oc | Friday 24th January

Stock Quality was down. Significant drop in Bidderman and Clearance Rates at Today’s $m+ Auctions. A hiccup or the start of a rebalancing? It’s only one day so stay tuned!

Toorak: 140 Kooyong Road - Bought $4,040,000 - Bidderman 2. A toughish day for Iain Carmichael and an even tougher day for many slightly surprised auctioneers across Melbourne who were playing to smaller less enthusiastic crowds than a fortnight ago.

: 140 Kooyong Road - Bought $4,040,000 - Bidderman 2. Although this went better than some thought it would, an overall toughish day for Iain Carmichael and an even tougher day for many slightly surprised auctioneers across Melbourne who were performing to less enthusiastic bidders than a fortnight ago.

It is 6pm Saturday and the James Million Dollar-Plus Clearance rate from the 31 Auctions we attended today was 61 per cent. Wow that was a bit of a surprise! Please note we thought the quality of the homes on offer was not as high as the last two weeks in February or the upcoming March 27th auction list.

Bidderman
A major drop in Bidderman today. Bidderman was 2.8 the week before our Labour Day break and today he was 2 bidders per auction.

Wormie the Price Worm took her first breather of the year and flattened, maybe even fell a bit. Prices should continue to remain level or even fall marginally for next fortnight or so – after Easter price rises or falls will in part be determined by how quickly any overhanging (if any) March 20th and 27th stock is mopped up by the market; and what new stuff is coming on in late April following the Easter hiatus and off course any change in buyer sentiment.

Feel and Mood
There was definitely a more subdued feel out there today. Why? Well it could have been that the overall quality of stock was not at the premium level of February 27. It could have been that it’s the natural ebb and flow of buyer mood. March 27 has some rippers on offer, so maybe buyers are holding off; nonetheless the word around the traps is an easing and todays results for the moment show that. We have said that March 27 and the first month after Easter are the real 2010 tests. February did start very strongly but in part was this a reflection of the angst 2009 unsuccessful buyers felt or was this a pointer to 2010? As we say its early days and all things are still pointing upwards for prices in 2010 but today was not as convincing as the last few auction weeks. As buyers we hope we are not just imagining things -some rebalancing would not be a bad thing. Reminding buyers that they can be little seller hiccups in the middle of a bullish run eg the week after Melbourne Cup. Next two weeks will be interesting.

Stock Levels
We looked at more than 100 homes last week. There were many new ones on the market with sellers trying to get sold on March 27 before the Easter shutdown.  2010 has been both a feast and famine for $1 million-plus properties. The feasts of new stock were three weeks (typical auction campaign length) before February 27  and this week, which is three weeks before March 27. Easter is in early April, so, after March 27, we have a gap of a few weeks before housing stock should arrive on the market in a more orderly fashion. Then there will be a more consistent level (down or up but fairly consistent) before the build-up to Spring Carnival racing, footy and, finally, Santa. If you are thinking about buying a million dollar plus home now is the time to be looking with an incredible 150 auctions scheduled for Boroondara, 70 for Stonnington, 50 for Bayside and 40 for Port Phillip in the next fortnight you mightn’t see what you want but at least you will get an idea of what is on offer.

Today’s Results of Interest
26 York St :  Auctioneer: Andrew MacMillan ()  
Result: Passed In   Bidderman: 0
Advertised under  the banner “New York New York!”, contemporary design, three bedroom, two bathroom home. Advertised in the $2,000,000 to $2,200,000 range. Bennison Mackinnon agents (Hugh Hardy and Monique Assaw) James rating: 767.
James Auction Report: Very quiet auction except for the occasional crowd (60) smirk after an Andrew McMillan joke. Opening and closing vendor bid of $1,800,000. No action.
 
127 Mitford St : Auctioneer: Mark Tappin (Rand)  
Result: Bought $1,831,000   Bidderman:5

Spanish Mission home offered for the first time in 43 years in a beautiful tree-lined street in Elwood. Large of approximately 532m2. Rand Corporation, Bernadette Cheet. James rating: 738.
James Auction Report: In bright sunshine, a large crowd of 105 people spread themselves out in this wide leafy street. A confident Mark Tappin (Rand) kicked things off and was rewarded by a genuine bid of $1,300,000. There was fast and furious bidding from 5 buyers and it was soon on the market at $1,560,000. There was no vendor meeting and no let up. These fired-up buyers had a battle on their hands. It sold for $1,831,000 – a strong result confirming once again land in good Elwood is over $3000 per sq metre.

28 Victoria Avenue : Auctioneer: Gerald Delany (
Result: Passed In $4,025,000 Bidderman: 1
Fantastic French Provincial house in one of Canterbury’s best streets. Highlights include a 6 car garage and a 2000 bottle wine cellar.  Kay and Burton (Ross Savas and Michael Armstrong). James rating: 771.
James Auction Report:The usual big crowd (180) with a fair level overseas interest for this Gerald Delany Kay and Burton auction. In the $2,000,000 to $3,000,000 price range the newer homes go well in Boroondara but as you rise to $4,000,000 and above the bidders at auction drop and this was no exception with a longish drawn out begging procedure from Gerald after an opening $4m vendor bid which finally, finally resulted in a lone bid and pass-in at $4,025,000.

