… and everyone’s invited.

Auctions are booming, private sales the same. Even the wallflowers of summer (expressions of interest) are resulting in winter romances.

Dance! Like it’s 2007!

2007? Didn’t that come just before (shudder) 2008?

Yes. But there are differences. The clearance rates we’re seeing now (at least at the top end) are being driven by some of the lowest stock levels we have ever seen. And that isn’t about to improve.

There’s usually a lull at this time of year but, usually, looking forward to August/September there are long lists forming of properties which will be for sale during Spring.

Not this year. This year the air is as full of agents’ prayers as the weekend papers were full of their advertisments pleading for listings.

We’re back to chickens and eggs: while clearance rates suggest this is a good time to sell, the lack of choice suggests it’s a tough time to buy. So what does a vendor do? For many, it’s sit-on-hands time.

What are we saying to our buyers? Same as always: Only buy what you really want; if that’s not available, then wait.

Game of The Week?

No, not dummy bidding. That’s every week. The winner this week was the agent who, following an auction which had two bidders and was passed in, offered the highest bidder a reserve $100,000 above the reserve offered to the underbidder. The agent’s strategy is obscure (was he hoping to sell to someone who would list another property?), but if “highest bidder gets first right of refusal” means losing to someone who can buy the property for $100,000 less, there’s a lot to be said for underbidding. And how happy would the vendor be?

In a year when little has sold for over $7 million, last week brought two notable exceptions:

• 63 Albany Road, Toorak sold for $8 million after an expressions of interest campaign. This was a solid result as it was a developer turning the house over, but it again underlies our belief that buyers will pay handsomely for fully renovated properties which are ready to move into.
• The extreme exception to the “buyers will pay handsomely for fully renovated …” rule was 64 Hopetoun Road. Much publicised mortgagees auction. A new house which still needs $2-3 million spent on it (real money pit, real problems). It sold for a whopping $7,075,000 with three bidders in front of 500 fans. Footy is not the only sport played in Melbourne.

Less lustrous was 74 Park Street, South Yarra: 2 storey Victorian, sold for just $2,520,000.

We also managed to sneak a bargain or three when we bought properties for considerably less than their vendors had paid.

Elsewhere, quality sold and agents’ minds appeared to be on wrapping up sales quickly (never mind the vendor) and heading for the holidays.

We?

There will be little to report so Top End Trends will be very quiet for a couple of weeks. You will not see us in the shadows, but we will be around: hunting out gems we know are there.

David Morrell

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Bayside: Brighton shines

Although the numbers of onlookers were well down on last week (they were probably all at Hopetoun Road, above), bidders were still active at the vast majority of auctions held in Bayside; and Brighton continued to perform well across all price catergories.

Private sales are still the method of choice at Brighton’s top end:

• after more than six months on the market, an as-new house at 25 Cosham Street, Brighton finally sold for a shade under $6 million…
• … leading to arched eyebrows among many in the know, as 7 Cosham Street, on similarly-sized land, sold this week for just $2.97 million – even allowing for the new house which will certainly be built, that’s a gap which won’t be bridged. They’ll be happy chappies at 25
• and third agent lucky with the sale of 7 Manor Street. A totally made-over house on 1200 sq m, it has a tennis court and snappy pool but apparently that’s not good enough: the intention is to bulldoze the lot and to start again. At $4.075 million for the land, this will have to be some new house.
• 1/9 St Ninians Court a new apartment in the Golden Mile, changed hands at $2.75 million.
• 39 Meek Street, Brighton found a new owner for a mere $1.85 million.

The standout auction result was at 95 Cochrane Street, Brighton a brand new spec house on a modest 565 sq m. Following a passionate auctioneer?s spiel before a large crowd (those left over from Hopetoun Road?), an opening bid of $2.6 million was met with prolonged silence until a $20,000 vendor bid was countered with another $20,000 from the only real bidder before the property was passed in at $2,640,000. Some fast talking later, a sale was concluded at $2.85 million, a really strong result for the location.

