Big bang. Not a theory.
By moko | March 1, 2010
It was the first big weekend of the year and it had all the signs of going off with a bang, but…
That was deafening.
And there are some worrying echoes.
First, the big bang:
There’s still a wave of pent-up demand, much of it dating back to last year. Once people have made the decision to move (or circumstances demand it) there’s usually a period of quiet optimism – getting to know what’s out there, no rush – and then there will be a property or two which really appeals and, not unusually, goes to others; and then disquiet starts to gnaw. How much higher can prices go? Is it now or never?
All of which can add up to some very anxious people offering numbers they never expected and may regret. Which helps to explain days like Saturday.
There were numerous auctions where four or more bidders were still in there well beyond the reserves and there were prices 10-15% and more above what we believe is fair value (and even that is well above what it was just six months ago). Particularly stressed were those putting up their hands at between $1 and $3 million.
Can it go higher? Is another 10-25% possible? Yes. And yes.
Can that go on? Not unless someone has repealed the law of gravity.
How volatile does it get?
About a week ago, 1002 Malvern Road, Armadale, a large Victorian house on 12,000 square feet, sold before auction for $2,825,000. On Saturday, four doors up at 122 Kooyong Road, a smaller Victorian on 8,000 sq feet sold for an impressive $2.7 million against a reserve of $2.4 million. One property was an outstanding buy and the other truly expensive and just 8 days separated them. Why? What (or who) persuaded Malvern Road to sell? What persuaded six people to go head-to-head and so far over the top in Kooyong Road?
2 Selbourne Road, Toorak, a modern townhouse, sold for a very large $4.75 million after being passed in at $4.6 million (someone couldn’t wait for the Easter bunny?). A grand, renovated-by-the-local-RSL (not their forté) Victorian mansion at 23 Loch Street, St Kilda West had nine bidders who took it to $4.1 million. No surprise there, but still quite a clutch of under-bidders who, presumably, are ready to put their hands up elsewhere.
Boroondara. A student from mainland China saw the property for the first time only minutes before the auction … and bought it. Impulse buying is supposed to be restricted to supermarket checkouts. Now it’s houses?
Even in paddocks we don’t often play in – investors and apartments – close to the city there have been prices paid that only astronomers could comprehend.
And the hangover from last year’s very top end expressions of disinterest campaigns has been relieved, a little, by a new owner at 10 Heyington Place. In the end there were two interested buyers and one genuine seller. How do we know? Well…
But it’s still those echoes which worry. Not so much of a problem at the very top end, but head down the scale and you will quickly find the over-stretched. Head all the way to the first-home buyers and you’ll find what for some is a recipe for misery.
It’s not good. Not good for individuals and not good for a society which is increasingly becoming split along lines of those who can afford somewhere they are happy to live and those who cannot.
There are two elements to what we believe is now an unhealthy market: one is the seemingly inexorable rise in prices, the other is the volatility which shakes confidence among both buyers and sellers and, in the end, helps no-one. Both are, we hope, exercising the minds of those in government and at the Reserve Bank.
For now, the rise and rise continues, but history suggests it’s unsustainable.
David Morrell
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Bayside takes plunge
Last week it looked like Bayside buyers were dipping a toe into the water before deciding to stay dry or to dive back into the market.
Not this week. Now there are rows of wet Speedos hanging on the line. There were strong clearance rates at auction and numbers of sold-priors and private sales; while properties passed in at auction were rare (and mostly due to getting prices well and truly wrong).
Bentleigh powered along with 16 sold from 18 auctions; with multiple bidders and prices mostly above expected. Bentleigh East is the local darling: strong buyer support and two properties topping the million dollar mark.
4 Kadir Street was expecting mid $900’s but zoomed away to sell at $1.07 million and 19 Vasey Street quickly eclipsed that: $1.295 million.
Beaumaris and Black Rock had a big week with the former recording 11 auction and private sales for the week; the vast majority around the million dollar mark.
Exceptions were pass-ins at 6 Rennison Street ($1.7 million, reserve $1.95 million) and 374 Beach Road ($2.7 million on a vendor bid, reserve $2.9 million). Seems the Bayside top end can still be challenging.
