
Like father like son. Learning the auction business. A Melbourne tradition. 38 Lambeth Ave, Armadale, under the hammer, $2,569,000, 4 bidders. John Bongiorno (Marshall White).
At 6pm on Saturday, the James Clearance Rate for $M+ was 74% on the 34 auctions we attended. We are now well and truly in the realm of a balanced market.
The Weekly Review Bidderman, our demand indicator, was 1.8 bidders per auction – a significant rise on the last two weeks.
Stock levels were fairly solid again this weekend and are looking to be healthy through most of March. So any demand stats coming in, are off a healthy base.
Market Summary:
Analysing the above data more closely, 25% of the auctions had 3 or more bidders while only 10% were ducks (i.e. no bidder auctions). These are the sort of stats that provide early indications of a strengthening market. Should this demand be sustained on the solid auction numbers in the next few weeks leading up to Easter, then it’s safe to say for now that the $M+ market, as a whole, has performed a lot better than most expected and that we may be in fact be in a stabilising price phase.
However if we have a repeat of 2011, where demand fell away after a fairly positive pre Labour Day 2011 market, then all we are seeing now is a bit of price spiking.
As we keep saying, it is early days. But the numbers are substantial and if the clearance rates continue to improve and the bidder numbers continue to increase then in time we could see an end to price falls and prices could in time begin to climb again (the current market has been trending downwards since Anzac Day 2010).
Our focus for the above statements is the $1m to $2m segment. We are still not seeing any significant positive momentum in the $3m plus market. Sure, agents are claiming they’re getting offers on properties and yes, some long term stales are being cleaned up. But they are at lower prices and happening when the vendor is meeting the market not the other way around. So before we acknowledge any uniform improvement across all segments of the market, we need to see the Top level perform in greater numbers and a lot more consistently.
Do all the good deals have to drag out?
Not necessarily. You can make it hard for yourself and the other side if you want, but good negotiations aren’t necessarily long, unpleasant and drawn out. Indeed, why wouldn’t you negotiate in a timely manner if it is right for both parties?
As a case in point, we were involved in a Bayside $M+ property purchase mid week that had been sitting around since before Xmas. With the help of the selling agent we were able to conclude a mutually acceptable agreement in a few hours. Both the buying and the selling sides had done their due diligence and were ready to deal – and both sides wanted a satisfactory result. So in the space of a few hours, a couple of coffees and several phone calls, the basis of an agreement was reached and then signed off on.
There are many deals out there in ‘real estate land’ that haven’t worked out just because both sides have insisted on taking what they think is the ‘moral’ or ‘right’ stance (otherwise known as the ‘ego’ or ‘victim’ position). But over the decades we have found that the best position for buying and selling is the ‘agreement’ position.
The fact is that there is no relationship between the time and pain involved in a negotiation, and the quality of the outcome you end up with. Otherwise how could anybody think a 15 minute Saturday auction was a good thing?
So don’t rush. Don’t go in unprepared or without good representation. But at the same time don’t snatch defeat from the jaws of victory for no good reason other than it seemed too quick or too easy. How dumb would it be if the negotiation could have been good, simple and quick and you still said no! Helllooo sucker.

CAMBERWELL, 11 Wiringa Ave: Scott Patterson, passed in ($1,560,000, 5 bidders) then sold after
Cooling – off:
On March 1 (last week) the cooling off laws were amended so that now almost all purchases, except those transacted three days either side of an auction, are subject to a cooling-off period. Previously agents could remove the purchaser’s ability to end a contract within three business days of signing by forcing them to seek legal advice prior to making an offer.
Will this amendment have any material effect on the upper end market?
It may. What’s likely is that we’ll see less agents considering offers that come in well before auction day, and agents busier than ever before on the three days just before and after the auction when an agreement can be locked in with more certainty.
We may also see less of the early Auction ring-around with a good offer. Let’s say an agent receives a $3,500,000 offer in writing on a $3,000,000 home three weeks before the auction. Why would the agent do the ring-around to other buyers, potentially scaring them away from the home at $3,500,000, if there was a possibility that the $3,500,000 buyer might exercise his right to cool off? That would significantly affect the auction momentum. What’s more likely now is that the seller will simply accept the $3,500,000, wait till the cooling off is over and then tell other buyers the deal is done – perhaps creating more heat between selling agent and buyers.
