2021 Bought - $19m
This Week Sold - $23m
Normally we say nothing - privacy - but somebody else splashed it all over the papers. In 2021 we bought for our client. This week sold for a $4m gross profit in 2 years. Same home, same agent. In fact same clients we acted for on another $4m+ profit Toorak home previously. That's a +20% uplift as the Toorak median dropped 10%.
Hawthorn Auction Today
James Buy Sell - we bought for parents to be near to family - we couldn't miss it.
6 Bidders
Quote $1.6m
Fitzroy Auction Today
James Buy Sell - we bought for parents - we couldn't miss it.
6 Bidders
Quote $1.6m
Generational – Hat looks better on Mia than Mal
Increasing Numbers of Inner East Volcanoes
100 Auction Test. 2023M2. 2nd Week
We covered 34 auctions today
May 1st Week 2023
Bidderman
1.4
Stock
LOW
Clearance
64%
May 2nd Week 2023
Bidderman
1.9
Stock
LOW
Clearance
76%
Markets Bigger Picture
The market is strengthening. The results are volatile. The stock low and not increasing.
Micro
We have been to 4 homes in the last week to give opinions on price – the most since mid-last year and the markets – it’s really clear and simple what is happening overall, despite volatile individual results.
Overall, the market is creeping upwards but on the lowest turnover in a very long time. It’s volatile meaning not consistent and it’s that because volatility always occurs around directional change.
Some areas as you can see in our 100 Auction tests are on fire – like Inner East.
Bayside warmed today and Stonnington went back into the cooler at the lower levels.
Volatile.
However overall, the pressure is on Inner Melbourne buyers and will continue to build as stock remains low, and as the local, state and fed governments continue to have no housing policies of value.
AND as Xi, Philip and Vladimir do, whatever it is they feel they must do.
Macro
And when’s done is done, there are all the signs the Inner Melbourne property market will explode again once their handiwork smooths over.
Philip is playing with the middle Price segment by making people think twice about buying and selling where a mortgage is involved.
Xi affects Chinese people settling in Aus and once the migration floodgates open, the ripples from Inner East may become floods to the Bay where the Aussie Chinese high-end market is only in its infancy. Xi does affect Position. Why? The lack of private school places could be a catalyst for more Asian background communities to open and in turn, attract more Asian background people with more money and a need for high end homes near private schools. The Inner East is already at bursting point compared to Bayside, so does that make sense?
Vladimir is affecting the world’s supply chains and that is affecting the wealthy’s thoughts on business and also builds (Property) – when those issues are resolved, renovations will get back on the agenda and homes in need of a reno, will begin to attract volcanic bidding again.
It’s simple demand and supply = price change. We have no supply and demand is in a lull.
Buyers and sellers were on hot sauce in 2007, 2009, 2015/16 and 18 months ago, then the second half of last year they fell into treacle, but right now there’s some honey around (making prices volatile). It’s full steam ahead in the East and back on the hot sauce again.
What is happening in the markets on a PPP basis?
Legend: Red is a problem and green in good with amber mixed.
Position: If you were buying or selling a ready to move in home, top or bottom end in Boroondara then expect some action. Well that’s you Xi.
Price: If you were looking to sell a home needing a big mortgage in the $2m to $6m range in Bayside expect little, until you are prepared to give it away. Thanks Phil.
Property: If you have land in Stonnington and its higher end, say Toorak expect a 50/50 – may or may not sell – depends on right agent, right method and right price. Mmmmm Vlad that’s you and wealth confidence and building chains of supply!
Sackville Ward Classic - 2430 sqm - $20m - $22m
Multi-Agent - Off-Market
Kew
James 0417 003 333
Marcus 0411 411 271
Boroondara - On Fire
Camberwell Canterbury Glen Iris Hawthorn Hawthorn East Kew
May 13 2023
Bidderman
1.9
Stock
LOW
Clearance
88%
May 20 2023
Bidderman
2.6
Stock
LOW
Clearance
94%
Boroondara – Week 2
Clearance: 94%
Bidderman: 2.58
Mont Albert, 12 Victoria Crescent
SOI: $3,500,000 – $3,850,000
Sales Agent: Duane Wolowiec – Marshall White
Crowd: $3,500,000 – $3,850,000
Opening Bid: $3,500,000
On the Market: $3,900,000
Under the hammer: $4,560,000
Bidders: 4
Auctioneer Doug McLauchlan opened with a $3,500,000 vendor bid, which encouraged two bidders to pitch in their offers. A prolonged bidding war ensued, taking the eventual sale price to $4,560,000.
