Kids, we don’t want to frighten you, but things just get weirder with each passing week. Weirder and weirder.
The exceptional will always be the exceptions: they’ll sell. But finding buyers for anything less has now become work. Auctioneers who had bidders leaning out of passing car windows only a few weeks ago are now bellowing vendor bids into oblivion. That merry band who could not see a reserve when they fell over it has at last marched away.
Today’s tune is somber: the bass tones of caution and (hallelujah!) logic. Witness some pass-ins:
- 8 Macquarie Road, Toorak (not reported – its second failed auction). Nowt but a too-optimistic vendor bid of $6.4 million.
- 52 Kensington Road, South Yarra. Vendor bid: $4 million. Only echoes heard.
- 13 Como Avenue, South Yarra. Rumoured to have an offer of $4 million prior to auction, the only bid heard on the day was the vendor’s $3.7 million. Anyone for a haircut?
Even in some leafy suburbs:
- 31 Dorrington Avenue, Glen Iris. $3.1 million. Vendor bid.
- 15 Kardella Street, Malvern East. $3 million. Vendor bid.
The only real action on Saturday was post-auction and too often that produces careless people with cheque books.
7 Church Street, Toorak. Two bidders. Passed in at $2,130,000, sold later for $2,305,000. Whaaa? Close to $200,000 more to buy on the day when all the signs are the market is faltering? Who is advising these people? Are they getting advice?
Two stories, two apartments, one week:
704/108 Bay Street, Port Melbourne. Multiple bidders. Sold at auction for $2.765 million. Wait a week and step down a floor to 605 – essentially the same unit – nothing heard but a vendor bid of $2.1 million. Hark! Is that the thump of a market dropping through the floor?
Those wailings and grindings of teeth you’re hearing are not only the sounds of Richmond supporters, they’re vendors being beaten by their agents into acceptance of the new real; and no need, here, to again point out that it’s usually agents who encourage unreal expecations in the first place. What is worth pointing out is that many of the properties which were passed in over recent weeks are now being sold for a lot less than previous offers.
So much for the auctions. What’s weird, in contrast, is the off-market action. Last Friday, five properties were sold off-market at between $5 and $8 million apiece. Only one buyer for each; and with realistic vendors, that’s all it took.
Dot points:
- The big question: Why has it changed so quickly?
- We don’t think vendors are panicking.
- We’re seeing less competition between bidders.
- We see agents becoming more realistic – typically after a pass-in.
- We’re hearing more agents’ half-truths – another sign of a changing market.
- We are picking more dummy bidders.
- We’re seeing agents who recognise what’s happening and are ready to deal.
- We’re seeing agents who are stuck in “She’ll be right.” and will stay there.
- We’re seeing agents who are hoping for rescue via their new weekly; and who should stick to what they know.
What might have been said:
- “Just a couple of ordinary weekends. It’ll turn.” – the agent
- “You would expect a slight dip in clearance rates on big volumes. It’ll turn.” – REIV
- “I spent $30,000 advertising for a vendor bid?” – the vendor
- “It’s still a great market! Can we sell you an ad?” – some media
- “I think I’ll go to the footy. I can see value there.” – the buyer
- “Patience. Opportunity beckons.” – yours truly
This is something we have been waiting to say for the best part of a year: wonderful buying opportunities are beginning to emerge.
David Morrell
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Bayside: beatups and brickbats
Bayside, and Brighton in particular, was still in recovery after the shock of last week’s results. It was probably fortunate that there were considerably fewer auctions conducted this week.
Looking at the breakdown, it is instructive that of the nine auctions scheduled for the day, more than half were reported as sold prior. That suggests nervous vendors and is a stat we have not seen in over twelve months.
On a very quiet auction day, two from the four put up were passed in with no genuine bidder in sight.
49 Hanby Street, Brighton was met with a pained silence from its handful of attendees. The auctioneer put everybody out of their misery by passing it in on a vendor bid of $1.8 million. One of those ethereal “later offer” bids was reported at $2 million. The reserve is an optimistic $2.18 million.
Similiar story at 1 Montgomery Street, Brighton East. The highest bid on the day was the auctioneer’s $1.6 million, matched by a “later offer” of the same amount but not enough to sway the vendor. The reserve is $1.725 million.
And the rest:
- 9 Dawson Avenue, Brighton sold before at $3.85 million
- 33 Huntingfield Road, Brighton, ditto: $2.375 million
- 40 Black Street, Brighton, ditto: $1.95 million
- 35/149 Male Street, Brighton, ditto: $1.0 million
- 27 Ferguson Street, Brighton East, ditto: $906,000
But then to the auction of 16a Wellington Street, on the corner of Sussex Street, a compact site of 618 sqm with a dated single level house that is not long for this world. Platinum territory in Brighton and an appropriate result. Several bidders made it quick and easy for the auctioneer and the result of $2.65 million ($4300/sq m or nudging $400/sq ft) was not unexpected. Our prediction of a flight to quality properties and/or prime locations in a cooling market is thus vindicated.
Elsewhere in Bayside, Beaumaris notched up a notable private sale with the outcome of 518 Balcombe Road. Described as a “hilltop estate” on the Balcombe Road hill, it’s a battleaxe allotment of 1900 sq m with a sprawling six bedroom house that a bunch of Bradys would have loved. It sold for $1.85 million.
Hampton’s top end was dented with the passed-in result of a substantial beachside house on 700 sq m. 26 Holyrood Street could only raise a vendor bid of $2.35 million with no “later offers ” received and a price now of $2.45 million.
Sandringham’s top end also disappointed: the blue chip location of 25 Kirkwood Avenue was not enough to get it over the line. The highest bid was the auctioneers’ $1.95 million. It’s now listed at $2.2 million.
Brickbat of the day must be reserved for the thunderous underquoting prior to the auction of 42 Elster Avenue, Elsternwick. A very substantial period Edwardian, already extended, with all the right rooms in all the right places and on over 850 sq m of north facing rear gardens. Initial quote? $1-1.1 million, reluctantly revised in the second week of the campaign to $1.1-1.2 million.
Our reality check phone call to the agents on behalf of a client the day before the auction:
“What’s the story behind the ridiculously low quote?”
“Aw, the conjunctional agent put that on it at the beginning.”
“What do you really think it will get?”
“$1.3 million and probably up to $1.4 million.”
It sold for $1.46 million. Our client took his kids to the park instead and retold them the fable of Pinocchio.
Damian Taylor
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