oc | Sunday 5th April

2014 is going out with a bang!

Biggest auction of the day! Alastair Craig (Jellis Craig) sells 33 Hawthorn Grove, Hawthorn under hammer for $6,125,000, 2 bidders. Big crowd of 150 filled the front yard to watch proceedings.

At 6.00 pm on Saturday, on a day where there were around 150 $1m+ scheduled auctions across Inner East and Bayside, the James Clearance Rate was 71% on the 38 auctions we covered. The  , our bidders per auction measurement was at 2.2.  After a slight breather last week, it looks like the year will end strong, just as it has been all year.

Summary of Melbourne’s Million Dollar-Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 21%
  • Lone Rangers ($M+ auctions with one bidder) 12%
  • Norms ($M+ auctions with 2 or 3 bidders) 36%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 31%

It is Super Saturday after Super Saturday until Mid December. The Top End Market is HUGE in size, strong in price agreement (look at clearance rates) and big on demand (). Our measurement dials are all in the red zone for buyers and that has been the story for almost all of 2014.

Market Summary

What are your buying choices in the run up to Christmas? It might seem there is no choice other than to go to auction and be slaughtered. This is not the case.

Today we did not buy one home, no not one home at auction. I think it’s our first blank canvas for the year, although we went close on October 25th. Would have been happy to buy a few, as some of the homes on offer were first rate. However, for some we didn’t have enough to start, and for others, at some point you have to recommend to your clients that PRICE is part of the good buying PPP equation (Price, and Position). Price and (different concepts) are about your needs (true), but they are also about alternatives. And right now that is very relevant.

So no auction buys today, but that’s not to say we’ve been inactive in the last week. Four properties bought, just none at auction. Strong prices were still paid, but obviously acceptable in all cases.

  • Malvern (off-market, John Morrisby, Jellis Craig)
  • Beaumaris (off-market, Geoff Stephan, Concourse Real Estate)
  • Hampton (before auction, Michael Cooney, Hodges)
  • Malvern (Rae Tomlinson, Marshall White)

In the run to Christmas 2014, buyers need to be smart about the opportunities presented to them. Of course if it’s a great home, you have no alternatives and you really, really want it; then you have to pay the piper and compete at auction. But smart buyers are looking for (and finding) alternatives in this current AUCTION DOMINATING market.

Who is that lurking in the shadows? It's THE BOSS, Mr Jack to you sonny. Bought after: 14a Plant Street, Malvern sells after auction for an undisclosed amount (John Bongiorno, Marshall White), 2 bidders.

Biggest Auctions:

  • Hawthorn, 33 Hawthorn Grove (Alastair Craig, Jellis Craig), under hammer, $6,125,000, 2 bidders
    A massive crowd of around 150 people filled the front yard to watch Alastair Craig in action at what was undoubtedly the biggest auction of the day…(See more in Auction Reports)
  • Camberwell, 25 Alma Road (Alastair Craig, Jellis Craig), after auction, undisclosed above $5,250,000, 3 bidders
    Alastair Craig was ably assisted by Peter Batrouney at this auction which was held in the expansive garden surrounding the property…(See more in Auction Reports)
  • Camberwell, 13 Kintore Street (Alastair Craig, Jellis Craig), under hammer, $4,680,000, 2 bidders
    A great crowd of about 200 gather in the front garden for the auction of this finely renovated Queen Anne home…(See more in Auction Reports)

At 6.00 pm BIG AL must have been on the ‘roids, like a kid with too much red cordial, talking at a million words a minute to anybody who would listen, judging by these three results. Good effort man!


  • Deepdene, 26 Walsh Street (Steven Abbott, Jellis Craig), under hammer, $3,205,000, 6 bidders
    There was a buzz in the air as the crowd of 130 gathered in the street…(See more in Auction Reports)
  • Black Rock, 21 Potter Street (Steve Tickell, ), under hammer, $2,920,000, 6 bidders
    A huge crowd of around 125 people gathered to see what would happen at the auction of 21 Potter Street…(See more in Auction Reports)
  • Glen Iris, 41 Flowerdale Road (Andrew Hayne, Marshall White), $2,950,000, 6 bidders
    Now this is my kind of property, a half-sized basketball court and a pool nearby, all flowing onto Hill ‘n’ Dale Park…(See more in Auction Reports)

