Let's Dig Down

by Mal James & Gina Kantzas

Saturday 23rd of May 2020

How have you found your week – brushing off the cobwebs and getting back on with it – somewhat gingerly at first and then somewhat disappointed, realising that a part of your life you thought was scary, wasn’t that bad after all and maybe you actually got some unexpected meaning from it?

 

Today you will see the first of our design changes to bring in our ability to encourage and promote Multi-listing, especially on off-markets to help get our Top End going again. Please excuse our hiccups.

Market in a Minute

Its 6:00pm Saturday - what a week

Let’s drill down into what is really going on in our Inner Melbourne market.

 

Stats and comparisons to past years aren’t really all that helpful – negative headlines or even positive predictions about the future, don’t actually get your home bought or sold.

 

So let’s forget the macro (the world and virus) and try and work out what is happening on the micro (your home) – what is happening to you and me, to individual buyers and sellers, to real people in Inner Melbourne at the Top End.

 

To do this we thought we would drop in for an update on what is happening in our May 100 “Auction” Test in each council.

 

Below are the results along with some market opinions from Mark Harris, Nicholas Brooks, Tony Doh, Adrian Wood and David Hart who we ran into at opens today. Thank you.

Executive Summary

1. More are selling than we thought

2. Price/Value is harder to pick

3. How are you attracting buyers after week 1?

More are selling than we thought would

Two weeks ago we started our May market 100 “Auction” test – meaning because of Covid-19 we couldn’t find a 100 auctions to check and compare Clearance Rates and Bidderman, like we do 4 times a year, every year, so…

 

We decided to select 100 properties randomly that in “normal” times may well have gone to auction and they would become our “Auction” test.

 

We gave them an extra week on top of a normal 4 week campaign to sell and we said we would check how many had sold by the June Queens Birthday weekend.

 

Today we are half way through our 100 “Auction” test and we thought it was time for an update.

 

Surprisingly 22 of the 100 have already sold across all councils and we set a target of 50% for saying the market is actually running ok. We might get there or close.

 

Of those sold, 18 have been on market and 4 off market – so thumbs up to say advertising is either bringing in more buyers or focusing the sellers mind, as they are spending money and don’t want to waste it with poor pricing, access or presentation.

 

The main take out is the differences between the $ segments. The large majority of homes sold are in the lower echelons of Top End pricing – meaning the large majority of sales are in the $2m range or very close to it.

 

For detailed breakdown of stats please check out each council below.

Wormy says price / value are hard to pick

One thing is becoming very clear, very quickly – our Top End is now a tale of three very distinct markets.

 

$1million – the general mood is things are slipping a little, but basically holding.

 

$2million to $3million – have to get selling range (meaning the seller will actually sell in that range) right (meaning the buyers agree) and probably its 5%-10% off its peak for most (not all, but most); then a deal can happen.

 

$5million and above –  This market has a serious lack of buyers right now – the chances of you putting a home to market for a short public campaign and getting the result you want as a seller, are small.

 

Not zero, but far less than 50/50.

 

This is the market segment that you could argue has had the biggest falls – you could argue, but you couldn’t prove it, as the number of transactions have been so small.

 

Lets drill down on a few May biggies:

 

60 St Vincents Place Albert Park (Simon Gowling) – you could argue that the price was significantly less than the original quote. You could also argue that a sale north of $9million in this market just gone was exceptional.

 

4 Heymont Close Toorak (Jeremy Fox and Antoinette Nido) at circa $8000 per sq metre that is pretty close to full dollar in any market – allowing for limited street frontage in a great court location. Would it have got more last year – not sure.

 

18 Royal Crescent Camberwell (Mark Pezzini and Tower Property Advisory) – Landed above the real quote and north of $4million with multiple bidders, selling on closing day of EOI. Good address, needing a major reno on a great facade at $4,000 per sqm. That’s a price that could stack up in any past market.