20 Wallace Grove, Brighton also sold after brief negotiations following its auction. Again only one bidder, who opened quickly at $2.2 million, was countered almost as quickly with a $100,000 vendor bid and then the property was passed in. The sole bidder finally upped the ante to an irresistible $2.4 million.

The recovery in the Bayside market is well illustrated by the auction result at 66 Black Street, Brighton. A 1970?s house on 814 sq m, it last sold in February 2008 for $1,925,000 with the intention of demolishing and rebuilding. Only four months ago, it would have struggled to realise much over $1.75 million, but it sold on Saturday for $1,930,000. Again, the intention of the new owner is to bulldoze and rebuild.

A new town house at 16 Whyte Street, Brighton on only 371 sq m, sold for $1.9 million.

A contemporary but not new house on 435 sq m at 4 Lynch Street, Brighton sold for $1.85 million.

5 Yuille Street, Brighton on a northerly rear facing 700 sq m allotment, was snapped up prior to auction for its land value of $1.65 million.

Into East Brighton, the best result of the weekend was 25 Baird Street a near-new house with a pool and on 620 sq m. A gently paced auction saw three bidders take it to $1,870,000 before it was passed in and sold shortly after for the same price.

1 Margaret Street eventually sold after being passed in at $1,135,000 – post-auction discussions brought it to $1,152,500.

Hampton was down on auctions, but 40 David Street on 662 sq m, sold for $1.4 million while 37 Sargood Street sold privately for $1,255,000.

Beaumaris and Black Rock had the week off and even Bentleigh was quieter: only five auctions and a few private sales.

See you when the lull is broken …

Damian Taylor

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June. The solstice descends and, along with the shortest day, we usually have the least active market. Not this year. Clearance rates are off the Richter scale.

In fact it’s not just one market but three and – at least for the time being – they all appear to be working in unison. But one question hovers over them all: how long can this go on?

Three markets?

1. The bottom end. Buoyed by the governments’ first home-buyers’ incentives. If, and more likely when, the incentives are removed or reduced, that ship will sink.
2. The middle. Mostly riding on the back of the bottom end. When things are busy down there, there’s a trickle-up effect. There’s also relatively little on offer and investors are now becoming more active, particularly between $500-800,000.
3. The top end. Clearance rates are as high as those at the other end of the ladder, but the volume is nowhere. $5 million plus sales in the last quarter were the lowest they have been in a decade. With so little quality and so little choice on offer, when the right property comes along, it’s not around for long. When volumes return to more typical levels, it’s likely prices will come under pressure.

Vendors, too, have contributed; reducing their price expectations back toward levels which represent value.

And there are, as always, the exceptions (the unthinkable exception is is a weekend without exceptions). Those swimming against the if-you-list-it-it-will-sell tide have price expectations firmly fixed in the stratosphere – and there’s not a lot of life up there – or they are marketing properties with Issues. That’s with a Capital I.

Meanwhile, back at the coal face …

1097 Malvern Road, Toorak – a period home, but probably not for long – sold for $3,115,000. That’s about $220 a foot and not by any means exceptional.

Some quality offerings which achieved strong results:

• 1/4 St Georges Court, Toorak great address and a good townhouse, sold for $1.5 million against a $1.3 million expectation.
• 8/2-4 Lansell Court sold prior to auction for $2,350,000. A good result given they paid $2 million for it a couple of years ago and this has traditionally been a hard block to sell in.
• 25 Loch Street, Camberwell a good period home, sold for $2,750,000. A vendor who didn’t want to risk a no-sale before the school holidays?

And some wallflowers:

• 19 Oak Street, Hawthorn a period house up for auction for the second time in six months. It was passed in again on a vendor bid of $3,600,000. Issues, anyone?
• 68A Clendon Road, Toorak a modern house on 5,000 square feet. We’re lead to believe they were offered $5.6 million and want more. Reality check required.

Observation of the week ?

The turnaround in the “Cinderella” suburbs of Albert Park and East Melbourne, which were particularly belted over the last six months with margin calls and GFC pressures.

