Fresh Market News

May 3rd & 4th Weekend, 2008. Melbourne.

Overall Clearance rate: 60% on 861 properties to auction.
Million Dollar Offerings: 45% Clearance rate

Million Dollar Melbourne.

Auctions attended this weekend.

As we have been stating for some time and was again confirmed this week, the market is still continuing to fall in the order of 10 to 20% for most homes in inner Melbourne since February. Reading recent stats from the various authorities the fall has been greater in inner Melbourne than outer Melbourne however behind those stats we think you will find that at least inner Melbourne is still transacting at a relatively strong rate.  We still have an incredible amount of homes on the market compared to last year and with lower clearance rates the numbers of unsold properties are building each week.

Six auctions at million dollars and above we attended this last Saturday

8 Churchill Grove Kew (Rating 543 out of 1000). Nice period home in a great position but had three big negatives – south facing so poorer light, no car parking and no obvious room for it and smaller rooms. Auction was attended by around 70 people and started with a vendor bid at 1.1m – two bidders took it to 1.13 and it was sold afterwards between 1.1 and 1.2m

39 Alfred St Kew (Rating 859 out of 1000). Good Strong Auction well conducted by Iain Carmichael of Bennison Mackinnon. This is a great block (north facing rear and sitting proud) in a great street with its only criticism being not deep. It was expected to go well and it did with 3 strong bidders taking it from 1.6million to ‘on the market’ at 1.75million, to sold at $2,040,000. Making land value for good house building blocks in the Sackville Road area $2400 a square metre and again reinforcing that irrespective of the market quality attracts.

47 Donald St Prahran (Rating 691 out of 1000) and we may have been a little harsh with our rating. This lovely Victorian with a great feel had very strong bidding – as it should and achieved $1,505,000 after a number of strong bidding duels between several interested parties. James Redfern of Marshall White was in charge of proceeding and a strong but expected result was achieved for the vendor.

13 Goodall Street Hawthorn (Rating 884 out of 1000). A lovely Victorian with oodles of space, very well renovated and last year would in our opinion have sailed past $3million. After a big turn out of well over a 100 people and some strong bidding the property was passed into the highest bidder at $2.8m and later sold between that and $3million (exact amount undisclosed). Well conducted campaign by James Tostevin.

9 Arthur St Brighton. Cutting edge design that just didn’t fire at auction and with good reason. This property was originally advertised at 2.9m private sale and was then auctioned. It is very difficult to sell a property at auction after you have told the market the price you are chasing. Consequently it didn’t sell. A vendor bid was announced at around 2.45m then 2.5m saw it passed in with no expressed interest despite 80 people being in attendance.

14 Forbes St Essendon, (Rating 781 out 1000) As expected was passed-in. A big ticket was wanted on this property and despite our high rating (based largely on the brilliant quality of the home), it didn’t sell because in our opinion, the home and asking price didn’t match the street. When looking at property we always need to consider the 3 P’s and two of those P’s on this one (Price and Position) didn’t match up with the other P (Property).

Overall you can see many of the results below and some million dollar suburbs are really continuing to struggle –  Bayside in Hampton and Sandringham and then on the eastern front Balwyn and Nth Balwyn.

One final word – with Melbourne now being the 4th most affordable capital city and a big drop in real terms having been experienced in the last few months, now might be the time to consider hopping into the market – after all it won’t stay this way forever.

MILLION DOLLAR SALES (all results can be found at REIV)