Hawthorn, 7/12-14 Auburn Road
SOI: $1,600,000 – $1,700,000
Sales Agent: Desiree Wakim – Marshall White
Crowd: 30
Opening Bid: $1,600,000 VB
On the Market: $1,900,000
Under the hammer: $2,190,000
Bidders: 6
6 Bidders fought it out in a quick auction
Kew, 62 Alfred Street
SOI: $2,900,000 – $3,100,000
Sales Agent: Chloe Quinn – Jellis Craig
Crowd: 65
Opening Bid: $2,900,000 VB
On the Market: $3,075,000
Under the hammer: $3,180,000
Bidders: 4
Bids move steadily and the home is placed on the market. A bidder stalls for lengthy phone consultation late in the piece but can’t top $3,180,000.
Camberwell, 35 Moorhouse Street
SOI: $2,795,000 – $2,995,000
Sales Agent: Stuart Evans – Marshall White
Crowd: 40
Opening Bid: $2,900,000 VB
On the Market: $3,000,000
Under the hammer: $3,060,000
Bidders: 2
A fast auction, this one, with Bidder 1 straight away opening with $2,900,000, followed by a second bidder, to bring the hammer down at $3,060,000.
Glen Iris, 4 Watson Street
SOI: $3,000,000 – $3,300,000
Sales Agent: Jesse Matthews – Marshall White
Crowd: 60
Opening Bid: $3,000,000 VB
On the Market: $3,500,000
Under the hammer: $3,500,000
Bidders: 4
4 Bidders were keen off mark, a quick half time saw the home not quite on the market but after a couple more bids the home was sold to Bidder 4.
Canterbury, 3 Wentworth Avenue
SOI: $4,650,000 – $4,950,000
Sales Agent: Geordie Dixon – Jellis Craig
Crowd: 60
Opening Bid: $4,600,000
On the Market: $4,850,000
Under the hammer: $5,200,000
Bidders: 4
Four bidders ensure a competitive auction. The two front runners break near the end to conduct an impromptu chat about who should be the buyer before resuming their battle.
Glen Iris, 3 Madeline Street
SOI: $2,100,000 – $2,300,000
Sales Agent: Ash Howarth – Marshall White
Bought Before: $undisc
Bidders: 1
Kew, 15 Hunter Street
SOI: $2,100,000 – $2,300,000
Sales Agent: Davide Letteri – Marshall White
Crowd: 80
Opening Bid: $2,200,000
On the Market: $2,475,000
Under the hammer: $2,650,000
Bidders: 5
Five bidders competed for this property, with auctioneer Davide Lettieri bringing the hammer down at $2,650,000.
Hawthorn East, 44 Harts Parade
SOI: $3,100,000 – $3,400,000
Sales Agent: Scott Patterson – Kay & Burton
Bought Before: $undisc
Bidders: 1
Camberwell, 14 Pine Avenue
SOI: $3,700,000 – $4,000,000
Sales Agent: Richard Winneke – Jellis Craig
Crowd: 50
Opening Bid: $3,700,000 VB
On the Market: $4,010,000
Under the hammer: $4,010,000
Bidders: 2
Camberwell, 14 Palmerston Street
SOI: $2,100,000 – $2,300,000
Sales Agent: Tim Mursell – Marshall White
Crowd: 40
Opening Bid: $2,200,000 VB
Passed in: $2,250,000
Sold After: $undisc
Bidders: 2
Auctioneer Tim Mursell opened with a vendor bid of $2,200,000, then came a bid from the crowd of $2,225,000. However, offers from two bidders wasn’t enough to achieve the reserve, resulting in the property passing in.
Hawthorn, 22 Elphin Grove
SOI: $2,900,000 – $3,150,000
Sales Agent: Alex Broque
Crowd: 30
Opening Bid: $2,800,000 VB
Passed in: $2,800,000 VB
Sold After: $2,918,000
Bidders: 0
A quiet crowd stares into the middle distance. Passed in on a single vendor bid.
