We’re back.

Yup. The zoo has opened its doors and the wide-eyed are buying, or not buying, their tickets. What’s new? What’s changed? Will there be more of the same?

Short answer: Sorta.

Some of those who prowled the lion enclosure are now walking with the elephants; and there’s an occasional dinosaur to be found among the fossils. (If you follow the agents, you’ll see where the action is.)

What’s carried over from last year? Buyers wanting to pay less and sellers still asking for more; and that’s a gulf that many won’t bridge. A number of those big trophy homes offered in November are still waiting for even a cheeky offer. Christmas cheer? Not here.

What’s different? Vendors with $30-40,000 to promote their wares are nowhere to be found – if this keeps up, agents may have to start paying for their own ads.

For the two months since the curtain came down, $4 million + transactions have been missing in action. That’s had a knock-on effect resulting in those who may have been thinking of selling banishing all such thoughts. (We usually see a lot more on offer than we’re seeing this year.) Our instinct is that $3 million + people are waiting to see which way the wind is blowing and putting off deciding whether to sell until after the Easter break.

Looking for clues to support that? Look down the coast. The lack of activity in the beach market suggests that owners and even the better agents knew that the prices they were hoping for were simply not going to be there. The great homes just did not appear.

Yes, there were a few exceptions (there always are) but even where there were sales it was common to have only one real bidder at an auction.

And so that miasma has spread up the bay. A damp grey fog obscuring much, punctuated by some of last year’s wallflowers given new paint jobs and new agents and hoping to be asked onto the floor at last. Unlikely. Not now. Not unless the ex-agent really didn’t know how to dance.

But, remarkably, quality buyers are still there (we know because we’re competing with them). When sales are made it’s because both sides are working at it – there’s no such thing as an easy sale and those who are selling have learnt that the days of premiums are behind us. Those who haven’t are tabling valuations which suggest that some valuers are living in a different century. Those who haven’t are looking at taking the rental option for another year.

And still some investors are popping up in inner city areas. There were auctions with five and six people bidding.

Next weekend looks like being a big one, but it’s all quantity and not a lot of quality. Last weekend had an air of desperation (why else go to market in the first real weekend of February?) – the sense that vendors and agents felt they must deal or face 12 months that look even harder. Anyone for renting?

Which suggests … opportunities. For those who know what they are doing, not all will be losers in the year ahead.

And then there’s the inexorable transformation of the media landscape.

Mrs Rinehart’s newest toy, The Age, is looking more and more yesterday as a real estate medium. We speak to enough buyers to know that most (at least at the top end) are not reading the Saturday classifieds. Agents we talk to report being reached by email, not phone. The internet is a rising tide, submerging all else, and the waste is horrendous. Seas of ads which no-one looks at (and how long before agents start asking for your email address rather than your mobile number?).

David Morrell

Bayside: a change in the air?

We are over the Greek and European debt crises. We are most definitely over Kevin vs Julia. So thank the powers that be that we at last have the property market back for our amusement.

Winding back a little, you will recall that November/ December finished limply and that plenty of Bayside properties remained unsold, in turn providing a real challenge to those agents still on duty in January to clear the decks of old stock.

While a handful of soon-to-be-stale properties did clear last month, the low level of activity seemed to discourage would-be sellers from piling into the market in February and, as a result, there’s no heap of interesting and appealing choices out there.

Fast-forward to the week just past; the first real look at the market for 2012.

With the one or three exceptions, most selling agents would be a little disappointed with the results on the day, having been encouraged in the preceding weeks with the turnout to the open days and apparent renewed buyer interest.

Having said that, in Bayside there is a perceptible change in buyer sentiment in the air. The doom, gloom and negativity of late 2011 seems to have lifted somewhat.

While fence sitting is still popular, there are early signs that buyers are preparing to move – though this may not happen immediately. There’s a likely tipping point in the coming months when buyer confidence builds and one buyer’s action leads to another and the sudden impact of many raising their hands will see the pendulum move from nervous to positive.

What’s stopping that now is lack of choice for quality properties at realistic prices. Once prospective sellers become confident that buyers are back in the market, supply will start flowing and transaction numbers will increase.

And so the cycle continues …

Now back to those one or three exceptions.

1 Farleigh Grove, Brighton, has been in one family virtually since it was built 90 years ago so it does qualify as a “rare” offering. It’s in a quiet court between Church Street and the beach on 700 sq m. It’s a toss-up between a major renovation and a complete rebuild, so it had wide appeal. To prove the point, at least half a dozen bidders competed, pushing the price well past the apparent reserve of $1.85 million, to eventually sell for $2,222,000 or just over the magical $300 per sq ft (sorry, $3253 sq m). Prime property, sensible reserve = great outcome.

