Listen …

Silence. It’s all around us. Silence.

First comes the expressions-of-interest campaign, followed by … not even an echo.

Nothing. No agent chest-thumping. No shouting it’s all joy again. Nothing. Either the sale has not been made or it’s at a price the agent would rather not admit to.

All of which, if you read the signs, suggests one of two things.

First, that what was on offer was not all that special – for the AAA top end is still remarkably resilient.

And, second, for the rest, for the also-rans, that time is very much on the buyer’s side – negotiations we have recently been a party to have been running into months; and prices have been softening throughout.

But if you can’t read the signs – as can too-easily happen to recently-arrived overseas buyers – it’s too much cash too quickly and an eon to regret.

10 Rathmines, Street, Toorak. Passed in on a vendor bid of $4.3 million – and an immediate offer (accepted) (no surprise there) of $4,588,000.

But if no-one else wanted it at $4.3 million, why tip in close to another $300,000? It underlines, again, that if a negotiation takes two minutes, someone has paid too much.

In this market, anything over $3 million has a very small chance of selling under the hammer and maybe a 40% chance post-auction. Everything points to patience.

As we have commented here before, patience can be a very profitable virtue.

David Morrell

Bayside: reality is catching

When there was bidding at this week’s Bayside auctions it was mostly lackluster and infrequent. No surprises there.

Highest price was 1 Norwood Avenue, Brighton – a comfortable single-level brick bungalow on an exceptionally wide allotment of 1050 sq m, with a favourable northerly rear orientation and less than 100 metres from the beach. It’s been an on-again, off-again story. Three months ago the agents were talking above $3 million and reported the sale was on at $3.2 million. Then off again. Things cooled during the cooling-off period. Then Saturday’s reality check: One bid of $2.855 million and then passed in. Sold soon after for not a lot more.

There was another outbreak of reality at 11 James Street, Brighton. Over two years(!) ago, the hope was for more than $2.2 million. Now in its third(!!) year on the market, it went to auction on Saturday and two bidders took it to $1.825 million before it was passed in. It sold a little later for about the same figure and sighs of relief all ’round. !!!’s to agents and advisers.

5 Birdwood Avenue could use its own reality-check. Passed in on a vendor bid. How much was bid? Not telling. What’s the reserve? That’s a secret. Will we see a sale at a price that justifies all the mystery? Don’t think so.

In Brighton-used-to-be-Gardenvale, 144 Cochrane Street – on larger-than-usual 840 sq m – was expected to do well and has apparently sold for $2 million.

A slice of history sandwiched between Nepean Highway and Landcox Park created its own kind of record over the weekend. Half a street went to auction and more than half sold. 5, 6, 7, 8, 9, 10 and 11 Tregenna Court, Brighton East, had been in the same family for over 100 years. On Saturday four of the seven properties parted company for between $722,500 and $810,000 – and at those prices the remainder are unlikely to be around for long.

Further need for reality? 76 South Road, Brighton-but-nearly-Hampton got as far as a vendor bid of $1.9 million, later topped by an offer of $2 million which was gazumped by a reserve of $2.3 million and would someone please pass the smelling salts.

Overall the Brightons scored 15 out of 25 sold, but most were at the lower end. Some worth keeping an eye on where the big kids play are 112 The Esplanade, 43 Seacombe Grove (about $10 million) and 4 Wellington Street (around $5 million).

Not a lot happened in the rest of Bayside, with the exception of the Bentleighs – 9 out of 10 sold.

Damian Taylor

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Fear and greed have long been given the honours as the great drivers of the stock market and they’re probably at work in just about any market you can name.

But the real estate market …

The real estate market dances not only to its own drum, but to its own orchestra.

To fear and greed add ignorance and ego, avarice (greed underhanded), cunning and common sense.

Most of which was out and about over the past week.

A couple of egos went to a my-wallet-is-bigger-than-yours war in Malvern and the “winner” managed to spend more per square metre than would have bought well in Toorak. Winner last seen on Sunday morning in foetal position under kitchen table?

Fear and greed? Look into the eyes of most (not all) agents while they tell you hand on heart that the market has bottomed and all is rosy for the clever. Look a little deeper and see whether they speak from knowledge or desperation.

Avarice? Avarice is everyday. Common as the Autumn chill. The vendors who insist they have an offer half a mill over the odds and it takes an honest agent (yes, they happen) to tell them to get real.

