oc | Tuesday 21st January

We are learning to love this market

We love the Inner Melbourne property market right now. We love where it is heading short term and how it will be reacting, possibly in the medium term and almost certainly in the longer term.

The current statistics, trends and yes, even the mainstream press, are on the money when they express that the market is experiencing a significant price decline, as the drivers of the Inner Melbourne market of the past decade have all been changed by the government(s) or are proposing to be changed.

What were some of these drivers?

  • Chinese and other Asian money inputs,
  • “Easy credit” by banks without considered due diligence,
  • Population explosions into Inner Suburbia and
  • Out-of-date tax concessions?

With the above drivers going or gone, our housing market has been left without key upward drivers.

We feel right now this is not a bad thing, as it allows each buy/sell transaction to find its own level, its own position in the overall scheme of things.

Three cheers we say! Well done to all concerned and “Phew!” we think, as a community, we may well have dodged a very difficult time.

The market we feel can be seen as good because it is more stable, even though it is declining in price and turnover overall.

The players, such as agents, sellers and buyers are all gradually coming to terms with the new paradigm (to use one of those buzz words, hey!).

3 Willcyrus Street, Surrey Hills - After Auction $2,090,000, 2 Bidders Tim Derham

3 Willcyrus Street, – After Auction $2,090,000, 2 Bidders.
Tim Derham

So why can now be a good market?

We like the new pace of decision making – it is suiting a lot of our buying and some selling clients.

We like the fact that this market rewards good processes and good decisions, more than the 2015-2017 market which was just “scorched earth negotiations”, no matter what finessing was done by buyers.

The Inner Melbourne property market is again becoming the realm of the home buyers and home sellers rather than the developers, us agents, investors, builders, the advertisers and all other ancillary hangers-on.

Welcome back to the housing forefront, Mums and Dads.

In April 2019 as a buyer, seller, or renovator, you now have time to think things through, to make the right decisions for your future and to go about the process in a manner that doesn’t resemble scalded chickens, hooked into the rack, knowingly on the way to the slaughterhouse.

What is a normal market?

A declining market is not a bad thing. A rising market is not a bad thing.

Just as evaporation is neither better or worse than precipitation for the juice of life; we need to go through rises and falls or else we don’t have another juice of life – an ongoing home market.

We and our clients are finding that you can happily exist in the 2019 market, be you a buyer or seller.

In order to survive 2018, we, and other buyer/seller agents had no choice but to become more efficient, more flexible and most importantly, more frugal.

This need for adaptation has already seen some fringe players leave the industry and better solutions being offered to buyers and sellers. And to be frank, this current market has allowed the smart agents time to breathe, time to take stock and maybe a few more holidays or more time with the family or ……

Yes, since our last Market News I survived 17,600 feet reaching Everest Base Camp and returning, with the help of a great guide and some good fellow travellers, but that is a story for another day. 

We are defining good agents as those that are still here and have a flexible mind that says commission growth, does not in isolation, equate to a happy life. These same agents have made the changes to their businesses, in order to meet the demands of the new market and pave a way for longevity. These good agents may well be in a better place in this current market than say, 18 months ago, as may be many families…

What about buyers and sellers. What about families?

How do you, as a buyer or seller (families with children growing, changing, leaving) maximise your outcomes in this current market phase?

64 Essex Road, Surrey Hills - Under the Hammer $3,390,000, 4 Bidder Peter Vigano

The only Volcano auction in 31 covered today: 64 Essex Road, Surrey Hills – Under the Hammer $3,390,000, 4 Bidders.
Peter Vigano


We are always being asked when is a good time to buy?

There is a case to say the market is better for buyers now than say two years ago. In a number of cases it is – but it’s not an absolute truth. In a number of cases, it would have been better to buy two years ago – especially if you were looking for an A-grader and you were knee deep in high LVR’s. Why?

i) More choice

ii) Easier Bank lending

iii) You are two years into a good solution now and life is short.

You buy well when it feels right to buy when you have found the right home and you move on when you haven’t found the right home, irrespective of the market noise.

However, let’s take the angle that it could be better to be a buyer in April 2019 than say April 2017.

Prices are lower and interest rates haven’t gone up, so if your earning capacity (and spending) is the same, then it’s pretty easy to make a case that good buying now should be at a lower price than good buying in the recent past. Look at Bidderman – competition is weaker. The rider…..if you can find the right home. For us, the off-market right now is a far more active place than two years ago. Of course, you need to have a good 2019 bank and off-market strategies (happy to show clients several).

