Pressure Cooker
by Gina Kantzas, Mal James, Simone Clarke, Phoebe James, Randall Smith
Brighton - more of Simone please
4 Sussex Street
Agent: Nick Johnstone
Auctioneer: Simone Chin
Open: $4,800,000
On market: $5,600,000
Under hammer: $5,900,000
Bidders: 4
Crowd: 80
Simone Chin displayed elegance and flair in conducting a hard-fought battle between two of her four bidders. The property was on the market halfway through the auction and then deep consideration from both bidders came to the fore around $5,850,000. A young woman took over the bidding from her father and cleverly offered a number favoured by Asian bidders when she called $5,888,000. She showed intestinal fortitude again when at $5,900,000 the hammer fell in her favour, responding with ‘I did it myself. Yesss!’.
Officially a hot market
Clearance Rate Methodology: Four times a year (Opening, May, Spring and pre-Xmas) we at James Buy Sell measure the auction markets over a 3-week period, by covering 100 Top End auctions. We randomly choose the auctions before the weekend and we cover or chase down every result, so the measurements are accurate.
Today we completed the 100-auction clearance rate test for the 2021 Opening Market (Feb 20, 27 and Mar 13) and we compare it to previous year’s Opening Markets.
Continuing 'til Easter (at least)
Bidderman Methodology: Nobody has been able to consistently and successfully predict the markets in the medium future: 6months – 5 years. However, Bidderman or bidders per auction can tell you what will happen in the immediate future – the next few weeks.
Bidderman is the number of bidders, divided by number of auctions.
- Averaging 1.1 to 1.3 bidder per auction and below and the market is falling
- Averaging 1.3 to 1.8 bidders per auction and the market is steady
- Averaging 1.8 to 2.0 bidders per auction and above and the market is rising
We no longer count all bidders at all 100 Auctions – we only count on the middle weekend.
This tells us that, barring a world event, the market will in all likelihood, continue to rise until Easter. After that, another Bidderman measurement will need to be taken for market direction and we will do that in May.
Hawthorn
6 Brook Street
Agent: Richard Winneke
Auctioneer: Campbell Ward
Open: $5,100,000
Sold After: Above $5,300,000
Bidders: 2
Crowd: 52
Neighbours, keen market watchers and two bidders fronted up. A vendor bid topped the initial crowd opening which in turn motivated the initial bidder plus one to respond. Proceedings soon ended with the property passed at $5,300,000 to the opening bidder. Sold After.
Pressure Cooker
A pressure cooker environment is the Inner Melbourne high end property market now.
I work in it.
I play in it.
I live in it.
It gives me meaning, joy, a way to put food on the table. It facilitates happiness.
In many ways being on the street, keeps me off the streets.
This article is a personal one, so plenty of i’s. It is designed to help, if you are struggling right now, be you a wounded underbidder, a stressed side watcher or an embattled combatant.
I hope you can find a footing to build your platform on.
Now is a time in the market cycle that is particularly brutal – and in this last week I have felt particularly battered.
On top of reading the general news of all things horrible, which have replaced the 2020 headlines of all things horrible, I also found myself in property situations where I trusted and that trust was misplaced, where written agreements seemingly meant nothing and where I was dealt with in a manner, that even as an insensitive agent, I started to feel a little sensitive. Of course I recognize my actions may have in part contributed, I’m just unclear how.
So I felt the emotion of hurt, I felt sorrow for some of my clients, I felt a building of overwhelm at times.
Stepping back: this week despite being a super busy week – I also went for two additional 3-hour walks in the mountains, followed by conversation and pizza at Dudley’s Olinda with a true friend.
Deep down I am a happy person and have been all my life – despite my seemingly never-ending surface difficulties due to my personality foibles. Overall, big picture, I am contented (and obviously lucky).
And why not, I am living the dream, my dream. I am in a very advantaged position. I earn enough to do what I want, to have freedoms, my children are healthy and happy, I have those I care about and I get meaning out of the things I do, work wise and community wise.
My retirement plan has been for a long time…. DON’T (retire), remain as is.
Enough of me – what about you?
If you are feeling a sense of property overwhelm, you may be more normal than you think.
With all the lifeline and beyondblue messages in other areas – it shows there is a perception of much community suffering; although it’s not yet compulsory for every individual. You can still choose your path – but for some, I recognize that seems impossible.
