With school holidays rapidly approaching, the market was geared up for a record number of houses for sale in May. Mixed messages still permeate through the market and with conferences at Federation Square on underquoting*, times are … interesting.

What is clear is that, after talking with dozens of estate agents, the common expression is that the market has gone back to “normal”, whatever that means. Over the weekend, clearance rates were below 75% and crowd numbers continue to be less than they were 12 months ago; but that is not unexpected.

Underquoting, in a “normal” market, will still come into play but it seems this time ’round that vendors have modified their price expectations a lot more quickly than they have in the past. They want to sell.

When vendor fear starts to rule, prices start to fall as vendors anticipate what waiting could cost them. We would like to take credit for predicting all this months ago, but credit for predicting the inevitable?

And so to the top end’s weekend …

Before a nicely dressed crowd of about 100, 81 Clendon Road, Toorak, was quietly passed in on an opening bid of $7.35 million. Within the hour it sold for, we believe, over $7.5 million.

Land, lots of land:

• 27 Harcourt Street, Hawthorn East, with an historical covenant, sold for $2.3 million.
• 39 Mt Ida Avenue, Hawthorn East, sold for $2.08 million
• 24 Henman Street, Hawthorn East, sold for around $2m.

Well situated land will always find buyers.

Elsewhere:

• On the Grace Park Estate, 40 Kinkora Road, Hawthorn, was passed in then sold for a whisker over $2.6 million.
• 71 The Broadway, Camberwell, sold for over $3.6 million.
• On the top of “Mount Eagle”, three people went to war over 5a Albert Jones Court, Eaglemont. It sold for $1.76 million. The adjoining block, subdivided for separate sale, was passed in and has a reserve of $1.19 million.
• 12 Chesterfield Avenue, Malvern, was passed in at $3.175 and two interested parties are currently negotiating with a sale expected to be closer to $3.25m.

Come down a notch and things became more boisterous:

• 9 Aintree Road, Glen Iris started at $1 million, had five hands waving in the air, continued past its $1.25 million reserve and sold for $1.42 million.
• 24 Evandale Road, Malvern had three bidders who pushed it to $1.21 million. It was passed in and sold shortly afterwards.

So this is “normal”. The argy bargy and to-ing and fro-ing are back, with agents now having to draw on sometimes rusted skills to negotiate conclusions.

The rest of the year? Expect more “normal”; although if suggestions that the SYD top end has eased by 10% or more, hurry up and wait may be a useful strategy.

However and but: if it’s quality, well priced, it will always sell.

Christopher Koren

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Bayside: Timing, or time in?

Wait long enough and the value of your house or investment property will increase (and, no, we’re not claiming any prizes for stating the obvious).

But timing your sale or purchase to maximise its value?  That’s an exercise which can consume an ocean of your time and you can still be wide of the mark. Could you have predicted the current cycle? Would you have bought in April ’09 and sold in March ’10?

Really?

For some there’s a temptation to treat houses like investments on the stock market. Problem is, they’re not commodities which can be traded at will. While there are all kinds of signs that this is becoming a buyers’ market (interest rate rises, foreign debt crises, China’s threatened hiccups, insert next crisis here), leaping in for that reason threatens both the baby and the bathwater.

The obsession with timing too-often transcends much more important matters involving lifestyle issues of shelter, security, accommodation, family … the very reasons why a purchase or sale is being contemplated.

In the long term, your investment will be OK. In the short, stop worrying about corrections or missing the market and concentrate on buying the right property, in the right area, for the right reasons.

End of editorial.

And so to the past week.

Beaumaris and Black Rock were well and truly on Bayside’s leader board: two strong upper-end sales against the tide:

• 24-25 Beach Road, Beaumaris, a 6-bedroom multi-level house on 1255 sq m and over the road from the Bay, sold for $3.15 million.
• 26 Ebden Avenue, Black Rock, a comfortable clinker brick on a double corner site totalling 1226 sq m, sold for $2.5 million.

Hampton sold all but four out of fifteen, but mostly below $1 million. Well above that, 22 Margarita Street fell at the first fence: a vendor bid of $2.25 million and a reserve we believe to be around $2.5 million. Might have done it a couple of months ago, but … (did someone mention timing?).

