April 20, 2024
GLEN IRIS (STONNINGTON), 11 Wandeen Road
SOI: $3,500,000 – $3,850,000
ELWOOD, 4 Heaton Avenue
SOI: $3,950,000 – $4,200,000
SANDRINGHAM, 7 Le Fevre Street
SOI: $3,200,000 – $3,350,000
MALVERN EAST, 6 Wilmot Street
SOI: $2,200,000 – $2,400,000
ARMADALE, 36 Barkly Avenue
SOI: $2,350,000 – $2,550,000
TOORAK, 658 Orrong Road
SOI: $6,100,000 – $6,600,000
BRIGHTON EAST, 142 South Road
SOI: $2,300,000 – $2,500,000
MONT ALBERT, 8 Earle Close
SOI: $2,500,000 – $2,750,000
CAMBERWELL, 15 Donna Buang Street
SOI: $3,400,000 – $3,600,000
CAMBERWELL, 29 Fairfield Avenue
SOI: $3,900,000 – $4,290,000
Sales Agent: Sophie Su – Kay & Burton
Crowd: 30
Opening Bid: $3,900,000
Bidders: 4
After Auction: $undisc
This weekend at Inner Melbourne auctions, if you got the quote right there was bidding, mostly lacklustre, and often it started and finished on or around the agent quote – a far cry from 6 months ago.
With one Volcano, yes only one from the 33 auctions we reported on or 3% and with Ducks at 1 in 4 or 27% of auctions covered, there were clear statistical signs of continuing market weakness.
For all the BS market commentary from those who are yet to acknowledge the market change, that has been occurring since November 2021 and this last week are now talking about balance or rebalancing, we say:
Wake up!
When you are on a chair having too many drinks and then you find yourself on the floor – you haven’t rebalanced, you have fallen.
Photo: Simone
GLEN IRIS 17 Watson Street. SOI: $2,000,000 – $2,200,000. Steve Burke. Crowd: 50
Opening: $2,000,000. On Market: $2,210,000. Under Hammer: $2,345,000. Bidders: 2
Welcome to the 100 Auction Test for Top End Inner Melbourne – second week of 5 weeks of reporting on the 2nd of 4 majors for 2022 – the May Season.
Each major goes for 5 weeks with pregame, 3 weeks of reporting and then post game.
Week 2 (this weekend) we are specifically looking at bidders, where they are and where they are not – for without them this is no market to report on, no property sport.
Those new to marketnews and not up to speed on the lingo, please look at the bottom of the scoreboard for explanations and meanings.
Today we are focusing on Bidderman or for the pc’s Bidderman and Bidderwoman or Bidderperson – but let’s go with Bidderman and generic to man or woman.
Bidderman is a measurement of bidders and is the most dynamic measurement of the health of a market – more so than clearance rates or median price movements. It’s also the most accurate short term predictor and a stat that can be broken down the easiest and still mean a lot, on many different PPPs or Price, Property Type and Positional segments.
We luv ya Bidderman and Bidderwoman!
Photo: Phoebe
CAMBERWELL 9 Fairfield Avenue. SOI: $3,900,000 – $4,290,000. Sophie Su.
Crowd: 30. Opening Bid: $3,900,000. Bidders: 4. After Auction: $undisc
Bidderman truly tells you the state of the market when portrayed accurately. Invented in 2008 when bidder numbers were not even counted and now it’s the gold standard of market measurement. Like anything good in real estate, it’s copied and sometimes distorted.
In its correct form on a good sample size, Bidderman is the amount of bidders / amount of auctions. You get a quotient usually between 1 and 3 eg between an average of 1 bidder per auction and 3 bidders per auction. Our sample is 100 auctions over 3 weeks, same 4 seasonal times each year.
At Melbourne’s Top End, anything below mid 1’s is a falling market. In the GFC it was 0.8. Anything mid 1’s to high 1’s is somewhat a balanced market. Around 2 is a rising price market and towards 3 and above is on fire, as we had in 2015/16 and much of Lockdowns 3-6.
