oc | Thursday 23rd January

Maybe now is the time to see the glass half full, rather than half empty.

Here we are at the Colosseum with Emperor Tostevin managing the lions, the lambs and the lookers. 29-31 Deepdene Rd, Deepdene, under the hammer, $4,550,000, 4 bidders

At 6pm on Saturday, the James $M+ Clearance Rate was 61% across the 31 auctions we attended. The Weekly Review Bidderman was 1.5 bidders per auction.

While those figures did not represent a noticeable improvement in the stats, we think the market has shifted to a positive note in the last fortnight as you will see below.

Out there in buyer-, we are finding more people at opens (and we went to over 60 as a team this week), there is noticeably more action going on behind the scenes (i.e. more inquiry about starting the buying process) and stronger competition at the auctions at which our advocates are competing.

To the outsider, the argument could well be made that nothing has changed except that our outlook about the market has become that the glass is half-full rather than half-empty. It’s a subtle mood change but we think it’s a significant one.

Biggest Sales:

  • Deepdene, 29-31 Deepdene Rd, James Tostevin, under hammer, $4,550,000, 4 bidders
    Big numbers came out to see a race in Deepdene today…(See More in Auction Reports)
  • Kew, 53 Rowland St, James Tostevin, after auction, undisclosed under $3,000,000, 2 bidders
    Beautiful, tranquil backyard setting for this auction …(See More in Auction Reports)
  • , 7 Crowther Pl, Leigh Hallamore, after auction, $2,925,000, 1 bidder
    Crowther Place is a quiet cul-de-sac just off bustling New St…(See More in Auction Reports)

Bidderbuzz Auctions:

  • Canterbury, 57 Alexandra Ave, James Tostevin, under hammer, $2,510,000, 4 bidders
    A volcano auction with 4 bidders here at 57 Alexandra Ave, led by James Tostevin…(See More in Auction Reports)
  • South Melbourne, 39 Tribe St, Karl Gillon, passed in, $940,000, 4 bidders
    Neighbours thought it was the perfect opportunity to …(See More in Auction Reports)
  • , 19 Acland St, Kaine Lanyon, after auction around $1,600,000, 3 bidders
    With not a hair out of place, the affable Kaine Lanyon …(See More in Auction Reports)

Biggest Pass Ins:

  • Malvern, 3 Chesterfield Ave, passed in, $3,300,000, no bidders
    A crowd of 40 people gathered in all the shady spots …(See More in Auction Reports)
  • , 31 Evans Crt, passed in, $3,250,000, no bidders
    Around 40 people gathered around in the glorious…(See More in Auction Reports)
  • Glen Iris, 125 Finch St, passed in, $2,025,000, 1 bidder
    The sun streamed through the trees on this… (See More in Auction Reports)

Market Summary

1)  Sellers have now accepted market realities – it has taken a long time for them to ‘forget’ that someone told them their home was worth a lot more than they are being offered now.

2)  Transactions are actually happening. The top of the is by no means flying, so it’s still on life support numbers-wise, but there is a pulse.

3)  All sides of the market opinion triumvirate are now singing from the same hymn book for the first time in 18 months. Agents, advocates and the press are all quite positive on what is happening right now. We think Chris Vedelago’s piece in the Saturday Age was spot on.

4)  We have been suggesting to sellers that they not live in the past, and we think that now it is maybe the turn of some buyers to do the same if they want to be successful on a specific home. There is some solid competition in the market, which means that buyers not prepared to act with some sense of urgency and accept a little pain are risking missing out on the deal to another buyer.

Buyer Mood Change

We are not saying that prices are rising or there has been a major change in buyer psychology. We are saying there has been a subtle mood change in many buyers. Some buyers are getting a little toey after missing on their second or third auction attempt this year – and this is leading to tension and creating some urgency, which is what strengthens a falling market.

Two months ago, there was such limited  that we were encouraging buyers to be patient and not act imprudently and not settle for purchasing a home that is only 3 out of 10 for their needs. Now for the first time this year, with good choices at all levels, we are encouraging buyers to consider this Spring a window of opportunity which might actually be the time to have a go.

When you finally have real choices as a buyer, you may need to tweak your ‘buyer brain’ after such a sustained period of negativity. It’s right to be resisting homes that are 3 out of 10 for you. But if you really want to buy a home, it’s not a good idea to be dismissing homes that are 8 out of 10 for you.

If, in 2012, you have firmly been in the ‘only if it’s perfect’ camp, now may be the right time to move into the ‘only if it’s really good’ camp because there is real choice out there in late October 2012.

So Simone, will Super Saturday be a success? Sure thing Suzy, Super Saturday should sizzle!

Next Week Super Saturday

So what may happen next week? It’s dangerous to predict – but given we’ve asked some selling agent experts to give us their opinions, we were told we should stick our neck out as well.

Our prediction on Super Saturday, October 27th is …..drum roll please…. that it should be better than people would have envisaged a month or two back.

Here is some anecdotal evidence to support our notion that the market has been on the up over the last few weeks.

1)       The K&B Mexican Wave is warming up.

There is a bit more noise around town. are a good indicator of this – they’ve started their 2012 Spring Mexican Wave and it appears to be spluttering into action, albeit on a limited scale. 779 Orrong Road (big land, made-over-home in an okay part of Toorak) has been sold after the auction was a non-event. We don’t know exactly how much for, but Andrew Baines had the auction quote at $7,000,000.

18-20 Fitzroy St Kilda (Michael Gibson) has been sold after a year or so on the market for ‘allegedly’ around $7,000,000.

