Famine to feast. The top end, at last, is being spoiled for choice; coinciding with very few buyers who are prepared to come to the table.
It’s now the classic recipe for a buyers’ market, but unless a property is have-to-have, why would you? It’s only going to get better: more choice and prices are (understatement warning) still trending down.
Last week, Christmas came early for buyers. Properties were discounted by as much as 25% below market value. In one case, a winning offer which was 30% below the Council site valuation. How do we know? Well…
And it can be ugly. A few agents have been prepared to sacrifice their vendors at the altar of their own cashflow needs. Not pretty.
Out in the streets was scary. Auctions which last year would have seen forests of raised hands couldn’t raise a yawn. No competition, followed by even less.
We also saw our first “Sydney style” auction: a property withdrawn from the market five minutes before the event. What was going on in the minds of the vendors and agents? Someone panicked?
The cold snap hit Albert Park first. With a gale roaring in off the Bay, three properties were put up that should have attracted interest, but nothing was heard over the screaming southerly and auctioneers’ cries for help (which was not forthcoming).
There were some contributing factors: 370 Park Street, South Melbourne, for instance, passed in on a vendor bid of $2 million but is leased until the middle of next year. Only the misguided or desperate would try to sell in a market that demands all the pluses and no problems.
40 Verdant Avenue, Toorak, a good property, saw a vendor bid of $2.8 million and hopes of over $3 million. If it eventually sells for less than the vendor bid, it will not be the first … or last.
12 Mercer Road, Armadale saw expressions of interest closing on Saturday. There was no Sold sign outside this morning. (Come to think of it: the big St Georges Road result of a few weeks ago is still without a Sold sticker. Is there a problem?)
As reported elsewhere, the sub-million market is in better shape.
What will turn the market back up? Not, in our view, interest rates. They could go to 1% (and probably will) and even that would still have little effect at the top end. What’s missing is confidence; and you can’t legislate intangibles. The market has to shake out, and be seen to shake out.
What’s the rush? If an $8-10 million property drops by another 10% between now and March, that adds up to a fair pile of Milky Bars.
To paraphrase Ron Barassi: “When all else fails, go back to basics.” … which brings us back to our most basic advice: it’s not just the money.
It’s important that you focus on lifestyle as much as the deal. You may find the have-to-have house this year and, even though it may cost you more it, or one like it, may not still be around next year.
You’ll be living there. If it’s perfect, grab it.
Bayside: Storms continue
Wet, cold and windy were Bayside’s weekend auctions: wet weather, cold bidding and windy auctioneers all contributing to another tough weekend in the trenches.
In spite of the inclement atomospherics, some joy was apparent in Bentleigh and Brighton East: 8 sales from 11 offered and 7 from 10.
Despite the much better clearance rate in Brighton East, the $1 million+ market continues to struggle at auction with only one result recorded at the seven figure level: 9 Garden Avenue, on 814sq m, achieving $1,235,000.
Beaumaris auctioneers also struggled to find bidders. Even the market up to $800,000 was at best mediocre: only two sales from the five in a normally reliable price range.
A rare multi-million dollar sale was negotiated at 408 Beach Road, Beaumaris. A 65 square home overlooking Rickett’s Point with Bay views sold for $2.65 million.
Hampton and Sandringham continue to be out of favour: two sales from the nine offered with one of those a sold-before.
The solitary auction sale on the day was at 34 Mills Street. Advertised as a “Realisation Auction” (meaning the vendor has finally realised they want/have/need to sell) with an expected price range of $1.6-1.75 million, the property had one bidder and was passed in at $1.575 million and sold later but no one is saying for how much. It was also auctioned on the 30th August with no bids and passed in on a vendor bid at $1.8 million with a reserve of $2.2 million. But what’s half a mill between friends?
Brighton (as in 3186) has had a mixed week. Its lack of auction action was well and truly offset by strong private sale activity.
15 Murphy Street was reported as sold on the day for $2.15 million when in fact it was sold last Monday (oh, OK, we know that because we bought it) and 2 Cosham Street was passed in on Saturday for $2.1 million with a later offer of $2.2 million and then sold on Saturday evening for $2.275 million
39 Park Street was passed in on a vendor bid of $1.54 million against a reserve of $1.62 million.
17 Lindsay Street was passed in. Its reserve is $1.12 million
On Sunday a large architect designed home with court and pool at 43 Kinane Street (the other end, not the beach end) passed in on the auctioneer’s bid of $3.3 million. Rumour has it that the vendor is waiting for over $4 million. Great patience may be a great virtue. And essential.
5 Wilson Street was sold before auction for what is a new low in $’s per sq m/sq ft. Essentially land value, the property was sold for $1.85 million. At 1012 sq m or 10890 sq ft, that equates to just under $170 per sq ft in the heart of Middle Brighton.
Better news for one busy agent: an off-market sale at 87 Wells Street, Brighton (classic Victorian on plenty of land selling for an undisclosed amount believed to be at least $5.5 million) and 19 Glyndon Avenue, Brighton on over 1300 sq m sold for just over $5 million.
The same agent finally sold 2a Glyndon Avenue, a two storey townhouse, for $2.3 million and as an afterthought also sold 29 Lawrence Street for $1,130,000.
Privately negotiated sales seem to be working well for this agent; possibly because he is working with sensible, realistic vendors who have accepted the new reality and simply want to get on with their lives.