Our additional suggestions are to compare the stat to the previous measurement period and to consider stock levels in your thoughts – very low stock can distort Bidderman a bit and of course the actual quotient itself – two measurement periods of 0.8 or 3 are not balancing markets, but two measurement periods of say 1.8 are.
Photo: Catherine
BRIGHTON 14 Lorac Avenue. SOI: $3,100,000. Chris Hassall. Crowd: 80.
Opening: $3,050,000. On Market: $3,200,000. Under Hammer: $3,750,000. Bidders: 3
Bidderman is the logical predictor for buy and sells in the immediate future – the underbidders who didn’t buy, the wounded underbidders who are hurt, will go and get more $ to prevent that feeling again. Therefore, knowledge or measurements of them are very useful. The higher the Bidderman number, the more wounded underbidders AND by human nature, the more push on price in the immediate future.
And yes, the reverse is true – the more who watch and don’t bid, then the lower Bidderman. “The timids” who see no sales (stales), are less likely to go hard in the future, as their modus operandi is also about hurt and fear – but not the fear of missing out or fomo – it’s the fear of being laughed at or fobla for supposedly paying too much.
Bidderman is a momentum measurement, and as we know, the future ups and downs of property cycles are all about momentums. (last week’s marketnews on Melbourne property cycles)
Photo: Kathy
MALVERN 24 Glendearg Grove. SOI: $3,300,000 – $3,500,000. Carla Fetter. Crowd: 50. Opening: $3,200,000 VB. On the Market: $3,400,000. Hammer: $3,400,000. Bidders: 2
Currently the market cycle momentum is down or falling. A week of bullshit or spin commentary from the property experts who described the market as balanced or rebalancing when they never acknowledged a 5% – 10% fall in prices from early November to now is pathetic.
Please, when the market drops down a few rungs on the price ladder, when median prices are less, when clearance rates are in the low 60’s, this is not a balanced market THIS IS A FALLING MARKET.
As we said at the top, when you are on a chair having too many drinks and then you find yourself on the floor – you haven’t rebalanced, you have fallen.
The market moves from falling to balanced when the numbers stabilize – when Bidderman moves upwards, towards 2, on a regular basis and real (proper samples) clearance rates get back into the 70’s regularly.
Why do we think it is important to acknowledge?
Acknowledge a falling market – remove the doubt and then get on with it. It’s not the falling that hinders a market, it’s the doubt that surrounds it. Reduce the doubt and denial and minds tend to stabilize more quickly from that point and then we all get on with it and its only increased transactions and productivity that will improve the market, improve our standards of living and make it more fun again.
Photo: Jo
CAMBERWELL 38 Moorhouse Street. $2,700,000 – $2,970,000. Stephen Gough.
Crowd: 80. Opening: $2,900,000. On Market: $2,995,000. Hammer: $3,015,000. Bidders: 3
Now the contradiction. We may have already stabilized.
- Prices have already fallen a fair way.
- Low Stock – words out that the market has been falling and discretionary sellers have not been entering the May market in as higher numbers as times passed. Less stock affects the number of options some buyers have and so that tends to lift Bidderman – especially on the A-Graders, as non-discretionary buyers don’t disappear – they are simply less active on B and C Graders – but they still have to buy, as their children don’t stop growing – this will eventually be reflected in an improved Bidderman and as Bidderman improves so do prices.
- We had a serious amount of activity immediately before and after Lockdown 6 and sometimes the future is dragged forward and then when you hit that future, many buyers have been satisfied and so you create a temporary hole. We may be in one.
- There are interest rate increases – but right now they are yet to bight, they are not scary for many doctors, lawyers, professional homebuyers. Their jobs markets are healthy = few professionals are seemingly fearing losing their jobs and therefore perhaps still happy to plunge into mortgage homebuying, maybe watching and waiting for now, but not for long, or maybe that wait is over.
- The foreigners, expats, migrants, rest of the world will likely be coming in the next few years, and the market knows it. Now, may simply be a blip (a good blip for buyers) – and of course, it may not, it may be several seasons and still further to go – in part world events have some sway.
