oc | Wednesday 22nd January

Balwyn – not Toorak or Brighton – saw 40% of this weekend’s $3m+ sales

Going, going, gone! Robert Ding (Marshall White), sells 11 Frederick St, Balwyn, under the hammer for $2,580,000, 2 bidders

At 6.00pm Super Saturday, the James Clearance Rate for Melbourne’s $M+ was 71% on the 38 auctions we covered. The Weekly Review Bidderman, our bidders per auction measurement, was at 2.1. Both stats are up on the last few weeks.

Overall Summary of Melbourne’s Million Dollar Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 26%
  • Lone Rangers ($M+ auctions with one bidder) 17%
  • Norms ($M+ auctions with 2 or 3 bidders) 37%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 20%

Market Summary

2014 is still motoring along very strongly. The lull we reported of the last few weeks seems to have been nothing more than another stair landing in the continuously rising price-staircase which began in October 2012.

This weekend was another Super Saturday, with over 150 Auctions in Melbourne’s Inner east and Bayside. It was a very solid test, in that bidders were spread out over a large number of auctions – i.e. there was significant choice. The bidder depth held up, in fact it increased marginally. Bidderman is now back up over 2 bidders per auction – this is strong.

As you can see, all four of our measurement dials are back in the red zones – not the green zone that says steady as she goes, but the red zone that points to further market rises.


And, to take Bidderman one step further: if you look at the roughly 200 $1 million plus auctions that took place across all of Melbourne, with a Bidderman of 2 that means that not only were there 200 buyers, there were also 200 bidders who missed out – i.e. “wounded” bidders. Most of those “wounded” bidders are not discretionary buyers – they have to buy and next time they will be more aggressive on price, even if only a tad.

However, after next week it gets very tight for new stock going into the school holidays and Easter. So the pool of choice will diminish. That means many of those 200  “wounded underbidders” may well be competing against you over Easter but on lower stock levels. That means we’re likely to see 200 underbidders competing not on 200 homes, but on, say, 100 good homes which would double the bidders. If that number is spread out over 50 good homes, that will be four times the bidder strength we saw this weekend.

As you know, the greater the depth of Bidderman, the higher prices are likely to go.

So what to do as a buyer? Maybe it’s time to wait until the steam goes out of the market?

For those buyers still waiting on the edge for a downturn – good luck. I’m not sure that is a proven good strategy. This is where we think market prices have gone in the last decade.

But surely it can’t last forever!!!

Why has our market been so good for so long and will it last?

The Chinese Community – Simple and .

The reason our market has been so good for so long is very simple – the overseas Chinese community.

Here are the top ten reported sales on Saturday. 40 per cent of those sales were in Balwyn for new homes or blocks to build new homes. Where is , where is Toorak? North Balwyn and Balwyn reported 13 bought from a reported 15 auctions. had 9 bought from 16 and Toorak and South Yarra just 7 from 12.

The Top 10 reported on Saturday

  • 14 Selwyn Av, ELWOOD – Above $3,600,000
  • 21 Monash Av, BALWYN – $3,520,000
  • 17 Rolls Ct, GLEN WAVERLEY – $3,416,000
  • 65 Metung St, BALWYN Above $3,200,000
  • 30 Wills St, KEW Above $3,000,000
  • 4 Mt Ida Av, HAWTHORN EAST  $3,235,500
  • 69 Alfred Cr, FITZROY NORTH  $3,140,000
  • 2 Barnsbury Rd, BALWYN Above $3,000,000
  • 9 Fairfield Av, CAMBERWELL  $2,888,000
  • 65 Yarrbat Av, BALWYN $2,850,000

So how long will it last?

This is my potted history of Chinese involvement in Melbourne’s market.

1973: I went to Camberwell Grammar in the early 1970s (I’m not sure they want me to advertise that fact – it could be bad for new enrolments). Camberwell Grammar is in Balwyn and a number of my classmates at that time were Chinese.

1983: Chinese start buying into Doncaster and Box Hill, which were then more affordable suburbs. I grew up in Doncaster.

