseas events, jobs, and who knows what exactly. As well there has been plenty of choice. BUT as soon as there is a hint of a quality stock shortage the market responds, particularly with regards to well-located quality family homes, on land and of a period flavour. And it responds strongly.

More insights

• It wasn’t just the consistent $1m to $1.5m range holding up its end in isolation, this was also the strongest single week this year for $3m+ buys.
• It was the second strongest clearance rate of the year, despite an almost Super Saturday (140 $M+ Auctions – Inner East and Bayside)
• We saw consistent bidding across the board, with over 75% of monitored auctions having at least one bidder.
• The big question going forward after our Easter market break is whether nervous sellers will re-enter the market on one week’s good showing.
• Prices are generally down on this time last year (there are exceptions), so good homes are attractive right now. And while new choice may become limited,  some existing choice (overhang) still remains.
• Top End rentals are getting considerably more rent than expected as supply in relation to demand is tightening. This observation from two agents needs more examination at a later date. We’re interested in how widespread this may be, why it is happening and what effects it may have on the buying market. (Are borderline investors perhaps re-entering the Top End?).

Wild and Wooly - the weather that is, not Rob Vickers-Willis. Toorak 3 Denham. Passed In $2,010,000. 2 bidders.

The $3m+ Market’s strongest 2011 week so far (some examples):

South Yarra 43 Marne St: Nicole Gleeson of Kay and Burton: Bought well over the $12,000,000 quote range, putting Domain Precinct land values at $8,000 per sqm for the bigger blocks.

Hawthorn 51 Berkeley St with Tim Blackett also of Kay and Burton: Over $7,000,000 on Scotch Hill for a good home with tennis court that needs some floor plan reworking.

While still in Hawthorn, Mr Nice Guy and the Very Effective Tim Picken of Jellis Craig got away the quinella with 25 Mary St (modern home in Grace Park) being bought for a credible $4,300,000 and 1 Hilda (period home in Grace Park) for $2,800,000. Both prices were a little down on ambitious asks but they were nonetheless solid prices for what they were.

Kew – Was it us who cried out the death of the Balwyn formula – i.e. new build, small block and overpriced? Well technically we are still credible, because these were in neighbouring Kew: with 21 Macartney (Walter Dodich of Marshall White) and 5 Mawson (Peter Dixon of Jellis Craig) both selling at auction today for $4 million-ish, the death of this market may be a little exaggerated. It was only two sales, but they were biggies.

Malvern and Canterbury -  50 Wattle Valley, Canterbury (Duane Wolowiec and James Tostevin) sold under the hammer for a strong $3,465,000; 54 Stanhope Malvern with Rae Tomlinson also under the hammer for $3,170,000 and 13 Rubens Grove Canterbury with Fletcher’s Jeremy Desmier bought before for over $3,000,000.

Bayside has recorded a few $3M+ sales as well, with 29 Bay Street, Brighton (Bert Stewart of Buxton) selling post auction over $3,550,000. The final result put north-facing Golden Mile land (no view) at more than $3,200 per sq metre. That is a “steady as she goes price” similar to last year’s Golden mile (no view) buys. Another $3m+ sale with a strange twist (all non bidders asked to leave auction) was at 40 Drake Brighton (Ian Jackson of Kay and Burton).

Toorak While on land sales, 1073 Malvern Road (Justin Long) passed in at $3,225,000 and a reserve was offered which was not taken up by the pass-in bidder. Two new bidders appeared and a second auction took place resulting in a sale well over the pass-in figure.

For full details each week of what is happening in the Top End $M+ market see our regular $3-Million-Plus Market Reports.

Round the Grounds – Price this year v last year and a word on Post Easter stock levels.

Malvern John Bongiorno, Marshall White: “Price is a little softer on certain homes but on high quality homes they are still rocking, granted buyers are more discerning. Stock levels are not as strong as last year. Rentals at the top end are exploding in the middle and top end market. Big news is rents have increased, possibly making investments more attractive at the higher end. There is such a shortage of homes to rent.”

Caulfield Rodney Morley, Woodards: “I think the negativity means less stock is coming on in May and Winter. Everybody wants records that are not coming at the moment. The market is definitely softer than this time last year in price. Buyers (then) were buying anything. Right now, buyers do not feel that urgency. No question that the market is softer.”

Brighton Bert Stewart, Buxton: “I think the market is around 10% down on some top end homes. Stock levels and therefore buyer choice after Easter are not looking good.”

Camberwell Geoff Hall, Noel Jones: ”Prices are down around 10% on this time last year, with some exceptions for quality homes, and stock post Easter is just not coming on like it did last year.”

Hawthorn Richard Winneke, Jellis Craig: “Big drop in new buyer enquiry this week. Probably due to the holiday factor but it was a noticeable drop. Rentals are definitely getting more than I expected price-wise and this may stimulate investment into Top End homes. East of Burke Road (Camberwell and Canterbury) has not performed as well as Hawthorn and Kew this year to date. I think prices are still relatively solid around that early million dollar mark but softer higher up.”

Carlton Tom Roberts, Nelson Alexander:  ”Stock levels Post Easter are tightening with only the sellers that need to sell going to market. Good homes still going exceptionally well but those results are in amongst the not so good going not quiet so well as last year. Prices are down a smidgen.”

Playing for Keeps here. Big 150 plus crowd. 29 McKinnon, Carlton. 3 bidders. Bought for a whopping $1,417,000 (462 sqm). We thought it was justified, but it was still big. Nick Renna, Peter Sinclair and Melissa Ryan of Hocking Stuart

Biggest Sale we covered: 21 Macartney Ave, Kew; Walter Dodich (Marshall White): After auction, undisclosed around $4,000,000
“Being in the coveted Sackville area this auction attracted a large crowd of about 100. The crowd were well spread out and even blocked the road in front of the property as they heard auctioneer Walter Dodich open proceedings. The auction began in Mr Dodich’s own words with a ‘traditional’ vendor bid at $3,700,000 as no one was willing to start things off. However this was the trigger that allowed two bidders to start the battle off for the property. Initially there were meant to be three bidders however the third bidder couldn’t get his bid in as he always cut off by the other two. When he finally got one in there was applause from the crowd and a cry of joy from the bidder. As the auction went on, the climax built and the crowd held their breath as the price rose and rose yet there was still no indication from Mr Dodich about whether the property was on the market or not. At $4,000,000 Mr Dodich passed the property in and after lengthy negotiations the property was bought after for an undisclosed amount.” (Josh Bong)

Biggest Pass in we covered: 72 Kerferd St, Malvern East, John Bongiorno (Marshall White); Passed in, $2,800,000, no bidders
“With 300 people having viewed this property and 100 or so crowded into the garden of this Gascoigne Estate home, auctioneer John Bongiorno was confident of a sale. But it was not to be with a vendor bid of $2,800,000 the only one of the day and the property passed in. However, with one interested party heading inside, it may not be long before this stunning property is sporting a ‘sold’ sign.” (Debbie McTaggart)

The Big Issue: Architect Adam and Klarity Kris discuss whether they believe buying conditions will be as good post-Easter as they are now.

Auction Video: This week Jen Milligan, our Market News Co-ordinator, fills in for our advocates who were busy with other auction commitments. 15 Epping St, Malvern East, a BenMac auction with Iain Carmichael. Click on the live action auction video.

Buyer Masterclass: Conditions are great for homebuyers – so where are they?

We Only Buy Homes

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