School Holidays!!!!! The cupboard is bare, the offerings few and far between. Most of the action has been off market in the last week. In fact, we secured three properties prior to auction over the last few days. (We do this when we can; it avoids some of the outrageous bidding that has become an epidemic over the last few months.)

Boardroom auctions were also popular. What has surprised us is how vendors are becoming willing to treat and (more significantly?) the agents who are keen to do deals so they can take off on holiday. You have to ask who some of them are acting for – their clients or themselves? Sorry. Silly question.

It was a quiet weekend for auctions. 45 Emo Road, East Malvern, an attractive 4 bedroom Californian Bungalow with a floor plan that had problems was quoted at $1.4 million plus and sold for $1.7 million with six bidders. 32 Nicholson Street, South Yarra sold for $1,350,000 following a quote of $900,000 plus.

An apartment in ?Kingstoun? on St Kilda Road saw it sell for $1,730,000 with very strong bidding against a reserve of $1.1 million.

We still see the residential market heading up; with many vendors and purchasers holding out until Spring. The greatest buyer interest, however, is still in houses rather than apartments. Individuality rules?

What a crazy weekend! Clearly some vendor?s expectations are getting ahead of themselves. 4 Scotsburn Avenue, Toorak, was a classic example of an over-ambitious vendor who paid $2.3 million for the property three years ago, saw a genuine bid on Saturday of $4 million made a vendor bid of $4.5 million and held to a reserve of $5 million. Over 100% in three years? We doubt it. You do the math: 10,000 square feet at $400 per foot and a little for a house that isn?t that good would be reasonable. This property risks being the bridesmaid for quite some time.

100% over reserve?

Yes. Someone paid more than 100% over the vendor?s reserve at 18 Crossman Court, Flinders. This would have to have been the silliest auction we have seen in over 30 years in real estate. $4,575,000 against a reserve of $2.1 million when the property was bought for $700,000 a few years ago? Come on. But it shows what two egos can do in an auction environment. The next day the winner must have woken up in a foetal position and the loser would be counting his misfortune as the luckiest day in his life!

The start of school holidays brought fewer offerings and we did notice that the heat was out in some cases. 46 Ewart Street, Malvern, a good family home close to Malvern Primary School which should have had 5-10 bidders saw a lacklustre auction with just three bidders and the property selling for $1,520,000 against a $1.5 million reserve. It’s a good sign from the perspective of buyers, but was short-lived; a few hours later 7 Ardrie Road, Malvern East (with a Melbourne Cup field of bidders) sold for $1,995,000 – $400,000 above expectations. A double fronted weatherboard on a small block of land in Malvern East, this sale confirms our belief that the public will bid strongly for something that is totally done up and ready, rather than having to renovate themselves.

Another example was 29 Park Road, Middle Park ? a single fronted brick home which sold for $2,285,000 against a $1.8 million expectation on land of only 300 square metres.

Our tip for the next few weeks? Take a Panadol as nothing will really happen until the end of the school holidays.

Proof of how quickly the market has moved ?

5 Berenice Terrace, Toorak, sold less than six months ago for $2.4 million, sold again on Saturday for $3,450,000 – a $950,000 gain on land and a record $508 per foot. This is ?B Grade? Toorak, not St Georges or Albany Road and that kind of number has never been seen in these parts before. Another land sale at 7 Burnie Street, Toorak, saw $2,110,000 against a $1.5 million reserve with 11 separate parties competing for the honour. Land in Toorak is always the litmus test to what the market is doing and this is proving in spades the adage ?good property doesn?t come cheaply?.

With only one more weekend until the school holiday winter slowdown, there were multiple bidders at all auctions we attended. Clearly there were many purchasers who were trying to get on the merry go round in a hurry as prices are still heading north. We sense that many of them believe the market still has room to grow and are prepared to bid far beyond what comparable sales would suggest.

There is a lot of energy, a lot of urgency, to secure a property. This, with the lack of choice at the top end, is the combination fuelling the market.

Need more proof?

