We had something of everything:

• little choice
• wonderful opportunities
• some surprises
• large numbers
• mostly subdued bidding
• an occasional out there result

… sounds a bit like the new government.

Overall impressions?

• there’s a bit more confidence around – possibly due to us at last having a government
• the number of quality AAA properties continues to dwindle at an alarming rate
• in at least 50% of top end properties, vendors are still well ahead of the market
• sub-$1 million investors are returning quite quickly
• the appetite for quality is still largely unsated – those on offer attracted three to six serious bidders

A couple of days can still change prospects: as a result of two auctions in Malvern over the weekend, a property purchased on Friday night would now be expected to sell for somewhere north of an additional $300,000.

That said, when we bought we came in somewhat under expectations, but there were still some runaways:

• 24 Somers Avenue, Malvern, arguably the best on offer. On the market at $5.65 million, four bidders pushed it to $6.060 million.
• 24 Netherlee Street, Glen Iris, originally quoted at $1.7 million plus, amid reports of interest north of $2 million, it was on the market at $2.3 million and nine bidders pushed it to $2.66 million. This was one case where the under-bidder should have been breaking out the champagne and toasting his narrow escape.
• 100 Stanhope Street, Malvern. On the market at $2.3 million – four bidders took it to $2.66 million (popular number).

The goss:

• questions being asked about slow hammers – there may be a cure in sight
• underquoting and dummy bidders (both blossom in the Spring) arousing the attention of Consumer Affairs Victoria. Reports of “observers” at over 100 auctions may seem reassuring, but we saw none – and if we didn’t, nor did the agents.

Top End Turkey Award:

To the agent who had the brain-fade which decided that an invitation-only auction was  worth a shot. It missed (as did the same property at two earlier public auctions this year). What’s also missed is a big-bang advertising spend. And any buyers we’re advising: there’s something not quite right about this.

David Morrell

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Bayside sparks don’t fly

Bayside continues to chug along with about a 65% clearance rate, but the spark normally associated with the advent of Spring has taken a holiday. Auction crowds are down along with – with a few exceptions – the number of active bidders at each auction.

There are some agents who will tell you that we’re now back to “normal”. That a “balance” between buyer and seller and clearance rates of 65% to 70% point to a now “healthy” environment, but that’s a point lost on potential sellers. They are not convinced, at least not yet.

Agents are lamenting the poor forward listings for early Spring. An even clearer signal of the lack of conviction among sellers is the low level of appraisals being sought.

And yet, and yet …

It could still all turn around and become furiously busy in November and December.

Our advice to buyers? Be patient, but also be aware that if the ideal property comes along, it’s most likely that you will not be the only one putting your hand up.

And then came the weekend …

Beaumaris and Black Rock had half a dozen private sales during the week and eight auctions scheduled over the weekend. Two sold prior and only two of the remaining six were sold.

• 24 Bayview Crescent, Black Rock sold for $1.35 million
• 14A Stanley Street was passed in at $1.5 million with some heavy lifting to go get to the reserve of $1.75 million.

Hampton again performed well relative to its neighbours: five sales from eight auctions with two very different homes which both saw the hammer falling at $1,405,000.

• 14 Banks Avenue is a beautifully renovated and presented timber California Bungalow with 4 bedrooms and all of the designer bits
• 71 Thomas Street was originally a red brick 1930′s style that has grown out and up over the years and now offers six bedrooms of Brady Bunch space. It last sold in April 2009 for $1.2 million, so there should be enough to cover the stamp duty

In a location many consider superior to those two, 45 Service Street didn’t quite fire. Its highest bid was $1.5 million; only a little shy of its $1.575 million reserve.

Brighton continued to be active although not as busy as expected for this time of year. A respectable eight results from 12 scheduled auctions.

• 14 Cowper Street topped the day. A single-level 4-bedroom period house, with only two bidders it sold a snick above the top of its quote range. Knocked down for $1,932,500.
• 99 New Street, a partially renovated weatherboard bungalow on 745 sq m, sold within its quoted range. Sold for $1,490,000.

The upper end of the auction market continued its struggle with the offering of a brand new luxury town house at 61 North Road. Despite the recent sale of a similar property in the development for over $2.7 million, the only genuine bid was the opener: $2.2 million – immediately countered by a vendor bid of $2.5 million. The reserve is still a long hike from the opening bid: $2.825 million.

On Brighton’s private sale front:

• 11 Well Street, the hugely successful Avignon development, saw another two apartments sold; these for $2.3 million each. A “Sold Out” shingle cannot be far from the front fence.
• 22 Tennyson Street, a resort style house with pool and tennis court on 1600 sq m, has sold after the close of a recent Expression Of Interest campaign. Although the selling agent would not confirm it, we understand the price was just over $5 million.

And then came a busy top end in Elwood …

• 76 Addison Street sold for $1.95 million
• 31 Ormond Esplanade.”Fontainbleau” (circa 1929) is an Elwood landmark and has reinvented itself over the years until its most recent incarnation back to a superbly renovated family house sold for what is being claimed as a record for the suburb – the price was not commented on by the selling agent, but good authority tells us it was in the vicinity of $4.25 million.

Did someone mention a football game next Saturday night?

Go Sainters!

Damian Taylor

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Gales and floods and crowds at auctions. Trembling temperatures and crowds at auctions. Finals footy and crowds at auctions.

Are Melburnians mad?

Our all-season sport is to crowd auctions. Now, with a market heading in all directions, it may be the only way to see who is bidding and whether the scene still has a pulse.

And so to the weather report.

