Strange thing about the top end market we’re seeing today. We’re not seeing it. It’s like a footy game with the crowd turning their backs to the field; looking to see what’s happening out of sight up in the stands.

Yes, yes, yes. There are exceptions (see below). Enough of them, at least, to keep the commentariat with something to comment on. But it’s not the main game.

(An aside: “David,” I was asked, “Why is it that so many market reports are replays of self-interested buyer agent or estate agent comments – the constant talking up of the market the major symptom. Shouldn’t those reporters be getting out and talking to the people who really make the market: That is, the buyers?”)

Last week, a mini-Mexican wave took place up those stands – some of it even visible to the casual onlooker – one result leading to another.

10 St Georges Road, Toorak. Listed, if memory serves, since before the first bounce of the football season. Many different agents, as many marketing campaigns and many balls kicked out of bounds until last week when a local player popped up and reportedly paid $8.7 million.

2 Forrest Court, Toorak. Again on the market for some time. A speculative build, different agents, different asking price and sold to another local for just under $7 million (anyone got batteries for a calculator?).

In the school belt, 4 Mernda Road, Kooyong. A good renovation, south side, 5 bedrooms, ready to move in – sold in the early sixes with three locals all wanting to move in.

Last week also saw one of very few successful top end auctions: 10 William Street, South Yarra. A strong $5.4 million, with two locals bidding.

Locals? All locals? Isn’t this market supposed to be ex-pat driven?

Not from where we sit. Rumours of underlying ex-pat interest have to be judged against who is spreading them; and in whose interest.

The one constant in any market is the buyers and sellers. Sales methods may change, but not the consistent needs of some for a roof over their heads and for others to sell (sometimes unwillingly). If the quality is there and the price is right, the twain will meet.

And now Spring looms and with it you can expect a new normal. At the top end we’re looking at fewer transactions, fewer auctions, less advertising … and more people.

This against a background of agents, little by little, losing conrol. More and more, the internet is stealing their power to influence outcomes. That, too, is bringing with it some new wrinkles. Underquoting and dummy bidding have long been tools of agents wishing to unfairly manipulate a sale; but to that you should now add the camera. How often do you see a bedroom or kitchen on the web that looks the size of a footy field and, when you inspect, discover the size is closer to a handkerchief.

Will Consumer Affairs next have to ban the wide-angle lens?

David Morrell

Bayside: Signs of life!

An auction. An auction at the top end. In Brighton. And a sale!

25 Kent Avenue went to auction on Saturday and, right after the auction, it sold. Really. $6.4 million. Four bidders, three of them serious. Right there on the foreshore in the Golden Mile, a 1930′s Deco style home on a relatively modest 665 sq m. Last sold 30 years ago (who said properties around here are tightly held?) for $360,000.

Nearby, 25-27 Glyndon Avenue has come up for sale again. On 1532 sq m, it last sold in more exuberant times for $15.5 million; the current record price for a Brighton property. Now, the rumour is closer to $20 million.

Contesting that record is “Kinane” on the corner of The Esplanade and Kinane Street. While it has twice as much land (3,200 sq m) and elevated views over the Bay and Dendy Street beach, that’s not quite the same as actually being on the foreshore. Five years ago it sold for $11.2 million. Today it’s expected you’ll need around $20 million to attract the vendor’s attention.

At less stratospheric heights, the attempted sale of 1A Webb Street was somewhat underwhelming at $2.05 million. Something of a rarity, it’s a good downsizer and ticked a lot of boxes: Single-level, manageable allotment, one of the more preferred positions in Brighton. It was expected to go for $2.2-2.3 million and apparently had good pre-auction interest. With all that, the best it could do was a pass-in to a solitary bidder’s offer of less than $2 million.

In Brighton East, 25 Marriage Road, a well preserved 1950′s home on 1500 sq m sold at auction for $1.96 million. Around the corner in Connor Street, number 14 sold some weeks ago for $2.065 million.

The Brightons had 16 properties offered for auction over the weekend – more than any other suburb – but only managed to clear half those. With the market about to limp into Spring, one-larger-than-life auctioneer was heard pleading with reluctant bidders to the effect that if they were waiting for the Spring market, then forget it – he was not expecting to have one this year.

He could be right. If buyers continue to sit on their hands, then expect potential vendors to do the same.

Damian Taylor

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… nothing.

As we said last week: “Top End property wasn’t making the news last week, it won’t be this week and it won’t be next.”

So little to report. We won’t waste your time.

David Morrell

 

Top End property wasn’t making the news last week, it won’t be this week and it won’t be next. With such a volatile and weird stockmarket, at least in public the top end has taken one serious dose of mogadon.

Up here where the millions play, auctions are starting to look so very last century.

Those still living back then – the vendors who have been chancing their arms – have had cause for some (very expensive) tears; and few more so than at Myoora Road, Toorak. A real bid of $9.8 million topped by the vendor’s $11 million and a reserve of … $13 million? Yes. “Hello. You’re wanted on the phone. It’s Santa.”

Where autions are working, sorta, is in flushing out buyers so that negotiations can begin. But that can be a pricey (money and emotion) route for vendors to take.

83 Walsh Street, South Yarra. Supposed “heaps” of interest. Opens on a vendor bid of $4,400,000. Auctioneer pulls teeth and extracts a real bid of $4,450,000. Passed in. Negotiations. Sells for $5,050,000. That’s some dentist. A buyer bidding against himself is persuaded to part with an additional $600,000? On whose advice?

A throwback

There’s always an exception and this one was an auction that seemed so last century: 49 Sackville Street, Kew. Four hands waving in the air. Sold sticker at $4,310,000. Quality rules.

Elsewhere, 8 Blackfriars Close, Toorak  found love at $3,250,000 after being passed in last week at $3,000,000. When sellers are motivated, sales are possible.

If not auctions, what?

