OK, the town’s a little horse-crazy and the real estate world is not immune. But we do have our own kind of fever. More Marx Bros than Melbourne Cup.

First-off: Super Saturday!

Says who? Compared with this time last year there were fewer auctions and a lower clearance rate.

“Way Below Average Saturday!” Not exactly headline material.

“Sitting On Hands Saturday!” The way it turned out.

A couple of OK properties did run quite well, but they weren’t Group One. Those which did qualify hardly troubled the starter:

• 11 Scotsburn Grove. Yup. Another tennis court (see last week). One bid. Reserve a state secret (which suggests there’s a lot of distance and maybe some hurdles to come).
• 13 Grant Avenue. Unofficially on the market since Eddie McGuire last had cause to smile. Just one bid. Reserve higher than a magpie can fly.

Yet there are buyers out there. They’re (wisely) just not reaching for their cheque books to back anything that isn’t a sure thing. And with the exception of one black horse, sure things are few and far between.

EOI? Your time is up.

Due dates for a number of top end Expressions of Interest are looming. All those closely-held hands must be revealed. Or not. If the REIV had any regard for its life-support (the people who buy the houses) it would require agents to publish EOI results. No go. But you will be able to draw your own conclusions when failed EOI campaigns miraculously morph into auctions or private sale offerings.

Order in the court

And then came a certain court case which the REIV also chose to ignore. If the organisation which argues for self-regulation fails to regulate, what is left but the courts? These are paths we have trod before; pinning agents who claim to have offers that don’t exist.

While not all agents are guilty, it’s something we have seen far too often. Real Estate Inactivity Victoria needs to take a long look in the mirror.

Oddity

A $6 million plus pile we’ve been running the ruler over. Rates haven’t been paid for a couple of years. Sign of the times?

Gloom? Us?

We’ve been accused of being too negative – of talking the market down.

Us? Arguing for lower prices? Suggesting all that cheer you’re hearing from agents rings a little hollow?

Yes. OK. Us. But have we not, in fact, been proved right? Are we supposed to be suggesting that the market is rising when that’s simply not true?

If you go back through our archives (they’re all on this site, nothing to hide) you’ll see there are times we have suggested the market is rising and that some haste is in order. But those times are not these times. Now, most people are better advised to wait until they find exactly what they are looking for.

And, yes, it’s not all gloom. We are still buying. But only when we find good properties, well priced.

David Morrell

Bayside: Weather prevails

Not-Super Saturday was in Bayside much like the weather: damp, grey and mostly miserable.

Greater choice than previous weeks was predicted to result in more sales.

Nostradamus, where were you?

Buyers largely chose to abstain, particularly around higher-end Brighton.

36 Middle Crescent was, on paper, the standout. A significant and well-renovated period house on 1100 sq m in the heart of old Brighton, it was offered at around $5.5 million by a previous agent; a lofty ambition which no doubt contributed to its fall on Saturday. It was re-priced at around $4.5 million in the lead-up to the auction and the best it could do on the day was the vendor’s own bid of $3.8 million. It now has a sticker with $4.75 million on it. Do we see a stable door swinging in the breeze?

55 Sussex Street, though a penny bunger of a house, turned out to be a squib. A 70-square house on a 800 sq m site doesn’t leave a whole lot of room for a strawberry patch. Or anything else. Undeterred, its auctioneer opened with a vendor bid of $3.5 million only to be topped by himself with another vendor bid of $3.8 million, and then it was passed in, thus demonstrating that a vendor and his money are rarely parted (unless it’s ad costs). Reserve? A nose-bleed $4.5 million. Reality? Short supply.

106 Carpenter Street was always going to be a test – it’s not what it is, it’s where it is. The house is beautifully crafted and intelligently designed on a compact site and there’s little to fault (bigger bedrooms upstairs maybe), but that was not enough. It was passed in at $2.4 million on a vendor bid. The reserve is not published (why?), but somewhere in the higher two millions is anticipated.

The top end of the Brighton East market performed no better:

• 26 Bright Street. Passed in – later offer of $2,260,000, reserve $2,490,000
• 14 Comer Street. Passed in – later offer matching the pass in of $2,200,000, reserve $2,400,000

At the end of a day when 21 were scheduled, two sold prior and only seven found new owners. Mostly long faces all around.

Beaumaris and Black Rock have had relatively few auctions this Spring.

7 Beach Road was put up on the weekend. On 985 sq m, the highest offer was the auctioneer’s $1.8 million – although the reserve is undisclosed, the sale after auction of 16 and 17 Beach Road on a total of 1570 sq m, for the asking price of $2,900,000, should provide a clue.

Hampton and Sandringham were busier with the sale of 31 Avondale Street, Hampton at $1,785,000 and, almost a month after the auction, 34 Service Street was sold for $2,155,000. This is a tickle above the best on the day but still daylight away from its post-auction reserve of almost $2,400,000.

Sandringham’s best was a sold prior at 46 Victoria Street for $1,780,000 followed by another SB at 30A Tennyson Street for $1,400,000.

Bentleigh was more active this week with eight sales from the 15 offered, two of which topped the million dollar mark:

• 5 St Ives Road, $1,130,000
• 317B McKinnon Road, $1,060,000.

Clearly, while we are better off backing Black Caviar (albeit at tiny odds) than backing where this market is going, if there is good news from Glen Stevens on the first Tuesday in November, this may excite some; but it’s still unlikely to be enough to ignite the top end.