And the greed is without season. The agents who promise the outrageous so ignorant sellers will give them the work (and advertising budget); sellers who are then left with one pathetic vendor bid when their auction inevitably collapses. The guilty parties? Look for the agents with the greatest number of failed auctions. You won’t have to look far.

The dollar factor? Overseas interest appears again on the rise but is yet to translate into significant activity.

Most optimistic prediction? Good bottle of red. By the fire.

David Morrell

Bayside: April showers?

But May storm clouds gathering.

Following a dismal month in April for Bayside real estate it was obvious that agents and vendors were hanging their collective hat on a resurgent May, particularly on the back of a .5% drop in official interest rates.

But so far not so good; and more so if you are trying to offload a property in the mid to top range.

What little momentum that may have been developing at the top end had stopped dead by the end of March – the only exceptions being those rarely available homes with the lot.

Forgive the following (stats! we’re reduced to stats!) but it’s the clearest snapshot of what has really been happening in Bayside between the end of March and the weekend just passed.

The Brightons. Total reported sales: 62

Highest reported price: $3,255,000 (22 South Road Brighton)

• Average price: $1,250,000
• Median price: $1,180,000

With only six reported sales over $2 million, the top end is near non-existent and the middle range is struggling.

62 sales might seem a reasonable number and, yes, some firms are still writing reasonable numbers. But when one of the leading marketing agencies and a boutique firm at the other end of the food chain each admits to only one sale for all of April, you can almost feel the pain.

Beaumaris/Black Rock. Total reported transactions: 26

Highest reported price: $2,400,000 (424 Beach Road, Beaumaris, early April)

• Average price: $1,016,000
• Median price: $900,000

A smaller catchment area with few sales, but again not much happening in the middle or top end.

Hampton/Sandringham. Total reported transactions: 27

Highest reported sale: $1,780,000 (164 Beach Road, Sandringham)

• Average price: $ 915,000
• Median price: $745,000

Similar story. Most sales in the lower quartiles.

And yes, Easter, school holidays and Anzac day can all be used as reasons (excuses?) which explain why things are struggling, but in reality we are still lost in the forest and can’t escape because of those blasted trees.

If a 50-point interest rate cut doesn’t provide the answer, will the budget tomorrow night do the trick? Hardly.

How about a chainsaw?

The road ahead looks long and the going slow.

End of sermon.

What, then, shook the world over the weekend?

Not a lot.

The Brightons saw a whopping 26 scheduled auctions with three sold prior and 14 selling on the day, although many were passed in and negotiated later.

42 Bay Street was offered with a quote of $2.5 million+ by its new agent following some 12 months under the previous firm, although the expectation was then in excess of $3.5 million. Two bidders competed gently before it was passed in at $2.635 million with a sale being negotiated a little later at a little more. (Although undisclosed word has it was around $2.7 million, almost a cool million less than initially sought.)

A mid-week twilight auction at 51A William Street finally got this one away after a previous campaign with another agent never quite made it. Against a initially hoped-for $2.5 million plus, cooler heads prevailed and a more realistic $2.2 million was accepted.

Of the handful sold prior, 38 Sussex Street is noteworthy.

A good period house in a great street – in terrific condition but still potential to do the big number – an early but realistic offer of $2,525,000 was received within days of it being listed. A combination of sensible expectations and a genuine pre-auction offer was enough to see a sale made. It does help if you are in the know.

10 Kent Avenue in the Golden Mile demonstrated a different trajectory. It began with fruitless gavel-swinging with an off-the-radar expectation of $4.5 million plus. A change of agent and a bite of reality brought that back to hopes of $3 million plus – which did bring two bidders to the party and an offer of $3.3 million. No sale as yet, but it no longer looks like a bridge too far.

Further down the bike path and into Bowie and Black Rock, the songs they sang sounded a lot like the blues.

• 4 Burgess Street, Beaumaris passed in on a vendor bid of $2.2 million, later countered by an offer of $2.15 million – its reserve is $2.3 million.
• 286 Beach Street, Black Rock another triumphant vendor (not) at $1.85 million – its reserve is $1.95 million.

Little heard in Sandringham, but a fair bit of shouting in Crisp Street, Hampton;

• 18 Crisp Street had two bidders and sold for $1,535,000
• 37 Crisp Street had a vendor bid and is now for sale at $1.45 million.

