Volcano in Malvern
Price Paradoxes in a Lifting Market
Mal James
0408 107 988
mal@james.net.au
Just back from a lightning week in the Dolomites.
Straddled the King’s Birthday Weekend (Go Pies).
Straddled Austria and Italy.
Straddled amore and amaro.
Straddled strudel and pizza, schnitzel and pasta.
Walked some beautiful mountains with some beautiful people…
But I digress. Today, back out and about, watching the Inner Melbourne Top End market. It’s continuing to lift — not like a rocket, more like a hot air balloon filling up on the ground — slowly, steady, subdued, but lifting!
Anecdotally: Three new big (>$10m) buy/sell clients committed while I was away.
I’m now wondering… should I go away more often?
Unscientifically: Today’s “Bidderman” (bidders per auction) was 2 across 9 randomly selected Top End auctions. Clearance rate? 78%.
Small sample, yes — but still telling. That’s strong.
Back at work now — there’s plenty to do this Winter. Loving it!
The Price Paradox: Buyers
There’s this strange look we get from buying clients when we explain why our values are a range, not a single number:
“If you bid, it could go for more. If you don’t, it could go for less — maybe a lot less.”
Huh? is the usual response.
But that’s the buyer’s paradox in a shifting market. When the market is just beginning to rise or fall, you — the buyer — often become the second woman or man in.
If you don’t bid, the only bidder might buy it for $3.9m.
If you do bid, you create competition — and it could go for $4.1m or $4.2m. Maybe to you, maybe not.
That’s the buyer’s paradox:
Jump in, and you could push the price up.
Stay out, and someone else might steal it for less.
Our advice?
Get in early.
Because it often gets tougher from here.
As other buyers take more and more flesh wounds from missing out, they fight harder next time to avoid the pain — and that’s how prices rise, sometimes quickly. The wounded underbidder effect.
Case in point:
The $4m–$7m A-grader market in Inner Melbourne.
In just the last month, some homes in that range have risen $300,000 to $500,000, as buyers are now prepared to compete — to fight for what they want. Last year, that rarely happened.
The Price Paradox: Sellers
Yes, sellers have a paradox too. And it relates directly to a seller’s key goal of choice — to sell and accept market price, or to hold out for the seller’s price.
Choice: Want a price above market?
You can ask for it — but you take the very real risk of going stale and not selling at all.
Alternative: Want to sell as your number one priority and let price take care of itself?
Then ask at or below market.
Sometimes, you’ll get the deal from the lone bidder who could have paid a lot more… Bidderman is still in the 1s — one-bidder auctions remain the average. Sometimes, you create a volcano and get both: above market and a sale.
Either way, you may not get the “dream” price that the brave (and sometimes lucky) few achieve — but you avoid the pain of no sale that those same brave risk.
If your main priority is to sell: price at or below market.
If your priority is to get a price: ask it — you might get it — but your risk of not selling rises.
And if you change your mind mid-campaign and now want to sell… the home may have gone stale. You could be left with an offer below market.
This is the seller’s paradox — and it revolves around your goal, your asking price, and the number and skill of the agents and final bidders.
In booming markets, this paradox softens. There’s usually enough momentum that one seller or one buyer doesn’t shift the whole game. But in normal or soft markets, the paradox matters a lot.
Strong in Camberwell
We had early interest, then no — but pre-auction we highlighted its quality and upside, and the result (3 solid bidders at a solid quote) showed a clear lift in demand for this type of home. Click below to go to our rating.
Strong in Grace Park over $9m!
Pass-In Canterbury. Work to be done!
Near Volcano in Malvern and that was just John!
Chilly in Hampton
Chilly also in Brighton East
Very sad in Toorak. RIP Fraser, a good guy!
Private Auction Scotch Hill tells the story for many in the last decade - only 33% land value growth between the absolute boom times of early 2015 and the more challenging times of the last few years and today!
That's an annual compounding growth rate on an A-Grader of less than 3% not the often quoted 8%. To be at 8% it needed to go at $10,800,000.
This is now the consistent norm throughout Melbourne with only a few exceptions and why many homes are not selling; as sellers are doing their back of serviette calculations as to asking price based on an outdated growth rate mindset.
Exceptional growth these days only comes from exceptional discipline, planning and execution. Its no longer a given. Lets talk!
Early Report prior James Home Rating delivered to Buying Client – pre auction
From: Mal James <mal@james.net.au>
Date: 28 May 2025, 6:16 AM
Subject: Kooyongkoot
Dear ??,
Initially, I was fixated on the quality of the completed build at Kooyongkoot—especially when comparing it to ??. My thinking was stuck on the resale risk tied to start price + build cost + eventual sale price over time.
That was a miss.
After chatting with you and stepping back from my quality-construction mindset…
This may still work.
Let’s reframe this practically—from the angle of growth, ease of transformation, manageable cost, and family happiness/functionality.
Let’s drop the idea of chasing a “classic build” and instead focus purely on dollars and lifestyle—for you.
If you buy well, act smartly (on your terms), and are frugal—but strategic—on the reno, then you could not only live well there for 10–20 years but also make it stack up financially.
Key thoughts:
- If the land value makes up a high % of the overall purchase—meaning the house is almost a freebie—big tick.
- If you don’t blow that % by over-capitalising on the renovation—tick.
- The upside comes when:
- Land value grows.
- You’re happy living in what you’ve created.