So this weekend overall, the market was weak.
Bidderman will reveal all in the May Season (May 14, May 28 and June 4) after the election.
See you then, the 28th. Mal, Gina, Sim, Phoebe, Maddie, Catherine and Kathy of the reporting team at James Buy Sell and a special welcome to Rowena. Great job everybody!
BIDDERMAN
1.5
CLEARANCE
61%
STOCK
LOW
BIDDERMAN
1.6
CLEARANCE
82%
STOCK
LOW
BIDDERMAN
0.9
CLEARANCE
56%
STOCK
LOW
SANDRINGHAM, 8 Reno Road
SOI: $2,400,000 – $2,600,000
Sales Agent: Kylie Charlton – Marshall White
Before Auction: $undisc – within the quote
Bidders: 1
HAMPTON, 3 Myrtle Road
SOI: $2,400,000 – $2,500,000
Sales Agent: Sam Maley – Buxton
Before Auction: $undisc
Bidders: 1
ALBERT PARK, 5 Dundas Place
SOI: $2,400,000 – $2,600,000
Sales Agent: Simon Gowling – Jellis Craig
Crowd: 50
Opening Bid: $2,500,000
Passed in: $2,620,000
After Auction: $2,800,000
Bidders: 3
A quick auction resulting in the property being passed in with 3 bidders in a crowd of nearly 50.
BRIGHTON, 23 Gray Street
SOI: $3,700,000 – $3,900,000
Sales Agent: Nick Johnstone – Nick Johnstone Real Estate
Crowd: 80
Opening Bid: $3,800,000
On the Market: $4,000,000
Under the Hammer: $4,220,000
Bidders: 3
Three parties battled it out in the rain, bidder 2 came out victorious and purchased the home at $4,220,000.
SANDRINGHAM, 5 Masefield Avenue
SOI: $2,200,000 – $2,400,000
Sales Agent: Jenny Dwyer – Belle Property
Crowd: 40
Opening Bid: $2,200,000
On the Market: $2,500,000
Under the Hammer: $3,050,000
Bidders: 2
The auction started with a strong opening bid of $2,200,000. Two parties battled it out in strong race, eventuating in property being sold for $3,050,000.
SOUTH MELBOURNE, 18-22 Nelson Road
SOI: $5,620,000 – $6,000,000
Sales Agent: Ben Manolitsas – Marshall White
Crowd: 36
Opening Bid: $5,500,000
Passed in: $5,550,000
Bidders: 1
Auction opened on a Vendor bid and only had 1 bid before being passed in.
SANDRINGHAM, 3 Pellew Street
SOI: $2,050,000 – $2,200,000
Sales Agent: Peter Hickey – Buxton
Crowd: 40
Opening Bid: $2,100,000
On the Market: $2,220,000
Under the Hammer: $2,291,000
Bidders: 2
Two bidders took 3 Pellew Street, Sandringham to a successful sale today in light drizzle where hoodies and umbrellas were the feature.
BEAUMARIS, 8 Lang Street
SOI: $3,000,000 – $3,300,000
Sales Agent: Michael Cooney – Hodges
Crowd: 50
Opening Bid: $3,000,000
On the Market: $3,400,000
Under the Hammer: $3,530,000
Bidders: 3
BRIGHTON, 14 Lorac Avenue
SOI: $3,100,000
Sales Agent: Chris Hassall – Buxton
Crowd: 80
Opening Bid: $3,050,000
On the Market: $3,200,000
Under the Hammer: $3,750,000
Bidders: 3
Chris Hassall directed a fast paced auction with three bidders who fought with vigour for the home, and it sold for $3,750,000.
BRIGHTON, 79 Roslyn Street
SOI: $5,000,000 – $5,300,000
Sales Agent: Gary Yue – Buxton
Crowd: 30
Opening Bid: $4,800,000
Passed in: $4,850,000
Bidders: 1
The auction opened with a vendor bid of $4,800,000. With one further bid of $4,850,000 the property was formally passed in.