Biggest Pass Ins:

  • South Yarra, 1/36 Murphy Street, passed in, $3,700,000, no bidders
    Auctioneer Gerald Delany made brief remarks, and in doing so noted that as an agent he had inspected a great many apartments…(See more in Auction Reports)
  • St Kilda West, 12 Loch Street, passed in, $2,725,000, 1 bidder
    The fountain containing several huge goldfish provided the perfect centrepiece for the crowd of around 40 to gather around…(See more in Auction Reports)
  • Albert Park, 27 Kerferd Road, passed in, $2,700,000, no bidders
    Auctioneer Geoff Cayzer is always a mine of information and takes us on a guided history tour of Kerferd Road…(See more in Auction Reports)

Mr Suave and Mr Nice all rolled into one. Steve Tickell crunches the numbers and the buyers (6 of them) at 21 Potter Street, Black Rock ($2,920,000).

Underquoting/Step Quoting – back in the news

Some salient points:

  1. You have a Consumer Affairs regulator that consistently says there is no problem.
  2. You have an election happening and what do politicians do when elections are happening?
  3. You have a real estate industry that generally believes in getting as many buyers as it can to a home rather than trying to communicate.
  4. You have a market that is flying, meaning that many times it is not underquoting, but the market that is dictating the gap between quote and result.
  5. You have buyers that don’t get professional help when spending the amount of money they do and they really should, especially if the same ‘bad’ things keep happening to them.
  6. Quoting is not just about buyers, it is also about the rights of sellers. In strong markets, like we are in now, it would be grossly unfair to expect a seller to have a tight reserve range at the start of an auction campaign. Legislation requiring this to happen would, in our mind, be impractical and unfair on the seller.

For the Record

A. If an agent quotes $1m in the final week of the campaign, then passes it in and says the reserve is $1.3m, then that is underquoting and it is illegal, and we feel the agents or the seller (if it was their instruction) should be prosecuted in court, if this is systemic within an agency. We do not approve of this.

B. If an agent quotes $1m, then updates openly, and a week later the quote is $1.1m, then another week later is $1.2m and then says the reserve is $1.3m on the day; then that may be sharp practice, but not necessarily illegal. This is step quoting not underquoting and we can see both sides of the argument – especially in a rising and/or strong market. A buyer who comes in the first week of a campaign, gets a quote and then turns up to auction three weeks later with no other agent contact, expecting the result to fall within the initial quote range; is, in this market, unreasonable and naive.

C. If an agent quotes $1.3m and passes it in at $1.3m and all buyers think it is worth $1m, then that is not necessarily misquoting, it may just be a sign that we live in a free country (the seller can ask whatever he or she likes).

D. If an agent quotes $1m and puts it on the market at $1.1m and it sells under the hammer at $1.3m, then that is the market and good agent work – which we approve of. We recognise that the agents have been ethical and have worked well for the vendor.

E. If an agent is responsive to the market, open in their communication and amends and updates the quote to $1.2m to $1.3m in the week of the auction and it sells at $1.28m and the agent does this regularly, then that is the sign of an ethical, professional and competent quoter. You should engage the agent if you are a seller and respect them if you are a buyer. This is the agent that in the long run gets the best (money and deal) results for the sellers.

F. If an agent achieves E says 8 times out of 10, then even on the 2 out of 10 times the agent gets it “wrong” they are still being ethical and professional if they are sincere in their attempts to communicate to the market. Quoting perfection (100 out of 100) is not possible – as ethical and professional buyer advocates we cannot give 100 out of 100 price estimating perfection to our clients in a shifting market. This is not to excuse the serial underquoters incompetent or criminal behaviour; this is to explain to the public that professional, accurate agent quoting is about intent rather than perfection.

The real estate industry has many genuine and competent selling agents, but there is still an underlying mentality to get all buyers to a home rather than communicate.

In conclusion and to be clear, we at James Buyer Advocates think agent quoting is actually very simple, irrespective of the individual situations or the market.

It is all about intent. Is the agent trying to deceive or to inform?

For more information read our much repeated article explaining Step and Under Quoting written a number of years ago, CLICK HERE

There he is, one of our favourites – the Captain. Iain Carmichael singing out his tune to the 3 bidders who competed for 24 Belson Street, Malvern East ($2,375,000).