Alternatively, there may now be a potentially acceptable buyer strategy where the buyer makes a high offer, then takes advantage of the protection of the cooling off period to end the contract and then comes in later at a lower amount and perhaps under another name – having seriously disrupted the sale process.
What about a boardroom auction? Does this qualify as a publicly advertised auction in all cases with regards to cooling off? What is the definition of publicly advertised? We are looking forward to a clarification on this from the REIV and the government.
Cooling off raises other issues too – especially if you are involved in long negotiations. What most people don’t realise is that your cooling off period begins when you make an offer, not when agreement is reached with the seller. So if the negotiating process takes longer than 3 business days, you will have lost your cooling-off period. There are also some other tricky issues re forfeiture of monies, and the actual process of claiming cooling off. So get some legal or buying agent advice before relying on it as a strategy.
Personally we think you are unwise to use cooling-off as a strategy in negotiation. We as an organisation do not use it as a negotiating strategy. Our strong recommendation is that you do all your due diligence prior to signing.
$3M+ Summary:
As we came to the end of February, most of the work we are involved in at this price level is off market or pre market.
However two really good properties that have just commenced their public selling campaigns should provide a very good public indication of where the market is at: 29 Kooyongkoot Rd, Hawthorn (Michael Armstrong) and 11 Bates St, Malvern (Tim Derham and Jeff Gole). We have inspected and rated both these properties, and there is more information on both in our regular article on the $3m+ Property Market. We’ll be very interested to see the outcomes of these sales.
We had the first signs of life in the Inner East this weekend, and it seems the Bayside Top End may be dragging itself out of its Summer slumber. After last week’s Sandringham Top End action, we saw solid sales this week at:
- Albert Park, 2 Kerferd Place (Oliver Bruce and Kaine Lanyon) – Mid Week Auction bought for $2,380,000
- Brighton, 192 Church St (Ian Jackson) – On market for some time at over $4m – Bought mid week just shy of that
- Brighton, 47 Champion St (Ian Jackson) – On market (with another agent) for an eternity, considering its quality, with an asking initially over $3.5m – Bought mid week for just under $3m.
- See Biggest Auctions below - 5 results over $3m and also one at 112 McKean St Fitzroy with Shayne Mooney of Nelson Alexander
However, there is still a lot of property at this price level on the market in Bayside and the Inner East that is simply sitting there doing nothing.
Overall the $3M+ market is seen by optimists as treading water and by realists as still edging backwards.

BRIGHTON, 19 St Ninians: Nick Johnstone, bought after auction for $3,150,000, 1 bidder
‘Round the Grounds: Market Wrap Headlines
- Boroondara – Bidder Numbers up on Solid Stock Numbers – 72%
- Stonnington – Steady as she goes and first action at the Top End – 68%
- Port Phillip – The best numbers for the year so far on good stock numbers – 65%
- Bayside – Leading the way at $3M+ with 5 sales this week – 73%
A word from the experts: Bumper Edition due to our break next weekend.
How has the $M+ market started, and what are stock levels like pre-Easter?
James Tostevin, Marshall White (Hawthorn): “A very encouraging and promising start to 2012, with multiple bidders at most auctions and literally double the numbers of buyers for open for inspections this year compared to the last quarter of 2011”.
Mike Gibson, Kay & Burton (South Yarra): “The million dollar market has started a little stronger than where it finished in December. The volume of properties is also increasing and it would appear that buyers are more confident in moving forward in 2012.”
Gary Peer, Gary Peer (Caulfield North): “ There is a small burst of quality properties coming on the market pre-Easter, which may result in a quiet winter season.”
John Holdsworth, Greg Hocking (Albert Park): “Stock levels are somewhat distorted in Albert and Middle Park because of the long weekend and car races, and then Easter. So far on low turnover, the million dollar plus market is still patchy.”
Jenny Dwyer, Hocking Stuart (Sandringham): “The million dollar market has seen a renewed sense of activity since the New Year, with solid prices being achieved. Attendances are on the increase at open for inspections and auction crowds are larger than the spring market. Pre Easter auctions and private sales are high across all price ranges and all suburbs.”
Iain Carmichael, BenMac (Armadale): “Last week we were of the view that the auction market for $1 million plus properties delivered strongly on its first real test for the year – for us, a 75% clearance. Last weekend (Saturday 25) resulted in a few more pass-ins than we would have liked. And who knows what next weekend will bring. It’s a tricky market to categorise but no doubt it will explain itself as the year rolls out.”
