oc | Saturday 21st September
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Slight breather today – nearly 50% of auctions with only 1 bidder

Leaning towards a sale: Steve Abbott () sells 6 Gellibrand Street, Kew, under hammer, $3,820,000, 2 bidders and a big crowd of 110 people

At 6.00 pm on Saturday, the James Clearance Rate for Melbourne’s $M+  was 66% on the 32 auctions we covered. The  , our bidders per auction measurement was at 1.9. Both and Bidderman are down on the results we saw prior to the Melbourne Cup.

Overall Summary of Melbourne’s Million Dollar-Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 10%
  • Lone Rangers ($M+ auctions with one bidder) 41%
  • Norms ($M+ auctions with 2 or 3 bidders) 28%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 21%

That’s a win to the Lone Rangers, with only 1 bidder at almost half the auctions we attended.

Big backyard auction: Steve Tickell () sells 65 Teddington Road, Hampton, under hammer, $1,750,000, 3 bidders and a big crowd of around 80 people

Market Snapshot

The market definitely felt a bit iffy out there today. Why?

  • It may well be the market taking a pause on the staircase rise again.
  • It may well be the market is finally groaning under the weight of numbers and simply can’t gorge anymore right now.
  • It may mean that we are approaching a turn.

Who knows – before the Cup the market was on fire, now it’s more subdued on what we saw today.

Size and Activity:

The best description for the market right now is BIG. Real BIG. Which is not abnormal for this time of the year, nonetheless, it feels bigger than the last few years.

BIG in all aspects:

Is this much choice good or bad?

In many ways, as Westerners we are brought up to think choice means freedom and freedom means happiness. On that logic there should be a lot of happy buyers out there right now.

Are there?

For many buyers there is simply too much choice for them to act. What do we mean?

If you are new to the market and you have a softly/softly or analytical or cautious personality then quite possibly you are finding the Inner Melbourne market a bit daunting right now. Too much information, too many options to weigh up and too much ….

There is a solution and that involves professional advice and a bespoke plan tailored to your real needs and wants. First step suggested would be to slash the number or options you consider and restrict the freedom of choice you apply to yourself. Wow, I’m practically a communist you say. Cutting back will help you, not hurt you, I promise.

Market hype at the Top End – $10m+!

Hey, it’s not all hype at the Top End, having been involved in a few circa $10m in this current market. But hey, let’s not talk about us, let’s talk about sleepy Bayside with Chris Bevan from JP Dixon who has been involved in four $10m+ waterfront properties in Moule, Bay, Alimar and Chatsworth in ’s Golden Mile. That’s right four x $10m+. With Pete Kennett firing up his gavel at 38 Dawson, (Been through it. Basic house, brilliant views.) for an end of November auction and a few other quiet ones, it’s very hard to say that the Bayside market talk of the last few months has just been agent hype. ’s Golden Mile is a microcosm of the inner Melbourne TOP END market before the Melbourne Cup.

Thinking

The resale apartment market is as strong now as it has been for many years and this is mainly due to the combination of the baby boomers losing their kids, agents knocking on doors offering incredible money and the continuing strength of the overseas Asian market.

We like apartments as lifestyle buys, however just because you’ve got money in the bank shouldn’t mean that you put your financial brain into neutral. There are a few traps for the inexperienced player.

  1. What is the going price per sqm metre? Is it $8,000 or is it $12,000. Oh, the selling agent will let you know as it’s hard to find pricing. Are you crazy?
  2. What is the size of the apartment? Oh, it feels like 250 sqm says the agent? Are you fair dinkum?

Even though we love buying family homes at auction it’s only part of what we do. We also buy apartments for clients in high-rise inner Melbourne or low-rise suburban.

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.