Goodbye from Around the Grounds 2014

As we leave public reporting of the markets for 2014 (private updates are still going to our clients till year’s end), here are some final Market flavour snapshots.

on Fire at the Top End – Architect Adam

Marshall White had a big auction at 41 Flowerdale, Glen Iris (Madeline Kennedy/James Redfern) at almost $4m and two $2.8-3.0m sales in Camberwell – 18 Stodart Street at auction (Duane Wolowiec/James Redfern) and 22 Rowell Avenue before auction (Stuart Evans) today. Speaking to Hamish Tostevin, he said the stock was a bit of mixed bag, but they had a clearance rate of 83% and listings have already started in earnest for February.

Jellis Craig had a very, very big day, with a clearance rate also in the 80% range. 13 Kintore (Peter Vigano) was a stand out for me – selling for $180K more than what was signed up for a few months ago and the two bidders at auction were Chinese. 33 Hawthorn Grove (Greg Toogood/Campbell Ward) and 25 Alma – both over $5m and both at auction today also. Kew – some healthy results there today – 47 Campbell (Greg Toogood) sold for $2.4m,  23 Wills (Mark Read/Pat Dennis) at $3.5m (which has been around for a while and backs on to a potential development site) and 24 Walmer nearly $4m (which failed at auction a month or two ago). Deepdene didn’t miss out either, with 26 Walsh Street (Geordie Dixon/Richard Winneke) selling for snick over $3.2m.

Interestingly, Jellis Craig had a big Thursday also according to Richard Earle – selling four properties over the $3m range, two of which were under advertised auction conditions.  Wattle Road, Hawthorn (Greg Toogood), Broadway, Camberwell (Richard Winneke), an off-market one in Tydall, Surrey Hills (Peter Vigano) and other one in Hosken Street, Balwyn (William Chen). I really can’t remember so many “heavyweights” selling in such a short span of time. I spoke with two of the most experienced agents in Boroondara – Alastair Craig and Peter Batrouney – and they couldn’t either.

Stonnington heaps of activity Off-Market – Call Gina

Oldies, but Goodies (agents that is) or; When experience counts…

Our sample auction results last week showed that nearly 50% had only 1 bidder. Is the market showing signs of turning? Well here’s a sample of the happenings outside of auctions this week;

  • Friday, 14th November, Off-market in Malvern East sold by Jeff Gole, Abercromby’s for over 10 % more than it sold 6 months ago
  • Saturday, 15th November, Off-market in Malvern East, sold by Andrew Luke, Jellis Craig
  • Tuesday, 18th November, Pass-in from October, Malvern home sold by Rae Tomlinson, Marshall White with 2 bidders  * $3m-plus
  • Wednesday , 19th November, Off-market home in Malvern sold by Madeline Kennedy, Marshall White  * $3m-plus
  • Friday, 21st November, home in Toorak sold before auction by Michael Armstrong, Kay & Burton for more than 20% than it sold for three years ago

And today back at the auction scene –  there was a trend for family-sized homes to pass-in despite multiple bidders! Is the gap between buyer and seller starting to widen?

Back to our oldies but goodies – agent experience that is… And some good top-end ($3m-plus) negotiation results in Toorak today:

  • 99 Canterbury Road, Toorak passed in at $2,910,000, only to be negotiated for a sale soon after by Peter Kudelka (Kay & Burton).
  • 6 Martin Court, Toorak passed in at $3,525,000, also negotiated for a higher result soon after by Gowan Stubbings (Kay & Burton).

Bayside as solid as it has been in a long time – Klarity Kris

The market, over all today, was still hot.  Bidderman was up again at 2.2 bidders per auction.

However, Greater Bayside wasn’t necessarily the reason why.

Port Phillip Council was the leader in biggest ‘pass-ins’ this weekend with three properties passing in over $2,500,000.

  • 27 Kerferd Road, Albert Park (Michael Szulc, Cayzer Real Estate)
  • 5 Charnwood Road, St Kilda (John Carter, Hocking Stuart)
  • 12 Loch Street, St Kilda West (Arthur Apostoleros, Buxton)

Are the vendor expectation in Bayside starting to exceed the market? And will this impact buyer confidence leading into the last few weekends of auctions for 2014.