A clue: Last week we took clients to inspect eight properties priced between five and twelve million dollars. All on the market, none advertised. Increasingly, the top end is behaving less and less like a conventional market and more and more like a private club.

If not the internet, what?

This off-the-radar market isn’t fond of the web. And being off the radar has implications for all the usual channels:

• Auctions What are those? The only thing which may resurrect them is legalisation to encourage dummy bidding. Vendor bids just don’t have the theatre.
• Expressions of Interest Secret agent’s business. Phantom buyers stalk here. Beware.
• Print advertising Not at the top end.
• Private Sales Around forever. And ever more. And, now, more private than ever.
• Agents Threatened species; and they know it. But the inventive ones still justify some care and attention.

Spring

Nearly apon us and any twittering birds are being drowned by wails that there is no stock; a view belied by that fat weekly magazine (not the old one; that’s decidedly thin). But what you find there is all low- to-mid or lacking quality. There’s no statistic for quality, and no substitute for it.

OK. Maybe one or two percent of those you find listed are worth fighting over; and then the battles can be epic.

David Morrell

Bayside: briefly.

Why no long report? Not a lot to write about.

Brighton and Bentleigh were the only Bayside suburbs with anything remotely approaching activity on the weekend.

Bentleigh had eight sales from the twelve scheduled but that included two sold before auction.

18A Durban Street was the highest on the day with a final bid of exactly $1,000,000. The other end of the scale saw 5/6 Brentwood Street sold for $350,000.

Brighton looked promising: 15 scheduled auctions, but most of those promises remain unfulfilled: just six sold. Highest of those was 38 Whyte Street at $1,710,000. Not exactly golden mile.

Brighton’s passed-in properties ranged from entry-level 4/227 Bay Street ($560,000, reserve $610,000) to 7 Foote Street ($3,200,000, reserve $3,500,000).

A clutch of private sales made during the week added some respectability to an otherwise ordinary seven days:

• 14 William Street, $2,850,000
• 3 Lorac Avenue, $1,700,000
• 342 St Kilda Street, $1,590,000

Beaumaris, Black Rock and Sandringham conducted the grand total of one auction between them: Success for the brave at 13 Coronet Grove, Beaumaris. $1,100,000.

Hampton fared a little better with 100% clearance from all of three properties. 10A Swyer Street the highest at $946,000.

Slim pickings (is there a song in that?).

Damian Taylor

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Vendors facing the hard sell

The Age

“If the owner’s price expectations are too high, a home that failed to sell at auction can quickly become a shag on a rock,” Mr Morrell said.  XXX

It was like the fathers’ room in a maternity hospital – pre-ultrasound. No-one quite sure what they were about to be presented with and shrouds of mystery and concern hovering over the entire process.

Another bloodbath on the stock exchange. Would it lead to a vendors’ nightmare? Would we, as happened in GFC1, simply look the other way while our stuttering market stuttered on?

Love to tell you, but the delivery is still dragging on. This market is still in labour.

Problem is, at the top end, there’s really been too little to test it. Yes, in the few (very) AAA properties which did come up there were three and four hands raised, but there were so few of those that you really couldn’t draw any conclusions.

Even down the ladder (see Bentleigh, below), Victorians’ love of bidding seems to have faltered – right down to agents letting up on one of our market’s great anachronisms: the vendor bid. What is this? It’s a shift as fundamental as a Collingwood supporter abandoning footy for rugby. No rainbows being chased here.

The top end is still being choked by vendors refusing to take tickets in what was a lottery with some very large prizes – the kinds which occurred when auctions were frenzies. Happily for we on the buyers’ side, those days have passed.

And that will make Thursday’s auction of 8 Myoora Road, Toorak more than usually interesting. It’s been quoted at $11 million plus and that is considerably less than the rumours had it prior to its formal listing. Coming on the back of an $8 million plus auction in Armadale (still available) and a $13 million plus Expressions of Interest campaign in Toorak (ditto), there may be more time in the waiting room ahead.

Yes, we’re still seing action at the top end, but it is (if possible) more private than ever. It’s a who-you-know market in which price, interestingly, is a lesser part of the equation – it’s more about who wants to sell and how highly would-be buyers regard what is offered. As a group they tend to be less affected by margin calls than those further down the scale. As a group, currently, we’re seeing more buyers than sellers.

Need an index of the health of the top end market? Take a look at what’s advertised for sale this year compared to last. You can measure optimism (both agents and vendors) by the amount spent on advertising – who needs Standard & Poors? – while the agents are still talking of a Spring revival, right now it looks like we’re already in the Christmas holiday doldrums.

David Morrell

Bayside: Beware light in tunnel

Just when it seemed the clanging bells had fallen silent and it was safe to cross the tracks, along came that speeding freight train and a scramble for safety. A week ago buyers were daring the market; over the weekend, most turned to water.

Even Bayside’s darlings, The Bentleigh Twins, left their tap shoes at home. Just five sold from the 16 offered – they’ve rarely had such a tough review – and it was the low end that suffered most. That’s not supposed to happen, Daisy.

Bright spot? Just the one: 185 East Boundary Road. Sharply renovated, big on style: $1.02 million.

The rest? The less said the better.

Down at sleepy corner, Beaumaris and Black Rock are marking time with neighbouring Mentone claiming the highest price of the week with a very quiet transaction negotiated at 22 Milan Street. A substantial five bedroom house with pool on 1626 sq m, it sold for $2,445,000.

Sandringham? Just the one: 2 Grange Road sold for $1.2 million

Hampton?  Two! (count ‘em!) Including a vacant allotment at 63 Orlando Street, 557 sq m sold for $1.25 million.

Despite the stockmarket carnage, Brighton fared reasonably well: 8 sold from the 15 offered.