Curiously, a similar offering at 20 Birdwood Avenue, Brighton, an older brick house on 820 sq m with a Northerly rear orientation was passed in at $2.7 million (a tickle over $300 sq ft) with reserve of $2.9 million. The difference is that BIrdwood Avenue is in the blue chip region of Brighton’s Golden Mile, which has always commanded a premium of at least 20%, so given the previous result, this seems fairly priced.

Neighbouring Elsternwick recorded a strong result with the auction of a signature Victorian era house at 9 Staniland Grove. On 738 sq m and offering plenty of modern family accommodation, it sold for $1,925,000.

Further south in Bayside, Hampton and Sandringham generally had a forgettable day with only two results from the 10 offered.

The well-located 10 Victoria Street, Sandringham was one of the two that got over the line. Quoted between $1.7-1.8 million, it had plenty to offer and in such a prime location was always going to have interest. The final result at $1.935 million did not surprise.

The Bentleighs had a very good start to the season proper – only one passed in from the ten scheduled.

Highest on the day was 16 Coates Street, which easily broke through the seven figure barrier. It sold for $1.185 million.

Next week? We hope for a real sense of where 2012 is heading.

Damian Taylor

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Game over. At the top end, that was the year that was. The year the tide went out for the agents – although some have yet to hear the news.

That flicker of light seen over the past couple of weekends has been snuffed out. Except for the one in twenty which tick all the boxes, there’s been little joy for the remainder. Yet the delusions persist. Even those priced 20% above where the market is prepared to go are still living in hope – and are likely to be living there well into next year.

Expressions of interest? The throng gathers. Expectation is high. The envelope is opened … and there’s nothing in it. (OK, in truth there’s not even a throng, an expectation or an envelope.)

$20 million+? Those houses destined to crash through? They crashed.

What’s wrong with 8 Myoora Road, 11 Grosvenor Court and 26 Albany Road? Their prices. Those buying at the top end know full well what they are really worth in this market; and that’s as far as they’ll go.

And still there are agents prowling the leafy streets, insisting there’s a buyer behind every bush. Conjurers? Illusionists? Delusionists?

The latter. Some still urging their clients to auctions hoping, presumably, for the one or two people left on the planet who are yet to hear the news. And the crisis in auctions is rapidly spreading from the top end down. How many pass-ins? How many millions wasted on advertising before the penny finally drops?

Next year?

We don’t see a recovery coming early in the year. Most activity is likely to be among agents retiring, agencies merging and agencies simply disappearing.

As, for this year, will we.

We’ll see you when the circus hits town again. And hope you have a good break.

David Morrell

Bayside: Hampton? Hampton!

Yes. Hampton. Its highest clearance for the year (7 sold out of 10 offered). And the rest of Bayside…

Don’t ask.

Back to Hampton:

• 8 Bolton Avenue – neighbour to a number of the well-heeled and well renovated and extended – had early competition from two buyers, was initially passed in and later sold for $2,250,000. In these uncertain times, both buyer and seller should be breathing sighs of relief.
• 5 Margarita Street, an old cal bungon 780 sq m sold for $1,575,000 and will probably soon ring to the sound of the bulldozer.
• 7 Linacre Road – that elusive EOI has been resolved: vendors held out for $3.3 million and eventually settled for $3.2. They should not complain.
• 22 Hoyt Street. Sold for $2.8 million. A good week for some.

Sandringham? 3 out of 6 sold, but not on blue chip Victoria Street. There is was 0 out of 2.

• 10 Victoria Street, passed in at $1.8 million, reserve $1.99 million.
• 63 Victoria Street, passed in at $1.4 million, reserve $1.525 million.

The Bentleighs? Don’t ask. Just 6 from 16 sold.

The Brightons? Just 5 from 11; including two who wisely took the money and ran prior to auction.

Stand-outs:

• 6 Wellington Street. Old charmer in need of some attention, on 1226 sq m. Sold post-auction for, we believe, #3.2 million.
• 51A William Street. Brand new, cleverly conceived, but no sale. Passed in at $2.1 million, later offer of $2.375 million and a reserve of $2.5 million.

Clues for next year?

There are many houses still waiting at the altar and following the next couple of weeks (we expect more carnage) there will be still more – so if you are looking, the timing is very much on your side.

