oc | Wednesday 22nd January

Living up to the headlines

The other Melbourne religion that is the Saturday auction: 41 Brunswick Street Fitzroy passed in for $1,700,000, but attracted a good sized crowd of around 80 people.

At 6.00 pm on Saturday the James Clearance Rate for Melbourne’s $M+ property was 70% on the 33 auctions we covered. The Bidderman, our bidders per auction measurement, was 2.4. Both are showing a strong market after the footy break.

  • Ducks (no bidder auctions) – 20%
  • Lone Rangers (1 bidder auctions) – 10%
  • Norms (2-3 bidder auctions) – 37%
  • Volcanoes (4+ bidder auctions) – 33%

Another win to the Norms, with Volcanoes not far behind!

Biggest Auctions:

  • Hawthorn East, 5 Higham Road, James Tostevin (), under hammer, $3,350,000, 3 bidders
    There was a sense of buzz and anticipation as the crowd of 60 was anxious to know what the result would be of this property, which had a large allotment and was located in the coveted Harcourt precinct…(See More in Auction Reports)
  • Hawthorn, 23 View Street, Bruce Bonnett (McLaren Real Estate), under hammer, $3,150,000, 4 bidders
    A massive crowd turned out to watch Bruce Bonnett in action here. The auction opened on a genuine bid of $2,500,000…(See More in Auction Reports)
  • Kew, 21 Barrington Avenue, Steve Abbott (Jellis Craig), under hammer, $3,010,000, 3 bidders
    As the dappled sunlight danced through the avenue’s Plane trees, the 100-strong crowd was invited by auctioneer Steven Abbott to enjoy this auction on the lush front lawn…(See More in Auction Reports)


  • Canterbury, 1 Carinda Road, Richard Earle (Jellis Craig), under hammer, $1,508,000, 5 bidders
    Petrol stations may have been running out of gas but this auction had plenty in the tank as it blew past the reserve with five bidders in action…(See More in Auction Reports)
  • Balwyn, 16 Paisley Street, Jeremy Desmier (Fletchers), under hammer, $1,260,000, 5 bidders
    As auctioneer Jeremy Desmier rang his bell to begin, 55 people gathered. There was a distinct buzz of anticipation in the air for this mortgagee auction…(See More in Auction Reports)
  • Albert Park, 110 Wright Street, Claudio Perruzza (Biggin & Scott), under hammer, $2,910,000, 4 bidders
    This cracker of a home needing some tender loving care has been all the talk for a month and finally auction day had come. Auctioneer Claudio Perruzza didn’t disappoint…(See More in Auction Reports)

Biggest Pass Ins:

  • , 127 Canterbury Road, passed in, $2,800,000, no bidders
    Despite a burst of sunshine and a desirable location, there was only handful of some 30 people to watch the auctioneer present this as new 40 square contemporary modern residence up for auction…(See More in Auction Reports)
  • Hawthorn, 19 Liddiard Street, passed in, $1,750,000, 1 bidder
    Among a rose garden with buds set to burst into flower, a crowd of 60 basked in glorious sunshine as the auctioneer exalted the lifestyle benefits of this ready to move into…(See More in Auction Reports)
  • Alphington, 1a Arbor Street, passed in, $1,700,000, 1 bidder
    The warm spring sun shimmered on the surface of the plunge pool at this “blue chip inner city residence” this morning….(See More in Auction Reports)

Biggest auction of the day: James Tostevin (Marshall White) sells 5 Higham Road, Hawthorn East, under the hammer, $3,350,000, 3 bidders

James Buyer Advocates apologises

Sometimes in life things don’t go to plan. This weekend the auction at Bath St, Glen Iris was one such case. To the casual observer it would have looked like an agent stuff-up, but it was not. It was us that caused the problems.

Firstly, we want to apologise to the auctioneer Michael Wood, and also to the agents Zali Booker and Anthony Reis, to the vendor and to the buyer who eventually bought it.

We were given instructions prior to the auction on the maximum to which we should bid on behalf of our client. However, whilst we were bidding at the auction our client informed us that he was not comfortable with the level of the last bid – this was obviously a surprise to us. As we had the final bid and the property was about to be knocked down to us, we had to ask for the auction to be stopped and informed auctioneer Michael Wood that our client wished to withdraw his last bid of $1.657m.

Michael quite rightly consulted with his vendor and the other buyer. He then asked for our last undisputed bid, which our client said was $1.6m. The property was then sold slightly above that amount to the other buyer.

To all who witnessed the auction there was confusion. But we would like to point out that the confusion was caused by James Buyer Advocates, not by the auctioneer, by Marshall White or because of some other mystery circumstance.

Sometimes in the heat of battle, minds are changed. We accept responsibility for the consequences of that and apologise. We could have waited in hope that someone else bid above us – or have it knocked down to us and then pull out. But we felt it appropriate to inform all parties during the auction that circumstances had changed right at that point.

In closing, I want to point out that we acted in good faith at all times, and that this was a legitimate auction during which things changed. But I, Mal James personally apologise unreservedly on behalf of our company for how things ended.

Main attraction: A big crowd of around 114 people turned up to watch Arch Staver in action at 91 Union St, Northcote. Bought after auction, $1,555,000, 4 bidders

Are you asking the right questions?