80 South Road (yes, kids, we all know it’s really Hampton, even if the new-to-the-area agent hasn’t worked that out) was the standout. First sold when new only two years ago for $2.78 million, the sale price on Saturday of exactly $3 million was a testament to the built quality; although the selling agents will no doubt claim some kudos.

Looking for one sign of how the market has slipped in three months? 63 Outer Crescent sold at auction in May for $2.61 million. On Saturday, its twin at 63A sold for, we believe, a number closer to $2.2 million. That’s around 15%. Room for gloom if it becomes widespread.

Other portents? Some in streets which until recently were sure sellers:

• 57 Hanby Street. Passed in. Vendor Bid $2.05 million. Reserve $2.28 million
• 12 Merton Avenue. Passed In. Vendor Bid $1.90 million. Reserve $ ? (we all love a mystery)
• 342 St Kilda Street. Passed In. Vendor Bid $1.56 million. Reserve $1.625 million

On June 20 we reported a non-result at 2 Tennyson Street, Brighton. Last week the Tennyson Street real estate gods smiled and against the tide of public opinion the property has now changed hands at exactly the pass-in price of $3.5 million.

Eventually, always, a buyer will come.

Damian Taylor

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Could this be the spring with no zing? For the first time since the 80s there are signs that this spring market … won’t.

No market to be seen. Gone. Kaput. Especially at the top.

When many in the media and even some agents are suggesting that the sky has fallen in, you know things have Become Serious.

And why wouldn’t they? Yes, we have a mining boom, but that’s in WA and may as well be in China. Here we have nothing but successive tidal waves: a government that can’t and an opposition which opposes everything (even itself every 2nd day), a soaring exchange rate, a US economy acting like a broken down washing machine and its repair man (Washington) whistling a patriotic tune and leaving his tools in the truck, the Europeans running scared from each other’s debts and maybe another GFC waiting to implode.

“Let’s buy a new house.”

Yeah. Right.

But, but. But.

While on the surface there is nothing to report, far under those tidal waves there are submarines at work, quietly investigating what might be available.

So sales are possible, but rarely are they the result of dancing to estate agents’ happy old tunes. Drop $20 or $30 or $60k into a marketing campaign when, if you have your ear to the ground, you already know who the buyers are? Unlikely.

Some recent observations:

• Expressions of interest? Deceased. Some agents still to be informed. Funeral details TBA.
• Downsizers going to market in Spring? Not when the kids haven’t left home. It’s another reason there’s so little choice.
• Sales on nod and wink? Surprisingly (often to both parties), they’re happening.
• Peep shows? Yes. Last week only one buyer was allowed to look. Sold.
• Privacy? On the rise. See above.
• Dreamers? Still hoping for glory and prices that are long-gone. (Melbourne supporters?)
• New agents? Some kicking goals – making deals without $60k ad budgets.
• Old agents? Some relying on laurels long-gone – now being left off teams altogether.
• Top end and auctions? Not playing together any more. See below.

The highest priced auction sale over the weekend would have passed unseen a year ago: 3 Irymple Avenue, Glen Iris. Quoted at $2.4 to $2.6 million it sold for $3 million with a clutch of hands in the air. Our opinion? It wasn’t that special and you could have bought better – but what choice is there in that bracket?

Exception: 20 Barrett Street, Albert Park. Good single-fronter. Passed in to stony silence, but sold for $2.2 million soon after.

Elsewhere?

• The games continue, the bowlers bowl, the wickets rarely rattle.
• More than a few investors have been seen inspecting.
• Signs are that if Spring ever sprungs, quality will rule.

David Morrell

Bear stirs in Bayside?

Still a bear market, but in Brighton at least the beast has made what sounded like a tiny snore and turned over. It’s alive!

Just.

For the last few months it has provided a convincing impersonation of that dead parrot: lifeless; closely attended by those insisting it’s in near-peak health, just misunderstood.

Then came the last week in July and a little shivering life in both auctions and private sales. Clearances still hovering around 50% but investors and first-home buyers resuscitating the lower end while further up the food chain anything that is true value arousing interest which just wasn’t there before.

“True value” is the key. Vendors still pricing in the land of last year are doomed to remain there – but if the quality is obvious and the price is fair, there will be interest.

This could be a false dawn, but current indications are that a slow recovery may have begun. What’s now worrying agents is not a lack of buyers prepared to consider true value, but a lack of vendors prepared to offer it.

True value sells?

• 28 Montclair Avenue, North Brighton. A comfortable and well presented 1920′s house extended to 4-bedroom family accommodation in a reasonably good and handy location. It surprised all present – not so much with the final sale price of $1.82 million, but with the number of bidders: at least six parties competing.
• 118 Cochrane Street, Brighton. Also well received. Sold for $1.74 million.

A hop and a skip away, 318a and 320 St Kilda Street add up to 1500 sq m. Right over the road from the Golden Mile, they were expected to have builders and developers constructing forests of hands. Not to be. Passed in at $1.6 million and $1.08 million respectively; and sold to a near-reluctant buyer a few minutes later. D9s to come?

At 43 Wilson Street, the best the vendors could do was their own $2.6 million bid for a lot of house on not a lot of land (but with a basement garage and turntable). Reserve is a state secret, but anything above 2.6 will probably get a nod.

Mopping up:

• 4 Sussex Street, Brighton. Reported as sold as a private sale at $3.775 million – we understand a sale was transacted immediately following its auction on July 2, with a conditional contract.
• 14 William Street. An auction many weeks ago and a vendor who should be quietly relieved by the $2.85 million eventually achieved.
• 18A Martin Street. Sold by Brighton’s newest agency after spending all this year unsold by one of Brighton’s oldest agencies. And a price cut of about a million (that can help).
• 2 Shandford Avenue. Reported as a 10-room house on 542 sq m, sold for $7.5 million on March 15, 2011. Three months later, a unit at 1/2 Shandford Avenue reported as sold at $2.55 million. Same day, 2/2 Shandford Avenue reported as sold at $6 million. A $1 million rise in 3 months? Nice accounting if you can get it.