That said, the games being played now – and which we expect to continue into the new year – suggest that Tip-Toe Through the Minefield is the new Monopoly.

One agent’s Expressions of Interest is conducted nothing like the next. Transparency is close to zero. Hybrid auctions – and even “private” auctions – are being invented and reinvented. There may be painful lessons for the unwary.

But you have the ultimate weapons: time, and choice. If you don’t like the ways the games are being played, play elsewhere. You’re in no hurry. When the other side understands that, there’s a far better chance they’ll play fair.

Enjoy the break. See you next year.

Damian Taylor

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Not one market. Many. Where you are buying/selling, and when, all count. Now more than at any other time of the year; and more so this year than most.

Some bites:

Traction. Some.

Surprise! Sales are being made at the top. More often than not, post expression-of-interest and, for the few remaining supreme optimists, post-auction. What are the odds?

Around 50% chance of selling if you’re going to auction (but pick your agent carefully, some are kicking goals, others are finding the boundary) — and if you are going to auction you have around a 50% chance of attracting multiple bidders, 50% of not seeing a single bid and a 50/50 chance you’ll still be living in hope in the new year.

One to watch: 19 Haverbrack Avenue, Malvern. A Dec 17 auction suggests the owners have already bought elsewhere and the urge to sell will be a factor. And it will test our belief that taking anything over $5 million to auction in these uncertain times can be an uncertainty too far.

Section 27 says we’re living like SYD

The conventional wisdom is that top end MEL is not like SYD. That the harbour-viewers are geared to their we’ll-borrow-all-we-can eyeballs and when the equity markets sneeze a great chill blows in from the heads — while MEL is conservative, rational, old-school and immune to temptations such as mortgages.

Guess what. We’re not. A significant number of the Section 27 Vendors’ Statements we’ve been hearing about indicate some very aggressive gearing. Would this help explain the late run of properties trying to find buyers so close to Christmas?

Not all. Certainly not two couples who, last week, each found over $5 million for apartments in Walsh Street

 Under $3 million? What does the Council say? 

Those houses under $3 million which tick all the boxes are still attracting the interest of numbers of potential buyers. The rest are struggling. Many, as we’ve noted before, are going for less than council valuation — and councils aren’t famous for getting ahead of the market (nor are ratepayers famous for accepting valuations which are higher than rock-bottom).

So, yes, there are bargains but you still have to ask yourself whether you can live long-term with any compromises you may have to make.

Too early to talk about holidays?

The real market is post-Christmas, but it’s around now that we start receiving enquiries about what’s what on the coasts and country — but then it was only last weekend that we bought several holiday houses on behalf of clients. The good news (for them): there was little competition.

There will be one serious pre-Christmas top end test: 3509 Frankston-Flinders Road. It’s an expressions-of-interest exercise chasing $10 million and should provide a signpost for eight-figure post-Christmas activity.

While out of town, what’s been happening in Mount Macedon over the last couple of weeks? Why is everyone wanting to sell?

Broken records

58 Howitt Road, Caulfield North. Around $6 million topped anything sold in the area. Ever.

1 Towers Road, Toorak. Not a record. Yet. A cutting-edge test of whether vendor expectations and market reality have a great deal in common. A few square feet shy of an acre in one of Toorak’s pricier slices. Just may be the highest price ever paid for a bed in Melbourne. Its sale via expressions-of-interest climaxes (or not) tomorrow.

Going once, going …

Auctions without end, when the auctioneer just doesn’t know it’s all over. When “Last call!” leads only to “I’ll just go inside and see what the vendor thinks.” — after the property has already been announced as being on the market.

It’s grubby. It should go not once or twice, but forever.

David Morrell

Bayside: lost weekend in Brighton

A week can be a long time in real estate.

A week ago there was something that looked like a light at the end of Brighton’s tunnel. It turned out to be a couple of kids playing with matches.

Last weekend Brighton’s very own Super Saturday — 31 auctions — proved to be as wet as the weather. Yes, 16 sold, but five of those were sold-priors so Saturday’s sold-at-auction result was in fact just 35%.

The sold-befores tell their own stories: One buyer, one reasonable offer, one agent prepared to advise that the first offer is often the best and no more so than in this market. You’ve seen the alternative: 35% — and those which did sell under the hammer were well under the median prices usually seen in these parts.

So. What went before?

