oc | Thursday 20th February

It was either boiling hot or it was ice cold – depending on the house and how it was priced

Perfect day, perfect setting. 3/61 Nepean Hwy, Aspendale (Rowan Thompson, RT Edgar). Massive crowd and a picture perfect back drop - but the home still passed in at $3 million.

At 6pm on Saturday, the James Clearance Rate for $M+ was 48% on the 29 auctions we attended.

The , our indicator, was 1.6 bidders per auction. But that average figure doesn’t tell the full story.

Market Summary

This weekend was a tale of some homes with a lot of bidders and some without any. That’s been happening a bit lately, but in this case the stats were very stark and indicative of what is happening in this market. Of the 26 auctioned homes we attended (3 had been bought before) on this weekend, 5 had a total 27 bidders and possibly more – that’s at least 5 bidders each! There was a total of 14 bidders across the other 21 $M+ auctions – so some of those had no bidders at all.

Of the five homes that had five or more bidders, two sold for over $5 million and two for over $2 million. They were in Carlton, Elsternwick, Surrey Hills, Toorak and Hawthorn

The majority of the other 21 homes had average bidding and passed in. A number of these will remain as passed-in until the would-be sellers realise that while we have a good market at market prices, it’s a very limited market above that. Your best price these days seems to be on the market early and let the bidders decide.

For sellers who have decided to stick to their guns, and let their property pass in – we thought we would go back in time and look at what’s happened to all the properties that passed in on Super Saturday (October 22).

Super Saturday Wash up: 1/3rd of all $M+ homes auctioned have not yet sold
Super Saturday, October 22, was three weeks ago. And just to remind you – the clearance rate on or before the day (October 22nd) was a disappointing and slightly surprising 43%. Of the 47 $M+ homes we reported on, 27 didn’t sell.

So what’s happened since then? Well, despite the racing distractions, a further 11 have sold, giving Super Saturday a thee week clearance rate of 64%. The market is clearly not as strong as it was two years ago when we were seeing 90% clearance rates after this length of time. However it’s nothing like the troubled times in 2008 (GFC).

Basically auction homes are falling into three categories

  1. Selling on or before the dayThe market priced: A graders and some well priced B graders, where the vendor has quoted conservatively and met the market. There is strong bidding – look again at this weekend’s results.
  2. Selling a few weeks after the auctionThe risk takers: meaning buyer and seller risk takers. Prices have generally been above the pass-in price but well short of the asking price. The risk for buyers is that someone else buys, and the risk for sellers is that they don’t sell.
  3. Not selling within a few weeks – The stales: With family homes the price is either scaring off buyers from making any offers or they’re making an offer usually at a lower price than pass-ins and being rejected. The next likely scenario for the seller is withdrawing their property from the market, sitting there on the net with no action or trying to sell by significantly discounting their original price.

Bayside sellers appear to be particularly bad at pricing their homes to the market. Some of their pricing is fanciful. Looking at the results, an inexperienced onlooker might conclude that the Bayside market is shot to pieces. It’s not: we have Bayside buyers on our books. It’s just that more than a few sellers are so far from where the real market is we’re not sure why they waste their money on advertising.

Suburb Address Pass-In Asking If Bought
ALBERT PARK 8 REED STREET 1,400,000 1,550,000 Still for Sale
ARMADALE 3 STANHOPE STREET 1,360,000 POA Still for Sale
BRIGHTON 55 SUSSEX STREET 3,800,000 4,500,000 Still for Sale
BRIGHTON 106 CARPENTER STREET 2,400,000 2,900,000 Still for Sale
BRIGHTON 36 MIDDLE CRESCENT 3,800,000 4,750,000 Still for Sale
BRIGHTON EAST 26 BRIGHT STREET 2,250,000 2,490,000 Still for Sale
CAMBERWELL 84 BOWEN STREET 1,700,000 1,950,000 Still for Sale
CAMBERWELL 155 THROUGH ROAD 2,000,000 2,395,000 Still for Sale
CANTERBURY 5 GOLDING STREET 1,175,000 1,425,000 Still for Sale
ELWOOD 20 KENDALL STREET 1,975,000 Bought
KEW 93 STEVENSON STREET 2,025,000 2,275,000 Still for Sale
KEW EAST 161 BELFORD ROAD 2,100,000 2,350,000 Still for Sale
MIDDLE PARK 94 HAMBLETON STREET 1,500,000 POA Still for Sale
MIDDLE PARK 65 MILLS STREET 2,000,000 POA Still for Sale
PRAHRAN 25 ELM PLACE 1,150,000 POA Still for Sale
TOORAK 11 SCOTSBURN GROVE 5,000,000 Bought
TOORAK 13 EDZELL AVENUE 3,020,000 3,300,000 Still for Sale