1993: After economic reforms start having an impact in China, wealthy overseas Chinese start buying into premium Melbourne suburbs such as Balwyn and . Why? Private schools. Chinese people want to give their children the best education (see 1973) and now a few could also afford to buy a home near the schools of their choice such as Carey, MLC, Scotch and Camberwell Grammar. But it was still difficult under Australian buying laws for overseas people.

2000: With restrictions on what Chinese people could buy and Chinese wealth increasing, off -the-plan properties became popular for many Chinese buyers. There were very few restrictions on Chinese people buying new properties and Chinese people were used to buying new apartments. High rises went up left, right and centre in Melbourne, many on the back of Chinese money.

2005: Chinese wealth had increased dramatically over the last two decades and as Chinese buyers became wealthier they also became more sophisticated in their knowledge about Melbourne properties and Toorak became a place where land banking became popular. It still is today.

2009: Australian government changes the laws making buying “second-hand” family homes in Australia a lot easier for Chinese people. This one decision really brought the Inner Melbourne property market out of the GFC a lot quicker than other countries.

2013: By this time, every one of the bigger buying or selling real estate agencies, ourselves included, has at least one Mandarin-speaking staff member.

2014 : At this weekend’s Super Saturday, 40% of our Top 10 $3m+ sales were in Balwyn, rather than Toorak or Brighton.

So in my 55 year history I have seen this equation of simple demand (increasing Chinese buyers) versus supply (no new land in Inner Melbourne) push prices up and up and up. I cannot see anything changing anytime soon. So waiting for the market to turn in 1970, 1980, 1990, 2000 and 2010 hasn’t in my mind proven to be a winning strategy. If you see the right home for you (emotionally, physically and financially) then you should buy it now.

Footnote 1): You may be interested to know that for a number of our Chinese clients, one of the reasons we are engaged is that they are concerned what other Chinese buyers may do and they don’t want to miss out.

Footnote 2): Auctions in Bayside see around half  the number of people attending as in Boroondara. A good auction in Brighton has 40 people while in Kew it would be 80. The Chinese community is nowhere near as well established in Bayside as it is in Boroondara.

Why not? There are some great private schools in Bayside! St Leonards, Haileybury, Grammar …….

Its a historical thing. But you can see more and more Chinese people considering say other areas such as Brighton when:

  • Chinese people become more comfortable with Bayside as a place to live, and
  • Demand in Boroondara and then Stonnington forces some Chinese people to consider other options.

Over time the Chinese community demand and supply equation will have the same effect in Bayside as it has had in Boroondara, unless China’s wealth begins to diminish.

Bentleigh: Ian Whiteside (Marshall White) sells 26 Phillip St under the hammer, $1,668,000, 6 bidders and big crowd of 150

Biggest Auctions:

  • Elwood, 14 Selwyn Ave, John Bongiorno (Marshall White), under hammer, $3,880,000, 3 bidders
    Located between Ormond road and the beach, a large renovated Federation home on 940sqm of land…(See More in Auction Reports)
  • Camberwell, 9 Fairfield Ave, Michael Hingston (Jellis Craig), after auction, $2,888,000, 3 bidders
    I turn up to this auction at Fairfield Ave, Camberwell in anticipation of a exciting auction – I hear it might go pretty well…(See More in Auction Reports)
  • Hawthorn, 8 Lawes St, Scott Patterson (Kay & Burton), under hammer, undisclosed above $2,500,000, 5 bidders
    Around 100 adults and quite a few children spread out at the top of the hill of this cul-de-sac…(See More in Auction Reports)

Bidderbuzz:

  • Malvern East, 30 Turner St, Justin Long (Marshall White), under hammer, $2,240,000, 7 bidders
    Seven bidders were handled adroitly in a lengthy 30-minute battle for 30 Turner Street…(See More in Auction Reports)
  • Bentleigh, 26 Phillip Street, Ian Whiteside (Marshall White), under hammer, $1,668,000, 6 bidders
    A huge crowd of upwards of 150 lined the street in front of auctioneer Ian Whiteside who was determined today…(See More in Auction Reports)
  • Elsternwick, 92 Seymour Road, (), under hammer, $1,315,000, 5 bidders
    “Welcome to Elsternwick” cried auctioneer Gary Peer who had plenty of local knowledge to talk about…(See More in Auction Reports)

