Hits:

• 59 Studley Road, Ivanhoe. Substantial art deco house on 3000 sq m with city views. Quoted at $3 million plus, reserve $3.5 million, sold for $4.3 million. Two determined bidders will do that.
• 31 Hawksburn Road, South Yarra. Unrenovated Victorian terrace. Quoted at $1.6 million plus, sold for $1.957 million.
• 5 Glover Court, Toorak. Just 518 sq m. Sold just after auction for just shy of $4,000/sq m.
• 11 Dorrington Avenue, Glen Iris. Four bidders. Sold for $2.87 million.

Misses:

• 31 Lambeth Avenue. Usually a popular spot in Armadale. Double-fronted timber Victorian on 373 sq m. Passed in. Now offered at $1.7 million.
• 9 Spring Road, Malvern. Passed in with not a bone on the truck at $3 million.

In the next two weeks:

1 Hopetoun Road, 4 Forrest Court and 11 Cole Court in Toorak, 24 Somers Avenue in Malvern, 49 Harcourt Street in East Hawthorn. Either by auction or expressions of interest. Indicators of what lies ahead for the top end.

Oddity of the Weekend:

Open house party in a prominent Toorak street. Up to 3,000 people pay a $1 donation at the door for security. By event’s end the house is somewhat re-decorated. Ouch.

Agent’s quote of the week:

“It is a bit patchy at the moment.” Right. Well, now we know.

In a word? Mixed.

House warming for some, house repairs for others and only 12-ish weeks left for done deals prior to Christmas.

Spot the dummy?

Yup. They’re around. A warning: You Will Be Pinged.

Christopher Koren

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Bayside mixture thickens.

The past weekend was seen by some as a pivotal indicator of the Spring market: agents and sellers praying for a return to more buoyant conditions after a fairly grim Winter.

Early signs are to expect some improvement in transaction numbers, but only if stock levels increase and buyers can find fair value. The rapid swing in buyer sentiment over the past four to five months left many sellers isolated and their properties unsold. It has taken a quiet Winter for the penny to drop and for that backlog to mostly clear.

Who will be a seller and who a statistic over Spring? A lot rests on the agents. It’s up to them to keep their vendors in touch with the new reality.

What moved …

Bentleigh and its up-market cousin McKinnon performed well over the weekend: 10 sales from 12 auctions and nudging the median price along with several sales at the top end of both.

• The standout was at 3 Anne Street, high on McKinnon Hil. An extensively renovated and extended “Cal bung” on a relatively modest 580 sq m realised an exceptional $1,827,000.
• Nearby, at 20 Jean Street, a somewhat smaller version of the above also performed well. Modestly quoted in the $1,050,00-1,150,00 range, buyers ignored the “guide” and competed up to the eventual sale price of $1,315,000.
• Another strong result was at 17 Twisden Road. Again fully renovated to a high standard, bidders pushed the price above the top of the quote to a sale price of $1,460,000
• 51 Hill Street in East Bentleigh, an original weatherboard on a considerable 960 sq m found favour with builders and developers: sold for $1,330,000.

Even in this weaker market, well located land and exceptionally presented houses with the right accommodation and facilities are still attracting the attention of multiple buyers.

Hampton and Sandringham generally did well on low numbers of properties offered. Top price on the day was 23 Gordon Street, Hampton. On 1007 sq m, it’s a well located two storey 1930′s style house with plenty of accommodation. It sold for $2.8 million.

In an area better known for its period style houses, an offering in the Gipsy Village precinct of Sandringham stood out from the rest: 4 Susan Street, on 752 sq m, had renovate or remove written all over it. A bygone style from the 60′s, its position and land size obviously appealed and it sold for $1,400,000.

Black Rock outgunned its Beaumaris neighbour with the strong result achieved at 31 Arkaringa Crescent. A contemporary family house with all the goodies, on 914 sq m in a name street, it sold above the top of the quote range for $1,965,000.

And then to Brighton, where the news is less than upbeat.

19 auctions scheduled. 7 sold under the hammer or shortly thereafter, 2 sold prior, but with 10 passed in it would seem Brighton is still doing it tough.

Of those sold, the highest on the day was 42 Foote Street. Historically a keenly sought location a few doors from Elsternwick Park, the auction was lacklustre and the property passed in to a sole bidder at $1.7 million. Some persuasive arguments must have been put because it emerges the buyer ultimately parted with $1.83 million. Although it’s 689 sq m, the relatively narrow and constricting frontage of 13.7 metres dampened the enthusiasm of some wishing to build a new house on the site.

Another couple of land-value sales were recorded at 53 Whyte Street (698 sq m): $1,492,000 and 94 Dendy Street (643 sq m): $1,484,000

Again, anything at or over $2 million struggled.

• 284 St Kilda Street, passed in $2,000,000 – reserve undisclosed
• 100 Were Street, passed in $2,060,000 – reserve undisclosed
• 4/174 The Esplanade, passed in $3,200,000 – reserve undisclosed

Meanwhile, the mopping up continues with a number of sales of properties that have been on offer for months to many many months. Agents, ever bashful, have become very coy about disclosing sale prices. While they want the world to know they have finally sold a property, all sorts of reasons are given for not revealing any more.

Could it be that the price finally achieved was a long way South of that initially suggested?

And then …

75 Roslyn Street, Brighton. Sold for $2.64 million. In 2008, it sold when new for $2.58 million.

71 North Road, Brighton. John Knox House. It’s on 1700 sq m and was bought in original condition in 2007 for $2,200,000. Now extensively restored, rebuilt and extended, it sold in the past few weeks for a price we believe to be just over $5 million.

3 Wellington Street. Auctioned at the end of May, it was passed in on a vendor bid of $4 million, refusing a later offer of $3.8 million. We believe it has now sold for $3.75 million, but the selling agent will not confirm the exact price.

Finally to an Expression of Interest sale at 36 Gordon Street, Hampton (reported as Brighton Beach). An architect designed reproduction period house on 1500 sq m, it sold soon after the campaign closed for $3.38 million.

