oc | Monday 20th January

The market is showing clear signs of rejecting overpricing.

Increasingly the story of the day - little interest - PASS IN Carpenter St Brighton - O bidders

Increasingly the B and C grader story – PASS IN – 74 Carpenter St Brighton, $2,750,000 – 0 bidders





31 Rubens Grove Canterbury, PASS IN $2,900,000, 1 bidder.

31 Rubens Grove Canterbury, PASS IN $2,900,000, 1 bidder.

Today is a special report – we decided to focus on B and C graders and see how the market viewed them. While not all homes in our reports are B or C graders, there is a greater skew than normal to B and C grade homes in our stats.

WOW you are saying, but WOW I’m shocked. Bidderman is shrinking, the Clearance Rate is in the dumpster and the property world seems to be caving in. Mal you told me the market was healthy last week. What the hell has happened – have we fallen off the cliff!

No not all, but the market has been moving back to a normal healthy market, devoid of a suffocating overseas influence and it appears to have done so quiet quickly and without too much collateral damage. (eg mid Spring 2015 to now).

In a normal market buyers have choices or more to the point feel they have choices. Sellers also have options.

We are in a normal or balanced market at the moment – there are plenty of buyers (plenty) and if you look hard enough you have options.

Pre Easter we had stock shortages – those stock shortages are not there now and buyers are back to being picky, as they were in late Spring 2015. If the price is going too high, buyers are moving on, as they feel there will be another opportunity.

May 2016 is a very, very different market to May 2015. It’s healthy not crazy – that is the big difference and with health comes balance – just like nature.

Another way of describing the market is as we said last week; its a Births, Deaths, Marriages and Divorces market rather than an Roaring Overseas Migration Market.

To be fair, the James Clearance Rate and James Bidderman today, is more a measure on the B/C grade market than the A grade market we usually focus on. The overall quality A grade market is nothing like what our stats show today.

Our definition of A, B and C grader relates to the properties PPP’s – Price and Position and Property (Land+Building) characteristics. You can have a well positioned, good flowing home that is overpriced and it then becomes a B grader. You can have a poorly positioned home that is well priced and it could sneak up to a B grader and in extreme cases an A grader. But basically the way we see things is an A grader has good Price, Property and Positional characteristics – B grader is off on one the P’s and C grader has a few P’s not working for it.

We think a number of A graders are being turned into B graders and B graders into C graders through SELLER PRICING alone.

Anyway back to today – what we highlighted is what we have been seeing since the middle of Spring 2015.

The A grade market hasn’t missed a beat.

The B grade market is feeling the pinch.

And the C grade market is grinding to a halt. Apartments can’t be given away right now.

This is reflective of a normal or balanced market.

How do you as a buyer, use this information wisely.

1) Still be aggressive on the good homes, but be smart aggressive. Smart aggressive, doesn’t mean be generous or stupid – smart aggressive means take advantage of the nervousness of other buyers or the seller and offer the right price at the right time.

2) Stop listening to the drivel that “we’ve got loads of Chinese interest from overseas”. Its not there like it was (in most cases); you don’t need to run yourself up the price flagpole, unless you want to (and do you really want to do that).

3) Understand we are still in very healthy normal market and you will still have to compete with local buyers and sensible overseas interest, if you are on an A grader. There have been some seriously healthy results in Brighton (3 locals – Marcus Gollings) and Prahran (no names sorry – not appropriate) over $10 million.

BUT today we are about PASS-INS.

The four pictures of the four auctions in this report, are all homes we have been to and rated and reviewed. Collectively they are NOT A graders and they attracted minimal interest on auction day, despite a market being chockers with buyers right now.

They are not A graders now, even though all of them are in A grade or very close to A grade positions. Between them they are either poorer in quality, poorer in design, poorer in finishes or poorer in flow, poorer in orientation; in other words they are B graders in their current form and they need some work on the property P.

However when I went through each one of them, the prices that were quoted to me (after allowances for the agent quoting) seemed to be that of A graders. So A grade pricing but these homes could be thought of collectively as B graders with regards to the Property P – meaning in some cases today, these homes have 2 of the 3 PPP’s with issues – well issues in my opinion and as of today, issues in the opinion of the market – meaning B or C graders. Price re-thinking could bring them into A graders – these are not C grade homes in the longer term, yet they maybe now. They could be A grade under different circumstances.

Right now in the market A graders still rocking, B graders are easing substantially when overpriced and C graders are really beginning to struggle.

Lets monitor these and the other pass-ins of today and see how the PASS-IN market goes in the weeks leading into Winter.

Dare I be cheeky and say for the first time in a long time, that we may be moving into an era of OVERQUOTING. Na only joking, that won’t happen – will it?

Happy Mothers day Mum, love you and Happy Mothers Day to all Mum’s out there.

Pass In, $3,500,000 - 0 Bidders. 84 Sackville Street Kew

PASS-IN, $3,500,000 – 0 Bidders. 84 Sackville Street Kew


389 Barkly Street, Elwood (James Paynter) – Under Hammer $4,500,000, 5 Bidders.
Auctioneer, James Paynter, stands in the large rear yard of the property at 389 Barkly Street, Elwood, a block of four Art Deco flats close to Elwood Beach.

51A Grove, Hawthorn (James Tostevin) – Under Hammer $4,260,000, 3 Bidders.
A deceiving property with the front of the property betraying the large backyard that hid behind.

16 Vincent Street, Glen Iris (Gowan Stubbings) – Under Hammer $3,500,000, 2 Bidders.
A curious crowd gathered to see this architecturally-designed contemporary residence located on a street mostly known for period homes.


68 Beaver Street, Malvern East (Rob Vickers-Willis) – Under Hammer $2,631,000, 6 Bidders.
Rob Vickers-Willis is clearly enthusiastic, both about the Gascoigne Estate and the opportunity to renovate this characterful home.

47 Spring Street, Sandringham (Peter Hickey) – Under Hammer $1,480,000, 5 Bidders.
If you closed your eyes at the auction today you could imagine it was Willie Nelson as the auctioneer such is the gravelly recital of Peter Hickey from Buxton in Sandringham.

15 Reno Road, Sandringham (Stephen Tickell) – Under Hammer $1,840,000, 4 Bidders.
It’s a late start at this auction and the veteran auctioneer Stephen Tickell is full of apologies and warmth, explaining some errant paperwork had caused delay …


23 Montalto Avenue, Toorak – Passed In $7,750,000, 0 Bidders.

19 Mowbray Stree, Hawthorn East – Passed In $4,761,000, 3 Bidders.

84 Sackville Street, Kew – Passed In $3,500,000, 0 Bidders.

PASS-IN $7,750,000, 23 Montalto Toorak, 0 Bidders,

PASS-IN $7,750,000, 23 Montalto Toorak, 0 Bidders,


James Buyer Advocates bought three auction homes this week, yet we didn’t put our hand up today.

They were Widford, Hawthorn East (Glen Coutinho) Ardmillan, Moonee Ponds (Matthew Febey) and Westminster, (Peter Dixon). All three were family homes, all three involved difficult but professional negotiations with the respective agents – two bought before and one from a pass-in last week. Combined Average $3m.

To buy well at auction.

You need to understand the process and nuances of each agency.

You need to understand your risk v reward options.

You need to think beyond just putting your hand up – today 1 in 3 auctions had no expressed interest at all.

You need to be clear on to you.

You need to develop innovative “secure the home” strategies in this market or you will continue to miss, if the home is an A grader.



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