And now all the talk is of a possible $16m sale – it’s not 1 Towers Rd or 12 Lansell, so is it one of the quieter ones on Linlithgow Ave or St Georges Rd? No doubt all will be revealed, or half-revealed, in the next instalment of the Kay and Burton Report.

During the week we saw some big cutbacks at the newspapers and TV stations and now we know why – the Kay and Burton Boys – gripping reality TV at its finest, more sub plots than Home and Away. In all seriousness though, it is good to watch – these guys are really good at this!

2) Boroondara has a heartbeat above $5m.

Those guys have pulled off the double-play of the year to date, proving that quality always wins out; with 29 and 51 Grove both selling in a joint interplay.

Nick Elmore, Paul Keane (get well soon) and Tom Aylward have done it to us again, making me look a little silly by selling 51 Hawthorn Grove Hawthorn reportedly for more than many of us thought was possible. We wrote about this property in a previous Marketnews and gave it a James Rating of 841/1000.

Despite the fact 51 was a brilliant Dean Dugdale rebuild and despite it being Hawthorn Grove, we thought anything over $5m was a big number. That’s $700,000 more than a really good one by the same builder that sold in Kinkora Rd in 2008, and $1,400,000 more than the period home on the same size land in the same street, that sold last year in far better times – although it wasn’t as polished as 51 Hawthorn Grove.

We believe negotiations went past the mid $5 millions, and if that is the case, that makes it $2,000,000 more than last year’s Hawthorn Grove sale and $2,000,000 more than was paid by the renovator of this home in 2010.

Again it hasn’t been confirmed by Jellis Craig, but we believe this was a special buyer situation. 29 Hawthorn Grove also sold at exactly the same time for, we believe, close to their $12 million asking price. We went through 29 and while this is a brilliant address and has a great land size, the renovation wasn’t to everybody’s liking. We think the fact that it sold and so strongly was again a sign of good agent work (Al Craig and Paul Keane) and a sign that right now it’s an improving market at the Top End.

3) In Bayside, in certain pockets, things are happening.

North Brighton is moving and it’s making sense.

11 Foote St, Brighton (Trudy Biggin) on 750 sqm of land near the beach in North Brighton, sold this week for $2,200,000 or around $3,000 per sqm metre.  This was the same price as was paid 2 years ago.  This result confirms the auction sale at 1 Foote (Ian Jackson) last month that put land at around the same , even if you thought the house wasn’t worth much.

As well, both of these results supported the auction sale last Sunday just up the way at 13 Downes (Ian Whiteside) which saw three bidders slug it out to a very strong, but not completely unexpected, $3,600,000 for an 850 sqm block with a great home on it. That puts land value in the low $2ms – and the home in the mid $1ms. So the market got it right. If you look at these sales as a group, then maybe some of $3M+ Brighton is starting to get a wriggle on again, as long as the sellers have the right product at the right price.

So our best predictive efforts conclude that that Super Saturday should be a good day for those buyers, sellers and agents who make the effort to listen to the market.

What do our friends on the other side think?

Agent survey: “What is your prediction for Super Saturday on October 27?”

Richard Winneke, Jellis Craig (Hawthorn): “Bidderman will be around 1.5 bidders and the clearance rate will be 60%.”

Tim Picken, Kay & Burton (Hawthorn): “Leading into the 27th October l believe will be a real test as to the strength of this recent lift in confidence and buyer sentiment with a large number of properties going to auction. If OFI numbers and enquiry are anything to go by l expect there to be a healthy clearance rate of between 60-70% which would be pleasing given the volume. The improved conditions are also being driven by realistic vendor expectations and pricing. Most owners are going to market understanding that values are not what they were 18 months ago. Buyers are certainly more confident with bidding at auctions, where we are seeing 2+ bidders at most auctions, some with up to 5 or 6 bidders if a property is well priced. The $1mill + market is still limited by good quality stock and if this continues over the next 6-8 weeks, clearance rates will continue up.”

Damian O’Sullivan, Marshall White (Albert Park): “Given the sheer volume of property being offered on ‘Super Saturday’ we still expect good attendances, with a competitive environment at most auctions. Undoubtedly, some properties will attract competition post auction as has been evident for some time now. $M+ clearance rates have been particularly healthy in what we view to be a very balanced market. (I think) 65%-70% would be a more than adequate outcome based on numbers alone.”

Jenny Dwyer, Hocking Stuart (Sandringham): “With the return of our first Super Saturday for the Spring of 2012, I would expect clearance rates and buyer interest to remain as we’ve seen for most of this year. The homes in excess of a million dollars that offer the ‘perfect package’ as perceived by the buyers will see 2 to 3 three bidders at each auction pending the vendors expectation being in tune with buyer sentiments. Properties that are less appealing will sell at some stage (probably not on the auction day), but vendors will need to correctly price their homes if they wish to see a pre- Christmas sale.”

David Lack, Biggin & Scott (Port Melbourne): ” While stock levels are still way down for the corresponding period over the last 2 years, the quality is better and we are confident that we could see a clearance rate above 70% for $1 million plus properties. Furthermore, there has been a noticeable increase in the number of qualified buyers around and we could see a higher number of bidders on Super Saturday – my prediction for Bidderman: close to 2.”

Lachie Fraser-Smith, BenMac (Armadale): “Saturday 27th October appears to be one of the busiest of the year thus far. There will be high bidder numbers and probably a 55% success rate in the $m + bracket (on Super Saturday). We expect after a busy Saturday of Auctions that even if the property does not sell on the day, 95% will have found buyers within a week of the auction.”

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