ELWOOD, 4 Heaton Avenue
SOI: $3,950,000 – $4,200,000
Sales Agent: Torsten Kasper – Chisholm & Gamon
Crowd: 35
Opening Bid: $3,950,000 VB
Passed in: $4,000,000 VB
Bidders: 0
A quiet Auction with an opening vendor bid and the property being passed in with no bids for 4 million.
SANDRINGHAM, 7 Le Fevre Street
SOI: $3,200,000 – $3,350,000
Sales Agent: Kylie Charlton – Marshall White
Crowd: 60
Opening Bid: $3,200,000 VB
Passed in: $3,200,000 VB
Bidders: 0
The auction started with an opening vendor bid of $3,200,000. Following a half time break and no further bids the property was passed in.
BRIGHTON EAST, 142 South Road
SOI: $2,300,000 – $2,500,000
Sales Agent: Alex Schiavo – Kay & Burton
WITHDRAWN
GLEN IRIS, 12 Renwick Street
SOI: $2,100,000 – $2,300,000
Sales Agent: Michael Wood – Jellis Craig
Before Auction: $undisc – above the range
Bidders: 1
CANTERBURY, 46 Hopetoun Avenue
SOI: $3,900,000 – $4,290,000
Sales Agent: Sophie Su – Kay & Burton
Before Auction: $undisc – above the range
Bidders: 1
MONT ALBERT, 8 Earle Close
SOI: $2,500,000 – $2,750,000
Sales Agent: David Banks – Jellis Craig
Crowd: 30
Opening Bid: $2,500,000 VB
Passed in: $2,550,000 VB
Bidders: 0
The rain seemed to put a dampener on biding activity, as two vendor bids weren’t enough to get this sale over the line; so the property was passed in at $2,550,000.
CAMBERWELL, 12 Nevis Street
SOI: $3,100,000 – $3,500,000
Sales Agent: Geordie Dixon – Jellis Craig
Crowd: 35
Opening Bid: $3,100,000 VB
Passed in: $3,125,000
After Auction: $undisc
Bidders: 1
A decent crowd despite the weather. Auctioneer Michael Wood squeezed one bid from the street and the property was passed in and sold after.
GLEN IRIS, 77 Ashburton Road
SOI: $2,700,000 – $2,850,000
Sales Agent: Chris Gillon – Jellis Craig
Crowd: 60
Opening Bid: $2,750,000 VB
On the Market: $2,960,000
Under the Hammer: $3,005,000
Bidders: 3
Well, despite the rain coming down on this outdoor auction, between three bidders, the hammer came down at $3,005,000 on this property.
CAMBERWELL, 1 Judd Street
SOI: $2,300,000 – $2,450,000
Sales Agent: Mark Salvati – Jellis Craig
Crowd: 25
Opening Bid: $2,875,000
On the Market: $2,875,000
Under the Hammer: $2,875,000
Bidders: 1
1 bid and it was on the market and sold.
CAMBERWELL, 15 Donna Buang Street
SOI: $3,400,000 – $3,600,000
Sales Agent: Anton Zhouk – Anton Zhouk Real Estate
Crowd: 30
Opening Bid: $3,400,000 VB
Passed in: $3,400,000 VB
Bidders: 0
Another ’silent’ auction where no bidding activity was forthcoming, causing a pass-in on a vendor bid of $3,400,000
CAMBERWELL, 29 Fairfield Avenue
SOI: $3,900,000 – $4,290,000
Sales Agent: Sophie Su – Kay & Burton
Crowd: 30
Opening Bid: $3,900,000
Passed in: $4,100,000
Bidders: 4
After Auction: $undisc
Auctioneer Scott Patterson was able to entice some back and forth bidding amongst the crowd but wasn’t enough to put the property on the market despite 4 bidders.
