Fresh Market News

Melbourne June 28th & 29th, 2008.

 

This weekend the REIV reported there were 477 auctions with a clearance or sold rate 65 percent.

Million Dollar Melbourne.

Mal James Principal Buyer Agent 0408 107 988.

There continues to be very little quality stock offered in the million dollar plus end of the market as sellers who have had the sell (ie must meet the market) have sold.

The significant drop in prices during March and April forced many potential buyers and sellers to re-evaluate their needs. Those reassessments resulted in inaction now being evidenced by the small numbers the market is seeing on offer. Winter is traditionally a quieter time, we all feel like being a less brave and with the stock and housing markets weaker in the both the US and UK than in Australia we are all feeling even less brave on these cold mornings. The last few winters we have seen a myth busted (myth: it’s better to sell in Spring) with higher prices coming owing the lesser stocks levels and the still panicky buyer market not being completely satisfied. We are not seeing the higher prices despite the lower levels of stock this 2008 winter.

At the end of the day, 600 out of 1000 properties are selling at auction; we are still seeing 1000 plus properties sell every week at private sale and auction, babies a still being born, children growing up, people leaving home, circumstances changing. Life is still short and it’s better to be living happily than money in the bank unhappily.

So if we are sounding a bit gloomy – we don’t mean to. The market is what the market is and as always the market presents to us many opportunities. Here is one.

Buy and Sell in the Same Market: Our favourite opportunity now available is the upgrade, especially if you are in the most difficult of markets - the $1.5 million to $4 million segment.  Now, more than last few years, you have opportunities to improve your housing situation. However you need to understand the risks this market brings, the strategies for managing those risks and we suppose you also need to understand the rewards if you get it right.

In a nutshell, there are properties out there that are available at a discount of up to say 20% on last year – not all – some. There are also properties out there that last year may have flown past any sensible measure of acceptable buying price due to competition from other buyers. If you (1) really like one of them (2) see it because you are looking (3) secure it and (4) either sell yours well or hold with a good tenant you are going to be able to go the next level. The key to achieving this process is good strategies that are carried out well. These strategies involve but are not restricted to good buyer and seller agent engagement (of course we would say that); low risk but creative financial strategies, nerve, good methods of sale and /or negotiating techniques, ever vigilant eyes for opportunities or processes for recognising them. What does this mean practically – come and talk to us – it costs you nothing – we have bought seven homes in the last two weeks and two of those have been for clients with us in excess of 12 months. Patience does pay off but patience needs to be supported with activity. 

Footnote supporting comment above: For some reason doctors have been active with us in the last month as we have completed work for 3 doctors all with multimillion dollar purchases - in fact in the last two weeks we have bought –

Hawthorn - $7M+; Balwyn $3.5M+, Donvale 1.6M+; Camberwell 2.2M at auction; Sandringham 1.4M+; Yarraville 635K; Hampton $1M+. We missed another two on price.  

A quick straw poll on the market based on the above: Two were off market (one with strong competition); one a set sale or tender (with other bidders); one at auction under incredibly strong competition – 2 others over $2m; one at auction under some but less than anticipated competition; one before auction with a solid pre auction offer and one just after auction when a much hyped result did not eventuate and we were Johnny on the spot; hung tough and bought.

AUCTIONS THIS WEEKEND - 28th, 29th June 2008

49 Mathoura Road, Toorak.
We talked about this property when it first came onto the market – looks great from the outside but after that it’s a bit of a never ending story unless you have very deep pockets (preferably not on borrowed money) a love of the site (and you could- it is a great position) and a desire for a major project. We rated it 559 out of 1000 – however it could easily be a mid 800’s rating after a 2-3M renovation. Just wish it had a tad more land for the final dollars spent or will need to be spent. As medical offices for a person or group of persons who wanted the best looking ones, this is almost unique but we still feel there are other alternatives currently on the market, fully developed with those period features and without the headaches. There were 70 people at the auction and auctioneer John Bongiorno some say the smiling assassin (we don’t mean that rudely – he is a tough negotiator but always has a smile on his face even when things are not going well) kicked it off with a vendor bid at $3.5 million and after some theatrics it was passed in on the one bid from the crowd at $3.55m. At the time of writing no result was declared. James Redfern is the managing selling agent and a first class one at that with these difficult properties. It is a case of watch this space.

 

 

Show Me The Money

Peter Sinclair Principal Buyer Agent  0423 778 774

 

 

 

Auctions this weekend.

16 Moss Street Prahran.
Position AAA+++ in Melbourne real estate and a most fascinating auction. Marshall White’s John Manton began the campaign quoting $1.6m and auctioneer John Bongiorno opened the bidding with a vendor bid of $1.7m.

