Sept 21: Top end breaks records. Not.
- September 21st, 2009
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For a couple of hours on Saturday – long enough to make it into Sunday’s papers – the REIV’s website was reporting the highest price paid at auction was $7,285,000 for a four-bedroom house in (drumroll) Ashwood!
Ashwood?
It seems a decimal point’s slip was showing.
In fact, in what the REIV was touting as another 80%+ clearance rate weekend, the highest number reached at auction was $2,810,000 for 64 Canterbury Road, Middle Park; so the true top end simply wasn’t tested.
That said, the sub-$3 million sector did do well.
5/50 Marne street, South Yarra a good older-style ground floor apartment with a AAA address was taken to an incredible $1,900,000 by a feeding frenzy of 8-10 bidders.
An hour later, at 103 Canterbury Road, Toorak, another frenzy was composed of would-be developers who went to war over a small (3,000 sq ft) block of land crying out for a townhouse. It sold for $1,520,000 which is over $500 a foot in B- or C-grade Toorak and a record price for a less than great position.
49 Chrystobel Crescent, Hawthorn sold for more than it should: $2,720,000
But it wasn’t all beer and skittles. Albert Park, that Cinderella of suburbs, got belted again:
- The best the two-storey Victorian at 365 Montague Street could manage was a vendor bid of $2,650,000.
- … and vendors were again active at 44 Dinsdale Street: $1,550,000.
And then there was 5 Mary Street, Hawthorn. A renovated Victorian, it sold 18 months ago for a little over $2.3 million and had recently been offered for private sale at $2.7 million. Over the weekend, it went for an unreported $3,050,000; which serves to underline how the market has moved.
If the top end was pale, expressions-of-interest campaigns are becoming terminal. Both agents and buyers are losing interest and it’s not hard to see why: so few succeed. We’d suggest that’s because they make transactions which should be out in the open transactions of mystery. No-one understands the ground rules and neither side can be really sure what is going on. (In fact, they usually signal vendors who want too much and agents who want four weeks to knock some sense into them.)
And then …
Agents just being agents provides endless fun, but when they jump the fence and start bidding, they’re hilarious. Over the weekend there they were, a roving comedy festival so desperate to buy in the hope that their deeply grateful clients would in turn give them something to sell. Over-pay? Sure. It’s not their money.
What’s next?
For the next two weeks, nothing. There’s a football match to be decided and the school holidays hiatus. And then it’s on for all comers.
Vendors who have been on the sidelines are expected to come out in numbers – they have been reluctant to sell when there’s so little to buy – and stock levels should begin to soar over the next three weeks. This could be good for buyers.
Expats and inter-staters who come for the Spring Carnival have been known to pick up a property while they’re here. That’s another incentive for vendors.
And the big one: There are just 10 selling weeks left before Christmas. If people have not bought/sold before then, the real market doesn’t recommence until March and that makes it unlikely they’ll be moving before June.
Get your skates on.
David Morrell
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MEL vs World. MEL wins.
After three weeks studying property markets on the other side of the world (rumours of visits to churches, museums and cultural institutions offering alcoholic life-support are grossly exaggerated), has shown that Melbourne is not on the same planet when it comes to residential sales activity and prices.
Agents in the UK and Ireland simply don?t believe the volume of transactions being experienced in Melbourne and our consistent 80% plus auction clearance rates. One leading agency in Dublin had not sold a single property in the past three months. Many agents in the UK are planning to emigrate to Australia. You Have Been Warned.
The housing situation in Europe is not much better and the US is still a basket-case. The only buyers in London are (you guessed it) wealthy Chinese and Russians taking advantage of bargains in usually super-expensive blue chip suburbs. Agents are confounded when they hear our official interest rate is at a comparatively lofty 3% compared to the Bank of England?s paltry .5% (with talk of decreasing to .25%), yet we still have buyers clamouring for properties and in many instances paying a premium. Gravity continues to be defied.
Having said that, Asian markets are faring a deal better. Sometimes unbelievably so.
A recently-completed penthouse of 360 sq m on the Kowloon side in Hong Kong has had its asking price increased to $300,000,000 HK. That’s about AU$45,000,000 and still the enquiries flowed. Most buyers are wealthy locals and cashed-up mainland Chinese.
So what do we take from this into own backyard ?
How about a little caution for a start.
Don?t overpay or over-commit on the funding side and always, always, buy as prime a property as you can. When the current excitement subsides, and subside it will, the last thing you need is to be living in a lemon.
The local news …
In Bayside, the highest price achieved at auction over the past week was for 299-305 New Street, Brighton. Quick history lesson: “Finchal, at 299-305 New Street Brighton is of historical significance. The house was the home of architect John Grainger, and the birthplace of Percy Grainger, noted pianist, conductor and composer. It is also of note as a particularly early Brighton house.” – which comes from its heritage listing. It’s a local landmark, a run-down single level Victorian on a generous 1596 sq m. It last sold at auction in July 2007 for a surprisingly high $3.28 million but came back to earth with a thump on Saturday: knocked down for $2.81 million.
A vacant allotment at 1 Holmwood Avenue, Brighton sold for an expected $1.95 million which equates to $228 sq ft (or $2460 sq m). It is unusually wide, with a 70 ft frontage, and won?t be impacted as severely as some are by Bayside?s arcane planning regulation C 2.
134 Male Street, Brighton on a modest 386 sq m site realised $1.57 million
75 Halifax Street, a newish townhouse on a more modest 338 sq m was reported as sold with the price undisclosed. (It went for $1.73 million.)
2 Lawrence Street on an even more modest 330 sq m sold for $1.405 million.
The last apartment in Lou Abrahams? Golden Mile development at 8/9 St Ninians Court sold before auction for (also undisclosed) $3.25 million.
357 New Street is a new townhouse built by Stewart Lowe. It passed in at $1.2 million against a reserve of $1.29 million.
843 Hampton Street an eight-room family home on 1040 sq m. It was passed in on the auctioneer?s bid of $1.65 million. A real offer of $1.675 million was rejected. They’re hanging out for $1.75 million.
7 Kilrush Street has finally found a new owner for $3.2 million in a privately transacted sale.
114 Dendy Street, land-only, sold for exactly $2 million. It’s 1249 sq m and that works out to $149 sq ft. Sounds good.
19 Hilton Street, Beaumaris sold for $1.685 million
22-24 Dreadnought Street, Sandringham is still waiting. Brick, 14 main rooms, 1330 sq m. The vendor bid $1.9 million. The vendor wants $2.05 million. Stay tuned.
Hampton’s day was mixed:
- 17 Rouen Street sold for $1.35 million
- 5 Linacre Road passed in on a vendor bid of $1.5 million. The reserve is $1.595 million.
And so to Bentleigh, whose star continues to shine. 16 from 18 on the day speaks volumes about this suburb’s continuing popularity and its prices continue to defy gravity. $1.621 million in Marston Street? Yes.
Next weekend will see us elsewhere. We will be comparing notes with a certain D Morrell who persists in delusions regarding the prospects of the Geelong Football Club when any person with the slightest knowledge of the Australian game knows that this is the year of the Saints.
Preserve us.
Damian Taylor
M&K in the news:
High-end homebuyers still happy to pay up The Australian Financial Review (subscription required) David Morrell said … “If you want to buy a house for $10 million plus in Melbourne, you can’t. There’s nothing for sale.”
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