The rest of Bayside? Forgettable. Even Bentleigh failed to blip.

Damian Taylor

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Astute house buyers holding off on investing
Melbourne buyers’ advocate Morrell and Koren founder David Morrell also
said that new and experienced investors were still “sitting on their
hands”. … Herald Sun

Agents withholding house price data
But buyers advocate Christopher Koren said many agents were resorting to
”sneaky behaviour” to mislead buyers over the true state of the market
and that … The Age

 

 

 

 

Art lovers, this is a week made for you.

Much staring into space, looking for elusive meaning. Finding gems where others see only confusions of colour.

Hot on the tail of Fred Williams, we took off for 2 Hyde Hill Road, Harkaway. in Williams, the aware mind is struck by its rural truth, right down to the waft of summer eucalyptus. Which makes rather easier sense than the abstract expressionism we found. Bizarre. Eight hands fluttering skywards in a mortgagees’ auction in these doomy days. Count ‘em! Eight! $4.4 million! Is there something we don’t know about the Harkaway water?

Meanwhile, back in town it looked more like a John Firth-Smith landscape. Doom and gloom spiked with – when the offer was outstanding – more fluttering hands and a picture auctioneers dine out on: She who had not raised her hand even once did so at the last minute and bought it. Husband at the footy. Unaware. “Darling, you’ll never guess what I did today…”

Then came 30 St Vincent Place. Definite contender for under-quote of the year. “$4-5 million” for a classic on over 1,000 sq m on one of the most desirable streets in this or any other city? Yes. Definitely. Never any doubt. Was anyone surprised when it went for $6.62 million? You? Then there’s a picture by Picasso we’d like to show you…

Across town, 66 The Broadway, Camberwell. Good house, four bidders. $3.83 million. Sensibly priced and indicative of the true market. Last year it would have topped $4 million. It’s another indication that reality has broken out in Hawthorn, Camberwell and Canterbury to a greater degree than has yet reached the inner suburbs.

And then we come to the truly bleak. The Peter Booth end of the market. Those who spent their tens of thousands promoting their wares and failed to attract even a cheeky bid. Look now upon:

• 63 Davis Avenue, South Yarra – Vendor bid $2.2 million, reserve $2.495 million – oops!
• 142 Kerferd Road, Albert Park – Vendor bid $2.350 million, reserve $2.5 million – ouch!
• 52 Armadale Street, Armadale – Vendor bid $1.7 million, reserve $1.85 million
• 21 Glassford Street, Armadale – Vendor Bid $1.650 million and a reserve which is, presumably, too embarrassing to disclose.

So there you go. When the house is right and the price is right, the hands still fly. Get either wrong and prepare to wait. And wait. And if you’re buying with the intent to sell, take your time. Get it right. Today’s mistakes will make for very expensive tomorrows.

Journo’s, come news or lack of, still have papers to fill. We’re in a happier position. Staring at the end of the financial year and no prospect of anything earth-shattering over the school holiday break, we’re taking the cue from our clients and won’t be back for a couple of weeks.

Unless, of course, the earth does shatter.

David Morrell

Bayside underwhelms

Tadeusz Kantor has a reputation for works of dynamic imbalance and Bayside is following suit. In the imbalance. Dynamic? Not.

It’s still out of whack: average stock labouring under above-average price expectations leading to everyone staying home – even the neighbours. Who can blame them? Underquoting and over-pricing leading to no sale is hardly a show worth crossing the street to see.

With stock levels down until the Spring we anticipate more of the same.

Bleak in the Brightons

Over the weekend in the Brightons, only eight out of 20 found new owners. Last week’s lion became a mewling pussycat at all its price levels. Even the lower end had its pass-ins.

9 Lindsay Street, Middle Brighton. The highest result on the day was undisclosed (OK, close to $2.2 million).

The highest pass-in was also in Middle Brighton: 14 William Street. A single level brick Victorian on 1000 sq m, it limped in on a vendor bid of $2.7 million, reserve undisclosed. Our guess is that any reasonable offer will be gratefully considered.

It’s an indication of where this market is at when properties in signature Brighton East streets, such as 100 Canberra Grove (passed in at $1.1 million, reserve $1.15 million) and 37A Plantation Avenue (passed in at $1.4 million, reserve $1.535 million) not only do not sell, but between them do not attract a single bid.

Slumber in The Bentleighs

The Bentleighs had a quiet day by their lofty standards with only 10 auctions scheduled for a 60% success rate.

Although the misleading and deceptive price quoting by one of the area’s high profile gavelmen put the spotlight on him and the suburb last week, it really is a matter of tell us something we don’t know. Bentleigh will survive. Bentleigh always does.

Bowie and Black Rock nod off

Beaumaris and Black Rock battled on gamely; with only eight on offer and just four sales. Highest on the day was 45 Stanley Street which sold for $1.6 million, followed by 425A Beach Road in Beaumaris at $1.205 million. Despite the brave claims of one of the agents, the chill of winter has meant an early hibernation for many down by the sea.

Sandy and Hampton shut the shop

A season low of one sale from six auctions: only 30 Cowper Street troubling the scorer. It sold for $1.245 million.

The real gem, a hop and a skip toward town from Bayside, was 30 St Vincent Place – as noted above by our colleagues from South Yarra. While the end result of $6.62 million with a number of interested and competing parties was impressive, one swallow does not make a Spring.

Damian Taylor

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The top end continues to work in mysterious ways. A very expensive, very silent submarine.

Secrets rule. We’d tell you but they’d have to kill us and we’re too busy to go to that funeral.

And then a periscope pops up. 21,000 square feet of 12 Albany Road sells – not overnight, it took four weeks – and no-one is saying a word about how much or to whom.

