oc | Wednesday 22nd January

After a few quieter weekends, this one was a major volcanic eruption!

28 Mitchell Street, Northcote (Arch Staver, Nelson Alexander) was one of many volcano auctions on Saturday. Four bidders here, under hammer $2,520,000

At 6.00 pm on  Saturday, the James Clearance Rate for Melbourne’s $M+ was 70% on the 33 auctions we covered. The , our bidders per auction measurement, was at a whopping 2.6. Only twice this year can we remember it higher. Sure it’s only one day, and maybe it’s the weather, but we reckon it’s been bubbling for the last few weeks.

Overall Summary of Melbourne’s Million Dollar Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 20%
  • Lone Rangers ($M+ auctions with one bidder) 13%
  • Norms ($M+ auctions with 2 or 3 bidders) 23%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 44%

An almost unprecedented win by the Volcanoes at almost half the auctions we attended this weekend.

Market Insight (Mal James)

You don’t need to have an economics PhD or be a 30 year veteran of the Melbourne market to understand that there is some heat in the market right now leading into our main Spring Markets. Check out our Bidderbuzz auctions below, sampled right across Melbourne .

In the north at Northcote, by the bay from Port Melbourne to , in Bentleigh, in the east from Toorak to Kew, through to outer east areas of Mont Albert North – wherever we went in our $M auction bidding for clients or reporting for James Marketnews, we found large numbers of bidders on market-perceived “good” homes.

Bidder depth (the key measurement to market ) by our simple and rock solid Bidderman statistic shows an underlying market strength, perhaps on even larger numbers than before our Winter break. And when you combine this statistic with our James $M+ Clearance rate of 70%, you can clearly see that the market is again being super selective, super picky and only really going for the ones it considers “market” in or a really good home. If the clearance rate number pushes into the high 70s and stays there, and Bidderman stats stay above 2 over the next few weeks, then the market direction is clear.


Right now we are in what we call the early Spring market which lasts until the Grand Final (c’mon Pies hang in there). Then we have the very powerful mid-Spring market between Grand Final and the Melbourne Cup and we finish with the late Spring or pre-Christmas market from early November to Mid December. Next week is the last of the new stock Early Spring weeks (with only 4 weeks to run an auction campaign before Grand Final). Then you have a window of one large new stock week after the Grand Final that will give  four weeks to run an auction campaign before the Melbourne Cup. And finally there are four (hopefully) solid stock weeks in November. That adds up to six key new stock weeks between this weekend and till when the market shuts down till February 2015.

Our balancing comments are 1) we are seeing a different Bidderman on deals over $4m right now, and 2) this early spring market can be a bit like our early February market. It can and often does perform slightly better than the higher volume Middle and late Spring markets as spreads across a wider number of homes. Having said that, make no mistake – this weekend’s figures are very, very clear on their messages.

Not everything that had multiple bidding sold under the hammer. Jack Bongiorno passed in 82 Chomley Prahran despite 3 bidders and negotiated afterwards and upwards, before it was bought just shy of $2m. Three bidders today didn't even rate a mention in our Top Dozen Bidderbuzz Auctions.

We may sound like a broken record, but those two clear messages, those two crystal clear market pointers are

1)     Beware the wounded underbidder. For each of the homes we reported on or purchased, there are still around four bidders out there in the market looking for a home varying in price between $1.2m to $3.3m. To put it another way, for the dozen homes reported on below there is still a pool of 40 frustrated buyers who will go more aggressively, with more money, when they are competing against you on a home of similar characteristics next week or next month. (It’s hard to explain to our potential clients that your “enemy” right now is, not always the agent, it is in August more often than not, the other buyer. But as we can see with our buying success rate around 90% this year, it is not always about the most money, often it is about the best strategy that wins the market priced home.)