Canterbury: 34A Maling Road, passed in, $4,200,000, big crowd of 200 people

Biggest Pass Ins:

  • Canterbury, 34A Maling Road, passed in, $4,200,000, no bidders
    A massive crowd of approximately 200 turned out to see what would happen at Maling Road…See More in Auction Reports)
  • Brighton, 2 Chatsworth Ave, passed in, $4,000,000, 1 bidder
    It was an idyllic autumn day which hosted the auction of this five-bedroom, two-bathroom 1920s home…(See More in Auction Reports)
  • Middle Park, 185 Beaconsfield Parade, passed in, $3,400,000, no bidders
    With yachts sailing across the bay in the morning mist, a group of 60 gathers to see the auction of  ‘GRANVILLE’…(See More in Auction Reports)

Kew: Richard Earle (Jellis Craig), sells 6 Rockingham Close, Kew, under the hammer, $2,105,000, 5 bidders

‘Round the Grounds:

Boroondara

  • Ashburton, 27 Nicholas St, Daniel Wheeler (Marshall White), under hammer, $1,830,000, 3 bidders
    Auctioneer Daniel Wheeler was in his typical upbeat mood…
  • Hawthorn, 11 Goodall St, Steve Abbott (Jellis Craig), passed in, $3,175,000, no bidders
    One auction attendee called this a ‘beautiful home’ and Steve Abbott sung the praise of the position along…
  • Canterbury, 1C Hopetoun Ave, Hamish Tostevin (Marshall White), passed in, $1,875,000, 1 bidder
    “A near new Stonehaven built home without the hassles of body corporate,”…
  • Surrey Hills, 3 Weybridge St, James Tostevin (Marshall White), after auction, undisclosed above $1,820,000, 3 bidders
    In front of around 100 people auctioneer James Tostevin kicks off proceedings sharply at 11.30am…
  • Kew, 6 Rockingham Close, Richard Earle (Jellis Craig), under hammer, $2,105,000, 5 bidders
    Agent Lloyd Lawson made the hospitable move of setting up some chairs on the grass for the public…
  • Mont Albert North, 113 Kenmare St, Richard James (Jellis Craig), under hammer, $1,330,000, 4 bidders
    Gathered on the tennis court this was bound to be an exciting auction…
  • Canterbury, 34A Maling Road, Steve Abbott (Jellis Craig), passed in, $4,200,000, no bidders
    A massive crowd of approximately 200 turned out to see what would happen at Maling Rd…
  • Balwyn, 11 Frederick St, Robert Ding (Marshall White)), under hammer, $2,580,000, 2 bidders
    A minor incident prior to the auction when the contracts went missing…
  • Canterbury, 9 Griotte St, James Tostevin (Marshall White), after auction, undisclosed above $1,425,000, 1 bidder
    James Tostevin and Mark Sutherland are in action here in front of about 50 people…
  • Camberwell, 9 Fairfield Ave, Michael Hingston (Jellis Craig), after auction, $2888,000, 3 bidders
    I turn up to this auction at Fairfield Ave, Camberwell in anticipation of a exciting auction – I hear it might go pretty well…
  • Balwyn, 33 Threadneedle St, Toby Parker (), after auction, undisclosed above $1,670,000, 2 bidders
    A bid of $1,450,000 from the crowd got this auction underway which was soon met by…
  • Hawthorn, 8 Lawes St, Scott Patterson (Kay & Burton), under hammer, undisclosed, 5 bidders
    Around 100 adults and quite a few children spread out at the top of the hill of this cul-de-sac…
  • Canterbury, 1 Scott St, Lachie Fraser-Smith (Jellis Craig Bennison Mackinnon), under hammer, undisclosed above $1,600,000, 3 bidders
    Opening the auction with a vendor bid of $1,400,000 Lachie Fraser-Smith was keen to get things underway…(See More in Architect Adam’s Boroondara Blog)

Balwyn: Toby Parker (Hocking Stuart) sells 33 Threadneedle St after auction, undisclosed above $1,670,000, 2 bidders