9 Cullinane Street, Black Rock sold at $1.235 million. 19 College Grove sold prior for $1.425 million.
Brighton and Brighton East sold 14 from 18 auctions and also recorded a handful of privately sold properties.
Among the successes, the standout was the unreported result under the hammer at 40 Sussex Street. It’s an unremarkable 70’s style single-level house of modest proportions on equally modest land of 700 sq m and expected to sell for $2.6-2.7 million based on two or three similar sales made less than three months ago. After an epic tussle, shortly after the auctioneer’s one and only opening bid of $2.6 million, it was knocked down for an astonishing $3.25 million – a mere half a million above expectation. If an underbidder is ever happy at missing out, it should be this one.
Also in the money are the vendors at 38 Montclair Avenue. A renovated and extended 1920’s brick house, its presentation and accommodation obviously appealed and $2.25 million was the result.
2a Rippon Grove buyers were not confused by the address. It’s on the corner of South Road with views over Brighton Beach oval and out to the bay. On 1077 sq m, it sold under the hammer for $3.2 million.
One of the few passed-in properties was 44 Roslyn Street. A new spec house, it failed to excite and could only muster a vendor bid of $2.5 million before the reserve of $2.85 million was announced.
An orphan from last year, 7 Wagstaff Court, was dusted off and set to be auctioned again over the weekend, but a buyer felt the love and parted with $1.925 million prior to the auction. Group hug for all involved.
Less than 12 months ago, a landmark house at 186 Church Street – on the corner of Halifax Street – was privately sold for $2.65 million. With very little done to it, the price has since climbed $550,000; or over 20%. It sold again during the week for a very handy $3.2 million.
Brighton East was less busy than its cousin but included a result at last for another 2009 reject: 1 Collis Street. An as-new property on 650 sq m, it sold for $2.5 million.
1 Lansdown Street was not so fortunate. The highest bid was the auctioneer’s $1.8 million. A later offer brought that up to $1.825 million but still nowhere near the vendor’s now stated reserve of $2,050,000.
13 Alicia Street, Hampton, also profited from a stronger 2010, selling for $4.17 million following an expression of interest mini campaign. It’s a substantial resort of a property with pool and court and languished on the market earlier last year with no takers at mid-$4 millions.
The vendors of 31 Gordon Street, Hampton, will be hoping to do still better. They’re looking for $5 million or more in an expressions of interest campaign. Expect a sale soon.
Dreadnought Street, Sandringham, has become a classification of its own. Three sales in a week:
- Number 9. Standard two-storey townhouse, sold at auction on Saturday for $877,000.
- Number 15 was sold at auction on Sunday for exactly $1 million.
- Number 22-24 changed hands during the week for $1.8 million.
The Labour Day long weekend will give buyers who have been underbidders these past two weeks time to reflect on their buying strategies for the remaining auction weeks prior to Easter.
Some will decide to dig deeper if they must to buy into the most keenly sought locations. Others it will be a matter of reviewing what is on their must-have lists and to get the red pen out. And some will have little choice than to widen the geographic search area in an attempt to find the affordable.
The least advisable option is to do nothing in anticipation of the market going into a huge correction phase (or to crash as some would like). That said, it is patently obvious that the current heat in the market is not sustainable, nor healthy, and the sooner the market plateaus, the better for all concerned.
Damian Taylor
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2010 and all that.
By moko | February 22, 2010
Welcome to this year. Hope it’s a good one.
“What is the market doing?” “What will the market do?”
If we had a dollar for each time …
Let’s start the year with a clarification: there is no Melbourne market. There’s a whole series of them. And then there are markets within markets. Sometimes in the same street.
What’s coming?
Things will change. Significantly. Quickly.
Is it time to re-calibrate?
At a couple of auctions in Portsea last month, there were multiple bidders who took each property to close to $9 million (and well past both their reserves and logic). In all of last year there were only two or three Peninsular properties sold at that level and each took around six months.
OK, at least seven people are ready to pay over $8 million for land in Portsea. Does this mean fasten your seatbelts in Toorak?
Um, no.
There’s still a backlog of mansions out there waiting for offers. And waiting. And waiting.
Grab your wallet:
They’re all $10 million plus “trophies”, all with a poultice spent on marketing. All still on the shelf.
