Strange thing about the top end market we’re seeing today. We’re not seeing it. It’s like a footy game with the crowd turning their backs to the field; looking to see what’s happening out of sight up in the stands.

Yes, yes, yes. There are exceptions (see below). Enough of them, at least, to keep the commentariat with something to comment on. But it’s not the main game.

(An aside: “David,” I was asked, “Why is it that so many market reports are replays of self-interested buyer agent or estate agent comments – the constant talking up of the market the major symptom. Shouldn’t those reporters be getting out and talking to the people who really make the market: That is, the buyers?”)

Last week, a mini-Mexican wave took place up those stands – some of it even visible to the casual onlooker – one result leading to another.

10 St Georges Road, Toorak. Listed, if memory serves, since before the first bounce of the football season. Many different agents, as many marketing campaigns and many balls kicked out of bounds until last week when a local player popped up and reportedly paid $8.7 million.

2 Forrest Court, Toorak. Again on the market for some time. A speculative build, different agents, different asking price and sold to another local for just under $7 million (anyone got batteries for a calculator?).

In the school belt, 4 Mernda Road, Kooyong. A good renovation, south side, 5 bedrooms, ready to move in – sold in the early sixes with three locals all wanting to move in.

Last week also saw one of very few successful top end auctions: 10 William Street, South Yarra. A strong $5.4 million, with two locals bidding.

Locals? All locals? Isn’t this market supposed to be ex-pat driven?

Not from where we sit. Rumours of underlying ex-pat interest have to be judged against who is spreading them; and in whose interest.

The one constant in any market is the buyers and sellers. Sales methods may change, but not the consistent needs of some for a roof over their heads and for others to sell (sometimes unwillingly). If the quality is there and the price is right, the twain will meet.

And now Spring looms and with it you can expect a new normal. At the top end we’re looking at fewer transactions, fewer auctions, less advertising … and more people.

This against a background of agents, little by little, losing conrol. More and more, the internet is stealing their power to influence outcomes. That, too, is bringing with it some new wrinkles. Underquoting and dummy bidding have long been tools of agents wishing to unfairly manipulate a sale; but to that you should now add the camera. How often do you see a bedroom or kitchen on the web that looks the size of a footy field and, when you inspect, discover the size is closer to a handkerchief.

Will Consumer Affairs next have to ban the wide-angle lens?

David Morrell

Bayside: Signs of life!

An auction. An auction at the top end. In Brighton. And a sale!

25 Kent Avenue went to auction on Saturday and, right after the auction, it sold. Really. $6.4 million. Four bidders, three of them serious. Right there on the foreshore in the Golden Mile, a 1930′s Deco style home on a relatively modest 665 sq m. Last sold 30 years ago (who said properties around here are tightly held?) for $360,000.

Nearby, 25-27 Glyndon Avenue has come up for sale again. On 1532 sq m, it last sold in more exuberant times for $15.5 million; the current record price for a Brighton property. Now, the rumour is closer to $20 million.

Contesting that record is “Kinane” on the corner of The Esplanade and Kinane Street. While it has twice as much land (3,200 sq m) and elevated views over the Bay and Dendy Street beach, that’s not quite the same as actually being on the foreshore. Five years ago it sold for $11.2 million. Today it’s expected you’ll need around $20 million to attract the vendor’s attention.

At less stratospheric heights, the attempted sale of 1A Webb Street was somewhat underwhelming at $2.05 million. Something of a rarity, it’s a good downsizer and ticked a lot of boxes: Single-level, manageable allotment, one of the more preferred positions in Brighton. It was expected to go for $2.2-2.3 million and apparently had good pre-auction interest. With all that, the best it could do was a pass-in to a solitary bidder’s offer of less than $2 million.

In Brighton East, 25 Marriage Road, a well preserved 1950′s home on 1500 sq m sold at auction for $1.96 million. Around the corner in Connor Street, number 14 sold some weeks ago for $2.065 million.

The Brightons had 16 properties offered for auction over the weekend – more than any other suburb – but only managed to clear half those. With the market about to limp into Spring, one-larger-than-life auctioneer was heard pleading with reluctant bidders to the effect that if they were waiting for the Spring market, then forget it – he was not expecting to have one this year.

He could be right. If buyers continue to sit on their hands, then expect potential vendors to do the same.

Damian Taylor

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… nothing.

As we said last week: “Top End property wasn’t making the news last week, it won’t be this week and it won’t be next.”

So little to report. We won’t waste your time.

