oc | Thursday 23rd January

Lots of Stock Splintering the Market

What's happening with this market Kevin? 1/29 Huntingtower Road, (Kevin O'Brien, Bennison Mackinnon), under hammer, $1,625,000, 6 bidders and a big crowd of 110

At 6.00pm on Saturday the James Clearance Rate for Melbourne’s $M+ was 53% on the 38 auctions we covered. The Weekly Review Bidderman, our bidders per auction measurement, was at 2.3.

This market is really splintering down the middle, and this weekend’s stats show this starkly. When you’ve got a clearance rate down to 53%, and Bidderman up at a strong 2.3 bidders per auction, it’s clear sign that the market is focusing on the “goodies” and ignoring the “not so goodies.”

Look at the rates for Ducks and Volcanoes. They represent over half the auctions – and are almost equally split between no bidders and lots of bidders.

  • Ducks (no bidder auctions) – 24%
  • Lone Rangers (1 bidder auctions) – 16%
  • Norms (2-3 bidder auctions) – 32%
  • Volcanoes (4+ bidder auctions) –28%

Market Summary

Last week was the first real hiccup we’ve seen in the Inner Melbourne auction market this year. With clearance rates in the sixties, and Bidderman at a very low 1.3 bidders per auction, the market sat up and took notice.

What did this mean?

Was last week the start of a big slump like the Pies had at the end of the season, or was it just an off week like had on the way to another premiership?

In our opinion, last week was the start of something, but of neither of the above. In our opinion it was the start of a more splintered market. Almost half the auctions we covered last week had no bidders and this week again there were a significant number of the Top End Properties with no bidders. However, the goodies had lots of interest – check out the volcano stat above!

Two reasons for this splintering market:

  1. The incredible amount of choice out there at the moment means that unless a home is an A-grader or a well-priced B-grader, it is no longer an automatic sell. This is creating an easing of demand per property. Why? Right now in late Spring this easing of demand per property is due mainly to the sheer volume of what’s on offer. This weekend was a Big Saturday (100+ auctions) and there’ll be another Big Saturday next weekend  (100+ auctions), and then we’re up for a Super Saturday (150+ auctions) on November 30th.
  2. Price – Some vendors are getting ahead of themselves. Nothing wrong with that. Except that in this market they may well be punished by no sale, whereas in early Spring that was not happening as often.

Right now, just as a buyer stretching to buy a property has to ask themselves: Am I buying a price or am I buying the property, the market is asking sellers the same sort of question: are you selling a property or are you selling a price? That’s a big difference in strategies!

BUT, and it’s a very big But: When the property has the right 3Ps – Price, Property and Position – how sweet the market is for sellers. That’s the splintering effect.

Let’s look at two sales in Toorak to prove a point.

Both were land sales. We had tentative interest in both at around the quote level, but, as we told our clients, we knew we were never going to be serious contenders. While the homes may have been quoted with an eye on the reserves, they were not quoted with an eye on the expected final result.

So while both went miles over the reserve, they didn’t go miles above the professional estimated buying range.

11 Tashinny Toorak – This was 511 square metres of north-facing rear land with two period apartments that needed serious renovation.  The quote was around $1.7m, but the agents (Scott Patterson and Michael Armstrong) expected more and said so. We put the range at $2.1m to $2.5m, expecting it to go in the low $2ms. It was declared ‘on the market’ fairly at $1.85m, and with 6 bidders it pushed through to $2,395,000. This price put land at $4,700 per square metre, strong for that little pocket but normal for other land nearby, such as the nearby Dunraven precinct.

6 Verdant Toorak (Philippe Batters) – On 836 sqm, this was one of the best mid-sized Toorak blocks offered in a long time – we rated it at 761/1000. The $3m+ quote was courageous – with two street frontages and wide and Verdant Ave. We thought it might go for perhaps around $4m, or maybe more, so the final result of $4,445,000 after four bidders had fought it out was not a complete shock but it was still very strong. This says great land down near the Royal South Yarra Tennis courts is worth $5,300 per sqm.

In two places not that far apart you had 10 bidders (plus those that didn’t speak up) putting the price of land – no house – at circa $5,000 sqm. So, yes, there is still a very strong market for properties with the right PPPs.

All the Ps above were good – Position, Property and Price. The smart agents got these A-graders on the market quickly and then let nature take its course. It’s a very different story from a number of pass-ins where the agents and sellers wanted a price that the market did not support.

