oc | Sunday 26th January

Last hurrah before winter sets in for auctions after next week!

Winter chill: A sea of umbrellas at the auction of 60 Well Street, . Greg Costello (RT Edgar), under hammer, $2,290,000, 6 bidders

At 6.00 pm on Saturday the James Clearance Rate for Melbourne’s $M+ was 76% on the 38 auctions we covered. The , our bidders per auction measurement, was 2.3, which is much stronger than it was this time last year (hovering 1.5). Wow 2.3!

In terms of bidder demand at auctions, the breakdown was:

  • Ducks (no bidder auctions) – 16%
  • Lone Rangers (1 bidder auctions) – 16%
  • Norms (2-3 bidder auctions) – 40%
  • Volcanoes (4+ bidder auctions) – 28%

Another win to the Norms!

Round the Grounds

  • Port Phillip – 57% on 14 auctions – poor
  • Stonnington – 70% on 30 auctions – strong
  • Bayside – 50% on 20 auctions – poor
  • – 73% on 33 auctions – strong

Market Summary

There were some very good results this weekend on specific homes, and the proportion of properties that sold under the hammer – the Hammer Rate – was a strong 50%, well up from previous weeks. And a Bidderman rate of 2.3  is as good as we’ve had all year.

But it’s no surprise that with Winter hitting hard, the auction action is starting to dry up. That is what happens in Melbourne, year in and year out.

July looks like being as it is every year, a proverbial auction ghost-town – hence no Market News after next week till end of July.

During Winter, all stock levels, particularly the A-graders, tighten up – no surprises there. Although this year it is a bit disappointing because we had been hoping that with the stronger prices we’ve been seeing lately a few more vendors might be feeling more emboldened to put their homes on the market.

But vendors are clearly deciding to hold out until Spring. Given the limited supply and solid demand right now that is not necessarily logical. But it is understandable, given that many people simply just like to put off decisions wherever they feel they can.

In any case, this Spring may well have as many uncertainties as Winter. We’ve got an election looming, which always makes people a bit antsy and insecure, and the financial issues on the global stage don’t seem to be receding in a hurry.

Which all seems a bit boring.

But wait!

What is interesting is Off-markets

Three of the five properties we bought this week were Off-market: Surrey Hills (Zali Booker); Essendon (Paul MacDonald) and (Scott Patterson)

It seems that even if some vendors aren’t keen to go through the auction hoopla in Winter, they’re happy enough to have agents send interested buyers their way, and to take the considerable sums they’re bringing with them. A large modern home in Kew, for instance, was recently sold by James Tostevin () for under $7m Off-market.

So for now, while there isn’t as much stock out there as we’d like, it’s still a little bit steady as she goes – with strong buyer demand, and vendors keen to take the money when they come knocking on their doors – if you know where to look: off-market.

Also not Boring right now is Pricing.

“Oh come on Mal – you can’t tell me the market has gone up 10% in a year – the agents are exaggerating – you are exaggerating.”

We do get this response at times when we’re presenting possible pricing scenarios for potential clients on homes they are wanting to buy.

Actually it’s not even a year, it’s really only since October 2012 that the Inner Melbourne $M+ home market has moved 10% (approximately). It’s true that not every home has gone up 10% in a year – but a lot of the goodies have, especially the ones on good land.

What does this mean?

When it comes to pricing, you do need to understand that if you are looking at a good home you may be paying a record price if you want to be the buyer that is.

Yes, we are at the same level as our last peak in 2010. But that was a higher peak than 2007, and higher than all the previous ones. Therefore we are at the highest peak of all time.

Yes, this is very different from the rest of the world, but they have been saying that about the Melbourne market since the GFC.

And if you have been waiting for the plummet since 2008 then….. well – you are still waiting.

Should you be scared, should you panic? No, you should remain balanced and understand we are in a rising market on certain homes. The moment you stop thinking straight is the moment you will hop on the slippery pole of bad decision making.

Will the market continue to rise in Spring? Please, we are not that smart – all we can say for sure is what is happening now.

The Highest Other Buyer

There are three opinions that really count. Not ours, not the selling agents. The three that really count are:

  1. The Sellers
  2. Yours
  3. Highest Other Buyer

If you are competing on a good home you need to be sensible on what kinds of numbers it should actually achieve. Of course you do not have to pay a record price on every home. In fact many homes can still be bought “very well”. Of course you should not offer record prices in casual discussion. BUT you need to consider that if your overriding desired outcome is actually buying the little beauty and it is a goodie, then your main “enemy” is probably not the seller or the seller’s agent. In fact your main “enemy” is probably the Highest Other Buyer, and you need to know where they are really at. If you don’t at least explore this, then your main “enemy” may actually be you.