44 Lisson Grove, Hawthorn ? the agent originally quoted high $2?s and then moved up to $3 plus with an ?out there? expectation of $3.5 million. The opening bid (and attempted knock out) at $3.6 saw the property later sold for $3,790,000. 10% above vendor?s expectations is almost par for the course.

From the buyers’ perspective, we hope that the ?Spring Rush? of properties onto the market (if it comes at all) will become a flood and at least cool the upward pressure on prices.

Any signs of the top end cooling? Regrettably not, however there was one glimmer of hope – 39 Kinkora Road, Hawthorn; a thumping big 2-storey grand Victorian on 13,500 square fee. Exactly what the market has a huge appetite for (it did have a poorly set up kitchen, however). The house was passed in at $5,025,000, $475,000 under its reserve with only one bidder. Clearly the agents overcooked the property when quoting. It sold later for $5,205,000, which was $300,000 less than the vendor’s expectation. Music to our ears.

This cheerful tune was all too short. 14 Monomeath Avenue, Canterbury sold for an astonishing $2,990,000 against a reserve of $2.5 million. This was a land value transaction, which has now set Canterbury at approximately $300 per foot. Only four weeks ago the next street had the record per-foot at $205. Given Monomeath can command a 20% premium, it’s right up there with Toorak prices. It is still an outrageously expensive block of land, but what really surprised was that there were at least 11 bidders prepared to go past the vendor’s reserve!

28 Chrystobel Crescent, Hawthorn (wrong side of the street) a well renovated Californian Bungalow sold for more than $750,000 above its reserve. This was repeated several hours later at 12 Chrystobel, which sold for in excess of $2.5 million for a totally unrenovated home – again on the wrong side of the street – well above its reserve price.

Even over in Malvern, 14 Clarence Street went $250,000 over its expectations at $1.4 million – that surely is a lot of money for a weatherboard in that position!

Off-market transactions still led the way with the top sale in Lansell Road for an average house on 30,000 sq ft for $11.2 million.

Our main concern at present is the volume of bidders attending and bidding at auction. You only have to look forward to the stock over the next few weeks to see that the levels will be at an all-year low (by at least 50%). Those unsatisfied bidders will still be on the look-out, but the houses won’t be there. Therefore, we are of the firm belief that the market still has legs and that after the school holiday hiatus, prices will continue to move up.

Our advice to clients remains: if you see something you like, it won’t be a bargain, its price will hurt, but if it works for you, then reach for your cheque-book. By the end of the year it could be looking cheap.

Queen’s birthday weekend is a quiet time at the top end of the real estate market. We’ll be back next week.

One wonders what substances some buyers must be on. Once again the market on Saturday has continued to move forward, however with the Vizard sale at $18 million for a property that was arguably worth $14 million, one has to question what is motivating some buyers.

Last Thursday 6 Coppin Grove sold for $5.6 million after being passed in for $5.51 million – yes passed in at $5.51!!! Remember, this is not Toorak. However, if you delve into the sale, it was bought by an expat who reputably hadn’t even seen it. The local money, including some local agents in attendance, all thought $5 million would be an exceptional price, given there were problems with the floor plan.

Another example of how quickly the market is moving was seen in the resale of 29 Mercer Road, Armadale. This property was sold approximately six months ago, in a bullish auction, for $4.4 million with everybody believing the buyer had overpaid by at least 10%. Last Saturday it was sold again – for a staggering $5.1 million. Not a bad gain for doing absolutely nothing for six months.

However, Saturday also produced signs of the market being fickle. 63 Kensington Road, South Yarra (good house on 10,000 square feet of land) was passed in at $4.21 million and sold later for $4.3 million. One could argue that this house should have been worth at least $4.5 million. Go figure.

Each week we have been seeing different signs of a strengthening market. 2 French Street, Northcote, which was due to be auctioned next week with a reserve of $850,000 saw nine parties attend a boardroom auction (never before seen in Northcote) – it sold for a staggering $1,160,000. What is of concern and suggests where the market will be going is that eight other parties still have no roofs over their heads.

Again, the inner suburbs were particularly strong across the board. 13 Packington Place, Prahran (a single fronted weatherboard without a car parking space) was quoted at $680,000 plus and sold for an amazing $1,100,000 – only $300,000 over the reserve!!