Until a couple of weeks ago, 100% clearance rates were looking like a given in Bentleigh. Now, at 73%, it looks merely mortal. The weekend’s extremes:

• 2A Osborne Avenue, sold for $1,305,000.
• Unit 9, 60-66 Patterson Road, sold for $447,000.

Brighton and Brighton East had fatter choice and a thinning number of buyers. 14 sold out of 24 offered at auction, a clearance rate of 58%

The trend for upper end properties being passed in and then sold later continued, with the exception of 18 Sussex Street, a single-level thirty-something house taking up most of a generous allotment of 920 sq m in Brighton’s heartland. It sold for $3.185 million – about $3462/sq m (321/sq ft).

37 Normanby Street, a classic old Brightonian built around 1919, on over 10,000 sq ft, was passed in then sold soon after for $2.83 million.

After an EOI campaign with other agents failed to achieve a mooted $8 million, 323 St Kilda Street, on the corner of Bay Street and on the cliff’s edge of the Golden Mile, was auctioned last Saturday. Best bid was (no surprise) the auctioneer’s $5.5 million. An auctioneer’s bid placed prior to a pass-in is usually not far from what their vendor expects. Here there was a later offer of $5.7 million, which is probably not far off the achievable if the vendor really wants to sell.

“Struan” a landmark Victorian at 7 Grosvenor Street was also passed in after a real offer of $3.31 million. Discussions continue. Expect an eventual sale at around $3.5 million.

An elaborately built and finished house at 7 Maysbury Avenue – including a a lift to the third level and Bay views – was not enough to coax a bid beyond $3.2 million. The vendor’s is asking $3.35 million, surely a small gap to bridge.

91 Dendy Street also failed to excite. The excitable and energetic auctioneer’s $2.375 million was unmet. The word is that the asking price is closer to $2.6 million.

Winner of the week:

31 Middle Crescent, Brighton, a single level Victorian in comfortable condition but requiring the full rebuild/extend. It’s on 1137 sq m opposite Firbank and was bought in October last year for what the selling agents regarded as a full price: $3.2 million. Since then, the market has bounced and then hit a pot-hole, It sold last week for almost $3.7 million. That’s almost half a million dollars in seven months. Previous seller? Last seen choking on his Weeties.

Damian Taylor

*John Keating, well known real estate maverick, organised a conference at Federation Square with various agents who are for and against what we believe to be inexcusable: underquoting. Sundry media and press were there for the two hour program. Recommendations included a more pro-active REIV, publishing all auction and private sale results and trying to organise a system of quoting properties that is fair to all. Don’t hold your breath. Forums are a good idea as long as they achieve something or give the public a voice and this one was the first.

Participants were:

Moderator

• Paul Wheeler, Former Chairman Urbis, and Life Fellow Australian Property Institute (API)

Panellists

• John Keating, Keatings Real Estate
• Barry Plant, Barry Plant Real Estate
• Christopher Koren, Morrell & Koren Buyers’ Advocates
• Mark Armstrong, Property Planning Australia
• Chris Plant, President API 2008-2009

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The equity market had the ride of a lifetime over the past week with uncertainty, a falling dollar and Government policy making it not a particularly nice place to be. As one investor wept: “I would rather be on holiday in Bangkok, it’s safer.”

Meanwhile, in real estate …

Over the weekend, the top end did not continue its ever-upward march - it took a delicate step sideways. Is that a little sense we see before us?

Even though three out of four properties going to auction are still selling – which in times of yore would have been regarded as a reasonably healthy result – what we’re seeing, and what agents are reporting, is that buyers are now much thinner on the ground than they have been in recent months. Instead of five or six hands going up, it’s more often one or two. If that continues it suggests a considerable thinning in the numbers of people who are actively looking. With a record number of auctions for this time of year, it is a combination which could provide long-awaited opportunities for buyers.