17 McKinley Ave : Andrew Macmillan  Auctioneer:
Result: Bought under the hammer $2,460,000 Bidderman: 2
Gracious period home with a light filled extension close to Claremont Ave Village and Malvern Station. Advertised in the $2,100,000 to $2,300,000 range. Bennison Mackinnon (Tim Bennison) James rating: 862.
James Auction Report:
On a sensational sunny day, in a beautiful part of Melbourne, Auctioneer Andrew MacMillan started the auction with a vendor bid of $2,100,000 dollars. After two parties revealed their interest in the Malvern property, the bidding came thick and fast, quickly rising to $2,400,000, at which point Mr MacMillan went inside the house to consult with the vendor, returning to declare that the property was now on the market. Around 60 people turned up to watch the action which peaked at $2,460,000 and was sold to a very happy couple to the sound of cheerful applause.

Mark Stobart from Bennison Mackinnon who is well liked as a knockabout guy and respected within our circles is unwell at present and our prayers and thoughts are with him, his family and those close to him at Benmac. We all hope he gets well soon.

Something Smells

Issue One:  It’s being done
Smart agents and sellers know that buyers are affected in the very critical first 30 seconds by what their senses pick up (our emotions). Smell is one of our senses most easily influenced and smart agents are now incorporating fragrances into the dress-up of houses before OFIs. An increasing number of homes that we visit smell pleasant and evocative: perhaps a saltysomething smells sea tang or fragrant flowers. Ross Savas and Nicole Gleeson of Kay and Burton are masters at this and are consistently, overall, the best smell presenters of homes we have seen; in fact, they would win that award by a country mile. Painting, gardening, antique furniture, music – they have the ability to convince vendors to spend $50,000, even $100,000, on dressing up their home and, as well, they also get smell absolutely right.

Speaking with Ross, he states that presentation is everything, whether it be a restaurant dish or a birthday present, and  a home is no different. He also said that Kay and Burton has made an effort with fragrances because of the impact they have; for example, many international hotels have a particular and identifiable fragrance, so that you know where you are as soon as you smell that familiar scent.

Issue Two: Prices
Does this result in higher prices? In our opinion, absolutely yes. We went through 482 Barkers Road (James Rating 755/100) mid-week. They are asking $10 million-plus and, besides the manicured grounds, antique furniture and  co-ordinated décor, what we really noticed was the smell. The perfumes, fragrances and aromas throughout the house had been thought through carefully. They were not overpowering in any way but they evoked a response from our senses and to such an extent that we thought about the smells of a few other homes we’ve been through recently. Another one that sprang to mind was 83 Marine Parade Elwood (James Rating 836/1000), also coincidentally Kay and Burton-Michael Armstrong. This home, almost on the beach, had the smell treatment; a bit different from Barkers Road as it incorporated the sea and a more homey feel.

But it’s not just smell; sound is also a big deal.

Issue Three: Disguise problems
Music and water fountains are mood setters but they are also noise disguisers and are especially good at deflecting road noise. Politely ask it to be turned off next time (for a minute or so) if you wish to gauge road noise levels. As an aside, I still go into some houses that have doof-doof or loud music playing – in fairness, it’s rare; but it’s hard to see the positive features in a home with that sensory attack.

The increased emphasis by high-end agents on sound, visuals – furniture, knick-knacks and flowers – and smell only confirms our view that buying a home is dual outcome process – emotional and financial.

Issue Four: Opportunity
Let’s look at one of the senses in isolation. How important is smell in the emotional decision-making process? Well, at the extreme end, smell is an incredible turnoff – for example, the smokers and fresh paint combination giving us the trashed rental home feel; or the damp, dank odour that lingers from darkened corners of a home – makes us all nervous to put our hand deeper into our pockets come auction time. But does bad smell equal a bad home? Not necessarily. It can be an indicator of a problem or a partial cover-up (which a building inspection can help uncover); but on the positive side, though, smell can also be a turn-off to the one or two buyers who would have been your competition. Most smells can be removed in time, via improved ventilation, fixing the problem or removing the source. So if the house flow, room sizes, price and position make sense, then maybe your financial sense needs to override your emotional (and smell) sense.

Similarly, bad visuals – outdated wallpaper or garish paintwork or furniture that only your great-uncle would have used – can act as a turn-off to your competition, but this can often be one of the easiest things to fix in a house. One house currently on the market is 5 Beech St , with Adam Cashmore of (rated 709/1000). While it is a good home, it has a strong individual décor that, in our opinion, is suited to a small minority of people and could potentially be pushing away a number of potential buyers. We don’t think you should be turned off this property because of the pig out the front (please, no, that’s not Adam or Jeff) or the colours inside, as it is a good, practical family home.

Issue Five: Misunderstanding
And one final point on this:  the feel sense – often we are thrown by wobbly floors and we should have a raised eyebrow but many times this big time turn-off to many is a relatively easy and inexpensive fix. It’s called restumping and, in some cases, it’s less money than your new TV.

Issue Six:  First impressions
Perhaps, as buyers, we should not be so keen to accept or reject without a more thorough examination – eg a rating. First impressions are often the best impressions but make sure that these impressions are worked through and don’t lead you to poor decisions.

PS the owners of 5 Beech St Malvern East have a nice home and are perfectly entitled to present it how they wish  –  after all, I’m the idiot in an 18th century hat!

Buy Well

Mal

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