The ever-reliable Bentleighs … weren’t. 14 auctions, 8 sold. Demonstrating again that interest rate relief is not alone enough to allay Fear of Buyer.

Damian Taylor

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David Morrell

Bayside: back next week …

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The siren sounds. The players run on to the field. The crowd’s roar … can barely be heard.

Where is the crowd?

Players wander, waiting for the bounce. And what players: the new kids – seen little and know it all; the old stagers – know every trick in the book and need to because their lungs and legs ain’t what they used to be; the plotters and strategists – creating plays no-one understands (including, sometimes hilariously, themselves).

What a grand old game it is!

Waiting for the bounce.

Waiting.

Waiting.

Something’s missing. No men in white. No-one to bounce the ball. The crowd (all three) starts a slow clap.

At last there’s movement from the umpire’s race.  The consumer’s champions – the arbiters of fairness – are on their way!

They’re here!

The umpires wander on, making their way toward … where exactly? Blinded by the light. The opposing captains exchange a shrug and bounce the ball themselves. Unless a player runs into one, this game will proceed umpire-free.

And that’s how the big game is played today in Melbourne. Real Estate Rules is mostly no rules and the players make it up as they go. Desperate times and desperate measures.

Super Saturday? Worked for some, but there was no roaring crowd at the top end. Under $5 million with a realistic price had supporters, but above that the silence near-deafened.

Anxieties. Sellers and agents facing three weeks on the bench after Easter – and longer for the top end teams. Deal now or deal with uncertainty for another month.

And so to the match report …

A staggering off-market play: 35 Stonnington Place. An overseas buyer goes for a $6.25 million screamer, rising well above a pack that couldn’t see why. Two agents claim the credit. Huh?

A quiet goal is kicked at 11 Moralla Road. Original expectation was over $6 million and it just sneaks past the post at a shade over $5.5 – which is about right.

4 Grandview Grove, Prahran, is taken by three bidders to $4.57 million. Much hyped, but not the $5 million they were chasing last year.

14 Lysterville Avenue, Malvern. Quoted at $2.8 million, sold for $3,591,000. Quote Of The Year winner so soon in the season?

Off the field …

• some failed expressions of interest have succeeded in extra time … but only after their prices were brought back under the salary cap
• several sales made with no agent in sight – portent of things to come?

And still there are agents who are playing entire games in their heads: “Yes, we’ve got an offer.” “Yes, it’s in writing.” And the pretence continues even in the face of stark, stark reality. Extraordinary.

David Morrell

Sun shines in Bayside

A big week for the end of the first half of the Autumn season. Some ups, some downs, but eventually more up than down; although the jury is still out at the very pointy end.

The sense is that, despite the naysayers, the economy is in a sufficient state of health to encourage buyers to spend. The flurry of the past week may be as a result of building confidence and a little bit of one-in-all-in, or it may simply be a reflection of nothing much else to choose from. There few new listings for most of April and May is still a big question mark at this stage.

And so the sun shone over Bayside: 70% clearance rate over the weekend and smiles everywhere you looked.

OK. Not quite everywhere.

Beaumaris and Black Rock continued their march to a different drummer: just one property sold from the ten auctioned.

6 Love Street in Black Rock was the solitary success. An eight room brick veneer on a generous 1047 sq m, it sold for a respectable $2,220,000 – proving it can be done.

Of the rest, 424 Beach Road, Beaumaris topped the pass-ins at $2,350,000 and a later offer of $2.4 million was still not enough to reach a reserve still shrouded in mystery.

The Bentleighs bounced. The highest clearance rate in recent memory: almost 85%. Just three pass-ins from eighteen auctions.

Top of the heap were 2/79 Brewer Road at $1,105,000 and 4 and 6 Matthews Road at $1,100,000

Hampton and Sandringham had a 75% clearance with nine from twelve plus a handful of private sales.

The Brighton twins had an extraordinary 28 auctions, so their 70% clearance rate is still impressive.

Top billing goes to an older style single level house on 930 sq m with two street frontages at 29 Cosham Street. It was passed in with two bidders at $2.85 million and following some nimble footwork by the auctioneer it sold for $3,033,000.

Just across Nepean Highway, a Victorian mansion at 1 Clive Street was scheduled to be auctioned but was sold during the week for, the local chatter says, about $2,750,000 – something of a discount to its previous sale three years ago at almost $3 million.