Evidence:

• Toorak, four out of eleven auctions passed in
• Port Melbourne, six out of twelve
• 48 Park Place, South Yarra, well situated opposite Fawkner Park, passed in at $2.5 million, reserve $2.9 million
• 216 Kooyong Road, Toorak, effectively 600 sq m of somewhere to build, didn’t find a buyer at $2.31 million
• 19 Margaret Street, Canterbury, all 1045 sq m, passed in at $2.5 million, reserve $2.65 million

Bucking that trend:

• 3/28 Kensington Road, South Yarra. Opening bid $800,000, reserve $850,000. Four bidders took it to $1,020,000.
• 15 Winter Street, Malvern. Expected $1.7-1.9 million, sold for $2,010,000. If the property is in the right location and is well priced, buyers will still be there.

Developer confidence is creeping back, particularly in South Yarra. There are hundreds of units to be offered over the next 18 months and they may cause a dent in sales of more traditional real estate. Feeling brave?

So. A few more weeks of wide choice then the mid-June hibernation of school hols. Next weekend will be interesting.

Christopher Koren

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Bayside: It’s tough at the top, but …

… but the rest remains solid for the moment*.

Europe’s in debt crisis? The dollar’s hit the skids? Equity markets have taken tickets on roller coasters? That’s nothing, in Brighton cheque books are hiding in pockets.

Brighton and Brighton East were reported as having nine successful auctions out of the nineteen properties on offer (47%), but as three were sold prior, the on-the-day real clearance rate slipped to a dismal 37%.

Among Brighton’s passed in:

• 3/23 St Ninians Road, a new beach front apartment. Vendor bid: $4.2 million, reserve, $4.7 million.
• 19 Wellington Street. Classic Brighton on 1100 sq m. Genuine bid: $4.21 million. Reserve a secret. Discussions continue.
• 2A Emily Street, a contemporary house. 10 principal rooms, 1154 sq m. Vendor bid: $3 million and another reserve we’re not allowed to know.
• 22 Oak Grove. Vendor bid: $2.55 million, reserve $2.7 million
• 6 Sheridan Court. Vendor bid: $1.75 million, reserve $1.95 million
• 1/138 Were Street. Vendor bid: $1.55 million, reserve $1.69 million

Brighton East had little on offer, but:

• 57 Comer Street passed in at $2.5 million, reserve again undisclosed.

So.

The premium prices being paid only a month or two ago have left the building (and the land it stands on). Sellers will have to accept that. Truth is, recent rises had taken us into fantasy-land and that’s not healthy.

While for most people – selling and buying elsewhere at the same time – the net effect will not be great, in a fast-changing market there will still be sellers whose expections are too great facing buyers who are not ready to meet them. Time is now on the buyer’s side, but a genuine seller and a realistic buyer who is looking at the long term will still see sales being made.

And so.

There were still some significant sales in Bayside; including Brighton.

• 11 Sussex Street – 1,300 sq m with the lot: tennis court, pool, basement garage, glass, stone, near countless bedrooms, bathrooms and living areas, sold privately for what is being touted as the highest price in Brighton this year and we believe to be just over $9 million.
• 26 Oakwood Avenue was reported as sold prior for an undisclosed figure (OK, just over $3 million), a solid result given the week’s uncertainty.
• 7/15 Well Street sold off the plan for $2.25 million, continuing the strong results in the luxury end of Brighton’s apartment market.
• 6 Higinbotham Street, 683 sq m of land value only with a dated single level house that has seen better days. Quoted at $1.85-2 million, it passed in at $1.8 million then sold later for … $1.8 million. Vendor, we presume, is not cracking open the champagne.
• 36 Martin Street, not unlike Higinbotham but on 725 sq m and owned by the same family since it was built in the 70′s, faced subdued bidding which rose to a modest $1.9 million before the auctioneer refused an additional $50,000, passed it in, then went on to negotiate a sale at $2.175 million – a big win for the seller and a pat on the head for the agent.

And Hampton was grinning. All eight sold, from one end of the scale to the other:

• 148 Thomas Street, a 7-room renovated timber house on 500 sq m: $1.57 million
• 6/518 Bluff Road, a 3 room villa unit: $310,000

Bentleigh the bullet-proof also had a perfect score: eight from eight. Highest among them was 22 Banksia Street: $1.15 million.