Today’s Highest Other Buyer Stats

  • The Hammer Rate on the auctions we covered was 50% – very strong.
  • The Clearance Rate was 76% – 3 in 4 sold
  • $M+ auctions saw 2 out of 3 offerings have multiple bidding and sell
  • Look at the Bought-befores in the last few weeks- there is a reason!

Carlton North: 286 Rathdowne Street, Tom Roberts (Nelson Alexander), under hammer, $1,170,000, 3 bidders

Crossakiel by Adam Woledge

There has been plenty of talk lately about the strong result of 3 Crossakiel Court, Hawthorn (John Manton/Justin Krongold, Marshall White), which sold on June 1. Auctioneer Andrew Hayne conducted a textbook auction and boy was it a strong one – selling under the hammer for $2,760,000 with seven bidders!

Compare this to the result of 2 Crossakiel Court in August last year, which sold after passing in at auction for $2,125,000.

Less than 12 months later that’s over a $600,000 difference! Wow! We rated both properties, and while No.3 was marginally better, I personally (and speaking architecturally) liked No.2 better. It had bigger bones, bigger land, better flow and plenty of upside.

So why the big difference? Both were marketed well and both had very good agents. Mainly it all has to do with the macro and the micro market.

Macro: Improving Market – tighter supply combining with increasing demand.

Micro: Quite possibly bidders who had been “damaged” (beaten badly) on recent other bidding episodes.

When there are more deals, there are also more people who miss out on deals, and when the planets line up for a seller and there are multiple “damaged” buyers then you have the recipe for a Volcano. And boy, this was a Volcano by any measure!

Hawthorn: 41 Henrietta Street, Scott Patterson (Kay & Burton), under hammer, $1,700,000, 4 bidders

Biggest Auctions:

  • Kew, 14 Edward Street, James Tostevin (Marshall White), under hammer, $2,880,000, 3 bidders
    We unfortunately missed this auction but Robert Ding was kind enough to provide us with the following details..(See More in Auction Reports)
  • South Yarra, 1 Norman Avenue, Andrew Macmillan ( Bennison Mackinnon), under hammer, $2,715,000, 4 bidders
    About 80 people nestled in the bend of this cul-de-sac to observe the auction of this solid Victorian…(See More in Auction Reports)
  • Hampton, 57 Crisp Street, Steve Tickell (Hocking Stuart), under hammer, $2,472,500, 3 bidders
    This auction was slow to start off. I couldn”t quite understand why, after all this is a great location and land size, northern orientation and practical family floorplan…(See More in Auction Reports)

Biggest Pass Ins:

  • Toorak, 25 Irving Road, passed in, $3,950,000, no bidders
    Set amongst some of the most expensive and prestigious real estate in Toorak, and with a number of well-known identities living nearby…(See More in Auction Reports)
  • East Melbourne, 74 Simpson Street, passed in, $3,000,000, 1 bidder
    Auctioneer Paul Caine was chuffed to be standing in front of this East Melbourne heritage home for the second time in 2 years…(See More in Auction Reports)
  • Brighton, 7 Wagstaff Court, passed in, $2,800,000 no bidders
    Opening with the promising suggestion that “the sun always shines in Brighton”, 20 or so people scattered around the bowl at the top…(See More in Auction Reports)


  • Brighton, 60 Well Street, Greg Costello (RT Edgar), under hammer, $2,290,000, 6 bidders
    A sea of umbrellas surrounded the front of no. 60 Well street Brighton this afternoon. But as the rain started to ease and the umbrellas came down…(See More in Auction Reports)
  • Toorak, 148 Kooyong Road, (Marshall White), under hammer, $2,692,000, 5 bidders
    The sun hid and raindrops began falling, so we were ushered inside for the auction of this c1952 solid brick five-bedroom home with a wraparound pool…(See More in Auction Reports)
  • Kew, 123 Edgevale Road, James Tostevin (Marshall White), after auction, $1,830,000, 4 bidders
    Enjoying the cosy embrace of a high-walled garden, 60 spectators listened to auctioneer James Tostevin as he summarised the benefits of this Victorian…(See More in Auction Reports)

Agent Survey: How has June shaped up this year compared to the same time last year (stock wise)?

Justin Long, Marshall White (): Stock supply across the market is definitely a bit tight, not uncommon for this time of year. But whilst stock levels are comparable to last year, increased buyer demand has highlighted the shortage.

, Nick Johnstone (Brighton): Stock levels are extremely low, especially for good quality family homes. It always amazes me why people don’t sell in winter, it is clearly a great time to sell as buyers are starved of opportunity and subsequently prices are firm as there is so much competition. It appears the season, coupled with the upcoming federal election, is making people sit on their hands until they have some clear direction of where we are heading economically.

Richard Winneke, Jellis Craig (Hawthorn): Listing levels are up on 12 months ago. June 2012 we had 70 Auctions in Boroondara & this year we have 78 Auctions booked for June. It also appears that early spring will be very busy as vendors elect to sell before federal election, grand final and the next school holidays.

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