Spirited bidding by two parties was strong with $50,000 bids, down to 25’s, then 10’s, then 5’s. After two breaks, the second of which was about ten minutes, the property was passed in to the highest bidder at $2.125m and reported as sold for $2.13m. Again, a crowd of about forty people were in attendance. We rated this home at 751/1000 and it is a special inner urban period residence. No downstairs bedroom is a drawback; however, lots of positives; location, period features, off street parking for probably three cars, two courtyards and a great use of natural light, despite its south facing rear orientation.

 

99 Manning Road Malvern East.
This period home on the eastern side of Bourke Road was quoted at $1.2m by Marshall White agent Anthony Reis. Great facade, but not updated to suit everybody. We rated the home at 754/1000, strengths being location, land size and orientation.

Weaknesses may have been no grass for the kids to play in and the school at the rear. A crowd of about seventy people attended the auctioned, conducted by John Bongiorno. Opening with a vendor bid of $1.2m, three bidders advanced the price from $1.2m to $1.3m, from then on two bidders fought it out in bids of $1,000 to $1.332m, the winner issuing a knockout $3,000 bid to silence his competitor, buying the home at $1.335m. Attended by six or seven Marshall White agents who worked the two bidders very well – the under bidder issued his final bid at least three times and each time was encouraged to stay in the race, to the benefit of vendor who no doubt is now about $30,000 better off due to the agents. Even the eventual buyer was encouraged to stay in it after a couple of times indicating he was out.
A fair result, given 99 Manning Road sold in May for $1.3m on slightly smaller land and the market has had the jitters in the last month or so.

 

67 Kerferd Street Malvern East.
Price, Property, Position. I thought this home ticked all three. Agent Andrew McCann of Bennison Mackinnon was quoting $1.5m pre auction and this did not strike me as being over the top.

Gasgoine Estate, period home, north facing rear, land not huge, surrounded by good quality homes.No under cover car accomodation may have put some people off. Auction opened on a vendor bid of $1.45m and closed on a vendor bid of $1.5m, without a single bid made from the crowd of about forty people. We rated this home at 777/1000 and wouldn’t expect it to be on the market for too much longer. A large number of homes have been sold in that precinct recently with some serously good prices. 67 Kerferd is almost entry level for a period home in an around Central Park.

Some other Malvern East (Central Park precinct) results from the last few months –
Address                         Date                      Land                   Price                Price per sqm
28 Central Park Road      1/3/08                   756 sqm               $2,487,500           $3,290
14 Turner Street               15/3/08                587 sqm               $1,905,000           $3,245
75 Kerferd Street             19/4/08                902 sqm               $2,460,000           $2,727
77 Kerferd Street             3/5/08                   872 sqm               $3,275,000           $3,756
64 Beaver Street              12/5/08                936 sqm               $3,325,000           $3,352
70 Coppin Street              19/5/08                906 sqm               $2,375,000           $2,621


67 Kerferd Street at $1,500,000 equates to about $2,800 per sqm, which does seem like  unreasonable buying, given that some people may want to update it.

 

Architectural advisory

Adam Woledge Registered Architect 0413 318 079

Another cautious weekend for buyers.

Another cautious weekend for buyers – fringe suburbs with houses requiring work or having dominant negatives are finding the going tough, while good houses with little work required and ticking all (or many of) the boxes are selling.

27 Binnie Street Brighton East.
A functional, pretty Californian bungalow with great potential, we rated this 673/1000. Big positives here were the street presence and north facing rear orientation – the street itself ranks as one Brighton East’s good ones, without being brilliant. In it’s current form the house is liveable, with tall ceilings carried throughout.

This was a very quiet auction – about 30 people. Buxton auctioneer David Hart opened the bidding at the lower end of the quote range at $970,000 and that is where it passed in at. Fairly predictable result here as house requires renovation. Two options are obvious, keep things at single level or go up. Up is probably the right way to go. Below indicates a possible two-storey option. With three out of three auctions failing on the weekend, Brighton East is suffering at present.

 

1 Hanby Street Brighton.
A better turn up here, but again a non-seller. Whilst this has incredible WOW it falls down in other areas – small land content (320m2), no downstairs bedroom. We rated this 514/1000. Bidding opened on vendor bid of $1.7m and has a reserve of $1.89m. Again not a totally unbelievable result given price expectations.

39 Denman Avenue Glen Iris.
A recently built Porter Davis house in a good location with north facing rear. We rated this 717/1000 and it sold on the weekend for an undisclosed figure (in the $1.6m range). Highlights here for us were the pool and rear open plan living area. Only real negative were the small sizes of bedrooms 2,3 & 4.

 

 

Happy Spouse, Happy House

Melissa Ryan Principal Buyer Agent 0409 409 357

The Showman, The Footballer and The Bayside Agent..
A Tale of Three Auctions...