There’s a big auction list to absorb in the next two weeks. Time for nerves to be steeled on both sides of the fence.

Damian Taylor

* The price correction has started at the top end, but history suggests that it will trickle down to the middle range and, to a lesser extent, to lower price points.

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Kids, we don’t want to frighten you, but things just get weirder with each passing week. Weirder and weirder.

The exceptional will always be the exceptions: they’ll sell. But finding buyers for anything less has now become work. Auctioneers who had bidders leaning out of passing car windows only a few weeks ago are now bellowing vendor bids into oblivion. That merry band who could not see a reserve when they fell over it has at last marched away.

Today’s tune is somber: the bass tones of caution and (hallelujah!) logic. Witness some pass-ins:

• 8 Macquarie Road, Toorak (not reported – its second failed auction). Nowt but a too-optimistic vendor bid of $6.4 million.
• 52 Kensington Road, South Yarra. Vendor bid: $4 million. Only echoes heard.
• 13 Como Avenue, South Yarra. Rumoured to have an offer of $4 million prior to auction, the only bid heard on the day was the vendor’s $3.7 million. Anyone for a haircut?

Even in some leafy suburbs:

• 31 Dorrington Avenue, Glen Iris. $3.1 million. Vendor bid.
• 15 Kardella Street, Malvern East. $3 million. Vendor bid.

The only real action on Saturday was post-auction and too often that produces careless people with cheque books.

7 Church Street, Toorak. Two bidders. Passed in at $2,130,000, sold later for $2,305,000. Whaaa? Close to $200,000 more to buy on the day when all the signs are the market is faltering? Who is advising these people? Are they getting advice?

Two stories, two apartments, one week:

704/108 Bay Street, Port Melbourne. Multiple bidders. Sold at auction for $2.765 million. Wait a week and step down a floor to 605 – essentially the same unit – nothing heard but a vendor bid of $2.1 million. Hark! Is that the thump of a market dropping through the floor?

Those wailings and grindings of teeth you’re hearing are not only the sounds of Richmond supporters, they’re vendors being beaten by their agents into acceptance of the new real; and no need, here, to again point out that it’s usually agents who encourage unreal expecations in the first place. What is worth pointing out is that many of the properties which were passed in over recent weeks are now being sold for a lot less than previous offers.

So much for the auctions. What’s weird, in contrast, is the off-market action. Last Friday, five properties were sold off-market at between $5 and $8 million apiece. Only one buyer for each; and with realistic vendors, that’s all it took.

Dot points:

• The big question: Why has it changed so quickly?
• We don’t think vendors are panicking.
• We’re seeing less competition between bidders.
• We see agents becoming more realistic – typically after a pass-in.
• We’re hearing more agents’ half-truths – another sign of a changing market.
• We are picking more dummy bidders.
• We’re seeing agents who recognise what’s happening and are ready to deal.
• We’re seeing agents who are stuck in “She’ll be right.” and will stay there.
• We’re seeing agents who are hoping for rescue via their new weekly; and who should stick to what they know.

What might have been said:

• “Just a couple of ordinary weekends. It’ll turn.” – the agent
• “You would expect a slight dip in clearance rates on big volumes. It’ll turn.” - REIV
• “I spent $30,000 advertising for a vendor bid?” – the vendor
• “It’s still a great market! Can we sell you an ad?” - some media
• “I think I’ll go to the footy. I can see value there.” – the buyer
• “Patience. Opportunity beckons.” – yours truly

This is something we have been waiting to say for the best part of a year: wonderful buying opportunities are beginning to emerge.

David Morrell

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Bayside: beatups and brickbats

Bayside, and Brighton in particular, was still in recovery after the shock of last week’s results. It was probably fortunate that there were considerably fewer auctions conducted this week.

Looking at the breakdown, it is instructive that of the nine auctions scheduled for the day, more than half were reported as sold prior. That suggests nervous vendors and is a stat we have not seen in over twelve months.

On a very quiet auction day, two from the four put up were passed in with no genuine bidder in sight.