What is of concern at the very top end is, after Vizard’s sale, some vendors in Toorak have been overdosing on greedy tablets. “If Vizard can get $4 million more, why can’t we get …?” If we see some properties passed in over the next few weeks this will be a sign that greed is being recognised in the marketplace.

But the message overall this week is quite clear; fasten your seatbelts, the market is still taking off.

What a weekend!!!

It is getting very tough out there and even tougher to find value. Prices paid over the weekend again confounded experts, but what was really surprising was the number of bidders attending most auctions. You weren’t bidding against just one other; often it was four or five.

Some of the results were startling – almost beyond comprehension – however it again shows that the market is not stagnant and is moving further forward. There’s still no blip on the radar in sight.

2 Glenbervie Road, Toorak, quoted in excess of $3,000,000, sold for $4,500,000.

This was repeated at 30 Montalto Avenue, Toorak. 9,200 square feet and a house which needs work. The expected price was near $3,000,000 yet with multiple bidders the property sold for an amazing $4,250,000.

Even in Armadale it was hot in the kitchen; a little weatherboard at 8 Rose Street, quoted at $910,000 plus, sold for $1,370,000 and it didn’t even have a car space. 14 Munroe Street, south facing, not a good house, sold for $2,455,000 against a $2 million expectation.

Outside the blue chip areas, in areas such as Kew, it was even hotter. 19 Grange Road sold for $6,600,000 against an expectation of $5 million. Remember, this is Kew – not AAA and certainly not Toorak.

Investors were again very noticeable with two of them competing for 7 Perth Street, Prahran – a single fronted weatherboard in need of work. The expectation was high $700′s, the reality was $941,000.

The only good news we can report is that we did secure several properties privately. We’re advising our clients that this is a method they should use to avoid paying sometimes horrendous premiums.

What is of most concern is the market’s underlying trend, which has been especially evident over the last weeks. If this continues it is reasonable to assume that a further rise of 10-15% before Christmas is a real possibility – the only cloud on the horizon being a possible change of government which may slow the market down.

It just keeps rolling along … the juggernaut continues!

Again, it was the top end that was setting the pace over the weekend. With the distinct lack of choice available, we expect this sector to continue to outperform other market sectors.

The sale of 20 Lansell Road, Toorak, on land of 19,000 sq ft for $9,225,000 (without a court and in need of renovation) had three parties vying for the honour of owning it. Other areas also featured prominently. A unit in East Melbourne, 2/2 Jolimont Crescent, sold for $2,516,000 against a quoted price of $2.1 million. Even out in Balwyn, not usually known for exceeding reserves by $330,000, 18 Chatfield Avenue sold for $2,830,000, which was a high price given the land was only 8,500 sq ft, which would value it at $160 per foot. This sale again shows that premium buyers will chase a renovated property. In South Yarra, 220 Domain Road sold prior to auction for more than $6 million, again demonstrating the healthy demand at the top end coupled with the desire to secure properties prior to auction.

Investors have clearly returned to the fold with a vengeance. Of the auctions we attended, several were bought by investors who had to beat home owners. Regrettably the interest in these type of properties is also incredibly strong, but it also flags the fact that if investors are returning to the marketplace, there has to be more room for the market to grow, as traditionally they don’t buy at the top of a market.

At other auctions we attended, reserves were being passed with opening bids and with multiple bidders still out at the coal face, there is many a bidder still being left as a bridesmaid.

Bucking the top-end trend, the unit market is still soft with several properties being passed in. One high point: Unit 10, 245 Kooyong Road exceeded its reserve by $150,000 with three bidders. Astute investors have realised that unit prices are not moving in step with the rise in home prices. Homes are being sought for capital appreciation rather than return.

Coastal properties were also soft. One auction we attended at 6 Spindrift Avenue, Flinders, “the dress circle of Flinders” sold for $1.4 million – in line with expectations. Not the silliness that we have seen in the inner city.

The surge continues …

Another weekend when the top end took the market into unknown territory. Results which continue to defy logic and surprise us and valuers alike.

