Your questions answered …

• Pass-ins? All over the top end. Spinning wheels, little traction.
• Rhetoric? Up, action down. Agents and would-be advocates talking up Spring awakening. Our view? This is more than a holiday – think long-service leave.
• Direction? Top end leads, the rest follows. $5 million +? Dead end. Extinct. Only the desperate are selling.
• Nothing to be gained by bidding against a vendor.”
  Buyers? Learning. Nothing to be gained by bidding against a vendor. Keep hands in pockets.
• Timing? Selling in Melbourne now? Kiss your $30-40,000 marketing campaign goodbye. Everyone’s thinking footy or on a beach far away. Join them.
• Wallflowers? They’ll be back (always are), but will remain unloved unless price reality sinks in.
• Quality? A rarity. But still sells.
• Pendulum? Swung firmly toward buyers. Welcome back.

David Morrell

Bayside: Sombre

Although there was a lift in the number of properties offers at auction this week, the sentiment of recent months was much the same and was reflected in modest attendances, reluctant bidding (when and if it happened) and generally a sombre mood.

Even private sales were thinner this week; which may be as a result of school holidays or a reflection on the lack of quality and choice of properties.

After some weeks of relative inactivity, Hampton and Sandringham bounced back into action with 18 properties put up – but only half that number finding buyers.

Highest on the day was 28 Service Street, Hampton; taken to $1.825 million by three bidders. Also contested was 19 Brighton Street, Sandringham, which sold immediately after auction for $1.75 million.

Less cheer was had at 34 Service Street: passed in on a vendor bid of $2,110,000. A real $2,125,000 was also shy of the mark and a reserve has been posted at $2,395,000; which may prove a mite ambitious.

Beaumaris and Black Rock still seem to be in slumber mode – modest auction activity, but with a noteworthy private sale indicating there is still a pulse. On 1271 sq m, 6 Bayview Crescent in Black Rock’s triangle was sold to a local developer for a respectable $2.2 million.

The Bentleighs were subdued. Only eight properties offered and a 50% clearance. Highest on the day was 14 Austin Street: sold for $1.1 million.

Brighton and its Easterly cousin offered greater choice this week: 15 auctions were scheduled, but only eight sold – an underwhelming result particularly considering that not much is likely to happen on Grand Final weekend.

Although reported as undisclosed, the result at 2 Albert Street, Middle Brighton, was the highest on the day. Three parties showed intent before it was passed in at just over $3 million and sold later for between $3.1 and $3.2 million. It’s on a site of 1260 sq m and that equates to land value of $235 per sq ft ($2,540 per sq m) – well below the expected in an area where $300+ has in the past been regularly achieved.

11 Norwood Avenue also sold – again for an undisclosed sum but understood to be around $2.4  million.

The lead pass-in was a fine Victorian attached home on the hill at 168 Church Street. It offers typical period style and spaciousness and its compact 560 sq m site seems much larger. Despite the persuasive charms of the auctioneer, nobody bit and a pass in of $1.95 million against a reserve of $2.25 million ensued. This is a fine slice of Brighton real estate (and not over the odds) so it says much as to the health of the Bayside property scene.

Let us hope next Saturday’s entertainment provides some relief from the tedium that has been endured so far this Spring. As long as Collingwood or Geelong is victorious then someone will be happy … just not a draw please!

See you in a couple of weeks …

Damian Taylor

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The top end, as is its want, continues to march to a different drum. Or drums.

Near-city? Asleep. Bayside? Occasional stirrings with fitful nightmares.

So we go. Still quietly active behind the scenes but not much in public prospect in the near-city until the football is decided, the kids are back in school and the September shutdown is behind us.

Just one flicker on the ECG: 27 Hampden Road. One of the year’s wallflowers finally found love at $6,625,000. Original asking price? $7.5 million. There’s a lesson: Love ain’t blind.

David Morrell

Bayside: No champagne.

Three weeks into Spring and you can’t help but get the feeling that it’s just not happening: no fizz, no zing, no zip. And no lack of reasons why.

You know them all, from sliding shares to looming debt crises. Will Germany or China ride to the rescue? Will all this doubt be unfounded?

Tis a fog of uncertainty and within that lives timid buyers and when buyers are too timid to buy, sellers become too unsettled to sell.

So it goes. Or not.