Decisions are seemingly harder to make for many but we feel you have more time, you are not as rushed, due to lower stock and lower competition overall.

You can make those better decisions through having the time to be getting better due diligence, clarifying that what you are targeting is actually what you want and then having/seeking the advice of a professional buyer/seller agent to carry this out. This is one time-proven way to better decision making – assuming your chosen professional is competent, experienced in this field and ethical.

Which leads to better Outcomes.

What does a better outcome look like in April 2019 compared to April 2017

$400,000 tax-free less on some $4m sale prices.

An extra 120 sqm on 700sqm on some blocks in Inner Melbourne.

Renovated in 2019 of the same property type for the same price, as unrenovated in 2017 on some homes.

Strategies working in 2019

There are many for both buyers and sellers. One example of a working strategy right now is backward bidding. In 2017 you could offer $3,000,000 – the seller says No – and then a month later you offer $3,220,000 to do the deal. Now in 2019, a buyer can make an early good offer at $3,000,000 – within the ISP range of $2,900,000 to $3,100,000  – get a No and at the end of the campaign, with no other obvious buyer, offer $2,780,000 to do the deal. That’s a $440,000 difference if you have the right advice and execute correctly.

We are still slightly confused as to why some sellers/selling agents think backward bidding is “unethical” yet when the market is strong, upbidding and upquoting from sellers to buyers is not a problem and actually the norm.


Granted there are some sellers that are very disadvantaged by this market;

  • The developer
  • The quick resaler
  • The off-the planner
  • The B/C grade seller who could have sold two years ago
  • The downsizer

However, many sellers are not significantly disadvantaged by this market if they go through good processes

  • Is it who you know? No, it is not! Select the right agents to interview.
  • Is it what you know? Not really! Interview agents with meaning and purpose, not emotion and confusion.
  • Present to the right buyer profile – who is your buyer and what do they want to see – in some cases, the cost of presentation means a lot more than just a few per cent. The presentation can mean the whole purchase price, that is, selling v not selling.
  • Opportunity Costs – understand where to save and when to spend – we are still surprised how a supposedly smart seller will try and save $20,000 in commission only to lose $220,000 in tax-free capital on poor choices – of agent and/or asking price.
  • Strategy – eg, a method of sale and clarity of outcome – clearance rates are circa 50%, under the hammer are around 15%, high asking prices are killing auction campaigns and many sellers are still being talked into a public auction campaign with a high asking price in a weakening geographical area …

These sellers below can actually benefit in this current market

  • A-grader who wants to sell and prices correctly.
  • Seller who is looking to trade up.
  • Seller who is selling a home which does not require a renovation.
  • Seller who is buying and selling and looking for time to coordinate the double act.

We are learning to love this market. Is your agent? Are you?


Its 6.00pm Saturday and we have completed our 2019 Opening Market’s James 100 auction test over three weekends (February 23rd, March 2nd and March 23rd) and the results are in below.

We do this this 100 auction test four times a year  Opening, May, Early Spring and Pre-Xmas markets.

No real surprises in the Opening Market stats!  We think it’s all pretty self-explanatory and confirms what you are reading in the wider press and what has been going on since 2017.

The market is in major price decline and will seemingly continue that way for some time OR until new positive market drivers return.

Next full 100 auction market measurement test is May 2019.

Opening 2019

Grounds opening 2019

Summary above (we examined each of the 100 auctions in geographical terms)

Boroondara is a weak and declining market

Logical reasons why, as they have had the greatest “Chinese money” declines and many selling agents have not changed their modus operandi – still offering expensive and unsuccessful auction processes only. 

Bayside – almost ditto above, but not quite

Actually performing better than one may think – some selling agents are responding smartly. Declining “Chinese money” has had minimal effect, as it was never as strong as say Boroondara 2009-2017.

– Borderline Ok or flat market

These stats have said this for the last year in Stonnington. A credit to the agents as they have had to deal with some losses of “Chinese money”. The increased activity away from unsuccessful auction campaigns is a reflection on agents professionalism. To be balanced though, not too many super high-enders going to auction to be tested publicly – still a lot of smoke and mirrors.