This was lead by the sale of 19 Barry Street, Kew, for $5.8 million. A totally renovated Victorian on 16,000 sq ft. and a sale which is definitely “out there” as the land would only be worth around $160 per foot. It was passed in for a little over $5.6 million and sold later with the purchaser also buying the rear property. So now we have properties changing hands in not the best part of Kew for in excess of $8 million.

Toorak, again, was strong with the sale prior to Auction of 176 Kooyong Road for around $5 million – again indicating the growing demand as a block of land only two doors away sold four weeks ago for $2.6 million.

Clearly, people are willing to pay a premium for something that is already renovated and ready to move straight into.

Land prices in Toorak have long been the litmus test of where the market is and again we have seen it highly sought in a private transaction on Friday. 14 Kent Court sold for $2,275,000 for 6,000 sq ft with a frontage of only 25 feet – demonstrating that, now, a month is a long time in real estate: next door sold for $1,920,000 and a month ago the vendors of Kent Court would have been happy with $2 million.

Of the 12 Auctions we attended, only one property was passed in, with the others exceeding their reserves by 10-15%.

Underquoting is still rampant and a problem. The one property that was passed in was at 13 Beach Road, Brighton Beach. It was quoted at $1.8 plus, passed in at $2,150,000 with four bidders and the reserve was $2,250,000. Yes, we are seeing a sign of vendors getting greedy. Needless to say, we didn’t pay that.

Hawthorn again provided strong results, particularly for a small two bedroom Victorian at 9 Churchill Grove, which was quoted at $600,000 plus (at that price a good investment) and which sold for a staggering $932,000. Then there was a small outbreak of sanity at 11 Goodall Street, Hawthorn, where a double fronted Victorian – attractive from the street but which had some fundamental issues with the floorplan – sold for $2,220,000.

The market generally is still on the up. And, still, we’re seeing signs of unfair manipulation, perhaps collusion, between some agents and vendors. We would be happy to provide evidence if called on.

It was business as usual with the market continuing to move forward, exceed expectations and break new ground. The weekend started badly for purchasers with the 5.00pm Friday night boardroom auction of 2 Rowland Street, Kew (south side and not AAA). The land was only 8,280 sq ft and $200 per foot yet to be achieved for a similar address. It sold for $237 per foot with four bidders! Again, the demand for land is very strong. This was confirmed on Saturday at 28 Embling Road, Malvern, which sold for $3,020,000 against a $2.55 million reserve, achieving a record $270 per foot for the street.

Again, the very top end was healthy, but not stupid. 20 St Georges Road, Toorak sold for $6,010,000 with 3 bidders. Land again was the priority with 20 Kent Court, Toorak selling for $450 per foot, which underlines the incredible appetite for land in Toorak at present.

Buyers are chasing quality addresses. For example, a totally unrenovated terrace at 35 Leopold Street, South Yarra with a $950,000 plus quote, sold for an incredible $1,438,000 with seven bidders; which makes valuing property not an exact science as a totally renovated similar property sold only 3 months ago in the same street for $1.4 million. Clearly buyers are not taking into account comparable sales when bidding for property.

Brighton also continued its healthy upwards trend with a small house at 11 Vista Road, Brighton Beach selling for $2.55 million against a $2.1 million quote.

The trend seems to be that quality properties are exceeding their reserves by 10-20%, which is confounding valuers and buyers advocates alike. We expect this trend to continue because of the number of underbidders at each auction. If there was only one underbidder, there could be an argument that it was a bit of a “one-off” result – but when you have six you just have to realise that the market has moved up a cog. Even suburbs that were once thought of as “bridesmaids” are experiencing strong results.17 Wills Street, Kew was quoted at $1.1 million plus and sold for $1,720,000 – $420,000 above the vendors reserve! Surely the market hasn’t moved that much?

Investors continued to appear on the landscape, however from Saturday’s results many were being beaten by the owner/occupier market, who are chasing the “wow factor” with incredible dollars. A prudent investor realises that you shouldn’t chase much beyond a reserve, especially more than 10%.