oc | Thursday 23rd January

This is a real market – and the bidder rates and stock numbers are telling us that it is going very well.

Crowds, crowds crowds! 22 Grandview Road, (Nick Johnstone), bought after auction, $1,750,000, 2 bidders and a crowd of 80 people

At 6.00 pm on Saturday the James Clearance Rate for Melbourne’s $M+ was 81% on the 36 auctions we covered. The Weekly Review , our bidders per auction measurement, was 2.3.

  • Ducks (no bidder auctions) –18%
  • Lone Rangers (1 bidder auctions) – 13%
  • Norms (2-3 bidder auctions) – 45%
  • Volcanoes (4+ bidder auctions) – 24%

Another win to the Norms!


This weekend has been big, and next weekend will be even bigger auction-wise. Bidderman and the $M+ Clearance rate are now real litmus tests for the market, as we are in plentiful . In other words this is no longer a tight market where you can’t really trust the statistics. This is a real market. And the bidder rates and stock numbers are telling us that it is going very well.

The other Key Performance Indicator is Price. And for now prices are moving, but they are not yet flying. The situation is just as it has been for a year now, having started its latest run around this time last year, coinciding with the footy finals.

Overall, prices are continuing to improve because of the weight of demand (see Bidderman).

But sellers are also helping, by keeping their heads and their dreams in neutral – and this is giving this market some real momentum.

Why are sellers doing this, when in 2011 and early 2012 many of them seemed to smoking stuff rather than trying to do deals when it came to price?

Why is right now a true market (overall) for both buyers AND sellers? The reason is simple. For many sellers there is an additional part of their selling transaction. That is, they need to buy. For many buyers it is vice-versa, in that they need to sell. Buyers and sellers have been hanging around now for two years and they have finally decided that conditions are right to “get on with it.”

From a client satisfaction point of view, we are seeing lots of happy customers. As are no doubt the agents too: Kay and Burton, Jellis Craig,  and so on.

Biggest Auctions:

  • Toorak, 10 Yarradale Road, Tim Derham (Abercromby’s), under hammer, $4,840,000, 4 bidders
    80 or so are comfortably gathered in the backyard of this 1930s home. Seated on the outdoor furniture and behind trees many look more prepared for a drink with an umbrella…(See More in Auction Reports)
  • East Melbourne, 114 Hotham Street, Paul Caine (Caine Real Estate), under hammer, $3,810,000, 2 bidders
    An East Melbourne auction always draws a crowd and with 120 people gathered on the central green strip in front of this Victorian terrace, this morning proved no exception…(See More in Auction Reports)
  • Balwyn, 120 Winmalee Road, Scott Patterson (Kay & Burton), after auction, undisclosed, high $3ms, 2 bidders
    A big crowd of around 100 people gathered to watch Scott Patterson in action. Bidding opened at $3,500,000 and passed in at $3,710,000 selling soon after for an undisclosed amount.
  • Malvern, 12 Coonil Crescent, John Morrisby (Jellis Craig Bennison Mackinnon), under hammer, $3,425,000, 3 bidders
    With sunshine out and happy neighbours about auctioneer John Morrisby is in a poetic mood as he begins his preamble in front of this iconic…(See More in Auction Reports)


  • Brighton East, 165 Dendy Street, John Clarkson (Hocking Stuart), under hammer, $1,325,000, 6 bidders
    As auctioneer John Clarkson and agent Peter Kennett stepped out into the sun-drenched yard of this four-bedroom…(See More in Auction Reports)
  • Brighton East, 119A Dendy Street, Peter Kakos (Marshall White), under hammer, $1,855,000, 5 bidders
    “Well it feels like we’re about to have a party” auctioneer Peter Kakos said as he welcomed the crowd of 40 into the backyard. Gathered between the outdoor setting on the deck, the swimming pool…(See More in Auction Reports)
  • Glen Iris, 14 Greendale Road, Karl Fitch (Noel Jones), under hammer, $1,505,000, 5 bidders
    Karl Fitch seems to be everywhere today – after running a great auction in Camberwell he fronts up again in Glen Iris to ply his trade again for this double story period home…(See More in Auction Reports)

Biggest Pass Ins:

  • East Melbourne, 193 George St, passed in, $4,500,000, 1 bidder
    There was an air of anticipation in the huddle of 112 people outside ‘Sunnyside’ this morning…(See More in Auction Reports)
  • Toorak, 28 Clendon Road, passed in, $2,775,000, 3 bidders
    What a start to the bidding! As our auctioneer completed his preamble, eager Bidder 1 started…(See More in Auction Reports)
  • Brighton, 1 Higinbotham Street, passed in, $2,750,000, no bidders
    The Buxton team lined Higinbotham street today as number 1 was up for auction. Following procedure…(See More in Auction Reports)

Crowds, crowds and more crowds: 193 George Street, East Melbourne, passed in, $4,500,000, 1 bidder, crowd of 112 people

Mutual Love

So with all this mutual love in the air, what does this mean for late Spring to Christmas?

We think overall price really has only one way to go – UP

UNLESS there is:

  1. An unexpected external influence
  2. A price brain snap by sellers or agents on asking prices
  3. Massive stock inflows

In the past week, our Buying Agent World was Zen-like:

  • We bought three on Friday, in Kew, Canterbury and
  • We bought three under the hammer on Saturday, in Hampton, South Melbourne and Malvern
  • We missed three under the hammer on Saturday, in Camberwell (3 bidders), Glen Iris (5 bidders) and Prahran (4 bidders)

The price variances were substantial.