57 North Road, on the corner of Foote Street, is something of a local landmark; even on its modest 633 sq m. Bidding started on the vendor’s equally modest $1.75 million and it eventually sold for $2,020,000. The smile on the buyer’s face suggests the Easter Bunny came early.

Among those the Bunny passed by was the renovated period house on 960 sq m at 727 Hampton Street. There was a lonely vendor bid of $2 million, later equalled by a genuine offer, but a reserve of $2,250,000 suggests it will be a while before that egg is cracked.

5 Tynefield Court passed in at $1,850,000. There has been a later offer of $1,900,000 but that is apparently not near enough to an unpublished reserve.

3/7 Grantham Court passed in $1,700,000. There’s been a later offer of $1,830,000 but that reserve, too, remains a secret.

And a couple of private sales that were cleaned up during the week:

• 13 Halifax Street – exactly $3 million
• 20 Birdwood Avenue – somewhere in the higher $2 millions

And we’ll be back after the Easter and school holiday break.

Damian Taylor

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There is no normal anymore. Everything is the exceptional.

Nothing’s happening up in the stratosphere? Right. With the exception of two off-market sales – each over $12 million – in the past week. Not cheap. Not forced sales. Not 10-15% discounts. Just four parties who wanted to transact quietly and to get on with their lives without all the noise that deafens mere mortals at lower climes.

And then came an exceptional “private” auction at 11 Bates Street, Malvern East. The rules? First rule is to put your first bid on paper before you’re invited to attend – after that there are no rules. The agents make them up as they go. It began with a bid for $5.9 million right there on a piece of paper. But “the bidder” didn’t show (sorry, suspicious minds). And then an auctioneer asked for bids over $200,000 above that. Silence. Then an Innocent Party raised her hand to offer another $50,000. Passed in. Let the games begin. One Innocent Party, five agents. Equal contest? Some serious money later, it was over.

Contrast that sitting-in-the-dentist’s-chair-waiting-for-the-drill scene with what might have been: street-side on a Saturday afternoon with a crowd of locals creating the buzz and everything on the up-and-up.

And then from the what-should-always-be-the-exception-but-isn’t dept: 14 Airlie Avenue, Prahran. Multiple bids from four, three and then two bidders before the property is passed in at $2.5 million. Right, you’d reckon: the property’s value has now been openly established by the market. And 10 minutes later it’s sold for $2.65 million. Pardon?

Kids, if ever you are in this situation – if ever you have bid what is probably already too much for the “right” to negotiate – the first thing to do is turn to the under-bidders and ask whether they have any further interest. No? Then the market is you. Now is the time to park your emotions and to make what you think is a reasonable offer – and then wait. Do not be harried or hurried. The cards, at last, are in your hands. You should not pay more money to sellers and their agents than the rest of the market is ready to pay. There are charities which could really use that money.

Exceptional area? Inner city. Especially below $2 million. They’re brawling in the streets – some of the biggest stoushes you’ll find beyond late-night King Street – and it’s leaving some vendors as clear winners.

What’s up? Lack of choice. Holidays looming. “I’m sick of looking.” And the worst reason of all: “I’m not gunna be beat by him!.”

Walk away. Or toss a coin. Just don’t let the emotions take over, as in…

The house next door has come up for auction and he’s decided to buy it. Slight complication: So has his ex. Cue hammer and tongs. No holds barred. And soon they’ll be neighbours. (Someone should be acquiring the film rights.)

Us? Commuting between MEL and SYD quite frequently. Sign of returning times?

David Morrell

Bayside: Belles, ball.

… but not everyone gets to dance with Princess Charming.

Most of the action in Bayside centred on the 20 auctions scheduled for the Brighton belles.

With a clearance rate of 50% (apparently the new not-exceptional), both pass-ins and solds were spread across the price spectrum.

Then add spice. There is nothing like a mortgagee auction to draw a crowd in anticipation of high drama and maybe a bit of blood – particularly when a top-end property is involved.

St Ninians Court, Brighton is the mayor’s office of the Golden Mile and number 8 has a privileged court setting and views of the bay at the end of the street.

The extravagant style of the house is unlikely to be regarded with great affection by the locals (“What were they thinking?” was muttered) and it was also not quite finished.

However it seems nab had had enough of the giving and was ready to take after the vendors’ efforts to unload their creation for over $7 million late last year had gone aground.