Balwyn, 6 Sevenoaks Street
SOI: $2,800,000 – $2,900,000
Sales Agent: Sophie Su – Kay & Burton
Bought Before: $undisc
Bidders: 1
Kew, 187 Cotham Road
SOI: $2,900,000 – $3,150,000
Sales Agent: James Tostevin – Marshall White
Crowd: 40
Opening Bid: $2,900,000 VB
On the Market: $3,025,000
Under the hammer: $3,036,000
Bidders: 3
A slow start, with auctioneer James Tostevin declaring a vendor bid of $2,900,000 to commence proceedings. At last a bid of $2,910,000 from bidder 1, then two more bidders entered the fray, resulting in the hammer falling at $3,036,000.
Canterbury, 89 Mont Albert Road
SOI: $3,700,000 – $4,070,000
Sales Agent: Annabelle Feng – RT Edgar
Crowd: 85
Opening Bid: $3,600,000 VB
On the Market: $4,100,000
Under the hammer: $4,230,000
Bidders: 4
Slow going affair with multiple vendor referrals. Gets there in the end after some solid and patient bidding.
Hawthorn, 27 Power Street
SOI: $1,870,000 – $2,050,000
Sales Agent: James Tostevin – Marshall White
Before Auction: $undisc
Bidders: 1
Kew, 14 Carnsworth Avenue
SOI: $2,600,000 – $2,800,000
Sales Agent: Stuart Evans – Marshall White
Crowd: 35
Opening Bid: $2,600,000 VB
Passed in: $2,600,000 VB
Bidders: 0
Kew: 4 Bed / 3 Living / 2 Car. Gorgeous garden. Ready to move in family home. Walk to major schools.
Kew
Off-Market
$3.0m to $3.3m
Helen Yan 0404 078 588
Stonnington - Volatile - better the higher you go!
Armadale Malvern Malvern East Prahran Richmond South Yarra Toorak
May 13 2023
Bidderman
1
Stock
LOW
Clearance
50%
May 20 2023
Bidderman
1.1
Stock
LOW
Clearance
55%
Stonnington – Week 2
Clearance: 55%
Bidderman: 1.09
Malvern, 1 Bonview Road
SOI: $2,000,000 – $2,200,000
Sales Agent: Fiona Counsel – Marshall White
Crowd: 40
Opening Bid: $2,000,000 VB
Passed in: $2,050,000
Sold After: $2,175,000
Bidders: 1
Auctioneer Justin Long opened the bidding at 1 Bonview Road Malvern, placing a vendor bid of $2,000,000. This was met with a $50,000 bid. The property was passed in to the sole bidder for $2,050,000.
Prahran, 64 Murray Street
SOI: $2,500,000 – $2,750,000
Sales Agent: Jack Edgar – RT Edgar
Crowd: 30
Opening Bid: $2,500,000 VB
Passed in: $2,500,000
Sold After: $undisc
Bidders: 0
After opening with a vendor bid and asking for a rise of $10,000, the property was passed in.
Malvern East, 27 Ferncroft Avenue
SOI: $4,700,000 – $4,800,000
Sales Agent: Kellie O’Neill – Jellis Craig
Crowd: 50
Opening Bid: $4,650,000 VB
Passed in: $4,650,000 VB
Bidders: 0
Auctioneer Ian Carmichael opened and closed the bidding at the auction of 27 Ferncroft Avenue, Malvern East placing a sole vendor bid of $4,650,000.
Windsor, 4 McIlwrick Street
SOI: $2,750,000 – $3,025,000
Sales Agent: Harley Toyle – Buxton
Crowd: 20
Opening Bid: $2,750,000 VB
Passed in: $2,750,000 VB
Bidders: 0
A small crowd gathered to see this property pass in on a single vendor bid.
Armadale, 22 Hampden Road
SOI: $4,500,000 – $4,950,000
Sales Agent: Hugh Hardy – Abercromby’s
Crowd: 45
Opening Bid: $4,500,000 VB
On the Market: $5,000,000
Under the hammer: $5,185,000
Bidders: 3
A good sized crowd gathered under the autumn trees. Auctioneer Hugh Hardy with a vendor bid and soon had three bidders keen to buy. After a quick mid auction break, property sold under the hammer to a round of applause.
Malvern, 2 Lysterville Avenue
SOI: $2,400,000 – $2,600,000
Sales Agent: John Morrisby – Jellis Craig
Crowd: 22
Opening Bid: $2,450,000 VB
Passed in: $2,450,000 VB
Bidders: 0
As the sun started to come out the crowd gathered, the auctioneer pointed out the convenient location. With no bids the property was passed in.