And when it does go, it’s the exceptional:

• 198 The Esplanade, Brighton is a rather special multi-level “penthouse” apartment on the best part of the beach road; overlooking the baths and the yacht club. They were shooting for an exceptional $8 million. The mark was found, eventually, somewhat shy of $7 million. Reality rules again.

Still, a strong price in a market that’s seen very little action above $5 million.

Private sales? Also slow; with the maybe exception of an agent’s trumpet: “$10 million in sales in Brighton East in 20 days!”

Auctions? 15 each in the Brightons and the Bentleighs. 9 and 10 sold.

In the Brightons, not a lot of joy for those looking for over $1 million.

• 2-4 Sandown Street. Vacant land with nothing on it but a permit for four apartments. Passed in on a $3.5 million vendor bid, with a notional reserve of $4 million. Help?
• 7 Tovell Street. Modern, well fitted, but somewhat out-neighboured. Passed in to the vendor at $2.475 million and then a real offer of the same amount. Reserve’s a stretch at $2.65 million.
• 12 Cairnes Crescent. A period house of no great distinction and priced at land value. Passed in at $1.8 million. Reserve a guarded secret.
• 1/60 North Road. Street-side town house on a majestic though busy boulevard. Passed in at $1.5 million and still a considerable distance to the reserve of $1.8 million.

And the exception:

• 45 St Andrews Street. Modest house, difficult floorplan. Sold for a modest $1.3 million.

In the Bentleighs, just one at $1 million+ and that ran into a brick wall.

• 33 Godfrey Street. Ticks all the right boxes: McKinnon School zone, four bedrooms, two bathrooms, four living areas … but the best offer was $1 million against a reserve of $1.15 million; which suggests it probably won’t last for long.

Bentleigh’s highest sale under the hammer was 7 Mortimore Street. On a subdivided block, it sold for $957,000.

Points south – Hampton to Beaumaris – were quiet. Both auction and private sale activity somewhat subdued.

Despite school holidays, and unlike points further north (Mr Morrell’s hunting grounds) next week is a busy one before the traditional Grand Final auction holiday; and then we are well and truly into October, the true test of the selling season.

And to the person who stole the year: Bring it back.

Damian Taylor

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A faint ringing sound came from beneath a pile of cobwebs that had lain undisturbed for as long as he could remember. A faintly familiar ringing sound.

He rolled up the form guide he had been reading and, tentatively, pushed the mess aside. It was a telephone. He picked it up.

“I want to sell my house.”

The Agent stared at the phone. Was this a joke?

“Pardon?”

“My house. I want to sell it. Six and a half mill I reckon. That’s what the place down the street sold for last year and mine’s just as good.”

Christmas? Could this be Christmas? A real, live, top end listing? How long had it been?

They talked. The agent knew the house. Knew what it was worth today: $5.25, tops.

“Bewdy,” he said, “Not a prob. Market’s tough, but we know our way around. Big marketing campaign. That’ll pay for itself a dozen times over.”

Or something like that. And then the house goes to auction and there’s only one bidder and the highest bid is $5 million.

That’s one of the three scenarios that are playing out at the top end right now.

When you get to $5 million plus, there are those who must sell (moving interstate, Family Court, deceased estate, etc), those – our friend above – who would sell if they could get the price they would have early last year and those whose agents really do know what they are doing and earn their 2%.

The first group are the vendors agents’ dreams are made of. The have-to-sells will sell because they’ll lower their expectations until they do (the wealthier agents are particularly skilled at lowering expectations).

Those still living in last year are tougher. Some will be worn down, many not. There are lots of wallflowers still out there. They’re often the once-were-auctions or expressions of interest that are now being offered for private sale. Their vast marketing spends have gone for nothing but to increase their agents’ exposure.

And then there are the houses which sell because their agents priced them accurately and sold them effectively. Yes. It happens. Really. It happened at Blessington Street only last Saturday.

But the one rule of markets is that markets rule – and in our current environment one market rule is that auctions aren’t working at $5 million plus.

Evidence?

• 32 Canberra Road, Toorak Not a bid. Last time it was auctioned there were three hands in the air.
• 2 Iona Avenue, Toorak No bid on the day and sold post-auction for less than had been offered prior to that auction. (“Sold Some Time Later” is the sign you should see most often on all but AAA auction boards.)

Then what about the market stats? Don’t they tell a different story?

Yes. They do. But then you have to look at who is providing the data. It’s the estate agents and their trade union and they don’t care for any news which suggests that anything growing in the garden is less than rosy.

