oc | Thursday 2nd April

Auction stock still low, but there’s a reasonable amount of ‘oomph’ out there in the market.

Good to see the Big Guns back 1: Iain Carmichael ( Bennison Mackinnon), sells 18 Nott Street, East under hammer, $2,075,000

At 6.00 pm on  Saturday, the James Clearance Rate for Melbourne’s $M+ was 79% on the 29 auctions we covered. The , our bidders per auction measurement, was at 2.1. Another strong result. We are still on low auction stock, but there is still a reasonable amount of oomph in the market.

Overall Summary of Melbourne’s Million Dollar Plus Auctions:

  • No bidders ($M+ auctions with no bidders) 12%
  • Lone Rangers ($M+ auctions with one bidder) 20%
  • Norms ($M+ auctions with 2 or 3 bidders) 56%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 12%

Two of the auctions we covered on Saturday had no bidders, yet both were bought after auction. What does this tell us? Why are people waiting for a pass in before they declare their hand?

Good to see the Big Guns back 2: Scott Patterson (Kay & Burton) sells 17 Goodall Street, after auction for an undisclosed amount above $2,900,000, 3 bidders

Melbourne’s Million Dollar Snapshot

Last week at our first week back reporting on the new market’s auctions, Melbourne’s overall Million dollar plus Bidderman was strong at 2.2.  Though many areas had slim pickings, with less than a handful in Yarra and only eight in Stonnington for example, others such as had good numbers of auctions. Speaking with Mark Sutherland (, Hawthorn), this weekend remarked that there was momentum in the market in Boroondra and that he’s looking forward to September.

This weekend we had 91 auctions and next week we will have 86 auctions. We see a bumpy ride ahead in August in terms of volume.  We dip down next week but we start the ascent back up towards Spring levels (hopefully) with 92 and 104 auctions scheduled for the last two weeks of August.

How do these numbers affect buyers? Are they being picky and waiting for more choice or better stock? There’s a risk in missing out now, as well as a risk missing a better home later. Traditionally we see more competition in Spring – that means more competition for buyers as well as for vendors. Will this result in prices for the A graders continuing to rise? Off-markets and access to properties coming up can be useful if you know how to assess each within the context of the market – now and in the future.

The tale of two markets

The second half of this year has been deemed a new market – and anticipation of a strong Spring is growing, especially during this lower stocked winter market.

But there’s also the dichotomy between the more uniform markets in family suburbs as opposed to the contrasting markets of more urban suburbs. Buyers have become more educated over recent years about the kinds of factors that universally impact popularity. It’s a given in Melbourne that south-facing properties and those without car parking can cause limitations for their owners for instance. But depending on the pockets within precincts, astute buyers can find happiness in these kinds of home as well as increases in their accounting balances over time.

Areas such as Boroondara and Bayside and Glen Eira are the heartland of family buyers. These  areas are predominantly favoured as family living areas as they are made up predominantly of family homes on blocks with backyards, in family friendly where you walk to your neighbours for a coffee, and that all centre around school communities and commuting to the city for work.

Yet areas offering a more diverse style of living such as Stonnington, Yarra  and City of Melbourne are becoming increasingly popular with those wanting a more urban or Inner City life. And it’s not just the younger generation wanting to be close to the city. The evolution of property buyer profiles can be correlated to the changing demographics in Melbourne. Everyone has heard of downsizers wanting single level properties, but there are also buyers known to be scaling-down, or needing a lock ‘n leave or city-base or town-home, and these are affecting for various different types of properties. Properties that appeal to a broader buyer profile will therefore be in in the long-term. So how does this affect supply  Which properties will become rarer to find and which will become more difficult to sell?

This requires a further level of buyer education.

Stonnington’s demographics for example have been evolving over time, which has already affected the supply of types of properties versus the volume and types of buyer profiles.

In simplistic terms, Stonnington can be categorised into two halves – urban living in the inner city suburbs, and family living in the eastern suburbs.  We cover City of Melbourne and City of Yarra and surrounds in such suburbs as Richmond, East Melbourne, Carlton and St Kilda Rd. In terms of Inner City living, what constitutes a good home in these suburbs may not share the same priority factors as in the family living suburbs.