1. The top end has hit the wall. Of course. You only have to look at:

1 Hopetoun Road, Toorak, quoted an ambitious $6 million plus. Opens with a vendor bid of $5.5 million. The only thing heard is the wind howling. 300 people in the crowd and 600 hands in pockets. That’s a lot of marketing money spent on hands in pockets. Passed in, but since sold well short of the original expectations.

2. The top end hasn’t missed a beat. Not one. Take a look at:

49 Harcourt Street, Hawthorn East. The whole enchilada. Opening vendor bid of $6.9 million. Two keen bidders take it to $7.16 million and it sells afterwards for $7.3 million. That is $140,000 more than the other bidder? Passion and emotion still rule.

1 Myamyn Street, Armadale. The caution lights are flashing, there’s no opening bid and a vendor bid of $2.9 million. And then two people raise their hands. It’s on the market at $3.16 million and sells for $3.215 million. All with the grace of that part of dentistry which involves pulling teeth. It went forever. On seven occasions, both bidders declared they’d gone about as far as they would go; they were out, finished. And then went further.

19 Acland Street, South Yarra – the week’s highlight. Reserve of $2.6 million, five bidders, sold for $3.6 million A million dollar bonus in this market. Another demonstration of position, position, position. Again demonstrating that the market is not dead but very property specific.

Interest under $3 million was still reasonably solid but at the very top end even the SES would have struggled to find a pulse. This is in part explained by lack of choice and is contributed to significantly by vendors whose expectations are still well above what people are prepared to pay.

What’s coming? Not a lot. Early Spring listings appear to be very thin and it may be October/November before there’s any real choice. (It is, mostly, lack of choice which appears to be preventing the market from falling off a cliff.)

Agents’ amusements

They never give up; and often it’s fun to watch. Lately we have been entertained by auctioneers making vendor bids while still working through the auction preamble (heard one, heard them all). This avoids the embarrassment of failing to get an opening bid, but doesn’t exactly fool those with $5 million or more to spend.

We have also received a copy of some delightful correspondence from a Mr Iain Carmichael of Bennison MacKinnon. If we understand him correctly, he is suggesting that after an auctioneer declares a property to be on the market the whole going once, going twice rigamarole can take place and then … the auctioneer can ask the vendor whether the property is really on the market. Our associate, Mr Taylor, has referred the practice to the REIV and it’s likely they will take action, or not (the REIV is not famous for taking action). In the meantime, Mr Carmichael has offered some useful advice on how we can improve our practices and bring them into line with his expectations of buyers’ advocates. Interesting concept. A parallel would be the prosecution advising the defence about the approach it should take. We believe the practice is wrong. We will continue to say so. And in case  you haven’t noticed, Iain, we represent buyers, not agents.

David Morrell

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Bayside. Mixed blessings.

The combination of Spring rain and football finals had surprisingly little effect on the weekend’s auction activity in Bayside. Most market segments performed reasonably well nothwithstanding the relative under-supply and mixed quality of properties on offer.

Bentleigh continues to outperform: 11 sales from 12 auctions with multiple bidders at most.

The only miss for the day was – almost as could have been predicted – at the very top end of the suburb’s price point: 3-5 Buckingham Avenue, Bentleigh. A seven room timber house but on exceptional land of 1157 sq m, it was passed in on a vendor bid of $1.5 million with a later offer reported at $1.55 million. Still some work to be done – the reserve is now set at a lofty $1.75 million.

Beaumaris and Black Rock did little – only four auctions between them

In Sandringham and Hampton it was full on – a dozen auctions conducted; seven of which sold.

The highest on the day was at 46 Thomas Street. An Edwardian weatherboard on a generous 955 sq m and an easy stroll to Hampton Street shops and train, it was quoted somewhat conservatively at $1.5-1.65 million. Not unexpected competition easily breached the quoted range and strong bidding resulted in a sale being made at $1.85 million.

Closer to the water but not quite as stunning was 60 Orlando Street. On a more typical 618 sq m, it sold for a more typical $1.355 million.

36 Villeroy Street sold privately for $1.54 million. They had been asking for $1.65 million.

Again $2 million plus is proving hard to achieve. 31 Tennyson Street, Sandringham was reported as passed in on a vendor bid of $2.3 million with a later genuine offer of $2.35 million. The reserve is still some distance away at $2.65 million.

Brighton clearances rose this week: eight sales from fourteen scheduled auctions.

A Nicholas Day designed free standing town house at 52 Martin Street was listed for auction, but a pre auction offer of $2.5 million was sufficient to secure it prior to the day.

68 Head Street, on the corner of Foote Street, and directly opposite Elsternwick Park drew the best crowd and response for the weekend and easily breached the tough $2 million auction barrier. On 713 sq m and with a comfortable 1930′s style home, five bidders competed strongly. It was declared on the market at $2 million, two bidders traded bids for another quarter of a million before it was knocked down at $2.55 million; just a whisker under the magical $300 per square foot mark ($3,162 sq m).

19 Oakwood Avenue, a contemporary house on 991 sq m, fell just shy of the $2 million mark. It sold for $1.9 million.

At first glance the buy of the day appeared to be 3 View Court, Brighton. A considerable 777 sq m in a court off the lower end of prestigious Were Street – with an admittedly unimposing two storey 1960/1970′s house – the sale price of $1.45 million still seems cheap. But it’s an awkward site, opposite the railway culvert and with a view of mostly graffiti; and so the modest price is perhaps understandable. What it really shows is how selective buyers are when you compare the relative merits of this with, say, 68 Head Street.

In this type of market the cream really does rise to the top. The rest get the crumbs.

Damian Taylor

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