Armadale, 11 Barkly Avenue
SOI: $3,100,000 – $3,400,000
Sales Agent: Will Bennison – Jellis Craig
Crowd: 50
Opening Bid: $3,250,000
On the Market: $3,520,000
Under the hammer: $3,550,000
Bidders: 2
With a quiet crowd, Auctioneer Ian Carmichael opened the bidding with a vendor bid. After a quick break in proceedings, two bidders then swiftly reached and passed the reserve. After a strong final bid from bidder one, bidder two stepped aside.
Toorak, 20 Gordon Street
SOI: $3,600,000 – $3,960,000
Sales Agent: Richard Mackinnon – Marshall White
Crowd: 80
Opening Bid: $3,600,000 VB
On the Market: $4,200,000
Under the hammer: $4,210,000
Bidders: 3
A strong crowd garnered to watch 3 bidders battle it out prior to the property being sold for $4,210,000
Malvern East, 9 Central Park Road
SOI: $4,100,000 – $4,510,000
Sales Agent: Andrew Hayne – Marshall White
Crowd: 70
Opening Bid: $4,100,000 VB
Passed in: $4,100,000 VB
Bidders: 0
A crowd of 70 gathered in front of 9 Central Park Road, Malvern East. A sole bid was placed by auctioneer Andrew Hayne. The property was passed in on a vendor bid of $4,100,000.
Malvern, 13 Warner Street
SOI: $1,850,000 – $2,000,000
Sales Agent: Jack Moss – Marshall White
Crowd: 35
Opening Bid: $1,800,000 VB
Passed in: $1,800,000 VB
Bidders: 0
The enthusiastic auctioneer, who was a local, commenced by highlighting the location of the property. A vendor opening bid and no further bids the home was passed in.
Toorak, 25 Canberra Road
SOI: $2,500,000 – $2,600,000
Sales Agent: Michael Armstrong – Kay & Burton
Crowd: 25
Opening Bid: $2,400,000 VB
On the Market: $2,510,000
Under the hammer: $2,830,000
Bidders: 3
After the break, two bidders traded quick bids and soon had the property on the market. Just as it seemed to be over, a third bidder stepped in to take the keys.
Bayside & Port Phillip - Warming
Albert Park Brighton Brighton East Elsternwick Elwood Hampton Middle Park
May 13 2023
Bidderman
1.2
Stock
LOW
Clearance
54%
May 20 2023
Bidderman
1.7
Stock
LOW
Clearance
67%
Bayside/Port Phillip – Week 2
Clearance: 67%
Bidderman: 1.66
Albert Park, 3 Finlay Street
SOI: $2,000,000 – $2,200,000
Sales Agent: Ben Manolitsas
Crowd: 42
Opening Bid: $2,000,000
On the Market: $2,358,000
Under the hammer: $2,360,000
Bidders: 2
Audience opening bid of $2,000,000, the auctioneer then bid $2,100,000. 2 bidders then battled it out and the property was sold at $2,358,000
Brighton East, 32 Canberra Grove
SOI: $3,400,000 – $3,600,000
Sales Agent: Simone Howell – Marshall White
Crowd: 45
Opening Bid: $3,400,000 VB
Passed in: $3,700,000 VB
Sold After: $undisc
Bidders: 3
Auctioneer opened the auction with a vendor bid of $3,400,000. Bidder one entered shortly after. Whilst another 2 bidders entered, the property was passed in at $3,700,000 to bidder 1.
Brighton, 15 Cairnes Crescent
SOI: $4,500,000 – $4,950,000
Sales Agent: Chelsie Cargill – RT Edgar
Crowd: 50
Opening Bid: $4,700,000
Passed in: $4,700,000
Sold After: $undisc
Bidders: 1
At the suggested opening price, a bidder agrees with auctioneer however no there is further competition, so the home is passed in for negotiation. Sold after.
Brighton East, 8 Trinity Court
SOI: $2,725,000
Sales Agent: Nick Renna – Jellis Craig
Crowd: 45
Opening Bid: $2,600,000 VB
On the Market: $2,840,000
Under the hammer: $2,921,000
Bidders: 4
The auctioneer placed an initial bid of $2,600,000. First 2 bidders entered and the property was on the market at $2,840,000. Another two bidders entered shortly after. The property was sold under the hammer at $2,921,000.