ALBERT PARK
S 199 Bridport B 5rm 266sqm $1,600,000 Hocking Stuart
S 73, 75 & 77 St Vincent Pl B 1500sqm $10,100,000 Bennison Mackinnon
PI 26 St Vincent Pl B 7rm 390sqm $3,200,000 VB res undisc Hocking Stuart
PI 67 Merton St B 6rm $1,400,000 VB res undisc Biggin & Scott
PS Canterbury Rd $1,155,000 Hocking Stuart
ALPHINGTON
S 55 Bennett St WB 7rm 38mx13m $1,250,000 Nelson Alexander
ARMADALE
PI 35 Valentine Gr B 9rm 826sqm $2,500,000 res $2,900,000 Castran Gilbert
PI 9 Osment St BV 5rm 467sqm $950,000 VB res $1,080,000 Marshall White & Co
PS Huntingtower Rd BV 8rm 817sqm $3,025,000 Jellis Craig
ASCOT VALE
S 19 Hillside Tce WB 6rm 642sqm $1,000,000 Nelson Alexander
ASHBURTON
S 1 Munro Av B 11rm 759sqm $1,490,000 Marshall White & Co
BALWYN
S 112 Yarrbat Av v/land 1370sqm $1,900,000 Noel Jones
S 114 Yarrbat Av BV 10rm 1480sqm $2,945,000 Noel Jones
S 141 Yarrbat Av BV 9rm 501sqm $1,650,000 Noel Jones
S 62 Belmore Rd BV 7rm 906sqm $1,360,000 Jellis Craig
PI 20A Jersey St BV 9rm 740sqm $2,800,000 VB lo $2,950,000 res undisc Marshall White & Co
PI 31 Yongala St B 7rm 766sqm $1,200,000 VB lo $1,210,000 res $1,290,000 Hocking Stuart
PI 8/132 Yarrbat Av BV 9rm $1,075,000 VB res $1,150,000 Philip Webb
BALWYN NORTH
S 15 Stephens St B 6rm 908sqm $1,280,000 Noel Jones
S 339 Belmore Rd BV 8rm 867sqm $1,300,000 Noel Jones
PI 13 Dunstan St BV 9rm 941sqm $1,350,000 VB res $1,395,000 Jellis Craig
BEAUMARIS
S 2 Wells Rd BV 9rm 252sqm $1,055,000 Hodges
PI 391 Beach Rd Rend 8rm s/div $2,300,000 VB res $2,550,000 Hocking Stuart
BENTLEIGH EAST
SB 5 Maree St WB 8rm 600sqm $1,280,000 Hocking Stuart
BLACK ROCK
PI 12 Mcgregor Av BV 7rm 780sqm $1,450,000 VB res $1,550,000 Buxton
PI 28 First St B 9rm 1129sqm $1,700,000 VB res $2,100,000 Buxton
BLACKBURN
S 5 Goodwin St WB 6rm 662sqm $1,029,000 Woodards
BRIGHTON
S 111 South Rd BV 10rm $2,820,000 Hodges
S 22 Downes Av B 10rm 750sqm $2,600,000 Hocking Stuart
S 3 Anne Cr B 6rm 703sqm $1,147,500 Hodges
S 5 Stanley St BV 8rm 792sqm $2,110,000 Hodges
S 6 Kent Av BV 7rm 560sqm $2,505,000 Hocking Stuart
S 823 Hampton St B 6rm $1,018,000 Hodges
S 9 Inner Cr B 8rm 652sqm $1,730,000 Buxton
PI 423 New St B 9rm 833sqm $1,800,000 res $2,150,000 Hocking Stuart/Ian Reid Vendor Advocacy
PI 109 New St BV 10rm 1395sqm $3,150,000 VB res $3,600,000 R T Edgar
PI 19 Cadby St BV 6rm s/div $1,260,000 VB res $1,325,000 R T Edgar
PI 23 Cadby St BV 9rm 561sqm $2,200,000 VB res $2,400,000 Hodges
PI 27 Murphy St BV 7rm 598sqm $2,025,000 VB res undisc R T Edgar
PI 50 Asling St B 7rm 732sqm $1,475,000 VB res $1,600,000 Hocking Stuart
PI 6 Arthur Av 7rm 330sqm $2,500,000 VB res undisc Buxton
SB 3A Chatsworth Av B 7rm 662sqm $4,100,000 Buxton
BRIGHTON EAST
S 24 Charles St B 7rm 623sqm $1,065,000 Gary Peer & Associates
PI 1/20 Robinson St BV 6rm s/div $1,400,000 VB res $1,550,000 Century 21 Wilson Pride