Bidderbuzz: Six bidders in total at 54 Barkly Avenue, Armadale (Daniel Wheeler, Marshall White), bought under hammer, $2,200,000

Inner City

People love these Inner City areas for their condensed urban profile, which is great for convenience and proximity to the city, but brings with it a different type of living. For example, buyers here are prepared to trade off the possibility of noise for the reward of being in the action. Car parking is also not as high on the priority list when people can walk or hop on a tram to get to work in the city.

People here more often buy a location rather than waiting for their dream home. The transaction opportunities at certain price points (such as lower $1ms) here are generally high. The “miss at auction” rates for buyers are also generally high because they face competition in terms of numbers of bidders. Understanding longer term values here is important, as is getting the edge in negotiation. We have bought pre-auction as well as under strong competition at auction. Knowing how and when to move is imperative. So is knowledge of how to deal with Off-markets. Despite the high volume of public listings in these areas, there is a growing volume of Off-market properties such as new builds. We deal with agents experienced in both these facets.

During the week we chatted about the upcoming market over a coffee with long-time Richmond agents Luke Schickerling and Craig Hillis of Jellis Craig Bennison Mackinnon (Richmond), and our conversation got onto the finer points of what gets buyers’ attention in those areas. Richmond and its rows of classic single fronters, townhouses and terrace homes often do not have room for onsite parking, which leaves the street as the only option. But they still see strong competition unlike in the more family living suburbs. Understanding the various pockets within precincts  is also important for gauging potential for longer term growth.

Many younger buyers, particularly in Richmond and Carlton, traditionally used inner city buying as a “stepping stone buy” before moving further out to the inner suburbs to start families and secure a bit more dirt, often in suburbs such as Hawthorn or Camberwell. This seems to be changing, as many more buyers are seeking to upgrade from an apartment into a smaller home or townhouse within the area. The growth rates of single fronters and new townhouses has been strong but Luke advised that price growth for Richmond apartments recently has generally stayed flat.

We also buy for an increasing number of downsizers wanting to leave their bigger property in the burbs and get back to a place where they can more easily enjoy the inner city living, such as restaurants and theatre and of course, the footy. Do they have more money than the younger generation to buy, and are professional couples such as doctors and lawyers their competition?

Second thoughts on family living? Steven Abbott (Jellis Craig) sells 80 Through Road, Camberwell after auction, $1,525,000. Is this life in the slow lane?

Understanding property in these areas may not be as straightforward as in the more uniform family living suburbs.

For example, buying an inner city property with parking  has traditionally been a way of securing better long term growth over one without this access. But the peculiarity of precincts  are an important consideration when assessing this potential. For example, residential properties in Yarra Council generally get permits or car parking,  but it depends on the age of the dwelling rather than its capacity. This policy is being reviewed by the Yarra Council, and many issues are being looked at including the number of permits that residents may be issued, and also the way the December 2013 ruling affects owners who pay rates but don’t get access to parking. When or if this scenario will be changed it is unclear, so due diligence is needed as to what entitlements you are buying and at what price you are paying now against expected future demand.

Captive audience: Phillip Kingston (Gary Peer, in conjunction with Hodges), sells 8 Gray Street, Brighton, after auction for an undisclosed amount above $1,825,000

Biggest Auctions:

  • Hawthorn, 17 Goodall Street (Scott Patterson, Kay & Burton), after auction, undisclosed above $2,900,000, 3 bidders
    Extensive media coverage meant a large turnout at the auction of this renovated art deco home…(See more in Auction Reports)
  • Glen Iris, 46 Celia Street (Michael Armstrong, Kay & Burton), under hammer, undisclosed above $2,500,000, 3 bidders
    Auctioneer Michael Armstrong welcomed a crowd of 100 to the home on offer…(See more in Auction Reports)
  • , 31 Jackson Street (Gowan Stubbings, Kay & Burton), under hammer, $2,445,000, 2 bidders
    Gowan Stubbings  is always a pleasure to watch at auction and today is no exception…(See more in Auction Reports)