Meanwhile, over just the past couple of weeks we have bought a number of properties at that level. One in particular highlighted the fragility of some positions: three weeks ago the vendor had a written offer with eight numbers in it. And vacillated. The offer evaporated. We bought it for a number approaching a million less.
And then there are the expressions of interest campaigns. As often as not, they’re people putting toes into the water and hoping there will be a punter who knows no better than to pay what an agent says will be needed.
(Why do people ask agents? You’re far better off asking other people at inspections what they think a property is worth. They’re the ones who will – or will not – be putting their hands up.)
Why such great inconsistencies? They’re at least in part explained by the lack of supply at the top end. Little choice can lead to bad choices; or irrational decisions to spend too much money.
- 14 Scotsburn Grove, Toorak. An unsurprising $7 million, but only looked good because there was nothing else good to look at.
- 1 Yarradale Road, Toorak. Declared on the market at $2.3 million and went to just over $2.8 million with multiple bidders. Handy premium.
And then there’s the complicating factor of timing. We’re in a stop-start season. It’s on for two or three weeks in February, stops for a long weekend and is followed by (this year) an early Easter.
The feedback we’re getting is that there are people who are ready to sell, providing it’s into a market with more certainty. They’ll list post-Easter if the run-up looks promising. For buyers, patience may pay.
Lower down, there’s strong interest at $1.5-2.5 million which thins when there’s a 3 involved. And crowded open-for-inspections because there are so few to inspect.
And then comes google.
This is far more significant than toe-in-water stuff. It’s potentially a major, major business for google and will affect local heavies realestate.com.au and domain.com.au — to say nothing of estate agents. Their future business model may be as consultants, not agents, and require a serious culture change. (It’s a model we have already embraced, but we must still anticipate change.)
Star Gazing
It seems everyone’s an authority on the top end (estate agents who would like some listings, buyers’ advocates we never see). We suspect there’s a lot in common with the fan magazines’ fascination with the royalty of Hollywood. And is about as reliable.
The top end is our backyard. We don’t rely on rumours, we know what’s happening there (we have, for example, bought more of Toorak than anyone in its history).
And so a word of caution: do not believe all that you hear. If claims are being made, ask to see proof.
David Morrell
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Bayside: It’s still very lonely lonely lonely at the top.
Bayside was largely deserted throughout January. Those agents who were still around mostly stared forlorn at unringing phones while colleagues, buyers and sellers were out of range on beaches or the ski slopes of the US and Japan.
It’s tough.
Yet the need for a break was compelling after the roller-coaster of 2009. Had anyone ever had a year like it?
A year which began with echoes of not-distant thunder of the financial meltdown – and you could buy despair for a penny a pound – by its end had prices and volumes headed for unpredicted stratospheres.
Who woulda thunk it?
Then what to expect now, when the unexpected seems the only certainty?
The sense we get is that the extended summer break has given buyers some time to pause, to catch their breath and to reflect on how they are going to deal with the market in 2010. That it is well and truly 12 o’clock on the Bayside real estate dial and it’s time for a more measured approach; that heads rather than hearts should rule.
It’s a cyclical thing: the sellers have now moved ahead of the market. This is most evident at the very top end across Melbourne; and certainly in Bayside.
We commented in Top End Trends late last year that the $5 million plus segment was suddlenly innudated with gleeful sellers hoping to cash in on the surge of foreign buyers who appeared mid-2009.
That surge turned out to be a wavelet and, as predicted, that end of the market is now parked. A dozen or so properties that were extensively marketed in Spring and the pre-Christmas period remain unsold or in some cases withdrawn from sale.
Consider:
- 319-323 St Kilda Street on the corner of Bay Street in the Golden Mile. Still available at around $9 million.
- 29 St Ninians Road. 1000 sq m on the beach. No takers at around $10 million.
- 1a Martin Street. Beachfront 1930’s mansion on 700 sq m and recently refurbished. Still looking for around $10 million.
- 52 South Road. Brighton’s 5500 sq m “Gone with the Wind” which, frankly, no-one seems to give a damn about, at least at $15 million (but the brave souls knocked back an offer not far from that).