An extremely optimistic opening offer of $2 million was trumped by a still optimistic $3 million before the auctioneer decided to take charge of his own auction with a counter-punch vendor bid of $3.5 million.

Two parties then set in for the long haul and after $4.3 million was reached it was declared on the market. A third bidder then spoiled the party for the others and finally won it at $4.9 million.

A good auction? Most definitely.

A good result? Presumably so for the bank; but local owners and others selling in the area may look at that result through less than rose-tinted glasses.

At 20 Sussex Street, Brighton, a well built and fastidiously presented town house was offered in a mid-week twilight auction. Although the timing was a little out of the usual, that did not faze the assembled crowd of mostly locals and several bidders.

In the end, an entertaining auction resulted in a sale under the hammer at $2.27 million.

26 Park Street, Brighton, also went to auction. The quote of $1.8-1.9 million plus was greeted with scepticism by some and on the surface 954 sq m of prime Brighton land seemed cheap.

But it pays to do the research. Not only a single house covenant but a single-level height restriction are in place; presumably to protect the privacy of the members of the neighbouring and exclusive West Brighton Club (local goss has it that Robert Menzies once sang here). Having passed in after vendor bids of $1.9 million and $2.1 million, a sale was later negotiated. The whisper is that it went for a little over $2.2 million.

And then some balloons were pricked:

• 11 Alverna Grove, Brighton. A glass and steel statement (AKA … ask the neighbours) in a cul de sac overlooking the William Street Reserve. A good structure, well built and presented but a little obvious for some. Despite the best endeavours of the selling team, the only bid was the vendor’s $3 million – further discussions are welcome at the reserve of $3.4 million.
• 8 Berwick Street, passed in at $1.85 million, reserve unknown.
• 192 Dendy Street, passed in at $2,200,000 and there was a later offer of $2,272,000. The reserve is not available for public consumption.

A little further South, would-be vibrant Hampton and genteel-ish Sandringham were busier than usual and had a rather good day with all but five from the fifteen scheduled finding new owners.

Among the notables:

• 53 Victoria Street, Sandringham, a respectable $1.58 million
• 27 Grout Street, Hampton, $1,170,000

Of the 10 sold it is instructive that four were sold before auction. Take what you can while it is still there … or an offer that could not be refused?

Beaumaris had the best and worst, with a sound result in blue-chip Lang Street. Number 8 was sold for $1.9 million but nearby on the equally splendid Beach Road, number 435 failed to ignite with “no bids” being reported and a reserve now set at $2.5 million.

In neighbouring Black Rock, 21 Iluka Street (Bay aspect and Royal Melbourne environs) was almost as disappointing. There was an offer of $1,950,000 after it was passed in to the vendor, but a reserve of $2,150,000 suggests there’s work to be done.

McKinnon plays second fiddle to bigger and brasher Bentleigh, but following a record-creating sale at the weekend, bragging rights have moved house.

Many regard Rose Street as being the pick of the streets on the McKinnon Hill. Add $2,930,000 to that argument with the sale of number 41 – good house, on 833 sq m, and three well-heeled buyers took it to a price that would buy well in Brighton.

Next week? Big. Over 1,000 auctions before the tap is turned off for school hols and Easter.

We are living in exceptional times.

Damian Taylor

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It’s a buzz through the inner suburbs (with many of those who live there attempting to swat it). It’s a fever that’s supposed to spread to the auction scene, but to the untrained eye a lot of not very much was all there was to be seen.

Those not deafened by the buzz were watching the swans. All the real action was under the water. Six serious sales over the past two weeks – sales that would have been unlikely even a month ago – and all happening out of sight.

What can be told?

• Kooyongkoot Road, Hawthorn. Sold after an expressions-of-interest campaign slightly on the happy side of $8 million. (But not that happy, the vendors had paid over $9 million.)
• 16 Selbourne Road, Toorak. Another EOI. Quoted up to $5.5 million, motivated vendor prepared to sell at $5.25 million and received $5.62. Happy? Maybe. But the Council valuation was $5.5 million, which doesn’t suggest a speed record. (We’ve had a number of people comment that Council valuations are notorious for wildly under-estiamting real values … that’s the point. Sorry if it wasn’t clearer.)

Capital gains, anyone? Anyone? Only in the history books.