David Morrell

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Bayside: busy, busy, busy.

Multiple buyers, plenty of bids and strong private sale activity marked the second last week of the financial year in Bayside. Have people not realised we are in the middle of Winter?

Only a few months ago, the vast majority of auctions were receiving little interest let alone any real bids. The order of the day was:

1. auctioneer’s spiel
2. auctioneer passes property in on vendor bid
3. auctioneer scratches head.

In only a couple of months, that’s all changed:

1. auctioneers spiel
2. auctioneer swamped in genuine bids
3. auctioneer calculates commission
4. auctioneer orders champagne

Several weeks ago, we spoke of the ripple effect: the strength in the sub $1 million market trickling up to the one to two million range and prospects of movement ever upward to the top end.

Some ripple. Saturday was a tidal wave. The big kids came out to play and three auctions in Brighton went close to $3 million and over.

But the real surprise was the number of bidders competing up to those levels.

And so …

Brighton? Busy.

7 Cosham Street, Brighton is a tired single level 1980′s house with an indoor pool but it’s in an excellent street and on 980 sq m of northerly rear facing land. Quoted at $2.4 million +, a bellow of seven bidders drove the final price to $2.97 million, at which point it was gleefully knocked down by the auctioneer.

The winning bidder had that very morning achieved a solid result at the auction of her own house at 10 Murphy Street, Brighton. It’s an as-new and very stylish house with 10 main rooms on 845 sq m. The buyer had spotted the place on the internet, flown in from Sydney on Friday, plonked down $3.5 million and bought it. Most of the marketing budget would have disappeared into print media; all to no effect. Time to sell your shares in Fairfax?

2 Lorac Avenue is a 10 room resort on 600 sq m and has a serious outdoor living and entertaining area. It sold immediately after the auction for $3.475 million.

76 Were Street, Brighton was, befitting the style of the house and the dignity of the industry, a less frenetic auction. Not. It was conducted around a large in-ground pool and had four bidders on its way to selling under the hammer for $2.25 million. The gavel-banger was so excited at seeing such interest that on several occasions he was perilously close to taking the plunge, but robbed the crowd of just-add-water entertainment by staying out of it.

A vacant allotment of 761 sq m at 63 Lynch Crescent, Brighton sold for $1.75 million. That’s $2,300 per sq m or $214 per sq ft in the old money. If land is the litmus test, this is a result of more than passing interest. Land sales were being ignored only a few months ago. This sale suggests the sector has recovered by at least 10% in the past quarter.

Two sales at the lower end of the Brighton market demonstrate its continuing strength. Each is on a compact allotment and each was quoted in the early to mid $900′s.

86 Cochrane Street a classic “ugly duckling” with little to love other than its position had nine bidders fighting over it before the exhausted auctioneer dropped the hammer at $1,153,000. Myer’s Boxing Day sale had nothing on this.

9 Byron Street achieved almost as much with the successful buyer putting down $1,145,000 for the privilege.

Only one no-sale on the day: 373-375 New Street a former service station and automotive workshop, was passed in at $1.725 million. There was a later offer of $1.85 million. The reserve is $1.95 million.

A smartly turned out town house at 3/1 Thomson Street sold privately for $1.5 million.

2 William Street on 545 sq m, sold at land value only for $1,220,000.

East Brighton? Busy.

A land-value (836 sq m) sale under the hammer at 6 Baird Street realised $1.225 million

8 Sunlight Crescent a single-level 7 room brick house on 847 sq m which backs onto Dendy Park sold for $1.26 million.

16 Camperdown Street a land-value property of 850 sq m., was marketed as having a “floor price” of $1.2 million and that offers at that level or better would be considered. We think “floor price” and “reserve” are synonymous and would welcome suggestions for any other coined terms which may assist the industry in further confusing its customers. In any event, it sold for $1,266,500, which is exactly in line with the sales in Baird Street and Sunlight Crescent.

181 Dendy Street opposite Brighton Golf Course, is a cleverly renovated and extended 1950′s home on a triangular corner block. It sold for $1.525 million and everyone was very happy.