$3M+ Market continues to produce some results

Non-Auction sales:

  • 16 Kenley Court, Toorak, (Michael Gibson of Kay and Burton) – sold for over $12 million for nearly 2000 sqm of land and a very substantial home. James Home Rating 779/1000.
  • 24-26 Balmerino Avenue, Toorak, (Justin Long of Marshall White and Hugh Hardy of Bennison Mackinnon) – 1850 sqm of land including tennis court. Passed in at the Thursday afternoon auction for $7,000,000 and bought immediately after 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 for over $4,000,000.

Auction Sales:

  • 47 Kinkora Road Hawthorn, Peter Batrouney (Jellis Craig); Under the hammer, $5,660,000, 4 bidders (see report below)
  • 49 Mathoura Road Toorak, Justin Long: Under the hammer, $5,220,000, 5 bidders

‘Round the Grounds

  • Boroondara – Not much better than last week and not as good as it was – 53%
  • Stonnington – Reasonably Solid and 64%
  • Bayside – There continues to be minimum buyer and seller price matching – 44%

HAWTHORN, 47 Kinkora Rd, Peter Batrouney and Campbell Ward (Jellis Craig). The grand old home in the Grace Park estate was bought under the hammer, $5,660,000, 4 bidders

Biggest Sale: 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. 2 more bidders join in and it’s on the market at $5,500,000. A few up bids and she all stops at $5,660,000. A typical successful Peter Batrouney and Campbell Ward / Grace Park auction. (Mal James)

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.  (Kate Agnoleto)

Bidderbuzz Auction 1: 539 Canning St, Carlton North, Tom Roberts (Nelson Alexander); Under the hammer $1,300,000, 5 bidders
This auction was going to be the hottest of hot with a very conservative quote at $900,000 to $990,000 and a wonderful A grader on offer. 539 Canning was always about width and side access and at 6.5m, with lane at the side this renovatable period home was as good as is offered in this area due to the ongoing options it provides. Around 100 or so people turned up in anticipation to see what auctioneer Tom Roberts was going to extract in the end.

After the usual Robert’s spiel we were away instantaneously with a 950 then 960 then $1million bid all within 10 seconds. Twenty seconds later we were on the market at $1,050,000 and then past that to $1,080,000.

One bidder, Chris Koren of Morrell and Koren, was leading the bidding in strong style – coming back at each and every bidder quickly and assertively. It was textbook bidding and he is a master at this when he is on his game, as he so obviously was today. At $1,180,000 the fifth bidder, also an advocate, joined the battle. At this stage we had dropped to $500s and $1000s and with both advocates firmly positioned it looked like this was going to be a long and drawn out battle. And so it turned out to be – with auctioneer Tom Roberts taking a back seat, allowing Chris with his strong and firm style to battle it out with Guy Angwin (from our company). The two advocates continued past $1,200,000, then $1,240,000 and then $1,275,000 – at each milestone getting crowd applause like they were witnessing a momentous MCG event.

Eventually at $1,300,000 Chris Koren who had led the auction all the way, was declared the victor and a deserved one at that. Commiserations to the underbidders. The eventual buyers bought well and not over the top either. Our estimates at a strong auction were $1.2m to $1.3m for this prime A grader – a far cry from the 900k to 990k quote. But no complaints re underquoting as the home was on the market quickly. (Mal James)

Bidderbuzz Auction 2: 29 Guildford Rd, Surrey Hills, Jeremy Desmier (Fletchers); Under the hammer $2,185,000, 7 bidders
The auction of this property had a fractious beginning when four different parties all asked questions of auctioneer Jeremy Desmier ranging from – “are there easements?”  – “is the property subject to Heritage overlays?” –  “can I demolish?” – “what are the land tax implications?”. The tone was set – this was going to be war with seven bidders all trying to buy this rough diamond just waiting to be polished. Consistent with all the initial interest, a genuine bid of $1,500,000 started proceedings, soon followed by two other bidders looking to control the auction. Just when you thought this bidding war was losing momentum multiple bidders joined in and for the next twenty minutes strategies were put to the test.  Eventually the property was bought for $2,185,000, a very entertaining auction from beginning to end. (Guy Angwin)

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GLEN IRIS, 22 Wilson: The Abercromby's team, Rob Vickers-Willis, Andrew Harlock and Tim Derham marching out for some action. Bought after auction for an undisclosed amount above $1,900,000.

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