David Morrell

 

Top End property wasn’t making the news last week, it won’t be this week and it won’t be next. With such a volatile and weird stockmarket, at least in public the top end has taken one serious dose of mogadon.

Up here where the millions play, auctions are starting to look so very last century.

Those still living back then – the vendors who have been chancing their arms – have had cause for some (very expensive) tears; and few more so than at Myoora Road, Toorak. A real bid of $9.8 million topped by the vendor’s $11 million and a reserve of … $13 million? Yes. “Hello. You’re wanted on the phone. It’s Santa.”

Where autions are working, sorta, is in flushing out buyers so that negotiations can begin. But that can be a pricey (money and emotion) route for vendors to take.

83 Walsh Street, South Yarra. Supposed “heaps” of interest. Opens on a vendor bid of $4,400,000. Auctioneer pulls teeth and extracts a real bid of $4,450,000. Passed in. Negotiations. Sells for $5,050,000. That’s some dentist. A buyer bidding against himself is persuaded to part with an additional $600,000? On whose advice?

A throwback

There’s always an exception and this one was an auction that seemed so last century: 49 Sackville Street, Kew. Four hands waving in the air. Sold sticker at $4,310,000. Quality rules.

Elsewhere, 8 Blackfriars Close, Toorak  found love at $3,250,000 after being passed in last week at $3,000,000. When sellers are motivated, sales are possible.

If not auctions, what?

A clue: Last week we took clients to inspect eight properties priced between five and twelve million dollars. All on the market, none advertised. Increasingly, the top end is behaving less and less like a conventional market and more and more like a private club.

If not the internet, what?

This off-the-radar market isn’t fond of the web. And being off the radar has implications for all the usual channels:

• Auctions What are those? The only thing which may resurrect them is legalisation to encourage dummy bidding. Vendor bids just don’t have the theatre.
• Expressions of Interest Secret agent’s business. Phantom buyers stalk here. Beware.
• Print advertising Not at the top end.
• Private Sales Around forever. And ever more. And, now, more private than ever.
• Agents Threatened species; and they know it. But the inventive ones still justify some care and attention.

Spring

Nearly apon us and any twittering birds are being drowned by wails that there is no stock; a view belied by that fat weekly magazine (not the old one; that’s decidedly thin). But what you find there is all low- to-mid or lacking quality. There’s no statistic for quality, and no substitute for it.

OK. Maybe one or two percent of those you find listed are worth fighting over; and then the battles can be epic.

David Morrell

Bayside: briefly.

Why no long report? Not a lot to write about.

Brighton and Bentleigh were the only Bayside suburbs with anything remotely approaching activity on the weekend.

Bentleigh had eight sales from the twelve scheduled but that included two sold before auction.

18A Durban Street was the highest on the day with a final bid of exactly $1,000,000. The other end of the scale saw 5/6 Brentwood Street sold for $350,000.

Brighton looked promising: 15 scheduled auctions, but most of those promises remain unfulfilled: just six sold. Highest of those was 38 Whyte Street at $1,710,000. Not exactly golden mile.

Brighton’s passed-in properties ranged from entry-level 4/227 Bay Street ($560,000, reserve $610,000) to 7 Foote Street ($3,200,000, reserve $3,500,000).

A clutch of private sales made during the week added some respectability to an otherwise ordinary seven days:

• 14 William Street, $2,850,000
• 3 Lorac Avenue, $1,700,000
• 342 St Kilda Street, $1,590,000

Beaumaris, Black Rock and Sandringham conducted the grand total of one auction between them: Success for the brave at 13 Coronet Grove, Beaumaris. $1,100,000.

Hampton fared a little better with 100% clearance from all of three properties. 10A Swyer Street the highest at $946,000.

Slim pickings (is there a song in that?).

Damian Taylor

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Vendors facing the hard sell

The Age

“If the owner’s price expectations are too high, a home that failed to sell at auction can quickly become a shag on a rock,” Mr Morrell said.  XXX

It was like the fathers’ room in a maternity hospital – pre-ultrasound. No-one quite sure what they were about to be presented with and shrouds of mystery and concern hovering over the entire process.

Another bloodbath on the stock exchange. Would it lead to a vendors’ nightmare? Would we, as happened in GFC1, simply look the other way while our stuttering market stuttered on?

Love to tell you, but the delivery is still dragging on. This market is still in labour.

Problem is, at the top end, there’s really been too little to test it. Yes, in the few (very) AAA properties which did come up there were three and four hands raised, but there were so few of those that you really couldn’t draw any conclusions.

