oc | Wednesday 22nd January

Back in the saddle, but a bit of a shocker at the Top End!

The $3m+ market had a dog of a day! 4 Forrest Court, Toorak, passed in for $4,200,000.

At 6.00 pm on Saturday the James Clearance Rate for Melbourne’s $M+ was 61% on the 38 auctions we covered. The Bidderman, our bidders per auction measurement, was down to 1.3. An unusual day today, with everything down compared with recent weeks.

$3M+ PLUS

It was a bit of a shocker weekend for the $3m+ market!

Of the 9 auctions we covered in this segment there were just four bidders across the three that sold – this is a stat worthy of note.

Does this indicate a market that has splintered between the lower end, which has been going gangbusters, and the upper end, which this weekend seemed to have the handbrake  back on?

It is probably too early to tell just on this set of numbers. Pre-Melbourne Cup, the Top End was rocking along both at auction and in the secretive world of off market sales. But this weekend’s results would have been a kick where it hurts for some.

Overall, at all levels we had a lower Bidderman and one of the weakest clearance rates we’ve seen for some time. Why?

Well, firstly we at James were focussed at the top of the Top End, and it performed particularly poorly. Secondly there was lots of choice out there.

Since before the Melbourne Cup, the market has been tested with very strong and in some cases record stock levels. So there has been heaps of buyer choice.

This weekend was the first time buyers rejected in biggish numbers what was on offer. Was it a change in market sentiment or merely a rejection of the specific homes on offer?

Where to from here?

With more than 100  $1m+ auctions scheduled for each of  the next three weekends in Inner East and , including another Super Saturday on November 30th, the market faces a tough late Spring test due to a very heavy inflow of stock. We think buyers are still there in solid numbers, but there is no doubt today was a bit of a slap to the market at the Top. Will the result just be a burp or is this a sign of something a bit stronger – stay tuned!

  • Ducks (no bidder auctions) – 43%
  • Lone Rangers (1 bidder auctions) – 14%
  • Norms (2-3 bidder auctions) – 34%
  • Volcanoes (4+ bidder auctions) –9%

Look at the Ducks! Nearly half the auctions we covered had no bidders.

Biggest Auctions:

  • Toorak, 21A Albany Road, Gowan Stubbings (Kay & Burton), under hammer, $4,550,000, 1 bidder
    With formalities out of the way, auctioneer Gowan Stubbings expansively announced that we were standing in ‘one of the best streets in Australia’…(See More in Auction Reports)
  • , 34a Coppin Grove, Hamish Tostevin (), after auction, undisclosed above $3,300,000, 1 bidder
    The weather was unable to make up its mind, but auctioneer Hamish Tostevin made up his and called the small crowd gathered inside the home…(See More in Auction Reports)
  • Toorak, 3 Rostill Court, Gowan Stubbings (Kay & Burton), under hammer, $3,020,000, 2 bidders
    At the eleventh hour auctioneer Gowan Stubbings strides to the head of the court and delivers a short and sweet introduction…(See More in Auction Reports)

Bidderbuzz:

  • Albert Park, 142 Mills Street, Kaine Lanyon (Marshall White), under hammer, $1,320,000, 5 bidders
    With an advocate hovering, Kaine Lanyon took the stage for yet another of his marathon efforts…(See More in Auction Reports)
  • South Yarra, 56 Clara St, Justin Long (Marshall White), under hammer, $2,130,000, 4 bidders
    A steady drizzle sent 50 auction-goers indoors for this contemporary 2 level townhouse…(See More in Auction Reports)
  • , 32 Martin Street, Jonathan Dixon (JP Dixon), under hammer, $1,800,000, 4 bidders
    Alternating bursts of watery sunshine and wind-driven rain provided the backdrop for the auction of this four-bedroom, two-bathroom period home with the bay at the end of the street…(See More in Auction Reports)

Biggest Pass Ins:

  • Brighton, 25 Manor Street, passed in, $4,800,000, no bidders
    A crowd of 40 or so had come to participate in the auction of this five-bedroom, three-bathroom Edwardian home on its very large plot…(See More in Auction Reports)
  • Canterbury, 168 Mont Albert Road, passed in, $4,525,000, 1 bidder
    The auctioneer put forward a very compelling list of reasons why this home would be a great buy for families…(See More in Auction Reports)
  • Toorak, 4 Forrest Court, passed in, $4,200,000, no bidders
    A crowd of 17 people plus one dog turned up to the cul-de-sac location for this auction…(See More in Auction Reports)

Wet weather didn't deter the crowd from watching Arch Staver (Nelson Alexander) in action at 5 King William St, Fitzroy. Bought under the hammer, $1,505,000, 2 bidders

Apartment Action

With all we’ve been hearing about the hot market for top-end houses, it can be easy to miss the fact that apartment sales are also the strongest they have been in years. Both clearance rates and prices are rising and agents are reporting some of the best sales in recent times.