And still there are those who are dreaming there are people out there ready to pay 20% or more above what the market is saying. Those very same dreamers who were waiting for Santa and a big sack are now hoping the Easter Bunny will come hopping in. And if that doesn’t happen, there’s always Anzac Day, the Queen’s Birthday, next Christmas…

To top all that, there are some pot-holes causing great grief among top end agents. One of their newest darlings, the post-EOI boardroom auction, looks like it has just hit the wall. “It’s an auction,” says the new rule. “So what?” say the agents. “Cooling-off period, that’s what.”

Oh.

Not only must the auction be publicised for two weeks prior, the winning bidder in the boardroom has three days for a mind-change. And does. Leaving the agent to scurry back to the under-bidder to save the sale at a somewhat respectable price. Chances? Not good.

The choices are narrowing. An EOI without an auction option is potentially a dead-end. Auction-auctions are the last thing most in the top end want (who wants hordes of strangers traipsing through their mansion?). A “private” auction? How many potential buyers will bid before an auction even begins?

Does anyone remember the private sale?

An agent agrees to sell a property at a certain price and when buyer and seller agree, a sale takes place?

Too simple? Not enough income for agents to make it worth their while?

No big ad spend to keep their names up in lights?

Sorry. Terrible idea. Can’t happen.

David Morrell

Bayside: Spins wheels

More spin than traction?

The momentum that appeared to be developing in Bayside over the last few weeks may be short-lived. The weekend results had a pallid clearance rate and prices were less than stellar. Unless properties were exceptionally located and in exceptional condition, buyers went not 1¢ over the odds.

Take the temperature:

• a leading local agent gets cold feet over committing now on a small investment flat (and how difficult does that make it for him to persuade anyone to go where he won’t?)
• for the first time since the early 90′s, we’re seeing buyers only prepared to buy subject to the unconditional sale of their existing property – and vendors having no other choice
• because banks are tightening lending criteria, there’s talk of sales returning on Vendor Terms (you haven’t been around for 100 years and haven’t seen that before? It’s when the vendor is the lender)
• banks tightening lending criteria

So, for the agents, the road ahead is not as sunny as it may have looked. If you were on your bike you could say you have just crested a little rise and the road ahead is looking flat. With a bit of a headwind. Pedal. Pedal harder.

And yet …

Sales are still happening. They should be. This is, after all, one of the prime selling seasons. In fact there were over 60 sold in Brighton and Brighton East over the last 30 days; but the median was $1.2 million – a long way this side of a record. Most activity is at the lower end with anything over even $3 million countable on your fingers.

And still there’s a happy chappy wandering Hampton and Beaumaris telling all who will listen that he can’t get enough to sell. And telling no-one that it’s all down where you wouldn’t want to know.

The exceptions? The $3 million and over sales in Brighton. In the last fortnight:

• 55 Sussex Street. Passed-in last year after hopes of $4 million plus. Sold for a number which we believe was nearer 3. Ouch.
• 1 Norwood Avenue. A door from the beach and 1050 sq m. Said no to $3.1 million and yes to $3.2. Solid.
• 29 Seymour Avenue. 1100 sq m. Builder’s big house. Listed last year with something over $5 million on the ticket. Marked down, we believe, to closer to $4.5 million.

Straying a little: 241-243 Bay Street, on the corner of Clarkson Avenue, was auctioned during the week and sold at $2.58 million. It last sold for $1.2 million at auction the very day that we remember as 911; where a lone bidder was the only one brave enough to commit when everyone else was contemplating Armageddon.

And then, in Elsternwick: a well renovated and presented Victorian on close to 800 sq m at 29 Orrong Road. Several eager hands took it past $2 million and it sold for $2.1 million; making it the highest published sale price for the weekend.

Take an unaccustomed bow, Elsternwick.

In all: not many new listings that would interest you and still many left dangling from last year.

Damian Taylor

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Price is Right for Trophy Homes

Melbourne’s prestige market isn’t falling off a cliff as everyone thought a
month ago, says buyer’s advocate David Morrell. While the pulse at the top
end … The Australian Financial Review

It’s a yes-and-no time.

Has the dust settled?

Yes. And no.

Yes, still not much choice. Yes, some in the wings (with homes you would really want) waiting to see the signs post-Easter.

Yes, some sales over $3.5 million over the past two weeks (and thank you, pass-ins and newly realistic vendors).

Yes, up to $1 million. Yes, but less so, $1-2 million. Yes, but hen’s teeth, up to $4 million.

Over $4 million? No. Only off-market. Only very quietly.

