oc | Sunday 26th January

Stock on the Up. Quoting on the Down!

Sign of the times - a smidge under $1m instead of a smidge over. Antony Woodley (Marshall White), sells 6 Barloa Rd, Mont Albert, after auction for an undisclosed amount just under $1m. Two bidders and a crowd of around 40 people.

At 6pm on Saturday, the James $M+ Clearance Rate was 72% across the 25 auctions we attended. The Weekly Review Bidderman was 1.6 bidders per auction.

Welcome back!  So, what do we have now? – What’s been happening? – Where is the market at? – What’s in front of us?

This week was really about brushing off the cobwebs after the school holidays and footy finals. Agents put a few homes up for auction that they felt would have a better chance of success now than in the middle of Super Saturday (October 27th). And really, not a lot can be taken from today.  Basically, most of what was on offer did actually find a buyer at auction (or shortly afterwards) and that was in the knowledge that buyers can see what is coming up.

The market can only deal with what is available and therefore overall this weekend was positive. But the big test will come in two weeks.

Super Saturday – October 27th

The big game in town will be happening on October 27th. This is looking like a real Super Saturday, with well over 100 auctions (towards 150) over $1m in Bayside and Inner East. (In this market it in fact not easy to predict exactly how many auctions will go for over $1m, as the quoting is conservative and many at this level are not getting any bidding.)

October 27th will be the pre-eminent Saturday for late 2012. The results will provide a strong indication as to where the market is right now and how it will finish the year.

Why?

When you have a good cross section of stock with some really good homes all going under the hammer at the same time, you get an accurate indication of buyer depth and therefore future price and market direction. If Bidderman is getting up towards 2 bidders per auction on Super Saturday then we can confidently say the market has some health. If the clearance rates are down at the low end of 50% and Bidderman is around 1 bidder per auction, then the market is looking tough for the rest of the year.

Biggest Sales:

  • STOP PRESS Sunday Auction – Brighton, 13 Downes Avenue (Ian Whiteside), brilliantly renovated 1920’s home with wonderful park aspects – James Rating a whopping 877/1000. Quoting $3m+. On the market around $3.2m and sold under the hammer for $3.6m – 3 strong bidders. http://www.james.net.au/rating/13-Downes-Avenue-BRIGHTON
  • Armadale, 13 Redcourt Ave, Jack Bongiorno, sold after, $2,225,000, 2 bidders
    A good-sized crowd of around 50 people turned out to see the auction of this Armadale …(See More in Auction Reports);
  • Malvern, 29 McKinley Ave, Jack Bongiorno (Marshall White), after auction, above $1,670,000, 3 bidders
    This property was last auctioned a staggering 102 years ago and this fact alone seemed to draw a large crowd…(See More in Auction Reports)
  • Kew, 31 Molesworth St, Richard Earle (Jellis Craig), after auction, above $1,605,000
    A still, spring Melbourne afternoon and in front of around 30 people auctioneer Richard Earle and campaign agent Greg Toogood did their usual professional best for the auction here of 31 Molesworth Street Kew…(See More in Auction Reports)

Bidderbuzz Auctions:

  • Ashburton, 22 Highgate Grove, Mark Williams (Kay & Burton), under hammer, $1,417,000, 4 bidders
    There was a genuine buzz at this auction – you could feel the anticipation from the good sized crowd of around 60…(See More in Auction Reports)
  • Camberwell, 13 Lesley St, Daniel Wheeler (Marshall White), after auction, $1,302,500, 4 bidders
    A late start to this Daniel Wheeler led auction allowed ample time for a good crowd to build and settle…(See More in Auction Reports)
  • Hampton, 38 Margarita St, James Paynter (Hodges), under hammer, $1,515,000, 3 bidders
    Quite a good-sized crowd of around 45 lined the street to see what would happen at the auction of 38 Margarita St, a home on a corner block close to Hampton St shops, schools and the beach…(See More in Auction Reports)

Biggest Pass Ins:

  • Kew, 9 Valentine Ave, passed in, $2,200,000, no bidders
    A mild sunny morning set the scene for this Kew auction…(See More in Auction Reports)
  • Hampton, 10 Rouen St, passed in, $1,525,000, 1 bidder
    Drenched in spring sunshine, a delightfully quiet cul-de-sac, so close to Hampton Street shops…(See More in Auction Reports)
  • Elwood, 7 Pine Ave, passed in, $1,425,000, no bidders
    There were a good number of people through the open for inspection before the auction…(See More in Auction Reports)


Agent Survey: How has the market been over the school holidays in terms of activity?

Rob Vickers-Willis, Abercromby’s (Armadale): “The market has been very quiet during the school holidays. Most people head off for a break. We are expecting solid numbers and sales this quarter after a strong previous one. At Abercromby’s, 25 percent sold privately off market during the July to September period.”

Mark Earle, Buxton (Sandringham): “With the grand final in the middle week of the school holidays it is always quiet, however last weekend saw a marked increase in numbers of people at open for inspections and auctions, which should be a good sign for the weeks to come.”