With 596 private sales during the week, agents are still ‘mopping-up’ and this is a good sign for the market. The topsy turvy clearance rate (up from last weekend from 62% to 65% for 477 auctions this weekend).  It’s school holidays currently and this has a softening effect on the amount of stock and number of sales at the high end of town. This was reflected this weekend with a 45% clearance rate in the million-dollar plus market.
Non referral auctions were the order of the day this weekend in Hampton and Brighton with Buxton. I don’t know if this was Melbourne wide with this particular franchise but it is a good idea. In this market with the inevitable pass-in and negotiate scenario why not get the auction over and done with as quickly as possible and also put pressure on the buyer to think they only have one opportunity to bid. It worked at two of their auctions I attended on Saturday.

At an auction in Malvern on Saturday a buyer tried to enter negotiations after the auctioneer had passed the property in to another buyer. Auctioneer John Bongiorno of Marshall White announced at later auctions that that person was not given the opportunity to buy the home; all he/she had to do was bid when the opportunity presented itself during the auction. This scenario is timely. Take note new auction regulations come into force this weekend. The State Government has closed a controversial loophole in auction conduct that did not prohibit late bids. The new rules prohibit auctioneers from accepting any bids or offers from buyers after the ‘fall of the hammer’. I have seen this tactic used over the years and it leaves a very sour taste in the mouths of all concerned; accept of course for the successful buyer!

His team may have won by a point in a hard fought game yesterday against the Brisbane Lions but unfortunately he was not successful in selling his home on Saturday.

We rated 9 Waverly Street, Sandringham highly at 786/1000. Internally the property is terrific and with an impressive façade. It does have some limitations however it is one of only a few modern homes in the street surrounded by Californian Bungalows and is on small land. The property had been on the market earlier this year , firstly as an auction then as a private sale by the owner for $1.35mil.The reserve now is $1.248mil and is in the very capable hands of Jenny Dwyer of Hocking Stuart, Sandringham.

 

A prominent Bayside agent’s home was auctioned on Saturday in front of 25 onlookers. Auctioneer Leigh Hallimore of Buxton conducted proceedings and was assisted by Christian Hegarty. The property was 10 Avondale Street Hampton. Leigh conducted a non referral auction and started proceedings with a vendor bid of $1.15mil. A young woman made a bid of $1.2mil and without consultation with the vendors the home was passed-in to her. A later offer of $1.23mil was made but the home remains unsold with a reserve of $1.29mil. We rated 10 Avondale Street Hampton 559/1000. The home has good accommodation and a Spanish Mission façade in a good location. In the rear of the property it does have low ceilings as a consequence of a flat roof extension and the kitchen could be better positioned.

 

Finally, just an observation made at an auction on Sunday in a suburb that is home to, I am told, a well known brothel. The young agent handling the sale of this home had done his job well. He secured editorial exposure for the property, his enthusiasm for the home was genuine and you could tell the agency was delighted to be offering the property for sale.  The marketing of the home was successful with the biggest crowd I have seen this year and there was a feeling of anticipation that this would be a good auction.
This is where the young agent’s good work began to unravel.

Enter stage left – The Auctioneer.
There is no doubt the market is tough for agents at the moment. Buyers are thin on the ground and it takes a lot of nurturing by the agent during the four week campaign to get at least one bidder to bid at auction.
At this auction the experienced auctioneer called for bidding and when offered a genuine opening bid refused it. When asked if the property was on the market by a second potential bidder he refused to answer. In fifteen minutes the auctioneer managed to put any potential bidders offside.
He must have lost sight for a moment that his role was to encourage bidding. He mentioned on more than one occasion that he prided himself on his ‘showmanship’ at auctions. I think he may be confusing this with ‘one-up-man-ship’.  The auction limped along, was passed-in and remains unsold.

 

Overall Off Market action is still reasonably quiet – while there are many on the market quietly a large number of them are without interest owing to asking price.

 