Brighton, 7 Sheridan Court
SOI: $2,200,000 – $2,300,000
Sales Agent: Guy St Ledger – Buxton
Crowd: 70
Opening Bid: $2,200,000
Passed in: $2,250,000
Bidders: 0
The watery sun has given people the impetus to gather in Sheridan court Brighton for the auction and the crowd left unsatisfied as the home was opened with a vendor bid of $2,200,000 and subsequently passed in on a vendor bid of $2,250,000.
Brighton, 16 Budd Street
SOI: $2,400,000 – $2,600,000
Sales Agent: Simone Howell – Marshall White
Crowd: 70
Opening Bid: $2,400,000 VB
Passed in: $2,400,000 VB
Bidders: 0
Stephen Smith from Marshall White conducts the auction in front of about 70 people and many fashionably attired dogs, however only one bidder emerges to agree with the suggested opening price of $2,400,000 and he is hustled inside a after the property is passed in for further negotiations.
Mal and Gina, so we know you as buyer agents – what’s the “off-market selling” you do?
In a buy sell, on the sell, we manage the whole process. Our focus is price, strategy, presentation, agent selection, execution, and extras, all of which are largely ignored in many off-markets, big mistake.
Price: The most abused tool in your toolkit. Get it right and it’s off to the races, get it wrong and you’re mucking out the stables. Why is so little testing done on price prior to going to market? Why is your decision made on who tells you the highest number or who sounds the most credible, when neither of those is consistently the best strategy to get the best price.
Strategy: When the average bidders at auctions in this market is 1, why is the only strategy suggested by the agent quote ‘em low and watch ’em fly at auction. Don’t worry about the sales pitch of somebody else’s miracle auction, give me the logic on why 1 bidder auctions, quoted low, are a plus for you. They are not, they are efficient for the agent and good for the buyer.
Presentation: Why is there an unwritten law that if you are selling your home off-market: it’s ok to look less than its best? Some of our strongest arguments with our off market selling clients are about spending money on presentation. You need to do it, even if the agent says oh, she’ll be right. That’s total BS. Why would we go out on a limb if we didn’t know it makes a difference – why does an agent not push as hard as we do: turnover and lack of time.
Agent selection: You really wonder about some sellers when they say I am going with such and such, as I know her, or he is a mate, or he has been ringing me a lot for a long time (why isn’t he or she ringing buyers for existing selling clients). WTF. Would that cut it at work?
Does Ross Lyon or Brad Scott make their selections on mates or who is best for the job? The coaches they replaced have been hailed as hardly done by nice guys – but Ross and Brad are very different – a clear plan, good support and they don’t select their mate or who rings them up all the time – they select who is best for the job, after they have been through a series of tests.
Why narrow the field in your first act. Wouldn’t it make more sense to have more agents, bringing more buyers and wouldn’t it make sense to keep more agents on your side?
How do you feel when you are rejected? Pissed off and angry at who rejected you? Probably – so what do you think agents who didn’t get your job are saying to a buyer when asked about your home? Let them have a chance to sell it if they have the best buyer.
It doesn’t feel like rocket science, there is so much history and self interest in how some currently sell.
Competing: What do you want agents to compete on – promises or results. Huh? Why make your final selection on glossy brochures and a slick sales presentation – it’s a pointer for sure – but when all are slick and glossy (all look so similar) doesn’t it just become a case of mine is bigger than his, choose me.
What about bring me the offers – from multiple agents? Why not test credentials in an off-market competition? Agents tell you it’s all about competition to get you the best, well get them to compete. We compete all the time.
But be careful – if you can’t manage the public narrative, then multiple agents instead of a better deal, become a fight to the bottom.
Execution: For all the not so nice things you can say about agents – there is one huge plus – their ability to focus on cutting a deal. It’s brilliant. But what happens if that deal is not in your best interests right this second? There seems to be no pause and reflect button on our agent friends at times. We encourage pause and reflect and then accept or keep going.
Extras: How can your agent take the time to give you something extra when they have 6 to 10 campaigns running this week – sorry I can’t see you at this time or this time or this time, but I can see you at 10.57 in my office for 3 minutes – and you’re the client. The buyers must be getting less. Catch 22 – if they are not full on, then do you want them?
Solution: Let them do what they do best – call and call and call and combine them with someone who can bring strategies to the table like a mexican wave, another buyer, another agent and advice to hold until we get a competing buyer and more.
Real Life: This week the off-market above was a multi-agent home where we ran a mexican wave in Marketnews over the Easter weeks and sold in the low $4m’s having been bought in the high $2m’s during Covid – nothing done to it. It’s a great home.