- 184 The Esplanade. Glitz. Glam. Views. And nobody’s darling at $8 million plus.
- 22 Glyndon Avenue. Old Dowager in Golden Mile with partial beach frontage seeks new partner with $9 million to spare. (OK, really a block of land and now withdrawn from sale).
- 316 St Kilda Street. Vast land, appealing period house. No takers at around $7 million.
- 23 Cosham Street. The wallflower of 2009. Still available at over $5 million.
Why are so many still to find buyers?
Our view? It’s the money. (The agents’ view? It’s the money. But they won’t say that out loud and rarely to their vendors.)
But among this hive of top-end inactivity, there were a few sales which were made:
The pick was 25-27 Glyndon Avenue. On the beach and a very strong $15.5 million paid by Mario Salvo.
For the Warnes, for Christmas, a beautifully restored Victorian mansion on William Street, with an adjoining house, and all it took was around $9 million.
And there were a few (private) tunes whistled to break January’s silence:
Following an expression of interest sales campaign, 6 Martin Street was resold by James Brayshaw for $4.9 million.
28 Normanby Street sold for “close to $5 million” a gleeful agent reported to Top End Trends. A source close to the vendor said it was really $4.76 million, but agents’ arithmetic has always been negotiable.
A new house on the corner of of Meek Street and James Street sold for around $3.5 million.
79 Well Street finally sold after a change of agent: $2.75 million.
On the auction fron the only sale of note was 1-4/380 St Kilda Street. 4 old villa units on 1000 sq m on the corner of New Street. Following an initial quote of something over of $1.8 million, the property sold under the hammer for $2.585 million. Is a hmmm? in order?
This weekend was really the beginning of the season and although the clearances were strong, of the 6 or 7 auctions attended by Top End Trends in Brighton, most were uninspiring with muted or no bidding.
8 Carpenter Street should have sold for at least $2.5 million and if auctioned in November, would have reached $2.7 million. Three lame bidders hardly fought over it before it stumbled to $2.4 million and, after a vendor referral, was declared on the market. And that is where it finished.
51a William Street was passed in on a lone bid and a sale at $1.5 million was negotiated shortly after. We remained unstirred.
2 Alton Avenue, a little over 500 sq m marketed as an opportunity to do up or tear down pulled two bidders who almost aplologised to each other for bidding for the same property. A reasonable result ensued at $1.475 million – $265 per sq ft.
A townhouse at 52 Halifax Street on the corner of Weatherly Grove, had the auctioneer looking somewhat nervous prior to the auction as he scanned the gathered few trying to identify a friendly face, but to no avail. It was passed in on a vendor bid, but smiles all around when someone showed some later interest and was hastily escorted inside. Final result? Sold for $1.555 million.
No joy at 9 Peacock Street. A vendor bid of $2.4 million unbeaten by any genuine bid. Reserve yet to be disclosed.
118 Cochrane Street sold for a very respectable $1.771 million
Surprise of the day was 35 St James Park Drive. Well attended by a number of Chinese buyers, the fung shei must have been right because strong bidding pushed it $260,000 over the reserve to a very giddy $1.91 million.
In East Brighton, 62 Canberra Grove reached an expectable $1.58 million, well within the quote range of $1.5-1.65 million.
Overall, a soft start to the auction season. Watchful buyers and semi-spirited bidding. But it was a hot day and maybe the beach was still beckoning.
The real test will be next weekend with a full book of auctions ahead of the following long weekend with none.
The beach. The beach again will call.
Damian Taylor
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Dec 21: Bayside: It’s lonely at the top.
By moko | December 21, 2009
As predicted over the past few weeks, the very pointy end of the Brighton market has failed to deliver. A swag of top end properties remains unsold despite serious amounts of vendor’s money being spent on marketing and the very best efforts of some of Bayside’s finest agents.
The tom toms are telling us that although reasonable offers have been made by buyers, in many cases the response from sellers has been less than reasonable; with some agents grumbling about clients getting ahead of the market.
A sample of those still to call on the titles office:
- 15 Dudley Street. Expecting over $5 million and a rumoured offer rejected in the very, very high $4’s. Patience may not be a virtue.
- 22 Glyndon Avenue. Initially expecting over $9 million for what is essentially land only. The market is probably closer to $7 million.