Kaine Lanyon (Marshall White (Albert Park): “The school holiday period saw an increase in new listings onto the market of which we were all both hoping and waiting for. Furthermore, the actual bidding activity on the first weekend of the holidays was as good as I can remember for many, many months. Perhaps a sign of things to come should the stock levels remain lower than normal spring markets.”

$3m Report – A few things happened over the holidays including $10m+ in Caulfield North!

  • The biggest we can report is 2 Keverell Road, Caulfield North with Jeremy Fox – sold for over $10 million we believe.
  • Toorak 17 Huntingfield Rd – changed hands for a price in the mid $7 millions, after a failed auction a few weeks ago, also with Jeremy Fox.
  • Toorak 18 Linlithgow Ave – sold off-market with Peter Bennison – bought for we believe in excess of $5,000,000. Linlithgow Ave must be the world’s most sold street. A few years back Mike Gibson sold just about the entire street in one season and while he has some help this time around, it looks like in 2012 it’s just about all back up for sale again.
  • Toorak 1 Stradbroke Avenue – off-market with Marcus Chiminello – well over $4 million

Down Bayside way the agents’ deposit receipt-books were dusted off on:

  • 2-4 Sandown St, Brighton – Brian Devlin for $3,700,000.
    This result says that Golden Mile land is still going out for around $3,500 per square metre – which has consistently been the going rate for some time.
  • 29 St Ninians Rd, Brighton – Marcus Gollings in the mid $4 millions
  • 35 Ormond Esplanade, Elwood – Townhouse – also Marcus Gollings  – Mid $3 millions
  • And 49 Mary Street St Kilda has finally disappeared from the radar after being on the market for 18 months, but we believe it has been sold, by Damian O’Sullivan, for less than the $4m+ it had hoped to achieve at auction well over a year ago.

A personal note from a current seller

” As a recent unsuccessful vendor I can vouch for the use of underquoting – from our perspective the whole selling (or in our case, not selling) has been a difficult, expensive and heartbreaking experience.
You realistically appoint an agent to work on your behalf – they actually only worked for themselves.
And they play games the whole time.
They verbally your property higher than they put in writing.
They then spend the entire campaign managing your expectations downwards, as no sale = no commission.
Our agent ignored our instructions and underquoted by more than 20% the price they had ‘valued’ our property.
This then appeals to a bunch of prospective buyers who are not qualified (and generally not interested) in buying at your price.
They then come up with the line that ‘the market isn’t where it was you’ll have to drop your price’, delivered on the Thursday before the Saturday auction where two agents play ‘good cop, bad cop’ and make you feel like you are being completely unreasonable sticking to the price they cheerfully quoted only 6 weeks earlier.
When you point this out to them they have a copy of your rates notice and point out the rateable value to you and say you are being unreasonable.
Even our auction instructions were ignored leaving us hung out to dry and an agent who rang us a few days after the auction to see if we wanted to take our property off the market as we were obviously a pain insisting on having more home opens.
We spent $20k+ alone on advertising our property – all completely wasted by underquoting.
All up including preparation (painting, furniture etc) we are around $60k out of pocket.
And it’s pointless making a complaint to – they are more than happy to do nothing to stop this circus.
The real estate industry are cowboys and nobody is prepared to take any action to stop it.
It’s a joke.”
Name and Details supplied but withheld

Editors Note: Underquoting is when an agent tells a buyer the seller wants $1.5m, when in fact the seller wants $2m. Underquoting hurts people and Underquoting is lying.

Underquoting is not when an agent says $1.5m, it’s on the market at $1.55m, but it goes for $2m. That is not underquoting, that is market forces.

We understand that no agent can get it right every time. As buying agents in this market we can expect to estimate within a 10% range either side of the eventual buy price around 80% of the time, depending on the type of home. There is always the occasional unexpected result and occasionally a quirky client. Nobody is talking about perfection, what is being spoken about is systematic underquoting, systemic lying.

Reading the above personal story, and during a year there are hundreds like this, some agents and sellers may say what has this vendor got to complain about? It didn’t sell when it was quoted lower, so why would it have sold at a higher price?

What is not being said – the elephant in the room – is that a number of buyers simply don’t go to homes they know are being sold by underquoters – and they refuse to bid at these properties.

If we were representing sellers, in this market, we would recommend you consider agents who have good relationships with buyers.

There are a number of great marketers out there and they market brilliantly to sellers. But what they don’t tell the sellers is that they have appalling relationships with buyers, and in the end the only trick left in their kit bag is to tell lies to buyers and hope somebody still believes.

For more information on how it works please read our Masterclass on Step Quoting. https://marketnews.com.au/2012/09/step-quoting-black-or-noble-art/

Subscribe to our Market News Newsletter


Tags: , ,

Be with James

Would you like to talk to us about finding or negotiating on your next home?
We buy 100 homes for our clients every year.
We buy Inner East and Bayside over $2m.
View more MasterClass Articles

Inside James Market News