A couple of goodies sold prior to auction in Hampton, both with multiple interested parties at levels the vendors were happy to accept.

  • 4 Kerferd Street, Hampton (Michael Cooney, Hodges) undisclosed high-$1 million.
  • 56 Crisp Street, Hampton (Ian Jackson, Kay & Burton and Anne Forsyth, Duffy Forsyth & Co.) above $2,100,000

One that stood out today was 21 Potter Street, Black Rock (Jenny Dwyer, Hocking Stuart).  With six bidders fighting for the property and an eventual sale of $2,920,000, this demonstrated that if the product is right, the demand is definitely there.

I think Justin needs to use some colouring. What do you think, is that grey hair? gives the ultimate buyer the full carnival ride selling after auction for $2,770,000. 8 Norman Avenue South Yarra (3 bidders).

The Very Top End of Town in 2014

Strong, very strong. In fact, an ultra strong finish to the year and so much is happening behind the scenes – off market. To date this year we have bought more off markets than in any other year EVER.

In the last month we have purchased 13 in the TOP END category and missed a few as well. We will have bought around 100 by years end again in 2014. To view the homes we have bought – CLICK HERE

Thank you to our clients who have shown faith and have trusted us in 2014. Some of their comments can be viewed here – CLICK HERE

I would like to take this opportunity to thank all agency principals, agents, buyers and sellers who allow us to report the auctions week in, week out. Without their co-operation we would not be able to bring you James Market News each week.

As far as Market News goes, you will next see us in February 2015. However, as far as Buyer Advocacy goes we at James Buyer Advocates are working right up till Christmas – we have solid auction bidding books ahead until mid-December. AND right now we are buying more homes off market, pre and post auction and at private sale than ever before. Why? Because right now a number of auction results are slamming the door firmly shut on “best buying for buyers”. IF, and only IF, you can find a more suitable alternative, then you should think outside the dots.

Agent Survey: How much do you think land values have gone up in your ‘patch’ this year?

Glen Coutinho (RT Edgar Boroondara, Kew): “Our area has seen a significant rise in land value. Some of the better streets were trading at $2000 per square metre, but this year has seen a rise to $2500 per square metre, or $250 per sq ft. This is due to lots of buyers and developers wanting to build new homes in leafy streets plus strong off-shore interest. The new home market for houses over $4m is very buoyant and this is now reflected in land .”

John Clarkson (Hocking Stuart, Brighton):  “Land values in the Bayside area have certainly crept up 5-7% over the course of the year. Clearly, land in the highly desirable precincts near Church Street and Bay Street have been attracting a premium. The demand will continue to be high for the centrally located land and house opportunities that are close to the local amenities. Clearly, the properties closer to schools, parks, shopping and transport continue to create huge interest and demand which doesn’t look like abating!”

Gary Peer (Gary Peer, North):  “Land has gone up in our “patch“ this year. The large amount of development has made parcels of undeveloped land more rare and highly sought after. Furthermore the low rental returns have encouraged investors to seek land, trusting in a more likely higher capital gain outcome. The rising prices of established houses on large parcels of land has left many buyers aware that they may not be able to afford their desired family home on a large allotment, encouraging them to build two smaller homes and sell one, or do a joint project with a friend or relative and own one each. Only last week we made an ‘off market’ sale of land in St Kilda East for $250,000 over expectations due to these circumstances (two families building a home for each of them). There are a few rare situations where some building regulations have changed limiting the density of development, resulting in those parcels of land being worth less than before.”

Justin Long (Marshall White, ):  “There has been definite upwards pressure on land values this year and, whilst there is never absolute consistency in these measures, it would likely be in the range of 5-10% across the board. Bear in mind of course, that while land values may have increased, the value of bricks and mortar is always likely to attract some depreciation, so applying a 5-10% rise in the value of a finished home doesn’t necessarily always follow.”

Aaron Silluzio (Barry Plant, ):  “The Banyule market experienced a moderate increase from January 2014 to April 2014 of 3-5%. Then after CBA came out with a fixed 4.99% for 5 years, the Banyule market saw a further increase of at least 10%.”