49 Hanby Street, Brighton was met with a pained silence from its handful of attendees. The auctioneer put everybody out of their misery by passing it in on a vendor bid of $1.8 million. One of those ethereal “later offer” bids was reported at $2 million. The reserve is an optimistic $2.18 million.

Similiar story at 1 Montgomery Street, Brighton East. The highest bid on the day was the auctioneer’s $1.6 million, matched by a “later offer” of the same amount but not enough to sway the vendor. The reserve is $1.725 million.

And the rest:

• 9 Dawson Avenue, Brighton sold before at $3.85 million
• 33 Huntingfield Road, Brighton, ditto: $2.375 million
• 40 Black Street, Brighton, ditto: $1.95 million
• 35/149 Male Street, Brighton, ditto: $1.0 million
• 27 Ferguson Street, Brighton East, ditto: $906,000

But then to the auction of 16a Wellington Street, on the corner of Sussex Street, a compact site of 618 sqm with a dated single level house that is not long for this world. Platinum territory in Brighton and an appropriate result. Several bidders made it quick and easy for the auctioneer and the result of $2.65 million ($4300/sq m or nudging $400/sq ft) was not unexpected. Our prediction of a flight to quality properties and/or prime locations in a cooling market is thus vindicated.

Elsewhere in Bayside, Beaumaris notched up a notable private sale with the outcome of 518 Balcombe Road. Described as a “hilltop estate” on the Balcombe Road hill, it’s a battleaxe allotment of 1900 sq m with a sprawling six bedroom house that a bunch of Bradys would have loved. It sold for $1.85 million.

Hampton’s top end was dented with the passed-in result of a substantial beachside house on 700 sq m. 26 Holyrood Street could only raise a vendor bid of $2.35 million with no “later offers ” received and a price now of $2.45 million.

Sandringham’s top end also disappointed: the blue chip location of 25 Kirkwood Avenue was not enough to get it over the line. The highest bid was the auctioneers’ $1.95 million. It’s now listed at $2.2 million.

Brickbat of the day must be reserved for the thunderous underquoting prior to the auction of 42 Elster Avenue, Elsternwick. A very substantial period Edwardian, already extended, with all the right rooms in all the right places and on over 850 sq m of north facing rear gardens. Initial quote? $1-1.1 million, reluctantly revised in the second week of the campaign to $1.1-1.2 million.

Our reality check phone call to the agents on behalf of a client the day before the auction:

“What’s the story behind the ridiculously low quote?”

“Aw, the conjunctional agent put that on it at the beginning.”

“What do you really think it will get?”

“$1.3 million and probably up to $1.4 million.”

It sold for $1.46 million. Our client took his kids to the park instead and retold them the fable of Pinocchio.

Damian Taylor

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A chill has descended. A chill unlike others; for this one has a sound track. It can be heard in the more and more desperate tones of auctioneers making more and more vendor bids.

Goody.

Smiles are appearing on the faces of buyers. Their choice is growing while their competition is lessening. There is, as reported, a perfect storm brewing; one intensified by the fun and games of the equities markets, but one we predicted would occur even without that (dis?)stimulus.

It’s long-awaited news for buyers. Tradition holds that the overall market starts and stops at the top end and the weekend’s immoveable objects of Toorak suggest that truffle-hunting season looms:

• 12 Flintoft Avenue – Passed in (vb $2.1 million)
• 5 Merriwee Crescent – Passed in (vb $3.5 million)
• 172 Kooyong Road – Passed in (vb $7.5 million)
• 13 Devorgilla Avenue – Passed in ($2.1 million)
• 7 Power Avenue – Passed in (vb $3.6 million)

The properties which did sell were mostly first passed in – with the balance of negotiating power thus passing to the buyers. Every property we bought over the weekend was first passed in. In the negotiations which followed, in some cases we bought for less than the vendor bid.

Message for vendors/agents? Get ahead of the market and you’ll have to get used to the silence. The days of idiot prices are (mostly, see Bayside below) over.

Yes, in the case of exceptional properties, there will always be exceptions: 159 Victoria Road, Hawthorn had five people bidding and sold under the hammer for $3,460,000

When the vendor bids

Changing times prompt changing tactics. As noted above, especially at the top end we’re seeing more and more vendor bids. But that doesn’t mean that the logic behind them can always be seen (assuming there is logic).