  • Armadale, 54 Barkly Avenue (Daniel Wheeler, Marshall White), under hammer, $2,200,000, 6 bidders
    I lost count of people but there must have been 150 in this crowd. They gathered around the corners of the t-junction…(See more in Auction Reports)
  • Caulfield North, 20 Redan Road (Daniel Wheeler, Marshall White), under hammer, $1,242,500, 5 bidders
    Auctioneer Daniel Wheeler is always good for a laugh. With his booming voice he races through the contractual matters like a jockey…(See more in Auction Reports)
  • Albert Park, 243 Bridport Street (David Wood, Hocking Stuart), under hammer, $1,270,000, 4 bidders
    A big crowd of 100 people turned up to witness the auction of this Albert Park property. David Wood was in charge…(See more in Auction Reports)

Biggest Pass Ins:

  • Kew, 98 Yarra Boulevard, passed in, $2,990,000, 3 bidders
    Raheen in the background and waterfalls, birds and wattles on set. This was a unique setting…(See more in Auction Reports)
  • Canterbury, 36 Maling Road, passed in, $2,725,000, 1 bidder
    Every room was full during the pre-auction inspection; recent updates to the property had gotten the better of neighbour’s curiosity…(See more in Auction Reports)
  • Camberwell, 520 Burke Road, passed in, $2,700,000, 3 bidders
    A breezy auction but the chilly windy did not stop the bidders at this auction…(See more in Auction Reports)

Agent Survey: Which is the hottest part of the market and which is the coldest part of the market right now?

Torsten Kasper (Chisholm & Gamon, Elwood): “We are finding renewed strength in the $1.5 – 1.8 million dollar segment as well as the $2.3 – 2.6 million dollar market segment. The million plus price point is hot, hot, hot. From our point of view each market segment is reasonably strong.  The weakest segment would be the 3 – 5 year old town residence space representing predictable outcomes for .”

Peter Vigano (Jellis Craig, Hawthorn): The hottest part of the Boroondara market is in the $1.5m – $2.5m price bracket.  We are seeing a shortage of property available in this price range and many buyers from across a broad demographic are eager to purchase however have not been able to find any suitable properties.  Property styles wanted range from townhouses, Victorian & Edwardian doubled fronted brick or weatherboard houses, renovated single fronted or semi detached houses, modern houses and properties ready for renovation or new home sites.  The coldest part of the Boroondara market is the $8m – $12m price segment due to buyers being very selective on the style and composition of the property.  We are seeing a greater number of larger properties in this price range coming to market however buyers are not prepared to offer vendors a price which will tempt them to sell.  We find if a property requires renovation and/or is affected by Heritage or the balance of house to land is not suitable then buyers will reduce the price they are prepared to pay by 10% – 20%.

Chris Carrington (, Brighton): “We can’t identify any areas of the market which aren’t performing well and like always if well priced there are a number of buyers for every property. Land or land properties are highly sought as are 4/5 bedroom family homes. Cheaper and smaller new apartments are slower but definitely not cold.”

Nicole French (Marshall White, Armadale): “The hottest part of the market without doubt is the amount of off market “non visible” sales occurring currently. Astute buyers are working closer than ever with their agent and buyers advocate to gain access to listings, well before a photo has been taken. The larger agencies who can tap into the greatest number of buyers, are scoring big wins for their vendors. Never before have we seen the amount of fly in fly out buyers, who purchase in a day or two. There is a growing trend with auction sales occurring in the first or second week of an auction campaign. Buyers are becoming increasingly aware the remainder of 2014 may not present the volumes of previous years and are eliminating their competition and purchasing early. What’s not hot about the current market, is the amount of property for sale between now and December.  Property levels are well down on previous years, interest rates are low and buyers demand is high. If you’re thinking of selling, don’t wait until later in the year, the time, without question…..is now.”

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