Multi-agent Off-market began Feb 4 with a welcome meeting:
- Selling client was a reader of marketnews – unhappy with agent advice she had received.
- She rang us. We made a presentation to be open and look at all angles.
- We were given an authority, organised a contract, produced an SOI and gave access. The 4 off-market ducks.
- Gina replaced the styling with a new style.
- We selected to go off-market with a multi-agent strategy.
- We replaced the photography.
- We ran a mexican wave in Marketnews
- Solid interest in Week 1 from 1 buyer, via an agent.
- We at marketnews produced buyer 2 with solid interest in Week 3
- Selling client and agent and James Buy Sell meeting: strategy to make it happen as we now had 2 solid and understood buyers.
- An auction (we do love them when the ingredients are there) was organised over the phone and strong competition from mid $3m’s and on the market to over $4m. Agent did a great job. The buyer bought well.
- The buyer came from a marketnews mexican wave and looked at a beautifully presented off-market home and competed against another buyer from another agent – the brilliance of multi-agent.
- The total cost to our client was less than $10,000 for furniture, touch-ups, photos, contracts etc. and total agent fee was no more @ 2.2% split 50/50 with winning agent.
- Job done: Buyer bought a rare home well and the seller got what she wanted.
- Money: James Buy Sell Multi-Agent increase was $1.25 million or 45%.
Melbourne Median increase during the same time was 7.1% (reiv)
Aspendale Median increase during the same time was 9.5% (reiv)
Increase taking local agent opinion of value and not the result was: 21% (SOI)
The price in this volatile market was a record for area property type.
This graph above shows this and is to scale.
April 25 2023
“If you’re thinking of selling don’t look past Gina and Mal for exceptional results. It’s their business to know how to stage a house and garden, know the best time of the year to sell in different areas, and they will know the key selling points of your house (and they can arrange for all of this to happen for you). They know how to negotiate and more importantly, how to time negotiations. They know the real estate agents and know who will be the right one for you. You’re in really safe hands and most importantly they’re honest – they will advise to not sell if the offer isn’t right. They’re truly ‘on your side’ and advise you on how to get the best outcome for you. My advice: at the very least meet with them – you won’t be disappointed.”
Our Buy Sell Client on this Aspendale home
James Buy Sell YouTube
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James Buy Sell Jargon
NEW TO JAMES BUY SELL? WELCOME – THE JARGON OF 4 SEASONS and 100 AUCTION TESTS: 100 Auction Test is where we randomly select Top End homes before they go to auction and then we turn up and report on all results, so as you can get a true picture of the current Inner Melbourne Top End Market. We do it 4 times a year in the major markets.
Opening Market M1 usually sets a direction till Easter (sometimes the whole year)
May Market M2 post Easter leading into Winter trends – capricious market usually.
Spring Market M3 is Footy Finals and Pre-Cup – a major buy sell season. Can see a market turnaround either way, coming out of winter.
Christmas Market M4 is from November till Santa comes. Often the hardest market to sell in, due to oversupply relative to unsatisfied demand.
Demand – Bidderman. How many bidders per auction? A very accurate measurement of market depth when taken over a wide sample. Number of Bidders / Number of Auctions.
1 bidder average – Falling Market. 2 bidders – Rising Market. 3 bidder average – On Fire
Supply – Stock Levels. It’s a nuanced opinion measurement, more so than scientific, as there can be a flood of unrenovated homes, but the market wants ready to move in.
Clearance Price % – Many data points give exaggerated readings as agents choose to leave out the bad news (unsolds). We choose the sample before auction and track down every result. The higher the clearance rate, the more agreement between buyer and seller on price and if Bidderman is also strong this shows prices are rising.
Measurements: Under 60% falling. 60-70% some stability but easing if below 65% consistently. 70%-80% rising. 80%+ On fire.
GLOSSARY
PPP’s – All homes and all buyers have 3 characteristics. A good deal for a buyer is when their PPP’s match the homes PPP’s.
Position (land location) + Property (building) + Price = 3P’s. A buyer can adjust all three to get what they really, really want and to meet the market.
Whilst a home has 3 P’s, a seller has only 1 P they can adjust – Price. Although a good seller and agent can, prior to the sale, affect the P of Property through Presentation.
Overall there are 3P’s and Position is most often, the most important.