Hampton through to Beaumaris? Busy.

2 Olinda Avenue, Beaumaris sold for $1.225 million.

10 Hutchison Avenue, Beaumaris was passed in on a vendor bid of $1.3 million, there was a later offer of $1.4 million but still a fair gap to the reserve of $1.525 million.

6 O’Connor Street, Black Rock was knocked down for $1,170,000.

63 Bridge Street, Hampton on a compact 452 sq m allotment, just tickled over the seven figures to sell for $1,015,000.

15 Alicia Street, Hampton was auctioned on Saturday. No result was reported, but discussions are continuing with two potential buyers.

Several other private sales were negotiated during the week around the $1 million mark.

Bentleigh? Busy.

15 sales from 15 auctions plus a serious handful of private sales. Auctions continue to be the marketing method of choice in Bentleigh and for good reason.

Elwood? Busy. For Elwood.

The standout result was 32 Vautier Street. On a modest 450 sq m allotment, it sold for an impressive $2,625,000.

The week ahead? Busy. Very busy.

We expect a scramble among home buyers and investors for the little stock remaining between now and June 30 and the extended mid-year school break. Following that, pickings will be thinner until Spring.

For many, Spring can’t come quickly enough.

Damian Taylor

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Those not at the coalface could read in Saturday’s Age “Global Crisis Hits Toorak” and come away with a 180 degree view of what was really in store. The article should probably have been headed “Global Crisis Misses Toorak, Last Seen Heading for Perth” ? because in these parts, over the weekend clearance rates approached the stratosphere.

If you look only at the residential market, you could conclude that Melbourne is leading the world out of the GFC. The graph is taking on a distinct U-shape, at the top end driven in large part by continuing stock shortages (in that, at least, we see no early respite).

So what’s up? Is it sustainable? Should those property analysts who were predicting 20-40% drops be seeking alternative employment?

Oh, the unpredictables. We can only tell you what we are seeing; and that’s a solid market right through the inner-city, the reappearance of investors and the added spice (following the FIRB’s relaxation of rules) of overseas interest.

At times over the weekend, it felt like we were back in 2007. Multiple bidders, reserves left in frenzied wakes, auctioneers with grins from chequebook to chequebook.

A peak in margin-call driven sales? In mortgagee auctions? There are always some, but today’s levels are nothing out of the ordinary. So there go a few more crises whizzing by.

The litmus test is always land. The result? Land is not going out of fashion.

32 Grange Road, Toorak sold not all that long ago at the absolute height of the market for $4,115,000. It sold again on Saturday for $4,116,000 ? only (!) $500,000 over its reserve.

12 Como Avenue, South Yarra made a case that land has actually increased in value ? it sold for $4,050,000, about $460 per foot, and that is on the east side; not AAA South Yarra.

Elsewhere, established housing also had some strong results; 22 Stonnington Place, Toorak was passed in for $4,320,000 then sold after auction.

1010 Malvern Road, Armadale a 2 storey Victorian sold for $3,510,000.

1/50 Hampden Road, Armadale a villa unit, reasonably new but a strong price at $3,010,000.

Off-market? A lot of action. Sorry, can’t tell.

We’re expecting two strong weeks prior to the school holiday hiatus and then the winter-proper hibernation could well set in. The surprised expressions will be on the faces of those agents and vendors who are heading north and finding themselves in business class instead of (where they expected to be) clinging to the wheel of the family wagon.

DM

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Bayside: Bidders are back

An auction clearance rate of 84% for the second week of winter has excited those who get excited by records being broken and, as noted above, this reflects the shortage of good property against the pent-up demand being felt by those who reckon they have survived the GFC intact and see nothing but blue sky ahead.

We share the view that the steepest of the residential property market downturn of 2008 and earlier this year is now behind us. One warning bell: the CBA taking the unprecedented step of increasing mortage rates in the absence of official increases by the Reserve Bank. If the other three pillars and the minnows start to see profit in this, there could be an outbreak of more than swine flu. Gloom (as we have seen over the past 18 months) can be very catching.