KEW, 93 Stevenson Street
SOI: $3,000,000 – $3,300,000
Sales Agent: Scott Patterson – Kay & Burton
Crowd: 25
Opening Bid: $2,700,000 vb
On the Market: $2,830,000
Under the Hammer: $2,960,000
Bidders: 2
Auctioneer Scott Patterson allowed a pause in the auction for a couple to quickly inspect the home – Lucky he did, as they came out and started to bid. However, the property was sold to the original first bidder for $2,960,000.
GLEN IRIS, 17 Watson Street
SOI: $2,000,000 – $2,200,000
Sales Agent: Steve Burke – Belle Property
Crowd: 50
Opening Bid: $2,000,000
On the Market: $2,210,000
Under the Hammer: $2,345,000
Bidders: 2
Two bidders we eager to get going – Back and forth until the home was sold for $2,345,000.
CAMBERWELL, 38 Moorhouse Street
SOI: $2,700,000 – $2,970,000
Sales Agent: Stephen Gough – Marshall White
Crowd: 80
Opening Bid: $2,900,000
On the Market: $2,995,000
Under the Hammer: $3,015,000
Bidders: 3
A keen bidder commenced the proceedings straight off the bat, and was joined by two others, resulting in a sale of $3,015,000.
MALVERN EAST, 60 Emo Road
SOI: $2,800,000 – $3,000,000
Sales Agent: Gowan Stubbings – Kay & Burton
Before Auction: $3,000,000
Bidders: 1
MALVERN, 1a Glendearg Grove
SOI: $3,800,000 – $4,000,000
Sales Agent: Carla Fetter – Jellis Craig
Before Auction: $undisc – within the range
Bidders: 1
MALVERN, 24 Glendearg Grove
SOI: $3,300,000 – $3,500,000
Sales Agent: Carla Fetter – Jellis Craig
Crowd: 54
Opening Bid: $3,200,000 VB
On the Market: $3,400,000
Under the Hammer: $3,400,000
Bidders: 2
As Auctioneer John Morrisby declared the home on the market, bidder two bowed out and the property sold to Bidder One, with a round of applause.
GLEN IRIS (STONNINGTON), 24 Wilson Street
SOI: $2,900,000 – $3,100,000
Sales Agent: James Tomlinson – Marshall White
Crowd: 30
Opening Bid: $3,000,000 VB
Passed in: $3,025,000
Auction After: $undisc
Bidders: 1
One brave bidder placed a bid of $25,000 and the home was passed in.
MALVERN EAST, 6 Wilmot Street
SOI: $2,200,000 – $2,400,000
Sales Agent: Ian McLennan – Jellis Craig
Crowd: 30
Opening Bid: $2,000,000 VB
Passed in: $2,050,000 VB
Bidders: 0
A quiet crowd, consisting of mostly neighbours, offered no bids today. The property was passed in on a vendor bid.
ARMADALE, 36 Barkly Avenue
SOI: $2,350,000 – $2,550,000
Sales Agent: Abby Ines – Marshall White
Crowd: 35
Opening Bid: $2,400,000 VB
Passed in: $2,400,000 VB
Bidders: 0
With no audience participation, the auction was quickly closed.
GLEN IRIS (STONNINGTON), 11 Wandeen Road
SOI: $3,500,000 – $3,850,000
Sales Agent: John Morrisby – Jellis Craig
WITHDRAWN
TOORAK, 17 Turnbull Avenue
SOI: $3,600,00 – $3,750,000
Sales Agent: Rodney Morley – Rodney Morley Persichetti
Crowd: 45
Opening Bid: $3,500,000 VB
On the Market: $3,725,000
Under the Hammer: $3,725,000
Bidders: 3
Opened with a vendor bid and sold shortly after a quick break for the reserve price.
TOORAK, 658 Orrong Road
SOI: $6,100,000 – $6,600,000
Sales Agent: Andrew Macmillan – Jellis Craig
Crowd: 20
Opening Bid: $6,000,000 VB
Passed in: $6,000,000 VB
Bidders: 0
A small crowd gathered inside, no bids were placed, and the property was passed in.
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 Top End markets, over the same 3 week period.
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. 70%-80% rising. 80%+ On fire.