The more astute agents will make their bid for just a little less than their vendor will accept. The negotiations which follow then have a reasonable chance of success.

Then there are agents who will go low; often as part of a ploy to “condition” their vendors – to persuade them that their price expectations are impossibly high (expections which are often fanned by the agent when competing for the listing). This can prompt buyers into bidding against themselves.

Stop. Be patient. Give the vendors time to reflect, to panic. Wait for them to adjust their reserve.

Dot points:

• Care to add up the hundreds of thousands of dollars in wasted advertising over recent weeks? When there’s no sale it all goes for nothing except building agents’ brands.
• Has anyone seen a copy of the agents’ newest ploy in picking their vendors’ pockets? The Weekly Review appears more like The Weekly Absent. We can’t find a copy, nor can our clients.
• Sharemarket volatility and the announcement of resource taxes will prompt investors to re-visit property. We won’t be surprised to see a lot of activity, not necessarily overnight, in the sub $1 million bracket; which should keep ticking along at a greater rate than we will see at the top end.
• Will sharemarket volatility infect the top end real estate market? History suggests that a serious fall in shares will be reflected, especially at the top end. That said, good properties will always attract interest. While we’d love to tell our clients we can steal them the best, in practice it takes a lot of luck to pinch a good property.

David Morrell

Bayside: winds of change strengthen.

Don’t you love the Bay? Hot northerly one minute, southerly buster the next. And that’s just the real estate.

A couple of weeks ago, everything was selling and no price was too high. Now – unless it’s very special – forget paying a premium.

For the past nine months, Bayside has been mostly tracking with Melbourne’s unsustainable 80% plus clearance rate. With the exception of its lower-end ‘burbs, that link has now broken.

Last week:

• Brighton/Brighton East: 22 offered, 11 sold (50%)
• Beaumaris/Black Rock: 14 offered, 8 sold (57%)
• Hampton/Sandringham: 12 offered, 8 sold (66%)
• Bentleigh: 24 offered, 18 sold (75%)
• Carnegie: 9 offered, 7 sold (77%)

What happened?

• Is our top end now fearful of GFC aftershocks spreadinbg from the EU?
• Are six successive interest rate rises adding up to enough to scare the horses that more are on the way?
• Is the sudden increase in the number of available properties adding up to over-supply?

Whatever the reason(s), the truth is that this change has been inevitable. It was only a matter of when the switch would be flicked in buyers’ minds.

Yet amidst the numerous properties passed in, there were still several standouts. Generally speaking, the well renovated/extended family home in the right street is still keenly sought; more so now with a softening in the market which always leads to a flight to quality.

For example …

28 Amiens Street, Hampton. A stunningly presented 10 room timber house. Contemporary. Plenty of wow. Sold for a not inconsiderable $2.4 million.

A similar story in Carnegie: four properties sold for over $1 million, including:

• 13 Reserve Avenue: a near-record $1,431,000.
• 19 Holywood Grove, a timber Edwardian on less than 500 sq m, an exceptional $1,320,000,
• 156 Leila Road, nicely renovated timber bungalow, only four main rooms, only 523 sq m, quoted at $800,000 -$880,000 and with a reserve close to that upper figure, finally knocked down for $1,120,000 or a mere $240,000 above the top end of the quote. Must be sitting on an oil well because in a faltering market a price like that simply doesn’t make sense.

Oddity of the week:

The Expression of Interest campaign (where the agent says show me your wallet and I might tell you what you have to pay) for 900 sq m of vacant land at 16 Mulgoa Street, Brighton. There were four in the running at the end of the day, so the clever agent sat all around a table and auctioned it. No place for the inexperienced or fainthearted, it sailed past the indicated “near to $4 million” and went for $4,525,000.

Still Brighton, still land only (836 sq m) 76 Carpenter Street sold after a contested auction for $2,220,000 or $2,655/sq m.