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

ALBERT PARK
PI 76 Bridport St B 6rm 200sqm $1,850,000 res $2,050,000 Buxton
ARMADALE
S 13 Seymour Av WB 7rm 511sqm $1,870,000 Marshall White & Co
PI 2/25 Sutherland Rd B 5rm strata $1,100,000 VB res $1,200,000 R T Edgar
BALWYN
PS Para St BV 11rm 581sqm $1,840,000 Woodards
BALWYN NORTH
S 17 Rangeview Gr B 4rm 1070sqm $1,325,000 Noel Jones
BEAUMARIS
PI 12 Chateau Gr C 8rm 724sqm $1,500,000 VB res $1,550,000 Hodges
PI 6 Wall St Rend 9rm 938sqm $1,025,000 VB res $1,145,000 Hocking Stuart
PS Beach Rd BV 9rm $1,500,000 Buxton/Buxton Sandringham
BRIGHTON
S 1 Arthur Av B 8rm 694sqm $1,620,000 Buxton
PI 2 William St B 6rm 521sqm $1,050,000 res $1,200,000 Hodges
PI 1 Hanby St Rend 4rm s/div $1,700,000 VB res $1,890,000 Buxton
SB 110 New St 7rm 885sqm $1,850,000 Buxton
PS Hampton St $1,040,000 Hocking Stuart
PS Higinbotham St B 7rm $1,975,000 J P Dixon Brighton
PS Murphy St B 7rm $1,050,000 Hodges
BRIGHTON EAST
PI 57 Glencairn Av BV 8rm 730sqm $1,700,000 VB res undisc Hocking Stuart
PS Stone St WB 6rm 630sqm $1,122,000 Hodges
CAMBERWELL
S 53 Fairmont Av WB 9rm 557sqm $1,135,000 Jellis Craig
CANTERBURY
PI 5 Scott St WB 8rm 551sqm $1,655,000 res $1,850,000 Marshall White & Co
PI 19 Selwyn St WB 9rm $1,600,000 VB res $1,695,000 Noel Jones
CLIFTON HILL
S 63 Dally St 6rm 10mx30m $1,200,000 Nelson Alexander
DONVALE
PS Mozart Circle 8rm 1498sqm $1,020,000 Fletchers
ELSTERNWICK
PS Orrong Rd B 9rm 587sqm $1,450,000 Biggin & Scott
FOOTSCRAY
PS John St BV 20rm strata $1,050,000 P Di Natale Footscray
GLEN IRIS
PS Seaton St WB 8rm 663sqm $1,055,000 Marshall White & Co
HAMPTON
PI 10 Avondale St Rend 6rm 683sqm $1,200,000 lo $1,230,000 res $1,290,000 Buxton
HAWTHORN
S 17 Lisson Gr B 8rm 584sqm $1,120,000 Jellis Craig
HAWTHORN EAST
PI 11 Mount Ida Av BV 8rm 658sqm $1,480,000 VB res $1,590,000 Hocking Stuart
KEILOR
PS Petrik Dr BV 10rm 2002sqm $1,250,000 Brad Teal
KEW
S 377 Cotham Rd B 8rm 1288sqm $1,500,000 Woodards
PI 63 High St South B 6rm 836sqm $1,285,000 lo $1,325,000 res $1,475,000 Collins Simms
PI 89 Fitzwilliam St B 10rm 702sqm $2,600,000 VB res $2,790,000 Jellis Craig
PS Locksley Av B 7rm 774sqm $1,735,000 Marshall White & Co
MALVERN
S 2/16 Gaynor Ct B 6rm s/div $1,020,000 Bennison Mackinnon
PI 9 Beaven Av B 8rm 368sqm $1,650,000 VB res $1,700,000 Bennison Mackinnon
MALVERN EAST
S 99 Manning Rd B 4rm 751sqm $1,335,000 Marshall White & Co
PI 67 Kerferd St B 6rm 535sqm $1,500,000 VB res undisc Bennison Mackinnon
MITCHAM
PI 476 Mitcham Rd WB 6rm 1795sqm no bids res $1,100,000 Noel Jones
MONTMORENCY
PI 198 Sherbourne Rd BV 6854sqm $1,900,000 VB res $1,975,000 Miles RE
MOUNT WAVERLEY
PI 12 Debbie St BV 657sqm $1,100,000 VB res undisc Barry Plant
NORTH MELBOURNE
S 2-4 Moss Pl BV 7rm irregular $1,375,000 Hocking Stuart
PARKVILLE
PI 185 Park Dr B 7rm 7.7mx20m $1,750,000 VB res $1,950,000 Nelson Alexander
PRAHRAN
PI 34 Westbourne St WB 6rm 208sqm $1,425,000 res $1,500,000 Century 21 Wilson Pride
RESERVOIR
PI 19 Oakhill Av B 7rm 18mx45m $1,025,000 lo $1,100,000 res $1,200,000 Nelson Alexander
SANDRINGHAM
PI 9 Waverly St Rend 7rm s/div no bids res $1,248,000 Hocking Stuart
ST ANDREWS BEACH
PS Sandy Rd $1,200,000 Hocking Stuart
ST KILDA
S 3 Gurner St B 6rm 520sqm $1,500,000 Wentworth
SB 12 Baker St $1,900,000 Wentworth Real Estate St Kilda
TEMPLESTOWE
SB 9 Oxford Close BV 10rm $1,067,000 Philip Webb
TOORAK
PI 49 Mathoura Rd B 20rm 735sqm $3,550,000 res undisc Marshall White & Co
WILLIAMSTOWN
SB 47 Smith Av B 7rm 400sqm $1,130,000 Hocking Stuart