oc | Thursday 23rd January

Interested in Expressing Interest?

A home among the gum trees: Alastair Craig () at 15 Hastings Road, East. Bought after auction for an undisclosed amount above $1,925,000, 2 bidders

With the break in traffic due to last week’s long weekend, how did we finish up this weekend after the shaky Second Super Saturday a fortnight ago?

At 6.00pm Saturday the James Clearance Rate for Melbourne’s $M+ was 66% on the 35 auctions we covered. The Weekly Review Bidderman, our bidders per auction measurement, was at 1.7

Overall Summary of Melbourne’s Million Dollar Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 28%
  • Lone Rangers ($M+ auctions with one bidder) 19%
  • Norms ($M+ auctions with 2 or 3 bidders) 37%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 16%

That’s a win to the Norms, followed by a lot of ducks at the auctions we attended.

What does all this mean? For us it seems the market at this point in time is probably flattening overall – meaning that prices are leveling  after a staircase rise that began in October 2012 and went all through last year and into 2014.

Hold on – what does overall mean?

It means that while this is a general trend, it’s not the case in every segment. For instance, homes in Boroondara that are drawing strong Chinese interest are still going gangbusters. But the overpriced B-graders and all the C-graders, i.e. the ones needing  a big reno and where the price is not quite right, are not showing the same results as they did just a few months ago.

Hold on – what does ‘probably flattening’ mean, and what is a staircase rise?

If you look back over the articles and graphs of 2013 you will see an overall significant advancement in the market i.e. price increases. But this has not occurred in a consistently upward straight line.

What has happened typically is that one month the market seems a bit flat (the landing) and the next month it has another growth spurt (the stair rise), giving the price chart over the year the look of a staircase rise.

This year we started with a stair rise, and then the markets this weekend and the one before the long weekend (March 1st) have both been flattish.  It’s not terrible, not a shocker – just not as bullish as before (overall) – therefore a stair landing.

Let’s see how the next two weeks go before we start to speculate as to any significant market directional change.

Next weekend has a similar middling number of $1 million plus auctions to this weekend. And then the last week in March is looking like it will be another Super Saturday or very close to it, with around 150 $M+ auctions scheduled in Inner East and Bayside. Some good homes are scheduled too, so we will have a good market to base our opinions on.

Our advice to clients right now is – don’t just assume it’s a runaway auction. Make sure you turn up with 1) a bidding strategy and 2)  a pass-in strategy also.

At a pass-in you need to think about how you are going to work through your thoughts if, say, you are the “winner” on the street at $1.8m but the auctioneer says you still need to give him another, say, $300,000 at the pass-in negotiations to buy it – especially if you were the only bidder.

On the flip side, look at the Bidderbuzz auctions below – if you went to any of them this weekend hoping for no interest then you would have left without a home and very disappointed.

In a flattening market you begin to see fracturing results – i.e. a disparate number of bidders and prices paid. Some are hot and some are not, which is what we feel may be the market we are moving into. But a week is a long time in the Melbourne market – so stay tuned.

Biggest Auction: 29 Hopetoun Road, , Mark Wridgway (), under hammer, $6,008,000, 2 bidders

Biggest Auctions:

  • Toorak, 29 Hopetoun Road, Mark Wridgway (RT Edgar), under hammer, $6,008,000, 2 bidders
    Two years ago this home had failed to find a new buyer, but today, under the expert guidance of auctioneer Mark Wridgway…(See More in Auction Reports)
  • Camberwell, 54 Glyndon Road, John Bongiorno (Marshall White), under hammer, $3,430,000, 4 bidders
    John Bongiorno and Duane Woloweic decided to invite the crowd in to the front garden for the auction of this Camberwell…(See More in Auction Reports)
  • Carlton, 170-174 Cardigan Street, Arch Staver (Nelson Alexander), after auction, $3,400,000, 2 bidders
    Carlton on a Saturday is certainly the place for street theater. 40 additional people joined the initial crowd of 62 while auctioneer Arch Staver presented his preamble…(See More in Auction Reports)