14 Royal Avenue, Sandringham - After Auction $1,587,000 with 3 Bidders Mark Earle

14 Royal Avenue, – After Auction $1,587,000 with 3 Bidders.
Mark Earle

BRIGHTON, 20 Oakwood Avenue. Ben Thompson (Jellis Craig) Under the hammer, $2,030,000 2 Bidders

BRIGHTON EAST, 28 Ferguson Street. Nick Renna (Jellis Craig) Under the hammer, $2,020,000 2 Bidders

SANDRINGHAM, 14 Royal Avenue. Mark Earle (Buxton) After auction, $1,587,000 3 Bidders

ALBERT PARK, 7 Merton Place. Warwick Gardiner (Greg Hocking) After auction $1,525,000 2 Bidders.

BRIGHTON, 40a Head Street. Before auction, undisclosed

BRIGHTON, 444 & 444a St Kilda Street. Before auction, undisclosed

MIDDLE PARK, 271 Beaconsfield Parade. Passed in $4,600,000 0 Bidders

BRIGHTON, 7 Campbell Street Brighton. Passed in $4,110,000 1 Bidder

ELWOOD, 31 Tennyson Street. Passed in $2,850,000 0 Bidders

HAMPTON, 36 Imbros Street. Passed in $2,850,000 0 Bidders

ELWOOD, 53 Dickens Street. Passed in $2,650,000 0 Bidders

SANDRINGHAM, 49 Victoria Street. Passed in $1,690,000 0 Bidders

HAMPTON, 4 Edinburgh Street. Passed in $1,520,000 0 Bidders

Read all 31 Reports here


30 Alfred Street Kew - Scott Patterson. Sold after auction undisclosed

30 Alfred Street, Kew – Scott Patterson. Sold after auction undisclosed.

SURREY HILLS, 62 Essex Road. Peter Vigano (Jellis Craig) Under the hammer, $3,390,000 4 Bidders

, 6 Halley Avenue. Steven Abbott (Jellis Craig) Under the hammer, $2,130,000 3 Bidders

SURREY HILLS, 14 Albion Street. Peter Vigano (Jellis Craig) Under the hammer, $2,125,000 3 Bidders

SURREY HILLS, 3 Willcyrus Street. Tim Derham (Abercromby’s) After auction, undisclosed 2 Bidders

KEW, 30 Alfred Street. Scott Patterson (Kay & Burton) After auction, undisclosed 1 Bidder

HAWTHORN, 1 Yarra Grove. Passed in $3,500,000 0 Bidders

KEW, 9 Victor Avenue. Passed in $3,200,000 0 Bidders

CAMBERWELL, 28 Spencer Road. Passed in $2,100,000 0 Bidders

CANTERBURY, 64 Warburton Road. Passed in $2,100,000 0 Bidders

 Read all 31 Reports here


17 Vincent Street, Glen Iris (Stonnington) - Under the Hammer $3,642,500 with 3 bidders Marcus Chiminello

17 Vincent Street, (Stonnington) – Under the Hammer $3,642,500 with 3 bidders.

GLEN IRIS (Stonnington), 17 Vincent Street. Marcus Chiminello (Marshall White) Under the hammer, $3,642,500 3 Bidders

GLEN IRIS (Stonnington), 42 Maitland Street. Andrew Hayne (Marshall White) After auction, undisclosed 1 Bidders

SOUTH YARRA, 8 Cunningham Street. Daniel Wheeler (Marshall White) After auction, undisclosed 1 Bidder

MALVERN, 4 Embling Road. Justin Long (Marshall White) After auction, undisclosed 3 Bidders

PRAHRAN, 29 Duke Street. Andrew James (Hocking Stuart) After auction, $1,650,000 2 Bidders

TOORAK, 19 Tashinny Road. Before auction, undisclosed

TOORAK, 12 Canterbury Road. Passed in $2,800,000 0 Bidders

GLEN IRIS (Stonnington), 64 Erica Avenue. Passed in $2,300,000 0 Bidders

MALVERN, 8 McArthur Street. Passed in $1,770,000 1 Bidder

Read all 31 Reports here

Screen Shot 2019-02-03 at 5.06.17 am

Two more deals for Gina this week, one an off-market and one that seemingly was never going to happen until it did. Well done Gina - I should take a break more often.

Two more successful deals for Gina this week, one an off-market and one that seemingly was never going to happen until it did. Well done Gina – I should take a break more often.

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