PI 1/7 Camperdown St BV 4rm $440,000 VB res $475,000 Hodges
PI 3 Parklands Cr B 7rm 650sqm $1,000,000 VB res $1,050,000 Hocking Stuart
PI 4 Stone St WB 6rm 630sqm $1,150,000 VB res $1,400,000 Hodges
PI 7 Lansdown St B 9rm 1272sqm $2,050,000 VB res $2,225,000 Hodges
PS Camperdown St 6rm 698sqm $1,730,000 Buxton
PS Hornby St $1,100,000 Hocking Stuart
CAMBERWELL
S 19 Broadway B 6rm 406sqm $1,317,000 Marshall White & Co
PI 5 Remon Av B 7rm 714sqm $1,400,000 VB lo $1,450,000 res $1,459,000 Jellis Craig
PI 520 Burke Rd B 8rm 1273sqm $2,500,000 VB res undisc R T Edgar
PI 60 Christowel St BV 8rm 714sqm $1,725,000 VB res $1,800,000 Jellis Craig
PS Toorak Rd BV 8rm 650sqm $1,550,000 Noel Jones
CANTERBURY
PI 14 Avenue Athol BV 9rm 775sqm $2,100,000 VB res $2,475,000 Jellis Craig
PI 24 Alexandra Av B 5rm 732sqm $1,400,000 VB res undisc Jellis Craig
PI 62 Mont Albert Rd B 10rm 1821sqm $3,900,000 VB res undisc Jellis Craig
PI 79 Mont Albert Rd B 6rm 756sqm $1,550,000 VB res $1,595,000 Jellis Craig
CARLTON
PI 330-332 Cardigan St B 5rm $1,080,000 lo $1,100,000 res $1,180,000 Thomson
CARLTON NORTH
PI 682 Rathdowne St B 5rm 6mx38m undisc VB lo $1,150,000 res undisc Nelson Alexander
EAST MELBOURNE
S 503/30 St Andrews Pl C 5rm strata $1,180,000 Caine RE
ELSTERNWICK
S 15 Murray St WB 7rm 690sqm $1,675,000 Hocking Stuart
S 15 Rowan St B 7rm 710sqm $1,220,000 Biggin & Scott
S 31 Regent St B 6rm 590sqm $1,490,000 Biggin & Scott
PI 29B Downshire Rd BV 9rm 10.8mx29.5m $1,000,000 VB res $1,190,000 Biggin & Scott
ELWOOD
S 32 Byron St B 7rm 690sqm $2,030,000 Wentworth
PI 39 Ruskin St B 6rm 402sqm $1,120,000 res $1,200,000 Chisholm & Gamon
ESSENDON
S 28 Hedderwick St WB 6rm 890sqm $1,100,000 Nelson Alexander
PI 14 Forbes St WB 8rm 776sqm $1,800,000 lo $1,860,000 res undisc Nelson Alexander
FAIRFIELD
PI 7C Park Cr BV 4rm 295sqm $1,125,000 res $1,250,000 Collins Simms
FLEMINGTON
S 10 Church St WB 7rm 550sqm $1,120,000 Hocking Stuart
GLEN IRIS
PI 13 Clyde St BV 9rm 652sqm $1,300,000 VB res undisc Marshall White & Co
HAMPTON
PI 1 Poole Av BV 5rm 583sqm $1,100,000 VB res $1,150,000 Hodges
PI 23 Barnett St BV 7rm 836sqm $1,125,000 VB res $1,225,000 Hocking Stuart
PI 36 Margarita St BV 9rm 743sqm $2,600,000 VB res $2,750,000 Hocking Stuart
PI 53 Crisp St BV 10rm 860sqm $1,800,000 VB res $1,900,000 Hodges
S 5 Hazel Av B 8rm 676sqm $1,250,000 Ray White
HAWTHORN
S 168 Power St B 105rm 2880sqm $11,000,000 TBM Toorak
PI 14 Hawthorn Gr BV 9rm 1461sqm $4,500,000 VB res $5,000,000 Jellis Craig
HAWTHORN EAST
S 52 Campbell Gr WB 8rm 704sqm $1,150,000 Hocking Stuart
PI 34 Clive Rd B 8rm 888sqm $1,910,000 lo $1,975,000 res $2,150,000 Hocking Stuart
PI 39 Lawson St B 8rm 1114sqm $1,610,000 res undisc Jellis Craig
IVANHOE EAST
PI 8 Rotherwood Rd BV 8rm 1200sqm $1,200,000 VB res $1,350,000 Duncan Mcintyre
KEW
PI 18 Mcevoy St BV 10rm 581sqm $1,625,000 lo $1,640,000 res $1,750,000 Jellis Craig