 

40 Service Street Hampton (Jenny Dwyer) at a short breath under $4,000,000 with 4 or more bidders for a home that was very good without being great – the market said give a me a move in home, well located with a top floor plan and I will pay you a top price.

 

34 The Ridge Canterbury (Geordie Dixon) Premium street and good agent who sells in the street – within the quote range, tad under $4million, in a market segment that has now become a lot harder to get a commitment from due to fewer active buyers than a few years ago. A very solid result if bought as land only, as this specific market had changed before the virus.

Headline Two

Spy

On the same day the biggest of our four banks were predicting a property Armageddon over the next one, two or three years with CommBank’s headline topping the ladder with a 32% drop – we were quietly withdrawing from a 5 buyer bidding war on a Hampton home (circa $4m) that went well past a balanced agent quote. Mmmmm … predictions and modelling – don’t you just love the usefulness they provide day to day.

How do you get buyers after week one?

Buying and selling homes above $3million is no longer all about algorithms, it’s becoming personal again.

 

Since 2000, with our massive population increases we have seen a breakdown of buyer-seller-agent relationships, in part due to a restriction of time, an abundance of money and the growth of corporatisation.

 

Real estate (myself included) had at times simply been a numbers game – got a problem then make more calls, spend more on advertising, hire more people, do more opens and more, more and more.

 

Got a different type of problem then lower your commissions, lower your time and effort and lower prices – just lower something, get it done and move on.

 

One of the really good things Covid-19 and now this new market has shown, is that when more and more is not enough – you will have to find another way – you will have to be creative.  We are thinking that could well be in relationships – no, not the fake friend ones – we mean real, working professional ones.

 

Relationships between sellers and agents. Relationship between buyers and agents. Relationships between agents and agents.

 

This is what Marketnews Multi-listing is all about.

 

When all else fails build a mutually beneficial (but not unethical) relationship. And when you find it actually works – then next time build a relationship before a failure and reap even more mutual benefits.

 

Marketnews Multi-listing is not about lower commissions – its about better commissions.

 

Marketnews Multi-listing is not about creating unmanageable competition – its about creating managed competition.

 

Marketnews Multi-listing is not about less – its about more – a bigger pie for all with more options and fewer barriers. Like the good stuff in international trade.

 

Marketnews Multi-listing is not about benefit of one segment over another, it is about creating the possibility of a better deal for the buyer and the seller and the agent.

 

Baloney hey! Really? We’ve bought and sold an estimated 1500 plus homes and in all cases two agents, not one have been paid. Our clients have paid more than any other or else they were not the buyer, so isn’t that good for the seller and we bought what the buyer wanted, at a price they agreed to – so wasn’t that of benefit to the buyer. Win-win-win and all jobs with two agents.

 

Not all jobs need two agents. But many in this market at the Top End do. After your selling agent has bought his or her entire $5million database through your home in week one, what is the next plan if your home is off-market and doesn’t sell.

 

No, please tell me or tell your client what the plan is. Advertising at this level can have drawbacks, the OFI’s are not massively full of spare buyers to take off and bring to your off market client and ……how are you getting new buyers and keeping a mood, a momentum going?

 

And sellers do you really think that less and less commission will motivate your agent to bring you anything other than lip – service. How do you perform in your role when you are earning next to nothing?  Are agents going to bring that elusive buyer to your home or another seller who is paying a fair rate.

 

How do you perform when there is a real chance of an excellent pay-day – do you go that extra mile? Commission, unlike marketing or price lowering is only paid when the deal you want is done. Finding the cheapest most desperate agent works in some circumstances, but not many.

 

If you’re a $5million buyer how, in this fractured information market do you find all your options and really understand what price and terms may work for you, without some professional help. Multi-listing can give you expert help on certain homes.

 

If you’re an agent with a couple of slow listings do you tell your seller its price, but then still don’t find a buyer – do you encourage your client to spend more on marketing, when that already hasn’t worked or do you reach out to others (share a bit) and see if there is another way.