- 319-323 St Kilda Street. Initial hope was for over $8 million. While hope springs eternal, time may run out.
- 184 The Esplanade. Agent was “confident” of achieving at least $8 million. So far, buyers are not on the same page.
- 142-142a The Esplanade. Paid $4.1 million back in April. Three bidders at the recent auction. The highest bidder ($4.96 million) invited inside and asked to pay more. Politely declined. Any takers?
- 316 St Kilda Street. Originally asking around $7 million. Some months later we understand something close will tempt.
- 23 Cosham Street. Initially up for private sale at around $7 million, the recent auction saw the property passed in to the auctioneer at around $5 million. Offers will be considered.
- 52 South Road. Chasing $15 million. The word locally is that an offer a little under that mark was recently rejected.
All notable wallflowers. Those invited onto the floor during the last dance of the real estate year included:
- 3/200 The Esplanade. Sold at last for a very reasonable $3.55 million.
- 2 Higinbotham Street, another land only sale: 680 sq m for $1.9 million.
Meanwhile, in Brighton East:
- 40 Heathfield Road. Passed in on a vendor bid at $1.6 million. Reserve $1.79 million in one of the few auctions in Brighton E over the weekend.
- 11 Plantation Avenue. Expressions of interest suggested interest at $2.185 million. Sold.
- 42 Glencairn Avenue, a contemporary house on 700 sq m, sold very privately for $2.23 million.
Elsewhere in Bayside, most concerns were about Christmas parties and shopping.
Coming weeks will see us pursuing anything but real estate over the Christmas break. Thank you for your attention over the past year and we hope your next will be peaceful, cheerful and prosperous.
Damian Taylor.
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Dec 14: And now, the end is near…
By moko | December 14, 2009
According to Google Maps, 10 hours and 12 minutes and 881km of the Hume is what separates Melbourne and Sydney.
That’s not all, folks. Consider AFL and NRL, restaurants and theatre, beaches and not. And … and a lot of stuff.
Also, underlined and underlined and underlined this year has been the differences in top-end property markets.
Differences? Sydney is more about display, Melbourne about security. In Sydney, living in a palace is important, even if a king’s ransom is owing on it. In Melbourne, you can get away with six bedrooms and four bathrooms and underground garaging for only half a dozen cars.
In short, SYD is geared, MEL less so.
That translates to confidence or lack of when the going gets rocky; and when the going got rocked by the GFC, confidence drained in Sydney. While things also became a little pale in Melbourne, the shock was not as deep and the recovery was robust.
Beyond robust. At times it defied logic.
Which raises the next question: Where is the demand coming from? Despite the hype of Asian influences, it is largely organically grown. While it’s true that mainland China has underpinned some suburbs, there is only faint Chinese interest in period houses; and feng shui rules out many others.
And, yes, there are still many unsatisfied buyers waiting out there; but at the top end they’re not living in hovels so most can afford the wait. Quality is still the decider.
This year also nicely demonstrated the estate agent’s “sheep” theory:
Herd of sheep at a gate: one goes through, they all go through; one stops, all stop. That applies to buyers and sellers.
Last December there was almost nothing on offer at the top end, even less of quality and hardly a bid to be seen. This month only the lemons had fewer than three or four hands in the air.
Will it continue? Probably.
It’s likely there will be few transactions early in the new year and that may suggest a cooling market, but lack of stock and continued pent-up demand suggests that prices should again begin to rise.
And now it’s Christmas. But not all are tidings of joy. Read between the lines and you’ll find auctions which ended as pass-ins and a number of expressions-of-interest campaigns that raised no more than a yawn.
- 10 Fairbairn Road, Toorak. Only the vendor could be persuaded to bid. Passed in at an optimistic $1,850,000
- 39 Power Street, Toorak. Another vendor. This with a bid of $2.5 million.
- 2/22 Verdant Avenue, Toorak. That vendor again. $1.4 million.
And, while we’re here:
- Dunraven, 55 Clendon Road, Toorak, 28,000 square feet of prime possibility still hasn’t got a sold sign on it.
- 8 Macquarie Road, Toorak. Large ask, little interest.