Buyers, we suggest, should trim their budgets in the expectation of rates rising. Historical lows do have a habit of becoming history.

Bayside? The mid- to top-end has had a busy fortnight; with Brighton in the lead.

Max Hudgton’s return to St Kilda’s senior side against Carlton last Friday night must have been made easier knowing he had finally sold his latest creation at 28 Cole Street, Brighton. Having languished on the market for many months, Max’s patience was rewarded with a sale price of $5.05 million.

An unrenovated Victorian home on 1570 sq m at 44 St Andrews Street, Brighton has been sold for $3.11 million. A few days later, across the road, 65-67 St Andrews Street was sold for close to $2.925 million by the same agent. It was similiarly original and was on 1154 sq m. Both are restoration projects and neither should expect much change out of $1 million.

Another private sale was negotiated during the week for a single level Victorian home at 49 Bay Street, Brighton. It was on 1115 sq m and had an extension and upgrade some years ago. It realized $2.9 million

10 Hartley Street, Brighton is a smartly built town house overlooking Kostka’s playing fields. It sold for $2.1 million after a short private sale campaign.

A well presented single-level house at 29 Murphy Street, Brighton also sold after a relatively painless private sale campaign for $1.665 million.

4 Ballara Court, Brighton found a new owner for $1.57 million.

26 North Road, Brighton tired and run down but on 925 sq m, sold at land value for $2.15 million.

The standout in Sandringham was 11 Keats Street, on 1000 sq m. A well renovated and extended bungalow, it attracted a fair swag of interest and sold for $2.7 million against a quote of $2.5 million.

The next two weekends are particularly busy as sellers attempt to fairwell their property prior to the mid-year school holidays. Later listings are are likely to be slim until Spring. Prospective buyers are advised to remain calm.

DT

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Liz’s Birthday and nothing to report. Nothing else to do? Have a look around her place.

Victoria continues to lead the nation: more swine flu, slower trains, more mid-city level crossings and extraordinary real estate clearance rates.

The last few weeks have seen high clearance rates on low volumes. Last weekend volume was up and there was nary a dent in clearance rates. 667 auctions, 82% of which sold.

Even a couple of months ago, would you have believed:

1. 42 Perth Street, Prahran a single fronted brick Victorian that started at $1 million, was on the market at $1.2 million and selling in front of a crowd of 120 people with three bidders for $1,312,000.
2. A small original 2 bedroom apartment at 43-49 Clowes Street, South Yarra selling in front of a crowd of 50 people with three bidders. An opening bid of $625,000 leading to an eventual sale at $707,500.
3. Around the corner, 4/20 St Leonards Court an older style Art Deco apartment 100 metres from the Botanical Gardens, starting slowly at $700,000, on the market at $745,000 and with two investors fighting it out in front of 50 people fascinated by the stalactite pace of the event. It went on and on and on. And on. $500 rises eventually took it to $838,000.
4. 61-63 Alfred Street, Kew a large Victorian house in between Sackville Street and Cotham Road and in sore need of an update, selling in front of a large crowd for $4,850,000.
5. In Albert Park a single fronted timber house at 13 Barrett Street on 177 square metres of land sold for $1,061,000.

Toorak was relatively quiet. 90% of the activity was townhouses and apartments. 33 Stonnington Place, which was an original early 1950?s house on a northern block of 1,013 square metres was passed in at $3,250,000, which suggests that developers and home builders are still shy about committing to large projects.

Meaning?

It’s apparent that if properties are well priced and in the right location, there is good competition. Some say that the market will continue to be competitive because of low interest rates and the lack of supply. Others with a more daunting view suggest the economy is still headed for Armageddon and that will flow into real estate.

In the meantime, Melbourne continues to bubble along.

Bubble? Did we say bubble? Surely not.

CK

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Bayside: Tide turns?

The jury has returned.

The verdict is unanamious (well, almost).

Judging by activity across all Bayside suburbs this past week, it appears that sentiment has changed from the fear and uncertainty that gripped both buyers and sellers only a few months ago to guarded optimism that the residential property market has turned and, even as winter approaches, blue sky rather than grey will predominate.