PS Miller Gr B 7rm 756sqm $1,440,000 Jellis Craig
KEW EAST
PI 5 Bennett Pde B 9rm 581sqm $1,020,000 VB res $1,250,000 Jellis Craig
KOOYONG
S 3 Monaro Close B 6rm 653sqm $2,177,500 Bennison
LOWER PLENTY
PI 4 Woodfull Rd BV 10rm 4041sqm $1,075,000 res $1,150,000 Morrison Kleeman
MAIDSTONE
PS Omar St WB 6rm 1930sqm $1,300,000 Biggin & Scott
MALVERN
PI 44 Mcarthur St B 4rm 387sqm $1,100,000 VB res undisc Marshall White & Co
MALVERN EAST
S 115 Brunel St BV 6rm 230sqm $1,055,000 Marshall White & Co
S 16 Bruce St BV 5rm 610sqm $1,007,000 Noel Jones
S 77 Kerferd St B 9rm 880sqm undisc Kay & Burton
PI 26 Turner St B 7rm 596sqm $1,500,000 VB res undisc Marshall White & Co
PI 63 Repton Rd B 5rm 717sqm $1,100,000 VB res undisc Marshall White & Co
MARIBYRNONG
PI 68 The Esplanade BV 6rm 1689sqm $1,700,000 VB lo $1,800,000 res $2,100,000 Brad Teal
MIDDLE PARK
PI 69 Hambleton St WB 5rm 200sqm $1,650,000 VB res $1,700,000 Hocking Stuart
MOONEE PONDS
PS Bowen St WB 9rm 487sqm $1,100,000 Nelson Alexander
MURRUMBEENA
S 13 Spark St WB 5rm 660sqm $1,076,000 Hocking Stuart
NORTHCOTE
PI 52 Gladstone Av WB 8rm 470sqm $1,225,000 VB res undisc Thomson
PARKDALE
PS The Corso BV 8rm $1,310,000 Buxton
PARKVILLE
PI 92 Story St B 6rm $1,100,000 VB res $1,150,000 Thomson
PORT MELBOURNE
PS The Crescent B 5rm irregular $1,075,000 Maher & Co Port Melbourne
PRAHRAN
S 47 Donald St BV 5rm 377sqm $1,505,000 Marshall White & Co
PI 50 Porter St Rend 6rm s/div $1,050,000 VB res $1,190,000 Hocking Stuart
RICHMOND
S 2 Fraser St v/land 394sqm $1,115,000 Jeffrey Wilson Richmond
S 26 Rotherwood St B 26rm 650sqm $3,040,000 TBM Toorak
S 49 Somerset St WB 5rm 9mx35m $1,050,000 Biggin & Scott
PI 15 Miller St B 4rm 6mx30m $922,500 res $1,050,000 Jellis Craig
SANDRINGHAM
PI 26 Bamfield St 7rm 806sqm $1,260,000 lo $1,276,000 res $1,350,000 Buxton
PI 51-53 Fernhill Rd BV 962sqm $1,700,000 VB res undisc J P Dixon Brighton
SOUTH MELBOURNE
S 21 Dow St B 6rm 153sqm $1,425,000 Barry Plant
SB 4/230 Ferrars St B 4rm $1,157,000 Bennison Mackinnon
SOUTH YARRA
S 16 Oxford St B 5rm 240sqm $1,550,000 Castran Gilbert
S 35-37 Alexandra St 7rm $1,470,000 Kay & Burton
PS Osborne St B 421sqm $2,000,000 Williams Batters RE
ST KILDA
S 1-6/80 Chapel St B 30rm strata $2,196,000 Gary Peer & Associates
TEMPLESTOWE
PI 15 Atkinson St WB 8rm 3285sqm undisc lo $1,400,000 res $1,875,000
PI 71 Newmans Rd B 11rm 5019sqm $1,100,000 res $1,200,000 Allens EA Doncaster East
TOORAK
PI 7 Ross St 5rm $1,450,000 res $1,625,000 Kay & Burton
PI 14 Martin Ct B 6rm s/div $1,000,000 VB res $1,075,000 R T Edgar
PI 6 Stonnington Pl B 11rm 890sqm $4,200,000 VB res undisc Kay & Burton
WEST MELBOURNE
S 581 King St B 6rm 180sqm $1,100,000 Biggin & Scott
WILLIAMSTOWN
S 8 Lindsay Ct BV 11rm 490sqm $1,235,000 Compton & Green
PI 72 Victoria St B 6rm 503sqm $1,475,000 res undisc Sweeney