And also …

We hear talk of certain serious sales being made at the upper end. More on those when we are at liberty to report them.

Damian Taylor.

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We’ve been feeling the pulse of Map 58, trying to detect a heartbeat. Hardly a flutter. The agents will tell you that this is the usual Winter hibernation, but there are some indications that we’re nearing another Ice Age.

From the agents’ perspective, it’s a vicious circle: those who haven’t seen it all before can’t understand why people won’t give them their homes to sell while those same people are reluctant to buy elsewhere when there is so little choice.

There could be a break in the clouds after the September school holidays, but we doubt it.

And then, defying logic and expectations, a wood duck lands at 3 Avalon Road, Armadale. After an expressions of interest campaign that floundered for months, suddenly a buyer appears with, we believe, $7.5 million in hand. Or about $1 million more than we would have paid. Quack.

Saturday’s action at the top end, or lack of it, was confined to Boroondarra.

• 23 Chaucer Crescent, Canterbury, period house with a court, passed in with three bidders and sold afterwards in the high 3s. The vendors were originally chasing $4 million.
• 5 Callantina Road, Hawthorn, right in the centre of the Scotch mafia, again passed in and sold later: $3,330,000

They’re the kind of results which suggest that too many vendors are still ahead of where the market has retreated. Their choices are to wait the arrival of the endangered wood duck (see Avalon Road) or to lower their expectations.

Weather report

The industry offers an interesting mix. There are agents with the experience to survive even an Ice Age, but there’s a bunch of the younger crew who have never seen a real downturn before and will have to learn fast how to survive the chill; while end-of-epoch barren wastes are wandered by lonely dinosaurs who have still to come to grips with how their world is being changed by the internet – who struggle even with text messaging.

Just when you thought you’d seen it all dept.

The latest in off-market transactions. Last week, a new offering appeared at $20 million plus. But before the agent will tell you where the house is or how much you will be expected to pay, you have to sign a confidentiality agreement. Really? Kids, there are maybe five people in this town who are looking at that level and you don’t want them talking to each other, is that it? Could it be that the property is obscenely over-priced and you don’t want them comparing notes? Perish the thought.

Slow hammer, cont’d

There’s been a new development in the hammer saga. Slow hammers – when an auctioneer takes forever to knock a property down even after bidding has stopped – are now so very last week. Damian’s eye-witness report is below. It reinforces our argument that Consumer Affairs Victoria and the REIV must put forward a system that is fair to all parties. If bidders cannot take auctioneers at their word and don’t know even after a property is declared on the market whether they are bidding for the right to buy or only to refer, that adds yet another unneccessary uncertainty.

David Morrell

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Bayside battens down.

With little of substance on offer, buyers were in shut-down mode on the weekend: average to poor auction clearance rates and, more telling, very few privately transacted sales made during the week.

Brighton’s highest and only auction result was a modest $683,000 for 8/49 Wilson Street. There was also a mysterious $3.1 million sale recorded in Black Street; which we reported as sold weeks ago.

Although I am told there are a number of sales pending in the middle and top end, it appears that may be wishful thinking on behalf of some agents who are struggling to bridge the gaps between their clients’ expectations and reality.

Beaumaris and Black Rock had the week off and Hampton wasn’t much better with the better of two only results:

• 2/25 Keith Street, Hampton East, sold for $735,000.
• 36 Villeroy Street — a well located and renovated period house in the highly regarded Castlefield Estate  –  was surprisingly ignored. The highest bid was the vendor’s $1.51 million and the reserve is set at $1.65 million. When a property like this one fails to excite, alarm bells should be ringing.

Sandringham offered two properties with price expectations well in excess of $2 million.

Not unexpectedly, neither sold nor attracted a single bidder.

44 Tennyson Street pushed a lot of buttons: it’s in a blue ribbon part of the suburb, is a timber reproduction of the beachside style and offers all the fittings and finishes expected in a quality house. But … a family size property with this accommodation on only 590 sq m? The agent’s report was brutally frank: no bidders, reserve $2.25 million.

Nearby at 3-5 Heath Street, a generous allotment of 1813 sq m — formerly an aged care facility — was passed in on a vendor bid of $2.5 million with the reserve a fair hike further North of that: $2.9 million.

Bentleigh provided some hope with solid results in excess of a million dollars at two auctions.

3 Hobart Street brought $1,085,00 and 20 Talbot Avenue $1,210,000

Mr Gavel reinvents auctions

Over the weekend, we were on the receiving end of a new gavel bangers’ tactic.

We were bidding on behalf of a client on a property which had been quoted at $1.05-1.2 million.

Including us, there were three bidders. When bidding reached $1.2 million, we asked whether the property was on the market. “I will let you know,” came the reply. Bidding continued to $1.25 million. Same question, same answer. $1.28 million. Same question, and this time Mr Gavel sent his scribe inside to ask the vendor. Yes, came the answer and Mr Gavel loudly and unequivocally declared the property to be on the market and would be sold to the highest bidder.

At $1.33 million, we had exhausted the only other bidder and after making his first, second and third call, Mr Gavel was about to knock it down to us and then decided to head inside “…to seek final instructions!”

Pardon? Did you not say in front of this assembled throng that the property would be sold to the highest bidder? That’s us, Mr Gavel.

We were not quite that polite.

But, no, he went in anyway then re-emerged a full two minutes later and re-opened the bidding; urging the under-bidder to get back into the race.

That grubby little exercise cost our client another $20,000 before it was finally knocked down to us at $1.35 million.

Our client is now seeking legal advice on the laws of misleading and deceptive conduct and how to recover his $20,000.

Watch this space.

Damian Taylor

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Agents are now spruiking a flood of properties about to come onto the market; but even if that’s true (we suspect not), there are too few buyers around to soak up any tsunami.

An astronomer’s view: agents are on a different planet (“Just wait, the Spring market is around the corner!”) while a colony of vendors have moved into a pie in the sky where time has warped and it’s still 2009 (“The place up the road sold for $X last year, mine must be worth $X-plus this year.”)