Down the street at 26 Albany? The whole 26,000 square feet is still all yours for the asking. Another Expressions of Interest campaign in danger of sinking without trace.

Not alone. Over the last six weeks or so, most buyers have realised that the helm of that sub is theirs and they’ll steer it where they choose. The frenzy has gone. If the price isn’t right or the offer doesn’t tick all the boxes, they simply sail away.

6 Fullham Road, South Yarra. Sunk with nary a real bid. Vendor requires a new course.

24 Park Street, South Yarra. Two bidders. Found port at $4,850,000. Not bad, not good. Wrong side of the street. About right.

“And what,” you may ask, “are the agents doing when the buyers aren’t coming to the party?”

Some we know of have done the rats and sinking ship trip. First off. Off to parts more to their liking for five or six weeks.

How does that feel? You’re a vendor who has just dropped 50 or 60 large notes on a campaign that couldn’t fail and the agent who was once your very very very best friend is now in some distant time zone? For five or six weeks? You? Relaxed and comfortable? Not.

And then we had a call last week from someone whose house we had looked at – who rang to tell us he’d had an offer and was about to sell. Really? “Does your agent know about this?” Apparently not. “Are you anxious to sell?” Apparently so. “And you have a real buyer just ready to sign?” Absolutely.

Funny thing, that. The house is still for sale. A phantom offer? A phantom buyer? Another reminder that it’s not always the cleverest idea to be rushing for the chequebook the moment a competing offer is mentioned (and, no, we weren’t interested anyway).

And just when we were wondering why the world doesn’t love agents to bits we found ourselves choking on our Weeties. An agent was pinged! For underquoting! 11 times!

It’s right there in the Herald Sun: “This is a stern warning to the real estate industry and agents that any businesses suspected of misleading price advertising will find themselves under close scrutiny…” (Consumer Affairs Minister) Mr O’Brien said.

“Lordy!” we thought, “That agent will be spending the best years of his life on a prison ship.”

Well, not exactly. That agent (OK, Nick Renna, Hocking Stuart, Bentleigh) was sentenced the equivalent of having to stand in the corner for 30 seconds. “Naughty! Don’t you dare do that again!”

Yes. That’ll teach them.

David Morrell

Bayside: All in good time …

After a long weekend with few auctions and fewer private sales, everyone went back to work and tried to read the signs.

How do you like your omelette? Served in the dark, a garnish of this and that and not quite knowing what it really contains? Coming right up…

Seems everyone has an opinion as to what this market is doing – ranging from sinking into oblivion to sunshine just around the corner.

Meanwhile, properties that were expected to struggle sold. Those expected to walk out the door were left waiting.

That’s what’s making this market: the doomsayers selling out now before the end of the world while the glass half-fullers are moving in on what they see as opportunities.

Both can’t be right. There will be winners and losers.

More than ever it’s essential for buyers to thoroughly understand and research their options, to take a measured long term view, to resist the temptation to over-gear and to choose the very best property their budgets will allow.

And in spite of some of the gloom, it is a fact that properties are still selling and, in a few cases, selling quite well.

One prominent Bayside agency is happy for all and sundry to know that the firm has sold one property per day for the past two months. A commendable effort which probably points to their skill at managing their vendors’ expectations better than some of their competitors.

And although transactions are ticking along, they are doing so at a considerably slower pace and predominately in the lower- to mid-level of median value in their suburbs. The upper end is a challenge and has become very sensitive to pricing. If a property is not on the money, expect it to sit there for some time.

So to the week’s action. And inaction.

The attention-grabbers in Bayside were not the mega mansions, but still beach front properties. The City of Bayside offered two recently-constructed bathing boxes at 58A and 58B Dendy Beach.

Each about the size of a mega mansion’s powder room but without light, power or services and with a “title” that is no more than a licence to occupy and which must be renewed annually – none of which proved to be an impediment to the buyer who paid over $260,000 … just $45,000 above the previous highest price paid on this beach last year. The sale of the second box at $221,000 seems a snip. And there’s a prediction of more boxes becoming available.

At the other end of the spectrum, a structure with radical extras including bedrooms, a kitchen, etc., at 2 Lorac Avenue was sold. Again. On three levels, in its short life it has already been sold three times; the last occasion being two years ago for $3.475 million. (For the agents involved it’s not so much a house as a career.) Initially passed in at $3.4 million, negotiations throughout the evening with a second buyer saw agreement reached between $3.6 and $3.7 million.

At a similar price point, the auction of 2 Tennyson Street was short and not so sweet. A cavernous faux French chateau style house, it has a mix of internal finishes well calculated to confuse. After a brief preamble the house was unceremoniously passed in on a single vendor bid of $3.5 million. The reserve is undisclosed, but earlier gossip was of a vendor expectation in excess of $4 million. Don’t hold your breath.

One that should have sold was at 10 Downes Avenue. A comfortable brick bungalow on average land but in a desirable street, it needs some large numbers being spent at the rear. When the best offer at the auction of $1.675 million was increased to $1.8 million, most observers (and perhaps the selling agent) anticipated acceptance. Not the case. The reserve now is set at an ambitious $1.95 million.

A couple of private sales worth noting were 42 Cole Street at $2.36 million and vacant land at 38 Hanby Street that was passed in several weeks ago. It sold for a fair $2.05 million.

Overall Brighton performed reasonably well with 13 sales from the 20 scheduled; although three of those were sold prior to auction.

Elsewhere, Beaumaris and Black Rock hardly raised an eyebrow and Hampton and Sandringham hardly raised a sweat; with the exception of 3 Linacre Road which sold for $1.46 million.

The sensible, predictable and safe Bentleighs posted a solid 13 sales from 18 on offer. Hardly surprising. They’re affordable, well serviced semi-bayside suburbs with vendors who generally have sensible expectations.

Sense. Now there’s a thing.