Down to business: Antony Woodley (Marshall White) sells 35 Range Street, Camberwell, under hammer, $2,545,000, 5 bidders

Biggest Auctions:

  • Malvern, 5-7 Woodmason Street, Justin Long (Marshall White), under hammer, $4,690,000, 5 bidders
    We are invited to watch the auction from the vantage point of the tennis court, and as a crowd of some 80…(See more in Auction Reports)
  • Toorak, 3 Highgate Hill, Warwick Anderson (RT Edgar), after auction, undisclosed above $4,000,000, 1 bidder
    According to auctioneer Warwick Anderson the Christian brothers of St Kevin’s put a single dwelling covenant…(See more in Auction Reports)
  • Kew, 6 Gellibrand Street, Steven Abbott (Jellis Craig), under hammer, $3,820,000, 2 bidders
    Auctioneer Steve Abbott suggested that this looked like a steal considering what people were now paying for land…(See more in Auction Reports)

Bidderbuzz:

  • Camberwell, 35 Range Street, Antony Woodley (Marshall White), under hammer, $2,545,000, 5 bidders
    This was a fun auction to watch especially with Anthony Woodley as auctioneer…(See more in Auction Reports)
  • Balwyn, 25 Yarrbat Avenue, Walter Dodich (Kay & Burton), under hammer, $3,205,000, 4 bidders
    The crowd of 70 people were ushered into the front yard of the house where auctioneer Walter Dodich spoke onto…(See more in Auction Reports)
  • Camberwell, 13 Nevis Street, Simon Lord (Jellis Craig), under hammer, $ 2,365,000, 4 bidders
    Auctioneer Simon Lord certainly had his work cut out for him at this auction, which got off…(See more in Auction Reports)

Biggest Pass Ins:

  • St Kilda West, 101 Park Street, passed in, $2,400,000, 1 bidder
    About 35 people attended today’s auction….(See more in Auction Reports)
  • Balwyn North, 32 Aquila Street, passed in, $2,300,000, 1 bidder
    A good-sized crowd gathered here to watch Jeremy Desmier at work this afternoon…(See more in Auction Reports)
  • Sandringham, 46 Fernhill Road, passed in, $2,000,000, no bidders
    About 25 people attended this auction at 12:30pm today…(See more in Auction Reports)

Agent Survey: How BIG is this market?

Steve Tickell (Hocking Stuart, Brighton): “I’m not so sure about ‘BIG’, but I can relate to the market being described as ‘HOT’ for (certain) properties at the moment! It’s almost what one might describe as a two-speed market as far as goes. If it’s unique, if it’s a great home, if it’s a brilliant site, or simply fits into that ‘rare as hen’s teeth’ category it’s going to be HOT! If it’s none of the above, and slightly overpriced, chances are it will either struggle to sell, or we find there might only be a buyer or two interested. This trend applies to all price categories at the moment. That said, simply due to a strapped supply situation right now, properties are still ultimately selling, something that doesn’t necessarily occur in a weaker market.  For upper-end properties, say at $3,000,000-plus, there is also strong demand, though the buyers become a little more selective, and again, if it’s not quite right, it will stick. Having said that, with clearance rates at auction hovering in the high 70-80% range, clearly we are witnessing a market that is as strong as any over the past twenty years. In a BIG market, apart from high clearance rates, you also find there are big ‘spikes’! That is, properties that see prices way above the anticipated price range. Not all properties, but just those that are special.  If clearance rates at this level, with hot demand for the right properties, is another way of saying this market is BIG, then that’s as good a description as any!”

Richard Winneke (Jellis Craig, ):  “It has been an extremely busy start to spring with a record number of auctions and very strong clearance rates.  November and December will be a little quieter, however there always tends to be many off-market transactions between now and December 25.”

David Lack (Biggin & Scott, ): “We have not seen this volume of listings since late 2007/early 2008 and whilst the market is still very strong for A-class properties, those properties that don’t quite tick a lot of the boxes are starting to struggle with the greater amount of competition.  Larger prestige apartments with good water, and or city views, continue to perform well.”

Mark Wridgway (RT Edgar, Toorak):  “The market is as big as I’ve seen in terms of volume, throughout my 20 year career. And prices are higher now than in any previous cycle.”

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