Meanwhile, down here on earth …

Saturday’s auction of 11 Moorakyne Avenue, Malvern. Family home, Stonnington Estate, good spot in the heart of the school mafia, north side. Ticks a lot of boxes. Original expectation: $4.5 million or more, but the highest three bidders would take it was to $4 million. Sold … for $5,000 less than it brought in 2007. So much for the incredible gains you have heard about over the past year or two.

And that wasn’t a one-off. It gets worse. Drip by drip, vendor bid after vendor bid.

• 2/3 Martin Court, Toorak, vendor bid $2.7 million, reserve undisclosed
• 2/45 St Georges Road, Toorak, vendor bid $2.5 million, reserve $2.9 million (20%!?)
• 36 Chrystobel Crescent, Hawthorn. Seems like it’s been for sale since Collingwood last won a flag. Huge advertising campaign. Lonely vendor bid of $3.6 million. This is the same property that was for private sale last year between $4.5-5 million? A 30% hit?
• 29 Tivoli Road, South Yarra, vendor bid $2.4 million and surprise, surprise, reserve undisclosed.
• 34 Grace Street, Malvern. One bidder, passed in on a vendor bid of $1.65 million, reserve undisclosed (OK, it’s $1,980,000. Is the vendor dreaming?).

Passed in on a vendor bid. Meaning?

It’s not rocket science. An auctioneer can’t get a bid and so makes one on the vendor’s behalf in the hope of getting the ball rolling. OK. But when a property is passed in on a vendor bid, you may reach the reasonable conclusion that the vendor’s expectations are above what the market is prepared to pay. What should flow from that? The price is reduced or the property doesn’t sell.

But then …

Even post-auction, vendors are becoming more and more coy about what they will accept. There are now more undisclosed reserves than published reserves. Tread carefully.

Heard on Saturday:

“If I walked over there and asked him for $40,000, firstly he wouldn’t give it to me and if he did he would want a personal guarantee. However vendors seem to be opening their wallets without question.”

What’s that about?

The extraordinary amount of money being spent in advertising properties which go on to be passed in without a bid. You have to ask whether advertising to a wilting market is really a useful strategy or simply spraying money up against a wall. If it was our money, we’d spend $400 on the web and take a little holiday with what’s left over.

David Morrell

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Bayside asleep at wheel?

Bayside is in cruise mode, meandering along with the occasional rise and fall in the road, forever hopeful of something big around the next corner.

Buyers, sellers and agents all waiting and expecting something to happen. More choice? More bidders? More commission?

Yet the darkest cloud still looms: Are Australian property prices sustainable? If it’s true that moods make markets (and do they explain ours?), where will our moods take us?

It may not get to a debate but each week the rumblings are there and where there’s smoke …

Last week?

Not particularly noteworthy or newsworthy. Mostly plain vanilla properties recording similiarly flavoured prices or being passed in with no real bidders.

The few exceptions included a contemporary family house on Beach Road, Black Rock. On 880 sq m, overlooking Quiet Corner and offering bay views from the rooftop deck, it sold quietly for $2.55 million. In fact it sold so quietly that we are not permitted to divulge the exact address.

In Brighton, 10 Tovell Street sold at auction for $1.85 million and a town house at 6/6 Stanley Street enjoyed rare competitive bidding before being knocked down for $1.46 million.

Then there was apartment 4 at 36 The Esplanade. Located in Brighton’s first and only five storey apartment building, it feels like this property has been about forever. It was auctioned without success at least two years ago and had a repeat performance on Saturday: passed in on a vendor bid of $1.6 million against a reserve of $1.8 million.

There’s also a chequered history developing at 836 Hampton Street. It was recorded as sold for $1,244,500 in March this year. Over the weekend it struggled and was passed in at $1.1 million with a later offer of $1.05 million. The reserve is undisclosed but expect some pain when it does sell.

And then, in Brighton East:

• 22 Canberra Grove, passed in. Vendor bid $1.44 million, reserve $1.49 million
• 159 Dendy Street, passed in. Vendor bid $1.42 million, reserve $1.6 million

Hampton had a better day: five sales from five offered. 16 Highett Road at $1.5 million the highest on the day.

Bentleigh had mixed success on low numbers. Five sold in eight auctions. Bentleigh, usually, has the highest or close to highest clearance rates in Bayside. It’s currently a contrast to Brighton which appears to be saddled with a swag of top end property that buyers are treating with great caution.

And finally, under-the-radar Elsternwick recorded one of the stronger results of the week:  $1.95 million for 12 Erindale Avenue.

Oh, alright, we’ll say it again: Good property in the right location equates to good price, even in less predictable times.

Damian Taylor

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Explanations? They’re wherever you would like to look: the election, the sharemarket, the footy (the footy?). But the explanations don’t alter the inescapable: there’s nothing out there and there won’t be anything significant for the next month.

Even off-market transactions trickled to near stand-still and, on-market, Map 58 was almost a no-go zone. Its highest recorded result was 58 Washington Street, Toorak. 850 square metres of arguably land value (the house is badly positioned, so renovation is not a happy option). It was first passed in and then sold for $3,350,000.

$3,350,000?

$370/foot? Nothing nearby has sold for less than $400/foot for months. So spare a thought for the poor developer who paid $500/foot just up the road not long ago.

Owner-occupiers? Gone missing.

But not so at 15 Loch Street, St Kilda West. A Victorian on small land. $3.94 million. At that price, who needs South Yarra?

Feel the magic?

There are some fabulously inventive agents out there. Now they’re inventing houses. We’ll get a call asking whether we have a buyer for a house an agent is yet to list. When we suggest we might have, suddenly that property is no longer available. Dare we suggest they’re sniffing for listings? Dare we suggest they try elsewhere?

Great disappointments?

Those publications hoping the spring market would bring an avalanche of advertising dollars could be looking at the perfect storm. Few listing at the top end and, further down the ladder, talk of interest rate rises persuading investors and first-house buyers to go and hide in Their Eskys.