- 1002 Malvern Road, Armadale. Ditto.
Vendors, often encouraged by cheer squads of estate agents, are optimists. Those who have bought elsewhere (optimists do that) may find Santa brings them a hard dose of reality.
And so we end a weird year. Faltering start, extraordinary end. Some of the more unsavoury industry practices such as under-quoting brought to (limited) account; but still a long way to go to an open and clear industry.
And it could be. And it would make life so much easier for everyone.
We’ll work on it.
Here’s hoping your break is cheerful; and your next year even more so.
David Morrell
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Bayside: doing it its way.
After the beachfront and the Golden Mile, Middle Brighton’s primest location is between the beach and Church Street. Last weekend, the record for land prices was both set and broken; underlining again the strength of demand among private house builders.
16 Wellington Street, a compact allotment of 623 sq m (6705 sq ft) defied initial expectations of up to $2 million and under relentless competition was finally knocked down for $2.3 million. For a couple of hours, that was the record: $3691/sq m or $343/sq ft. About 15% higher than the previous high in the area.
And then came 23 Albert Street, just around the corner. On 740 sq m with a graciously tired old timber house, it was about to be knocked down at $2.7 million when a last minute knockout bid was made of another $50,000 and it was all over red rover. This just shaded the earlier record and has put the new benchmark at $3716/sq m or $345/sq ft.
Apart from the stunning price paid in both instances was the fact that at least four bidders competed at each auction; meaning there are another six disappointed buyers presumably still looking for new house sites. That’s a complete about-face from earlier in the year when a chook raffle in Church Street attracted vastly more interest than any land auction.
On the topic of land, two adjoining older houses were offered at 81 and 83 Carpenter Street, each on about 630 sq m. Number 83 (on the corner of Collins Street) was offered first with the auctioneer at pains to point out that the successful buyer of Number 83 would be given first dibs on 81 at a generously discounted figure $150,000 less (yes, less). The auction proceeded and 83 was knocked down for $1.55 million. In turn, 81 should have realised $1.4 million, but it seems the purchaser out-negotiated the agents and secured the second property for $1.375 million.
Highest price paid on the day was at 98 Were Street, an extensively renovated and extended period house on 910 sq m with a swimming pool. It realised $3.75 million.
219 Church Street was reported as sold prior to auction at $2.54 million and 1 Anne Crescent went the same way for $1.61 million. The same agent claimed these two each sold prior to a scheduled auction, but we cannot find any evidence that they were in fact listed for auction. We have spent eons trying to rid the scene of dummy bidders and now we have phantom auctions?
Among the positive results under the (real) hammer were 34 Montclair Avenue at $1.84 million, 500 New Street at $1.57 million and 138 North Road at $1.265 million.
But it wasn’t all smiles in Brighton. Several pricier properties are still on the shelf.
10 Esplanade Avenue, a “cutting edge cool” property has been somewhat blunted: passed in at $2.8 million, $300,000 under reserve.
11 Anne Crescent, a new house on 670 sq m failed to excite. Passed in on a vendor bid of $2.4 million with a later offer of $2.5 million and no news yet as to the reserve.
A near new townhouse at 2/30 Grosvenor Street is still a work in progress: passed in at $1.925 million with a reported later offer of $2 million and still ground to cover with a vendor who is asking $2.2 million.
And no joy at another “cutting edge ” town house at 31 Whyte Street where the most excitement was a vendor bid of $1.35 million. The reserve is $1.45 million.
Brighton East had mixed results: some hits, several misses.
13 Curley Street was the priciest result on the day: $1.81 million
80 Canberra Grove sold for $1.335 million
81 Union Street went unreported, for good reason. A charming red brick period house, comfortable and with extension potential on a 840 sq m northerly rear facing garden was quoted at $980,000-$1,050,000 throughout the campaign. Despite this writer on several occasions protesting at the obvious underquote, the estimate remained as it was and surprise, surprise, it sold for $1.2 million. This was one of very many underquotes we and our clients have had to put up with in recent weeks despite the bluster from CA and the REIV to impose serious financial penalties to deter the practice. The recently publicised prosecution and conviction of an agent found guilty of deliberately misleading buyers on price where a fine of $1,000 was imposed does nothing to persuade others to clean up their act. $1,000 would hardly cover the beemer’s parking meter money.