1st and 2nd Homebuyers

In Search of Home Sweet Home - Part 2.

Hello Buyers,

This is the fun part of purchasing your new home!

You will need your favorite searching 'tool' e.g the Internet, newspapers, real estate magazines ( not 'Wheels' or 'Marie Claire' ) and a knowledgeable real estate agent.

The bulk of new property is downloaded onto the internet midweek and some is also available in publications such as Melbourne Weekly early in the week. By Friday evening you will have a list of the properties you will be visiting on Saturday/Sunday. Remember if you are searching in the Bayside area, agents no longer do opens on Sunday.

Going to open for inspections serves two purposes - one to find the property that suits your requirements and two to become value savvy in your suburb of choice. After you have seen at least 20 homes in your suburb you should be able to predict a property's value, whether for auction, or as a private sale. Please factor-in emotion when trying to predict results for an auction property. It is not only about bricks and mortar and land size.
Not all homes will suit you but don't despair, use these properties to create value knowledge. Keep an eye on these homes, go to the auctions or follow-up their private sale prices in the newspapers or at the REIV website (www.reiv.com.au) where results are available on Sunday & Monday mornings. Compare the estimated price range and the actual result.If you want to do this properly, it is important you get into the habit of buying either the Monday edition of The Age or The Herald Sun. All real estate results from the weekend and previous week are listed here (except those very annoying “undisclosed” prices!)

So you are in the car with your list of properties, your Melways or Google maps and very important, along with something to eat. If you are committed to this process, your Saturdays will be spent seeing as many properties as possible in a short space of time. This will speed-up the buying process. There won't be time for a leisurely lunch! You are on a mission!

At every open for inspection you attend, PLEASE greet the agent with a smile and in a courteous manner recite your name and phone number. There are two reasons why agents ask for this information - one for security and two if he/she receives an offer prior to auction or for a private sale, they will ring you to give you an opportunity to be involved. There is nothing worse than finding a property you were interested in, selling prior to auction and not knowing about it. PLEASE leave your contact details.

A great real estate agent is not the enemy but a positive and valuable allie. By nature most real estate agents are friendly and want to help. You will be seeing the same agents over and over again so try and build good rapport with them. You can use this rapport to gain valuable insights into properties you are interested in. Importantly a good agent will think of you when they are listing a property that may suit your requirements and give you an opportunity to view and purchase the home before it comes on the market. After missing out at auction or private sale, wouldn't it be invaluable to have 'someone on the inside' thinking of you? Use the agents to build your knowledge of prices in your suburb. Ask them what comparable sales they have for each property you view. This will indicate to you if the estimated price range is fair or under quoted. Again priceless information.