61 Kensington Avenue, South Yarra? On the market for over three years. Over $12 million. Agents with offers? We believe that’s a no.

Highest-profile top end agent jumps ship and goes to work for the enemy? No.

True that the only agents who have done really well this year have sold their media adventure to their enemy? Yes. Always part of their plan? Take a guess.

True that Mercedes and BMW dealers are no longer rushing to answer agents’ calls? Yes.

True that some high-net citizens are heading for no-net and their estates are in the hands of the banks? Yes.

True that the banks are in no hurry? Yes.

True that everything in real esate is now as clear as a bell?

That’s not a yes.

Long weekend next weekend. See you in two.

That’s a yes.

David Morrell

Bayside: Signs of life?

Last week we cautioned that there was a way to go before the market can be called healthy or even robust, but after this weekend the patient seems to be out of intensive care and showing signs of what might be a kind of recovery.

That’s providing you exclude anything over $4 million. Still in Emergency. Still flatlining even while the hopeful (agents) circle with the Packer Whackers.

This week we’ve been 1st-hand at a number of real sales with real buyers. That’s plural. Buyers. Something hardly seen since late-ish last year.

What’s changed?

Those who believe that economic principles rule markets (but rarely seem able to time those markets) may have an answer, but from here it looks more like, eventually, impatience rules. The emotional, psychological imperative to do something rather than nothing. If the decision has been made to upsize, downsize, seachange or treechange has continually been put on hold, hold, hold, then eventually there comes a tipping point.

Those with calculators may also have figured that the market’s descent is now likely to be at or near the bottom and while there may not be prospects of any hurried upswing, they still have to get on with their lives and maybe this is not a bad time to start.

And so the caravan starts to move and when that’s seen, confidence creeps back aboard and those who see only downside are left behind. Or the caravan makes a large circle and comes back to where it began or even further back down the track.

Time, the only truth-teller in these things, will let us know when she is ready.

Here endeth the rumination.

What’s been happening in the real world?

In Bayside, most action has been in the Brightons; with the Bentleighs playing a supporting role.

The Brightons

23 auctions scheduled, 16 sold.

Highest on the day wasn3 Tennyson Street. Contemporary. Views of the Bay from its upper level. 975 sq m. Started with a (real!) bid of $2.7 million, went with three bidders to $3.1 million and was then declared on the market. Subsequent bidding by two cheery bidders was either excruciating or theatrical – depends on who you ask – and it was eventually knocked down for a solid $3.27 million.

19 St Ninians Road is … unusual; at least for this dress-circle location. A conundrum. Land-only or too good to knock down? Cream brick on a compact 617 sq m. A hopeful $2.7 million opening bid was countered by the vendor’s $3 million. All over. Until. Until a sold sticker went up outside. What’s next? Looks like a renovation. How much? Nobody’s saying, but think of a number a little over $3 million.

734 Hawthorn Road, East Brighton. Local landmark. Two-storey brick of indeterminate vintage. Double-block of 1400 sq m. Sold for a healthy $2.22 million. Probably a record for this part of Hawthorn Road.

More quietly …

327 St Kilda Street (corner of Mulgoa). One of last year’s hangers-on. 1500 sq m. Substantial brick. Great potential (= money). Initially looking for early $4 millions. Even though the agent is keeping mum, we believe it eventually sold for closer to $3.8 million.

192 Church Street (up the hill). Substantial single-level Victorian. Originally listed at $4 million. Our belief: $3.6-3.8 million.

3 Park Street, corner of Webb. Built by Ron Clarke after he’d finished running world records and before he ran for Mayor of the Gold Coast (and now he’s running for QLD parliament, will he never learn?). 930 sq m – somewhat less than when Ron had it after the tennis court was excised and a small house was built there (and sold late last year for $2.05 million). Two parties expressed interest and it sold to one of them prior to the closing date for just shy of $3 million.

66 North Road. First listed well over a year ago at $2.5 million + and third-agent lucky sold for, we believe, rather closer to $2 million plus change.

And then …

One of the better sales in Bayside so far this year: the off-market sale by negotiation of a largely unrenovated 1930′s house on over 2000 sq m of Victoria Street’s highly-desired sq m. Local goss is $3.4 million. Not a whisper from the agent.

Next?

A weekend’s mini-break before the push up to Easter.

Will buyer interest be maintained? Will it ever stop raining?

Back with an update the week after next.