Stonnington

  • Malvern East, 30 Turner St, Justin Long (Marshall White), under hammer, $2,240,000, 7 bidders
    Seven bidders were handled adroitly in a lengthy 30-minute battle for 30 Turner Street…
  • Malvern, 22 Ethel Street, Rob Vickers-Willis (Abercromby’s), after auction, undisclosed above $1,950,000, 2 bidders
    A smallish crowd was well spread out when Rob Vickers-Willis opened the floor for bidding on this property today…
  • Prahran, 26 McIlwrick St, Andrew McCann (Jellis Craig Bennison Mackinnon), under hammer, $1,675,000, 3 bidders
    Around 60 people gathered to watch the auction of this Prahran property, with many locals arriving late to see what would transpire…
  • South Yarra, 63 Caroline St, Philippe Batters (Williams Batters), after auction above $2,200,000, 1 bidder
    In a beautifully tree lined street on top of the hill, auctioneer Philippe Batters waxes lyrical about the home and its historical significance…
  • Toorak, Penthouse/14 Martin Court, Paul Castran (Castran Gilbert), passed in, $2,650,000, no bidders
    Paul Castran, our auctioneer, suggested the crowd make themselves comfortable and be seated…
  • Toorak, 44 Verdant Ave, Gowan Stubbings (Kay & Burton), passed in, $3,200,000, no bidders
    With verdant views this home could not have been more aptly located than in Verdant Avenue…
  • Malvern, 38 Claremont Ave, Andrew Stuart (Marshall White), passed in, $2,670,000, 2 bidders
    Gun for hire Andrew Stuart (Andrew Stuart Property) name checked some of the great streets in the area and listed Claremont…(See More in Call Gina’s Stonnington Blog)

Elsternwick: Gary Peer (Gary Peer) sells 92 Seymour Road under the hammer, $1,315,000, 5 bidders and crowd of 60

Bayside

  • Brighton, 22 Willansby Ave, Peter Kakos (Marshall White), under hammer, $1,420,000, 4 bidders
    A great morning greeted an expectant crowd as Auctioneer Peter Kakos plied his trade on the street…
  • Brighton, 4 Duncombe Ave, David Hart (Buxton), passed in, $2,800,000, no bidders
    This really was a tranquil auction – the home itself oozed serenity with trickling water features and candlesl…
  • Brighton, 2 Chatsworth Ave, Jonathan Dixon (JP Dixon), passed in, $4,000,000, 1 bidder
    It was an idyllic autumn day which hosted the auction of this five-bedroom, two-bathroom 1920s home…
  • Brighton, 4 Gray St, Julian Augustini (Hodges), passed in, $2,700,000, no bidders
    Fired up from a prior hotly-contested, volcanic auction, Julian Augustini burst onto the scene brimming with enthusiasm…
  • Brighton, 8 Orchard St, Campbell Cooney (Hodges), under hammer, $1,891,000, 3 bidders
    Aggressive bidding and clever bidding were on the menu today for the auction of this “land only” sale comprising a 775m2 plot plus rented house…
  • Brighton, 6/10 Sandown St, Greg Hocking (Greg Hocking Holdsworth), passed in, $2,700,000, no bidders
    There aren’t many properties available this close to the beach, the courtyard stopping where sand commenced…
  • Sandringham, 20 Sims St, Steve Tickell (Hocking Stuart), after auction, $1,680,000, 3 bidders
    It is not often that we heed the advice to “stop and smell the roses” but around 60 people did just that…
  • Brighton, 39 Kinane St, David Hart (Buxton), after auction, $2,425,000, 1 bidder
    Set in the north facing back yard, auctioneer David Hart commenced proceedings with a short spiel…(See More in Klarity Kris’s Bayside Blog)

Sandringham: Steve Tickell (Hocking Stuart) sells 20 Sims St after auction, $1,680,000, 3 bidders