Highest priced pass-in on the day was 27 Arthur Avenue, an unusual attic-style house overlooking the Whyte Street Reserve. A bid of $2.36 million did not interest the vendor. The reserve? Mum’s the word. The need? Sellers who realise that the light may not be out, but it’s certainly dimmer.

Should be an interesting month ahead.

Damian Taylor

In the news:

Home crunch to hurt us all - Herald Sun - Buyers’ advocate Christopher Koren says the Government badly miscalculated the effect and in some suburbs 30-40 per cent of buyers were foreign citizens. …

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End of the day. A gargle of estate agents around a bar:

“Mate, it’s a wonderful market!”

“It’s never been stronger mate!”

“Look at the clearance rates mate!”

“Mate, I gotta tell you …”

All true. All true. Depending on where you look.

But we’re seeing some cracks, some signs of a market that has talked itself up to heights which cannot be sustained. And we’re still seeing a lot of long-term unsold mansions; and more joining them each week.

The top-end choice, encouragingly, is wider now than it has been for months. There is quality to be found; and in this faltering market we have recently bought several properties for significantly less than written offers would suggest they would sell for as little as three weeks ago.

OK. Put that down to our fabulous negotiating skills or (more realistically) put it down to our recognition of vendors who are ready to, and need to, meet the market and hear some persuasive arguments for reality checks.

Other signs? Significantly fewer bidders and more top end properties being passed in. You may have read today of a boom in the expensive suburbs. Not at the very top. And since those stats were compiled, it’s looking more fragile.

And, as always, there was the exception.

32 Grandview Grove, Prahran, a two storey Victorian requiring a money-pit renovation went for $4,410,000 and confirmed that period houses are often exceptional.

Elsewhere? Train crashes. More anxious vendors and fewer nervous buyers. Vendor bids were heard across South Yarra; and often stopped auctions in their tracks.

• 7 Kensington Road, 2-storey Victorian, normally something highly sought after, killed by a vendor bid of $4 million.
• 76 Caroline Street, another 2-storey Victorian. Another death by vendor bid ($3,200,000).
• 22 Davis Avenue. The record is stuck: Dead. Vendor bid ($2,500,000).
• 76 Mason Street. Totalled. Vendor bid ($1,750,000).

Meanwhile, in Toorak, 5 Hopetoun Road went up for auction for the second time in six months. And was passed in with (hallelujah!) a real bid of $6 million. It sold later for a cigarette paper more to the one person who was interested; which is a fair pocket full of change from the $7-8 million they were chasing previously.

Look a little further, to Hawthorn and Malvern, and everything sold, sold, sold. Look in the AAA areas and it’s soft, soft, soft. It’s the flip side of 12 months ago.

Citizens, if nothing else, you can’t argue that volatility is dull.

The Henry report.

The government appears to have left the property market alone – no great surprise – but its move on the miners may see an investors’ retreat from the stock market (BHP and Rio are being battered on the ASX as we write) and back to the comfort of property. It won’t happen overnight and it’s likely to underpin the lower end.

More auction fun.

There are too many blokes with big voices who love nothing more than standing outside houses bellowing their audiences into submission. It’s a bully’s approach to auctioneering. A good lie? They’ll tell it. They’ll yell it.

The latest doing the rounds is the threat that a property will either be sold or passed in on the third call; that there will be no referral to the vendor (what their terrified vendors think of this hasn’t been recorded – are they expected to withdraw their houses from sale?).

So it’s passed in. And then the auctioneer starts the auction again.

Pardon? Didn’t you just say …?

We think it’s deceptive and we’re ready to go to court (again). Our advice is that this practice is in breach of the Trade Practices Act and is misleading and deceptive. Bellowers, you have been warned.

David Morrell

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Bayside: Champagne to sav blanc.

… still white, still alcoholic, but no fizz.

Thus was the sense of the auction scene in Bayside over the weekend: no sparkle and definitely flatter. The frenetic activity that had been evident since January was noticeably absent.

Brighton’s clearance rate slipped to 61%, East Brighton was 75% and there was often only one bidder and then an arm struggle later a pass-in and no cigar.

For the first time in many months, buyers have something to smile about: choice.