We, the anomaly?

The quieter the market, the busier we become. The small gems which appear off-market become more and more appealing. That said, we’re now experiencing a first: we have more clients than there are properties for them to consider.

Oh, OK. We still bought four properties over the weekend. It’s not all gloom.

David Morrell

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Bayside: It’s been a long time.

A week can be a long time in politics. Ask Kev. A week in footy? Ask St Kilda. A week in real estate? Take a look around Bayside.

From bustle and hustle last weekend to doom and gloom (again). The Bayside auction market has more highs and lows than the The Big Dipper.

Only a few weeks ago it was curtains for any auction over two million dollars. Buyers were simply not biting, regardless of the fortunes in vendor-funded advertising bait. Last weekend that all turned around and then, despite the best efforts of Bayside’s finest (and still more marketing dollars), the past week in Brighton saw the bar lowered on anything much over a million. The best and only result under the hammer was 94 Asling Street, Brighton (the née Gardenvale bit). An old weatherboard with a railway station looming over its rear garden, it scraped to a modest $1,125,000.

Even conservative and stable Brighton East could not escape the glassy stares of onlookers. Hands firmly thrust into pockets. Nary a bid to be seen. The only exception was 4 Ratho Avenue and there the million dollar barrier was in no danger. It sold for $855,000.

At the pointier end, a big crowd gathered for the auction of a visually standout property at 24 Boxshall Street. Cleverly designed and constructed, yet not without blemish, it’s a lot of house for just 455 sq m. Probably more at home in trendy Elwood or Prahran, it failed to resonate with Brighton buyers: passed in by a somewhat bemused auctioneer on a vendor bid of $3 million. Although the reserve is undisclosed, we expect it to be around the mid-$3 millions with negotiations to move forward (sorry, Julia) from there.

A more traditional Brighton mini-mansion was offered at 10 Campbell Street. Despite the auctioneer’s exhaustive efforts to fire up the crowd, an opening vendor bid of $3.65 million was raised to just $3.75 million by a lone punter before a final vendor offer of $3.85 million was met with stony silence. New cards please. Reserve is again undisclosed but will have a four in front of it.

Hampton/Sandringham did not improve on Brighton’s performance: a solitary result recorded at 48 Mills Street, Hampton. A well renovated brick period house in the right spot, it achieved an expected $1.56 million.

Not so joyous at 12 Margarita Street. A contemporary family house, it failed to excite and was left on a vendor bid of $1.775 million and the asking price is now set at $1.85 million. The agent’s pre-auction quote of up to $1.95 million, suggests this one may have been initially oversold – with the published reserve indicating a willingness to now meet the market.

At nearby 14 Duff Street in Sandringham, the tea leaves indicate agent and or vendor may not be in sync with each other or, at very least, with prospective buyers. The pre-auction price quote was $1.44-1.6 million, a bit over a fair 10% range. Result? Passed in on a vendor bid of $1.58 million with a reported later offer right at the top of the quote range: $1.6 million. Outcome? No sale; and the published reserve is now $1.7 million. Just when you thought agents’ quotes were becoming more reliable and/or vendor’s expectations more realistic.

Beaumaris and Black Rock were about as (un)busy as can be expected at this time of year. Only a couple of auctions and a handful of private sales. The highest price for the week was the private sale of 28 Hardinge Street in Beaumaris. Smartly presented, contemporary, in the heart of the suburb, it changed hands for $1.75 million.

Bentleigh and first cousin Bentleigh East were also reasonably quiet with pre-election uncertainties keeping all but hardened or needy vendors away. Of the eight auctions scheduled, two sold before, three were passed in and three sold. Overall, about as exciting as watching the Julia and Tony show.

Damian Taylor

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Jeremy Grantham pontificated on Oz and continued his stirring of our property market, suggesting that we’re at the height of a bubble and home price falls are “a near certainty”. So what did the polls accompanying that story tell us?

When people were asked what their outlook was for median prices over the coming year, 11,938 of them failed to agree:

• 6% expected a rise of 10% or more
• 18% expected a rise of 0-10%
• 27% thought there would be little change
• 19% figured a fall of up to 10%
• 30% expected a fall of more than 10%

So around half are expecting a fall versus about a quarter who expect the rises to continue.

Need more cause for caution? The Economist Magazine this month said, “Australian property is the most overvalued of any of the 20 countries we track.”

But markets aren’t made by statisticians, economists, pollsters or pundits. Two or three people can “make” a market by putting their hands up at an auction. Yes, there are trends, but they’re overridden by individuals. Ask any of the bidders we were up against on Saturday. They were firmly in the camp of Rory Robinson from Macquarie, who said “…structural differences in Australia would prevent the steep falls seen in the US and European markets following the financial crisis.” Yup. Same Rory Robertson who won that bet with Steve Keen.

Where do we stand in all this? Same as always. The surveys and the stats can provide no more than broad overviews, it’s down on the ground where the realities rule. Good properties, well priced, arouse interest. Always.

We attended seven auctions of good houses on Saturday; and we were not alone. Amid all the doomsaying, six people took one of those properties several hundred thousand dollars past its reserve. All had two or three people bidding.

At the top end – $3.5 million plus – the pickings are thinner and the crowds thicker. At one of the few on offer, Moorakyne Avenue, Malvern, you would have thought they were giving away passes to the Emirates Marquee

What rules, amid the ebbs and flows? Sentiments such as this, heard on Saturday: “I have to put the family somewhere. It’s where we sleep most nights. It’s where we live our lives. It will be the best place I can afford.” That, and the tax laws relating to the principal place of residence, also serve to underpin residential property values.

And then, to underpin the irrationality which can also rule, came 4 Grace Street, Malvern. Four bidders and passed in, whereapon one of the underbidders rushed inside and paid a sum which we believe was way over the odds. In a few minutes, it had suddenly leapt in value so far beyond what anyone else was prepared to pay?

Too much reality?

