oc | Wednesday 26th February

2014 Has Started and It’s Still Hot!

2014 Has Started and It’s Still Hot!

How was your Christmas and New Year?

Was it as busy as the upper end market seems right now?

Welcome to 2014. Please note there was a very small number of $1m+ auctions today – we covered the main three. All Bidderman, Clearance Rates and Stock Graphs will not be working until February 22.

We are starting Marketnews a little earlier than normal because it is all happening; and in fact, we are only two weeks away from our first Super Saturday on February 22nd – which already has over 150 auctions scheduled for Inner East and Bayside over $1m.

From where we stand we can see strong evidence that the market has already started with further upwards impetus on demand and therefore more than likely on price.

Some key “on the ground” indicators.

1)     Having personally already been to in excess of 30 opens you can feel the buzz in

  • the people who are there
  • the agents who are manning the OFI’s – they are smiling (never a great sign for future prices)

2)     Our inquiry level – we have been back two weeks and have already logged over 40 enquiries

3)     Results of late December through January. There has been plenty and we have listed a number of them later in this article.

Please note: Of course these buoyant comments do not apply to every home – eg weaker ones or ones that are seriously overpriced. This weekend’s comments are to give you a general feel.

Off Markets: At the Top End this is an ever increasing market, in other words no sign, no internet – just a buyer agent and a selling agent; each with a client. A discreet deal is done in the best interests of both parties and there is no fanfare.

By way of example we bought 4 homes off market in the immediate week before Xmas:

  • Mt Ida Ave Hawthorn (Paul Richards)
  • Champion St Brighton (Tim Blackett)
  • Malin St Kew (Tim Picken)
  • Ardrie Rd Malvern East (Andrew Luke)

If you have a family home to sell quietly in that $1m to $4m and above range then we have good buyers and we will come visit you. We need to know you’re serious before we bring buyers and for that you need to have a price idea and a contract of sale or be willing to get one within a few days.

36 Beryl Street, , (Bryan Cain, JA Cain), under hammer, $1,382,000, 2 bidders

One of the first auctions for 2014 drew a decent sized crowd for this family home nestled in Beryl Street. Auctioneer Bryan Cain kicked off proceedings with a vendor bid of $1,260,000, suggesting to the crowd that this might be a good place to start. He quickly got the response he was looking for with 2 bidders moving steadily in $10,000 dollar increments. At $1,320,000, after a few inquiries as to whether the was on the market, a quick half-time break was called to confer with his vendor. Mr Cain re-emerged and announced that, yes, the was selling! This inspired the two bidders to continue the fight up to the $1,370,000 mark at which point bidding broke down into $2,500 and $1,000 increments. Some slower bidding followed and finally resulted in the home being knocked down for $1,382,000. An animated crowd, with lots of discussion going on, seemed to show some excitement for this auction, with some interesting predictions and opinions on the coming market overheard. Bring on 2014! (Adam Gardner)

Our Best Advice for Buyers for 2014:

1. Decisions

In buying a home you are going to have to make many, many decisions – even not doing anything is making a very big decision and no matter who you are, you are going to make wrong decisions in pursuit of your conscious and non-conscious shelter outcomes.

The framework (process) on which you operate will determine the damage limits of those poorer decisions and it will also determine the quality and number of the good decisions you make.

Those that balance it best, buy the best homes and live better lives.

2. Fight

As a buyer you need to be or you need to have a warrior – a fighter representing you.

The market is not easy for buyers right now in 2014.

Yes you have plenty of choice but you also have plenty of competition on some and then no competition, except yourself, on others.

To paraphrase Sun Tzu – while you need to be prepared for the fight and at all times prepared to actually fight; the best warriors are the ones that achieve their (clients’) goals with a minimum of bloodshed.

Many buyers do not know what they are getting themselves into, do not know how to get out of it when they are in it and ultimately do not know what it has cost (emotionally and financially) them and their family until it is too late.

3. “The Way”

If you are into Tao then you will understand the concept of “The Way” – Good is very much centred around “A Way” – we have found it’s not the same with each home, it can’t be quantified all the time, it’s almost impossible to explain and therefore many don’t know what it is – yet most inexperienced buyers in negotiations know when they are not on “A Way” (by then it’s too late).

Human negotiations – one of the hardest, yet simplest things!

In the Melbourne Market there is “A Way”.

OUR BLOGS ARE BACK TODAY!

Architect Adam in Boroondara: What will 2014 bring? Well of course that question is hard to answer with total certainty. All we can say is the sentiment from our observations at open houses over the past couple weeks is that the market seems alive.

Call Gina in Stonnington: If buyers are now feeling “hungry,” that is determined and focused, and not just “browsing,” the next few weeks will show us what vendors are doing.

Klarity Kris in Bayside: Some of the unsuccessful sales of 2013 have resurfaced for 2014, under the same or new agencies and there is anecdotal and other evidence that stock left in the system through Christmas has been clearing..