From first-hand experience we can see those stresses extend to those looking for shelter, sanctuary; looking for their family home.
Some good news; if you are simply surface suffering and have lost your way only a little, then you can still choose a direction that will help you achieve your really really wanted outcome, in this “on fire” market.
Is this you?
I’m throwing more and more money at it and I still haven’t bought a home.
Example: We have a wonderful couple who have bid 3, then 4, then 5 in the last few months in Hawthorn and yet have not bought.
Has this specific market nearly doubled in 3 months? No, it’s very strong, but it’s gone up 10%, not 100%.
Ok, why isn’t the strategy working?
Simple: With their increase in budget, has come an increase in expectations and in this instance they have simply moved PPP markets rather than put more resources into their initial PPP market. That, and their advocate hasn’t been as adroit in communication as he should have been.
A solution?
Less is more.
Solution: Several hundred metres away in the Urquhart estate Hawthorn, is a family who bought two years ago – they had a $6m budget. After a long time in searching we encouraged them to look in the $4m range – they did and they bought almost straight away. We happily remain in contact with them on a semi-regular basis – they tell us they love their home and their life. We believe them.
If you are missing out on a single fronter period home in a hot market, you won’t buy, even if you double your budget: IF at the same time your goalposts move from that single fronter to a double fronter.
But Mal less is not more, less is less. It’s a compromise.
It’s a compromise if you see a negative rather than a positive life direction.
Seller footnote: The market for your home has probably moved if you took price advice before this latest market rise. But if your thoughts were over market then and have moved again with this hype, then in all reality you maybe still over the market. Just a thought.
A bit of balance, some good news on the way out of this week.
Whilst on the surface a tough week – as a company, we completed our 2nd largest buy /sell deal of all time. A sell that took three years and a buy that ended a five or so year search.
But it wasn’t just an economic result, which was stellar for all – no; it was also a journey of happiness.
The clients involved were smarter than us (well at least me) and so, we were able to get paid and learn at the same time. Life lesson – mix with those smarter than you.
If you remove the veneer from these agents, you will find decency AND if you are not too quick to pick up the shovel and fill their clients’ money box, then you will also find a win-win deal.
Life lesson – look for and work with the decent – if you can.
During the deal timeframe there were disagreements. Nonetheless, no harsh words were spoken and in fact, the interactions at all times had an underlying sense of camaraderie. We were working for different reasons and/or different sides, but we were in harmony.
Life lessons. Manners still matter. Some clients can provide good leadership.
Over the entire journey with the clients and agents, there was always a sense of care and respect from and for all sides. That is such a valuable life skill. Many buyers/sellers seem to think the way to success is to drive their agent into the ground on fee, on respect, on….. and then keep switching horses (agents) when it doesn’t work AND THEN after all this the buyer or seller feels cheated when the “favour” is returned. Granted, we on this side of the fence, tend to look for pass the buck opportunities, ahead of any self-reflection.
Hand on heart, the behaviours of the key agent and the clients in this deal, earned themselves and those they represented significant premiums on what otherwise might have been.
The “smash the pie and split unequally now” strategy was never used and that allowed the pie to grow bigger for all.
Take care, look after yourself please, life is good and the fundamentals are no different to any other time or any other part of life.
Elwood
22 Rothesay Avenue
Agent: Rhianna Hoyle
Auctioneer: Sam Gamon
Open: $3,850,000 (vendor bid)
On market: $4,170,000
Under hammer: $4,292,500
Bidders: 4
Crowd: 56
A vendor bid launched the auction and a couple of hands were soon going up. Vendor instructions were sought at $4,150,000 and again at $4,170,000 where it was deemed on the market. When bids broke down to $2,500 rises two bidders endured and threw haymakers at each other until a final knockout blow.
Today's data to complete 100 auctions
The one uncontactable result below we assumed to be passed-in.
Malvern East
13 Beaver Street
Agent: Fiona Ansell-Jones
Auctioneer: Andrew Hayne
Opening Bid: $5,000,000 VB
Sold After
Bidders: 2
Crowd: 60
The famous Gascoigne trees rustled in the wind as Auctioneer Andrew Hayne addressed the crowd that lined Beaver Street in Malvern East. Opening with a vendor bid at the bottom of the quote, a bidder was denied their chance at a $10,000 increase. Two bidders went back and forth, passed in and sold after.