This is what is happening out there since Melbourne Cup – buyers are more discerning and if it’s not right they are moving on. This is a change from a month ago.

That is the splintering effect we are talking about.

Now is this smart for buyers? Let’s wait and see. Our thoughts as buyer agents is that if you as a buyer see the right one, you should consider going for it (within reason).  Because there is no guarantee  that we’ll still see this amount of choice next year – even if many of today’s underbidders are assuming that will be the case.


What's happening with this market Andrew? 17 Wyuna Road, Caulfield North, (Andrew Hayne, ), under hammer, $2,060,000, 2 bidders

Biggest Auctions:

  • Toorak, 6 Verdant Avenue, Philippe Batters (Williams Batters), under hammer, $4,455,000, 4 bidders
    Philippe Batters, in his matter of fact style, started on time and explained why this was a good buy….(See More in Auction Reports)
  • Kew, 50 Fellows Street, Steven Abbott (Jellis Craig), after auction, $4,100,000, no bidders
    A touch of Paris in the springtime, in Kew as the sun peeped out for this late afternoon auction…(See More in Auction Reports)
  • South Yarra, 46 Macfarlan Street, John Bongiorno (Marshall white), under hammer, $3,200,000, 4 bidders
    It took a bit of time for both auctioneer and crowd to warm to the task here. Auctioneer John Bongiorno spoke of being blown away by the renovations that the owners had created…(See More in Auction Reports)


  • Toorak, 11 Tashinny Road, Scott Patterson (Kay & Burton), under hammer, $2,395,000, 6 bidders
    A rare offering was put forth by auctioneer Scott Patterson today, and 80 people turned up to see what would pan out for this pair of flats being sold as one…(See More in Auction Reports)
  • Armadale, 1/29 Hungtingtower Road, Kevin O’Brien (Jellis Craig Bennison Mackinnon), under hammer, $1,625,000, 6 bidders
    Auctioneer Kevin O’Brien could hardly believe his good fortune on Huntingtower Road this morning when his single storey courtyard home smashed through the reserve of $1,200,000…(See More in Auction Reports)
  • Elwood, 5 Tennyson Street, Dannie Corr (Whiting & Co), under hammer, $1,425,000, 6 bidders
    An unusual selling strategy was used here. The reserve for this large Queen-Anne home, with its polished original timber panelling, had been published, and draws a large crowd of 100 or so…(See More in Auction Reports)

Biggest Pass Ins:

  • Canterbury, 27 Faversham Road, passed in, $3,600,000, no bidders
    This property was so big that it felt like you were transported to your own world such was the tranquility that was felt standing in the backyard….(See More in Auction Reports)
  • Toorak, 8 Myrnong Crescent, passed in, $2,800,000, no bidders
    The auctioneer welcomed the 35 people who had turned up to the auction of this inter-war family home with an impressive street presence overlooking Kooyong Park…(See More in Auction Reports)
  • Hawthorn, 27 Glenroy Road, passed in, $2,750,000, 1 bidder
    A succinct and descriptive opening by our auctioneer was followed by a lacklustre auction with only one bidder keen to test the waters…(See More in Auction Reports)


Agent Survey: “The top end struggled last weekend, why do you think that might have been the case?”

Peter Kennett, (): “Buying houses (especially the top end) is put on hold and always will be over this week (due to the Spring Racing Carnival). I think the real buyers will now start to refocus over the next four weeks, as they realise that the won’t start to pick up again until next March. I expect some very solid purchases between now and Chrtistmas.”

Chris Hassall, Buxton (Bentleigh): “Our ‘top end’ of the market is going strong. I can’t speak for other suburbs, but our Bentleigh market is selling extremely well at the moment.”

, Marshall White (Armadale): “I wasn’t aware of much volume at the top end last weekend in . However anything top end not selling is price-related generally. Although, as the air is generally a little thinner, sometimes you just have to be patient as the right buyer can take some time to appear.”

Richard Winneke, Jellis Craig (Hawthorn): “I have never been one to recommend selling a family home (around the time of) the spring carnival. Many young families head away over the long weekend or go to the races. It is very risky selling your biggest asset during a time when potential buyers are distracted by holidays/sporting events. My advice has always either sell late October or Late November.”

Come on Gerald, what's happening with this market? 8 Myrnong Crescent, Toorak (Gerald Delany, Kay & Burton), passed in, $2,800,000

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