Vino Guy in Port Phillip: Early indications suggest that we may see a spike again in the early parts of 2014. The combination of quality stock and many market-ready buyers usually results in a very transactional market.

Back in the saddle: Mark Earle (Buxton) at 46 Stanley Street, Black Rock

46 Stanley Street, Black Rock (Mark Earle, Buxton), after auction, $1,140,000, 1 bidder

Running fashionably late, those that had come to witness their first auction of 2014 sought refuge from the sun whilst waiting for proceedings to get underway. Expressing gratitude to selling agent Vish Prashad for having the foresight to schedule the auction at 10.30am, before the temperature really soared, auctioneer Mark Earle pardoned himself if he seemed rusty having just come back from the summer break. A crowd of around 40 grew as Mr Earle launched into his spiel, acknowledging the odd neighbour or two among the crowd.  The call for an opening bid was met by bird song but to get things started an opening vendor bid of $1,040,000 was tabled. Still there were no hands in the air and another vendor bid took the price to $1,100,000.  Before long a live bid came and without leaving us all roasting for too long in the sun, the property was passed in with negotiations to take place behind closed doors. The property was bought some time later for $1,140,000. (Karen Bumpstead)

Agent Results and Comments which we have collected in our travels, coffees and direct negotiations since Australia Day.

Michael Gibson of Kay and Burton was involved in 2 sales over $10million in January – if he has another year like last year somebody will offer to float him personally on the stock exchange. Hopetoun Road around $15m and an off market also into the double figures.

Tim Derham of Abercromby’s reported strong pre and post interest with his company and forwarded evidence with

  • 367 Cotham Road Kew over $5.5m
  • 8 Chilcote Avenue Malvern just under $4.5m
  • 59 Marne Street South Yarra towards $3.4m

Marcus Chiminello, Marshall White (Armadale): “On a company and personal perspective, the $3m plus market finished strongly and has started early. We can already identify new buyers entering the market coupled with those that are still looking from last year will see considerable strength and demand for property across most price points in the first half of 2014. This is evidenced by some of these highlights over the Christmas/New Year period:

  • 4/3 Douglas Street Toorak – in excess of $3.5m
  • 1/36 Washington St, Toorak – in excess of $6m
  • 9/11 Trawalla Ave Toorak – around $4m

Ian Jackson, Kay & Burton (Brighton): “In January we sold 12a Manor Street, Brighton, for $3.5m, which was the asking price. We have seen solid inquiry at the higher $3m level, and 38 Cochrane Street, Brighton has just gone on the market (expressions of interest above $3m). In terms of buyers, we have seen quite literally, since Christmas and the holidays, solid inquiry and qualified buyers above $3m.”

Nick Johnstone, Nick Johnstone Real Estate (Brighton): “We have had some big sales over the summer including 5/9 St. Ninians Court, Brighton for just under $4.5m and 3/16 North Rd, Brighton, around $3m.

John Bongiorno, Marshall White (Armadale): The real estate market in 2014 has started in fantastic fashion in most price ranges, including the $3m+ price range – we have seen inquiry and attendances at OFI’s up on 2013 – with retail sales over Christmas up positively and interest rates on hold, 2014 looks to be a great year for anyone considering upgrading, buying and/or selling.”

  • 3/36 Washington Street Toorak – $5,450,000
  • 25 Beach Street Port Melbourne – $5,175,000
  • 49 York Street, St Kilda West – $4,000,000
  • 9 Waterloo Street, Camberwell – $3,950,000
  • 2 Newbay Crescent, Brighton – $3,600,000
  • 3/15 Lansell Road Toorak – $3,450,000
  • 46 MacFarlan Street, South Yarra – $3,200,000

Michael Coen, Hocking Stuart (Albert Park): “2013 was certainly one of the most exciting years in real estate in the last five years. The real estate market was in a clear growth phase with continued buyer confidence, falling interest rates and low stock levels of properties on the market. These contributing factors combined to result in consistent weekly clearance rates of 80% approx and record results being achieved in all price ranges and property types.

With the dramatic improvement in the market of the previous year, 2014 should be another strong year and should encourage more vendors and buyers into the market and underpin a rise in transactions, contributing positively to the health of the real estate market.

Torsten Kasper, Chisholm & Gamon (Elwood): “We have found a 50% increase in buyer enquiry in the $2.5m+  market.”

Doug McLauchlan, Marshall White (Hawthorn): “Of approximately 100 properties offered for sale in Boroondara, across all agencies in the $3m+ range in the second half of 2013,  89 properties were sold with most experiencing multiple buyer interest, whether auctions, private sales or expressions of interest. This was an encouraging clearance rate after two years of relatively little activity in this price sector and augers well for the early part of 2014 for which somewhat more stock in this market sector appears to be coming to market.”