Even down the ladder (see Bentleigh, below), Victorians’ love of bidding seems to have faltered – right down to agents letting up on one of our market’s great anachronisms: the vendor bid. What is this? It’s a shift as fundamental as a Collingwood supporter abandoning footy for rugby. No rainbows being chased here.

The top end is still being choked by vendors refusing to take tickets in what was a lottery with some very large prizes – the kinds which occurred when auctions were frenzies. Happily for we on the buyers’ side, those days have passed.

And that will make Thursday’s auction of 8 Myoora Road, Toorak more than usually interesting. It’s been quoted at $11 million plus and that is considerably less than the rumours had it prior to its formal listing. Coming on the back of an $8 million plus auction in Armadale (still available) and a $13 million plus Expressions of Interest campaign in Toorak (ditto), there may be more time in the waiting room ahead.

Yes, we’re still seing action at the top end, but it is (if possible) more private than ever. It’s a who-you-know market in which price, interestingly, is a lesser part of the equation – it’s more about who wants to sell and how highly would-be buyers regard what is offered. As a group they tend to be less affected by margin calls than those further down the scale. As a group, currently, we’re seeing more buyers than sellers.

Need an index of the health of the top end market? Take a look at what’s advertised for sale this year compared to last. You can measure optimism (both agents and vendors) by the amount spent on advertising – who needs Standard & Poors? – while the agents are still talking of a Spring revival, right now it looks like we’re already in the Christmas holiday doldrums.

David Morrell

Bayside: Beware light in tunnel

Just when it seemed the clanging bells had fallen silent and it was safe to cross the tracks, along came that speeding freight train and a scramble for safety. A week ago buyers were daring the market; over the weekend, most turned to water.

Even Bayside’s darlings, The Bentleigh Twins, left their tap shoes at home. Just five sold from the 16 offered – they’ve rarely had such a tough review – and it was the low end that suffered most. That’s not supposed to happen, Daisy.

Bright spot? Just the one: 185 East Boundary Road. Sharply renovated, big on style: $1.02 million.

The rest? The less said the better.

Down at sleepy corner, Beaumaris and Black Rock are marking time with neighbouring Mentone claiming the highest price of the week with a very quiet transaction negotiated at 22 Milan Street. A substantial five bedroom house with pool on 1626 sq m, it sold for $2,445,000.

Sandringham? Just the one: 2 Grange Road sold for $1.2 million

Hampton?  Two! (count ‘em!) Including a vacant allotment at 63 Orlando Street, 557 sq m sold for $1.25 million.

Despite the stockmarket carnage, Brighton fared reasonably well: 8 sold from the 15 offered.

80 South Road (yes, kids, we all know it’s really Hampton, even if the new-to-the-area agent hasn’t worked that out) was the standout. First sold when new only two years ago for $2.78 million, the sale price on Saturday of exactly $3 million was a testament to the built quality; although the selling agents will no doubt claim some kudos.

Looking for one sign of how the market has slipped in three months? 63 Outer Crescent sold at auction in May for $2.61 million. On Saturday, its twin at 63A sold for, we believe, a number closer to $2.2 million. That’s around 15%. Room for gloom if it becomes widespread.

Other portents? Some in streets which until recently were sure sellers:

• 57 Hanby Street. Passed in. Vendor Bid $2.05 million. Reserve $2.28 million
• 12 Merton Avenue. Passed In. Vendor Bid $1.90 million. Reserve $ ? (we all love a mystery)
• 342 St Kilda Street. Passed In. Vendor Bid $1.56 million. Reserve $1.625 million

On June 20 we reported a non-result at 2 Tennyson Street, Brighton. Last week the Tennyson Street real estate gods smiled and against the tide of public opinion the property has now changed hands at exactly the pass-in price of $3.5 million.

Eventually, always, a buyer will come.

Damian Taylor

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Could this be the spring with no zing? For the first time since the 80s there are signs that this spring market … won’t.

No market to be seen. Gone. Kaput. Especially at the top.

When many in the media and even some agents are suggesting that the sky has fallen in, you know things have Become Serious.

And why wouldn’t they? Yes, we have a mining boom, but that’s in WA and may as well be in China. Here we have nothing but successive tidal waves: a government that can’t and an opposition which opposes everything (even itself every 2nd day), a soaring exchange rate, a US economy acting like a broken down washing machine and its repair man (Washington) whistling a patriotic tune and leaving his tools in the truck, the Europeans running scared from each other’s debts and maybe another GFC waiting to implode.

“Let’s buy a new house.”

Yeah. Right.

But, but. But.

While on the surface there is nothing to report, far under those tidal waves there are submarines at work, quietly investigating what might be available.