Well, the market seems to now be in agreement. We are officially, whatever that means, in a sustained upward phase or “boom”.

By our reckoning – i.e. according to our MarketNews reports – Inner Melbourne at the Top End has been in a “boom” since October of last year (2012).

As the realisation of this hits buyers, the questions we are getting have changed from: “How’s the market going, Mal?” to: “When is it all going to end, Mal?

Our answer is: “Who knows?”, and also: “We think you’re actually asking the wrong question.”

Well, you’re asking the wrong question if you want an informed answer. Because, if we ‘experts’ had little absolute idea as to when the market started, it’s unlikely we should know when it will end.

In any case, is it that relevant anyway? For all we know, the ferocious rise of this current market phase may have already eased. On the other hand it could run, as per 2009, for 18 months, or for another 6 to 12 months as in 2007, or another 13 years as it did from 1994.

We leave prognostications of the future to the economists, as well as to the media commentators who manage to expound at length on the market on evidence about as skimpy as that used by pre-game footy commentators. (Hey don’t you miss it already? Nothing to watch on Friday nights! And you have to talk to people, including the kids.)

The really useful and good buying question, in our opinion, is not a general market-based one – it’s a specific property-based one: Is this home you are currently looking at a good buy? Well is it?

More specifically, is it a good financial buy?

Let’s eavesdrop on a coffee conversation with a prospective buyer.

Mal: Are there good financial buys right now?

Fred the buyer: Well, no Mal. Nothing is now. Everything is expensive.

Mal: How do you know it’s expensive? What is your definition – is it one based on hindsight?

Fred the Buyer: Ok, the good financial buys are the ones when there are no other bidders or where I can get a big discount away from the auction.

Mal: So Fred, you are saying the good buys are the ones that nobody else wants – even in a booming market. Or where only you and the agent agree on the price frame, but nobody else does.

End of conversation

Let’s test some theories on the recent ups and downs of the market. In the previous boom markets, who made the good decisions?

Did those who bought homes in 2002 or 2005 or 2009 make good or bad buying decisions?

Did those who bought on the precipice of the falls in 2007 and 2010 make good or bad buying decisions?

The financial wisdom of proceeding rarely relates to overall timing. It relates more to the individual circumstances.

You can still buy very well in rising markets if you have the right fundamentals – the right land content, the right location and the right floorplan.

These are things you can control – unlike the ups and downs of the market. And these are what determine the wisdom of your decisions. We are happy to provide a solid list of buys we purchased in 2007 that had solid property fundamentals, and that were sold over the next five years with a significantly increased price.

The fact is, we have no idea when or indeed if the current “boom” will end.

Our predictions always relate to a longer term picture, as it is impossible to get the short term right anyway. The longer term picture says that the population increase from China, then India and then Indonesia, is fuelling demand for our schooling, space, minimal corruption, safety of money and person, stable politics, pollution and our relaxed lifestyle.

In terms of supply – well they ain’t making any more land! The auctioneers are right on that one.

And in terms of price – are we as a community going to build to increase or decrease our overall wealth and wealth generation possibilities?

So in this current boom, forget about when it’s going to end, and think instead about whether you are asking the right question with regards to making good decisions and buying well for the long term.

“How are high end going in terms of price and sales compared to this time last year?”

Aaron Silluzio (Barry Plant, ): We have found that high end apartments and townhouses have increased by 6–8% compared to the same period last year. The prices have been driven up by investors and also by owner occupiers that are not ready to move in straight away, choosing to rent the property for a 2–5 year period and then move in when the time is right to downsize.

(Marshall White, ): The appetite from the market for high end apartments this year has been one of the best in the past 5-6 years. For new or off-the-plan luxury stock, It’s now very common to hear the rates of value sitting between $17,000-$20,000 per sqm as an average in the Domain precinct, and $14,000-$17,000 in Toorak Village. Numerous records have been set in , Toorak and Road over the past 6 months which is a culmination of a low inventory of great stock plus a desire from buyers in that market to make decisions they have been holding off ,for several years. Never have I had, like I do today, 6-7 clients in the market wanting to spend in the $8,000,000 plus range all the way up to $30,000,000, but unfortunately the stock isn’t available.

Peter Kudelka (Kay & Burton, South Yarra): I think it is fair to say that there has been an improvement in the sale of “high end” apartments compared to last year. I think it is important to understand that the buyers of these apartments are usually downsizing from larger family homes, often when the have left, and when the effort and cost of maintaining these larger homes becomes a nuisance. These buyers are usually under no pressure to sell, and therefore have the luxury of time, and the opportunity to choose the market in which they are comfortable to sell. With the improvement that we have seen in the sale of these types of family homes in the last 6 to 8 months, we have seen ever increasing confidence, and willingness, of these vendors to sell up and downsize to a high end apartment now that they see a more stable and buoyant market as opposed to last year. We have also seen an increase in off-the-plan sales of these types of apartments as well, which often won’t settle for up to 2 years. These buyers again are more comfortable with the way the market is moving and have the confidence today that the market will be as good, if not better when the time comes to sell their existing home in the not too distant future.

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