17 Florence Street, Brighton East got to $1.45 million with another later offer (they’re popular this weekend) of the same amount and again we are left to guess the reserve.
6 Parkview Road didn’t excite: vendor bid $1.25 million, reserve $1.34 million.
13 Curzon Street, passed in some weeks ago, has found favour with a buyer paying a respectable $2.6 million.
81 Comer Street sold privately, land value only: $1.285 million.
Beaumaris had equal numbers of pass-ins and sales:
84 Tramway Parade, a 10 room house on a generous 1022 sq m sold for $1.65 million.
31 Clonmore Street Not a bid to be had and, now, an asking price of $1.565 million.
Neighbouring Black Rock recorded a result at 7 Third Street. A six room house on over 1100 sq m, it sold for $1.55 million.
Hampton and Sandringham were relatively quiet.
Highest result was 10 The Avenue, Hampton. A timber house of eight main rooms and on 700 sq m, it sold at auction for $1.601 million
9 Carolyn Street, Hampton was sold prior to auction for $1.23 million.
49 Fernhill Road, Sandringham has finally sold for $1.875 million, three weeks after it was passed in on a vendor bid of $1.9 million with a reserve of $2.1 million.
Bentleigh had 18 auctions listed for the weekend and managed to clear all but four thus maintaining its position as the most efficient auction suburb in the Bayside. The standout was in East Bentleigh: a renovated seven room weatherboard house on 620 sq m at 17 May Street. As an early Christmas present for the owners, a generously spirited buyer stumped up an impressive $1.285 million.
A good deal less cheery was 15 Daley Street, Bentleigh. The auctioneer’s pass-in price of $1.2 million was upped to $1.315 million by a later offer, but it’s still shy of the reserve of $1.4 million.
We will be back next Monday to report on the final auction weekend of the year and to let you know the fate of the handful of serious top end expressions of (dis)interest campaigns closed or due to close this week.
Damain Taylor
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Dec 7: Bubble, balloon, bull-run?
By moko | December 7, 2009
Alan Kohler, in today’s Business Specatator: “… the US dollar is weak and central banks everywhere else are being forced to accommodate US monetary policy to try to stop their currencies appreciating against the dollar. Bubbles in real estate and shares are inevitable in those circumstances.”
The sense we’re getting at the coalface is that we’re now in a bubble; and, like the great procession of bubbles that came before, that it can’t last.
Symptoms? Vendors with expectations beyond great. Purchasers panicked into meeting them.
That’s a sitcom without a script. Or sense. And everyone’s an expert; even if their views are based on data that is months out of date (another of Mr Kohler’s long-held concerns).
Sour grapes? Us?
Yes. Over the past week we have been underbidders on several significant properties where we simply could not make the numbers add up. There’s land value, there’s improvement value and there’s oomph value. Add them and you get to a number which reasonably approximates real value. If you then bid against those who can’t do the sums or simply ignore them you’ll be playing a game with no rules.
Sorry. We won’t take our clients there.
(Why would we, when there are still some gems which are virtually overlooked and some vendors who can’t see these rises being sustained – so while it’s not easy, it’s still possible to buy well.)
Saturday. Land auction at 177 Kooyong Road. Good land, deceased estate, around 15,000 sq ft. On the market at $4.9 million and sold for $6,190,000. No-one else has gone near $350/sq ft in Kooyong Road, yet this ended up at $410/sq ft with three bidders. Bubble, balloon or $1.2 million free kick?
2/122 Anderson Street, South Yarra. Six weeks ago this was offered for private sale at around $760,000. No takers. The owner cleaned it up, farewelled the tenant, put in display furniture and – bubble or balloon – it sold on Saturday with seven bidders taking it to $905,000. Some paint job!
Gems?
29 The Righi, South Yarra, 8 year-old house on 5,000 sq ft. An expressions of interest campaign raised none and, as usual, left seller and agent not knowing what to do. Suddenly, $4,250,000 is put on the table and the game is on with a realistic vendor and the year’s first lounge-room auction. All over at $4.8 million.