Kaine Lanyon, Marshall White (Albert Park): Now that everyone is well and truly back from their summer breaks, there is plenty of market activity. Open homes over the last 2 weekends have been very well attended and we are seeing many new buyers that have entered the market since the big man has inched his way down the chimney.

Richard Earle, Jellis Craig (Hawthorn): “The $3m+ market prior to Christmas was strong across Boroondara. Even those in the high $2m’s that had missed at auction were all sold, including some architectural extensions. One property in Ivanhoe sold close to $9m and  one property in Blythswood Court, Kew ended up selling in excess of the asking price which was over the $3m mark . Over January 2014,  the market was quiet with holidays for all. However  the end of  last year has produced strong inquiry at $3m plus.   Looking ahead towards Easter there are some exciting offerings around Boroondara. Recently, 206 Mont Albert Road, Canterbury in the golden mile had 21 groups through a mid week open in 40 degree heat.

The residential market settings are in line with the general economy  with stable interest and exchange rates, and the best properties in the premier streets will continue to be perceived by the market as being a safe haven for  both capital growth and lifestyle.”

Editor Note: I was at that open and it was packed – check out our rating at www.james.net.au and type in 206 Mont Albert Road or Google

Glen Coutinho, RT Edgar Boroondara (Kew): The market in-excess of $3m, closed very strong last year and has opened up this year with a positive mindset. We have already listed quite a few $3m+ properties and enquires is quite strong already. This is partly because properties in excess of $2m have increased substantially to allow people to upgrade to the next step which is over $3m. There is also a reasonable demand for properties at $3m+ for people are scaling down from properties over $5m.”

Jeremy Fox of RT Edgar was equally buoyant on the pre Easter 2014 market and pointed to recent sales at

  • 7 Selborne Rd, Toorak ($5,000,000 plus December)
  • 32A Walpole St, Kew ($5,000,000 plus, December)
  • 6 Hampden Road Armadale for just under $6m.

And some more around the grounds

  • Kay & Burton 81 Kooyongkoot Rd, Hawthorn ($3,000,000 plus, December)
  • Marshall White 20 Studley Av Kew, ($3,000,000 plus, January)
  • Bekdon Richards, 10-12 Trafalgar Rd, Camberwell, ($5,000,000, December)
  • Jellis Craig, 37-39 Rochester Rd, Canterbury, ($5,760,000, December)
  • Kay & Burton 11 Grant Av, Toorak ($5,000,000 plus December)
  • Hodges 23 Dawson Av, Brighton ($3,980,000, January)

So that’s a very brief snapshot of the market since we last communicated and next week our focus will be what can you do to give yourself the best chance of getting the home you really want in 2014.

Hot auction: Bill Stavrakis (Biggin & Scott) at 25 Gordon Street, Elsternwick

25 Gordon Street, Elsternwick, Bill Stavrakis (Biggin & Scott), under hammer, $1,222,000, 5 bidders

Fortunately for the crowd of 70 there was plenty of shade at 25 Gordon St when auctioneer Bill Stavrakis stepped outside and took centre stage. Mr Stavrakis started off by offering the crowd water and letting everyone know this was the third time in 25 years he would (hopefully) have sold this property. Shortly after the preamble ended the first bid came from the crowd for $1,000,000, which Mr Stavrakis gratefully accepted. Shortly after a second bid came for $1,010,000 and the auction was underway. The price rose between the first two bidders before a third entered the contest. At $1,175,000 agent Angelos Stefanis announced the home had “hit reserve and we are selling!!” Two more bidders entered the contest and eventually the price reached $1,222,000 at which point it was knocked down to a buyer bidding from inside the home – the only  party to bid from the air conditioned living room, while the others were all outside in the scorching sun. There were 5 bidders on the day. (Daniel Ehrenreich)

James Apology for late 2013

At Denbigh Road Armadale, at a Jellis Craig Bennison Mackinnon auction conducted by Iain Carmichael late last year 2013, (after we had finished Market News) we were the “winning bidder”.

As we went to sign, our client informed us that was not what they had wanted to do. If it was not for the totally professional dealings of Iain Carmichael and the whole  Jellis Craig Bennison Mackinnon team who managed to salvage the situation for their vendor with another buyer in very difficult circumstances, then it could have become very ugly. As the leader of the James Group, I genuinely apologize to the other buyers, to the seller and to Iain and his team.

For avid readers of Market News you will recognise this is the second time this has happened. We take many written and face to face precautions to prevent this from happening and we could give reasons as to why this has now happened for a second time. But we are not going to do that, as that would mean we are totally missing the point and the message we are receiving. We have improved our auction training with an additional section designed to better recognise stress freezes. In both cases our clients are fine and one has since bought and we are still working for the other.

Jellis Craig Bennison Mackinnon did not ask for this apology – however we felt it appropriate as we believe in an open and transparent auction system. Even though we have completed well over a thousand auctions without incident, we recognised we needed to look into this and we have and we are continuing to do so.

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