There are a lot of crossed fingers in Bayside.

Why are we not surprised?

Because our pre Christmas 2008 forecast predicted precisely the change we are now experiencing … just that it has arrived a month or two earlier than expected.

For those who delight in mountain and crevasse stats, the peak of the recent boom was clearly Oct/Nov 2007 and it appears the bottom of the cycle may well have been March 2009.

Talk of Recovery is moving from wish to reality; the question is by when and by how much and in that everyone has an opinion but in truth no one really knows.

Our 2¢ suggests the recovery is real, but it won’t be a steep upward curve. Irrational exuberance has left the building.

Meanwhile, in the trenches, there was much activity in Bayside; all the way from Elwood to Mordialloc.

In eclectic Elwood, there were 10 sales from 13 auctions and one lonely private sale. The lower end of the scale was a one bedroom flat at 9/6 Cyril Street which sold for $340,000; and you could have bought four of those for the $1.41 million paid for 90A Ruskin Street.

Around the corner, the sale of 90 Broadway is still a work in progress. The property was passed in at $1.75 million on a vendor bid and a reserve is yet to be revealed. (Why oh why are reserves still secret post-auction? Are agents frightened they may be ambushed by someone with money?)

In neighbouring Elsternwick, the clearance rate was 100% with five auctions and five sold; plus a clutch of private sales during the week.

Brighton performed well: 11 sold from 13 offerings. The top end sale was 4 Manor Street. It’s a 90?s style house with 10 principal rooms and a tennis court on 1251 sq m. $4.025 million bought it.

14B Well Street was a runaway result at $1.87 million. A refurbished 20 year old townhouse, the agent?s initial expectation was around $1.5 million. Smiles all around.

27 Asling Street sold post-auction for $1.415 million. It was previously touted 18 months ago at $1.6-$1.7 million but an outbreak of common sense eventually prevailed.

9 Dudley Street sold privately for $2.426 million. This property was auctioned in December with little interest and the perseverance of the vendor (and a change of agent) has paid dividends. The price is really land value only.

Cheltenham continued to attract a large proportion of first home buyers: eight sales recorded for the week, including two auctions, all of them in the broad range of $300,000 to $600,000.

Beaumaris was overshadowed this week by its sister suburb, Black Rock:
261 Beach Road on 1086 sq m, sold for $2.025 million in a well contested auction.
28 Second Street an 8 room house on 1189 sq m sold under the hammer for $1.59 million.
27C Bayview Crescent sold privately for $1.47 million.

The Beaumaris highlight was 21A Beach Road selling for $1.8 million following an advertisement headlined ?Must Be Sold?. Sighs of relief all around.

Hampton was much quieter but still recorded three from three auctions, including 45 Linacre Road selling for $1.28 million.

And Bentleigh continues to shine. 100% clearance. 10 from 10 plus another half dozen private sales for the week while slightly further upmarket, neighbouring McKinnon recorded a strong result at 9 Crozier Court selling for $1.381 million.

TET overlooked a major auction result conducted last week at 10 Iluka Street. It finally sold, for $2,886,000, at its second mortgagee auction in seven months. It’s on a high point in Black Rock, only a wedge from Royal Melbourne Golf Course, a vast vacant allotment of 3364 sq m with a rich recent sales history. It was sold four years ago by the long encumbant family at $2.4 million. It was rapidly resold for $2.7 million, then again for $3.1 million and yet again in May 2007 for $3.5 million. When things went pearshape thanks to the GFC, the mortgagee in possession auctioned it at the end of October 2008 with the best bid being the auctioneer’s at $2.75 million. The only real winner (agent?s fees aside) is Mr Brumby. Stamp duty, by our calculations, have benefitted to the tune of some $800,000 over the past four years; all from one property!

Our Queen is having her birthday next weekend, so everyone’s taking a holiday.

Well, some. There will still be some slim pickings that we’ll be picking over.

Until then.

DT

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