It’s you-be-the-detective time

There are a number of $5 million plus properties currently for sale or on their way to market. Keep an eye on them and you’ll soon work out which of the above scenarios is in play.

• 16 Kenley Court, Toorak is among those coming up. 20,000 square feet and a reasonable house. $10 million plus is likely, but will it sell?
• There’s a house on Montalto Avenue with a court and a pool which is due to hit the market in the next couple of weeks.
• The $10 million plus wallflowers, including 26 Albany Road and 8 Myora Road.
• Those sellers waiting until late October to enter the market. Great expectations? Realistic?

There are also a number of houses we have made offers on where agents and owners think they can do better on the open market. We’re betting they’ll run into the brick wall of reality, they’re betting that six weeks and $50,000 in marketing costs can turn things around. History suggests we rarely lose and there are a number of vendors currently out there who will be wishing they had taken what was offered before they were persuaded to take similar bets.

All this is playing out against a background of new agents trying to elbow their way into the top end paddock. We’re hearing a lot about them from owners trying to decide between the old bulls and young bucks (they ask us because they know we have nothing to sell).

And we can’t help wondering whether $1,000 spent on the internet wouldn’t be just as effective.

One thing seems sure: the over-optimistic are courting failure.

Interesting times …

David Morrell

Bayside: back next week

 

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The Top End still has a heartbeat, it’s very faint but there are a few transactions taking place; although some at levels less than they were offered last year. Don’t knock it, it’s a kind of life.

Life? We have a client who believes the whole real estate world is like life in a zoo and that set us to thinking. What are the parallels?

We reckon it’s a circus and (roll up! roll up!) the circus has come to town.

We spent Saturday with an interstate client who had never seen performances like it. Lots of acts to entertain the kids (and us) while he slowly curled into a foetal position.

We saw:

• The Spruiker! The agent who lured people to the auction with everything, “The greatest show on earth! It will defy logic! It’s worth $4 million! It will sell for $4 million!” (OK, the reserve was $5 million, but that’s only a detail.)
• The Ring Master! The auctioneer who loved the sound of his voice so much that he could not any hear others, including real bidders trying to make real bids.
• The Elephant! An unwise old agent with skin thick enough to deflect all criticism. (He also trumpeted through his nose.)
• The Trapeze Artist! The salesman who performed death-defying lurches from one side of the tent to the other, hanging onto the merest hint while sliding up and down some very greasy poles.
• The Bareback Rider! Well poised, beautifully coiffed and went around and around in circles leading to precisely where she started.
• The Fire Eater! An agent with offers that miraculously disappeared.
• The Contortionist! The agent who found himself in an impossibly difficult situation, within his own company.
• The Clown! Looked like one, acted like one and paid serious money more than a passed-in price when it was clear no-one else was prepared to come close. And, depressingly, this clown describes himself as an advocate. For whom?

Did the fat lady sing? Yes, quietly. Not a lot of action, but some (fairly unspectacular) results:

• 19 Sargood Street – 5-bedroom family house. Sold for $4.7 million after being passed in at $4.6 million.
• 2 Iona Avenue – passed in on a vendor bid of $5 million, sold later for $5.08 million.
• 21 Washington Street – sold for $1.45 million against a reserve of $1.2 million.
• For seagull lovers down in the Cinderella suburb, 210 Nelson Road sold four years ago for $2.9 million, sold a year later for $4 million and sold again on Saturday with three bidders for $4.215 million.

The bridesmaid:

• 246C Domain Road – a good apartment which no-one wanted. Passed in on a vendor bid.

The Fortune Teller! (us)

There are some strong signs of more property coming onto the market (we have been through more houses over the last ten days than we have at any time this year) and some, believe it or not, are even worth a bid.

While it’s true that many vendors are still a little gun-shy – not wanting to go to the market until they see others doing so – we expect to see more property than we have seen for many months appearing in late October/early November; and it’s likely that the AAA ones will fare quite well. There are a lot of buyers out there looking – we see them at opens, we see them auctions, we see them coming through our doors – and a couple of good results could trigger more interest from all parties.

David Morrell

Bayside: Back next week

Damian is taking a well-earned. Bayside (with some large numbers in prospect) will resume next week.

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House prices to dip further during spring: experts

Buyers advocate Christopher Koren of Melbourne-based Morrell and Koren said when the housing market comes off the boil, as it had done since the start of … Sydney Morning Herald