Richard Winneke, Jellis Craig (Hawthorn): “From our perspective it has started very strongly. There have been several bidders at almost every auction so far. Buyers have finally realised it is a good time to buy- why wait any longer?”
Andrew Stuart, Hocking Stuart (Albert Park): “It seems there is renewed confidence in all sectors of the inner-city bayside market. The sentiment now is that perhaps we have hit the bottom and that prices may again be on the move upwards. Hopefully there is a spark that will get the engine rolling again!! Stock levels pre Easter are down on last year. However, should vendors get a sniff of increased activity we should see a lift in listings for the period immediately after Easter.”
Mark Earle, Buxton (Sandringham): “For quality homes that are priced in accordance with recent comparable sales, the market is strong. Numbers in general are surprisingly strong but this hasn’t translated to sales just yet.”

Greg Toogood (Jellis Craig) - man in charge! 7 Ross St, Kew, under the hammer, $1,920,000, 5 bidders
Biggest Auctions:
Hawthorn East, 2 Buley St, Jason Scillio (Kay & Burton), after auction above $3,700,000, 2 bidders: Jason Scillio was our master of ceremonies here and he led the way strongly and professionally, politely refusing low increment bids and keeping the auction moving along smoothly and quickly…(see more in Auction Reports)
Malvern, 9 Woodmason St, Jeremy Fox (RT Edgar), after auction, above $3,530,000, 3 bidders: Interested to see how this recently on the market and sold quality home goes at this indoor auction in front of crowd of around 40…(see more in Auction Reports)
Toorak, 33 Evans Court, Gowan Stubbings, After Auction, around $3,400,000, 1 bidder: This beautifully presented property attracted a sizeable crowd on a gloomy day. An opening bid from the crowd of $3,260,000 was trumped by auctioneer Gowan Stubbings ..(see more in Auction Reports)
Brighton, 3 Tennyson St, Leigh Hallamore (Buxton), under the hammer, $3,270,000, 3 bidders: Indoor auctions aren’t always that exciting, but this bucked the trend and was fast paced, entertaining and high energy all rolled in to one…(see more in Auction Reports)
Brighton, St Ninians Rd, Nick Johnstone (Nick Johnstone), after auction, $3,150,000, 1 bidder: The loud chatter of the crowd, with umbrellas in hand, who stood in a series of small huddles, made the weather seem much less dreary….(see more in Auction Reports)
Top Bidderman Auctions:
Brighton East, 734 Hawthorn Road, Phil de Fegely, under the hammer, $2,220,000, 5 bidders: A sea of shoes lined the front entrance and the assembled group of 60 swamped the front two rooms of the property….(see more in Auction Reports)
Kew, 7 Ross St, Richard Earle (Jellis Craig), under the hammer, $1,920,000, 5 bidders: Here was an auction in two halves. A slow start had Richard Earle posting three consecutive vendor bids, opening at $1,600,000 and chipping in two more to $1,630,000….(see more in Auction Reports)
Armadale, 38 Lambeth Ave, John Bongiorno (Marshall White), under the hammer, 4 bidders: This is my first Growling Jack auction for the year and he was in fine form in front of a very wet crowd of 120…(see more in Auction Reports)
Top 3 Pass Ins
Canterbury, 16 Monomeath Ave, Doug McLauchlan (Marshall White), $4,700,000, no bidders: Outside, and under a substantial porch, a crowd of 80 gathered. Doug McLauchlan opened with a vendor bid of $4,500,000, adding another at $4,600,000…(see more in Auction Reports)
Elwood, 8 Dickens St, Marshall Rushford (Hocking Stuart), $2,950,000, 2 bidders: This great old dame attracted a lot of curious bystanders – even (I was told) a former owner of this amazing old mansion, who had come along to see just how much it was worth in today’s market…..(see more in Auction Reports)
Brighton East, 10 Connor St, David Gilham (Noel Jones), passed in, $2,050,000, 1 bidder: A cool, wet autumn morning in a delightfully quiet and well maintained street – it was the perfect setting for an auction…(see more in Auction Reports)
Big Issue Video: Mal and Architect Adam discuss the early 2012 Market. Click on the live action.
No Marketnews next week due to Labour Day long weekend.