Port Phillip

  • Middle Park, 103 Neville St, Geoff Cayzer (Cayzer), under hammer $1,456,000, 2 bidders
    Although auctioneer Geoff Cayzer was forced to open on a vendor bid of $1,300,000, this auction really took off…
  • Elwood, 20 Docker St, Torsten Kasper (Chisholm & Gamon), passed in, $2,300,000, no bidders
    Located plumb in the middle of Docker Street – half way between the beach and Ormond Road village…
  • Middle Park, 185 Beaconsfield Parade, Geoff Cayzer (Cayzer), passed in, $3,400,000, no bidders
    With yachts sailing across the bay in the morning mist, a group of 60 gathers to see the auction of  ‘GRANVILLE’…
  • Elwood, 82 Tennyson St, Phillip Kingston (Gary Peer), passed in, $1,610,000, 1 bidder
    A relaxed crowd spread out across the street and to the sides of auctioneer Phillip Kingston…
  • Elwood, 14 Selwyn Ave, John Bongiorno (Marshall White), under hammer, $3,880,000, 3 bidders
    Located between Ormond road and the beach, a large renovated Federation home on 940sqm of land…(See More in Karen’s Port Phillip Blog)

Agent Survey: Super Saturday – Do you think the market is easing or is she full steam ahead?

Steve Tickell, Hocking Stuart (Brighton): ‘Super Saturdays’ have become something of a litmus test of the auction market in Melbourne over the past few years, fuelled principally by enthusiastic media and industry commentators.

Though a good indication of market sentiment, Super Saturdays are not necessarily representative of the true health or otherwise of the broader market across Melbourne, though they do indicate what if any ‘hot spots’ exist in certain market sectors.

If a sector can cope with what is essentially an oversupply of auctions on any given Super Saturday, then you know the market itself is resilient, and demand is strong. For example, the middle to upper end of the Bayside market, dominated mostly by Brighton properties (say $ 2 million to $ 5 million) has been performing strongly over the past 6 to 8 months in contrast to 2012 and early 2013, but on the back of ‘steady’ supply (note the focus on steady!)

That said, with several properties in that range about to be tested at auction, and with what seems to be a more circumspect mood that has come over the market in recent weeks, I suspect clearance rates could be compromised, possibly seeing figures dip into the low 60% range. This in itself does not necessarily suggest the market is faltering. Indeed, it simply confirms that supply and demand are directly linked, and ultimately all those properties will eventually sell.

The Southern suburbs of Bayside (Hampton, Sandringham, Black Rock) dominated by properties in the $1,000,000 to $ 2,000,000 range, and a variety of sub-$ 1,000,000 land properties and downsizer townhouses, have been consistent and strong with higher clearance rates of 80% and upwards, but again, on the basis of steady supply. A ‘Super Saturday’ will test this clearance rate, and whilst strong demand exists in this sector, there simply has to be enough buyers to go around soaking up this unusually heavy supply.

Finally, in incredibly strong sectors such as Bentleigh/McKinnon, it seems nothing will stop the train that seems to be going full steam ahead there at the moment, where demand is clearly outstripping supply. A ‘Super Saturday’ in that sector will only provide enough stock to meet the current insatiable appetite that seems to exist, until the next wave of property comes through.”

Gary Peer, Gary Peer & Associates (Caulfield North): I’m predicting a healthy clearance rate for Super Saturday , although I’m not convinced there will be heated competition for all property types in all locations. Last weekend we sold 14 of our 15 auctions proving that there is still significant depth in the market. Most popular were properties that hovered around $1,000,000 (say between $700,000 – $1,300,000). Buyers at the are very willing to transact, but these selective buyers aren’t concerned over missing out for fear of having to pay more tomorrow. The volume of bidders per auction has eased a tad ( but only a tad )  as the significant volume of offerings through spring and at the ” open of the market ” in 2014 absorbed many of the buyers. That said, the volume of stock also seems to also be unable to replenish those being sold – which may just keep the market at a healthy level through the autumn and coming winter months.”

Tim Heavyside, Fletchers (Canterbury): ‘The market is still gathering momentum and (we) are experiencing high clearance rates at  auctions – which is the ultimate indicator.  This includes properties at the top end ($1M to $3M and beyond).  Naturally, with the volume of properties currently on the market until Easter, buyers will have a little more choice.  Having said that, if I was a buyer I would expect competition, because that’s the reality.  Make no mistake, consumer confidence is high and prices are still rising.’

Justin Long, Marshall White (Armadale): I foreshadow good strong competition for the better properties and the knock on effect will mean some of the lesser properties will fare better than they may have done 6 months ago. We are, I feel, in a slow but steady price growth phase.

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