2)     Not every home flew out the door. Whilst the majority of our activity has been off-market and pre-auction, EOIs or even “stales” in the last month (we have had not just a record August, but our busiest month ever), you still need to be smart on price and strategy.
a. Price, don’t overpay the market based on your fear. Stock levels are good, if you know where to look
b. Strategy, you can’t assume you are the only bidder. Clearly on the sample you may not be. However you also don’t want to assume you are competing against many, because in a smokes and mirrors situation (e.g. away from public bidding), on an overpriced home, you may be Robinson Crusoe when it comes to putting in an offer.

This weekend is a pointer. Yes it’s only one week and it is early days yet, but nonetheless it’s a very solid pointer to Spring and it is sending a very clear message that if conditions are perceived to remain as they are perceived now, then the market is going in one clear direction only.

Our Bidderbuzz Top Dozen Volcanoes

  • McKinnon, 24 Hall Street (Chris Hassall, Buxton), under hammer, $1,502,000, 6 bidders
    It seems to happen frequently now that during an auction, parties in the crowd need the assistance of an obliging agent to “translate” the bids…(See More in Auction Reports)
  • Brighton, 23 Huntingfield Road, (Chris Carrington, Nick Johnstone Real Estate), $2,006,000, 6 bidders
    Chris Carrington fielded bids from 6 interested parties here…(See More in Auction Reports)
  • Mont Albert North, 16 Rostrevor Parade (Doug McLauchlan, Marshall White), under hammer, $2,260,000, 5 bidders
    Auctioneer Doug McLauchlan told us he and 16 Rostrevor Parade go way back, so it was only fitting that he would be in charge of this auction today…(See More in Auction Reports)
  • Bentleigh, 19b St James Avenue (Nick Renna, ), under hammer, $1,295,000, 4 bidders
    The “market is on fire” claimed Nick Renna, who’d been ordered this day…(See More in Auction Reports)
  • Brighton, 16 Murphy Street (Chris Carrington, Nick Johnstone), under hammer, $1,695,000, 4 bidders
  • Camberwell, 42 Spencer Road (Paul Richards, Bekdon Richards), under hammer, $2,514,000, 4 bidders
    “Dream Home” was the selling point of the day as auctioneer Paul Richards spoke about the labour of love…(See More in Auction Reports)
  • Camberwell, 589 Riversdale Road (Antony Woodley, Marshall White), under hammer, undisclosed above $3,000,000, 4 bidders
    A crowd of approximately 100 scattered across the tennis court a…(See More in Auction Reports)
  • Hampton, 15 Gordon Street (Phillip Musat, Thomson), under hammer, $1,730,000, 4 bidders
    The original weatherboard home with its numerous classic features (See More in Auction Reports)
  • Kew, 20 Raven Street (Chris Ewart, Christopher Russell), under hammer, $3,310,000, 5 bidders
    ‘Plenty of fine motor cars here …  I think I might have some competition’…(See More in Auction Reports)
  • Northcote, 28 Mitchell Street (Arch Staver, Nelson Alexander), under hammer, $2,520,000, 4 bidders
    The best weather since the start of winter bought a huge crowd…(See More in Auction Reports)
  • Port Melbourne, 299 Ross Street (Oliver Bruce, Marshall White), under hammer, $1,630,000, 5 bidders
    With the city at one end of the street, and the beach at the other…(See More in Auction Reports)
  • Toorak, 43 Washington Street (Andrew Macmillan, Bennison Mackinnon), under hammer, $2,525,000, 4 bidders
    Last auction around the corner with an upbeat Andrew Macmillan as auctioneer…(See More in Auction Reports)

Bentleigh: 19b St James Avenue (Nick Renna, Hocking Stuart), under hammer, $1,295,000, 4 bidders

Market Summary (Adam Woledge)

It seems spring has come early this year. With the milder weather, we saw some really spirited bidding this weekend for good properties and four, five and even six bidder auctions were not uncommon. Records are being broken often and not only in Hawthorn, Toorak or Brighton. One example was at 28 Mitchell Street, Northcote (Marek Olech, Nelson Alexander) which sold today at auction for $2,520,000 – WOW!

