… not very much at all; at least at the top end.
Up here in the stratosphere, the holiday continues. On the evidence so far, useful predictions have become almost impossible. Stock levels are probably the lowest they have been in 30 years. That cannot last, but while it does reading the market is the work of tea-leaves.
Yet the “official” opening of the auction season had to come and come it did. Not many auctions, but those that we saw all attracted crowds (Melbourne loves an auction). In family areas, multiple bidders were common, yet those that sold all sold at the lower ends of their quoted ranges; suggesting their agents are at last managing vendors’ expectations. Those that didn’t sell? Still at the altar.
The mood has changed. Unlike this time last year, auctioneers had to pull everything out of their bags of tricks to get first bids. Jugglers, fire breathers, trick cyclists take note: you have competition.
Yet buyers are there (we have more on our books than ever before at this time of year). The top-end cupboards are bare. That’s the problem.
The financial crisis? It’s biting, especially in the litmus-test January holiday-house market. This wasn’t just a cold front, it was global chilling. Little activity; and those who were selling mostly went off-market rather than risk public drubbing at auction.
And so to the few recent auctions of note …
21 Finch Street, East Malvern sold (unreported) for $3,860,000. Three bidders, a fully renovated Gascoigne trophy house with five bedrooms and a pool, demonstrating that if it?s a good property there are buyers even in this market.
In Toorak? No cause for excitement. 4 Tashinny Road did sell for $1,875,000 after being passed in without a bid. The owner, presumably having bought elsewhere and having to sell at this worst of times, was apparently chasing something that started with 2.
In Hawthorn, 19 Oak Street passed in on a vendor bid of $3,750,000 with owners chasing $4 million. It’s a 2-storey Victorian with lots of charm on 11,500 square feet and should have had some interest.
Expressions of interest campaigns concluding this week ended up in negotiation, negotiation, negotiation (the vendor wants too much). No sold signs seen.
Where to from here?
In these extaordinary times, it?s the lower end of the market that is leading the way. Lots of interest below $600-700,000, fuelled mostly by first home buyer grants, etc.
The top end? Still shaky. Predictions? See tea-leaves above.
Underlying the indecision is not low interest rates (they don’t have a profound effect up here), it’s the combination of job/income security, confidence and quality that really matters. And, yes, the return of the expats is underway, many seeing the rest of the world as a place of shrivelling job opportunities and coming home with considerable savings.
The predicted wave of mortgagee auctions is yet to hit the beach. There’s talk of stress, but the bankers we’re listening to are counselling patience; at least until June.
The real surprise? Investors are on the prowl again; and they’re hungry.
And … welcome to this year. May your trip be an enjoyable one, for it is sure to be interesting.
DM
Bayside. Fits and starts (again).
OK, Bayside activity-watchers, we’re back. We, your insider’s eyes and ears, have been ever-vigilant right through the holiday period.
You have to wonder why.
What’s to report? That there’s almost nothing to report.
The natives found better things to do: the beach, the cricket, the snow (not here, there). With the exception of returning expats, there was hardly a soul to be seen.
And a keen Kiwi who happily acquired 11 Gould Street, Brighton, for $3.45 million. (Buyer happy, vendor happy, agent amazed.)
Not so cheerful was the vendor of 78 The Esplanade. Last year reported sold at around $7.6 million, the buyer failed to settle, the ‘for sale’ signs reappeared and the property finally sold for $5.8 million. Lawyers, anyone?
142-142a The Esplanade, a pair of maisonettes on 935 sq m. Prime position overlooking the beach. Listed for private sale late last year at $4.5 million, sold last week for $4.1 million.
And then, last Sat., the ball got rolling again. The first “real” auction weekend of the year. Short story: anything between $500,000 and $800,000 was a contest, anything over $1 million, with a few exceptions, drew only yawns.
In October, 2007, 7 Collins Street, Brighton, was bought at a well contested auction for $2.92 million. On Saturday, before a crowd of at least two hundred, the auctioneer bid a lonely $2.6 million before shrugging his shoulders and bowing to the inevitable. And then a second auction was held inside and a sale was made at around $2.65 million.
(“Inside” auctions are increasingly common and a may become a cause for concern. Under what rules are these games being played? Buyer protection is limited enough in open auctions and even harder to enforce when deals are done behind closed doors.)
9 Villeroy Street, Hampton. Sold for $1.39 million.
177 Dendy Street, Brighton East. Reported sold under the hammer, in fact sold several days prior for $1.29 million.
The 77% auction clearance rate reflected the acute shortage of property available (436 auctions on Saturday vs.1146 at the same time last year) and much activity among first home buyers and investors in the sub $800,000 market. Historically low interest rates and the June 30 (current) deadline for the extended first home buyer’s grant are driving this segment while the $1 million+ market is still tough and gets tougher as the ladder is climbed.
Yet buyers are returning in the upper ranges. They’re poised with the cheque books at the ready. So what’s stopping them?
Three things: Quality, Choice and Value.
Until those ducks line up in a row, buyers will hold their fire.
DT