Opening Market usually sets a direction till Easter (sometimes the whole year)
May Market post Easter leading into Winter trends – capricious market usually.
Spring Market is Footy Finals and Pre-Cup – a major buy sell season. Can see a market turnaround either way, coming out of winter.
Christmas Market is from November till Santa comes. Often the hardest market to sell in, due to oversupply relative to unsatisfied demand.
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
- Contract of Sale
- Asking Price
- 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.
Mexican Waves: Occur at least twice a year – Labour Day to Easter and Footy Finals to the Cup.
It’s about the Ultra Top End, where agent led PR stories begin to appear in the papers, at the end of your phone and on social media; with the point of creating some momentum selling of trophy homes.
It’s a Mexican Wave; a powerful force that lives in the Top End of Melbourne real estate, dormant for much of the time, only to suddenly awake, just as it does at the G.
The Mexican as we call it and how it works.
1.Opening Stanza are side of mouth whispers about what may be coming to market quietly.
2.The Build by the protagonists is a balancing act of credible rumours (sales & prices behind closed doors) with the reality of what the punters can see on the street (sold stickers).
3.The Crescendo ….the results incited (or not) are almost secondary to this living, moving organism ……… however as quickly as it rises, the puff can drift and the intensity drop ….. and so, it lies dormant again until circumstances reignite life ..…. the next time around.
A good Mexican starts gently with some lite prosaic gossip. It is then fostered by those few Ultra Top End agents, who know the proven repetitive actions. They have a passion plan to finish with magic ……… screaming emotions, hands in the air and index fingers on computer screens ……. some on market but most silently (until cooling-off is over) off-market.
The latest result or near miss becomes a new side of mouth whisper and the wave restarts.
A good Mexican highlights the craftsperson’s art of luminating with innuendo a grey path that points to a light in the distance. This illumination brightens as the industry works together (consciously and subconsciously) even though they have competing interests, even though their comments differ, even though in many cases they dislike each other….to show all buyers and sellers where that light really could be, for each buyer and seller.
A living thing of wonderment is clarified during this time. Last year it launched itself into the stratosphere at Easter and again just before the Cup. For the previous few years, others have not left the launch pad or cruised at far lower altitudes until their power faded.
The Mexican with this bi-annual wildebeest migration timing will have either a La Niña or El Niño filtering effect on the rest of the Melbourne market in 2022, as it does each year.
In 2022 if like an MCG Mexican it builds again, then all of us will walk a little taller – as we all like to be in the presence of a bigger force at Melbourne’s Top End.
So mujeres and hombres crank it up and give us some good stories. Good stories for buyers (releasing of new stock), good stories for sellers (offer momentum) and good stories for the rest of us (dreams can still happen).
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.
Argy-Bargy – How can a seller ask for more after a pass-in than the quote? It’s a grey area, as CAV says its completely legal.
If it’s below the top of the quote and passed in – then it seems like all bets are off for the buyer and seller to ask and offer whatever they like to reach a deal in their best interests.
If it’s at auction and above the quote then it may be legal, but we consider a pass-in above the quote wrong. It’s a Clayton’s Quote (the quote you have when you’re not telling the truth).
A pass-in above the quote and no sale to the highest bidder is in our opinion wrong on so many fronts (morally), but CAV says it’s ok legally (go figure).
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.
All our most recent sale managed selling campaign quotes.
Range: On market and Sold 1% above the range.
Range: Sold 1% below the quote range
Range: Sold within auction quote range after step quoting to vendors changing reserve
Range: Sold at EOI (Volcano) – 5% above the range
Range: Sold after auction within the auction range
Range: Sold within the range
Range: On market in range and sold 11% above the range (Volcano)
Range: On market 1% above range and sold 5% above the range
Range: Sold within the range
Single Price: Sold within 3%
Range: Sold within the range
Single Price: Step quoted down off-market and sold within 2%
Range: Sold within the range
Range and we auction step quoted up: Sold within the final week range
Range: Sold 2% above the range
Range: Sold 3% above the range
Range: Sold 13% above the range
Range: Sold within range
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 that 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.