7 Ardrie Road, Malvern East . Sold for $1.92 million in February. Could not get a bid at $1.5 million over the weekend

Old games are on again …

Pass-ins? Yes. Many. Signs of vendors out of touch with prices and/or quality that is less than impressive. It’s then that the dummies begin to emerge, some as obvious as a man without a tie having lunch at the Melbourne Club.

How does that look? One recent high profile property was passed in on a “genuine” bid of $3.3 million; with a reserve of $3.6 million. And then we learn, despite a wall of confidentiality clauses, that it went for a trickle over $3 million. Um. They knocked back $3.3 million so they could take $300,000 less? Yes. Right. Happens all the time.

So those games continue. It’s wrong, it’s deceitful and it will only be stopped when reserves are published. More here.

A longer debate – over at last?

While Julia and Tony were meant to be going hammer and tongs last night, another debate came to an end over the weekend. In a story in The Age about vendors’ agents, this cat was let out of the bag: “After initial resistance from the real estate industry, buyer’s agents have become well-established players on the Australian real estate scene during the past decade.”

We’ve always preferred to call ourselve advocates rather than agents, but you get the point. Thank you linespersons and ball kids, when even Jonathon Dixon “admits begrudgingly” that we can be useful, we believe it’s game, set and match.

David Morrell

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Bayside, briefly …

Overall, Bayside staged something of a recovery this weekend with strong clearance rates and some very creditable prices and even some (drumroll) competitive bidding!

In Brighton, out of 15 auctions, 13 sold. Beaumaris/Black Rock saw 8 from 10. Bentleigh returned to the winner’s circle with a 90% clearance rate.

The highest on the day was 23 Murphy Street, Brighton, a well renovated and extended period house on over 1000 sq m with a lot of appeal. Three people competed from $2.9 million until the property was knocked down for $3.35 million; a price very much at the top of the value range.

Half an hour later it was a completely different scenario at 52 Head Street, Brighton. Another fully renovated and extended period house – on an average-size block of land – did not quite hit the spot. Good on paper but missing the wow, a large crowd was ominiously silent. A single and very lonely opening bid of $2.45 million and then it was passed in. The reserve? A towering $2.9 million.

A competitive and entertaining auction ensued at 16 Lynch Street, Brighton. Two equally determined bidders slogged it out with multiple and varied bids before it was knocked down at $1.37 million; with another couple of early bidders left well behind.

The most curious non-result was that of a land only auction at 8 Carrington Grove in Brighton East.  A standard size allotment of 650 sq m with an original 1940′s bungalow, it attracted an ambitious opening bid of $900,000 before being passed in on a vendor bid of $1 million. The reserve is for some odd reason undisclosed. Curious because, only an hour before, an near-identical allotment at nearby 27 Plantation Avenue attracted three bidders and sold under the hammer for $1.326 million.

The village gossip is that the most talked about property in Brighton at 323 St Kilda Street (corner Bay Street) on the edge of the Golden Mile has finally sold. Local chat suggests about $6 million, but the selling agents were obviously under strict instructions not to comment. Our belief is that it was well into the $6 millions.

Damian Taylor

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The top end has been out to lunch, on hols, nowhere to be found. Gone missing.

Top end vendors, however, have been found looking over fences, in bushes, under carpets – wondering where their agents have gone.

Amazing. You  spend $25-30,000 on a sales campaign and when that falls on its face your agent disappears on holiday and you’re left to deal with a 20 year old cadet.

We’re buyers’ advocates, not agents for vendors, but we’re getting calls from more than a few people with stalled top end properties who are asking for our advice on what to do next.

And then there are those considering selling who are asking us whether they should be donating their hard-earned to the estate agents’ new ad mag, whether there’s a market for their property, whether there are quality buyers still looking, whether their sales campaign budget is best spent in print or whether the internet is all they need.

All questions they could ask their agents, if their answers were trusted.

Short answer: good property, fairly priced, will sell. If it’s flawed or if the price is out of line, no $30,000 advertising campaign is going to change anything.

Yes, there’s still a market, but it is no longer desperate, no longer prepared to pay beyond the reasonable or for quality that isn’t there.

That said, the pickings are particularly thin and now the Julia and Tony Show has hit the road they will become even thinner. There’s nothing like an election to cause people to put things on hold and even before this one was called, stock levels at the top end were close to critically thin.

How critical? Over the past three weeks there has been only one top end sale worth reporting.

After an endless expressions of disinterest campaign 17-19 Huntingtower Road, Armadale, finally found a buyer. It went for, we believe, $8.3 million, well shy of the vendors’ hoped-for $10 million or their later asking price of $9 million. No heroes here. Reality rules again.

That’s the top. Step down a rung to the sub-$2 million market, particularly close to the CBD, and we have been seeing one or two other bidders. They are reserved – they have caution lights flashing – but they are less concerned by the market’s weekly fluctuations and are prepared to put their hands up for properties which tick all the boxes.

Long may reality prevail.

David Morrell

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Bayside snores on.

The Bayside winter hibernation was hardly disturbed over the weekend. Auctions were scarce and the few real bidders to be found were welcomed with open arms.

Expect more of the same until the election. As noted above, experience suggests that until Laurie annoints Julia or Tony, real estate activity will hit the pause button.

That, combined with the yearly seasonal low, may help explain the rash of “out of office” auto replies received from many agents. More on that above, too.

Bentleigh, as usual, provides the exception. It bounced back from last week’s hiatus to score 12 sold out of 16 auctions. Highest among them was 51 Mortimore Street at $1,172,500.

The sub-million dollar market is still active, but it’s a different story at the pricier end of the scale.

3 Barkly Street, at $1.33 million, topped the half-dozen auctions in Brighton.

A number of top end sales have quietly taken place in Brighton over the past fortnight, but agents (and owners?) are being very coy about the prices paid.

We understand that 31 Martin Street sold for around $4.25 million, ditto 19 Wellington Street. A third major Victorian, at 37 Black Street, changed hands at “well in excess of $3 million”. Given the correction in the top end in recent months, they’re all reasonable results and reinforce our contention that patient buyers and realistic sellers will be rewarded.