And then there’s our love affair with Ian Carmichael of Bennison Mackinnon. We bought a house. He didn’t know we bought it on behalf of the tenant. He’s crying foul. Our client is crying all the way to the bank. We’re taking a collection; with luck we’ll raise enough to buy Mr Carmichael his very own hankie.
And yet more perspective from Mr Kohler: “… bubbles can be hard to pick: ‘bubble’ is often just the name someone applies to a rally that they missed; if you’re on it, it’s a bull market.”
David Morrell
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Bayside: It’s lonely at the top
Buyers were out in force in Bayside this weekend with plenty of action from Elwood through to Mentone as the opportunities to secure a property this year are fast dwindling.
Low- to mid-level properties are being hoovered up despite a third interest rate rise in as many months and with the guarantee of futher rises in the new year. The pent-up demand that flowed from nothing happening in 2008 will clearly spill over into 2010; although there appears to be signs of herd mentality driving some buying decisions and this is reflected in some over-the-top prices being paid.
Mentone and Parkdale are two adjoining beachside suburbs that have been in the shadow of their more affluent northern neighbours but are now finding increased favour from buyers priced out of Hampton, Sandringham and, to a lesser degree, Beaumaris. Mentone recorded 9 sales from 10 auctions on the weekend and still offers value for money in this very heated market.
Beaumaris and its smaller cousin, Black Rock, also had a very busy week. Between them there were 12 sales from 14 offered.
The standout was a sale prior to auction at 4 Tramway Parade, Beaumaris; one of the prime streets in the suburb. A comfortable but dated beach-style property of 11 main rooms and on a substantial 2070 sq m allotment, it sold for $2,880,000.
The highest priced auction in Black Rock was 3 Glenmore Crescent. It sold for $1.64 million with 8 Stanley Street close by at $1,525,000.
Beach Road real estate continues to struggle to attract auction bidders with 2/366 Beach Road passing in at $1.74 million. A later offer of $1.75 million failed to convince the vendor. The asking price is $1.82 million.
Hampton recorded eight sales from nine auctions; most in the very popular sub-$750,000 range. Highest price on the day was 44 Imbros Street, an 8-room cal bung on stock standard land of 624 sq m. It sold for $1.56 million.
Perhaps reflecting its tightly held nature, but still surprising in a prime beach-side suburb in a busy time of year, Sandringham had only one auction scheduled. The solitary offering was 12 Sandringham Road and it’s still tightly (if unwillingly) held by the owner after being passed in at $890,000. A later offer of $920,000 was not enough. The owner is asking $990,000.
Brighton’s stats looked healthy: 16 of 20 sold at auction or soon after but, again, all the action is at levels up to but not exceeding the median for the suburb. Middle to top end properties are not quite getting there.
Evidence? 13 Wellington Street, a solidly built but dated brick house on just under 800 sq m on the corner of Sussex Street. The auctioneer was at pains to point out to the crowd that he couldn’t value it and didn’t really know what it was worth. Seems that message stuck: a solitary bidder offered $3.5 million before it was passed in. Presumably knowing no more than they did before the auction, the agents did not publish an asking price or reserve.
However there was action at 142-142a The Esplanade. It’s a pair of maisonettes on land totalling 930 sq m and overlooking the beach with excellent water views, rear access via Wellington Street and ripe for redevelopment. Last sold in April this year for $4.1 million, three bidders competed until it was passed in (after two referrals ) at a whopping $4.96 million. Apparently further discussions ensued with an offer made a tickle over $5 million, but still no sold sign on the board. The reserve is anybody’s guess but even in this hot market, that is a huge result for no sale.
Several pass-ins from the past few weeks are now being cleared up with 32 Cosham Street sold for $2.9 million and 65 Cochrane Street at $1.725 million.
A big, big auction weekend coming up will really test buyers’ resolves. While low- to mid-market properties will continue to hold up, it’s likely that a number of trophy and other top end properties which are concluding expressions of interest campaigns this week will still be for sale next week.
Time, that most persuasive of raconteurs, will tell.
Damian Taylor
M&K in the News:
Rate rises fail to hammer auctions – Australian Financial Review (subscription required) – Mr Morrell said that there had been a limited supply of quality housing stock available all year and surprisingly little fallout from the global financial crisis…
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