T
he 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.
Buying and selling in less than half the market click here to find out more?
Are your Reports Values Strategies evidence based?
We multi-listed Churchill Avenue Kew and selected Nikki van Gulick who along with clients T&A ran one of the best small campaigns we’ve seen in some time – 7 bidders, great effort.
Ducks (no bidding) v Volcanoes (4 + bidders) is not the be-all and end-all. I mean give me a Lone Ranger (one bidder) at $5.5m over a Norm (2 or 3 bidders) or even a Volcano finishing at $5.3m any day.
However, on the same home, start me at $5 million and I would much rather have a Volcano than a Lone Ranger or of course, a Duck auction.
And this is where Tactics v Strategies, in our minds, are so important with regard to auctions, whether buying or selling.
I want to sell for the highest price – is not a tactic or a strategy, it’s a want or if you are on the edge financially, it may even be a need.
But wanting or needing the highest price – verbalizing or not – does not automatically get you the highest price.
It’s a good start as its clarity, but STOP – stand up now and want or need a glass of champagne in your hand – has it appeared? No, you need action steps.
These action steps are tactics or strategies and for me, over the years I have found strategies to be far better than tactics.
So, the strategy for building price using a tactic of underquoting in a market like today, where volcanoes are a rarity, makes absolutely no sense. A better strategy would be to sell the price from Day One with tactics of truth, presentation and a more accurate quote and/or tactics of off-market testing and/or engaging multiple quality experienced agents rather than one – especially a BS cheap commission one.
Luck still plays a role, but the smarter you work on good strategies with effective tactics, then the luckier we have found our clients get, and that is true for buying or selling.
May 11
Dear Gina, Mal and Joel – just a short note to say thank you to you all for your professional and friendly support over the past 6 weeks (yes it was 6 weeks from first conversation with Mal and Gina to a signed contract). I feel we have all worked very effectively as a team with open and transparent communications and no “histrionics” or BS – just stick to the facts and execute the process we had agreed upon.
I have to say I think the co-agency worked super well for us.
- Mal/Gina “behind the curtain” strategising and supporting. Frankly when we first spoke with Mal & Gina on Friday 25th March it was to begin early preparation for a 2022 Spring campaign – but your advice to test the market now turned out in our view to be a game changer and sound. And then you introduced us to Joel who TBH we had never heard of (sorry Joel) so if we had been going on our own, we would not have selected him.
- Joel used his network to bring the buyer and his charms and negotiating skills to get them over the line.
- And importantly you all gave us the confidence to go for a higher price than other agents were recommending.
Bottom line I refer to our co-agent team as the iron fist (Mal and Gina) in the velvet glove (Joel) – Bravo!!
All the best
M & S
May 2022
Susmita Magar is an inspirational young woman from Nepal, who completed her nursing degree with distinction in Nepal and came to Australia to get a Masters in Business Administration in Nursing from Kaplan Business School in Melbourne.
When she completes her MBA – Wow what an addition to the Nepalese health system, which is getting better as more locals, get more qualifications.
Susmita has done everything to date under her own and her family efforts – asking for no help and getting no funding or scholarship.
Susmita has already overcome
· getting from her village to tertiary education in Nepal
· and being a woman,
· English not her native language
· Completing her nursing with distinction
· Getting to Australia with her family’s help – no scholarship
· Part funding her MBA and living here herself working odd jobs
Then the pandemic hit her country and there is no work for her father/family in the trekking industry (that’s how we know Susmita – her father took us up to Everest Base through World Expeditions – have you travelled and trekked and want to provide long term help? – here is one way).
We have met Susmita in Melbourne and she stayed with my Mum, she is a wonderful young woman – Australia does not yet recognise her nursing qualification and being an overseas student – help and jobs are very limited.
She receives no government money that we are aware of and stays with Melbourne Nepalis – she is self-sufficient, but she can’t continue her MBA without help to pay for the fees and that would be a loss to her, to the Nepalese health system and children and to all of us.