  • Elsternwick, 33 Hopetoun Street, Bill Stavrakis (Biggin & Scott), under hammer, $1,705,000, 5 bidders
    It seemed like only yesterday I was standing in almost the same location in Hopetoun Street, Elsternwick, the scene of many auctions in 2013…(See More in Auction Reports)
  • Brighton, 31 Lynch Street, David Hart (Buxton), under hammer, $1,510,000, 4 bidders
    It was one of those sultry, gusty, undecided mornings as auctioneer David Hart took up position outside this “elegant and stylish” three-bedroom…(See More in Auction Reports)
  • Elsternwick, 1 Rupert Street, Bill Stavrakis (Biggin & Scott), after auction, $1,535,000, 4 bidders
    With the hum of Formula 1 cars in the background it appeared there was no escaping a car racing theme to this auction…(See More in Auction Reports)

Biggest Pass Ins:

  • Prahran, 15 Wynnstay Road, passed in, $3,755,000, 1 bidder
    Only one bidder took part in this Prahran auction, with Gowan Stubbings at the helm….(See More in Auction Reports)
  • Malvern East, 73 Finch Street, passed in, $3,000,000, no bidders
    Walking through this home in the few minutes before the auction gave me the feeling that there was some serious buzz in the air…(See More in Auction Reports)
  • Brighton, 2A Higinbotham Street, passed in, $2,250,000, no bidders
    French provincial, ultra-modern and classic weatherboard homes provided the stage setting for the auction of this three-bedroom…(See More in Auction Reports)

Glen Iris: 8 Wallis Avenue, Steve Burke (Hocking Stuart), under hammer, $1,441,000, 3 bidders

‘Round the Grounds


  • Camberwell, 3 Maple Crescent, Doug McLauchlan (Marshall White), under hammer, $2,100,000, 3 bidders
    With the entire crowd lined up along the fence Doug, McLauchlan is keen to get things underway…
  • Glen Iris, 8 Wallis Avenue, Steve Burke (Hocking Stuart), under hammer, $1,441,000, 3 bidders
    Steve Burke was in charge of proceedings today to auction this interesting home backing onto Ferndale Park…(See Architect Adam’s blog for more Boroondara action)


  • Hampton, 9 Avelin Street, John Clarkson (Hocking Stuart), after auction, undisclosed around $1,200,000, 1 bidder
    A school fair was being held just around the corner from this Hampton auction and there were people and cars everywhere!…(See Klarity Kris’s blog for more Bayside action)


  • Armadale, 12 Ashleigh Road, passed in, $1,900,000, no bidders
    This leafy street in Armadale, a stone’s throw from High street, presented a convenient gathering spot for neighbourhood families this morning…
  • Malvern, 75 Stanhope Street, Marcus Chiminello (Marshall White), under hammer, $2,370,000, 3 bidders
    At 75 Stanhope St, Malvern Marcus Chiminello kicked off proceedings with a vendor bid of $1,750,000…(See Call Gina’s blog for more Stonnington action)

Port Phillip:

  • Elwood, 23 Byron Street, Bill Stavrakis (Biggin & Scott), passed in, $1,100,000, no bidders
    Auctioneer Bill Stavrakis began proceedings by giving a rousing description of 23 Byron Street Elwood. Position, renovation – the works…(See Café Guy’s blog for more Port Phillip action)

Carlton: 170-174 Cardigan Street, Arch Staver (Nelson Alexander), after auction, $3,400,000, 2 bidders

Expressions of Interest

More and more of the $3m plus homes we are involved with are being transacted through an Expression of Interest Campaign.

The latest two Masterclass Articles gave you some guidelines on the thinking parameters we would recommend you establish before you get involved in an Expression of Interest, and your thinking during the actual EOI campaign.

