What a difference a year can make. From last October’s TET:
Monday, October 13th, 2008
A bunch of years ago, Bob Dylan wrote The Times, They Are A Changin’. He could have been singing of now; as we write, banks are going “Whoops”, Governments are going “Oh bother”, car dealers are saying “Where is everyone?”, shops, travel agents and hotels are all loitering like barristers without briefs…
Today? More choice and more bidders than you’ll find roses at Flemington.
Something akin to Cup fever found five to eight bidders competing wherever a property ticked all the boxes, meaning there are four to seven people who are ready to buy and still looking; which suggests that this market is not about to fall at the first fence.
And yet, and yet …
That story has not been illustrated so clearly at the top end. Above around $5 million, it’s mostly an off-market world and there life is more considered; even if recent results have been more patchy.
It’s the $2-4 million bracket which is most public in enjoying its moment in the sun. There’s huge competition – both local and off-shore (although that is becoming less so as the exchange rate rises) – among people who want to move into the family home before the start of the next school year. Hawthorn, Malvern, Armadale and Kew are heading for the sky.
Usually the non-cognoscenti are offered only a glimpse at an occasional auction (over the weekend 55 Clowes Street, South Yarra, one of the best streets South Yarra can offer, was passed in on a vendor bid of $4.6 million with a $5 million reserve – no multiple bidders to be seen), yet the stratosphere is now looking forward to an almost-public test:
Miegunyah, 641 Orrong Road, Toorak, is now officially on the market. This is an exceptional property on one of Toorak’s largest remaining estates. There are some heritage issues, yet an original investment of a little shy of $2 million – 20 years ago – now appears likely to yield more than $20 million. A great part of the fascination will be to see who lodges expressions of interest, who wins and what any who lose out do next. There’s still very little choice at this level.
Also coming up – agent yet to be decided – is ‘Dunraven‘ on the corner of Dunraven Avenue and Clendon Road; which may make a desirable alternative.
Last week, while there was a lot of action on the streets, there was even more behind closed doors. Boardroom auctions (we practically invented them) are growing in popularity – we’ve attended four in the past seven days. They’re auctions for the invited, held in estate agents’ boardrooms at a time prior to sheduled auctions. They’re quick, they’re less emotional and often only one member of a couple will be present – with a pre-determined limit and no last-minute emotion-driven $50-100,000 attempted knock-out bids. For vendors there’s certainty without the stress of a public auction. For buyers there’s the prospect of significant savings.
Out in those streets?
The hot spot was 24 Hume Street, Armadale. Single fronted Victorian weatherboard, on the south side, no car parking. While it had a sensible reserve of $1,050,000, it sold for an incredible $1,360,000. Eight bidders and 30% above expectations. Emotion rules.
And not just in Armadale. Most auctions had the zing that vendors and agents crave.
221 Beaconsfield Parade sold for a remarkable $4,610,000.
Even in leafy Canterbury, 13 Avenue Athol, a good family home – but not that big and should have sold for around $2 million – gasped to $2,280,000; which has made some of our nearby purchases look very prudent.
Next weekend: the big one. It doesn’t get any bigger.
The buyers are there, the properties are there (although not as many at the top end as we would like) and there’s a horde of agents anxious to strut their stuff.
Cautions are in order:
- vendors, greed is not good; and may trip you.
- buyers, beware the lemon; and while you should not assume you face an ever-rising market, you will need to move smartly if you plan to avoid the end-of-year lull
And keep an eye on exchange rates. They are influencing overseas and expat buyers; especially toward the top end.
A final thought:
5 Rostill Court Toorak. Passed in at $2.320 million. Its reserve is $2.5 million. Hmmm.
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Brighton East was the centre of most Bayside action during the week and over the weekend.
The standout on Saturday was 7 Cluden Street, a new townhouse of 350 sq m on about 534 sq m of north-facing land – and its equally new twin at 7A Cluden Street. The pre-auction tip was in the high single millions, but when two determined bidders face off, anything can happen; and did. Bids and glowers exchanged until the tension snapped and the auctioneer knocked it down for $2.2 million. One happy buyer, one unhappy losing bidder. The gleeful auctioneer then collared the unhappy losing bidder and quietly slipped him through the twin next door. Within 10 minutes, the unhappy losing bidder says “OK” and gets an instant $50,000 discount. All happy.
1 Regent Street, a period style attic weatherboard on 923 sq m was quoted in a range up to $1.35 million. Following an embarrassing level of interest, that expectation was ramped up to $1.5 million or thereabouts before steady bidding from several parties took it to a heady $1.75 million. A high-profile local agent then threw in a killer bid of $100,000 on behalf of a client, only to miss out moments later when it was knocked down for $1.853 million. Underquoting by agent or bidders’ moments of madness?
At 20 Letchworth Avenue, 655 sq m of land, propelled by several determined buyers, sailed past its $850,000 reserve to sell for $1,006,000. Another land-only sale at 6 Sara Avenue confirmed everybody wants the precious commodity when a smaller site (610 sq m) sold under the hammer for $1,003,000.
However an occasional “reasonable buy” stills appears even in this heated market.
29 Canberra Grove, a signature East Brighton location, passed in at $1,410,000. It’s a big two-storey family home with five bedrooms and four bathrooms plus a pool and on almost 800 sq m of established gardens. A little bit of fine tuning would do wonders for it and at a guessestimated reserve (it wasn’t published) of around $1.55 million, it would be a lot of house for the money.
A private sale transaction was negotiated for 19 Lansdown Street. A fully renovated and extended California bungalow on 700 sq m, it sold for $1.48 million
10 Milliara Grove, reported last week as passed in, has since sold for $1.385 million.
Hampton had a busy week on the private sale front.
19 Littlewood Street (sorry, no link), on 800 sq m, changed hands for $1,475,000
42A Crisp Street sold after auction for $1,275,000.
17 David Street, a 7 room weatherboard on 720 sq m, sold for $1,240,000
20 Orlando Street, a contemporary house on a 588 sq m site one block back from the beach, also sold this week. Due for auction next Saturday, an offer of $2,225,000 was enough to put asn end to that.
In Sandringham’s blue-chip Keats Street, number 6, a typical brick home with 8 main rooms on 750 sq m., sold at auction for $1,780,000.
Bentleigh? Another yawn. 100% clearance. All nine sold.
The standout result was 3 Hamilton Street, a weatherboard house on 750 sq m which sold for $1,126,000
86 Mitchell Street, similar land but a brick veneer house, brought $1,020,000.
Not so long ago a million dollar sale in Bentleigh would have made headlines. No more. And even these numbers are tipped to rise as home owners have the confidence to extensively renovate or to build anew without fear of overcapitalising.
Next weekend? Over 1,000 auctions due. A marathon. We’ve been training for days.
In the face of those numbers, can the 80%+ clearance rates hold?
M&K in the News:
Sale of Toorak’s grand mansions to smash records – The Age, Oct 19 – Buyers’ advocate Christopher Koren said the public offering of two historic estates – both of which he described as ”big enough to graze sheep on” – was a rarity…
This could be our most expensive home – Herald Sun – Oct 19 Buyers advocate David Morrell said the property would most likely be sold to a local because overseas buyers had been scared off by the surging Australian …
Melbourne’s best tipped at $17m-plus. 14 October 2009 | The Australian Financial Review (subscription required) | …Buyers Advocate David Morrell said his international clients were voicing concern over currency…”
Signs of life at upper end of real estate market – 14 October 2009 | The Australian Financial Review (subscription required) “… pent-up demand, combined with economic optimism, was pushing up prices in the $1 million to $5 million bracket, Mr Morrell said.”
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