Her Melbourne friends are trying to raise $29,900 – the remaining balance of her $42,000 MBA course. She will continue to pay for her own living expenses.
We have already raised over $6,000 in 24 hours with 24 donations including $1000 from Paul Broderick our State Tax Commissioner, Nick Mazzeo of Mazzeo Lawyers, Phil Dreaver a founder of Plenary as well as young people like Sarah, Ben, Natalie, Phoebe $10 and $20 each.
Why this is smart donating to give to Susmita’s Education?
All money raised will go to Susmita’s education expenses, which in turn will benefit many Nepalis. It’s the multiplier effect.
Let’s say Susmita’s MBA helps an extra 1000 children in her lifetime that is $29.90 per child helped – its real bang for your buck.
Thank you all Marketnews readers who 18 months ago answered the call and donated $24,200 to help Susmita, a young lady from Nepal, finish her MBA after the pandemic had made it impossible without assistance.
On Wednesday just gone Paul (a marketnews reader, donor, your State Tax Commissioner – we went up Everest Base together in 2019) and I were on hand to witness the completion of a truly remarkable effort by one gutsy lady.
Well done to Susmita and well done to all international students and thank you to all donors below.
October 2020
All monies were paid out details https://www.gofundme.com/f/nursing-mba-for-nepal
Thank you to the following generous Marketnews readers:
$20 – Emily Powell
$1,000 – Paul Broderick
$20 – Chris Monger
$20 – Sharyn Wright
$35 – Phoebe James
$250 – Alec Arnot
$250 – Sonja Bollknow
$20 – Mk Karailis
$100 – Simone Clarke
$20 – Natalie Sullivan
$100 – Julie Spence
$1,000 – Nick Mazzeo
$100 – Iain Carmichael
$30 – Sally Hutchinson
$1,000 – Phil Dreaver
$1,227 – James Buy Sell
$10 – Ben Kneebush
$100 – Anne Sidebottom
$40 – Carly Douglas
$500 – Lyn & Helen Hayward
$100 – Kathy Russell
$20 – Sarah Roberts
$500 – Tina & Tony Roberts
$50 – Annie H
$30 – Jo Murfett
$250 – Doug Parkinson
$20 – Emily Roberts
$50 – Fiona Ansell Jones
$250 – Ali Tiley
$500 – John Bongiorno
$100 – Justin Long
$200 – Craig Whitten
$10 – Hannah Harvison
$100 – Bevan Warner
$50 – Chris Daly
$200 – Stewart Connelly
$100 – Malcolm Flanagan
$1,000 – Stanley Tay
$250 – David Whitelaw
$150 – Anton Zhouk
$400 – Megan Bailey Rule
$100 – Andrew Branson
$600 – Charlotte Thaarup
$1,000 – Gina Kantzas
$100 – Peter Vigano
$100 – Richard Winneke
$50 – Alison Burt
$200 – Stefanie Poon
$200 – Richard Earle
$100 – Zara Lawless
$1,000 – Ian & Sue Anderson
$100 – David Lack
$500 – John Russell
$50 – Jeny Heislers
$250 – Bruce Karyn Peterson
$50 – Belinda Hill
$300 – Dean Tey
$1,000 – Donna Schols
$1,000 – Philip Schols
$100 – Cerys Latimer
$100 – Joel Brakey
$250 – Stu and Liz Glen
$250 – Kylie Stillwell
$200 – Devinder Chauhan
$350 – Greg Smith
$250 – Rina Darryl Cuzzubbo
$50 – Chris Mills
$50 – Rob Fletcher
$250 – Mike Gibson
$300 – William Khoo
$180 – David Naphtali
$50 – Dinithi Kodikara
$50 – Steve Ehrenreich
$200 – Michael Chadwick
$25 – Joánne Gowing
$50 – Kellie O’Neill
$100 – Damien Davis
$250 – Michael Dodge
$100 – Tim Heavyside
$200 – Andrew McCann
$227 – Lewis Levitz
$50 – Sally Newstead
$100 – Stephen Smith
$25 –
Christina Assimakopoulos
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