A-Graders – If the home’s PPP’s are desirable to many in the market we call that an A-Grader. However, it’s all the 3P’s that need to be desirable. You can have a great location, great building and be overpriced in which case you have only 2 desirable P’s – we call that a B-Grader. C-Graders have 1 or no desirable PPP’s and the only usual desirable P is Price – a weak one – this is why C-Graders are poor investments.
Volcanoes – When the market is hot you see increasing numbers of 4 or more bidders on homes. We call that a volcano. 1 or no bidders we call a duck.
Wounded Underbidders – Buyers who miss, go harder (more money) next time to avoid the hurt of missing out again. When there are multiple unhappy buyers, who have missed multiple times (wounded underbidders), the market rises quickly.
Cautious Buyers – Non-Bidders – Potential buyers who see lots of pass-ins, tend to not want to bid because their fear of overpaying is greater than their desire to buy and get out of the market.
Stales – Number and length of time a property remains unsold. The older the stale, the weaker the price (as a general rule). The more stales, the weaker the market as they clog up the market creating an oversupply.
Off-market – Homes that are for sale but are not advertised in the mainstream media like realestate.com.au. Over say $5 million there are considerably more homes off market than on market. More than ½ the homes we buy and sell are off-market.
Pre-market – Homes that some agents say are Off-market. Pre-market homes are homes coming to market but are not yet advertised and are often not really for sale at the moment.
On-market – usually refers to homes sold with major advertising say on Domain or realestate.com.au
Not for sale (and the 4 ducks) – there are many homes that are also said to be Off-market or Pre-market homes that are not really for sale. Why? Seller is testing the market. Agent is testing the market. Agent has no work. Seller wants a free valuation or some company.
For a home to be really for sale off-market, it needs to pass the 4 Duck Test.
- Agent Authority 2. Contract of Sale 3. Asking Price 4. Easy Access.
Good ól Boring Process – When you are cooking a cake – do you get your best results by making up the ingredients, the amounts and throwing them into together, hoping for the best? If you do great, but I’m not hungry. A good recipe is a good process. And in property a good recipe is 3 Questions starting with what do I really really want? If you can’t work that out, then engage a good agent. When you answer that question, you go to the 2nd and 3rd questions and make good decisions. Good decisions lead to good outcomes – for you.
Market Prices – Every price is supposedly a market price. It’s a lazy concept.
Market price is a living organism – lets imagine it’s like a human. The market is the blood, the circulatory system. The PPP’s are the bones, the skin, the main organs and we agents and agent marketing are the lipstick, perfume, clothes. All 3 – blood, bones and lipstick make up a price and its attractiveness, it’s not just the market.
Market Values – Values are opinions. All opinions have vested interests and biases. What the council, the bank, the agent, the buyer, the seller values a home at will all be different.
Last year two valuers came to a home I was looking to refinance – $4m home – 3 weeks apart the valuations were approx. $700,000 different – that’s qualified valuers – same criteria.
Market Value v Market Price – One is an opinion before the deal and one is the actual result after the deal.
Quote Range: It is thought to be an agent estimate of final price – it is not. See Quoting
Under the Hammer: is when a home is sold to a buyer under the auctioneer’s hammer that is on the street or in the home in front of crowd when we says sold – it can be just clapping his hands together – under the hammer refers to the old gavel now only sometimes used.
On the market: (different from on-market) is a colloquial term that an agent or auctioneer uses to state we are now at a level that it will be sold (now) even if there is no more bidding.
What affects markets?
Demand and Supply – yes sir re – that is what really affects markets.
Some Key Supply Variants
- Government restrictions
- Lag Times in supply of demand changes
- Builders and materials
Some Key Demand Variants
- Money – Bank credit and community wealth
- Overseas Buyers, Interstate Buyers, Migration
- Stock Markets and World Events
Predicting the Future
Economists, banking leaders and other market predictors are like horse race “experts” – entertaining but of little long-term value. In 2017, 2018, 2019, 2020 the pundits on where the market was going got it wrong, dead wrong 4 from 4. A coin toss should have got at least 2 from 4. The only pundit we listen to with respect, is the one that says they don’t really know.
Rising / Falling / Easing – Humans are herd animals.
When there are a number of pass-ins the market eases. When combined with increasing stock coming on and more stales, the market falls more sharply.
Increasing numbers of wounded underbidders and less stock the market edges up – when wounded underbidders combine with loose bank lending and tight stock and increasing migration, then market prices begin to run away.