May looks like being Melbourne’s busiest month, ever: 2,500 auctions. Are vendors choosing to go to market before winter? Is there a fear that the good times cannot continue: that it’s now or never?

Truth is, some of the passed-in properties were not A grade and were treated accordingly. If this is an early sign of a wind-shift, there will be a move to quality. The best will sail merrily on and leave the pretenders and the over-priced in their wake.

Highest price on the day was 3 Keith Court, a tightly held cul-de-sac off The Esplanade. It’s 560 sq m and has a view over the Bay and to Green Point. It sold for land value: a serious $2.9 million or $5200/sq m. Only six weeks ago, its near neighbour at number 9 – on 582 sq m – sold under the hammer for a relatively modest $2.3 million (less than $4,000sq m). Either someone paid way too much or a bargain was had. We never claimed it was easy to call this market; particularly when you see two very different results for two very similar properties.

The standout pass-in of the day was at 7 Kilrush Street. Originally listed (in 2009, it’s had a birthday on the market) in the mid-$3 millions, it was passed on Saturday on a vendor bid of $2.85 million and now they’re asking $3.1 million. That train, we suspect, has left the platform.

5 Cairnes Crescent limped to $1.95 million with one bidder and an agent deserves a glass of chardonnay for extracting another $175,000 in post-auction discussions. In our book this was land value only: $3,160/sq m.

On (excluding Nepean Highway) Bayside’s busiest road, 399 St Kilda Street sold for $2,210,000 while, in quiet Young Street, number 12 failed to excite and was passed in at $2 million. They’re now asking $2.25 million.

Brighton East was more affordable, more saleable:

• 4 Carrington Grove: $1,605,000
• 10 Griffin Street: $1,450,000
• 21 Grant Street: $1,420,000.

Nothing showy, still solid.

Two recent private sales worthy of comment:

A potential development site at 10-12 St Andrews Street; across the laneway from The Pantry, opposite Brighton Grammar. 1040 sq m with a rambling brick home included, it has been available for sale for close to two years at about $4 million. Patience was rewarded with a sale negotiated recently at $3.8 million. Expect to see apartments arise in the near future.

46 Sussex Street, a rare single-level purpose-built townhouse with a basement garage has been sold for $2,825,000. We believe that sale is linked to another in the new apartment development, Avignon, at 11 Well Street.

Well Street apartment sales are as strong as they have ever been.

• Another three were sold in Avignon in the past week; all at prices over $13,000/sq m.
• The still-newer development at 15 Well Street has hit the pre-sales cash register at $14,000/sq m

Eclipsing them all, the boutique development of 4 apartments at 2-4 Sandown Street in the Golden Mile has also racked up a presale to the tune of $3.5 million with unit 2 being negotiated recently.

Elsewhere in Bayside, leafy Beaumaris and its smaller twin Black Rock had a dirty day with the eight auctions scheduled resulting in one prior to sale at 1/1 Rene Street at $720,000 and apart from 2 Stawell Street realising $1.266 million, the most exciting thing to happen was the auction of a bathing box on Beaumaris Beach which achieved $115,000. The remaining five offerings all passed in giving Black Rock the dunce’s cap: clearance rate zero.

Hampton did better with adjacent properties at 9 Myrtle Road and 11 Myrtle Road selling for $1.62 million and $1.453 million respectively and 10 Villeroy Street (sorry, no link) selling prior at $1.175 million.

We have been recommending Parkdale in the lower Bayside for some time: village atomosphere, train service, proximity to the Bay. Six of seven auctions conducted there all found buyers over the weekend so perhaps the message is getting through.

Finally, Bentleigh. Probably the most consistent performer in all of Bayside. Plenty of fizz here: 13 sold out of 14 auctions. A 92 % clearance rate and nothing much decent under $900,000 these days with regular results topping the million mark.

22 Loranne Street is a case in point, its price soaring past seven figures to reach $1.32 million.

Not so 588 Centre Road, a 10 room brick house on 585 sq m. Passed in at $1.8 million with a reserve apparently too frightening to disclose – the only blemish in almost another perfect day in downtown Bentleigh.

Damian Taylor

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