Torsten Kasper (Chisholm & Gamon, Elwood): “Chisholm & Gamon covers the Bayside area from Port Melbourne through to Mt Martha. Our inner Bayside offices have experienced growth at different price points between 7-15%. Our view is the economic environment will allow for some more sustained growth for the first half of next year and a more stabilised environment for the second half of 2015.”

Tom Roberts with his serious look as he bangs down the hammer on 242 Scotchmer St, Fitzroy North for $2,340,000. Volcano with 4 bidders

Some Extra Reading on Apartments

Buying Apartments for downsizers, oldies, change of lifers has been a James Buyer Advocates growing market segment this year. We are now involved in Apartment buys (mostly $2m and above) every week and as we said there are traps for young players.

Five concepts to encourage you to get professional buying help.

  1. At 50, you have more years in the future than your working life in the past. This won’t be the last home you buy – in fact, far from it for many of you.
  2. Some apartment types have historically had a lot lower growth than inner Melbourne homes – although this information is hard to find. Your nest egg needs to be protected.
  3. A $3m apartment that you value at $14,000 per sqm on new build rates as opposed to $11,000 resale per sqm rates means a $600,000 calculation difference.
  4. An apartment that you accept as 210 sqm, but in fact measures up at 190 sqm, means an overpaying of $220,000 at $11,000 per sqm.
  5. Most apartments are not transparently sold via auction, so it’s pretty easy to buy poorly and be $200,000 over value instead of buying well and being $200,000 under value. Do that a few times and come 70 you will be living well or living poorly. The only thing you had to do differently was get some independent, professional, buying help.

Another $1 million in your back pocket for free, due to a good decision. Even though you and I are getting older, $1 million should still mean something.

Making a decision to move to an apartment or a townhouse? Are you asking the right questions? By John Hazen

After living in a house on a suburban block for most of their lives many people decide at some time that they will now move into an apartment or townhouse. They spend weekends studying and visiting properties and often they just never seem “quite right”, but maybe this is because they are considering the wrong question. They’re asking, “Is this apartment right for me?” before they’ve considered the question, “Am I right for an apartment?” More ……….CLICK HERE

Northern Warehouses by James Buyer Advocates Valuer Adam (yes, Adam Gardner is a valuer by qualification)

While the numbers of new public listings is starting to slow down somewhat in the Inner Melbourne areas as Christmas approaches, there are still a number of properties that should garner some interest when they go under the hammer. In fact, the number of warehouse conversions on the market is significant at the moment, and these types of properties can often evoke some fairly strong emotions in buyers. What makes them different? A good part of this equation is the fact that each one is essentially bespoke – they have been done to suite the shell and spaces they have available to work with – some more effective than others. Let’s look at a few on the market now:

We have mentioned 9a Clifton Street, Richmond (Chris Byrne, Collins Simms) previously as an example of a special property that will appeal to a lot of buyers, but just how many are there at the suspected price range this property sits in will be a critical question in terms of how to approach buying this home. Visit this one and you will understand what I mean here.

20-22 Trades Hall Place, Carlton (Luke Chisholm, Nelson Alexander) is a fairly unique property, and is about as close to being in the CBD as you can get without actually being there. It is nestled away down a lane and has a style that is distinctive. The upstairs living area is a great space, and the inclusion of a motorised shade really improves the useability and privacy of this area. Entertainers and buyers looking for a city retreat should see this property. The floorplan for this one won’t suit everyone however, so buyers must balance emotion with functionality to make sure it suits them, and a very good understanding of price should be employed to understand value here. What does this compare to?


Today I watched Tom Roberts from Nelson Alexander auction 15 Little George Street, Fitzroy. Architecturally redone, this conversion was stylish, but featured a lot of stairs, so buyers needed to be comfortable with that. How many buyers were comfortable? Well, 4 bidders took it to over $2,100,000 today when it sold under the hammer. It opened on a $1,600,000 vendor bid….

If you are in the market for a high-end warehouse conversion the concept of value and pricing need to be considered carefully as these properties have very different characteristics and very different capital growth, rental and demand profiles. Once you find one that is right for you, ask yourself why are you buying it? How many other buyers will want this now and in 10 years? How do you beat your competition when many may have the same money as you do? More ……….CLICK HERE


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