• 4B Lorac Avenue, Brighton. $2,425,000
• 8 Orchard Street, Brighton. $1,730,000
• 5 Binnie Street, Brighton East. $1,950,000

What didn’t go at all?

• 20 Cole Street passed in on a $4,000,000 vendor bid, reserve a secret.
• 1 Martin Street passed in at $3,500,000, a later offer of $4 million, and vendors with 5′s in their eyes. Could be a very long wait.
• 2 Collins Street passed in at $2,975,000. Later offer $3,050,000. Reserve an approachable $3.3 million. Will sell.
• 24 Victoria Street passed in at $2,625,000. reserve $2.8 million. As land only, that’s a generous $2900/sq m ($273/sq ft). Are we missing something?
• 13 Holmhurst Court passed in at $2,000,000 with another $200,000 offered later. Reserve is $2,400,000.
• 375 St Kilda Street passed in on a $1,700,000 vendor bid. Reserve is $1,850,000

And a lot more of the same. But we don’t want to be seen as depressing the market.

And then came …

Hampton and Sandringham. Silence. Not golden.

More silence? 7 Linacre Road, Hampton. An expressions of interest campaign which closed last Monday. Nothing heard. Too much to ask for some transparency in the result?

Beaumaris and Black Rock. Hardly a peep.

The Bentleighs. Return from oblivion. 18 offered, 12 sold — but nothing over $1 million. “The pointy end has been well and truly blunted.”

Three weeks. All that’s left before the shop shut signs appear. A late rally looks a lot less than likely and with the number of recently-listed properties likely to remain on agents’ books into the new year, buyers could do well to wait for the January sales.

Damian Taylor

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Greetings, sports fans. Big weekend was had by all. Winners and losers, hard-hitters and duffers out in force while a squillion spectators had a ball.

Not golf: real sport. Real estate.

The winners were clear by about the third hole: buyers, no handicap.

There were even comedy acts for the children. One, supposedly a professional, opens the bidding at a shade under $2 million. Instant vendor bid (typical of this agent) raises that by $10,000. The professional bids again, adding … $90,000! A knockout bid! Against … who? Themselves? Can this really be happening? It gets worse. Post-auction negotiations put another $30,000 of the client’s money on the table before this comedy is over. We’re still shaking our heads.

When around 10 properties over $3 million are being passed in for the couple which sell, post pass-in is the time to play. Over just the past week we have bought a number of properties for more than $100,000 under their pass-in figures (one, notably, for $500,000 below an offer made last year).

Do the homework. It’s high-risk, but when you’re sure you are the only bidder, pick up the phone: “We won’t be at the auction. Call us after it’s passed in and we’ll talk.” – helps take the air out of some tyres.

More fun: agents re-labelling B & C properties which have failed in the hands of other agents and packaging them afresh. Same old product inside. Who do they think they’re kidding?

Off-market and out of the limelight there are some gems glinting in the dark. It’s Christmas!

And so to golf:

A Shark’s good walk was ruined over the weekend. Someone called Tiger did quite well.

David Morrell

Bayside: Nothing but the facts

Inspired by Joe Friday (‘Dragnet’, if you’re old enough to remember), “…just the facts, ma’am”.

Recent weeks. Bayside tables turn: Brightons up, Bentleighs down.

Brightons: 16 auctions, 11 sell (but a lot of rain fell on those over $2 million).

East of Thomas Street? Wheels fall off. Two sold from 15 offered. One rate cut was not enough.

Meanwhile, back in 3186:

• 7 Rothesay Avenue. Stumbled past $2 million to sell at $2,050,000. Highest on the day.
• 14a Downes Avenue. New townhouse. Comes close to $2 million.
• 366 St Kilda Street. corner of Elwood. Another townhouse. Gone for $1,760,000
• 4 Gray Street. Land (680 sq m) value. Gone for $1,500,000
• 43a Carpenter Street. Gone. $1,107,500

Higher up the scale, the weather changed. All passed in:

• 2 Snooks Court. $3,000,000 vendor bid, reserve a secret
• 27 Chelsea Street. $2,600,000 vendor bid, reserve another secret
• 28 Collins Street. $2,200,000 vendor bid, reserve not a secret: $2,350,000
• 58 Champion Street. $1,400,000 vendor bid, later offer $1,500,000 reserve $1,680,000

Hampton and Sandringham: 10 auctions. 5 sold.

• 17 Imbross Street. $1,495,000. Highest on the day.
• 21 Grange Road. $1,332,000. Sold.
• 10 Mills Street. $1,325,000. Sold.
• 15 Sims Street. Still waiting at the altar. Vendor bid: $2,000,000. Reserve: $2,100,000.