Apart from spectacular headline sales, such as the $13.5 million purchase of the Royal Domain Penthouse, the apartment market generally has been doing very well. Auction clearance rate on apartments has also been up around 70%. And that figure doesn’t take into account the private sales, which is how most apartments are sold.

Apartment Ratings

The move towards high-quality apartments is also clear from the growing number of apartments over $2 million which we are rating for our clients. Some recent stand-outs are in Toorak and include the penthouse at The Hemingway, on the corner of Robertson St and Grange Road, which is a particularly luxurious apartment in this new Art Deco building.

Another high rating apartment on the market is 2/63 Washington Street, a stylish apartment in this modern and well finished building. You can see our ratings for these apartments on our web page.

Off Market Apartment Sales

Besides trying to make sense of the complicated pricing mechanics, another major reason why buyers approach James Buyer Advocates to purchase an apartment is because of the number of off- market sales which occur in this sector. If you’re just looking at the internet or in the paper then you’re simply missing a substantial part of the luxury apartment market.

Canterbury, 18 Milton Street, Doug McLauchlan (Marshall White), after auction, undisclosed above $1,680,000, 2 bidders and a crowd of 60

Third Quarter 2013 Market Summary

Yes , the market is exploding. Demand at the moment is huge. With a Bidderman rate of 2.3 across around 250 $1 million plus auctions a couple of weeks ago, that suggests there are around 580 would-be buyers out there hoping to snap up a property before Christmas.

Compared to the little Putt-Putt Boat of around 90 buyers we had early last year, which could be turned around at the slightest hiccup in the market, what we now is a very Big Ship that is not going to change direction any-time soon. These are the ingredients for a very strong property market ahead of us till Christmas.

Does that sound scary? Do you feel like you’re about to miss out?

Well, if you’re a player with a positive the right mental attitude, these market explosions can be happy ones, as long as you regard them with a glass half-full attitude. Why? Because this is a transacting market – one where you can actually buy and sell better than in a down market. There are lots of good properties out there – unlike last year where they were as rare as hens teeth. You just need to be able to identify the one that’s right for you, and know the strategies to be able to buy it.

Remember, even in this market when everything looks EXPENSIVE – not all homes are the same. Just as in the 2007 market, there is “good expensive” and “bad expensive”. Those that buy the right home now well will be in a far better situation in 2020, than those who snap up just anything hoping to get into the market no matter what.

To those who boast that they bought a home at $200,000 lower than the private sale price all by themselves – with no valuer, no professional advice, no buyer advocate and minimal research – congratulations on buying a home at a price that nobody else wanted in an exploding market.

Buying the right house is not about getting a bargain, it’s about finding a house that is going to suit your family’s needs over the long time. Those who bought well during the last exploding market in 2007 are in a good situation today, confident they could sell their property well if they needed to, but probably not needing to because the house is fulfilling their needs long-term.

So how do you make sure you are the winning bidder on the right house when there are so many others out there chasing the same properties? As we keep pointing out, auction bidding success is not always about who has the most money or the most luck – it is about experience and strategies.

From our recent experience of buying 14 out of the last 18 homes we bid for, against an average Bidderman of 3.5 bidders per auction, and not because our clients miraculously always had the most money, here are our best tips:

Do build relationships

Do get professional advice

Do eat the right foods in the morning and just prior to pass-in late afternoon negotiations

Do understand number psychology

Do recognise that it is possible to buy if your mind is right

The only two don’ts I have for you are:

Don’t buy a home you don’t want (emotionally – life is too short), and

Don’t buy a home that nobody else wants at the price without being fully informed (financially – life is also too short)

Agent Survey: Do you expect the market to stay strong up until Christmas or do you think things will peter out before then?

Madeline Kennedy, Marshall White (Armadale): “I think the market momentum will continue as it is. There are plenty of good buyers out there and urgency is usually the theme for buyers and sellers in the lead up to Christmas.”

Adam Joske, Gary Peer ( North): “We have seen the market go from strength to strength, evidenced by multiple bidders at auctions and beyond reserve results. There seems to be no reason why it should slow down for the remainder of the year. We have over 100 auctions scheduled between now and Christmas, and traditionally we have seen strong demand right through this period. Buyers are becoming aware that if they don’t buy now, offerings will be scarce until late January. This can lead to a buying frenzy, particularly for those wanting to get settled prior to the new working and school year”.

, Nick Johnstone (Brighton): “I think the market will motor along strongly until the end of the year. There has been a lot of stock cleared in the last 14 days, so that should hold prices right up. There is still a huge shortage of good family homes in Bayside.”

, (Hawthorn): “We believe that due to consistent interest rates, quality real estate and buyers always chasing closer proximity to schools and more land, we will see consistent demand for the above until Christmas. As a vendor it’s a great time to capitalise on a very strong market.”

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