A home can easily be 5% more or less in a week (1 bidder drops away) and parts of the market can change by 5% in a month. A property can change by 10% during the length of an auction campaign. It is very similar to the ASX in terms of its variability – it’s just not as transparent.
Individual property prices are very fluid, they are far from fixed as many think and claim.
Market Conundrum – often the best time to buy or sell is when everybody else doesn’t want to – eg counter to the markets.
Buy or sell timing maxims we live by? Assuming it’s an A-grader. If you really, really like it, buy now. If you really, really like it never sell.
Which brings us back to Doe. Doe is dear, a female deer. This is why 10,000 people read Marketnews.com.au. It’s the only property thing that makes no sense (smiley face).
Underquoting – is when an advertised price (an agent quote) is below one of
- Agent estimates of value or
- A written buyer offer or
- The Vendor reserve
An agent quote is not a valuation, it is not a fixed sticker price – a quote is seen by my industry as a vehicle to attract bees (buyers) to the honey (home) and that’s ok, if legal.
However underquoting is unethical but widespread. Underquoting has been endemic in the last week of an auction campaign in the markets of 2015, 2016, 2019, 2020 and 2021 – a new falling market may be different.
Underquoting is a badge of honour for some selling agents – for god sake there is cheering from the rafters with every $1,000,000 over reserve. It’s celebrated not put into balance or condemned in the media. Please note sometimes genuine market forces create $1,000,000 over reserve when it’s not an underquote (celebrate then) – but when it is happening week in and week out and to the same people and same companies, then they must be very unlucky or incompetent agents or they are serial underquoters.
Underquoting can work in a rising market – work for the agent and seller that is, not the buyers.
Underquoting can hurt inexperienced buyers in 4 bidder auctions BUT
In many instances in falling markets and with B and C Graders it actually hurts the sellers – e.g. duck or 1 bidder auctions.
Underquoting is fixable with a buyer education program as to what a quote is and what it can and cannot do AND moveable (not fixed) step up and step down written legal quoting AND timely stated auction reserves say ? days out from an auction AND mostly an industry desire, but there is minimal desire within my industry or the CAV or the government.
Legal Step Quoting: A term we invented to explain moves/strategies in quoting. We used to have a problem with it, but now we see it as sensible practise on behalf of the seller – so long as it is down legally and actually done. Step quoting if done legally is simply moving the written quote during the campaign in line with offers, changing or firming vendor reserves and any changing agent’s opinion of likely value.
Illegal Step Quoting: Is when the agent has a written quote, then tells you a higher quote on the phone and then an even high quote after you offer.
Legal Quoting: It is legal (and we consider ethical and professional) for the agent to quote above the seller’s reserve providing it meets the other two key criteria.
Legal Quoting: When it’s on the market and unexpected market forces take it well past expectations. Our only argument is how often can that happen to one agent or agency before it becomes obviously illegal.
Quoting even with the best intentions (and we have them) is not a perfect science, just as market valuations and your buying estimates are not.
James Buy Sell Process – Ethical quoting brings more real buyers and sellers to you:
Early Campaign: We quote to attract buyers but not below what we reasonably think the home may go for. Where the seller has a firm price, we do not quote below that price either.
We suggest the seller keeps an open mind on reserve (early days) if their main focus is to sell.
If the seller has a firm fixed reserve and it’s too high, then not only will he or she be unlikely to sell but he or she will get no feedback on price and therefore he or she could compound the selling issue down the track – a double negative for selling – eventually getting a lower price.
Middle of Campaign: We may Step Quote (change the quote, preferably up, but sometimes down to more accurately represent the sellers thought on possible reserve and/or feedback from buyers and/or if we have had an offer than has not been accepted)
Advertised final week of Campaign: We genuinely try and have the quote reflecting a seller reserve and where James Buy Sell now thinks the majority of buyers are. Please note: it is not an exact science, and we cannot predict all buyers (often buyers do not tell the door agent anything or say lower amounts – both sides can be guilty of misrepresentations).
We care about buyers and our quoting reputation. If you do a building inspection in the last week of the campaign and the reserve ends up outside the quote, please ring us and we will probably refund any professional building inspections up to $600.
The current Underquoting enquiry’s timing relates to a forthcoming election, is running into a falling market where underquoting is less noticeable.
The best way to deal with underquoting (currently) is through your own quality research or a quality buyer agent or if selling then an ethical selling agent.
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