Damian Taylor

 

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Where did everybody go? Why has the top end … disappeared?

And who’s to blame?

Nobody’s short on theories: It’s the carbon tax, it’s the Oz Dollar, it’s the long weekend (really?), it’s school holidays, the weather, the footy, the…

Our turn: At the top end it’s because there’s next to nothing for sale for a reasonable price.

The buyers are there. They’re aware of all the reasons why this is not a good time to be looking (doom approacheth, etc), yet look they do. And they have their own personal reasons for doing so.

Then why is so little available?

You don’t have to spend a lot of time looking for clues. As we have commented before, you can’t jog far in suburbs such as Toorak without falling into someone’s skip. With so little to move to, those who may have moved on in the past are now staying put and renovating.

It’s a circle: There’s so little available because there’s so little available.

Litmus test of the renovation market is our friend the timber merchant. His trucks are now on the road non-stop.

And all this is playing out against a background of just about everybody telling you they know just about everything. People who were selling cars or life insurance last week are suddenly the oracles of property.

But not only them. The Fin Review reports estate agents numbers being down by 10,000 this year (good start) and a fair whack of those are hanging out buyers’ advocate shingles.

Which is nice. Always room for more. But changing sides also requires changing minds. An agent measures success by transactions done, an advocate by clients whose needs are met. They are not the same and it is not an easy transition.

So. What’s going on in the shop?

Things are still happening out of the public eye; but not at the levels we saw last year. Still, some who have been left alone at the altar have at last found suitors.

And, as always, exceptions:

5 Barnard Road Toorak sold very quickly for $7 million. A good result given it was apparently bought for $6.5 million in a heated market.

Perennial wall-flower Fairlie Court may have at last found love, but not at the $10 million mentioned as its dowry. Patience works. So does reality. Correction: And then we heard that, no, a suitor is still being sought.

51 Chrystobel Crescent, Hawthorn. Good house, good price. Sold. It happens. Correction: Not always. Two bidders saw it pass in at $3.05 million. The reserve is $3.5 million.

3 Towers Road, Toorak. $30 million. No sold sign. No more to be said.

And still there are agents persuading their clients that it’s a good idea to spend $30,000 on advertising now – while those they’re spending it on are somewhere where there’s sun or snow.

Next weekend? Ma’am’s birthday. We’ll be back the week after.

David Morrell

Bayside: If wishes were horses…

… beggars would ride – is an aphorism which has been around since the 16th Century (thanks, Google) and it’s still getting a trot in Bayside.

Rephrased by some local luminaries into: “There’s renewed buyer activity! There are multiple bidders!”

So that’s good. And that’ll be a new BMW in the mail. Promise.

What are we really seeing? Not a lot of action over the past week; and few private sales. With the mid-year long weekend almost on us and winter well and truly here, activity is still slowing on the back of underwhelming buyer confidence and a limited selection of quality offerings.

Which is not an argument to give up the search altogether. There are still gems to be found; but the finding is certainly harder.

And then to the news that was:

The standout auction: 20 St Ninians Road on the corner of Dudley Street in Brighton’s Golden Mile. Last sold just on two years ago for $2.74 million, it’s a presentable single level townhouse on just 574 sq m. The auction produced – remarkably – two genuine but frugal bidders who each put in one bid before the property was passed in at $2.97 million. Following an outbreak of good sense, that offer was accepted shortly thereafter.

Elsewhere in Brighton bidders were ducking for cover:

18 Carpenter Street was passed in at $1.75 million. There was a later offer reported to be $1.8 million and the reserve remains a mystery.

35 William Street was passed in on a vendor bid of $1.75 million and the reserve again confidential.

Among Brighton’s slim pickings was one notable private sale: 4 Belle Avenue, Brighton, sold for $3.62 million.

Elsewhere in greater Bayside the pattern continued with the lower to middle end (up to $1 million) travelling reasonably well, but with the tap turned off for almost everything over a million.

Seems our reports are incomplete without a mention of our favourite performing suburb(s), the Bentleighs.

With a rare zero number of auctions held in Bentleigh, attention moved East with a total of 11 auctions producing just six sales. Even the bullet-proof Bentleighs are not immune from the chilly winds of a cooling market.

Enjoy your birthday, Your Maj. And we’ll see you, commoners, the week after.

Damian Taylor

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Those seeking the real action at the top end should take a look at 250 William Street, Melbourne. Yes. The County Court.

It’s fun for all the family as QCs take aim at when an offer is or is not an offer and whether an agent had a real counter-offer or was crossing his fingers behind his back and if so whether that’s only what’s to be expected.

All of which might seem like some innocent entertainment if not for the $200,000 plus in fees on one side (and, presumably, the other) and the consequences for others if, in fact, the agent invented his offer in an attempt to raise the price paid by the complaining party.

If that is proved, there could be a queue at the County Court. Stories of invented offers in negotiation are legion – and those who can prove them may be entitled to significant compensation. It has the potential to be an overdue game-changer for the industry.

And then you have to wonder why this whole affair has been greeted with such resounding silence by those who in theory should have an intense interest.

Consumer Affairs Victoria? Anyone home?

REIV? Are you there? Would you like to reassure your public that you’re on top of this?

Other agents we’ve spoken to? Outraged: Horror that, if guilty, an agent could do such a thing and thus bring all into disrepute. And a great unstated relief that it’s not them in the witness box up against a chainsaw-wielding QC.

And then, as if enough isn’t enough, on Sat arvo, our phone rings. It’s a high-profile agent who has been bidding on behalf of a client and he’s been enticed to attend the auction by … underquoting! And he’s been bidding against … a dummy! And he’s … furious!

Lordy! What will they think of next? Maybe now he’ll begin to understand how the rest of the world feels when forced to deal in a market of distrust.