With ‘volcano’ auctions winning the day in the auctions we attended, the market showed it is a healthy one for buyers and sellers. It must be said sample sizes are not that big and we haven’t had a ‘Super Saturday’ for some time now – but this weekend’s result were strong.

In my regular chats with Richard Earle (Jellis Craig), he thinks this market could have a very late run in 2014. Listing numbers are not what they could be. That said, by my observation, Richard himself is doing pretty well in Kew/Hawthorn East right now.  With the state election looming and both parties looking to go pretty hard in the coming weeks, this could be a factor affecting the current market.

Single-fronted market

For those not quite sure, a single-fronted home is one where there is only one window next to the entry door, when you are looking from the street. Double fronted naturally has a window each side of the entry door.

The single-fronted market is particularly alive and well in most suburbs. Last week 1 Invermay Grove (Chloe Quinn, Jellis Craig) sold after only being advertised for one week for an undisclosed price believed to be over $1m. A mid-week boardroom auction was held and there were 3 bidders. This was a semi-detached timber period home close to Auburn Road and it previously sold for $765,000 in April 2012. With a clever yet very affordable cosmetic update and a bit of market change, the vendors no doubt are very happy with that result.  This could have been a particularly attractive property to $M+ investors, which is an increasing market (especially in Super Funds) for James Buyer Advocates right now. 


Great day for an auction: Around 110 people turned out to see what would happen at 20 Raven Street, Kew (Chris Ewart, Christopher Russell), under hammer, $3,310,000, 5 bidders

Melbourne’s Million Dollar Market (Gina Kantzas)

Has Spring Arrived Early?

It felt hot out there on Saturday and indeed we felt the build-up during the last week or so.

It’s very busy right now. Today we bought two at competitive auctions (low $1ms and low $3ms) and bought an off-market circa $4m. During the week we have been involved in EOI, private sales and pre-auction negotiations. There is plenty of activity, some of it reactive (out of frustration for example) and some based on calculated thinking. It seems that buyers are getting information and making decisions more quickly.

If there is any doubt in the market, it is: will it continue to rise?

But it’s not only the suburbs traditionally thought of as affluent which are experiencing strong demand.

Northcote is an area that has really changed over the last few years. In particular, the High Street precinct, a magnet for culture in the area, is attracting the young and old alike. Bars, cafes and the Northcote Social Club set the scene for the area, and this is a spot that has enjoyed a special respect from locals for a long time. A drawcard for new and younger families here is the larger and the real possibility of a usable backyard; this does set this area apart from some of the North Fitzroy precincts and further south is a super premium. Access to the city is still reasonable, although the area has the school, park and shopping access making it fairly self-contained.

A good mixture of old and abounds here, and there are some really special period homes to be found in the area, and a number of $2 million-plus sales have shown up in results over the last few years. Homes over 500 sqm of land which are not easy to come by or not widely affordable have sold in such streets as 92 Jenkins St in May, and 6 Palmer in June.

It is an area that we at James Buyer Advocates are increasingly buying into for our $M+ clients. In fact we now have a specialist James Buyer Advocate, Adam Gardner (a qualified valuer) who lives and works in the Northcote, Carlton, Fairfield triangle and surrounds.

28 Mitchell St Northcotethis auction was almost 40 minutes long with over 30 minutes of bidding

A round of applause to start an auction – not finish – that’s a  first for me!

A folk duo performing in the front porch of the home to be auctioned… Where else but in eclectic Northcote?!  As locals enjoyed the spectacle of this scene – the pirate tree house, the neighbourhood view from the top floor lookouts and of course the smell of good coffee from the myriad of cafés nearby, we enjoyed the early Spring sunshine as we counted over 200 people in this crowd. As the crowd gathered it reminded us of the popularity of this area as well as the popularity of a good home – when it’s a good home, it’s universally known. James Home Rating: http://www.james.net.au/rating/28-Mitchell-Street-NORTHCOTE

A vendor bid of $1.9m started proceedings despite the $2m plus quote. Two bidders took it up to the on-the-market figure of $2,290,000 and then two more bidders helped the numbers rise to a final price of $2,520,000. All four bidders were still in the ring in the high $2.4ms – Wow.