Damian Taylor

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Right now we know of seven properties, each valued at more than $6 million, and two at more than twice that … all sitting on offers 10-15% below numbers which would entice their vendors onto the dance floor.

$66 million. You can buy a car race for that and still have enough for a coffee.

The question? Who is making this market? Buyer? Seller? Agent?

We’re still hearing of agents who promise vendors the earth to get their listings (and their advertising) and go on to deliver only disappointment. We see vendors expecting they’ll need to go no lower and buyers who will go no higher.

Impasse.

And then over the weekend there was joy in the streets. Record prices! Record crowds!

Really?

Kids, a couple of good results do not make a market (and all the joy was below $3 million, so it’s not exactly top end).

And we’re facing Easter and a long weekend.

In real estate there’s reality and there’s self-interest and the two are rarely on speaking terms (“Hello, Julia.” “Hello, Kevin.”).

So what is really happening? Some hard facts should begin to emerge with the results of expressions-of-interest* for:

• 11 Bates Street, Malvern, $6 million plus
• 33 Kooyongkoot Road, Hawthorn, $9 million plus
• 46 Canberra Road, Toorak, $4 million plus

Another hint? One of last year’s wallflowers, 21 Isabella Grove, Hawthorn, sold over the weekend for under $6 million. Sounds good, until you learn that the original expectation was over $8 million.

With 10-15% bridges to jump – percentages which can translate to millions in real money – there’s a lot of pressure on agents to perform and some are significantly better than others. And, yes, there are those agents who have painted themselves into corners by promising the impossible in the hope they could wear their vendors down on the way to a sale. They’re typically agents with short use-by dates.

At the top end, the word gets around.

* Agent’s term for: “My game, my rules. You’re the mushroom.”

David Morrell

Bayside: Big but?

A big weekend for auctions. A clearance rate over 60%

But.

Despite the joy being trumpeted by some Bayside agents (I’ll have what they’re having), there is no clear evidence that the market has turned the corner. It’s still a multi-speed market. Some areas doing well, others don’t ask.

Generally inner-ring suburbs with attractions to young professionals and investor appeal are where the joy is most apparent. Move out to middle-Melbourne and it becomes hit-or-miss; while the upper-crust of Bayside and the Eastern suburbs are short of quality stock and still cluttered with the over-hang of the unsold from last year.

As noted last week, sellers with good properties are, in the main, yet to be tempted back. There’s an obvious lack of middle- to upper-range choice. Anything half-decent at up to a million is likely to have a number of hands up, homes from around $1.5 to $2 million are selling but there may be only one or two real buyers; and anything over $2 million is likely to have a task on its hands.

And so to the weekend’s sport report:

2/829 Hampton Street. A modestly-sized villa which was always going to attract plenty of attention, particularly when “quoted” at $580-630,000. It was declared on the market at just over the top of that range and – multiple bidders and countless bids later – was knocked down for $711,000. Despite the obviously shy quote, it suggests there’s still demand for well located and presented properties.

28/1-3 Carre Street, Elsternwick – a well located top floor apartment with Bay views – was quoted in a similar price range. At least four bidders competed and it was noteworthy that the property was not declared on the market until $700,000 by which time most bidding was exhausted and another $1,000 bought it. The lesson? Well located, good presentation, keenly sought.

Meanwhile, further down the Bay …

In Black Rock’s well regarded triangle area, 1A Eliza Street – a cutting edge new house on a modest 633 sq m – sold for $2,520,000.

Hampton and Sandringham were busy. 12 auctions, 8 sales over the weekend plus 8 private sales during the week. Signs of life, but a question still hovers over whether that can be sustained.

The Bentleighs, usually among the higher clearance rates, sold fewer than one in two.

Similarly the Brightons, even though there was nothing on offer at or above the suburbs’ medians. Highest on the day was 25 Montclair Avenue, which sold for $1,360,000.

Housekeeping

Sales made from late last year to late January which we should have included last week:

• 10-12 Yuille Street. House court and pool on about 1670 sq m. Sold for $4.25 million
• 9 Manor Street. Old period weatherboard at land value (1338 sq m.)  Sold for $3.32 million
• 2 Collins Street. New town residence with big basement on about 500 sq m. Sold for $3.1 million
• 69 Outer Crescent. Single level townhouse, one of two. Sold for about $2.125 million

There were also some quiet transactions, but quiet they must remain.

Damian Taylor

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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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