 

This is what multi-listing is all about. Better relationships – better deals.

 

David Sciola rang and asked to find out more information – from March 24 to April 24 with Carla Fetter he sold 16 properties (5 off-market) at an average sales price of $1.9million. None needed Multi-listing but he rang to enquire about how it may help his clients – maybe that is why he sold 16 in that month – an open mind.

 

This is industry based – we will not control it – we are only paid if we bring a buyer or a seller to the deal and many deals will not involve us at all. This is to help get our market moving again, paying taxes our government needs, creating jobs our community needs and helping our buying and selling clients and our industry get better deals from a bigger pie.

 

It’s about working together when it makes sense to do so and working apart when that is the best option for our respective clients.

 

Multi-listing is not for every deal, but it is for some.

Bayside Port Phillip

BRIGHTON • BRIGHTON EAST • HAMPTON • ELWOOD • ALBERT PARK • MIDDLE PARK •  SANDRINGHAM

David Hart

4 Peacock

Brighton

Adrian Wood

8 McGregor
Middle Park

100 Auction Test Update

Our Bayside sample started on May 2nd with 20 online properties and 15 off market properties and as of 22nd May

  • 7 online properties have sold
    • HAMPTON, 1 Kyarra Street. Nick Johnstone (Nick Johnstone Real Estate) Under the hammer $2,310,000
    • BRIGHTON EAST, 39 Shasta Avenue. Halli Moore (Buxton) Private Sale $undisclosed. ISP $2,150,000 – $2,250,000
    • ALBERT PARK, 18 Draper Street. Simon Gowling (Greg Hocking) Private Sale $undisclosed. ISP $2,600,000 – $2,800,000
    • HAMPTON, 40 Mills Street. Jenny Dwyer (Belle Property) Private Sale $undisclosed. ISP $2,900,000 – $3,100,000
    • HAMPTON, 40 Service Street. Jenny Dwyer (Belle Property) Private Sale $undisclosed. ISP $3,450,000 – $3,750,000
    • ELWOOD, 10 Byrne Avenue. Jock Langley (Abercromby’s) Private Sale $undisclosed. ISP $6,000,000 – $6,600,000
    • BRIGHTON, 47 Hanby Street. Ben Vieth (Marshall White) Private Sale $undisclosed. ISP $1,800,000 – $1,980,000
  • 1 off market has sold
    • ELWOOD. Sam Gamon (Chisholm and Gamon) Off Market $undisclosed. ISP $2,000,000
  • 1 no longer has an online listing – maybe withdrawn?
    • BRIGHTON, 14 Campbell Street.
  • 2 Off Markets are now online; 1 auction and 1 Private Sale
    • ALBERT PARK, 50 St Vincent Street.  Justin Reed (The Agency) ISP $2,300,000 – $2,400,000 – Scheduled for auction 6th June at 11am and is currently Under Offer
    • BRIGHTON, 39 Murphy Street. Andrew Campbell (Marshall White) ISP $3,650,000 – $3,950,000 

Bayside Private

Spy

On the same day the biggest of our four banks were predicting a property Armageddon over the next one, two or three years with CommBank’s headline topping the ladder with a 32% drop – we were quietly withdrawing from a 5 buyer bidding war on a Hampton home (circa $4m) that went well past a balanced agent quote. Mmmmm … predictions and modelling – don’t you just love the usefulness they provide day to day.

Join our Buy or Sell free list.