For our increasing number of new readers, Masterclass articles can be found in the grey navigation bar at the top of this page. The purpose of Masterclass articles is to give you a more in depth look into the issues buyers face in the $M+ Melbourne Market today.

PART 1 – Expressions of interest – How to Deal in the Fog

Expressions of Interest might seem straightforward. You put in your price and a deal is done. But you need to understand the unwritten rules – because in a way what they are a game of poker, of bluff and counter bluff, of manoeuvring, of patience and of risk – with high stakes, indeed very high stakes for all involved, and few or no rules.

For the full article:


PART 2 – Expressions of interest – The Results

Well, by March 1, the agents Kay and Burton had received expressions from four interested parties. Three of these were invited to a Boardroom discussion. This was a little unusual in that the seller’s reserve had not already been met……….

For the full article



Agent Survey:  Expressions of Interest

Peter Vigano, Jellis Craig (Hawthorn):

“EOI has traditionally been a sale method which explores buyers opinions on what the property is worth.  It is not a preferred method of sale for many vendors as it does not create a competitive environment as buyers cannot see who they are competing against.   Agents sometimes use this method if they believe the owner’s expectations are well above the market.   Personally I have not found the EOI method to be effective, as buyers have waited for the close date to arrive then asked what offers have been received and we end up going to a Private Sale.  The owner’s price in most cases is well above market .   Most properties which have been sold via an EOI method have taken 120 days or longer to sell.  Properties which have been auctioned sell within 30 days on average.    The sale price has been in some cases 20% below the vendor’s initial asking price via EOI.  Owners going to auction have achieved upwards of 20% above their reserve price with a competitive auction.”

Jeremy Desmier, Fletchers ( North):

EOI vs Auction:

“Theoretically Expressions of Interest with a closing date, effectively a tender, will achieve the highest price for a seller.  The argument goes that it forces buyers to place their absolute best price on the table, for fear of missing out to another buyer (who might or might not actually exist).  In contrast, theoretically, an auction only achieves one bid more than the second highest bidder.

In practice, we observe this process working quite differently.  Many buyers dislike the lack of transparency in an EOI situation, and still hold back in regards to the level of their bid/offer.

Also, in an auction situation, buyers usually appreciate the transparency, and benefit from the right to respond with an additional bid.  Buyers will often take some confidence from the fact others see value at a price point, and extend beyond what they would otherwise have paid.   Sometimes this is referred to as an “emotional” price, with negative connotations that they have overpaid.  I think in the vast majority of cases it is simply the “competitive” price, and by that I mean the price required to secure a in a competitive market.

For many buyers, particularly for a medium to long term family home, the fact of actually securing the home is more important to them than if they paid a little more or a little less in the short term, so the transparency of auction can often be to the benefit of both the seller and the buyer. It is not generally a winner/loser relationship between buyer and seller.

I have conducted numerous Expressions of Interest campaigns, and often with great success, but for the reasons stated above, I tend to recommend auction in most instances.

My comments above are predicated on a marketplace where there will be general or widespread buyer appeal.  For a particularly unique property, or one that may ultimately appeal to an individual buyer, then I certainly believe that Expressions of Interest can be a very effective sale method.”

Mark Wridgway, RT Edgar (Toorak):

“Upcoming EOIs  – we have a great property at 16-18 St Leonards Crt .  The benefits allow a more low profile sales process to take place, by contrast to a public auction, and enables the vendor to be more flexible on terms/conditions which sometimes can’t be accommodated at an auction. It also provides the framework to the best price when one purchaser may be willing to pay a significant amount more than the next best bid. These usually suit higher end properties where there may only be 2 or 3 buyers, with a reasonable gap between each buyer’s best offer. The closing date also provides the mechanism to ensure the transaction can be completed in a timely fashion. In addition the EOI has the benefit that if 2-3 buyers are all close in price it is quite common for us to convene a private auction or (boardroom auction), which in some instances can produce a sensational result.”


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