The times …

In this newly constrained market it is becoming abundantly clear that the hit-and-run three week auction campaign is generally insufficient time to attract a buyer looking to spend above $2.5 million.

Average days on market have more than doubled. As a consequence, agents will be under more pressure to justify the extent and price of their recommended marketing strategies and their initially advised price expectations. The double whammy of a big hit on the price promised followed by a $30,000 advertising bill must be testing the equanimity of even the most reasonable vendors.

Damian Taylor

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Melbourne’s other winter sport – property watching – yielded little to get excited about. Real bidders and live bidding the exception rather than the rule.

Anything over a million dollars was largely ignored in the prime Bayside suburbs and when venerable Bentleigh turns in a miserly six sales from fourteen auctions, that may be an alarm bell rather than an auctioneer’s that you are hearing.

The only bright spot for the day was the result of 29 Tennyson Street, Sandringham. A “palatial period classic” timber house on 960 sq m. With 10 main rooms and bay views, it sold for $2.375 million. Sound enough, but only a couple of months ago a reasonable expectation would have been somewhere north of $2.5 million.

In all of Bayside, the only other auction to top a million dollars was at 10 Trafalgar Street, Brighton. It crept up to $1,110,000.

Some of the casualties:

• 2 Westley Avenue, Brighton, passed in at $2,075,000 with, apparently, a later offer of $2.1 million. The reserve is undisclosed but probably not far away.
• 85 Carpenter Street, Brighton, passed in on a vendor bid of $1,900,000. Its reserve is a sensible $2.15 million and value buying at close to this figure
• 6/11-13 Well Street, Brighton, passed in at $2,350,000 on a vendor bid, reserve undisclosed. Expect at least $2.5 million.

There is, however, some quiet movement at the station. We are starting to hear reports of successful negotiations being concluded following both passed-in auctions and lapsed EOI campaigns – in some cases many, many months after the cessation of active marketing.

13 Wellington Street, Brighton, was among the latter. It was passed in at auction in December last year after a bid of $3.5 million was knocked back. Six months later a change of agent and a changed market finally saw a result “close to $3.5 million”, as reported by the selling agency; although our respective definitions of “close” are … not noticeably close.

7 Grosvenor Street, Brighton, has also been sold with the sale price variously being speculated as $3.05 million, $3.1 million and “close” to the asking price of $3.5 million depending upon who you trust. In these guessing games, it probably pays to take the middle ground.

Word has it that at least two other significant Brighton properties have contracts about to be exchanged and we will update you as confirmed information is available.

Any lessons in all this?

• Sellers’ patience will be rewarded.
• Buyers’ patience will be rewarded.
• A property expecting more than the median price for its area has to tick every last box (right location, all the usual fruit) and have a realistic July 2010 reserve or its owners would be better advised to take the advertising budget and splash out on a holiday. Spain is cheap and, now, very cheerful.

Damian Taylor

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It is becoming more and more obvious that the recent slide in clearance rates across Melbourne, and in Bayside in particular, has not been created by The European Debt Crisis, The Super Profit Mining Tax, The BP Oil Spill or (now) The Elevation Of Julia Gillard To The PM’s Office.

It’s Supply. And Demand. And Bayside’s reduced supply over the weekend meant demand peaked at those auctions which did take place. Multiple bidders, fewer pass-ins. In Brighton and Brighton East, seven out of seven sold.

And then another of our pet hates made its appearance: “Price undisclosed.”

Both in Brighton. Both with multiple bidders and both at prices well above their agents’ estimates (maybe that’s why they weren’t disclosed).

Kids, this is happening more and more often and it’s not good enough. They’re public auctions. They set price expectations for similar properties at later auctions. They indicate to people who are not selling what their properties are worth; and with around 60% of Australia’s wealth ($4 trillion and counting) being in residential property, they add up to statistics of national significance.

Full-disclosure time:

• 2/3 North Road, Brighton. Ground floor apartment in a development of four. Auctioneer kicked off with a vendor bid of $2.5 million. Two people took it to (how hard is this to say?) $3,050,000.
• 13 Albert Street, Brighton. 1980′s style property on 710 sq m in one of Brighton’s more sought-after streets. Quoted “…in the $2.35-2.65 million range.” Two people took it from $2.4 million to $2,770,000 where it was knocked down without referral. Solid result. In line with expectations. Why the secret?

Another sale of note last week: an off-the-plan transaction regarding a penthouse at 4 Dudley Street. Golden Mile. Designed by SJB Architects. One of six. Believed to be a record price for an apartment not located directly on the foreshore. $6.45 million.

20 Beach Road, Hampton, sold after an Expression of Interest campaign concluded last week. On a compact allotment of 500 sq m with bay views, it was quoted in the $2.7-3 million range and was reported as sold for $2.85 million.

Sandringham and Hampton also had a good week: seven sold out of nine auctioned, including:

• 58 Sims Street, Sandringham:  $1,437,500
• 16 Moor Street, Sandringham: $1,400,000
• 15 Victory Street, Sandringham: $1,362,500

And now we, too, will yield to the temptations of a break. Back the week after next.

Damian Taylor

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What did that look like? Look no further (and any resemblance to any real estate agents of this town is entirely their fault):

A lot of hype, a lot of promise, a lot of agents with fingers crossed and a lot of silence when opening bids were called for. (The smarter auctioneers went straight to vendor bids.) The top end has packed its bags and shot through for the winter.

Those agents who can have taken off on cruises (after the year to April, they can afford to), and it now looks like those vendors who were thinking about selling in a rising market are now considering hibernation. This winter’s record number of listings colliding with dwindling numbers of buyers is not a recipe that promises to rise.

How confused can it get?

Come along on one EOI campaign as it descended into farce.

17-19 Huntingtower Road, Armadale. Good Victorian. 18,000 sq ft. Court. Fully renovated. The hype: as many as six interested parties all putting in expressions of interest – with cheques – at 4pm on Saturday. The fact: one party gets on this merry-go-round while two others look on. All in the agent’s office. 5pm comes around. The agent decides on a boardroom auction.