The Beaumaris/Black Rock malaise (do they still hold auctions there?) seems to have infected the Bentleigh twins. No nurse in sight.

Tough week for some. And more to come.

Damian Taylor

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“I’d sell, but no-one is buying…”

“I’d buy, but no-one is selling…”

“Did you see what the place down the street went for?”

“Really? It did?”

And so the dominos begin to fall.

Over the past several weeks we’ve seen more action than we have seen all year. Not enough to say the market is back on the way up but, at least at the top end, sellers are reappearing and there are buyers waiting to meet them.

Meet them at the right price, that is. The usual pre-Christmas desperation among buyers is less in evidence. Most have done their homework, know how much to pay and won’t be panicked. While we’re a little surprised at how many offers have been taken up – we had anticipated more slack, more people sitting and waiting – in most cases there is still only one buyer in negotiation and so the conversation is all about price.

It’s the vendors who are anxious. The post-Christmas hiatus looms. Sell now or chances are the summer will be over before you’ll see your name on a cheque.

Yet still the games are played. The lemons listed as diamonds (and priced accordingly) in the hope that the fool and the money will soon be parted.

There are also agents – at the top end one in particular – who are all over the shop; including promising some clients the earth to gain listings and then delivering little more than apologies.

The top end is a very small world and we’ve seen all this before. Word gets around. Over-promising agents may not get it, but it’s their own futures they’re putting on the line.

Other career-limiting tactics?

• The auctioneer who belittled an old and valued (and extremely valuable) client over the weekend. Expect that agency to be overlooked in future transactions.
• Auctioneers who draw out auctions for no more than the joy of hearing their own voices. All over in five or ten minutes is no longer enough. Going once twice and thrice is only a prelude to all finished all done and it’s still not over. They promise an end and then leave the highest bidder gasping while they start all over again. Sold is sold, gents. Don’t be surprised if you start seeing those highest bidders walking when you’re treating them like idiots.

Dominos that fell?

• 47 Kinkora Road, Hawthorn. $5,660,000.
• 48 Mathoura Road, Toorak. $5,220,000.

Two sold by auction at over five million. We haven’t seen that for a while. But both were hen’s-teeth 2-storey Victorians; and big period houses are rarely kept waiting.

David Morrell

Bayside: Not a lot of room at the top

With the exception of Beaumaris and Black Rock, Bayside was generally steady over the past week – reasonable auction activity and a handful of private sales.

That said, most of the action is in the lower and mid-ranges. Activity at the top end is relatively sparse. With more on offer, the next few weeks will be severely testing at the top end but if the weekend before last is a guide, there will be interest if prices are sensible.

Big if.

Judging by two significant properties we have seen over the past week, there are still vendors who are living in outdated dreams. $1 to $2 million out of date by our reckoning.

Blame the vendors? Yes. Blame ambitious agents who have been buying listings? Them too.

It’s hard to see any sense in testing the market in the current climate. If you want to sell, price correctly and negotiate sensibly with buyers – they’ve done their research, they know how much the market will bear (even, dare we say it, they know that with greater authority than some agents).

The weekend?

The Brightons did reasonably well: 13 auctions, of which nine sold; mostly in The East.

• 54 Shasta Avenue sold for $1,655,000. Big block – 1178 sq m – working out at a somewhat modest $1,400/sq m or $130/ft.
• 11 Sunlight Crescent passed in to a vendor bid of $2.5 million followed by an offer of $2.62 million. Reserve? Undisclosed.
• 18 Connor Street passed in to a vendor bid of $1.95 million. There was a later offer of $2.025 million. Reserve is $2.175 million.

In Brighton itself, 23 Norwood Avenue failed to excite and was passed in on the auctioneer’s $1.95 million bid. The reserve is $2.2 million.

Hampton and Sandringham were busier: 12 auctions between them with just over half selling.

With a number of these results being reported as undisclosed, it is a reasonable assumption that someone was not excited about the price received.

The Bentleighs bounced back with a full book of 20 odd auctions being scheduled and a total of 13 clearances. Again the upper end struggled with both million dollar plus offerings falling short.

• 16 Coates Street was passed in on a $1.25 million vendor bid, reserve is undisclosed
• 188 Centre Road passed in on a $1.1 million vendor bid with a later offer undercutting that (and why not?) at $1.075 million. The reserve is $1.175 million.