- And you sell smart during the right part of the cycle.
The land is an A.
The location is an A.
Can we buy the price at A?
And—can you live with a B-grade home, and (if you’re really smart) convert it to an A while keeping the total outlay (purchase + reno) such that land still makes up 80%+ of the value?
That’s how smart families turn someone else’s “s..box” into an eco-friendly vegie farm. (Hope that analogy works.)
I’m into this home now—down this thought line—if you are.
Execution Ideas (not gospel, just starting points):
- Facade: Strip it back. Make it minimalist, maybe even brutalist. One material throughout. Frame it with great landscaping.
- Garage: Easy fix.
- Downstairs: Minimalist approach. Limit changes to finishes and windows.
- Upstairs: Lift hallway ceilings—gives light, air, and wow.
- Throughout:
- Paint smart.
- Choose floor coverings that unify.
- Replace appliances and finishes with low-cost, high-impact upgrades.
Final Questions:
- Do you really, really want to do this—as a family?
- What’s the true land value now?
- Are you disciplined enough to reno with clarity and constraint?
Exciting,
Mal
Blast from the past - covered this same home in 2015
I remember covering this auction last time – 10 years ago and it boomed, was a million over the quote in a market that was booming.
James Market Insight 2015
It’s official: it’s absolutely booming for the A-graders (right now).
BY MAL JAMES 28th February 2015
At 6.00 pm on Saturday, the James Clearance Rate for Melbourne’s $M+ property was a whopping 87% on the 31 auctions we covered. James Bidderman, our bidders per auction measurement was 2.6, which considering the Super Saturday stock levels was monumental.
The start of the year is as strong as I can remember and I’m not that young. Of course not all properties are flying – but hey – 87% clearance with a 2.6 Bidderman on a Super Saturday……. please, who are you kidding……. its booming.
We know the market’s super hot – as we are doing a lot of work for little result (in terms of deals). Yes we are getting a few over the line, but its bloody tough and they are mainly downsizing clients (cashed up and happy) or buy/sell or off market deals. For most of our trading up buyers we are in the preparation stage – meaning finding new ways to get things done and being ready when the chances come.
Overall Feb 2015 Summary of Melbourne’s Million Dollar-Plus Auctions:
- Ducks ($M+ auctions with no bidders) 14%
- Lone Rangers ($M+ auctions with one bidder) 7%
- Norms ($M+ auctions with 2 or 3 bidders) 45%
- Volcanoes ($M+ auctions with 4 or more bidders at auction) 34%
Biggest Auctions:
Hawthorn, 38 Kooyongkoot Road (John Manton, Marshall White) under hammer, $5,085,000, 4 bidders
‘Wow! There was no messing around at this auction as were done inside 15 minutes’ …
Be an Influencer. Be a Multiplier. Be the Reason a Child Lives.
It’s tax time.
You’re deciding where your final dollars go.
Here’s the deal:
$1,000 = 1–3 surgeries for children in Sub-Saharan Africa.
Surgeries that fix clefts, broken bones, burns, tumours, even cancers.
Done by locals. In local hospitals. That you helped build.
And you don’t just fund a surgery. You fund a system:
A child gets well → goes to school
A mother is freed → goes to work
A hospital trains staff → treats hundreds more
A village gains trust in medicine → reaches out earlier
An economy moves forward
That’s the multiplier effect.
And you are the difference between it happening or not.
This Isn’t Ongoing Charity. It’s a Fix. And It Works.
Over 10 years, you’ve funded over 1,200 surgeries.
We’ve helped build children’s wards across 10+ hospitals.
And we’re now expanding into Ethiopia, led by local young surgeon Dr Kassahun. See his visit to Melbourne and our place here,
In January, we randomly visited in Africa 70 children you helped operate on:
59 are thriving
9 showed major improvement
Just 2 were unchanged
That’s a better strike rate than some Western programs. See our 2025 visit here.
Mariam Was 8. Her Tumour Was Killing Her.
Her parents had no money.
You helped a young Melbourne couple win an auction.
A donation from another client covered Mariam’s surgery.
Today she’s in school.
Her father’s back at work.
The hospital team is saving more kids—because they gained the skills on her case.
One auction. One referral. One donation. One life saved.
And more to come.
Give Now. It’s Tax Deductible. It’s Guaranteed. It’s Real.
We’re aiming for $200,000 – we have $28,000 already.
If you can give $1,000, do it. If you can give more, please do.
If you know someone who needs help with buying, selling, or planning — and it’s outside my usual area — refer them. If it makes sense, I’ll do the work and donate every dollar.
This isn’t “our” charity.
We’re not an NGO. We just ask for proof — and get it.
95% goes straight to the work. The other 5% to transfer costs. No waste. Just results.
You can see the proof — children, videos, receipts — right now at:
👉 www.morechildsurgeries.com
Rotary page looks like this and you get a tax deductible receipt
They Have No Backup Plan. You Do.
USA Aid has collapsed (I get the issues, but there is still a problem and it is fixable) UNICEF is telling you many children will die and we know they are right, we are seeing it.
However if you help. Life changes for many.
If we don’t. Nothing happens.
This is your chance to be more than a donor.
Be a builder.
Be a multiplier.
Be the reason something great happens — and happens again.
Please donate securely via Rotary.
Click here on any banner to go there or contact me.
Mal James | 0408 107 988 | mal@james.net.au
Let’s make this tax time count — for them, and for you. Thank you