But.

But the agent won’t say whether there is a real offer on the table or whether it’s acceptable and won’t say what the reserve might be. Those interested are supposed to bid for the right to negotiate, but faced with an agent doing dances of endless veils, they bid … nothing. And why would they? This is a game with more twists than a LeCarre novel. Them that makes the rules make the rules for themselves. Sorry. Not playing. So at the end of the day, nothing results and the property is now on offer at $8.95 million.

Where does this leave a buyer who has played by the rules, only to see them changed and changed again? EOI? Expressions Of (an agent’s) Interest.

Dot points:

• more and more vendors getting ahead of themselves
• more and more properties passed in (see previous dot point)
• fewer bidders
• good properties still getting bids
• underquoting still an issue
• multiple bids and properties still not put on the market? (see previous dot point)
• June ain’t April
• agents wearing ad costs for unsuccessful auctions and EOI’s
• agents bleating (see previous dot point)
• agents discounting commissions to get listings
• agents bleating (see previous dot point)
• motivated sellers meeting market
• market becomg fairer (see previous dot point)

The goss:

Jeremy Grantham is in Australia, throwing hand grenades, frightening the daylights out of many, claiming the market is in a bubble and will drop by 40%. Problem is, he doesn’t know when. People still need a roof over their heads, in a good area, close to schools, etc. Melbourne’s macro and micro issues don’t seem to add up to world views. Yet.

The REIV:

All calm. No problem. “The top end’s been nuked? Whatever.”

• 1 Eldene Court, Toorak, passed in at $2.4 million
• 6 Avoca Street, South Yarra, passed in at $4 million
• 125 Finch Street, Malvern, passed in at $2.250 million
• 14 Belsen Street, Malvern, passed in at $1.5 million

And even Boroondara, which has been seemingly immune to Stonnington disease, got whacked:

• 49 Parkhill Road, Kew, passed in at $3.2 million
• 4 Victoria Road, Camberwell, passed in at $2.1 million

Those that did sell were, in the majority of cases, passed in and sold shortly afterwards.

All of which adds up to a lot of vendors wondering where the cheque books go in winter. With a couple of nearly near-miss exceptions:

• 51 Murray Street, Prahran. Good Victorian, always set to go through the roof, especially with a quote of $3 million plus. Five bidders had a red hot go, but (surprisingly) it wasn’t declared on the market until $3.7 million. It eventually sold for $3.740 million, less than 1% over the reserve.
• 52 Foam Street, Elwood. Almost a carbon copy. Quoted at $3 million plus. Five or six bidders there at the early $3 millions and two who pushed it beyond. Finally declared, after numerous requests to do so, on the market at $3.6 million. It sold for $3.61 million.

These were the supposedly runaway results?

View from the sewer:

Millions and millions of ad dollars going down the drain with little upside for vendors. It all adds up to interesting times.

David Morrell

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Bayside: Frustration is tidal

Three months ago buyers were frustrated by the lack of choice, the paucity of supply and at being forced to pay over the odds for even the most ordinary properties.

The flood onto the market since the end of April has changed the game. Sellers now look forlorn at buyers who are keeping their hands firmly in their pockets.

The vendor’s position was not helped over the weekend with almost 1,000 auctions scheduled, the largest Winter offering on record. No surprise that many passed in and, in a lot of instances, there were no real bids.

With the large overhang of unsold stock yet to be cleared, agents will now be hard-pressed to convince potential sellers to list properties for sale.

Meaning?

Good short-term choices and bargaining power for buyers, but as stock dries up, the tide is likely to turn again. It’s now unlikely that there will be any surge in properties being listed for sale until Spring and even that may be complicated by the coming elections. Many sellers choose to postpone rather than compete with political distractions.

But opportunities for buyers depend on their being realistic sellers, and that wasn’t evident in the middle to top end of Bayside auctions.

Brighton struggled with anything over $2 million, but there were 12 sales from 24 offerings – between $600,000 for apartment 6 at 35 Normanby Street to $1.86 million for 4 Baird Street in Brighton East.

The most entertaining auction witnessed for some weeks was that at 58 Dendy Street. Three genuine bidders, a reasonable reserve and an auctioneer in full flight entertained the large audience. The property was knocked down for $1.53 million.

The adjoining property at 56a Dendy Street was offered immediately after with not quite the same zip. It was passed in with one bidder and sold shortly after for $1.76 million.

Buyers over $2 million were hard to find, although two bidders reluctantly took 10 Cairnes Crescent to $2,075,000 before it was passed in. A later offer of $2,125,000 did not bridge the gap. The reserve is $2.2 million.

Tough going elsewhere.

• 7 Grantham Court passed in at $2.45 million, reserve undisclosed
• 3 Grosvenor Street passed in at $3.0 million, reserve undisclosed
• 6 Head Street passed in at $7.0 million, there was a later offer of $7.3 million. The reserve is $8 million.

Hampton and Sandringham also struggled. 6 out of 14.

• 31-33 Crisp Street, a development site of 1741 sq m, was the highest result on the day. Two bidders competed strongly before it was sold under the hammer for $2.86 million. Expect to see multiple townhouses or apartments.
• 10 Ocean Street, a red brick Edwardian on 900 sq m, was passed in. Three bidders took it to $2.39 million and it sold shortly after at $2.445 million.
• 4 Bendigo Street was left. Unloved. No takers at $2.85 million and a hopeful $3.1 million now the asking price. The property was bought for $2.9 million exactly two years ago so more pain than gain there.

Bentleigh has not escaped the softening in clearance rates with – by their standards – a modest nine results achieved from the sixteen offered.

However a newly released land subdivision in East Boundary Road saw 22 sales from the 50 lots available. They ranged from $550,000 for a small 357 sq m site to $740,000 for 546 sq m.

Damian Taylor

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That’s nothing. Look at our real estate. Changeable? We define it.

In two months the clock has been wound back two years*. It’s buyers’ time again.

What’s going on?