Stonnington

SOUTH YARRA • TOORAK • ARMADALE • MALVERN • MALVERN EAST

Mark Harris

Nicholas Brooks

47 Grandview

Prahran

100 Auction Test Update

Our Stonnington sample started on May 2nd with 12 online properties and 15 off market properties and as of 22nd May

  • 4 online properties have sold
    • ARMADALE, 8 Clendon Road. Andrew Smith (Kay & Burton) Private Sale $undisclosed. ISP $2,700,000 – $2,900,000
    • ARMADALE, 14-16 Ashleigh Road. Michael Armstrong (Kay & Burton) Private Sale $undisclosed. ISP $3,500,000 – $3,800,000
    • PRAHRAN, 29 Closeburn Avenue. David Sciola (Jellis Craig) Private Sale $undisclosed. ISP $2,250,000 – $2,450,000
    • GLEN IRIS, 6 Ellis Road. Andrew Luke (Jellis Craig) Private Sale $undisclosed. ISP $3,800,000 – Currently Under Offer
  • 2 off markets have sold
    • MALVERN EAST. Jack Moss (Marshall White) Off Market $undisclosed. ISP $2,000,000 – $2,200,000
    • MALVERN EAST. Matthew Coombs (Jellis Craig) Off Market $undisclosed. ISP $2,450,000 – $2,600,000
  • 1 Off Market is now online
    • MALVERN EAST, 26 Nott Street. Dean Gillbert (Marshall White) Private Sale. ISP $3,750,000 – $4,000,000

Stonnington Private

Spy

On the same day the biggest of our four banks were predicting a property Armageddon over the next one, two or three years with CommBank’s headline topping the ladder with a 32% drop – we were quietly withdrawing from a 5 buyer bidding war on a Hampton home (circa $4m) that went well past a balanced agent quote. Mmmmm … predictions and modelling – don’t you just love the usefulness they provide day to day.

Join our Buy or Sell free list.

Boroondara

HAWTHORN • KEW • CAMBERWELL • CANTERBURY • SURREY HILLS • GLEN IRIS • RICHMOND

Tony Doh

51 Broadway Camberwell

100 Auction Test Update​

Our Boroondara sample started on May 2nd with 22 online properties and 16 off market properties and as of 22nd May

  • 7 online properties have sold
    • CAMBERWELL, 16 Fairmont Avenue. Stephen Gough (Marshall White) Private Sale $undisclosed. ISP  $2,700,000 – $2,970,000
    • KEW, 25 Stevenson Street. Nick Whyte (Nelson Alexander) Private Sale $undisclosed. ISP $2,400,000 – $2,640,000
    • CANTERBURY, 91 Mont Albert Road. Walter Dodich (Kay & Burton) Private Sale $undisclosed. ISP $3,600,000 – $3,900,000
    • KEW, 5 Highbury Grove. Andrew Gibbons (Marshall White) Private Sale $undisclosed. ISP $2,500,000 – $2,750,000
    • KEW, 72 Fitzwilliam Street. Anton Zhouk (Anton Zhouk Real Estate) Private Sale $undisclosed. ISP $2,500,000 – $2,700,000
    • KEW, 53 Barnard Grove. Nick Whyte (Nelson Alexander) Private Sale $3,650,000. ISP $3,500,000 – $3,750,000
    • CANTERBURY, 34 The Ridge. Geordie Dixon (Jellis Craig) Private Sale $undisclosed. ISP $3,900,000 – $4,290,000
  • 1 off market has sold
    • GLEN IRIS.  Daniel Wheeler (Marshall White) Off Market $undisclosed. ISP $2,300,000 – $2,400,000
  • 2 Off Markets are now online; 1 Private Sale and 1 EOI
    • HAWTHORN, 100 Power Street. Tom Staughton (Kay & Burton) Private Sale. ISP $1,900,000 – $2,030,000
    • GLEN IRIS, 17 Webb Street. Jesse Matthews (Marshall White) EOI closing 2nd June. ISP $2,100,000

Boroondara Private

Spy

On the same day the biggest of our four banks were predicting a property Armageddon over the next one, two or three years with CommBank’s headline topping the ladder with a 32% drop – we were quietly withdrawing from a 5 buyer bidding war on a Hampton home (circa $4m) that went well past a balanced agent quote. Mmmmm … predictions and modelling – don’t you just love the usefulness they provide day to day.

Join our Buy or Sell free list.