So sales are possible, but rarely are they the result of dancing to estate agents’ happy old tunes. Drop $20 or $30 or $60k into a marketing campaign when, if you have your ear to the ground, you already know who the buyers are? Unlikely.

Some recent observations:

• Expressions of interest? Deceased. Some agents still to be informed. Funeral details TBA.
• Downsizers going to market in Spring? Not when the kids haven’t left home. It’s another reason there’s so little choice.
• Sales on nod and wink? Surprisingly (often to both parties), they’re happening.
• Peep shows? Yes. Last week only one buyer was allowed to look. Sold.
• Privacy? On the rise. See above.
• Dreamers? Still hoping for glory and prices that are long-gone. (Melbourne supporters?)
• New agents? Some kicking goals – making deals without $60k ad budgets.
• Old agents? Some relying on laurels long-gone – now being left off teams altogether.
• Top end and auctions? Not playing together any more. See below.

The highest priced auction sale over the weekend would have passed unseen a year ago: 3 Irymple Avenue, Glen Iris. Quoted at $2.4 to $2.6 million it sold for $3 million with a clutch of hands in the air. Our opinion? It wasn’t that special and you could have bought better – but what choice is there in that bracket?

Exception: 20 Barrett Street, Albert Park. Good single-fronter. Passed in to stony silence, but sold for $2.2 million soon after.

Elsewhere?

• The games continue, the bowlers bowl, the wickets rarely rattle.
• More than a few investors have been seen inspecting.
• Signs are that if Spring ever sprungs, quality will rule.

David Morrell

Bear stirs in Bayside?

Still a bear market, but in Brighton at least the beast has made what sounded like a tiny snore and turned over. It’s alive!

Just.

For the last few months it has provided a convincing impersonation of that dead parrot: lifeless; closely attended by those insisting it’s in near-peak health, just misunderstood.

Then came the last week in July and a little shivering life in both auctions and private sales. Clearances still hovering around 50% but investors and first-home buyers resuscitating the lower end while further up the food chain anything that is true value arousing interest which just wasn’t there before.

“True value” is the key. Vendors still pricing in the land of last year are doomed to remain there – but if the quality is obvious and the price is fair, there will be interest.

This could be a false dawn, but current indications are that a slow recovery may have begun. What’s now worrying agents is not a lack of buyers prepared to consider true value, but a lack of vendors prepared to offer it.

True value sells?

• 28 Montclair Avenue, North Brighton. A comfortable and well presented 1920′s house extended to 4-bedroom family accommodation in a reasonably good and handy location. It surprised all present – not so much with the final sale price of $1.82 million, but with the number of bidders: at least six parties competing.
• 118 Cochrane Street, Brighton. Also well received. Sold for $1.74 million.

A hop and a skip away, 318a and 320 St Kilda Street add up to 1500 sq m. Right over the road from the Golden Mile, they were expected to have builders and developers constructing forests of hands. Not to be. Passed in at $1.6 million and $1.08 million respectively; and sold to a near-reluctant buyer a few minutes later. D9s to come?

At 43 Wilson Street, the best the vendors could do was their own $2.6 million bid for a lot of house on not a lot of land (but with a basement garage and turntable). Reserve is a state secret, but anything above 2.6 will probably get a nod.

Mopping up:

• 4 Sussex Street, Brighton. Reported as sold as a private sale at $3.775 million – we understand a sale was transacted immediately following its auction on July 2, with a conditional contract.
• 14 William Street. An auction many weeks ago and a vendor who should be quietly relieved by the $2.85 million eventually achieved.
• 18A Martin Street. Sold by Brighton’s newest agency after spending all this year unsold by one of Brighton’s oldest agencies. And a price cut of about a million (that can help).
• 2 Shandford Avenue. Reported as a 10-room house on 542 sq m, sold for $7.5 million on March 15, 2011. Three months later, a unit at 1/2 Shandford Avenue reported as sold at $2.55 million. Same day, 2/2 Shandford Avenue reported as sold at $6 million. A $1 million rise in 3 months? Nice accounting if you can get it.

The rest of Bayside? Forgettable. Even Bentleigh failed to blip.

Damian Taylor

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Astute house buyers holding off on investing
Melbourne buyers’ advocate Morrell and Koren founder David Morrell also
said that new and experienced investors were still “sitting on their
hands”. … Herald Sun

Agents withholding house price data
But buyers advocate Christopher Koren said many agents were resorting to
”sneaky behaviour” to mislead buyers over the true state of the market
and that … The Age