This is increasingly driven by volume levels and buyer pessimism and the problem – especially when properties are sold post-auction or off-market – is the complete lack of transparency through the negotiation process. Never has “buyer beware” been more appropriate.

And now the weather report …

When agents start telling the media that auctions are no longer the automatic choice, when they lament having to tell vendors what they don’t want to hear, when they speak of finding innovative ways to engage buyers (not, we trust, of concern to the County Court), you could say there’s been a change in the weather. That’s not a cloud on the horizon, it’s right over us and it’s raining like hell.

And it seems to have brought on a new strain of flu among the auctioneers: Lots of huffing, puffing and very red faces, high blood pressure and low spirits. They should go home to bed.

But …

But there are always exceptions. Tick all the boxes and the buyers will come.

46 Elizabeth Street, Malvern. A good Victorian with ticks all over it (that’s why we bought it years ago). Four bidders competing. On the market at $4.5 million and sold at $4.68.

But still there are wallflowers. Still no sold sign on “Little Mytton” 29 Albany Road, Toorak. Expressions of Interest? Supposedly three punters? But still light years between the owner and buyer.

$10 million+ Toorak has always been about joining the dots and never more than now when there are alternatives quietly available off-market.

David Morrell

Bayside: reality rules?

Auctioneers and seller’s agents have been acknowledging for some months now that it is indeed a buyer’s market.

In fact this concession to reality seems to have become a part of auctioneers’ preambles in recent weeks. However there is an increasing edge to the spruikers’ tones as frustration and annoyance sets in with buyers simply refusing to buy into the argument.

“It is supposed to be a buyer’s market, so why on earth aren’t you all bidding?” one gavelman was heard to plead as he gazed into the blank faces of his not so enthralled audience looking for the three or so bidders he thought he had ready to go. “Now,” he must have been wondering, “How do I explain this to my vendor?”

Can it be a buyer’s market when the buyers haven’t come out to play?

Now even the banks are concerned with the lack of activity and the effect on the lending market; so much so that they have cut interest rates on larger loans and increased the loan-to-valuation ratio in an effort to stimulate lending (and to no doubt pinch some market share from the opposition).

The tea leaves indicate this holding pattern will continue for some months at least with clearance rates and prices continuing to ease a little over that period.

Will the traditional Spring market bring some respite to sellers? Too early to call.

But if history is repeated, when buyers decide to re-enter the fray, it will be in numbers and when that happens a market with barely a pulse can become resuscitated very quickly.

Greater Melbourne recorded an official clearance rate of 59% and that is likely to be adjusted down a little.

Bayside barely got to the 50% level with the clear exception of – yet again – Bentleigh and Bentleigh East. 79% sold: 15 from 19 offerings.

Beaumaris and Black Rock were back on the job after last weekend’s holiday with 12 auctions listed and seven of those finding buyers.

The standout offering was three adjacent allotments at 493-497 Balcombe Road, high on Balcombe Road hill. Ranging in size from 836 sq m to 936 sq m, the three coincidentally sold for exactly the same price of $1.4 million each.

A quiet day for Sandringham and Hampton with only three sold among the seven offered. Highest of the day was 4 Holloway Road, Sandringham: $1.63 million.

The top end in Elwood was not troubled with a prime opportunity at 24 Meredith Street not finding favour. It was passed in at $2.25 million, just shy of its reserve of $2.385 million.

A big weekend in Brighton and Brighton East resulted in half of the properties offered under the hammer eventually finding buyers.

Of the 10 that did sell, the vast majority were passed in on a single bid and bidder and negotiated afterwards.

The standout offering was at 2C Dudley Street in Brighton’s Golden Mile. Although the address implies an apartment or town house, it is in fact a very substantial family house on a battleaxe allotment of 1100 sq m. Genuinely described by the auctioneer as the best home he has had to sell in over 30 years in real estate, he was still met with a subdued silence. Passed in on the auctioneer’s bid of $5 million, discussions continue.

The auction of two adjacent vacant allotments in Hanby Street also failed to excite. Number 38 (1144 sq m) was offered first on the basis that if sold, number 40 (914 sq m) would be available to the purchaser at the same rate per sq m. A not-to-be-sneezed-at bid of $2.6 million was apparently received but a brief post-auction negotiation (held surprisingly with all to see) failed to find agreement and the reserve is now undisclosed. Number 38 did not attract any bids under the hammer and was also passed in on a vendor bid of $1.9 million. A later offer of $2 million was reported and again the reserve is to be disclosed but a figure of $5 million for both has been mentioned.

63 Outer Crescent, a brand new townhouse, has finally finding a buyer. First offered last year with an expectation of at least $3.5 million, several agents and many many months later a sole opening bid of $2.5 million was gleefully received and a post-auction chat encouraged said bidder to add some weight to the offer before a price of $2.61 million was agreed.

11 Thomson Street was a test of patience for both agent and buyer(s). An opening bid from an advocate of $1.5 million was made. The auctioneer was heard by most there that he did not intend to make a vendor bid and that the property would be passed at said $1.5 million in the absence of any further bids. Surprise, surprise when he then announced a vendor bid of $1.55 million. Said advocate was suitably unimpressed and made his displeasure known. The outcome was a standoff with the property passed in and negotiations then being conducted with no less than three parties. Against an initial reserve/expectation of $1.75 million a sale eventually was made but believed to be a lot closer to $1.6 million

Also finding buyers:

• 19 Cole Street reported as undisclosed but understood to be a little over $2 million.
• 45 Windermere Crescent passed in at $1.725 million and later sold for closer to $1.8 million
• 33 St James Park Drive sold post-auction for $1.69 million

And in Brighton East, in arguably the most expensive street in this locale, number 14 Shasta Avenue was unusually but candidly reported as having “no bids”. It now has a reserve of $2.875 million.

There’s another biggish weekend coming up. Our prediction? More of the same.

Anyone for footy or the snow ?