If all of the above goes to plan it won't take long to find you new home. Next week I'll talk more about what to look for and what questions to ask of your agent at open for inspections.

Until then, happy house hunting!

Architectural advisory

The best house in an average street.

There is an old saying in real estate, don’t buy the best house in the street and in particular the best house in an average street.

14 Forbes Street Essendon is a wonderful home and achieves a very high rating of 781, however one underlying thing lets this down – the street.

Late Saturday afternoon this went to auction and not surprisingly, there were many, many people in attendance. Also not surprisingly there was only one bidder, and the property was passed-in for $1.8m, well below the reserve. Post auction negotiations proved unsuccessful and at the time of writing, it remains unsold.

Forbes Street is quite short (very much a thoroughfare) and not part of the esteemed Windy Hill precinct. Top dollars in this area demand top locations and although this is not far from Essendon Central, this is not Windy Hill. Within the street there are many housing styles and many flats. Nature strips are tight and there are very few significant trees.

The renovation itself is very good, and has been undertaken with care and precision. It is difficult to fault the appearance and design of this house. One very minor negative may be that the first floor only contains one bedroom (it may have been better to enclose the study area), but really this would not have been a key issue for many.

Investors

Supply & Demand.

Successful investing is about one thing - growth. In property investing, the cash flow needs to be affordable and make sense. Capital growth as the main driver or cornerstone.
So how does growth work? Quite simply, growth comes from price increases, fueled by supply and demand, over long periods of time.

Real Estate Institute of Victoria (REIV) figures show that the median price for Seaford in March 2008 was $355,000, against a Melbourne metropolitan median of $435,000. Valuer General data also confirms that capital growth over the past ten years has been steady, averaging 12.7% per annum.

Figures and data like this can be confusing; if you are considering buying an investment property in Seaford with the view to develop the land, the area of this suburb most likely to provide the strongest long term growth is beachside of the Frankston freeway. In the last six months, data from the REIV tells us that the median price paid for a three bedroom townhouse in Seaford in 2007 was $393,000. Houses in the same period showed a median price of $345,000. How can this be, nearly 20% higher than houses, yet on half the land size? Position, and one other factor, position. All the higher priced townhouses were beachside (the dearest reported was $670,000 Wyatt St, January 2008).

Let’s assume all goes well with council and they will let you build what you want (you have checked that haven’t you?) Costs from here –

• bank interest
• stamp duty on your purchase
• holding costs
• plan of subdivision costs
• architects costs
• project manager
• building costs (about $250,000 each)
• unforeseen costs (the ones we don’t want to know about)
• selling costs (agents)
• capital gains tax
• opportunity cost of using that money elsewhere

If you can sell each of your two townhouses for somewhere close to the highest selling townhouse to date ($670,000 according to the REIV), allowing for growth over the next twelve months, you might have some chance of making a limited profit. That is, if your primary motivation is to buy, build and sell straight away. If you can afford to buy, build, hold (rent) then sell, your chances of a stronger financial outcome grows significantly.

Some experts say the market is going up and some say it is going down. Property does go up and down in the short term. Sometimes it’s because of artificial interference from governments via the manipulation of interest rates, or first home buyer grants, rent controls or tax concessions, but often it’s the natural market forces of supply and demand.

As demand exceeds supply near good schools, trains, the beach and the central business district, prices will continue to rise, along with increased wealth and net migration.
Auction on the weekend.

47 Donald Street Prahran – I rated this property at 691/1000 (see attached rating). Few issues to consider – pool not for everybody, corner block (perhaps a privacy issue), bathroom a bit messy. However, a very nice home and position AAA+++ Prahran. Opened with a vendor bid of $1.15M and three strong bidders took the bidding well above the vendor’s reserve (I think reserve was a tad under $1.3M) to a sale price of $1.505M.

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