• We have been predicting this change since April. The speed of its arrival is the real surprise.
• Some agents have at last caught up with the reality. They’re adjusting prices accordingly.
• Saturday’s Financial Review headline: “Melbourne mansions passed up” caused significant palpitations among some vendors, but those who offer quality, position and price have no reason to panic. Buyers are still there.

What’s not?

• Enzo Raimondo of the REIV scores the Ninny of The Week Award for his observation that the weekend’s results were “good”. This is the bloke who represents the vendors. The vendors are those people you see reeling, bleeding, after watching their expensive marketing campaigns going up in smoke and their properties passed in. Nearly half of those valued at $1 million plus failed to sell. That’s good?
• Too many agents are still living in 2010. They’re asking too much and they’re not getting it.

What’s bizarre?

• The Weekly Review. A consortium of estate agents taking on the Melbourne Weekly so they can make the profit instead of Fairfax. They’re suggesting giddily optimistic results in the face of reality. They would, they need the advertisers. Thoughts of conflict of interest? None. Awareness of the elephant in the room that’s now dominating real estate, the internet? Apparently that can be wished away.
• Expressions of Interest. The agents’ attempt to claw back control – especially in a declining market. “Show us your wallet and we’ll tell you … what we feel like telling you.” You won’t know who else is interested, whether there is any other interest, whether others you are told are interested are real or the products of the agent’s imagination. Don’t play. Demand to know a price, then work down. No price? Walk away.Boardroom auctions which follow EOI’s can bring real buyers face-to-face with real vendors. That’s a paddock we will happily play in. In the meantime, EOI’s are sorely in need of rules which guarantee transparency and place a time limit on vendor decisions. Are they real sellers, or just testing the market in the hope that fools will rush in?

What sold?

These had the essentials. Quality, priced fairly:

• 23 Ferncroft Avenue, Malvern East. A modern house with a tennis court. Five bidders (five! count them!) took it to $3,560,000
• 50 Hawthorn Grove, Hawthorn. Double fronted Victorian – they’re always in demand – four bidders. On the market at $3,030,000, sold for $3,510,000
• 2 Carmyle Avenue, Toorak. Land value (the ultimate litmus test). Deceased estate. Two bidders. Sold for $335/sq ft. A couple of months ago, it could have raised $360/sq ft.

What didn’t?

• 9 Kenley Court, Toorak. Contemporary 4-bedroom house with pool. AAA address. Passed in on a vendor bid $4 million. Weird, given its position.
• 10 Moonga Road, Toorak. Passed in on a vendor bid of $3 million. No real surprise. Quality was the issue.

Whatever happened to dummy bidding?

It’s still with us. At two auctions over the weekend we saw stooges bidding against vendor bids up to just short of the reserve. Goodness. What a coincidence. If they didn’t have “dummy” stamped all over their foreheads, you might have believed they were genuine. And then an agent phones: “Our other bidder has dropped out. You can have it for less than his bid.” Really and truly.

* The wheel has turned. Here’s some advice we were offering two years ago. It’s again valid.

David Morrell

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Bayside: A change in the weather

The first weekend of Winter sent a chill through an already cooling Bayside market. Real bids were a rarity and vendors took centre stage.

• Brighton and Brighton East clearance rates plunged to a blood numbing 31%. 16 auctions, 5 sales
• Hampton and Sandringham: 35%. 14 auctions, 5 sales
• Beaumaris and Black Rock: 50%. 10 auctions, 5 sales
• On the brighter side of Nepean Highway, Bentleigh and its boutique neighbour McKinnon defied the odds: 76%. 21 auctions, 16 sales

How bad is it? When auctioneers are tetchy, sales agents in shock and vendors wander the their unsold halls bewildered, you can bet something is up; and it’s not sales.

The expectations of a couple of months ago are history. Sellers will need patience and then acceptance to deal sensibly when the right buyer presents. There is no point in looking back to what might have been (ask Lot’s wife).

What bucked the receeding tide?

• 326 Beach Road, Black Rock. Essentially land only, it’s 950 sq m with bay views and has development or trophy-house potential. Sold for $2.45 million.
• 81 Iona Street, Black Rock. A nine iron to the back of Royal Melbourne Golf Course. 1977 sq m. Sold privately for $3,180,000.
• 12a Dendy Street, Brighton. An older style single level townhouse on a cluster title (473 sq m.) Sold to a neighbour for $1.56 million.
• 5 Rippon Grove, Brighton Beach. 1341 sq m of land value, originally auctioned and sold with conditions for $3.45 million on May 8. Apparently it’s now unconditional and rumour suggests it will be redeveloped into apartments or townhouses.
• 34 Camperdown Street, Brighton East. Sold for $1.485 million
• 24 Binnie Street, Brighton East. Sold prior to auction for $1.725 million
• 28 Keats Street, Sandringham. Sold for $1.65 million

What didn’t?

• 103 Bay Street, Brighton. Vacant land of approx 1800 sq m. Passed in $4.5 million followed by a real bid of $4.5 million followed by disclosure of a real reserve of $5.4 million (this not a misprint!)
• 3 Wellington Street, Brighton. Passed in at $4 million on a vendor bid after an opening real bid of $3.675 million was at first accepted and then ignored. Reserve is set at $4.1 million
• 190 Church Street, Brighton. Passed in on a vendor bid of $3.7 million. Reserve is undisclosed but believed to be around $4 million
• 68 Were Street, Brighton. Passed in on a vendor bid of $2.25 million. Reserve is undisclosed but mid $2 millions is the word.
• 295 St Kilda Street, Brighton. Passed in on a vendor bid of $2.05 million. Reserve is disclosed at $2.3 million
• 15 Kirkwood Avenue, Sandringham. Vendor bid: $2.4 million. Later offer: $2.425 million. Reserve: $2.6 million.

The price fall that started at the top end now appears to be filtering down to the mid-level in a number of suburbs where passed-in results have been common at around and even under the median price for those areas.

You’re an agent?

Break out the woollies. It will surely be a very cool winter ahead.

Damian Taylor

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