So, while we think price is improving overall, we do need to put in a rider to say that the current market price is made up of a whole of little mini market prices averaged out.

What do we mean?

Well, take for instance two auctions in Brighton over the last month. In many ways they were similar in position, home and size – they were in Loller and Orchard Streets, both homes were on in the 500 to 600 square metre range, and in both cases the buildings were both pretty average.  Both had multiple bidders, and both sold under the hammer – but one sold for a bit over $1,400,000 and the other for a bit over $2,000,000. One we think was a great buy (and no unfortunately we didn’t buy it) and one was pushed by strong emotional circumstances (which is a legitimate buying decision by the way, as long as it is an informed decision). This example highlights the fact that, while we can talk about price in generalities, when you buy it’s all about specifics.

You guessed it - crowds: 20 Cascade St, Balwyn North,Richard James (Jellis Craig), passed in, $1,650,000, no bidders

Round the Grounds

Call Gina buying Stonnington

In Stonnington the $1.5m to $3 million price bracket has performed well all year, with limited supply and increased demand causing a lift in values of these properties of between 5-10% overall. There has been good bidder depth at many Stonnington auctions in the weeks leading up to the election. But the big question will be about the quality of homes put to market after the holidays. Bidding depth does not always mean a better home and solid bidding depth could impact prices.

Architect Adam buying Boroondara

The market in Boroondara continues to be positive for buyers and sellers alike. Crowd numbers have been healthy at Open for Inspections – especially at good homes that have been well-advertised. There is good activity off-market also. We bought a beauty off-market this week in West Hawthorn through Campbell Ward and Nick Smith (Jellis Craig). Was it bargain? No. Was it a very good fit for our client? Yes!

Klarity Kris buying Bayside

In Bayside, the early onset of spring has brought out not only the cyclists, runners and walkers, but also the buyers. With the return of the sun, local buyers, expats and new arrivals have Bayside firmly back on the agenda. There’s a buzz in the air and Bayside is beginning to come alive for summer. But stock is still low, and for buyers there may be increased competition for the property they are interested in. Auctions of interest this weekend include the single-level home on 880sqm at 119A Dendy Street, Brighton. This is a property on a busy road, and these generally don’t do well in down markets, so it will be interesting to see the result this weekend. Another is the land/major renovation sale in an A-Grade location at 15 Norwood Avenue, Brighton.

Vino Guy buying Port Phillip and the Inner North

Three houses that sold in the same street in Albert Park over the past three years demonstrate the heat this market is building. No.77 Page Street, a semi-detached Edwardian, was bought for $1,290,000 just after the market high in 2010. Its twin, No.79, was purchased by private sale towards the end of 2012 for $1,150,000. Last week, 81 Page Street (Greg Hocking Real Estate) sold before auction. Though unconfirmed, the price was believed to be around the $1.4 million mark.

Agent Question: What are stock levels looking like in October?

Richard Earle (Jellis Craig, Hawthorn): Our stock levels for September and October are marginally higher this year than last, at around 60 odd auctions in September and 70 odd for October. The 19th and 26th of October are proving to be very popular choices and will be extremely busy days. November will also be a busy month. However,  vendors’ expectations throughout this spring market will need to be closely monitored to the market’s reaction to each property, as the increased supply will offer purchasers plenty of .

Currently the dynamics of the market are sound, with low interest rates offering a once-in-a-lifetime opportunity to trade-up given job security. Many buyers and vendors are indicating to us they have been through the hard times and made the tough decisions to re-structure their businesses. Outcomes-based performance packages have been similarly re-negotiated. So the pent-up demand for buyers to trade-up and those scaling down to enjoy the new found strength at the upper end of the market are the main reasons for increased supply.

John Clarkson (Hocking Stuart, Brighton): With the major distraction of the longest election lead up in history, the focus is now well and truly back to Real Estate. Whilst September numbers ( of listings ) are clearly established, October is gaining momentum with a good number of listings. This is positive, as we are dealing in a balanced market with interest rates at historical numbers and this means more positivity amongst both buyers and sellers .

John Bradbury (Noel Jones, Balwyn): With interest rates at an all-time low and likely to stabilise, and with the dollar wavering around 90 cents, the real estate market has shown unexpected strength. Stock levels for both September and October have increased compared to the same period last year and, with the election over, we expect that renewed consumer confidence will ensure the market continues to improve well into 2014. New homes that were selling in excess of $3M in 2011 are again back at that level and developers are entering the market again. Overseas buyers in particular are paying a premium for land within the Balwyn High zone to build their own home from a choice of building companies displaying their products along Belmore Road and other main arterials. Over the last month we have experienced an unusually high proportion of our auctions selling above the reserve and we expect this to continue in the coming months.

Torsten Kasper (Chisholm & Gamon, ): A positive lift in stock and choice. Importantly there has been an increase in all property types. The consistent strong results are motivating vendors to move forward and this,  coupled with low interest rates, will see the trend continue. We feel spring and summer will be strong. As a buyer I would be recommending you get in sooner rather than later.

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