Thank you for asking. Night and day.
- A share market which was heading for 7,000 and nothing but blue sky (even if some were hearing stall warning bells) is now close half that with prospects of gloom, gloom, gloom
- Pre-Christmas property sales driven by the need to scale back rather than the desire to trade up.
- Desperate sellers rather than desperate buyers
- Agents (the more successful agents) moving their Christmas parties from the most outrageous, most expensive function they could imagine to praying it won’t rain on the barbeque
- BMWs being struck off gift lists.
But agents, as always, are still whistling a happy tune even as the Titanic settles below the waves:
- Finding positives in auctions without bids
- Able to see into next year when things will return to “normal” (many still don’t get it ? last year’s normal wasn’t normal)
- Suggesting the buying is great, it’s the buyers who are failing the market.
And Canute held back the tide (first rule of marketing: don’t argue with the market).
Yes, there are transactions ? we are buying properties ? but they are very much on buyers’ terms; with only an odd exception when a 10 out of 10 property comes up that even in this market a dozen people want to own.
What is really out of the ordinary is that, even with the end of multiple bidders and no more over-the-top prices being paid, pre-Christmas stock levels are now greater than we have seen for many a year. This has to be a case of the have-to’s. Vendors who have to because they need money to cover share market losses, agents who have to persuade them to go to market when there’s a less than 50% chance of success because otherwise their sales budgets, and maybe jobs, will disappear.
Out in the hustings over the weekend?
Not many Sold signs. Where there were sales, in the majority of cases properties were passed in and sold later; and those who couldn’t bridge the gap between seller and buyer may well see those gaps growing wider with time.
2 Eden Court, Toorak, a large land holding in a quiet court saw an opening bid of $3.8 million and the vendor countering the bid at $4.8 million and then … silence.
This is the new black in auctions. It’s happening too often at the top end and is another demonstration that not all houses should be auctioned.
And as soon as we make that a rule, along comes the exception: 1 Grong Grong Court. Few redeeming features and not a house we’d recommend, but it sold for $3,050,000
29 Shakespeare Grove, Hawthorn offered a demonstration of a different kind. A two-storey Victorian in need of a bit of work, it sold the night before auction for $4.1 million. An agent with his wits about him established that there was only one real buyer and he didn?t want to be left standing trying to push that person up against a vendor bid.
506 Orrong Road, Armadale. 14 bedrooms, 8 bathrooms, 1 tennis court, 3,500 sq metres, hopes of $5 million and no bid. The vendor? Our government (so not a distressed sale, we hope). The should-have-been buyer? The school across the road with its hands in its pockets.
Off-market, there is still a trickle of transactions; drying up now because Christmas is coming and there are still too few truly exceptional properties on offer. In those very rare cases, we still have buyers.
Bayside. Is/isn’t, up/down. Etc.
We have been banging on for some months now about the legitimacy/illegitimacy of published weekly auction results and clearance rates.
The new official low is a clearance of 51% last weekend, but when the 88 “sold before” properties are taken out of the equation, the clearance rate of those properties actually put to the test under the hammer falls to 41%
And the numbers do not get any better for bruised and battered Bayside.
- Hampton and Sandringham: 2 sales from 13 offered (including one sold before) = 15% clearance
- Beaumaris/Black Rock: 2 sales from 8 offered (including one sold before) = 25% clearance
- Brighton and Brighton E: 7 sales from 24 offered (including one sold before) = 29% clearance
Not exactly inspiring. Now, with only three weeks to find a buyer before the end of year shutdown, there will be plenty of worried vendors dreading the Christmas post bringing $10,000+ advertising bills from equally worried agents.
You can put money on it that there will not be anywhere near the usual volume of auctions in the February/March period in 09
In spite of the carnage, there was a handful of sales worthy of comment.
90 Thomas Street, Hampton limped over the seven figure line with a sale price of $1,005,000
A 10 room timber house at 6 Retreat Road, Hampton was reported as sold prior at $1.8 million. It was originally scheduled for auction last weekend but in fact was snapped up in October just as the US financial crisis erupted. That vendor’s relief must be worth bottling.
16 Reserve Road, Beaumaris attracted an offer of $1,625,000 prior to auction and a sale ensued.
In Brighton, 15 Collington Avenue on 702 sq m/7555 sq ft sold for land value at $1,335,000. Only weeks ago we were saying that land in a reasonable Brighton location was down to $200/sq ft. After this result the benchmark is $177/sq ft. and “What’s it worth?” is the new imponderable.
180-182 The Esplanade is a pair of old brick maisonettes on about 840 sq m/9,000 sq ft, with rear access via Victoria Street. Their auction opened and closed on a vendor bid of $3.7 million. Post-auction two parties haggled and the property was sold within 30 minutes for a figure believed to be $3,550,000 ? in our opinion right on the money.
8 Avonbury Court, on the corner of St Kilda Street, is a Robyn Boyd designed brick house on 654 sq m. It sold prior to auction for a figure believed to be $1,450,000.
A near-new contemporary styled townhouse at 1A Cosham Street changed hands for $1,750,000
A slightly older townhouse at 85 Well Street had a genuine $1.5 million opening bid which was trumped by a vendor bid of $1.6 million before being passed in on a further vendor bid of $1.65 million with a reserve of $1.75 million. When vendors are bidding against themselves, smokescreens have no limits.
And there was more no joy at a smaller townhouse at 52A Were Street. Vendor bid: $1.525 million. Reserve: $1.65 million.
Two top end homes remained unsold: a builder’s home at 24 Hanby Street passed in on a vendor bid of $2.9 million against a reserve of $3.25 million and, on Sunday, 11 Gould Street attracted a solitary genuine bid of $3.2 million ? discussions are continuing.
With only two auction weekends before the end of the marketing season and a clutch of top end “expressions of interest” campaigns concluding soon, Bayside agents have never had to work harder to match their vendors’ often ambitious expectations to cannily gun-shy buyers.
For many, the Christmas break can’t come soon enough.