South Melbourne: 173 Nelson Road (Greg Hocking, Greg Hocking Holdsworth), after auction $3,250,000, 2 bidders

Biggest Auctions:

  • Kew, 20 Raven Street (Chris Ewart, Christopher Russell), under hammer, $3,310,000, 5 bidders
    ‘Plenty of motor cars here …  I think I might have some competition’ observed one soon-to-be bidder…(See More in Auction Reports)
  • South Melbourne, (Greg Hocking, Greg Hocking  Holdsworth), after auction, $3,250,000, 2 bidders
    Quite a crowd turned out to inspect ‘Elouera’, a renovated and refurbished double-fronted 1880s Victorian before it was due to be auctioned…(See More in Auction Reports)
  • Camberwell, 589 Riversdale Road (Antony Woodley, Marshall White) under hammer, undisclosed above $3,000,000, 4 bidders
    A crowd of approximately 100 scattered across the tennis court and terrace…(See More in Auction Reports)

Biggest Pass Ins:

  • Hawthorn, 23 Shakespeare Grove, passed in, $3,700,000, no bidders
    ‘As recognised address as we can offer you in all of Melbourne’ suggested our auctioneer Gerald Delany…(See More in Auction Reports)
  • Camberwell, 27 Russell Street, passed in, $2,160,000, 4 bidders
    Kicking things off with a vendor bid of $1,800,000 auctioneer…(See More in Auction Reports)
  • Brighton, 81 William Street, passed in, $2,150,000, no bidders
    David Hart addressed the group of 50 or so as they leant on parked cars or wedged themselves in between them…(See More in Auction Report)

Agent Survey: How do prices compare across the board in your area to this time last year?

Bill Stavrakis (Biggin & Scott, Elsternwick): “Pricing in the Elsternwick area has remained buoyant. Houses in the range of $800,000 to $1,500,000 are in strong demand. Due to a lack of stock, the middle market ($2,000,000 plus) seems to be stagnant and underperforming at this stage, in comparison to 2013.”

Jenny Dwyer (Hocking Stuart, Brighton): “House prices in 2014 are of a significantly higher level in nature than what we experienced in 2013. There has been a noticeable increase in the prices being paid in some cases 15 to 20% above reserve as a direct result of competitive bidding particularly in the family home sector. Stable interest rates and a higher degree of confidence has seen competitive tensions between bidders as low levels favour those Vendors opting to sell now as opposed to the latter part of 2014 where levels balance the scales more evenly.”

Lachie Fraser-Smith (Jellis Craig Bennison MacKinnon, Armadale): “The 2014 real estate market has been a fairly even  year. We have seen some increased growth up from last year’s pricing. There have been some run away prices lately with the lack of stock. However the autumn market started the year strongly as usual,  the Easter holidays and Anzac day break coming just at the right time when the market was getting ahead of itself. Then May and June also saw positive results just before the big midyear break through June/ July holiday period settling the market once again. It will be an interesting run home with not the same stock levels predicated as last year thus far for spring. The traditional spring selling season this year should see some very robust sales results finishing what has been a great year locally.”

Damian O’Sullivan (Marshall White, Albert Park): “Prices across the board have been very positive this year culminating in great volume and strong clearance rates. The general feel is that prices this year somewhat mirror that of last year yet a case by case analysis might suggest otherwise. For example, we have sold the same property in St Vincent Place, Albert Park twice in the past year –  the latest sale representing an 11% increase in price. Whilst this may be an anomaly, we are very optimistic about the months ahead”

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