Damian Taylor

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Soothsayers? Oracles? Statisticians?

We’re surounded by industry experts who know exactly where the market is going. They say. Those persuaded by voodoo are reading the entrails of chickens, those around us are more likely to be pondering the droppings of neighbours’ spoodles.

And now allow us to introduce some real numbers into the equations.

Toorak has around 120 tennis courts. Ten of those are now for sale. And we know of another ten if the offer is compelling.

Does this speak to you of a market which has bottomed? Should you be reaching for your cheque book any time soon?

Didn’t think so.

So whyohwhyohwhy has there been a rush of properties to market? And why are so many of them so optimistically over-priced?

Could there be an agent or three who is over-promising? Perish the thought.

The next three or four weeks will be egg-on-face time. That face could be ours, but we suspect those heading for the shower will be the agents and their vendors. If so, we’ll be there with some smiling buyers to hand out the face-cloths.

Why do we believe this is so? Over the past couple of weeks we have seen properties purchased at a 25% discount to the original “realistic” offers made to this office. One even went for 20% under its Council valuation. Really.

20%. Under. Its. Council. Valuation.

Kids, that just doesn’t happen in a stable or rising market.

We’re also now able to dictate terms in ways that aren’t possible when there’s a queue of buyers for a property. There are no queues; or they’re very short.

And while we’re prognosticating, here’s another: Half of the currently advertised properties at the top end will have trouble finding a buyer before Santa hurtles down the chimney.

A current concern: advertising.

There’s an axiom in adland which suggests that half the money spent is wasted, but no-one knows which half. Then why blow tens or hundreds of thousands to promote a pile in Toorak when you (you agents, that is) already know that most will not be needed because you know, or should know, who the buyers are? Just send them a bunch of flowers and an invitation and save the squillions that video cost. Yes, that video they’ll never look at.

Will there be a Wall Street protest rally on the doorsteps of agents who have over-promised and over-spent? Unlikely. But there may be some who choose not to pay for money ill-spent; and that would be educational.

Another concern? Mushrooms.

Expressions of interest campaigns. Springing up in the dark all over. Even in suburbs you’d never expect them. Significant traps for the unwary and the inexperienced. “You show me your wallet and I’ll tell you whether there’s enough in there.” There rarely is. You’re competing against the unknown, represented by an agent’s word. An agent obliged by law to extract as much as possible (and who may be among the over-promisers, so is also bound to extract the unreasonable). You’ve been bitten? You’re not alone. There are captains of industry among the walking wounded.

Time flees. Worries all

In eight weeks the lights go out and all goes quiet for summer; which means that those hoping to buy or sell must put their plans on ice until, at least, February.

Vendors, agents, buyers. They all feel it. Vendors and agents for obvious reasons, but most buyers also have reasons why they’re moving and they also frequently have time constraints.

Worry, worry, worry.

David Morrell

Fun in Bayside.

A funny thing happened last Saturday.

Your scribe arrived at 48 Cochrane Street, Brighton, a handsome double-fronted Victorian brick house with a pedigree. Comfortable as is, but with potential and on a generous corner allotment of 850 sq m.

There were (can you believe this?) a number of spectators, an audience, even … a crowd!

Then followed real bidding.

Real bidding. Just like the old days.

From 1, 2, 3, 4, 5, 6, 7 bidders! Count them!

And then the truly remarkable happened: It sold!

Above the reserve! (OK, it was under-quoted at $1.65-1.8 million and they’d already knocked back $1.85 million prior to the auction without seeing the need to change the quote, but…)

Yup. Sold for $2,015,000, suggesting that auctions may still work when the property is quality and the price is realistic.

And there the fun ended. Most other auctions in Bayside were predictably dull and even the Bentleighs only saw seven sales from its sixteen side-shows.

As noted further north, the Expressions of Interest are creeping, creeping, creeping like cane toads across the land. And should be about as welcome.

Do buyers understand this process? Most likely not.

Do buyers trust this approach? Almost definitely not.

At least an auction has a degree of transparency whereas an EOI can be like wading through murky water, never sure what might or might not be under the surface.

And then …

Some results quietly recorded over the past month or so – worthy of note and in no particular order but price.

• 168 Church Street, Brighton, sold after auction for $2.15 million
• 2B Mulgoa Street, Brighton, private sale for $2.2 million
• 43 Wilson Street, Brighton, private sale post-auction, believed to be near $2.5 million
• 45-47 Martin Street, Brighton, on 1350 sq m, private sale at $3.95 million
• 18 Cole Street, Brighton, on 1367 sq m, private sale at $4.8 million
• 12 North Road, Brighton (sorry, no link) on 1621 sq m, private sale at $5.3 million
• 1/198 The Esplanade, Brighton, reported on 19th Sept as “just shy of $7 million” was really exactly $6.5 million

And in the midst of the gloom we overlooked reporting that shy little Highett (next to Sandringham as you reach for the Melways) achieved its highest-ever price for a residential property: 4 Fuge Street sold for $1.45 million.

So now you know.

Back with (we live in hope) much more next week.

Damian Taylor

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HEADING

Golden opportunity on the Golden Mile
Melbourne Weekly Bayside
… a price that would blow the Brighton sales record of $15.5 million out of
the water, according to Damian Taylor from buyers’ advocates Morrell and
Koren. …