As mentioned at the outset, Beaumaris and Black Rock underperformed. Just two sold in eight auctions. Not sure what is in the water down there, but for now it can’t be the favourite tipple of the local estate agents.

Damian Taylor

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It seems there’s been a conspiracy among the boardroom auctioneers over the past couple of weeks: don’t let anyone get home in time for dinner.

Surprise, surprise: there’s been some action. Horses have left stables, the tennis set has its whites on.

15 Chastleton Avenue, Toorak, with four bidders, bolted: $300,000 above reserve (and was still a sensible price).

Three tennis courts with houses attached popped up in Linlithgow Road.

And some rank outsiders also bolted home. The recent construction at 33 Coppin Road, Hawthorn for over $8 million? Given what the site cost not all that long ago, we couldn’t make it work on our calculator.

And while Spring is yet to trouble a number with eight figures, that may still change if a vendor or two comes back to earth. There’s interest, we’ve seen it, but not in the stratosphere.

And then there are the agents. The question we are most often asked after “How much?” is “Who should I be dealing with?”

Our view:

1. Kay & Burton. They know a deal has to work for both sides.
2. RT Edgar. Had fun in court, but now being busy clearing a backlog that’s been around since Mr Malthouse was Collingwood’s only coach.
3. Marshall White. Don’t ask.

And now Edward de Bono is coming to town and agents are lining up to learn about the latest thing in thinking (a new experience for some). Will he suggest that auctions aren’t the way of the future? That EOI’s and private sales have passed their best before dates? Will he tell them about something called the internet? Will they wonder why they’re not attending a webinar instead of having to put Dr de B to the inconvenience of attending in person?

David Morrell

Brighton booms, Bentleighs bust (briefly).

18 auctions in Brighton. Testing times. And … wait for it … 10 sold! Three out of three in the Golden Mile; although prices tended toward the whiter shade of pale (the white of vendors’ complexions, that is).

1. On the beach, 8 Mytton Grove, on Sandown Street beach, overlooking the marina. Just 613 sq m and a similarly modest house, but two bidders whose enthusiasm at times defeated the auctioneer’s arithmatic. Sold, eventually, on the money at $6,050,000.
2. Around the corner at 8 Moule Avenue. Modest house and land (658 sq m) package. Price a suitably modest (even the agent thought so) $2,310,000 – $325/foot.
3. St Minver, 15 Dudley Street. Attractive attic-style house on 1000 sq m. Sold around August last year for a little over $5 million. Saturday’s auction kicked off with the auctioneer offering $4 million. No response. Auctioneer tops himslef and bids $4.4 million. More no response. Passed in, but later sold for, we suspect, not a lot more than the pass-in figure.

Elsewhere around Brighton:

• 6 Byron Street. Close to sold with a post-auction offer of $1,875,000. Declined. Wise?
• 299 New Street. Percy Grainger’s birthplace, but it’s changed somewhat since (the fruit trees have blossomed into up-end apartments, the old house has had a serious makeover). The only music heard was the auctioneer’s $1.7 million. Passed in.
• 190 Church Street. Sold for $3,112,500, somewhat shy of the $3.5 million plus being touted less than 12 months ago.
• 92 Wilson Street. Sold following a successful (for the vendor) EOI campaign. Price believed to be $2,880,000.
• 14 Comer Street, East Brighton. Wrapped up post-auction a couple of weeks ago at a respectable $2,350,000.
•  3/2 Dendy Street. Privately sold for $3 million.

A little further down the Bay, 107 The Crescent, Sandringham, has finally sold for a figure believed to be in the high $2′s.

Hampton and Sandringham had eight auctions with 50% sold. Highest was 7 Francis Street at $1,500,000.

Beaumaris and Black Rock have been flying under the radar in recent times. Auctions a hive of inactivity, but private sales are happening.

The Bentleighs barely raised a pulse on the weekend. Just three sold from 10 on offer, but any more interest rate cuts could quickly change that.

Overall, listings have jumped in the past fortnight – leaving little time to conduct sales campaigns before the Christmas closure. Agents with full books will no doubt be delighted with the appointments and the square centimeters in the media, but may soon despair of their chances of finding buyers for every property.

Genuine sellers with realistic late-2011 expectations will be well met by an emerging pool of buyers now willing to commit – and in fact anxious to buy ahead of the new year. And there will still be those – from both sides of the fence – for whom the time never seems right and who will still be on the merry-go-round come next year.

Damian Taylor

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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. …

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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