Damian Taylor

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This much you know: the market is soft, its top end especially so. Many listings, few must-haves. And plenty of those less than exceptional houses which a year ago would have had crowds queuing today can’t attract a stray cat – any bets on how long it will be before the offers of free coffee and cake re-emerge?

And, in any direction you look, there are more and more explanations being laid on the table: it’s the uncertain economy, it’s the banks, it’s the bubble, it’s the weather, it’s the footy (always), it’s the…

The explanations from the pundits are near-always certain, near-always neat. But out here where the deals are done, the world is a messier place.

That’s where the exceptions rule: the AAA’s with all boxes ticked; especially if renovated and ready to move straight in – the exceptional properties which make their own rules.

20 Gordon Street, Toorak. On the market at $2.5 million and many hands took it lightly to $2.925 million. Exceptional.

And then came Armadale and exceptional turned to weird. High-profile property offered by two high-profile agents in conjunction. A huge ad spend which came up with a great big expression of little interest. And then it sold. Over $8 million. Agent? Well … not one of the high-profiles in conjunction. The commission on a sale at that level is likely to be around $160,000+ so it’s not exactly kitty litter. But whose commission? The agents who didn’t or the agents who did? Those who made the sale or those who have the contract to sell? Lawyers at close range, anyone?

So what can you expect?

• AAA choice will continue to be narrow. That’s certain.
• The long weekend will be an interruption.  That’s certain.
• School holidays will be an interruption. That’s certain.
• Some who think they know better will ignore the forecasts and list anyway. That’s certain.
• Some who have no choice will list because they must. That’s certain.
• Some will still find hidden treasures. That’s certain.

And there will also be exceptions.

David Morrell

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Bayside relativity principles

The published results suggest that Bayside performed relatively well on the weekend. It’s only when you drill down that it becomes apparent all is not as it seems. Those which sold often attracted nary a bidder and were only saved from joining the PI list in drawn-out post-auction negotiations.

12 sales from 18 auctions over the weekend in the Brightons, for example, suggest it’s quite a solid market but in fact it’s skating on thin ice over waters of unknown depth.

With a soft market and winter approaching it’s understandable that many would-be buyers feel the bottom is yet to be reached; but it’s also true that trying to pick the bottom of any market is a daunting task and when lifestyle is involved, price should not be the final decider – that the investment component of a well-chosen house will, given enough time, look after itself.

Brighton gets busy

The very pointy end of the market in Bayside has been notoriously quiet this year with sales over $5 million virtually non existent, so the sale of a landmark Victorian house on 2790 sq m at 70 Halifax Street, Brighton is worthy of note. It’s been on and off the market at various times and with different agents over the past couple of years and finally sold during the week for a figure believed to be between $7 million and $7.5 million. Although a far cry from the $9 million plus quoted when first offered to us in 2008, that price is a positive for a property of this calibre, particularly given the less than prime location at this end of Halifax Street.

Those which sold at auction?

• A brick pair at 86-88 Wilson Street on total land of 1340 sq m. It passed in on a lone vendor bid of $2.3 million and when a token $10,000 extra was offered later, a sale quickly resulted.
• 7 Tucker Avenue, $2,010,000
• 482 New Street, $2,000,000
• 37 Windermere Crescent, $1,420,000

Those which didn‘t?

• 39 Orchard Street. Nary a hand raised for a fine single-level renovated Victorian. Passed in at $1,950,000, reserve $2,090,000.
• 5 Tracey Crescent. Again no bids nor bidders. Passed in at $1,750,000 with a hopeful $1,950,000 reserve.

And just as the demise of the entertaining Saturday arvo auction draws nigh, along comes the most engaging street theatre we have witnessed for some time.

126 Bay Street is an unusual property – a period-style double-storey residentially zoned shop in a group of four; but nowhere near Bay Street’s commercial and retail centre. Before the auctioneer could call for bids, a heated discussion ensued between the auctioneer and an increasingly angry questioner regarding flood zones. At the end of the day he with the loudest voice always wins and with the assistance of his portable amplifier (“Never argue with a man with a microphone.” – J Kennett), the auctioneer prevailed. That seemed to fire up the crowd and half a dozen bidders competed, pushing the final sale price to $855,000, $100,000 over the reserve. And no, Mr. Angry did not bid.

Bentleigh fired up as usual with 15 sales from 21 auctions and with three sales above $1 million, Bentleigh’s top end seems near-impregnable.

• The highest price paid was for a well renovated and extended timber cal bung at 4 McLean Avenue. On a modest 557 sq m, it has a designer pool and all the other accessories deemed necessary. It sold for $1,590,000.
• Also up there was the sale under the hammer of 12 Godfrey Street. Although not in the same league as McLean Avenue, it still attracted competitive bidding from two keen parties and sold at $1,370,000; just over its reserve of $1,350,000. It was earlier quoted at up to a quarter of a million dollars below that reserve and prospective buyers dragged along by false hopes are justifiably furious.

Black Rock and Beaumaris? RDO

Sandringham and Hampton? 7 out of 10

17 Avondale St Hampton, good location, a typical example of a nicely renovated and extended brick period house, passed in at $2,300,000 and later sold for what is thought to be around $2,400,000.

Elwood flies

Two sales in Elwood support our observation that there is a continuing flight to quality.

• A townhouse at 89 Mitford Street sold for $1,737,000 at auction
• A lavish Nick Wright house at 20a Docker Street did not make it to the day and was snapped up in the first week of its campaign for a cool $2.5 million.

With a huge weekend coming up next week, most Bayside agents will be relieved they have cleared a good percentage this week. We predict this will not be the case come next Sunday night.

Damian Taylor

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Soft is pundits’ new hard-sell

They need the turnover,” says buyer advocate David Morrell. Australia
escaped the worst of the global financial crisis, but some investors have
given up on … Sydney Morning Herald